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.
June 30, 1998 33-9686
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) 598-4216
(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 August 14, 1998, 955,841 shares were outstanding.
<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
QUARTERLY REPORT ON FORM 10-QSB
August 14, 1998
INDEX
Part I. Financial Information Page No.
Item 1 Financial Statements
Consolidated Balance Sheets - June 30, 1998
and 1997..............................................................3
Consolidated Statements of Income - Three
Months Ended June 30, 1998 and 1997
and Six Months Ended June 30, 1998 and 1997...........................4
Consolidated Statements of Cash Flows - Six
Months Ended June 30, 1998 and 1997...................................5
Notes to Consolidated Financial Statements -
June 30, 1998 and 1997 (Unaudited)....................................6
Item 2 Management's Discussion and Analysis or
Plan of Operation..................................................7-12
Part II. Other Information
Item 4 Submission of Matters to a Vote of
Security Holders..................................................12-13
Item 6 Exhibits and Reports on Form 8-K.....................................13
Signatures....................................................................14
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, 1998 June 30, 1997
------ ------------- -------------
<S> <C> <C>
Cash and due from banks $4,742,393 $9,516,989
Federal funds sold 2,673,000 3,905,000
------------ ------------
Total cash and cash equivalents $7,415,393 $13,421,989
Securities available for sale 25,009,947 15,080,217
Securities held to maturity (approximate market
value 1998 $21,318,779; 1997 $13,069,511) 20,892,558 12,834,097
Mortgage loans held for sale 739,350 0
Loans, net 94,152,981 86,390,601
Bank premises and equipment, net 3,988,048 3,498,575
Accrued interest receivable 1,161,136 826,360
Other assets 3,539,169 2,252,857
------------ ------------
Total assets $156,898,582 $134,304,696
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand deposits $19,547,240 $17,212,522
Interest bearing demand deposits and NOW accounts 25,632,235 22,571,795
Savings deposits 15,523,187 13,506,911
Time deposits, $100,000 and over 13,689,170 10,902,683
Other time deposits 59,690,716 51,614,622
------------ ------------
$134,082,548 $115,808,533
Securities sold under repurchase agreements 776,724 2,950,460
FHLB advance 5,000,000 -
Note payable 36,000 45,000
Accrued interest payable 325,258 223,620
Other liabilities 207,444 263,629
------------ ------------
Total liabilities $140,427,974 $119,291,242
------------ ------------
STOCKHOLDERS' EQUITY
Capital stock, common, par value $2.50;
authorized 3,000,000 shares; issued 955,841 shares 1998; 950,827
shares 1997 $2,389,603 $2,377,068
Surplus 4,207,632 4,118,457
Retained earnings 9,642,083 8,482,552
Unrealized gains (losses) on securities available for sale,
net of tax 231,290 35,377
------------- ------------
Total stockholders' equity $16,470,608 $15,013,454
------------- ------------
Total liabilities and stockholders' equity $156,898,582 $134,304,696
============= ============
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $2,242,470 $2,219,268 $4,392,832 $4,340,811
Interest on securities:
U.S. Government agencies and corporations 378,561 233,696 759,841 403,249
U.S. Treasury notes 31,750 21,213 58,275 21,213
States and political subdivisions 272,114 157,474 512,724 303,704
Other 34,634 22,354 53,547 26,547
Interest on federal funds sold 55,128 56,359 105,689 183,845
---------- ---------- ---------- ----------
Total interest income $3,014,657 $2,710,364 $5,882,908 $5,279,369
---------- ---------- ---------- ----------
Interest expense
Interest on deposits $1,317,159 $1,127,298 $2,578,867 $2,230,725
Interest on securities sold under repurchase
agreements 11,050 16,241 21,356 31,737
Interest, FHLB advance 73,938 0 147,063 0
Interest on note payable 720 900 1,620 1,980
---------- ---------- ---------- ----------
Total interest expense $1,402,867 $1,144,439 $2,748,906 $2,264,442
---------- ---------- ---------- ----------
Net interest income $1,611,790 $1,565,925 $3,134,002 $3,014,927
Provision for loan losses 49,500 41,250 98,999 82,500
---------- ---------- ---------- ----------
Net interest income after provision for
loan losses $1,562,290 $1,524,675 $3,035,003 $2,932,427
Other income
Gain (loss) on sale of securities ($121) $0 $10,079 $0
Service charges 160,402 142,253 298,640 288,649
Other 90,675 44,297 171,044 85,874
---------- ---------- ---------- ----------
Total other income $250,956 $186,550 $479,763 $374,523
Other expenses
Salaries and wages $493,900 $450,800 $959,800 $901,700
Pensions and other employee benefits 70,224 66,355 155,939 154,206
Occupancy expense 64,935 71,111 126,680 133,058
Equipment depreciation 84,784 74,576 168,460 155,277
Equipment repairs and maintenance 41,477 33,393 84,778 71,541
Advertising and public relations 75,314 45,326 135,080 89,937
Federal insurance premiums 4,684 4,087 9,231 3,196
Office supplies, telephone and postage 90,662 80,297 182,760 172,187
Taxes and licenses 31,248 32,288 60,894 64,916
Other operating expenses 223,503 218,667 394,885 393,886
---------- ---------- ---------- ----------
Total other expenses $1,180,731 $1,076,900 $2,278,507 $2,133,904
---------- ---------- ---------- ----------
Income before income taxes $632,515 $634,325 $1,236,259 $1,173,046
Income taxes 180,480 180,103 341,419 321,853
---------- ---------- ---------- ----------
Net income $452,035 $454,222 $894,840 $851,193
========== ========== ========== ==========
Per share of common stock:
Income before income taxes $0.66 $0.67 $1.30 $1.23
Net income $0.47 $0.48 $0.94 $0.90
Weighted average shares 955,067 950,797 954,485 950,113
Return on average assets 1.19% 1.42% 1.20% 1.34%
Return on average equity 11.51% 12.66% 11.49% 11.83%
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash Flows for Operating Activities
Net Income $894,840 $851,193
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation 209,530 195,946
Amortization 0 2,766
Provision for loans losses 98,999 82,500
Amortization and accretion on securities 24,991 35,379
Change in operating assets and liabilities:
(Increase) decrease in assets:
Mortgage loans held for sale (408,000) 201,798
Accrued interest receivable 157,744 (23,169)
Other assets (1,938,096) (629,750)
Increase (decrease) in liabilities:
Accrued interest payable (2,505) (9,326)
Other liabilities 68,604 94,085
------------- -------------
Net cash provided by operating activities ($893,893) $801,422
------------- -------------
Cash Flows from Investing Activities
Proceeds from maturities of securities held to maturity $250,000 $-
Purchase of securities held to maturity (3,784,351) (2,620,098)
Proceeds from sales and maturities of securities available for sale 5,091,290 2,236,525
Purchase of securities available for sale (6,915,490) (9,607,958)
Net (increase) decrease in loans made to customers (5,394,480) (2,142,388)
Net purchases of premises and equipment (657,273) (133,912)
Proceeds from sale of foreclosed real estate 0 166,274
Net expenditures on foreclosed real estate (1,465) (8,032)
Net cash (used in) investing activities ($11,411,769) ($12,109,589)
------------- -------------
Cash Flows from Financing Activities
Net increase in deposits $11,409,007 $5,927,593
Repayment of note payable (9,000) (9,000)
Net proceeds from issuance of capital stock 76,412 31,656
Net increase (decrease) in securities sold under repurchase
agreements (417,163) 1,415,981
Dividends paid (362,616) (341,995)
Net cash provided by financing activities $10,696,640 $7,024,235
------------- -------------
Increase (decrease) in cash and cash equivalents ($1,609,022) ($4,283,932)
Cash and cash equivalents:
Beginning 9,024,415 17,705,921
------------- -------------
Ending $7,415,393 $13,421,989
============= =============
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest $2,751,411 $2,273,768
============= =============
Income Taxes $293,925 $344,474
============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 and 1997
(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 $452,035 in the second quarter of
1998, a slight decrease of .5% from the second quarter of 1997. These results
reflect the costs associated with the opening of a new branch in Cumberland
County in mid-June. For the quarter, total interest income rose 11.2%, while net
interest income rose 8.7%. The primary source of the increases in interest
income was in interest on securities which rose 64.9% compared to the same
quarter in 1997. This was the result of a similar 64.4% increase in the balance
of securities from June 30, 1997 to June 30, 1998. Net income per common share
for the second quarter of 1998 was $.47 compared to $.48 for the same period in
1997. The Company's annualized return on average equity was 11.51% in the second
quarter of 1998, compared to 12.66% for the second quarter of 1997, while the
return on average assets amounted to 1.19% and 1.42% for these periods
respectively.
The Company's net income for the six months ended June 30, 1998 totaled
$894,840, an increase of $43,647, or 5.1% over the first six months of 1997. The
1998 results reflect primarily a 3.9% increase in net interest income as well as
a 29.1% increase in other income. Net income per common share for the first six
months of 1998 was $.94 compared to $.90 for the same period in 1997. The
Company's annualized return on average equity was 11.49% for the six months
ended June 30, 1998, compared to 11.83% for the six months ended June 30, 1997.
The return on average assets amounted to 1.20% and 1.34% for these same periods,
respectively.
Net Interest Income. The Company's net interest income was $1,611,790
for the second quarter of 1998, compared to $1,565,925 for the second quarter of
1997. The increase in net interest income in 1998 was attributable primarily to
an increase in interest earning assets. Average interest earning assets were
$140.6 million for the second quarter of 1998, compared to $118.6 million for
the second quarter of 1997. Average investment securities increased $18,073,976,
or 69.5%, to account for the majority of the increase. For the six months ended
June 30, 1998, average interest earning assets rose 18.24% to $139.5 million
compared to the same period in 1997.
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 4.59% for the
second quarter of 1998 and 4.49% for the first six months of 1998, compared to
5.28% and 5.11% for the same periods in 1997, respectively.
Non-Interest Income. In the second quarter of 1998, the Company's total
non-interest income totaled $250,956, an increase of 34.5%, or $64,406, compared
to 1997. For the first six months of 1998, non-interest income increased by
$105,240 or 28.1% compared to 1997. Included in the results for the first six
months of 1998 was a $10,000 gain on the sale of securities. There are no such
gains included in the 1997 results. Of the various components of non-interest
income, the increases noted are primarily attributable to an increase in fees
received on mortgage loans originated for others.
Non-Interest Expense. The Company's total non-interest expenses for the
second quarter and six months ended June 30, 1998 increased $103,831 and
$144,603, respectively, compared to the same periods in 1997. Expenses related
to salaries and employee benefits not treated as an adjustment to the yield of
loans originated in 1998 increased by 9.1% for the quarter and 5.6% for the
first six months
-7-
<PAGE>
compared to 1997. Expenses for advertising and public relations increased 66.1%
for the quarter and 60.9% for the six months as the Company increased its
efforts to attract new customers. Increases in office supplies, telephone, and
postage expense, and in other operating expenses were primarily attributable to
the opening of a new branch office in Cumberland County in mid-June.
Income Taxes. The Bank reported income taxes of $180,480 for the second
quarter and $341,419 for the first six months of 1998, compared to $180,103 and
$321,853 for the same periods in 1997, respectively. These amounts yielded
effective tax rates of 28.5% for the quarter and 27.6% for the first six months
of 1998, compared to 28.4% and 27.4% for the same periods in 1997, 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 June 30, 1998 loans increased $5.3 million from December 31, 1997
and $7.8 million from June 30, 1997. The loan to deposit ratio was 70.22% at
June 30, 1998, compared to 72.41% at December 31, 1997, and 74.6% at June 30,
1997. As of June 30, 1998, real estate loans accounted for 56.2% of the loan
portfolio, consumer loans were 20.7%, and commercial and industrial loans
totaled 23.1%.
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 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.
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<PAGE>
The following table summarizes non-performing loans:
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1998 1997 1997
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Loans accounted for on a non-accrual basis $146 $38 $593
Loans contractually past due 90 days or more as to
interest or principal payments (not included in
non-accrual loans above) 446 696 484
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 $592 $734 $1,077
==== ==== ======
</TABLE>
Management is not aware of any other loans at June 30, 1998 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 1.32%, 1.31% and 1.37% at June 30, 1998, December 31, 1997 and June
30, 1997, respectively. At June 30, 1998 the ratio of the allowance for loan
losses to non-performing loans was 207.9%, compared to 160.2% at December 31,
1997 and 110.0% at June 30, 1997.
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 $49,500 for the quarter ended
June 30, 1998 and $41,250 for the quarter ended June 30, 1997. For the six month
periods ended June 30, 1998 and 1997, the provision for loan losses was $98,999
and $82,500, respectively. In the opinion of management, the provision charged
to operations has been sufficient to absorb the current year's net loan losses
while continuing to increase the allowance for loan losses.
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<PAGE>
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 six months of 1998, total securities
increased 13.1% to $45.9 million or 29.3% of total assets at June 30, 1998. At
December 31, 1997, total securities were $40.6 million, or 27.9% of total assets
and at June 30, 1997, total securities were $27.9 million, or 20.8% 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.
The fully taxable equivalent annualized average yield on the entire
portfolio was 7.07% for the second quarter of 1998 and 6.84% for the first six
months of 1998, compared to 7.92% and 7.00% for the same periods in 1997. The
market value of the portfolio exceeded the book value by $302,413 at June 30,
1998.
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 9.3% between December 31, 1997 and June 30,
1998. The average aggregate interest rate paid on deposits was 4.04% in the
second quarter of 1998 and 3.99% for the first six months of 1998, compared to
3.98% and 3.96% for the same periods in 1997. 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 June 30, 1998:
June 30, 1998
Time Deposits
(Dollars in Thousands)
Three months or less $1,587
Three to twelve months 4,043
Over twelve months 8,059
-------
Total $13,689
=======
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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.
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 June 30,
1998, with minimum requirements, as defined by regulation, is shown below:
Minimum Actual
Requirements June 30, 1998
------------ -------------
Tier 1 risk-based capital 4.0% 15.15%
Total risk-based capital 8.0% 16.35%
Leverage ratio 3.0% 10.25%
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.
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<PAGE>
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
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 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Shareholders meeting was held on April 30, 1998.
(b) Directors elected at the meeting for a three year term were:
1. Charles W. Binford
2. John B. Larus
3. James T. Napier
Directors with continuing terms were:
1. Ralph Larry Lyons
2. Garland L. Blanton, Jr.
3. Fleming V. Austin
4. Elwood C. May
5. Charles B. Goodman
(c) Matters voted upon:
1. Election of Charles W. Binford as a director for a three year
term:
Votes for.....................718,833
Votes withheld..................4,735
2. Election of John B. Larus as a director for a three year
term:
Votes for.....................718,602
Votes withheld..................4,965
3. Election of James T. Napier as a director for a three year
term:
Votes for.....................714,651
Votes withheld..................8,917
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<PAGE>
4. Approve CVB's 1998 Incentive Plan
Votes for.....................405,208
Votes withheld.................21,834
Abstained......................18,637
Broker non-vote...............277,888
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
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CENTRAL VIRGINIA BANKSHARES, INC.
(Registrant)
Date: August 14, 1998 /s/ Ralph Larry Lyons
------------------------------------------------
Ralph Larry Lyons, President and Chief Executive
Officer (Chief Financial Officer)
-14-
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