U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended Commission File No. 33-9686
September 30, 1997
CENTRAL VIRGINIA BANKSHARES, INC.
Virginia 54-1467806
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2036 New Dorset Road
P. O. Box 39
Powhatan, Virginia 23139
(Address of Principal Executive Office)
(804) 794-6266
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 ___ (not subject to filing
requirements for the past 90 days).
As of November 14, 1997, 953,638 shares were outstanding.
<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
QUARTERLY REPORT ON FORM 10-QSB
September 30, 1997
INDEX
Part I. Financial Information Page No.
- ------------------------------ --------
Item 1 Financial Statements
Consolidated Balance Sheets - September 30, 1997
and 1996.............................................................3
Consolidated Statements of Income - Three
Months Ended September 30, 1997 and 1996
and Nine Months Ended September 30, 1997 and 1996....................4
Consolidated Statements of Cash Flows - Nine
Months Ended September 30, 1997 and 1996.............................5
Notes to Consolidated Financial Statements -
September 30, 1997 and 1996 (Unaudited)..............................6
Item 2 Management's Discussion and
Analysis or Plan of Operation.....................................7-12
Part II. Other Information
Item 6 Exhibits and Reports on Form 8-K...........................12
Signatures..................................................................13
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Sept. 30, 1997 Sept. 30,1996
-------------- -------------
ASSETS
------
<S> <C> <C>
Cash and due from banks $4,447,831 $5,197,033
Federal funds sold 3,412,000 15,391,000
--------- ----------
Total cash and cash equivalents $7,859,831 $20,588,033
Securities available for sale 22,622,723 8,023,651
Securities held to maturity (approximate market value 1997
$15,382,497; 1996 $9,521,065) 15,192,950 9,431,393
Mortgage loans held for sale 204,998 385,000
Loans, net 87,429,263 81,983,838
Bank premises and equipment, net 3,591,296 3,486,080
Accrued interest receivable 1,011,039 597,649
Other assets 1,649,798 1,252,616
--------- ---------
Total assets $139,561,898 $125,748,260
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand deposits $17,375,584 $15,697,950
Interest bearing demand deposits and NOW accounts 22,968,334 20,866,667
Savings deposits 13,852,111 12,431,989
Time deposits, $100,000 and over 10,070,334 10,366,209
Other time deposits 53,411,611 50,452,121
---------- ----------
$117,677,974 $109,814,936
FHLB advances 5,000,000 -
Securities sold under repurchase agreements 743,335 1,387,143
Note payable 45,000 54,000
Accrued interest payable 298,559 221,754
Other liabilities 352,002 229,179
------- -------
Total liabilities $124,116,870 $111,707,012
------------ ------------
STOCKHOLDERS' EQUITY
Capital stock, common, par value $2.50; authorized 3,000,000
shares; issued 953,638 shares 1997; 947,799 shares 1996 $2,384,095 $2,369,475
Surplus 4,136,728 4,066,628
Retained earnings 8,773,088 7,664,290
Unrealized gains on securities available for sale, net of tax 151,117 (59,145)
------- --------
Total stockholders' equity $15,445,028 $14,041,248
----------- -----------
Total liabilities and stockholders' equity $139,561,898 $125,748,260
============ ============
</TABLE>
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------------- ----------------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $2,147,269 $2,077,161 $6,488,080 $6,160,588
Interest on securities:
U.S. Government agencies and
corporations 358,101 136,681 782,563 333,653
States and political subdivisions 188,578 134,144 492,282 415,822
Other 16,995 0 43,542 5,169
Interest on federal funds sold 83,554 228,296 267,399 640,026
------ ------- ------- -------
Total interest income $2,794,497 $2,576,282 $8,073,866 $7,555,258
---------- ---------- ---------- ----------
Interest expense
Interest on deposits $1,178,957 $1,129,034 $3,409,682 $3,433,928
Interest on FHLB advances 69,530 - 69,530 0
Interest on securities sold under
repurchase agreements 12,745 10,404 44,482 25,025
Interest on note payable 900 1,080 2,880 3,420
--- ----- ----- -----
Total interest expense $1,262,132 $1,140,518 $3,526,574 $3,462,373
---------- ---------- ---------- ----------
Net interest income $1,532,365 $1,435,764 $4,547,292 $4,092,885
Provision for loan losses 43,750 41,250 126,250 123,750
------ ------ ------- -------
Net interest income after provision
for loan losses $1,488,615 $1,394,514 $4,421,042 $3,969,135
Other income
Securities gains $0 $ 0 $0 $25,000
Service charges 146,872 145,083 435,521 439,478
Other 44,695 58,228 130,569 192,350
------ ------ ------- -------
Total other income $191,567 $203,311 $566,090 $656,828
Other expenses
Salaries and wages $430,500 $387,325 $1,332,200 $1,165,525
Pensions and other employee benefits 82,028 72,632 236,234 199,512
Occupancy expense 65,052 64,566 198,110 159,659
Other operating expenses 473,694 479,392 1,418,634 1,344,499
------- ------- --------- ---------
Total other expenses $1,051,274 $1,003,915 $3,185,178 $2,869,195
---------- ---------- ---------- ----------
Income before income taxes $628,908 $593,910 $1,801,954 $1,756,768
Income taxes 164,247 177,341 486,100 524,712
------- ------- ------- -------
Net income $464,661 $416,569 $1,315,854 $1,232,056
======== ======== ========== ==========
Per share of common stock:
Income before income taxes $0.66 $0.63 $1.89 $1.86
Net income $0.48 $0.44 $1.38 $1.30
Weighted average shares outstanding 953,424 946,712 951,229 945,406
</TABLE>
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash Flows for Operating Activities
Net Income $1,315,854 $1,232,056
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation 296,498 233,045
Amortization 5,383 15,067
Provision for loan losses 126,250 123,750
Amortization and accretion on securities 55,792 (6,799)
Loss on sale of foreclosed real estate 9,362 -
Change in operating assets and liabilities:
(Increase) decrease in assets:
Mortgage loans held for sale (3,200) 483,594
Accrued interest receivable (207,848) 189,895
Other assets 103,345 (176,744)
Increase (decrease) in liabilities:
Accrued interest payable 65,613 (41,666)
Other liabilities 182,458 153,522
------- -------
Net cash provided by operating activities $1,949,507 $2,205,720
---------- ----------
Cash Flows from Investment Activities
Proceeds from maturities of securities held to maturity $440,000 $ 910,000
Purchase of securities held to maturity (5,418,023) (321,464)
Proceeds from maturities of securities available for sale 3,971,521 2,574,894
Purchase of securities available for sale (18,731,163) (5,788,583)
Net (increase) decrease in loans made to customers (3,608,060) 1,033,192
Net purchases of premises and equipment (327,185) (1,600,324)
Proceeds from sale of foreclosed property 360,108 -
Net expenditures on foreclosed real estate (18,220) (37,468)
-------- --------
Net cash (used in) investing activities ($23,331,022) ($3,229,753)
------------- ------------
Cash Flows from Financing Activities
Net increase in deposits $7,797,034 $2,008,731
Net increase in Federal Home Loan Bank advances 5,000,000 -
Repayment of note payable (9,000) (9,000)
Net proceeds from issuance of common stock 56,954 79,968
Net increase (decrease) in securities sold under repurchase agreements (791,144) (48,164)
Dividends paid (518,419) (482,024)
--------- ---------
Net cash provided by financing activities $11,535,425 $1,549,511
----------- ----------
Increase (decrease) in cash and cash equivalents ($9,846,090) $525,478
Cash and cash equivalents:
Beginning 17,705,921 20,062,555
---------- ----------
Ending $7,859,831 $20,588,033
========== ===========
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest $3,460,961 $3,504,039
========== ==========
Income Taxes $487,096 $549,088
======== ========
</TABLE>
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997 and 1996
(Unaudited)
Note 1 Basis of Presentation
These interim financial statements are unaudited; however, such information
reflects all adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods presented.
All adjustments are of a normal recurring nature.
Note 2 Accounting Change
On January 1, 1995, the Company adopted FASB Statement No. 114, Accounting by
Creditors for Impairment of a Loan. Statement No. 114 has been amended by FASB
Statement No. 118, Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures. Statement No. 114, as amended, requires that the
impairment of loans that have been separately identified for evaluation is to be
measured based on the present value of expected future cash flows or
alternatively, the observable market price of the loans or the fair value of the
collateral. However, for those loans that are collateral dependent (that is, if
repayment of those loans is expected to be provided solely by the underlying
collateral) and for which management has determined foreclosure is probable, the
measure of impairment of those loans is to be based on the fair value of the
collateral. Statement No. 114, as amended, also requires certain disclosures
about investments in impaired loans and the allowance for credit losses and
interest income recognized on those loans. The effect of adopting Statement No.
114, as amended, is immaterial to the interim financial statements presented
herein.
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<PAGE>
ITEM 2 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
The Company's net income totaled $464,661 in the third quarter of 1997,
an increase of 11.5% from the third quarter of 1996. The earnings for the third
quarter of 1997 were positively affected by increased interest income from loans
and investment securities. This increase is attributable to an increase in the
volume of loans and investment securities.
Net interest income increased by 6.7% for the third quarter of 1997
compared to the same period in 1996. This is the result of reinvesting
lower-yielding federal funds into higher-yielding loans and investment
securities over the past 12 months. Federal funds sold totaled $3.4 million at
September 30, 1997 compared to $15.4 million at September 30, 1996. Other
operating expenses increased 4.7% compared to the same period in 1996. Net
income per common share for the third quarter of 1997 was $.48 compared to $.44
for the same period in 1996. The Company's annualized return on average equity
was 12.70% in the third quarter of 1997, compared to 12.07% for the third
quarter of 1996, while the return on average assets amounted to 1.37% and 1.33%
for these periods, respectively.
The Company's net income for the nine months ended September 30, 1997
totaled $1,315,854 an increase of 6.8% over the first nine months of 1996. This
increase is also primarily the result of the increase in interest income
resulting from the reinvestment of federal funds sold. Net income per common
share for the first nine months of 1997 was $1.38 compared to $1.30 for the same
period in 1996. The Company's annualized return on average equity was 12.11% for
the nine months ended September 30, 1997, compared to 12.07% for the nine months
ended September 30, 1996. The return on average assets amounted to 1.35% and
1.33% for these same periods, respectively.
Net Interest Income. The Company's net interest income was $1,532,365
for the third quarter of 1997, compared to $1,435,764 for the third quarter of
1996. The increase in net interest income in 1997 was attributable primarily to
the reinvestment of federal funds sold into loans and investment securities as
well as an increase in the total volume of the Company's interest earning
assets. Average interest earning assets were $126.4 million for the third
quarter of 1997, compared to $116.4 million for the third quarter of 1996. The
composition of interest earning assets changed as lower-yielding federal funds
sold decreased from an average of $16.6 million for the quarter ended September
30, 1996 to an average of $5.4 million for the quarter ended September 30, 1997,
while average loans outstanding increased $4.0 million, or 4.8% to an average of
$86.6 million for the quarter ended September 30, 1997. Average investment
securities increased 102% to $34.4 million for the quarter ended September 30,
1997. For the nine months ended September 30, 1997, average interest earning
assets rose 6.6% to $121.7 million compared to the same period in 1996.
The net interest margin is a measure of net interest income
performance. It represents the difference between interest income, including net
loan fees earned, and interest expense, reflected as a percentage of average
interest earning assets. The Company's net interest margin was 4.85% for the
third quarter of 1997 compared to 4.94% in 1996. For the nine months ended
September 30, 1997, the net interest margin was 4.98% compared to 4.74% for the
same period of 1996.
Non-Interest Income. In the third quarter of 1997, the Company's total
non-interest income totaled $191,567, a decrease of 5.8%, or $11,744, compared
to 1996. Of the various components of non-interest income, this decrease is
primarily attributable to a decrease in fees received on mortgage loans
originated for others. For the first nine months of 1997, non-interest income
decreased by $90,738 or 13.8%, compared to
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<PAGE>
1996. This decrease is primarily related to a $25,000 gain on the sale of a
security in the first quarter of 1996 in addition to a decrease in fees received
on mortgage loans originated for others.
Non-Interest Expenses. The Company's total non-interest expenses for
the third quarter ended September 30, 1997 increased $47,359, or 4.7%, and for
the nine month period ended September 30, 1997 increased $315,983, or 11.0%,
compared to the same periods in 1996. Expenses related to salaries and employee
benefits not treated as an adjustment to the yield of loans originated in 1997
increased $52,571 for the quarter and $203,397 for the first nine months
compared to 1996. Other operating expenses for the quarter decreased $5,698, or
1.2%, primarily due to the SAIF assessment in the third quarter of 1996. For the
nine months ended September 30, 1997, other operating expenses increased
$74,135, or 5.5%. Occupancy expense and other operating expenses for the nine
months ended September 30, 1997 were affected by expenses related to the opening
of the new Operations Center in May 1996.
Income Taxes. The Company reported income taxes of $164,247 for the
third quarter and $486,100 for the first nine months of 1997, compared to
$177,341 and $524,712 for the same periods in 1996, respectively. These amounts
yielded effective tax rates of 26.1% for the quarter and 27.0% for the first
nine months of 1997, compared to 29.9% and 31.4% for the same periods in 1996,
respectively. In February, 1992 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109 "Accounting for Income
Taxes". This Statement superseded Statement of Financial Accounting Standards
No. 96, and is effective for fiscal years beginning after December 15, 1992.
This statement was implemented in March of 1993 and did not have a material
effect upon the financial position or results of operations of the Company.
Financial Condition
Loan Portfolio. The Company is an active residential mortgage and
residential construction lender and generally extends commercial loans to small
and medium sized businesses within its primary service area. The Company's
commercial lending activity extends across its primary service area of Powhatan,
Cumberland and western Chesterfield Counties. Consistent with its focus on
providing community-based financial services, the Company does not attempt to
diversify its loan portfolio geographically by making significant amounts of
loans to borrowers outside of its primary service area.
The principal economic risk associated with each of the categories of
loans in the Company's portfolio is the creditworthiness of its borrowers.
Within each category, such risk is increased or decreased depending on
prevailing economic conditions. The risk associated with the real estate
mortgage loans and installment loans to individuals varies based upon employment
levels, consumer confidence, fluctuations in value of residential real estate
and other conditions that affect the ability of consumers to repay indebtedness.
The risk associated with commercial, financial and agricultural loans varies
based upon the strength and activity of the local economies of the Company's
market areas. The risk associated with real estate construction loans varies
based upon the supply of and demand for the type of real estate under
construction. Most of the Bank's real estate construction loans are for pre-sold
or contract homes.
At September 30, 1997 loans increased $3.09 million from December 31,
1996 and $5.45 million from September 30, 1996. The loan-to-deposit ratio was
74.3% at September 30, 1997, compared to 76.8% at December 31, 1996, and 74.7%
at September 30, 1996. As of September 30, 1997, real estate loans accounted for
58.1% of the loan portfolio, consumer loans were 20.9%, and commercial and
industrial loans totaled 21.0%.
Asset Quality. Non-performing loans include non-accrual loans, loans 90
days or more past due and restructured loans. Non-accrual loans are loans on
which interest accruals have been discontinued. Loans which reach non-accrual
status may not be restored to accrual status until all delinquent principal and
interest has been
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<PAGE>
paid, or the loan becomes both well secured and in the process of collection.
Restructured loans are loans with respect to which a borrower has been granted a
concession on the interest rate or the original repayment terms because of
financial difficulties.
The following table summarizes non-performing loans:
<TABLE>
<CAPTION>
Sept. 30, 1997 Dec. 31, 1996 Sept. 30, 1996
-------------- ------------- --------------
(Dollars in Thousands)
<S> <C> <C> <C>
Loans accounted for on a non-accrual basis $176 $708 $487
Loans contractually past due 90 days or more as
to interest or principal payments (not included
in non-accrual loans above) 1,094 935 512
Loans restructured and in compliance with
modified terms (not included in non-accrual
loans or loans contractually past due 90 days or
more above) -- -- --
------ ------ ------
Total $1,270 $1,643 $999
====== ====== ====
</TABLE>
Management is not aware of any other loans at September 30, 1997 which
involve serious doubts as to the ability of such borrowers to comply with the
existing payment terms.
Management has analyzed the potential risk of loss on the Company's
loan portfolio, given the loan balances and the value of the underlying
collateral, and has recognized losses where appropriate. Non-performing loans
are closely monitored on an ongoing basis as part of the Company's loan review
process. Management reviews the loan loss allowance at the end of each month.
Based primarily on the Company's loan classification system, which classifies
problem credits as substandard, doubtful or loss, additional provisions for
losses are made monthly. The ratio of the allowance for loan losses to total
loans was 1.29%, 1.42% and 1.42% at September 30, 1997, December 31, 1996 and
September 30, 1996, respectively. At September 30, 1997 the ratio of the
allowance for loan losses to non-performing loans was 90.1%, compared to 73.8%
at December 31, 1996 and 118.6% at September 30, 1996.
Management evaluates non-performing loans relative to their collateral
value and makes appropriate reductions in the carrying value of those loans
based on that review. Management believes, based on its review, that the Company
has adequate reserves to cover any future write down that may be required on
these loans.
For each period presented, the provision for loan losses charged to
operations is based on management's judgment after taking into consideration all
factors connected with the collectibility of the existing portfolio. Management
evaluates the loan portfolio in light of economic conditions, changes in the
nature and value of the portfolio, industry standards and other relevant
factors. Specific factors considered by management in determining the amounts
charged to operations include internally generated loan review reports, previous
loan loss experience with the borrower, the status of past due interest and
principal payments on the loan, the quality of financial information supplied by
the borrower and the general financial condition of the borrower.
The provision for loan losses totaled $43,750 for the quarter ended
September 30, 1997 and $41,250 for the same period in 1996. For the nine month
periods ended September 30, 1997 and 1996, the provision for loan losses totaled
$126,250 and $123,750, respectively. In the opinion of management, the provision
charged to
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<PAGE>
operations has been sufficient to absorb the current year's net loan losses
while continuing to increase the allowance for loan losses.
Securities
The Company's securities portfolio serves several purposes. Portions of
the portfolio secure certain public and trust deposits. The remaining portions
are held as investments or used to assist the Company in liquidity and asset
liability management. During the first nine months of 1997, total securities
increased 111.3% to $37.8 million, or 27.1% of total assets at September 30,
1997. At December 31, 1996, total securities were $17.9 million, or 14.2% of
total assets and at September 30, 1996, total securities were $17.5 million, or
13.9% of total assets.
The securities portfolio consists of two components, investment
securities and securities available for sale. Securities are classified as
investment securities when management has the intent and the Company has the
ability at the time of purchase to hold the securities to maturity. Investment
securities are carried at cost adjusted for amortization of premiums and
accretion of discounts. Securities to be held for indefinite periods of time are
classified as available for sale and accounted for at the lower of cost or
market value. Securities available for sale include securities that may be sold
in response to changes in market interest rates, changes in the security's
prepayment risk, increases in loan demand, general liquidity needs and other
similar factors. The Company's recent purchases of investment securities have
generally been limited to securities of high credit quality with short to medium
term maturities or securities with longer maturities and short to medium term
call features.
The fully taxable equivalent annualized average yield on the entire
portfolio was 7.32% for the third quarter and 7.23% for the first nine months of
1997, compared to 7.65% and 7.56% for the same periods in 1996. The market value
of the portfolio exceeded the book value by $386,386 at September 30, 1997.
Deposits and Short-Term Borrowings
The Company's predominate source of funds is depository accounts. The
Company's deposit base is comprised of demand deposits, savings and money market
accounts and other time deposits. The Company's deposits are provided by
individuals and businesses located within the communities served.
Total deposits grew by 7.1% between December 31, 1996 and September 30,
1997. The average aggregate interest rate paid on deposits was 4.07% in the
third quarter of 1997 and 4.00% for the first nine months of 1997, compared to
4.06% and 4.17% for the same periods in 1996. The majority of the Company's
deposits are higher yielding time deposits because most of its customers are
individuals who seek higher yields than those offered on savings and demand
accounts.
The following table is a summary of time deposits of $100,000 or more
by remaining maturities at September 30, 1997:
Sept. 30, 1997
Time Deposits
-------------
(Dollars in Thousands)
Three months or less $ 1,228
Three to twelve months 4,002
Over twelve months 4,840
--------
Total $10,070
=======
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<PAGE>
Capital Resources
The assessment of capital adequacy depends on a number of factors such
as asset quality, liquidity, earnings performance and changing competitive
conditions and economic forces. The Company seeks to maintain a strong capital
base to support its growth and expansion activities, to provide stability to
current operations and to promote public confidence. The Company's capital
position continues to exceed regulatory minimums.
Banking regulations also require the Bank to maintain certain minimum
capital levels in relation to Bank Assets. Capital is measured using a leverage
ratio as well as based on risk-weighting assets according to regulatory
guidelines. A comparison of the Bank's actual regulatory capital as of September
30, 1997, with minimum requirements, as defined by regulation, is shown below:
Minimum Actual
Requirements September 30, 1997
------------ ------------------
Tier 1 risk-based capital 4.0% 16.21%
Total risk-based capital 8.0% 17.46%
Leverage ratio 3.0% 10.83%
Liquidity and Interest Rate Sensitivity
Liquidity. Liquidity is the ability to meet present and future
financial obligations through either the sale or maturity of existing assets or
the acquisition of additional funds through liability management. Liquid assets
include cash, interest bearing deposits with banks, federal funds sold,
investments and loans maturing within one year. The Company's ability to obtain
deposits and purchase funds at favorable rates determines its liability
liquidity. As a result of the Company's management of liquid assets and the
ability to generate liquidity through liability funding, management believes
that the Company maintains overall liquidity sufficient to satisfy its
depositors' requirements and meet its customers' credit needs.
Additional sources of liquidity available to the Company include, but
are not limited to, loan repayments, the ability to obtain deposits through the
adjustment of interest rates and the purchasing of federal funds. To further
meet its liquidity needs, the Company also has access to the Federal Reserve
System. In the past, growth in deposits and proceeds from the maturity of
investment securities have been sufficient to fund the net increase in loans.
Interest Rate Sensitivity. In conjunction with maintaining a
satisfactory level of liquidity, management must also control the degree of
interest rate risk assumed on the balance sheet. Managing this risk involves
regular monitoring of the interest sensitive assets relative to interest
sensitive liabilities over specific time intervals.
Effects of Inflation
Inflation significantly affects industries having high proportions of
fixed assets or high levels of inventories. Although the Company is not
significantly affected in these areas, inflation does have an impact on the
growth of assets. As assets grow rapidly, it becomes necessary to increase
equity capital at proportionate levels to maintain the appropriate equity to
asset ratios. Traditionally, the Company's earnings and high capital retention
levels have enabled the Company to meet these needs.
The Company's reported earnings results have been affected by
inflation, but isolating the effect is difficult. The different types of income
and expense are affected in various ways. Interest rates are affected by
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<PAGE>
inflation, but the timing and magnitude of the changes may not coincide with
changes in the consumer price index. Management actively monitors interest rate
sensitivity in order to minimize the effects of inflationary trends on interest
rates. Other areas of non-interest expenses may be more directly affected by
inflation.
Part II. Other Information
ITEM 6 EXHIBITS AND REPORTS ON 8-K
(a) Exhibits:
27 Financial Data Schedule (filed herewith)
(b) Form 8-K. No reports were filed on Form 8-K in the
period for which this report is filed.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CENTRAL VIRGINIA BANKSHARES, INC.
-----------------------------------------------
(Registrant)
Date: November 14, 1997 /s/ Ralph Larry Lyons
-----------------------------------------------
Ralph Larry Lyons, President and Chief Executive
Officer (Chief Financial Officer)
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<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,447,831
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,412,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,622,723
<INVESTMENTS-CARRYING> 15,192,950
<INVESTMENTS-MARKET> 15,382,497
<LOANS> 87,429,263
<ALLOWANCE> 1,144,658
<TOTAL-ASSETS> 139,561,898
<DEPOSITS> 117,677,974
<SHORT-TERM> 743,335
<LIABILITIES-OTHER> 450,561
<LONG-TERM> 5,045,000
0
0
<COMMON> 2,384,095
<OTHER-SE> 13,060,933
<TOTAL-LIABILITIES-AND-EQUITY> 139,561,898
<INTEREST-LOAN> 6,488,080
<INTEREST-INVEST> 1,318,387
<INTEREST-OTHER> 267,399
<INTEREST-TOTAL> 8,073,866
<INTEREST-DEPOSIT> 3,409,682
<INTEREST-EXPENSE> 3,526,574
<INTEREST-INCOME-NET> 4,547,292
<LOAN-LOSSES> 126,250
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,185,178
<INCOME-PRETAX> 1,801,954
<INCOME-PRE-EXTRAORDINARY> 1,801,954
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,315,854
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.48
<YIELD-ACTUAL> 4.98
<LOANS-NON> 176,000
<LOANS-PAST> 1,094,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,212,000
<CHARGE-OFFS> 220,000
<RECOVERIES> 27,000
<ALLOWANCE-CLOSE> 1,145,000
<ALLOWANCE-DOMESTIC> 772,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 373,000
</TABLE>
