U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (no fee required)
For the transition period from to
Commission File No. 0-12896
OLD POINT FINANCIAL CORPORATION
(Name of issuer in its charter)
Virginia 54-1265373
(State or other jurisdiction of incorporation or
organization)(I.R.S. Employer Identification No.)
1 West Mellen Street, Hampton, Va. 23663
(Address of principal executive offices) (Zip Code)
(804) 722-7451
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Exchange
Act: None
Securities registered pursuant to Section 12(g) of the Exchange
Act:
Common Stock ($5.00 par value)
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form, and
no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 11, 1997 there were 1,275,262 shares of common
stock outstanding and the aggregate market value of common stock of
Old Point Financial Corporation held by nonaffiliates was
approximately $40,936,679 based upon the last traded price per
share known to Management.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
OLD POINT FINANCIAL CORPORATION
Form 10-K
INDEX
Page
PART I
Item 1. Description of Business 1
General 1
Statistical Information. 2
Item 2. Description of Properties 12
Item 3. Legal Proceedings 13
Item 4. Submission of Matters to a
Vote of Security Holders 13
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters 13
Item 6. Selected Financial Data 14
Item 7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 15
Item 8. Financial Statements and
Supplementary Data 18
Item 9. Changes in and Disagreements
With Accountants on
Accounting and Financial Disclosure 34
PART III
Item 10. Directors and Executive Officers
of the Registrant 35
Item 11. Executive Compensation 38
Item 12. Security Ownership of Certain
Beneficial Owners and Management 39
Item 13. Certain Relationships and
Related Transactions 39
PART IV
Item 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K 40
-i-
PART I
Item 1. Description of Business
General
Old Point Financial Corporation (the "Company") was
incorporated under the laws of Virginia on February 16,
1984, for the purpose of acquiring all the outstanding
common stock of The Old Point National Bank of Phoebus
(the "Bank"), in connection with the reorganization of
the Bank into a one bank holding company structure. At
the annual meeting of the stockholders on March 27, 1984,
the proposed reorganization was approved by the requisite
stockholder vote. At the effective date of the
reorganization on October 1, 1984, the Bank merged into
a newly formed national bank as a wholly owned subsidiary
of the Company, with each outstanding share of common
stock of the Bank being converted into five shares of
common stock of the Company.
The Company has no other subsidiaries and does not engage
in any activities other than acting as a holding company
for the common stock of the Bank. The principal business
of the Company is conducted through the Bank, which
continues to conduct its business in substantially the
same manner and from the same offices as it had done
before the effective date of the reorganization. The
Bank, therefore, accounts for substantially all of the
consolidated assets and revenues of the Company.
The Bank is a national banking association founded in
1922. The Bank has thirteen offices in the cities of
Hampton and Newport News, and in James City and
York County, Virginia, and provides a full range of
banking and related financial services, including checking,
savings, certificates of deposit, and other depository services,
commercial, industrial, residential real estate and
consumer loan services, safekeeping services and trust
and estate services.
As of December 31, 1996, the Company had assets of $316.3
million, loans of $198.6 million, deposits of $263.5
million, and stockholders' equity of $32.4 million. At
year end, the Company and the Bank had a total of 234
employees, 45 of whom were part-time.
Based on 1990 census figures, the population of the
Bank's trade area, which includes Hampton, Newport News,
Williamsburg, and James City and York County was approximately
394,000. This area's economy is heavily influenced by
the two largest employers; military installations and
shipbuilding and ship repair. These industries are
impacted by reductions in defense spending and personnel.
Some of our customers are either employed at the various
military installations or at the shipyard, or they derive
some or all of their business from these two major
employers. There are numerous military installations in
the area including Fort Monroe, Langley Air Force Base,
and Fort Eustis. The consolidation of the Tactical Air
Command and the Strategic Air Command into the Air Combat
Command at Langley has somewhat mitigated the reduction
in military employment in the area. The largest private
employer on the Peninsula is the Newport News
Shipbuilding and Drydock Company, which currently
employees approximately 17,000 people.
The banking industry is highly competitive in the
Hampton/Newport News/Williamsburg area. There are
approximately nine commercial banks actively engaged in
business in the area in which the Bank operates,
including seven major statewide banking organizations.
The Bank encounters competition for deposits and loans
from banks, savings and loan associations and credit
unions in the communities in which it operates. In
addition, the Bank must compete for deposits in some
instances with the money market mutual funds which are
marketed nationally.
The Bank is subject to regulation and examination by the
Office of the Comptroller of the Currency, the Federal
Reserve Board (the "Board"), and the Federal Deposit
Insurance Corporation (the "FDIC").
As a bank holding company within the meaning of the Bank
Holding Company Act of 1956, the Company is subject to
the ongoing regulation, supervision, and examination by
the Federal Reserve Board (the "Board"). The Company is
required to file with the Board periodic and annual
reports and other information concerning its own business
operations and those of its subsidiaries. In addition,
prior Board approval must be obtained before the Company
can acquire (i) ownership or control of any voting shares
of another bank if, after such acquisition, it would
control more than 5% of such shares, or (ii) all or
substantially all of the assets of another bank or merge
or consolidate with another bank holding company. A bank
holding company is prohibited under the Bank Holding
Company Act, with limited exceptions, from engaging in
activities other than those of banking or of managing or
controlling banks or furnishing services to its
subsidiaries.
Statistical Information
The following statistical information is furnished
pursuant to the requirements of Guide 3 (Statistical
Disclosure by Bank Holding Companies) promulgated under
the Securities Act of 1933.
I. Distribution of Assets, Liabilities and Shareholders'
Equity; Interest Rates and Interest Differential
The following table presents the distribution of assets,
liabilities, and shareholders' equity by major categories
with related average yields/rates. In these balance
sheets, nonaccrual loans are included in the daily
average loans outstanding.
<TABLE>
TABLE I
AVERAGE BALANCE SHEETS, NET INTEREST INCOME* AND RATES*
<CAPTION>
For the years ended December 31, 1996 1995 1994
Dollars in thousands Average Average Average
Interest Rates Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/ Average Income/ Earned/
Balance Expense Paid Balance Expense Paid Balance Expense Paid
<S>
ASSETS <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans (net of unearned income)...............$ 192,940 $17,681 9.16% $180,638 $16,221 8.98% $162,963 $13,917 8.54%
Investment securities:
Taxable.................................... 78,734 4,736 6.02% 78,411 4,690 5.98% 86,038 4,932 5.73%
Tax-exempt................................. 15,194 1,292 8.50% 8,173 759 9.29% 6,315 628 9.94%
------- ------- ------- ------ ------- ------
Total investment securities.............. 93,928 6,028 6.42% 86,584 5,449 6.29% 92,353 5,560 6.02%
Federal funds sold........................... 3,981 208 5.22% 4,666 264 5.66% 3,540 131 3.70%
------- ------- ------- ------ ------- ------
Total earning assets....................... 290,849 23,917 8.22% 271,888 21,934 8.07% 258,856 19,608 7.57%
Reserve for loan losses...................... (2,240) (2,648) (2,759)
------- ------- -------
288,609 269,240 256,097
Cash and due from banks...................... 9,805 8,433 8,868
Bank premises and equipment.................. 9,724 8,125 8,275
Other assets................................. 4,874 5,376 5,158
------- ------- -------
Total assets.................................$313,012 $291,174 $278,398
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Time and savings deposits:
Interest-bearing transaction accounts......$ 50,041 $ 1,210 2.42% $ 49,335 $ 1,303 2.64% $ 50,739 $ 1,327 2.62%
Money market deposit accounts.............. 21,212 789 3.72% 19,375 765 3.95% 19,526 613 3.14%
Savings accounts........................... 26,354 722 2.74% 26,595 730 2.74% 30,070 826 2.75%
Certificates of deposit, $100,000 or more.. 17,026 940 5.52% 13,789 760 5.51% 10,979 478 4.35%
Other certificates of deposit.............. 103,029 5,642 5.48% 97,431 5,290 5.43% 83,512 3,850 4.61%
------- ------ ------- ------ ------- ------
Total time and savings deposits.......... 217,662 9,303 4.27% 206,525 8,848 4.28% 194,826 7,094 3.64%
Federal funds purchased and securities sold
under agreement to repurchase.............. 14,688 706 4.81% 11,234 573 5.10% 14,528 503 3.46%
Other short term borrowings.................. 1,599 84 5.25% 1,996 110 5.51% 617 28 4.54%
------- ------ ------- ------ ------- ------
Total interest bearing liabilities......... 233,949 10,093 4.31% 219,755 9,531 4.34% 209,971 7,625 3.63%
Demand deposits.............................. 46,198 40,843 40,004
Other liabilities............................ 1,532 1,554 1,729
------- ------- -------
Total liabilities.......................... 281,679 262,152 251,704
Stockholders' equity......................... 31,333 29,022 26,694
------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...$313,012 $291,174 $278,398
======= ======= =======
Net interest income/yield.................... $13,824 4.75% $12,403 4.56% $11,983 4.63%
======= ====== ======
Total deposits...............................$263,860 $247,368 $234,830
*Computed on a fully taxable equivalent basis using a 34% tax rate.
</TABLE>
The following table sets forth a summary of changes in interest earned and
paid attributable to changes in volume and changes in yields/rates.
<TABLE>
TABLE II
ANALYSIS OF CHANGE IN NET INTEREST INCOME*
<CAPTION>
Year 1996 over 1995 Year 1995 over 1994 Year 1994 over 1993
Due to change in: Due to change in: Due to change in:
Net Net Net
Average Average Increase Average Average Increase Average Average Increase
Dollars in Thousands Volume Rate (Decrease) Volume Rate (Decrease) Volume Rate (Decrease)
INCOME FROM EARNING ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans................................... $1,105 $355 $1,460 $1,509 $ 795 $2,304 $ 652 $ (414) $ 238
Investment securities:
Taxable.................................. 19 27 46 (437) 195 (242) 472 (395) 77
Tax-exempt............................. 652 (119) 533 185 (54) 131 (185) 20 (165)
----- --- ----- ---- ----- ---- --- --- ---
Total investment securities............ 671 (92) 579 (252) 141 (111) 287 (375) (88)
Federal funds sold....................... (39) (17) (56) 42 91 133 (123) 25 (98)
----- --- ----- ---- ----- ---- --- --- ---
Total income from earning assets....... 1,737 246 1,983 1,299 1,027 2,326 816 (764) 52
INTEREST EXPENSE
Time and savings deposits:
Interest-bearing transaction accounts.. 19 (112) (93) (37) 13 (24) 206 (96) 110
Money market deposit accounts.......... 73 (49) 24 (5) 157 152 (8) 53 45
Passbook savings accounts.............. (7) (1) (8) (95) (1) (96) (27) (127) (100)
Certificates of deposit, $100,000
or more.......................... 178 2 180 122 160 282 34 (14) 20
Other certificates of deposit.......... 304 48 352 642 798 1,440 (74) (203) (277)
----- --- ---- ---- ----- ----- --- --- ---
Total time and savings deposits...... 567 (112) 455 627 1,127 1,754 185 (387) (202)
Federal funds purchased and securities
sold under agreement to repurchase.... 176 (43) 133 (114) 184 70 (25) 91 66
Other short term borrowings.............. (22) (4) (26) 63 19 82 36 (17) 19
----- --- ---- ---- ----- ----- --- --- ---
Total interest bearing liabilities..... 721 (159) 562 576 1,330 1,906 196 (313) (117)
CHANGE IN NET INTEREST INCOME........... $1,016 $405 $1,421 $ 723 $ (303) $ 420 $ 620 $ (451) $ 169
* Computed on a fully taxable equivalent basis using a 34% rate
</TABLE>
Interest Sensitivity
The following table reflects the earlier of the maturity or repricing
data for various assets and liabilities as of December 31, 1996.
<TABLE>
TABLE III
INTEREST SENSITIVITY ANALYSIS
<CAPTION>
As of December 31, 1996
Dollars in thousands
Within 3 4-12 1-5 Over 5
Uses of Funds months months years years Total
<S> <C> <C> <C> <C>
Federal funds sold $ 561 $ --- $ --- $ --- $ 561
Investment securities:
Taxable 8,324 10,133 49,288 7,017 74,762
Tax-exempt 100 155 1,146 18,893 20,294
------ ------ ------ ------ ------
TOTAL INVESTMENTS 8,985 10,288 50,434 25,910 95,617
Loans:
Commercial 31,065 7,669 17,236 2,216 58,186
Tax-exempt 2,089 45 155 175 2,464
Installment 4,300 11,828 32,569 3,360 52,057
Real estate 18,480 20,052 33,198 12,007 83,737
Other 590 --- --- --- 590
------ ------ ------ ------ ------
Total loans 56,524 39,594 83,158 17,758 197,034
------ ------ ------ ------ ------
Total earning assets $ 65,509 $ 49,882 $133,592 $43,668 $292,651
Sources of funds:
Interest bearing transaction accounts $ 49,455 $ --- $ --- $ --- $ 49,455
Money market deposit accounts 21,263 --- --- --- 21,263
Savings accounts 25,478 --- --- --- 25,478
Certificates of deposit,
$100,000 or more 6,300 7,008 4,118 --- 17,426
Other certificates of deposit 30,790 46,011 25,563 --- 102,364
Federal funds purchased
and securities sold under
agreements to repurchase 17,135 --- --- --- 17,135
Other borrowings 2,267 --- 34 --- 2,301
------ ------ ------ ------ ------
Total interest bearing liabilities $152,688 $ 53,019 $ 29,715 $ 0 $235,422
Rate sensitivity gap $(87,179) $ (3,137) $103,877 $43,668 $ 57,229
Cumulative gap $(87,179) $(90,316) $ 13,561 $57,229
</TABLE>
The Company was liability sensitive as of December 31, 1996.
There were $87.2 million more in liabilities than assets
subject to repricing within three months. This generally
indicates that net interest income should improve if interest
rates fall since liabilities will reprice faster than assets.
It should be noted, however, that savings deposits; which
consist of interest bearing transactions accounts, money
market accounts, and savings accounts; are less interest
sensitive than other market driven deposits. In a rising rate
environment these deposit rates have historically lagged
behind the changes in earning asset rates, thus mitigating
somewhat the impact from the liability sensitivity position.
II. Investment Portfolio
Note 2 of the Notes to Financial Statements found in Item 8.
Financial Statements and Supplementary Data of this Report on
Form 10K presents the book and market value of investment
securities on the dates indicated.
The following table shows, by type and maturity, the book
value and weighted average yields of investment securities at
December 31, 1996.
<TABLE>
TABLE IV
INVESTMENT SECURITY MATURITIES & YIELDS
<CAPTION>
U.S.Govt/Agency State/Municipal Total
Book Weighted Book Weighted Book Weighted
Value Average Value Average Value Average
Dollars in Thousands Yield Yield Yield
December 31, 1996
<S>
Maturities: <C> <C> <C> <C> <C> <C>
Within 1 year $14,182 4.95% $ 255 9.13% $14,437 5.02%
After 1 year, but within 5 years 49,348 6.26% 1,118 9.60% 50,466 6.33%
After 5 years, but within 10 years 5,998 7.04% 9,226 8.24% 15,224 7.77%
After 10 years 0 0.00% 9,414 7.91% 9,414 7.91%
TOTAL $69,528 6.06% $20,013 8.17% $89,541 6.53%
December 31, 1995 $74,238 6.02% $12,270 8.66% $86,508 6.39%
December 31, 1994 $74,384 5.74% $ 6,736 9.57% $81,120 6.06%
</TABLE>
Yields are calculated on a fully tax equivalent basis using a 34% rate.
The book value of other marketable equity securities with no stated
maturity totalled $5.44 million, yielding 5.89%; $5.31 million,
yielding 6.03%; and $5.23 million, yielding 4.41%; at December 31,
1996, 1995, and 1994 respectively.
III. Loan Portfolio
The following table shows a breakdown of total loans by type at
December 31 for years 1992 through 1996:
<TABLE>
TABLE V
LOANS
<CAPTION>
Dollars in thousands
As of December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Commercial and other $ 28,944 $ 20,636 $ 17,806 $ 16,836 $ 17,043
Real Estate Construction 5,213 4,093 1,991 2,353 2,420
Real Estate Mortgage 104,230 109,469 105,703 96,185 105,424
Tax Exempt Loans 2,464 3,003 4,754 5,585 6,987
Installment Loans to Individuals
(net of Unearned Income) 57,733 52,154 43,487 29,322 29,640
Total $198,584 $189,355 $173,741 $150,282 $161,514
</TABLE>
Based on Standard Industry Code, there are no categories of loans which exceed
10% of total loans other than the categories disclosed in the preceding table.
The maturity distribution and rate sensitivity of certain categories of the
Bank's loan portfolio at December 31, 1996 is presented below:
<TABLE>
TABLE VI
MATURITY SCHEDULE OF SELECTED LOANS
<CAPTION>
One year One through Over five
December 31, 1996 or less five years years Total
Dollars in thousands
<S> <C> <C> <C> <C>
Commercial and other $10,466 $16,975 $1,503 $28,944
Real estate construction 5,136 77 --- 5,213
------ ------ ----- ------
Total $20,194 $13,061 $1,503 $34,157
Loans maturing after one year with:
Fixed interest rate $ 13,062 $ 891 $ 13,953
Variable interest rate $ 3,990 $ 612 $ 4,602
</TABLE>
The following table presents information concerning the aggregate amount of
nonaccrual, past due and restructured loans as of December 31 for the years
1992 through 1996.
<TABLE>
TABLE VII
NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS
<CAPTION>
Dollars in thousands
As of December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Nonaccrual loans $1,550 $2,447 $2,955 $5,328 $4,670
Accruing loans past due
90 days or more 1,342 248 837 458 2,239
Restructured loans none none none none none
Interest income which would
have been recorded under
original loans terms 163 350 470 570 783
Interest income recorded
during the period 222 131 188 239 478
</TABLE>
Loans are placed in nonaccrual status if principal or interest has been in
default for a period of 90 days or more unless the obligation is both well
secured and in the process of collection. A debt is "well secured" if it is
secured (i) by collateral in the form of liens on or pledges of real or
personal property, including securities, that have a realizable value
sufficient to discharge the debt in full or (ii) by the guaranty of a
financially responsible party. A debt is "in the process of collection" if
collection of the debt is proceeding in due course either through legal action,
including judgment enforcement procedures, or, in appropriate circumstances,
through collection efforts not involving legal action which are reasonably
expected to result in repayment of the debt or in its restoration to a current
status.
Potential problem loans consist of loans that, because of potential credit
problems of the borrowers, have caused management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms. At
December 31, 1996 such problem loans, not included in Table VII, amounted to
approximately $3.5 million. The potential problem loans included three
relationships in excess of $500 thousand. The potential problem loans are
generally secured by residential and commercial real estate with appraised
values exceeding the principal balance of the loan.
IV. Summary of Loan Loss Experience
The determination of the balance of the Allowance for Loan Losses is based upon
a review and analysis of the loan portfolio and reflects an amount which, in
management's judgment, is adequate to provide for possible future losses.
Management's review includes monthly analysis of past due and nonaccrual loans
and detailed periodic loan by loan analyses.
The principal factors considered by management in determining the adequacy of
the allowance are the growth and composition of the loan portfolio, historical
loss experience, the level of nonperforming loans, economic conditions, the
value and adequacy of collateral, and the current level of the allowance.
The following table shows an analysis of the Allowance for Loan Losses for the
years 1992 through 1996.
<TABLE>
TABLE VIII
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<CAPTION>
Dollars in thousands
For the year ended December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $ 2,251 $ 2,647 $ 2,692 $ 3,719 $ 3,233
Charge Offs:
Commercial, financial and agricultural 98 1,210 147 1,178 1,610
Real estate construction --- --- --- --- ---
Real estate mortgage 2 135 316 230 152
Installment Loans to individuals 825 375 148 179 287
----- ----- ----- ----- -----
Total charge offs 925 1,720 611 1,587 2,049
Recoveries:
Commercial, financial and agricultural 87 296 431 174 80
Real estate construction --- --- --- --- ---
Real estate mortgage 14 44 19 7 14
Installment Loans to individuals 303 159 91 129 141
----- ----- ----- ----- -----
Total recoveries 404 499 541 310 235
----- ----- ----- ----- -----
Net charge offs 521 1,221 70 1,277 1,814
Additions charged to operations 600 825 25 250 2,300
----- ----- ----- ----- -----
Balance at end of period $ 2,330 $ 2,251 $ 2,647 $ 2,692 $ 3,719
Selected loan loss statistics
Loans (net of unearned income):
End of period $198,584 $189,355 $173,741 $150,282 $161,514
Daily average $192,940 $180,638 $160,204 $155,551 $173,172
Net charge offs to average
total loans 0.27% 0.68% 0.04% 0.82% 1.05%
Provision for loan losses to
average total loans 0.31% 0.46% 0.02% 0.16% 1.33%
Provision for loan losses to
net charge offs 115.16% 67.57% 35.71% 19.58% 126.79%
Allowance for loan losses to
period end loans 1.17% 1.19% 1.51% 1.79% 2.30%
Earnings to loan loss coverage* 10.28 3.25 56.21 2.45 2.43
</TABLE>
*Income before income taxes plus provision for loan losses,
divided by net charge-offs.
The following table shows the amount of the Allowance for Loan Losses
allocated to each category at December 31 for the years 1992 through 1996.
<TABLE>
TABLE IX
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
<CAPTION>
As of December 31, 1996 1995 1994 1993 1992
Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
of Loans of Loans of Loans of Loans of Loans
in each in each in each in each in each
Dollars in thousands Category Category Category Category Category
to Total to Total to Total to Total to Total
Loans Loans Loans Loans Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial and other $1,238 15.85% $1,241 12.57% $1,334 12.98% $1,779 28.96% $2,713 29.29%
Real estate construction 35 2.62% 55 2.18% 21 1.15% 27 1.52% 51 1.50%
Real estate mortgage 478 52.49% 564 58.21% 912 60.84% 740 49.81% 709 50.90%
Consumer 579 29.04% 391 27.04% 380 25.03% 146 19.71% 246 18.31%
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
Total $2,330 100.00% $2,251 100.00% $2,647 100.00% $2,692 100.00% $3,719 100.00%
</TABLE>
V. Deposits
The following table shows the average balances and average rates paid
on deposits for the years ended December 31, 1994, 1995, and 1996.
V. Deposits
The following table shows the average balances and average rates paid
on deposits for the years ended December 31, 1994, 1995, and 1996.
<TABLE>
TABLE X
DEPOSITS
<CAPTION>
For the year ended December 31, 1996 1995 1994
Average Average Average Average Average Average
Dollars in thousands Balance Rate Balance Rate Balance Rate
<S> <C> <C> <C> <C> <C> <C>
Interest bearing transaction accounts $ 50,041 2.42% $ 49,335 2.64% $ 50,739 2.62%
Money market deposit accounts 21,212 3.72% 19,375 3.95% 19,526 3.14%
Savings accounts 26,354 2.74% 26,595 2.74% 30,070 2.75%
Certificates of deposit, $100,000 or more 17,026 5.52% 13,789 5.51% 10,979 4.35%
Other certificates of deposit 103,029 5.48% 97,431 5.43% 83,512 4.61%
Total interest bearing deposits 217,662 4.27% 206,525 4.28% $194,826 3.64%
Non-interest bearing demand deposits 46,198 40,843 40,004
Total deposits $263,860 $247,368 $234,830
</TABLE>
The following table shows certificates of deposit in amounts of $100,000
or more as of December 31, 1996, 1995, and 1994 by time remaining until
maturity.
TABLE XI
CERTIFICATES OF DEPOSIT $100,000 & MORE
(Dollars in thousands) 1996 1995 1994
Maturing in
3 months or less $ 3,089 $ 3,392 $ 1,941
3 through 6 months 3,550 3,779 1,464
6 through 12 months 3,774 5,436 5,714
over 12 months 7,013 2,629 3,529
------ ------ ------
Total $17,426 $15,236 $12,648
VI. Return on Equity and Assets
The return on average shareholders' equity and assets, the dividend pay out
ratio, and the average equity to average assets ratio for the past three years
are presented below.
1996 1995 1994
Return on average assets 1.10% .80% 1.00%
Return on average equity 10.99% 8.07% 10.39%
Dividend payout ratio 25.88% 33.17% 25.03%
Average equity to
Average assets 10.01% 9.97% 9.59%
VII. Short Term Borrowings
The Bank periodically borrowed funds through federal funds from
its correspondent banks, through the use of a demand note to the
United States Treasury (Treasury Tax and Loan Deposits), and
through securities sold under agreements to repurchase. The
borrowings matured daily and were based on daily cash flow
requirements. The borrowed amounts (in thousands) and their
corresponding rates during 1996, 1995, and 1994 are presented
below:
<TABLE>
TABLE XII
SHORT TERM BORROWINGS
<CAPTION>
Balance at December 31, 1996 1995 1994
Dollars in thousands Balance Rate Balance Rate Balance Rate
<S> <C> <C> <C> <C> <C> <C>
Federal funds purchased $ 2,000 6.28% $ 1,400 5.63% $ 2,930 5.88%
Securities sold under
agreements to repurchase 15,135 4.58% 14,336 4.33% 10,764 4.54%
U.S. treasury demand notes
and other borrowed money 2,301 5.03% 560 5.51% 1,162 5.42%
------ ------ ------
Total $19,436 $16,296 $14,789
Average daily balance outstanding:
Federal funds purchased $ 575 5.23% $ 96 6.03% $ 932 4.77%
Securities sold under
agreements to repurchase 14,413 4.76% 11,438 5.01% 13,596 3.37%
U.S. treasury demand notes
and other borrowed money 1,599 5.23% 1,996 5.46% 617 4.15%
------ ------ ------
Total $16,587 4.85% $13,530 5.09% $15,145 3.50%
The maximum amount outstanding
at any month end:
Federal funds purchased $ 2,700 $ 1,400 $ 4,600
Securities sold under
agreements to repurchase $16,046 $14,636 $18,598
U.S. treasury demand notes
and other borrowed money $ 4,052 $ 4,066 $ 4,072
</TABLE>
Item 2. Description of Property
The Bank owns the Main Office, an office building, and seven
branches. All of the above properties are owned directly and free
of any encumbrances. The land at the Fort Monroe branch is leased
by the Bank under an agreement expiring in October 2011. The
remaining three branches are leased from unrelated parties under
leases with renewal options which expire anywhere from 10-20 years.
During 1996 the Company acquired land in the Oyster Point area of
Newport News to build a 15,000 square foot office building. When
completed in late 1997 or early 1998 the new facility will house
the Bank's commercial and real estate lending offices and Trust
Services. The total cost of this project will be approximately
$2.5 million.
For more information concerning the commitments under current
leasing agreements, see Note 10. Lease Commitments of the Notes to
Financial Statements found in Item 8. Financial Statements and
Supplementary Data of this Report on Form 10K. Additional
information on Other Real Estate Owned can be found in Note 6.
Other Real Estate Owned of the Notes to Financial Statements found
in Item 8. Financial Statements and Supplementary Data of this
Report on Form 10K.
Item 3. Legal Proceedings
The Company is not a party to any material pending legal
proceedings before any court, administrative agency, or other
tribunal.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders
during the quarter ended December 31, 1996.
Part II
Item 5. Market for Common Equity And Related Stockholder Matters
The common stock of Old Point Financial Corporation is not listed
on an exchange and is not quoted by NASDAQ. The approximate number
of shareholders of record as of December 31, 1996 was 1,414. The
range of high and low prices and dividends per share of the
Company's common stock for each quarter during 1996 and 1995 is
presented in Part I. Item 7. of this Annual Report on Form 10-K.
Additional information related to stockholder matters can be found
in Note 15. Regulatory Matters of the Notes to Financial
Statements found in Item 8. Financial Statements and Supplementary
Data of this Report on Form 10K.
Item 6. Selected Financial Data
The following table summarizes the Company's performance for the
past five years.
<TABLE>
SELECTED FINANCIAL DATA
Dollars in thousands YEAR ENDED DECEMBER 31,
except per share data
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Interest income......................... $ 23,377 $ 21,534 $ 19,234 $ 19,105 $ 20,988
Interest expense........................ 10,093 9,531 7,625 7,743 9,999
------ ------ ------ ------ ------
Net interest income..................... 13,284 12,003 11,609 11,362 10,989
Provision for loan loss................. 600 825 25 250 2,300
------ ------ ------ ------ ------
Net interest income after provision for 12,684 11,178 11,584 11,112 8,689
Gains on sales of investment securities. 2 9 407 19 463
Noninterest income...................... 4,134 3,836 3,755 4,003 3,589
Noninterest expenses.................... 12,066 11,884 11,837 12,252 10,627
------ ------ ------ ------ ------
Income before taxes..................... 4,754 3,139 3,909 2,882 2,114
Applicable income taxes ................ 1,309 797 1,136 667 376
------ ------ ------ ------ ------
Net income.............................. $ 3,445 $ 2,342 $ 2,773 $ 2,215 $ 1,738
FINANCIAL CONDITION
Total assets............................ $316,345 $304,266 $277,680 $273,884 $268,721
Total deposits.......................... 263,519 256,535 235,599 234,171 231,509
Total loans............................. 198,584 189,355 174,881 150,776 161,806
Stockholders' equity.................... 32,400 30,328 26,222 25,836 24,193
Average assets.......................... 313,012 291,174 278,398 270,685 268,917
Average equity.......................... 31,333 29,022 26,694 24,897 23,856
PERTINENT RATIOS
Return on average assets................ 1.10% 0.80% 1.00% 0.82% 0.65%
Return on average equity................ 10.99% 8.07% 10.39% 8.90% 7.29%
Dividends paid as a percent of net income 25.88% 33.17% 25.03% 28.17% 28.40%
Average equity as a percent of
average assets......................... 10.01% 9.97% 9.59% 9.20% 8.87%
PER SHARE DATA
Net income.............................. $2.71 $1.84 $2.20 $1.77 $1.41
Cash dividends declared................. 0.70 0.61 0.55 0.50 0.40
Book value.............................. 25.44 23.81 20.75 20.60 19.47
GROWTH RATES
Year end assets......................... 3.97% 9.57% 3.33% 1.92% 1.01%
Year end deposits....................... 2.72% 8.89% 1.77% 1.15% 1.92%
Year end loans.......................... 4.87% 8.28% 8.08% -6.82% -10.20%
Year end equity......................... 6.83% 15.66% 8.39% 6.79% 5.50%
Average assets.......................... 7.50% 4.59% 3.53% 0.66% 3.96%
Average equity.......................... 7.96% 8.72% 11.90% 4.36% 3.74%
Net income.............................. 47.10% -15.54% 59.55% 27.45% 18.88%
Cash dividends declared................. 14.75% 10.91% 37.50% 25.00% 0.00%
Book value.............................. 6.83% 14.78% 6.54% 5.78% 4.73%
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion is intended to assist readers in understanding and
evaluating the consolidated results of operations and financial condition of
the Company. This discussion should be read in conjunction with the financial
statements and other financial information contained elsewhere in this report.
The analysis attempts to identify trends and material changes which occurred
during the period presented.
EARNINGS SUMMARY
Net income was $3.45 million, or $2.71 per share in 1996 compared to $2.34
million, or $1.84 per share in 1995 and $2.77 million, or $2.20 per share in
1994. Return on average assets was 1.10% in 1996, 0.80% in 1995, and 1.00% in
1994. Return on average equity was 10.99% in 1996, 8.07% in 1995 and 10.39% in
1994. For the past five years return on average assets has averaged 0.87% and
return on average equity has averaged 9.13%. Selected Financial Highlights
summarizes the Company's performance for the past five years.
NET INTEREST INCOME
The principal source of earnings for the Company is net interest income. Net
interest income is the difference between interest and fees generated by earning
assets and interest expense paid to fund them. Net interest income, on a tax
equivalent basis, was $13.82 million in 1996, up $1.42 million, or 11% from
$12.40 million in 1995 which was up $420 thousand, or 4% from $11.98 million in
1994. Net interest income is affected by variations in interest rates and the
volume and mix of earning assets and interest-bearing liabilities. The net
interest yield increased to 4.75% in 1996 from 4.56% in 1995 which was down from
4.63% in 1994.
Tax equivalent interest income increased $1.98 million, or 9%, in 1996.
Average earning assets grew $18.96 million, or 7%. Total average loans
increased $12.30 million, or 7%, while average investment securities
increased $7.34 million, or 8%. Interest income increased in 1996 by
fifteen basis points primarily due to the collection of interest
on nonaccrual loans.
Interest expense increased $562 thousand, or 6%, in 1996. Interest bearing
liabilities also increased 6% in 1996. The cost of funding liabilities
decreased three basis points primarily due to the lower cost of federal funds
purchased and securities sold under agreements to repurchase.
PROVISION/ALLOWANCE FOR LOAN LOSSES
Provision for loan losses is a charge against earnings necessary to maintain
the allowance for loan losses at a level consistent with management's
evaluation of the loan portfolio. The provision decreased to $600 thousand
in 1996 from $825 thousand in 1995 which was up from $25 thousand in 1994.
Loans charged off during 1996 totalled $925 thousand compared to $1.72
million in 1995 and $611 thousand in 1994, while recoveries amounted to
$404 thousand in 1996, $499 thousand in 1995 and $541 thousand in 1994.
Net loans charged off to year-end loans were 0.26% in 1996, 0.64% in 1995,
and 0.04% in 1994. The allowance for loan losses, as a percentage of year-end
loans, was 1.17% in 1996, 1.19% in 1995, and 1.51% in 1994.
As of December 31, 1996 nonperforming assets were $1.90 million, down from
$3.40 million at year-end 1995 which was up from $3.17 million at year-end
1994. Nonperforming assets consist of loans in nonaccrual status and
other real estate. The 1996 total consisted of other real estate of
$354 thousand and $1.55 million in nonaccrual loans. The other real estate
consisted of $354 thousand in a commercial property originally acquired as
a potential branch site and now held for sale. Nonaccrual loans consisted of
$701 thousand in commercial loans, $845 thousand in mortgage loans
and $4 thousand in installment loans. The Company has aggressively dealt
with these credits and specific action plans have been developed for each
of these classified loans to address any deficiencies. Loans still accruing
interest but past due 90 days or more increased to $1.34 million as of
December 31, 1996 compared to $248 thousand as of December 31, 1995 and
$837 thousand as of December 31, 1994.
The allowance for loan losses is analyzed for adequacy on a quarterly basis
to determine the required amount of provision for loan losses. A loan-by-loan
review is conducted on all significant classified commercial and mortgage
loans. Inherent losses on these individual loans are determined and an
allocation of the allowance is provided. Smaller nonclassified commercial
and mortgage loans and all consumer loans are grouped by homogeneous pools
with an allocation assigned to each pool based on an analysis of historical
loss and delinquency experience, trends, economic conditions, underwriting
standards, and other factors.
OTHER INCOME
Other income increased $291 thousand, or 8% in 1996 from 1995 compared to an
decrease of $317 thousand, or 8% in 1995 from 1994. The 1996 increase was due
to higher Trust Department and mortgage brokerage income. The 1995 decrease
was due primarily to lower security gains. The 1994 security gains of $407
thousand were the result of the sale of investment securities as an
asset/liability strategy to reduce the interest rate risk in the portfolio.
OTHER EXPENSES
Other expenses increased in 1996 $182 thousand, or 2% in 1996 over 1995 after
remaining almost constant in 1995 from 1994. Salaries and employee benefits
increased 3% in 1996 due to normal salary increases and increased profit
sharing contributions. Occupancy expense increased $54 thousand, or 8% in 1996
primarily due to higher rent expense associated with the opening of the Trust
Department's Oyster Point office in Newport News. Equipment expense increased
7% due to higher depreciation expense on the new mainframe computer system.
Other operating expenses decreased 6% primarily due to lower FDIC insurance
premiums.
ASSETS
At December 31, 1996, the Company had total assets of $316.3 million, up 4%
from $304.3 million at December 31, 1995. Average assets in 1996 were $313.0
million compared to $291.2 million in 1995. The growth in assets in 1996 was
due to the increase in average loans, which were up 7%.
During 1996 the Company acquired land in the Oyster Point area of Newport
News to build a 15,000 square foot office building. When completed in late
1997 or early 1998 the new facility will house to Bank's Trust Department,
commercial and real estate lending, and a branch office. The total cost of
this project will be approximately $2.5 million.
LOANS
The Company experienced good loan demand in 1996. Total loans (net of
unearned income) as of December 31, 1996 were $198.6 million, up 5% from $189.4
million at December 31, 1995. All categories of loans increased during 1996
except tax exempt loans and real estate mortgages. Footnote 3 of the financial
statements details the loan volume by category for the past two years.
INVESTMENT SECURITIES
At December 31, 1996 total investment securities were $95.1 million, up 3%
from $92.6 million on December 31, 1995. The goal of the Company is to provide
maximum return on the investment portfolio within the framework of its
asset/liability objectives. These objectives include managing interest
sensitivity, liquidity and pledging requirements.
DEPOSITS
At December 31, 1996, total deposits amounted to $263.5 million, up 3% from
$256.5 million on December 31, 1995. Non-interest bearing deposits increased
$4.6 million, or 11%, in 1996 over 1995. Savings deposits increased $391
thousand, or 0.4%, in 1996 over 1995. Certificates of Deposit increased $2.0
million, or 2% in 1996 over 1995.
STOCKHOLDERS' EQUITY
Total stockholders' equity as of December 31, 1996 was $32.4 million, up 7%
from $30.3 million on December 31, 1995. The Company is required to maintain
minimum amounts of capital under banking regulations. Under the regulations
Total Capital is composed of core capital (Tier 1) and supplemental capital
(Tier 2). Tier 1 capital consists of common stockholder's equity less goodwill.
Tier 2 capital consists of certain qualifying debt and a qualifying portion of
the allowance for loan losses. The following is a summary of the Company's
capital ratios for 1996, 1995 and 1994.
1996 Regulatory
Requirements 1996 1995 1994
Tier 1 4.00% 15.63% 15.47% 16.32%
Total Capital 8.00% 16.76% 16.47% 17.57%
Tier 1 Leverage 3.00% 10.21% 9.80% 10.00%
Year-end book value was $25.44 in 1996 and $23.81 in
1995. Cash dividends were $891 thousand, or $.70 per share in 1996
and $777 thousand, or $.61 per share in 1995. The common stock of
the Company has not been extensively traded. The stock is not
listed on an exchange and is not quoted by NASDAQ. Bid and ask
prices are not available for the Company. The volume of trading of
the stock is therefore limited. The prices below are based upon a
limited number of transactions known to Management during the past
two years. There were 1,414 stockholders of the Company as of
December 31, 1996. This stockholder count does not include
stockholders who hold their stock in a nominee registration. The
following is a summary of the dividends paid and market price on
Old Point Financial Corporation common stock for 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
Market Value Market Value
Dividend High Low Dividend High Low
<S> <C> <C> <C> <C> <C> <C>
1st Quarter $ 0.16 $ 37.50 $ 37.50 $ 0.15 $ 37.50 $ 37.00
2nd Quarter $ 0.16 $ 37.50 $ 37.50 $ 0.15 $ 37.50 $ 37.50
3rd Quarter $ 0.18 $ 37.50 $ 37.50 $ 0.15 $ 37.50 $ 37.50
4th Quarter $ 0.20 $ 41.50 $ 37.50 $ 0.16 $ 37.50 $ 37.50
</TABLE>
LIQUIDITY
Liquidity is the ability of the Company to meet present and future
obligations through the acquisition of additional liabilities or sale of
existing assets. Management considers the liquidity of the Company to be
adequate. Sufficient assets are maintained on a short-term basis to meet the
liquidity demands anticipated by Management. In addition, secondary sources
are available through the use of borrowed funds if the need should arise.
EFFECTS OF INFLATION
Management believes that the key to achieving satisfactory performance in an
inflationary environment is its ability to maintain or improve its net
interest margin and to generate additional fee income. The Company's policy
of investing in and funding with interest-sensitive assets and liabilities
is intended to reduce the risks inherent in a volatile inflationary economy.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements and related footnotes of the Company
are presented below followed by the financial statements of the parent.
Independent Auditors' Report
To the Board of Directors
Old Point Financial Corporation
Hampton, Virginia
We have audited the accompanying consolidated balance sheets of Old
Point Financial Corporation and subsidiary as of December 31, 1996 and
1995, and the related consolidated statements of income, cash flows and
changes in stockholders' equity for each of the years in the three-year
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above,
present fairly, in all material respects, the consolidated financial
position of Old Point Financial Corporation and subsidiary as of
December 31, 1996 and 1995, and the consolidated results of their
operations and cash flows for each of the years in the three-year period
ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/Eggleston Smith P.C.
January 14, 1997
Newport News, Virginia
<TABLE>
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
(Dollars in Thousands)
<CAPTION>
1996 1995
<S> <C> <C>
ASSETS
Cash and due from banks $ 10,988 $ 10,932
Investments:
Securities available for sale,
at market 70,089 77,604
Securities to be held to maturity
(Market value $24,820 in 1996
and $15,087 in 1995) 24,967 15,020
Federal funds sold 561 513
Loans, total 198,584 189,355
Less - allowance for loan losses 2,330 2,251
------- -------
Net loans 196,254 187,104
Premises and equipment 9,403 8,302
Other real estate owned 354 954
Other assets 3,729 3,837
------- -------
Total assets $316,345 $304,266
LIABILITIES
Non interest-bearing deposits $ 47,534 $ 42,902
Savings deposits 96,196 95,805
Certificates of deposit 119,789 117,828
------- -------
Total deposits 263,519 256,535
Federal funds purchased and
securities sold under
repurchase agreements 17,135 15,736
Interest bearing demand notes
issued to the United States
Treasury and other liabilities
for borrowed money 2,301 560
Other liabilities 990 1,107
------- -------
Total liabilities 283,945 273,938
STOCKHOLDERS' EQUITY
Common stock, $5 par value, 6,000,000
shares authorized
Issued 1,273,546 in 1996
and 1,273,537 in 1995 6,368 6,368
Capital surplus 9,345 9,345
Retained earnings 16,639 14,085
Unrealized gain on securities 48 530
------ ------
Total stockholders' equity 32,400 30,328
Total liabilities and
stockholders' equity $316,345 $304,266
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1996, 1995 and 1994
(Dollars in thousands except per share amounts)
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 17,580 $ 16,079 $ 13,757
Interest on investment securities
Taxable 4,736 4,690 4,932
Exempt from income tax 853 501 414
------ ------ ------
5,589 5,191 5,346
Interest on trading account securities --- --- ---
Interest on federal funds sold 208 264 131
------ ------ ------
Total interest income 23,377 21,534 19,234
INTEREST EXPENSE
Interest on savings deposits 2,721 2,797 2,766
Interest on certificates of deposit 6,582 6,051 4,328
Interest on federal funds purchased and
securities sold under repurchase agreements 706 573 503
Interest on demand notes issued to the United
States Treasury and other liabilities for
borrowed money 84 110 28
------ ----- ------
Total interest expense 10,093 9,531 7,625
Net interest income 13,284 12,003 11,609
Provision for loan losses 600 825 25
------ ------ -------
Net interest income after provision
for loan losses 12,684 11,178 11,584
OTHER INCOME
Income from fiduciary activities 1,667 1,441 1,463
Service charges on deposit accounts 1,887 1,893 1,780
Other service charges, commissions and fees 360 280 290
Security gains, net 2 9 407
Income from trading account --- --- ---
Other operating income 220 222 222
------ ------ ------
Total other income 4,136 3,845 4,162
OTHER EXPENSE
Salaries and employee benefits 7,406 7,178 7,050
Occupancy expense 768 714 700
Equipment expense 1,029 959 1,116
Other operating expense 2,863 3,033 2,971
------ ------ ------
Total other expenses 12,066 11,884 11,837
------ ------ ------
Income before income taxes 4,754 3,139 3,909
Income taxes 1,309 797 1,136
------ ------ ------
Net income $ 3,445 $ 2,342 $ 2,773
PER SHARE
Average shares outstanding (in thousands) 1,273 1,272 1,260
Net income per share
of common stock $ 2.71 $ 1.84 $ 2.20
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1996, 1995 and 1994
(Dollars in Thousands)
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,445 $ 2,342 $ 2,773
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 883 768 884
Provision for loan losses 600 825 25
Securities gains net (2) (9) (407)
Net amortization and accretion of
investment securities 679 1,078 1,340
Loss on sale of equipment 110 --- ---
Changes in assets and liabilities:
(Increase) decrease in other real estate owned 152 (553) (13)
(Increase) decrease in other assets
(net of tax effect of FASB 115 adjustment) 357 (8) 384
(Increase) decrease in other liabilities (117) 104 63
----- ----- -----
Net cash provided by operating
activities 6,107 4,547 5,049
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (30,015) (31,772) (8,902)
Proceeds from maturities and calls of
investment securities 24,171 25,315 11,928
Proceeds from sales of investment securities 2,003 --- 8,982
Loans made to customers (105,807) (104,681) (120,330)
Principal reductions on loans 96,057 88,985 96,155
Purchase of premises and equipment (2,113) (1,991) (178)
Proceeds from sales of premises and equipment 20 --- ---
Proceeds from sales of other real estate owned 448 167 664
(Increase) decrease in federal funds sold (48) (266) 4,553
------ ------ -----
Net cash used in investing activities (15,284) (24,243) (7,128)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in non-interest
bearing deposits 4,632 5,816 (2,494)
Increase (decrease) in savings accounts 391 (1,181) (5,009)
Proceeds from sales of certificates of deposit 43,478 66,693 67,378
Payments for maturing certificates of deposit (41,517) (50,392) (58,447)
Increase in federal funds purchased and
securities sold under repurchase agreements 1,399 2,042 849
Increase (decrease) in interest bearing
demand notes and other borrowed money 1,741 (602) 1,070
Proceeds from issuance of common stock --- 88 201
Dividends paid (891) (777) (694)
------ ------ -----
Net cash provided by financing activities 9,233 21,687 2,854
Net increase in cash and due from banks 56 1,991 775
Cash and due from banks at beginning of year 10,932 8,941 8,166
------ ------ ------
Cash and due from banks at end of year $ 10,988 $ 10,932 $ 8,941
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Net cash paid for:
Interest expense $ 10,126 $ 9,286 $ 7,561
Income taxes $ 1,275 $ 830 $ 980
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING TRANSACTIONS
Unrealized gain (loss) on investment
securities, net of tax $ (482) $ 2,453 $ (1,894)
Transfer of property from premises and
equipment to other real estate owned $ --- $ 354 $ ---
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 1996, 1995 and 1994
(Dollars in Thousands)
<CAPTION>
Unrealized
Common Gain (Loss) on Total
Stock Capital Retained Investment Stockholders'
(Par Value) Surplus Earnings Securities Equity
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994
Balance, beginning of year $ 6,271 $ 8,738 $ 10,856 $ (29) $ 25,836
Net income --- --- 2,773 --- 2,773
Sale of stock 49 294 (142) --- 201
Increase in unrealized loss on
marketable equity securities --- --- --- (1,894) (1,894)
Cash dividends paid
($0.55 per share) --- --- (694) --- (694)
----- ----- ------ ----- ------
Balance, end of year $ 6,320 $ 9,032 $ 12,793 $ (1,923) $ 26,222
YEAR ENDED DECEMBER 31, 1995
Balance, beginning of year $ 6,320 $ 9,032 $ 12,793 $ (1,923) $ 26,222
Net income --- --- 2,342 --- 2,342
Sale of stock 48 313 (273) --- 88
Increase in unrealized gain on
investment securities --- --- --- 2,453 2,453
Cash dividends paid
($0.61 per share) --- --- (777) --- (777)
----- ----- ------ ----- ------
Balance, end of year $ 6,368 $ 9,345 $ 14,085 $ 530 $ 30,328
YEAR ENDED DECEMBER 31, 1996
Balance, beginning of year $ 6,368 $ 9,345 $ 14,085 $ 530 $ 30,328
Net income --- --- 3,445 --- 3,445
Decrease in unrealized gain on
investment securities --- --- --- (482) (482)
Cash dividends paid
($0.70 per share) --- --- (891) --- (891)
----- ----- ------ ------ -----
Balance, end of year $ 6,368 $ 9,345 $ 16,639 $ 48 $ 32,400
See Notes to Consolidated Financial Statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. The accounting and reporting policies of Old Point Financial
SIGNIFICANT Corporation and its subsidiary conform to generally accepted
ACCOUNTING accounting principles and to general practice within the
POLICIES banking industry. The following is a summary of significant
accounting and reporting policies:
PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of Old
Point Financial Corporation ("the Company") and its subsidiary
The Old Point National Bank of Phoebus ("the Bank"). All
significant intercompany balances and transactions have been
eliminated in consolidation.
NATURE OF BUSINESS:
Old Point Financial Corporation is a one-bank holding company
that conducts substantially all of its operations through its
subsidiary The Old Point National Bank of Phoebus. The Bank
services individual and commercial customers, the majority of
which are on the Virginia Peninsula. The Bank has twelve branch
offices. The Bank offers a full range of deposit and loan
products to its retail and commercial customers. Substantially
all of the Bank's deposits are interest bearing. The majority
of the Bank's loan portfolio is secured by real estate.
USE OF ESTIMATES:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions. The amounts recorded in the
financial statements may be affected by those estimates and
assumptions. Actual results may vary from those estimates.
The Bank uses estimates primarily in developing its allowance for
loan losses, in computing deferred tax assets, in determining
the estimated useful lives of premises and equipment, and in the
valuation of other real estate owned.
INVESTMENT SECURITIES:
Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" (SFAS 115),
addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all
investments in debt securities. Those investments are to be
classified in three categories and accounted for as follows:
Held-to-maturity - Debt securities for which the Corporation
has the positive intent and ability to hold to maturity are
classified as held-to-maturity securities and reported at cost,
adjusted for premiums and discounts that are recognized in
interest income using the interest method over the period to
maturity.
Trading - Debt and equity securities that are bought and held
principally for the purpose of selling them in the near term
are classified as trading account securities and recorded at
their fair values. Unrealized gains and losses on trading
account securities are included immediately in income.
Available-for-sale - Debt and equity securities not classified
as either held-to-maturity securities or trading account
securities are classified as available-for-sale securities and
recorded at fair value, with unrealized gains and losses
excluded from earnings and reported as a separate component of
equity until realized. Gains and losses on the sale of
available-for-sale securities are determined using the specific
identification method. Premiums and discounts are recognized
in interest income using the interest method over the period to
maturity.
INTEREST ON LOANS:
Interest is accrued daily on the outstanding loan balances.
Accrual of interest is discontinued on a loan when management
believes, after considering collection efforts and other factors,
that the borrower's financial condition is such that collection of
interest is doubtful.
LOAN ORIGINATION FEES AND COSTS:
Loan origination fees and certain direct origination costs are
capitalized and recognized as an adjustment of the yield on the
related loan.
ALLOWANCE FOR LOAN LOSSES:
The allowance for loan losses is generated by direct charges
against income and is available to absorb loan losses. The
allowance is based upon management's periodic evaluation of
changes in the overall credit worthiness of the loan portfolio,
economic conditions in general, and the effect of these conditions
upon the financial status of specific borrowers and other factors.
The Bank is subject to regulation by the Office of the Comptroller
of the Currency. They may require that the Bank adjust its
allowance for loan losses upon request.
OTHER REAL ESTATE OWNED:
Other real estate owned is carried at the lower of cost or
estimated fair value and consists of foreclosed real property and
other property held for sale. The estimated fair value is
reviewed periodically by management and any write-downs are
charged against current earnings.
PREMISES AND EQUIPMENT:
Premises and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are
calculated on both straight-line and accelerated methods and are
charged to expense over the estimated useful lives of the related
assets. Costs of maintenance and repairs are charged to expense
as incurred.
INCOME TAXES:
Income taxes are provided based upon income reported in the
statements of income (after exclusion of non-taxable income such
as interest on state and municipal securities). The income tax
effect resulting from timing differences between financial
statement pre-tax income and taxable income is deferred to future
periods.
PENSION PLAN:
The Bank has a non-contributory defined benefit pension plan
covering substantially all of its employees. Benefits are based
on years of service and average earnings during the highest
average sixty-month period during the final one hundred and twenty
months of employment.
The Bank's policy is to fund the maximum amount of contributions
allowed for tax purposes. The Bank accrues an amount equal to its
actuarially computed obligation under the plan.
The net periodic pension expense includes a service cost
component, interest on the projected benefit obligation, return on
plan assets and the effect of deferring and amortizing certain
actuarial gains and losses and the unrecognized net transition
asset over fifteen years.
TRUST ASSETS AND INCOME:
Assets held by the Trust Department are not included in the
financial statements, because such items are not assets of
the Bank. In accordance with industry practice, trust service
income is recognized primarily on the cash basis. Reporting such
income on the accrual basis would not materially effect net income.
RECLASSIFICATIONS:
Certain amounts in the financial statements have been reclassified
to conform with classifications adopted in the current year.
NOTE 2. At December 31, 1996, the investment securities portfolio is
INVESTMENT composed of securities classified as held-to-maturity and
SECURITIES available-for-sale, in conjunction with SFAS 115. Investment
securities held-to-maturity are carried at cost, adjusted for
amortization of premiums and accretions of discounts, and
investment securities available-for-sale are carried at
market value.
The amortized cost and fair value of investment securities
held-to-maturity at December 31, 1996 and 1995, were:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Obligations of other United
States Government Agencies
as of December 31, 1996 $ 24,967 $ 23 $ 170 $ 24,820
Obligations of State and
political subdivisions
as of December 31, 1995 $ 15,020 $ 67 $ --- $ 15,087
</TABLE>
The amortized cost and fair values of investment securities
available-for-sale at December 31, 1996 were:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
United States
Treasury
securities $ 36,562 $ 253 $ (240) $ 36,575
Obligations of
other United States
Government
agencies 7,998 16 (134) 7,880
Obligations
of state and
political
subdivisions 20,012 320 (38) 20,294
Other marketable equity
securities 4,450 --- (103) 4,347
Federal Reserve Bank stock 85 --- --- 85
Federal Home Loan Bank stock 908 --- --- 908
------ ------ ----- ------
Total $ 70,015 $ 589 $ (515) $ 70,089
</TABLE>
The amortized cost and fair value of investment securities
available-for-sale at December 31, 1995 were:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
United States
Treasury
securities $ 53,220 $ 613 $ (178) $ 53,655
Obligations of
other United States
Government
agencies 5,998 46 --- 6,044
Obligations
of state and
political
subdivisions 12,270 446 (3) 12,713
Other marketable equity
securities 4,400 --- (121) 4,279
Federal Reserve Bank stock 85 --- --- 85
Federal Home Loan Bank stock 828 --- --- 828
------ ----- ----- ------
Total $ 76,801 $ 1,105 $ (302) $ 77,604
</TABLE>
Investment securities carried at $32.2 million and $29.1 million,
at December 31, 1996 and 1995, respectively, were pledged to secure
public deposits and securities sold under agreements to repurchase
and for other purposes required or permitted by law.
The amortized cost and approximate market values of investment
securities at December 31, 1996 by contractual maturity are shown
below. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties.
<TABLE>
<CAPTION>
December 31, 1996
Available-For Sale Held-To-Maturity
Amortized Market Amortized Market
Cost Value Cost Value
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Due in one year or less $ 14,436 $ 14,415 $ --- $ ---
Due after one year through
five years 28,499 28,467 21,967 21,846
Due after five years through
ten years 12,224 12,406 3,000 2,974
Due after ten years 9,413 9,461 --- ---
------ ------ ------ ------
Total debt securities 64,572 64,749 24,967 24,820
Other securities without
stated maturity 5,443 5,340 --- ---
------ ------ ------
Total investment securities $ 70,015 $ 70,089 $ 24,967 $ 24,820
</TABLE>
The proceeds from the sales and maturities of investment securities,
and the related realized gains and losses are shown below:
<TABLE>
<CAPTION>
1996 1995 1994
(Dollars in Thousands)
<S> <C> <C> <C>
Proceeds from sales and
maturities of investments $ 26,174 $ 25,315 $ 20,910
====== ====== ======
Realized gains $ 2 $ 9 $ 411
Realized losses --- --- (4)
------ ------ ------
Net gains $ 2 $ 9 $ 407
</TABLE>
NOTE 3. At December 31, loans before allowance for loan losses
LOANS consisted of:
1996 1995
(Dollars in Thousands)
Commercial and other $ 28,944 $ 20,636
Real estate - construction 5,213 4,093
Real estate - mortgage 104,230 109,469
Installment loans to individuals 57,733 52,154
Tax exempt loans 2,464 3,003
------- -------
Total $ 198,584 $ 189,355
======= =======
Information concerning loans which are contractually past due
or in non-accrual status is as follows:
1996 1995
(Dollars In Thousands)
Contractually past due
loans - past due 90 days
or more and still
accruing interest $ 1,342 $ 248
===== ====
Loans which are in non-
accrual status $ 1,550 $ 2,447
===== =====
The Bank has had, and may be expected to have in the future,
banking transactions in the ordinary course of business with
directors, executive officers, their immediate families, and
companies in which they are principal owners (commonly
referred to as related parties), on the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with others. The aggregate direct
and indirect loans of these persons totaled $2.0 million and
$1.2 million at December 31, 1996 and 1995, respectively.
These totals do not include loans made in the ordinary course
of business to other companies where a director or executive
officer of the Bank was also a director or officer of such
company but not a principal owner. None of the directors or
executive officers had direct or indirect loans exceeding 10%
of stockholders' equity at December 31, 1996.
NOTE 4. Changes in the allowance for loan losses are as follows:
ALLOWANCE
FOR LOAN
LOSSES
1996 1995 1994
(Dollars in Thousands)
Balance, beginning
of year $ 2,251 $ 2,647 $ 2,692
Recoveries 404 499 541
Provision for
loan losses 600 825 25
Loans charged off (925) (1,720) (611)
----- ----- -----
Balance, end of year $ 2,330 $ 2,251 $ 2,647
===== ===== =====
NOTE 5. At December 31, premises and equipment consisted of:
PREMISES
AND EQUIPMENT
1996 1995
(Dollars in Thousands)
Land $ 2,133 $ 1,514
Buildings 7,110 6,748
Leasehold improvements 855 855
Furniture, fixtures and
equipment 8,475 7,869
------ ------
Total cost 18,573 16,986
Less accumulated
depreciation and
amortization 9,170 8,684
------ ------
Net book value $ 9,403 $ 8,302
NOTE 6. Other real estate owned consisted of the following at December 31:
OTHER REAL
ESTATE OWNED
1996 1995
(Dollars in Thousands)
Foreclosed real estate $ --- $ 600
Property held for sale 354 354
----- -----
Total $ 354 $ 954
NOTE 7.
INDEBTEDNESS The Bank's short-term borrowings include federal funds
purchased, securities sold under repurchase agreements
(including $2.5 million to directors) and United States Treasury
Demand Notes. The federal funds purchased and securities sold
under repurchase agreements are held under various maturities
and interest rates. The United States Treasury Demand Notes are
subject to call by the United States Treasury with interest paid
monthly at the rate of 25 basis points (1/4%) below federal
funds rate.
NOTE 8.
STOCK OPTION The Company has stock option plans which reserves 59,050 shares
of common stock for grants to key employees. The exercise price
of each option equals the market price of the Company's common
stock on the date of the grant and an option's maximum term is
ten years. A summary of the exercisable incentive stock
options is presented below:
<TABLE>
<CAPTION>
Outstanding Granted Exercised Expired Outstanding
Beginning During During During at End
of Year the Year the Year the Year of Year
<S> <C> <C> <C> <C> <C>
1994
Shares 33,560 20,285 (8,340) --- 45,505
Weighted average
exercise price $ 20.97 $ 36.25 $ 18.76 $ --- $ 28.19
1995
Shares 45,505 2,702 (15,220) (750) 32,237
Weighted average
exercise price $ 28.19 $ 37.00 $ 19.54 $ 36.25 $ 32.82
1996
Shares 32,237 14,386 (250) (200) 46,173
Weighted average
exercise price $ 32.82 $ 37.50 $ 36.25 $ 36.25 $ 34.25
</TABLE>
At December 31, 1996, exercise prices on outstanding options
ranged from $25.00 to $37.50 per share and the weighted average
remaining contractual life was eight years.
The Company accounts for its stock option plans in accordance
with ABP Opinion No. 25, Accounting for Stock Issued to
Employees, which does not allocate costs to stock options
granted at current market values. The Company could, as an
alternative, allocate costs to stock options using option
pricing models, as provided in Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based
Compensation. Because of the limited number of options granted
and the limited amount of trading activity in the Company's
stock, management believes that stock options are best accounted
for in accordance with APB Opinion No. 25. However, had the
stock options been accounted for in accordance with
SAFS No. 123, pro-forma amounts for net earnings and earnings
per share would have been as follows for each of the years
ending December 31,
1996 1995 1994
Pro-forma net income
(in thousands) 3,401 2,313 2,737
===== ===== =====
Pro-forma earnings per share 2.65 1.81 2.16
==== ==== =====
Pro-forma amounts were computed using a 6% discount rate over
the term of the options and dividend rates which approximate
current payments.
NOTE 9. The components of income tax expense are as follows:
INCOME TAXES
1996 1995 1994
(Dollars in Thousands)
Currently payable $1,214 $ 572 $1,039
Deferred 95 225 97
Reported tax expense $1,309 $ 797 $1,136
The items that caused timing differences affecting deferred income taxes
are as follows:
1996 1995 1994
(Dollars in Thousands)
Provision for loan losses $ (8) $ 222 $ 51
Other writedowns
and adjustments --- --- 86
Pension plan expenses 32 15 30
Deferred loan fees, net 21 27 (12)
Security gains and losses (7) 3 (2)
Interest on certain
non-accrual loans 8 (77) (124)
Alternative minimum taxes --- --- 51
Depreciation 46 33 ---
Other 3 2 17
$ 95 $ 225 $ 97
A reconciliation of the "expected" Federal income tax expense on
income before income taxes with the reported income tax expense follows:
1996 1995 1994
(Dollars in Thousands)
Expected tax expense (34%) $ 1,616 $ 1,067 $ 1,329
Interest expense on tax
exempt assets 38 25 18
Tax exempt interest (352) (263) (240)
Alternative minimum tax --- --- 51
Disqualified incentive stock
options --- (47) (44)
Other, net 7 15 22
Reported tax expense $ 1,309 $ 797 $ 1,136
The components of the net deferred tax asset included in other
assets are as follows at December 31:
1996 1995
(Dollars in thousands)
Components of Deferred Tax Liability
Depreciation $ (110) $ (64)
Accretion of discounts on securities (15) (22)
Net unrealized (gain) on
available-for- sale securities (25) (273)
Deferred loan fees and costs (67) (46)
Other (2) (4)
Deferred tax liability (219) (409)
Components of Deferred Tax Asset
Allowance for loan losses 366 358
Net unrealized loss on
available-for-sale securities --- ---
Interest on non-accrual loans 311 319
Deferred compensation 12 18
Pension 25 56
Deferred tax asset, net $ 495 $ 342
NOTE 10. The Bank has noncancellable leases on premises and
LEASE equipment expiring at various dates, including
COMMITMENTS extensions so the year 2011. Certain leases provide
for increased annual payments based on increases in
real estate taxes and the Consumer Price Index.
The total approximate minimum rental commitment at December
31, 1996, under noncancellable leases is $1.05 million which is due
as follows:
Year (Dollars in Thousands)
1997 $ 144
1998 139
1999 126
2000 72
2001 72
Remaining term of leases 497
Total $ 1,050
The aggregate rental expense of premises and equipment was
$104 thousand, $165 thousand and $178 thousand for 1996, 1995
and 1994, respectively.
NOTE 11. The following table sets forth the Pension Plan's funded
PENSION status and amounts recognized in the Bank's financial
PLAN statements at December 31:
1996 1995
(Dollars in Thousands)
Actuarial present value of
benefit obligations:
Vested benefits $ (1,723) $ (1,533)
Accumulated benefit
obligation $ (1,840) $ (1,628)
Projected benefit obligation$ (2,576) $ (2,289)
Plan assets at fair value 2,176 1,661
Projected benefit
obligation in excess
of plan assets (400) (628)
Unrecognized net plan
asset (62) (75)
Net deferrals 390 537
Pension plan liability
included in consolidated
balance sheets $ (72) $ (166)
Net pension cost includes
the following components:
Service cost - benefits
earned in the current
period $ 146 $ 134
Interest cost on projected
benefit obligations 168 149
Return on plan assets (131) (98)
Recognition of unrecognized
net plan asset (12) (12)
Amortization of net
deferrals 17 31
Net pension cost $ 188 $ 204
Contributions to the Plan $ 282 $ 248
The actuarial present value of benefits and obligations were determined by
use of the following assumptions:
1996 1995
Discount rate 7.5% 7.5%
Compensation increase 5.0% 5.0%
Expected long term rate of
return on assets 7.5% 7.5%
NOTE 12. The Bank has a defined contribution profit sharing and
PROFIT thrift plan covering substantially all of its employees.
SHARING The Bank may make profit sharing contributions to the plan as
determined by the Board of Directors. In addition, the
Bank matches thrift contributions by employees fifty cents
for each dollar contributed. Expenses related to the plan
totaled $261 thousand and $215 thousand in 1996 and 1995,
respectively.
NOTE 13. In the normal course of business, the Bank makes various
COMMITMENTS commitments and incurs certain contingent liabilities.
AND These commitments and contingencies represent off-
CONTINGENCIES balance sheet risk for the Bank. To meet the financing
needs of its customers, the Bank makes lending commitments
under commercial lines of credit, home equity loans and
construction and development loans. The Bank also incurs
contingent liabilities related to irrevocable letters of credit.
At December 31, 1996, the Bank had the following off-balance sheet items
(in thousands):
Commitments to extend credit:
Home equity lines of credit $ 9,442
Construction and development loans
committed but not funded 5,228
Other lines of credit (principally
commercial) 19,201
-------
$ 33,871
Irrevocable letters of credit $ 1,071
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.
The Bank evaluates each customer's credit worthiness on a
case-by-case basis. The amount of collateral obtained, if
deemed necessary by the Bank, upon extension of credit is
based on management's credit evaluation of the customer.
Collateral held varies but may include accounts receivable,
inventory, property, plant and equipment, and income-producing
commercial properties.
Standby letters of credit and financial guarantees written are
conditional commitments issued by the Bank to guarantee the
performance of a customer to a third party. Those guarantees
are primarily issued to support private borrowing
arrangements. Most guarantees extend for less than two years
and expire in decreasing amounts through 1997. The credit
risk involved in issuing letters of credit is essentially the
same as that involved in extending loans to customers. The
Bank holds various collateral supporting those commitments for
which collateral is deemed necessary.
NOTE 14. The estimated fair values of the Bank's financial instruments
FAIR VALUE at December 31, 1996 are as follows:
OF FINANCIAL
INSTRUMENTS
Carrying Fair
Amount Value
(Dollars in Thousands)
Cash and due from banks $ 10,988 $ 10,988
Investment securities,
held-to-maturity 24,967 24,820
Investment securities,
available-for-sale 70,089 70,089
Federal funds sold 561 561
Loans, net of allowances
for loan losses 196,254 195,793
Deposits:
Non-interest bearing
deposits 47,534 47,534
Savings deposits 96,196 96,196
Certificates of Deposit 119,789 120,018
Securities sold under repurchase
agreement and federal
funds purchased 17,135 17,135
Interest bearing U.S. Treasury
demand notes and other liabilities
for borrowed money 2,301 2,301
Commitments to extend credit 33,871 33,871
Irrevocable letters of credit 1,071 1,071
The above presentation of fair values is required by statement
on Financial Accounting Standards No. 107 "Disclosures about
Market Values of Financial Instruments". The fair values
shown do not necessarily represent the amounts which would be
received on sale or other disposition of the instruments.
The carrying amounts of cash and due from banks, federal funds
sold, demand and savings deposit and securities sold under
repurchase agreements represent items which do not present
significant market risks, are payable on demand or are of such
short duration that market value approximates carrying value.
Investment securities are valued at the quoted market price
for the individual securities held.
The fair value of loans is estimated by discounting future
cash flows using the current rates at which similar loans
would be made to borrowers.
Certificates of deposit are presented at estimated fair value
using rates currently offered for deposits of similar
remaining maturities.
NOTE 15. The Company is required to maintain minimum amounts of
REGULARTORY capital to total "risk weighted" assets, as defined by the banking
MATTERS regulators. At December 31, 1996, The Company is required to have
minimum Tier 1 and Total Capital ratios of 4.00% and 8.00%
respectively. The Company's actual ratios at that date were 15.63%
and 16.76%, respectively. The Company's leverage ratio at December
31, 1996 was 10.21%.
The approval of the Comptroller of the Currency is required if the total
of all dividends declared by a national banking any calendar year exceeds
the bank's net profits for that year combined with its retained net profits
for the preceding two calendar years. Under this formula, the banking
subsidiary can distribute as dividends to the Company in 1997, without the
approval of the Comptroller of the Currency, $4.00 million plus an additional
amount equal to the Bank's retained net profits for 1997 up to the date of any
dividend declaration.
The following are the summarized financial statements of the Company.
<TABLE>
OLD POINT FINANCIAL CORPORATION
PARENT ONLY
BALANCE SHEETS
<CAPTION>
As of December 31,
Dollars in thousands
1996 1995
<S> <C> <C>
ASSETS
Cash in bank $ 143 $ 122
Investment securities 1,676 1,670
Total Loans 50 52
Investment in subsidiary 30,456 28,396
Other real estate owned 0 0
Other assets 75 88
------ ------
TOTAL ASSETS $32,400 $30,328
LIABILITIES AND
STOCKHOLDERS EQUITY
Notes payable - bank $ --- $ ---
Other liabilities --- ---
------ ------
Total liabilities --- ---
------ ------
Stockholders' equity 32,400 30,328
------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $32,400 $30,328
</TABLE>
<TABLE>
OLD POINT FINANCIAL CORPORATION
PARENT ONLY
INCOME STATEMENTS
<CAPTION>
For the year ended December 31,
Dollars in thousands
1996 1995 1994
<S> <C> <C> <C>
INCOME
Cash dividends from subsidiary $1,000 $1,000 $ 950
Interest and Fees on Loans 4 4 5
Interest income from
investment securities 94 96 63
Other income --- --- ---
----- ----- -----
TOTAL INCOME 1,098 1,100 1,018
EXPENSES
Interest on borrowed money --- --- ---
Other expenses 251 274 244
----- ----- -----
TOTAL EXPENSES 251 274 244
----- ----- -----
Income before taxes and undistributed
net income of subsidiary 847 826 774
Income tax (52) (59) (60)
----- ----- -----
Net income before undistributed
net income of subsidiary 899 885 834
Undistributed net income of subsidiary 2,546 1,457 1,939
----- ----- -----
NET INCOME $3,445 $2,342 $2,773
===== ===== =====
</TABLE>
<TABLE>
OLD POINT FINANCIAL CORPORATION
PARENT ONLY
STATEMENTS OF CASH FLOWS
<CAPTION>
For the year ending December 31, 1996 1995 1994
Dollars in thousands
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $3,445 $2,342 $2,773
Adjustment to reconcile net income to
net cash provided by operating activities:
Equity in undistributed (income) losses of
subsidiaries (2,546) (1,457) (1,939)
Market write-down on other real estate
owned --- --- ---
Increase (decrease) in other assets 12 (17) 95
Increase (decrease) in other liabilities --- --- ---
----- ----- -----
Net cash provided by operating activities 911 868 929
CASH FLOWS FROM INVESTING ACTIVITIES
(Purchase)/Sales of Investments --- (192) (850)
Purchase of Premises and Equipment --- (21) ---
(Increase) decrease in other real estate owned --- --- 435
Loans to Customers 2 2 2
----- ----- -----
Net cash (used in) investing activities 2 (211) (413)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in borrowed money --- --- ---
Proceeds from issuance of common stock --- 88 200
Dividends paid (892) (777) (694)
----- ----- -----
Net cash provided by financing activities (892) (689) (494)
Net increase in cash and due from banks 21 (32) 22
Cash and due from banks at beginning of period 122 154 132
------ ----- -----
Cash and due from banks at end of period $ 143 $ 122 $ 154
</TABLE>
Accounting Rule Changes
None.
Regulatory Requirements and Restrictions
For the reserve maintenance period in effect at December 31, 1996, 1995 and
1994 the bank was required to maintain with the Federal Reserve Bank of
Richmond an average daily balance totalling approximately $5.7 million, $ 4.6
million, and $4.9 million respectively.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The eleven persons named below, all of whom currently serve as
directors of the Company will be nominated to serve as directors
until the 1998 Annual Meeting, or until their successors have been
duly elected and have qualified.
<TABLE>
<CAPTION>
Amount and Nature of
Principal Beneficial Ownership
Director Occupation For As of March 11, 1997
Name and (Age) Since <F1> Past Five Years (Percent of Class) <F2>
<S> <C> <C> <C>
Dr. Richard F. Clark (64) 1981 Pathologist 30,589 <F3>
Sentara Hampton General Hospital 2.4%
Gertrude S. Dixon (83) 1981 Real Estate Management 96,062 <F3>
and Ownership 7.5%
Russell Smith Evans Jr. (54) 1993 Assistant Treasurer and 725* <F3>
Corporate Fleet Manager
Ferguson Enterprises
G. Royden Goodson, III (41) 1994 President 1,950*
Warwick Plumbing & Heating Corp.
Dr. Arthur D. Greene (52) 1994 Surgeon - Partner 1,382*
Tidewater Orthopaedic Associates
Stephen D. Harris (55) 1988 Attorney-at-Law - Partner 4,200*
Geddy, Harris & Geddy
John Cabot Ishon (50) 1989 President 6,290* <F3>
Hampton Stationery
Eugene M. Jordan (73) 1964 Attorney-at-Law 13,890 <F3>
Cumming, Hatchett & Jordan, P.C. 1.1%
John B. Morgan, II (50) 1994 President 1,200* <F3>
Morgan-Marrow Insurance
Dr. H. Robert Schappert (58) 1996 Veterinarian - Owner 44,870 <F3>
Beechmont Veterinary Hospital 3.5%
Robert F. Shuford (59) 1965 Chairman of the Board, President & CEO 71,858 <F3> <F4>
Old Point Financial Corporation 5.6%
Chairman of the Board, President & CEO
Old Point National Bank
*Represents less than 1.0% of the total outstanding shares.
<FN>
<F1>
Refers to the year in which the individual first became
a director of the Bank. Dr. Richard F. Clark, Gertrude S. Dixon,
Eugene M. Jordan, and Robert F. Shuford became directors of the
Company upon consummation of the Bank's reorganization on October 1,
1984. Russell Smith Evans, Jr. was elected April 27, 1993, G. Royden
Goodson, III was elected on August 9, 1994, Dr. Arthur D. Greene was
elected on August 9, 1994, John B. Morgan, II was elected on October
11, 1994, Stephen D. Harris was elected October 11, 1988, John Cabot
Ishon was elected March 27, 1990, and, Dr. H. Robert Schappert was
elected February 13, 1996. All present directors of the Company are
directors of the Bank.
<F2>
For purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3 of the
Securities Exchange Act of 1934 under which, in general, a person is
deemed to be the beneficial owner of a security if he or she has or
shares the power to vote or direct the voting of the security or the
power to dispose of or direct the disposition of the security, or if
he or she has the right to acquire beneficial ownership of the
security within sixty days.
<F3>
Includes shares held (i) by their close relatives or held
jointly with their spouses, (ii) as custodian or trustee for the
benefit of their children or others, or (iii) as attorney-in-fact
subject to a general power of attorney - Dr. Clark, 54 shares; Mrs.
Dixon, 48,740 shares; Mr. Evans, 325 shares; Mr. Ishon, 1,640
shares; Mr. Jordan, 8,485 shares; Mr. Morgan, 1,000 shares; Dr.
Schappert, 40,685 shares; and Mr. Shuford, 37,795 shares.
<F4>
Includes shares that may be acquired within 60 days
pursuant to the exercise of stock options granted under the Old
Point Stock Option Plans - Mr. Shuford 5,500.
</FN>
</TABLE>
There are two family relationships among the directors and
executive officers. Mr. Jordan is the father-in-law of Mr. Ishon.
Mr. Shuford and Dr. Schappert are married to sisters. None of the
directors serves as a director of any other company with a class of
securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934.
There were no delinquent Securities and Exchange Form 4 filings during 1996.
In addition to the executive officer included in the preceding list
of directors, the persons listed below were executive officers of
the Company or its subsidiary as of December 31, 1996.
Executive Principal
Officer Occupation For
Name and (Age) Since (1) Past Five Years
John G. Sebrell (49) 1992 Executive Vice President
Old Point Financial Corporation
Louis G. Morris (42) 1988 Senior Vice President and Treasurer
Old Point Financial Corporation
Cary B. Epes (48) 1993 Senior Vice President
Old Point Financial Corporation
W. Rodney Rosser (56) 1989 Senior Vice President and Secretary
Old Point Financial Corporation
Margaret P. Causby (46) 1992 Senior Vice President
Old Point National Bank
Patricia A. Orendorff (50) 1994 Senior Vice President and Cashier
Old Point National Bank
Each of these executive officers owns less than 1% of the stock of the Company.
(1) Prior to employment with the Company, John G. Sebrell was Senior Vice
President and Senior Credit Policy Officer at NationsBank. Cary B. Epes was
Vice President and Commercial Account Manager at Crestar Bank. All other
executive officers served in virtually the same capacity with the Company and/or
the Bank prior to appointment as an executive officer.
Item 11. Executive Compensation
Cash Compensation
The following table presents all compensation paid or accrued
by the Company and the Bank to the Company's Chief Executive Officer
and each executive officer whose salary and bonus for 1996 exceeded
$100,000. Mr. Shuford is compensated by the Company and Mr. Sebrell
is compensated by the Bank.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
Other
Name Annual All Other
and Compen- Compen-
Principal Salary Bonus sation sation
Position Year ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Robert F. Shuford 1996 $147,900 <F1> $10,000 <F2> $ 3,500 $ 8,715 <F3>
Holding Company 1995 $147,900 <F1> $ 0 $ 2,891 $55,053 <F3>
Chairman, President 1994 $143,400 <F1> $ 6,000 <F2> $ 2,941 $42,610 <F3>
& CEO
John G. Sebrell 1996 $113,900 <F1> $ 0 $ 9,271 $ 7,172 <F4>
Bank 1995 $113,900 <F1> $ 0 $ 8,047 $ 6,369 <F4>
President & CEO 1994 $110,400 <F1> $12,244 <F2> $ 8,631 $ 5,682 <F4>
<FN>
<F1>
Salary includes directors' fees as follows: Mr. Shuford - 1996 of
$3,900, 1995 of $3,900, and 1994 of $5,400; Mr. Sebrell - 1996 of
$3,900 - 1995 of $3,900, and 1994 of $5,400.
<F2>
Beginning in 1994, bonus consideration for Mr. Shuford and Mr. Sebrell
was deferred until January of the following year so that year end
results could be evaluated by the Compensation Committee.
<F3>
Mr. Shuford has received other compensation as follows:
1996 1995 1994
Profit Sharing $4,395 $ 3,233 $ 3,001
401(k) Matching Plan 4,320 4,320 4,149
Split Dollar Life Insurance * 0 24,750 1,460
Sale of ISO ** 0 22,750 34,000
$8,715 $55,053 $42,610
* The Split Dollar policy was awarded to Mr. Shuford in 1995. When this
occurs the gain must be treated as compensation to the employee.
** When an incentive stock option (ISO) share is sold prior to a one
year vesting period, the gain on the sale is treated as compensation
to the employee.
<F4>
Mr. Sebrell has received other compensation as follows:
1996 1995 1994
Profit Sharing $ 3,357 $ 2,469 $ 2,285
401(k) Matching Plan 3,300 3,300 3,159
Split Dollar Life Insurance 515 600 238
----- ----- -----
$ 7,172 $ 6,369 $ 5,682
</FN>
</TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
Security ownership of certain beneficial owners and management is
detailed in Part III, Item 10. of this Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions
Some of the Company directors, executive officers, and members of
their immediate families, and corporations, partnerships and other
entities of which such persons are officers, directors, partners,
trustees, executors or beneficiaries, are customers of the Bank. As
of December 31, 1996, borrowing by all policy making officers and
directors amounted to $2.05 million. This amount represented 6.0%
of the total equity capital accounts of the Company as of December
31, 1996. All loans and commitments to lend included in such
transactions were made in the ordinary course of business, upon
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than
normal risk of collectibility or present other unfavorable
features. It is the policy of the Bank to provide loans to officers
who are not executive officers and to employees at more favorable
rates than those prevailing at the time for comparable transactions
with other persons. These loans do not involve more than the normal
risk of collectibility or present other unfavorable features. The
Bank expects to have in the future similar banking transactions
with directors, officers, principal stockholders and their
associates.
The law firm of Cumming, Hatchett and Jordan, P.C. serves as
legal counsel to the Bank. Mr. Eugene M. Jordan is a member of the
firm. During 1996, the firm received from the Bank a retainer and
fees totalling $63,180. Hampton Stationery, of which John Cabot
Ishon is the owner, provided furniture and supplies to the Bank for
which it paid $72,244 during 1996. In addition, Morgan-Marrow
Company, of which John B. Morgan, II is President, provided
insurance to the Bank during 1996. Geddy, Harris & Geddy, of which
Stephen D. Harris is a partner, also provided legal services to the
Bank during 1996.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
A.1 Financial Statements:
The following audited financial statements are included in Part II,
Item 8, of this Annual Report on Form 10-K.
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Income
Years Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Changes in Stockholders' Equity
Years Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994
Notes to Financial Statements
Auditor's Report
A.2 Financial Statement Schedules:
Schedule Location
Average Balance Sheets, Net Interest Income and Rates Part I, Item 1
Analysis of Change in Net Interest Income Part I, Item 1
Interest Sensitivity Analysis Part I, Item 1
Investment Securities Part I, Item 1
Investment Security Maturities & Yields Part I, Item 1
Loans Part I, Item 1
Maturity Schedule of Selected Loans Part I, Item 1
Nonaccrual, Past Due and Restructured Loans Part I, Item 1
Analysis of the Allowance for Loan Losses Part I, Item 1
Allocation of the Allowance for Loan Losses Part I, Item 1
Deposits Part I, Item 1
Certificates of Deposit of $100,000 and more Part I, Item 1
Return on Average Equity Part I, Item 1
Short Term Borrowings Part I, Item 1
Lease Commitments Part I, Item 1
Other Real Estate Owned Part I, Item 1
Selected Financial Data Part II, Item 6
Capital Ratios Part II, Item 7
Dividends Paid and Market Price of Common Stock Part II, Item 7
Proceeds from sales and maturities of securities Part II, Item 8
Premises and Equipment Part II, Item 8
Stock Option Plan Part II, Item 8
Components of Income Tax Expense Part II, Item 8
Reconciliation of Expected and
Reported Income Tax Expense Part II, Item 8
Pension Plan Part II, Item 8
Commitments and Contingencies Part II, Item 8
Fair Value of Financial Instruments Part II, Item 8
Directors and Executive Officer Part III, Item 10
Executive Compensation Part III, Item 11
A.3 Exhibits:
3 Articles of Incorporation and Bylaws
4 Not Applicable
9 Not Applicable
10 Not Applicable
11 Not Applicable
12 Not Applicable
13 Not Applicable
18 Not Applicable
19 Not Applicable
22 Subsidiaries of the Registrant
23 Not Applicable
24 Consent of Independent Certified Public Accountants
25 Powers of Attorney
27 Financial Data Schedule
28 Not Applicable
29 Not Applicable
B. Reports on Form 8-K:
No Reports on Form 8-K were filed during the fourth quarter of 1996.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on the 28th day of
March, 1997.
OLD POINT FINANCIAL CORPORATION
/s/Robert F. Shuford
Robert F. Shuford, President
Pursuant to the requirements of the Securities and Exchange Act
of 1934, this report has been signed by the following persons on behalf
of the registrant and in their capacities on the 28th day of March, 1997.
Signature Title
/s/Robert F. Shuford President and Director
Robert F. Shuford Principal Executive Officer
/s/Louis G. Morris Senior Vice President and Treasurer
Louis G. Morris Principal Financial &
Accounting Officer
/s/Richard F. Clark * Director
/s/Gertrude S. Dixon * Director
/s/Russell S. Evans, Jr. * Director
/s/G. Royden Goodson, III Director
/s/Dr. Arthur D. Greene Director
/s/Steven D. Harris * Director
/s/John Cabot Ishon * Director
/s/Eugene M. Jordan * Director
/s/John B. Morgan * Director
/s/Dr. H. Robert Schappert * Director
EXHIBIT 22. SUBSIDIARIES OF THE REGISTRANT
The Old Point National Bank of Phoebus, a wholly-owned subsidiary
of the Corporation, is a national banking association subject to
regulation by the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, and the Federal Reserve System.
EXHIBIT 24. CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
EGGLESTON SMITH P.C.
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Old Point Financial Corporation
We consent to the incorporation by reference in this Annual
Reports on Form 10-K of our report dated January 14, 1997, relating
to the consolidated financial statements of Old Point Financial
Corporation as of December 31, 1996, 1994, and 1993, and for each
of the three-year period ended December 31, 1996.
EGGLESTON SMITH P.C.
/s/ EGGLESTON SMITH P.C.
Newport News, Virginia
March 1997
EXHIBIT 25. POWERS OF ATTORNEY
Old Point Financial Corporation
Power of Attorney
I, Russell S. Evans, Jr., do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/Russell S. Evans, Jr. (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Dr. Richard F. Clark, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ Dr. Richard F. Clark (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Gertrude S. Dixon, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ Gertrude S. Dixon (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Stephen D. Harris, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ Stephen D. Harris (SEAL)
Old Point Financial Corporation
Power of Attorney
I, John Cabot Ishon, do hereby constitute and appoint Robert
F. Shuford and Eugene M. Jordan, my true and lawful attorney-in-
fact, any of whom acting singly is hereby authorized for me and
in my name and on my behalf as a director and/or officer of Old
Point Financial Corporation (the "Corporation"), to act and to
execute any and all instruments as such attorneys or attorney
deem necessary or advisable to enable the Corporation to comply
with the Securities Exchange Act of 1934, as amended ("Act"), and
any rules, regulations, policies or requirements of the
Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ John Cabot Ishon (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Eugene M. Jordan, do hereby constitute and appoint Robert
F. Shuford and Eugene M. Jordan, my true and lawful attorney-in-
fact, any of whom acting singly is hereby authorized for me and
in my name and on my behalf as a director and/or officer of Old
Point Financial Corporation (the "Corporation"), to act and to
execute any and all instruments as such attorneys or attorney
deem necessary or advisable to enable the Corporation to comply
with the Securities Exchange Act of 1934, as amended ("Act"), and
any rules, regulations, policies or requirements of the
Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ Eugene M. Jordan (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Robert F. Shuford, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ Robert F. Shuford (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Dr. Arthur D. Greene, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ Dr. Arthur D. Greene (SEAL)
Old Point Financial Corporation
Power of Attorney
I, John B. Morgan, II, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ John B. Morgan, II (SEAL)
Old Point Financial Corporation
Power of Attorney
I, G. Royden Goodson, III, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ G. Royden Goodson, III (SEAL)
Old Point Financial Corporation
Power of Attorney
I, Dr. H. Robert Schappert, do hereby constitute and appoint
Robert F. Shuford and Eugene M. Jordan, my true and lawful
attorney-in-fact, any of whom acting singly is hereby authorized
for me and in my name and on my behalf as a director and/or
officer of Old Point Financial Corporation (the "Corporation"),
to act and to execute any and all instruments as such attorneys
or attorney deem necessary or advisable to enable the Corporation
to comply with the Securities Exchange Act of 1934, as amended
("Act"), and any rules, regulations, policies or requirements of
the Securities Exchange Commission (the "Commission") in respect
thereof in connection with the preparation and filing by the
Corporation with the Commission of its Annual Report on Form 10-K
for the year ended December 31, 1996 and any and all amendments
to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem
necessary or appropriate.
I do hereby ratify and confirm all my said attorneys or
attorney shall do or cause to be done by virtue hereof.
WITNESS my execution hereof this 11th day of January, 1997.
/s/ Dr. H. Robert Schappert (SEAL)
EXHIBIT 3. ARTICLES OF INCORPORATION AND BYLAWS
AMENDED: 04.25.95
(ART. III-A - ENTIRETY)
ARTICLES OF INCORPORATION
OLD POINT FINANCIAL CORPORATION
I. Name
The name of the Corporation is Old Point Financial Corporation.
II. Purpose
The purpose for which the Corporation is organized
is to act as a bank holding company and to transact any
and all lawful business, not required to be specifically
stated in the Articles of Incorporation, for which
corporations may be incorporated under the Virginia
Stock Corporation Act.
III. Capital Stock
A. General Authorization. The Corporation shall
have authority to issue 6,000,000 shares of
Common Stock, par value $5.00 per share.
B. No Preemptive Rights. Shareholders shall have no
preemptive rights to acquire any unissued shares
of the Corporation.
C. Cumulative Voting. At all elections of directors
of the Corporation, each holder of Common Stock
shall be entitled to cast as many votes as shall
equal the number of votes which he would be
entitled to cast for the election of directors
with respect to his shares of Common Stock
multiplied by the number of directors to be
elected, and he may cast all such votes for a
single director or may distribute them among as
many candidates as he may see fit.
IV. Certain Business Combinations
A. Higher Vote for Certain Business Combinations.
The affirmative vote of the holders of not less
than 75% of the outstanding shares of Common
Stock of the Corporation shall be required for
the approval or authorization of a Business
Combination (as hereinafter defined). The
foregoing shall not apply to a Business
Combination, and such Business Combination shall
require only such approval as is required by law,
if it shall have been approved by the affirmative
vote of at least 80% of the entire Board of
Directors.
B. Certain Definitions. For purposes of this
Article IV:
1. A "Business Combination" shall mean (i) any
merger or consolidation of the Corporation of
a subsidiary with or into, or the exchange of
shares of Common Stock of the Corporation for
cash or property of, an Acquiring Person, (ii)
any sale, lease, exchange or other disposition
of all or substantially all of the assets of
the Corporation or a subsidiary to or with an
Acquiring Person, (iii) any reclassification
of securities (including any reverse stock
split), recapitalization or other transaction
that would have the effect of increasing the
voting power of an Acquiring Person, or (iv)
any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or
on behalf of an Acquiring Person.
2. An "Acquiring Person" shall mean any
individual, firm, corporation, trust or any
other entity which: (i) beneficially owns,
together with its affiliates and associated
persons, 5% or more of the outstanding shares
of Common Stock of the Corporation; or (ii)
though owning less than 5% of such shares,
proposes or undertakes to obtain control or
exercise a controlling influence over the
Corporation as determined by the Board of
Directors.
C. Amendment or Repeal. The provisions of this
Article shall not be amended or repealed, nor
shall any provision of these Articles of
Incorporation be adopted that is inconsistent
with this Article, unless such action shall have
been approved by the affirmative vote of either:
(i) the holders of at least 75% of the
outstanding shares of Common Stock; or (ii) 80%
of the entire Board of Directors and the holders
of the requisite number of shares required under
Virginia law for the amendment of articles of
incorporation.
D. Certain Determinations by the Board of Directors.
When evaluating a proposed Business Combination,
the Board of Directors of the Corporation shall,
in connection with the exercise of its judgment
in determining what is in the best interests of
the Corporation and its stockholders, give due
consideration not only to price or other
consideration being offered, but also to all
other relevant factors, including, without
limitation, (i) the financial and managerial
resources and future prospects of the Acquiring
Person, (ii) the possible effects on the
business, employees, customers and creditors of
the Corporation and its subsidiaries. In
evaluating any proposed Business Combination, the
Board of Directors shall be deemed to be
performing their duly authorized duties and
acting in good faith and in the best interests of
the Corporation and its stockholders.
Any determination made in good faith by the Board
of Directors, on the basis of information at the
time available to it, whether (i) an individual,
firm, corporation or other entity is an Acquiring
Person, (ii) the number of shares of Common Stock
beneficially owned, directly or indirectly, by
such person is more than 5% of the outstanding
shares, or (iii) any individual, firm,
corporation or other entity is an "affiliate" or
"associated person" of an Acquiring Person, shall
be conclusive and binding for all purposes of
this Article IV.
V. Directors
The number of directors shall be fixed by the
Bylaws. Absent any Bylaw fixing the number of directors,
that number shall be 25.
VI. Indemnification and Limit on Liability
A. To the full extent permitted by the Virginia
Stock Corporation Act, as it exists on the date
hereof or may hereafter be amended, each director
and officer shall be indemnified by the
Corporation against liabilities, fines, penalties
and claims imposed upon or asserted against him
(including amounts paid in settlement) by reason
of having been such director or officer, whether
or not then continuing so to be, and against all
expenses (including counsel fees) reasonably
incurred by him in connection therewith, except
in relation to matters as to which he shall have
been finally adjudged liable by reason of his
willful misconduct or a knowing violation of
criminal law in the performance of his duty as
such director or officer. The right of
indemnification hereby provided shall not be
exclusive of any other rights to which any
director may be entitled.
B. To the full extent that the Virginia Stock
Corporation Act, as it exists on the date hereof
or may hereafter be amended, permits the
limitation or elimination of the liability of
directors or officers, a director or officer of
the Corporation shall not be liable to the
Corporation or its stockholders for monetary
damages.
C. The Board of Directors is hereby empowered, by a
majority vote of a quorum of disinterested
directors, to indemnify or contract in advance to
indemnify any person not specified in subsection
(A) of this Article against liabilities, fines,
penalties and claims imposed upon or asserted
against him (including amounts paid in
settlement) by reason of having been an employee,
agent or consultant of the Corporation, whether
or not then continuing so to be, and against all
expenses (including counsel fees) reasonably
incurred by him in connection therewith, to the
same extent as if such person were specified as
one to whom indemnification is granted in
subsection (a) of this Article.
D. Every reference in this Article to director,
officer, employee, agent or consultant shall
include (i) every director, officer, employee,
agent or consultant of the Corporation or any
consultant of the Corporation or any corporation
the majority of the voting stock of which is
owned directly or indirectly by the Corporation,
(ii) every former director, officer, employee,
agent or consultant of the Corporation, (iii)
every person who may have served at the request
of or on behalf of the Corporation as a director,
officer, employee, agent, consultant or trustee
of another corporation, partnership, joint
venture, trust or other entity, and (iv) in all
of such cases, his executors and administrators.
E. The provisions of this Article VI shall be
applicable from and after its adoption even
though some or all of the underlying conduct or
events relating to such a proceeding may have
occurred before such adoption. No amendment,
modification or repeal of this Article VI shall
diminish the rights provided hereunder to any
person arising from conduct or events occurring
before the adoption of such amendment,
modification or repeal.
F. In the event there has been a change in the
composition of a majority of the Board of
Directors after the date of the alleged act or
omission with respect to which indemnification is
claimed, any determination as to indemnification
and advancement of expenses with respect to any
claim for indemnification made pursuant to
subsection (A) of this Article VI shall be made
by special legal counsel agreed upon by the Board
of Directors and the proposed indemnitee are
unable to agree upon such special legal counsel,
the Board of Directors and the proposed
indemnitee each shall select a nominee, and the
nominee shall select such special legal counsel.
08.11.92
BYLAWS OF
OLD POINT FINANCIAL CORPORATION
ARTICLE I.
STOCKHOLDERS
AMENDED: 08/11/92
1.1 Annual Meeting. The annual meeting of the
stockholders of the Corporation for the election of
directors and for the transaction of such other business
authorized or required to be transacted by the
stockholders shall be held in Hampton, Virginia, at the
main office of the Old Point National Bank, or at any
other convenient place authorized by the Board of
Directors, on the fourth Tuesday in April of each year,
but if no election of directors is held on that day, it
may be held on a subsequent date designated by the Board
of Directors or stockholders in accordance with law.
1.2 Special Meetings. Special meetings of the
stockholders for any purpose or purposes shall be held
whenever called by the Chairman of the Board, or by the
President if there is no Chairman of the Board, or by
the Board of Directors or by the holders of not less
than one-tenth of all the shares entitled to vote at the
meeting.
1.3 Notice of Meetings. Notice of the
annual or any special meeting shall be mailed at least
ten days, and not more than fifty days, prior to the
date of the meeting to each registered stockholder at
his address as the same appears on the books of the
Corporation. If the meeting shall be called to act on an
amendment to the Articles of Incorporation or on a plan
of merger, consolidation or exchange, or on a reduction
of stated capital, or upon a proposed sale of all or
substantially all of the assets of the Corporation,
notice shall be given not less than twenty-five nor more
than fifty days before the date of the meeting, and such
notice shall be accompanied by a copy of the proposed
amendment or plan of merger, consolidation, or exchange,
or the proposed plan for reduction of capital.
1.4 Quorum. At any meeting of the stockholders
the holders of a majority of the shares issued and
outstanding, having voting power (which shall not
include any treasury stock held by the Corporation),
being present in person or represented by proxy, shall
be a quorum for all purposes, including the election of
directors.
1.5 Voting. At all meetings of the
stockholders, stockholders shall be entitled to vote,
either in person or by proxy duly appointed by an
instrument in writing, subscribed by such stockholder or
by his authorized attorney; at all meetings such
stockholder shall have one vote for each share of stock
entitled under the provisions of the charter to voting
rights which may be registered in his name upon the
books of the Corporation on the day preceding that on
which the transfer books may be closed by order of the
Board of Directors. Treasury stock held by the
Corporation shall not be entitled to vote.
ARTICLE II
BOARD OF DIRECTORS
2.1 Number. The business and affairs of the
Corporation shall be managed and controlled by a Board
of Directors which shall consist of not less than five
nor more than twenty-five shareholders, the exact number
within such minimum and maximum limits to be fixed and
determined from time to time by the Board of Directors
or by resolution of the shareholders at any meeting
thereof. A director may be removed at any time with or
without cause by a vote of the stockholders.
2.2 Term of Office. Each director shall serve
for the term of one year and until his successor shall
have been duly chosen and qualified.
2.3 Vacancies. Any vacancy occurring in the
Board of Directors, including a vacancy resulting from
an increase of not more than two in number of directors,
may be filled by the affirmative vote of a majority of
the remaining directors though less than a quorum of the
Board of Directors.
2.4 Stockholder Nominations of Directors.
Subject to the rights of holders of any class or series
of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the
election of Directors shall be made by the Board of
Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the
election of Directors generally. However, any
stockholder entitled to vote in the election of
Directors generally may nominate one or more persons for
election as Directors at a meeting only if written
notice of such stockholder's intent to make such
nomination or nominations has been given, either by
personal delivery or by United States mail, postage
prepaid, to the President of the Corporation not less
than 14 days nor more than 50 days in advance of such
meeting, provided, however, that if less than 21 days'
notice of the meeting is given to stockholders, such
nomination shall be mailed or delivered to the President
of the Holding Company not later than the close of
business on the seventh day following the day on which
the notice of the meeting was mailed. Each such notice
shall set forth (a) the name and address of the
stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) a
representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote at
such meeting and intends to appear in person or by proxy
at the meeting to nominate the person or persons
specified in the notice; (c) a description of all
arrangements or understandings between the stockholder
and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder; (d)
the principal occupation of each nominee; (e) the total
number of shares that to the knowledge of the notifying
stockholder will be voted for each of the nominees; and
(f) the consent of each nominee to serve as a Director
of the Corporation if so elected. The Chairman of the
meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing
procedure.
ARTICLE III
DIRECTORS' MEETINGS
3.1 Regular Meetings. Regular meetings of the
Board of Directors shall be held annually, immediately
following each annual meeting of stockholders, for the
purpose of electing officers and carrying on such other
business as may properly come before such meeting, and,
if necessary, immediately following each special meeting
of stockholders to consider and act upon any matter
which may properly come before such meeting. Any such
meeting shall be held at the place where the
stockholders' meeting was held. The Board of Directors
may also adopt a schedule of additional meetings which
shall be considered regular meetings, and such meetings
shall be held at the time and place, within or without
the Commonwealth of Virginia, as the Chairman or, in his
absence, the President shall designate.
3.2 Special Meetings. Special meetings of the
Board of Directors shall be held on the call of the
Chairman, the President, any three members of the Board
of Directors or a majority of the Board of Directors at
the principal office of the Corporation or at such other
place as shall be designated.
3.3 Telephone Meetings. The Board of Directors
may participate in a meeting by means of conference
telephone or similar communications equipment whereby
all persons participating in the meeting can hear each
other, and participation by such means shall constitute
presence in person at such meeting. When such a meeting
is conducted by means of conference telephone or similar
communications equipment, a written record shall be made
of the action taken at such meeting.
3.4 Notice of Meetings. No notice need be given
of regular meetings of the Board of Directors.
Notice of special meetings of the Board of
Directors shall be mailed to each director at least
three (3) days, or telegraphed at least two (2) days
prior to the date of the meeting and must set forth the
purpose for which the meeting is called.
3.5 Quorum; Required Vote. A majority of the
directors shall constitute a quorum for the transaction
of business by the Board of Directors. The act of the
majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of
Directors unless the act of a greater number is required
by law or these Bylaws.
3.6 Waiver of Notice. Notwithstanding any other
provisions of law, the Articles of Incorporation or
these Bylaws, whenever notice of any meeting for any
purpose is required to be given to any director a waiver
thereof in writing, signed by the person entitled to
said notice, whether before or after the time stated
therein, shall be the equivalent to the giving of such
notice.
A director who attends a meeting shall be deemed
to have had timely and proper notice of the meeting
unless he attends for the express purpose of objecting
to the transaction of any business because the meeting
is not lawfully called or convened.
3.7 Actions by Directors Without Meeting. Any
action required to be taken at a meeting of the
directors, or any action which may be taken at a meeting
of the directors, may be taken without a meeting if a
consent in writing, setting forth the action, shall be
signed either before or after such action by all of the
directors. Such consent shall have the same force and
effect as a unanimous vote.
ARTICLE IV
COMMITTEES OF DIRECTORS
4.1 Executive Committee. The Board of
Directors, by resolution adopted by a majority of the
number of directors fixed by these Bylaws, may designate
four or more directors to constitute an Executive
Committee. A majority of the members of the Executive
Committee shall constitute a quorum. The Executive
Committee shall meet on the call of any of its members.
Notice of any such meeting shall be given by mail,
telephone, telegraph or other means by the close of
business on the day before such meeting is to be held.
The Executive Committee shall have and may exercise all
of the authority of the Board of Directors except to
approve (i) an amendment of the Articles of
Incorporation; (ii) a plan of merger or consolidation;
(iii) a plan of exchange under which the Corporation
would be acquired; (iv) the sale, lease or exchange, or
the mortgage or pledge for a consideration other than
money, of all, or substantially all, the property and
assets of the Corporation otherwise than in the usual
and regular course of its business; (v) the voluntary
dissolution of the Corporation; (vi) revocation of
voluntary dissolution proceedings; (vii) any employee
benefit plan involving the issuance of common stock;
(viii) the compensation paid to a member of the
Executive Committee; or (ix) an amendment of these
Bylaws.
4.2 Audit Committee. The Board of Directors may
appoint an Audit Committee consisting of not less than
three directors, none of whom shall be officers, which
Committee shall regularly review the adequacy of
internal financial controls, review with the
Corporation's independent public accountants the annual
audit and other financial statements, and recommend the
selection of the Corporation's independent public
accountants.
The Audit Committee of the Board of Directors of
The Old Point National Bank may also serve as the Audit
Committee for the Board of Directors of the Corporation.
4.3 Other Committees. The Board of Directors
may designate such other committees with limited
authority as it may deem advisable.
4.4 Telephone Meetings. Committees may
participate in meetings by means of conference telephone
or similar communications equipment whereby all persons
participating in the meeting can hear each other, and
participation by such means shall constitute presence in
person at such meeting. When such meeting is conducted
by means of a conference telephone or similar
communications equipment, a written record shall be made
of the action taken at such meeting.
4.5 Actions by Committees Without Meetings. Any
action which may be taken at a committee meeting, may be
taken without a meeting if a consent in writing, setting
forth the action, shall be signed either before or after
such action by all of the members of the committee. Such
consent shall have the same force and effect as an
unanimous vote.
4.6 Committee Rules. Unless the Board of
Directors otherwise provides, each committee designated
by the Board of Directors may adopt, amend and repeal
rules for the conduct of its business. In the absence of
direction by the Board of Directors or a provision in
the rules of such committee to the contrary, a majority
of the entire authorized number of members of such
committee shall constitute a quorum for the transaction
of business, the vote of a majority of the members
present at a meeting at the time of such vote if a
quorum is then present shall be the act of such
committee. Except to the extent that these Bylaws
contain provisions to the contrary, in other respects
each committee shall conduct its business in the same
manner as the Board of Directors is required to conduct
its business.
ARTICLE V
OFFICERS AND EMPLOYEES
5.1 Chairman of the Board. The Board of
Directors may appoint one of its members to be Chairman
of the Board to serve at the pleasure of the Board. He
shall preside at all meetings of the Board of Directors.
The Chairman of the Board shall supervise the carrying
out of the policies adopted or approved by the Board. He
shall have general executive powers, as well as the
specific powers conferred by these Bylaws. He shall also
have and may exercise such further powers and duties as
from time to time may be conferred upon or assigned to
him by the Board of Directors.
5.2 President. The Board of Directors shall
appoint one of its members to be President of the
Corporation. In the absence of the Chairman, he shall
preside at any meeting of the Board. The President shall
have general executive powers and shall have and may
exercise any and all other powers and duties pertaining
by law, regulation, or practice, to the Office of
President or imposed by these Bylaws. He shall also have
and may exercise such further powers and duties as from
time to time may be conferred upon or assigned to him by
the Board of Directors.
5.3 Vice President. The Board of Directors may
appoint one or more Vice Presidents. Each Vice President
shall have such powers and duties as may be assigned to
him by the Board of Directors. One Vice President shall
be designated by the Board of Directors, in the absence
of the President, to perform all the duties of the
President.
5.4 Secretary. The Board of Directors shall
appoint a Secretary or other designated officer who
shall be Secretary of the Board and of the Corporation,
and shall keep accurate minutes of all meetings. He
shall attend to the giving of all notices required by
these Bylaws to be given. He shall be custodian of the
corporate seal, records, documents and papers of the
Corporation. He shall provide for the keeping of proper
records of all transactions of the Corporation. He shall
have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the
Office of Secretary or imposed by these Bylaws. He shall
also perform such other duties as may be assigned to
him, from time to time, by the Board of Directors.
5.5 Other Officers. The Board of Directors may
appoint such other officers as from time to time may
appear to the Board of Directors to be required or
desirable to transact the business of the Corporation.
Such officers shall respectively exercise such powers
and perform such duties as to pertain to their several
offices, or as may be conferred upon, or assigned to,
them by the Board of Directors, the Chairman of the
Board, or the President.
5.6 Clerks and Agents. The Board of Directors
may appoint, from time to time, such clerks, agents and
employees as it may deem advisable for the prompt and
orderly transaction of the business of the Corporation,
define their duties, fix the salaries to be paid to them
and dismiss them. Subject to the authority of the Board
of Directors, the President, or any other officer of the
Corporation authorized by him, may appoint and dismiss
all or any clerks, agents and employees and prescribe
their duties and the conditions of their employment, and
from time to time fix their compensation.
5.7 Tenure of Office. The President shall hold
his office for the current year for which the Board of
which he shall be a member was elected, unless he shall
resign, become disqualified, or be removed; and any
vacancy occurring in the Office of President shall be
filled promptly by the Board of Directors.
ARTICLE VI
CERTIFICATES OF STOCK
6.1 Form and Issuance. Certificates of stock
shall be in such form as may be approved by the Board of
Directors and shall be signed by the President or any
Vice President and the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer,
and may (but need not) be sealed with the seal of
Corporation or a facsimile thereof. Any such signature
may be a facsimile.
6.2 Lost, Stolen or Destroyed Stock
Certificates; Issuances of New Certificates. The
Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it,
alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to
give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account
of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
6.3 Transfer. The Board of Directors shall have
power and authority to make all such rules and
regulations as they may deem expedient concerning the
issue, registration and transfer of certificates of
stock and may appoint transfer agents or clerks and
registrars thereof. Unless otherwise provided, transfers
of shares of stock by the Corporation shall be made upon
its books by surrender of the certificates for the
shares transferred accompanied by an assignment in
writing by the holder and may be accomplished either by
the holder in person or by a duly authorized attorney-
in-fact.
6.4 Recognition of Other Stock Certificates.
The Corporation will recognize as its own common stock
certificates those stock certificates representing
shares of common stock of The Old Point National Bank of
Phoebus, which certificates have not been heretofore
exchanged for certificates representing shares of common
stock of the Corporation.
ARTICLE VII
AMENDMENTS
7.1 New Bylaws and Alterations. These Bylaws
may be amended or repealed and new Bylaws may be made at
any regular or special meeting of the Board of Directors
by the vote of a majority thereof. However, Bylaws made
by the Board of Directors may be repealed or changed and
new Bylaws may be made by the stockholders and the
stockholders may prescribe that any Bylaw made by them
shall not be altered, amended or repealed by the
directors.
ARTICLE VIII
CORPORATE SEAL
8.1 The President, any Vice President, the
Secretary or any Assistant Secretary, or other officer
thereunto designated by the Board of Directors, shall
have the authority to affix the corporate seal to any
document requiring such seal, and to attest the same.
Such seal shall be substantially in the following form:
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Fiscal Year. The fiscal year of the
Corporation shall be the calendar year.
9.2 Execution of Instruments. All agreements,
indentures, mortgages, deeds, conveyances, transfers,
certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions,
schedules, accounts, affidavits, bonds, undertakings,
proxies and other instruments or documents may be
signed, executed, acknowledged, verified, delivered or
accepted in behalf of the Corporation by the Chairman of
the Board, or the President, or any Vice President, or
the Secretary. Any such instruments may also be
executed, acknowledged, verified, delivered or accepted
in behalf of the Corporation in such other manner and by
such other officers as the Board of Directors may from
time to time direct. The provisions of this Section 9.2
are supplementary to any other provision of these
Bylaws.
9.3 Records. The Articles of Incorporation, the
Bylaws and the proceedings of all meetings of the
shareholders, the Board of Directors, standing
committees of the Board, shall be recorded in
appropriate minute books provided for the purpose. The
minutes of each meeting shall be signed by the Secretary
or other officer appointed to act as Secretary of the
meeting.
ARTICLE X
EMERGENCY BYLAWS
10.1 Effect.
The provision of this Article X shall be effective
during any emergency resulting from an attack on the
United States or any nuclear or atomic disaster
(hereinafter called an "Emergency").
10.2 Board of Directors.
During an emergency, the director or directors in
attendance at the meeting shall constitute a quorum. A
meeting of the Board of Directors may be called by any
director or officer of the Corporation. Notice of any
meeting during an emergency may be given only to such of
the directors as it may be feasible to reach at the time
and by such means as may be feasible at the time,
including publication or radio. If no director is
present, the three most senior officers of the
Corporation, as hereinafter defined, present shall be
deemed directors for the purpose of such meeting and
shall have all of the authority of the Board of
Directors. As used in this Article, officers shall take
seniority as follows:
President
Executive Vice President (if the Board of
Directors has elected
such an officer)
Senior Vice President (if the Board of
Directors has elected
such an officer)
First Vice President (if the Board of
Directors has elected
such an officer)
Vice President (if the Board of
Directors has elected
such an officer)
Treasurer
Assistant Vice President (if the Board of
Directors has elected
such an officer)
Assistant Treasurer (if the Board of
Directors has elected
such an officer)
Secretary
Within each officer class, officers shall take
seniority on the basis of length of service in such
office or, in the event of equality, length of service
as an officer of the Corporation.
10.3 Executive Authority.
The Board of Directors shall provide lines of
succession of executive authority which, until altered
by the Board of Directors either before or during an
emergency, shall be effective during an emergency.
10.4 Operations.
It shall be the duty of the senior officer present
at each office of the Corporation during an emergency
when communication with the President is impractical,
and he is hereby authorized, to take such action as he
shall think necessary or desirable to protect the assets
of the Corporation and provide service to its customers.
10.5 Indemnity.
No officer, director or employee acting in
accordance with this Article shall be liable except for
willful misconduct.
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