Exhibit 99.1

Bay Banks of Virginia, Inc. Reports Fourth Quarter and Full-Year 2018 Results

2018 Loan Growth Over 17%

RICHMOND, VA, February 6, 2019 /PRNewswire/ -- Bay Banks of Virginia, Inc. (OTCQB: BAYK), holding company of Virginia Commonwealth Bank and VCB Financial Group, Inc., announced financial results for the quarter and year ended December 31, 2018.

The company reported net income of $782 thousand, or $0.06 per diluted share, for the fourth quarter of 2018 compared to $1.0 million, or $0.08 per diluted share, for the third quarter of 2018, and to a net loss of $2.4 million, or ($0.18) per diluted share, for the fourth quarter of 2017. Net income for the fourth quarter of 2018 included $483 thousand ($382 thousand¹ after income taxes) of expenses incurred in connection with the company’s previously announced early retirement program. Net income in the fourth quarter of 2017 included $850 thousand ($561 thousand¹ after income taxes) of merger-related expenses in connection with the company’s merger with Virginia BanCorp, Inc. on April 1, 2017 (the “Merger”).

For the year of 2018, the company reported net income of $3.9 million, or $0.31 per diluted share, compared to a net loss of $1.2 million, or ($0.14) per diluted share, for the year of 2017. Expenses incurred in connection with the Merger were $363 thousand and $2.0 million for the years ended December 31, 2018 and 2017, respectively.

Randal R. Greene, President and Chief Executive Officer, commented: "Since our merger with Virginia BanCorp, Inc. at the beginning of the second quarter of 2017, we have grown our balance sheet by 30%. Our larger balance sheet coupled with the cost savings initiatives announced during the third quarter of 2018 are beginning to result in improved profitability. Income before income taxes for the fourth quarter of 2018 when excluding the provision for loan losses and the costs incurred in implementing our early retirement program was just over $2.0 million. Our challenge continues to be growing deposits at acceptable rates to keep pace with the loan growth opportunities we have in our very strong markets."

Operating Results

Fourth Quarter 2018 compared to Third Quarter 2018

• Income before income taxes for the fourth quarter of 2018 was $670 thousand compared to $1.2 million for the third quarter of 2018. Income before income taxes, excluding the costs incurred to implement the company’s early retirement program, was $1.2 million¹ for the fourth quarter of 2018.

• Interest income for the three months ended December 31, 2018 was $11.7 million, on average interest-earning assets of $989.3 million, compared to $10.9 million for the three months ended September 30, 2018, on average interest-earning assets of $929.1 million. Interest income in the fourth quarter of 2018 included accretion of acquired loan discounts of $352 thousand, while interest income in the third quarter of 2018 included $357 thousand of accretion of acquired loan discounts. Yields on average interest-earning assets were 4.72% and 4.66% for the linked quarter periods.

• Interest expense was $3.3 million and $2.6 million for the three months ended December 31, 2018 and September 30, 2018, respectively, and cost of funds was 1.40% and 1.19% for the linked quarter periods. Average interest-bearing liabilities were $817.3 million and $762.0 million for the fourth and third quarters of 2018, respectively. Higher funding cost in the fourth quarter period was primarily due to heightened competition for deposits in the company's markets and greater use of higher cost Federal Home Loan Bank of Atlanta (“FHLB”) borrowings to fund loan growth, both affected by higher interest rates, in general.

• Net interest margin (“NIM”) was 3.41% for the fourth quarter of 2018 compared to 3.57% for the third quarter of 2018. Net interest margin excluding accretion of acquired loan discounts and amortization of fair value marks on time deposits (“Core NIM”) for the fourth quarter of 2018 was 3.25%¹ compared to 3.40%¹ for the third quarter of 2018. The decline in Core NIM for the linked quarter periods was primarily attributable to higher cost of funds, partially offset by higher yields on interest-earning assets.

• Provision for loan losses was $870 thousand in the fourth quarter of 2018, while provision for loan losses in the third quarter of 2018 was $509 thousand. Provision for loan losses in the fourth quarter of 2018 was primarily attributable to an increase of $48.0 million of gross loans in the quarter and higher reserves attributed to certain loan types as the company’s loan portfolio mix shifts from residential and consumer loans to commercial loans.

• Noninterest income for the three months ended December 31, 2018 and September 30, 2018 was $1.0 million and $944 thousand, respectively. Increased income from the company’s wealth management business was partially offset by lower income from fiduciary activities from the company’s trust management and administration services business.

• Noninterest expenses for the three months ended December 31, 2018 and September 30, 2018 were $7.9 million and $7.5 million, respectively. Noninterest expenses for the fourth quarter of 2018 included $483 thousand incurred to implement the company’s early retirement program. Efficiency ratio for the three months ended December 31, 2018 was 83.7% (78.6%¹ excluding expenses incurred to implement the early retirement program) compared to 81.3% for the three months ended September 30, 2018.

• Income taxes for the fourth quarter of 2018 were a benefit of $112 thousand. The income tax benefit was primarily attributable to higher than estimated tax deductions reported in the company’s 2017 federal income tax return at the higher 2017 corporate tax rate and a lower effective income tax rate for the full year of 2018 than was recorded for the 2018 period through the third quarter of 2018.

Full-Year 2018 compared to Full-Year 2017

• Income before income taxes for the year of 2018 was $4.4 million compared to a loss before income taxes of $475 thousand for 2017. Results for the year of 2017 include the operations of Virginia BanCorp, Inc. since the effective date of the Merger, April 1, 2017.

• Interest income for the year ended December 31, 2018 was $43.8 million, on average interest-earning assets of $934.5 million, compared to $33.7 million for the year ended December 31, 2017, on average interest-earning assets of $702.1 million. Average interest-earning assets for the year of 2017 included those acquired in the Merger from the effective date of the Merger. Interest income for the year of 2018 included accretion of acquired loan discounts of $1.8 million, while interest income for the year of 2017 included $1.9 million of accretion of acquired loan discounts. Yields on average interest-earning assets were 4.70% and 4.83% for the years ended December 31, 2018 and 2017, respectively. Yields on average interest-earning assets in 2017 were favorably affected by higher accretion, higher average balances of higher yielding consumer loans, and higher fee income, some of which was to align policies for recording certain fees as a result of the Merger.

• Interest expense was $10.2 million and $6.0 million for the years ended December 31, 2018 and 2017, respectively, and cost of funds was 1.17% and 0.91% for the respective periods. Average interest-bearing liabilities were $768.8 million and $569.0 million for the years of 2018 and 2017, respectively. Average interest-bearing liabilities in 2017 included those assumed in the Merger from the effective date of the Merger. Higher funding cost in the 2018 period was primarily due to higher cost of deposits and greater use of higher cost FHLB borrowings to fund loan growth.

• Net interest margin was 3.61% for the year ended December 31, 2018 compared to 3.98% for the year ended December 31, 2017. Core NIM for the years ended December 31, 2018 and 2017 was 3.40%¹ and 3.66%¹, respectively.

• Provision for loan losses was $1.4 million for the year of 2018, while provision for loan losses for the year of 2017 was $4.9 million. Provision for loan losses in the 2018 period included the correction in the second quarter of 2018 of the overstatement recorded in the company’s 2017 allowance for loan losses, as previously reported, while provision for loan losses in the 2017 period was primarily due to higher reserves for a certain portfolio of consumer loans.

• Noninterest income for the years ended December 31, 2018 and 2017 was $4.3 million and $3.5 million, respectively. Noninterest income in the 2018 period included a $352 thousand gain on the discontinuance of the company's post-retirement benefit plan effective March 1, 2018, while noninterest income in the 2017 period included an additional $213 thousand of losses recorded on the disposition of assets.

• Noninterest expenses for the years ended December 31, 2018 and 2017 were $32.1 million and $26.7 million, respectively. Merger-related expenses were $363 thousand and $2.0 million for the years ended December 31, 2018 and 2017, respectively. Expenses in 2018 associated with the succession of the company's CFO and fees incurred in the completion of the company's 2017 year-end reporting totaled approximately $1.2 million, all of which were recorded in the first six months of 2018. Efficiency ratio for the year ended December 31, 2018 was 84.8% compared to 85.7% for the year ended December 31, 2017.

• Income tax expense for the year ended December 31, 2018 was $533 thousand, representing an effective rate of 12.1%. The effective rate was positively affected by higher than estimated income tax deductions reported in the company’s 2017 federal income tax return at the higher 2017 rate, as noted above. Income tax expense for 2017 of $797 thousand reflected the effect of the revaluation of the company’s net deferred tax asset upon the enactment of the Tax Cuts and Jobs Act of 2017 (“TCJA”) at the end of 2017.

Fourth Quarter 2018 compared to Fourth Quarter 2017

• Income before income taxes for the fourth quarter of 2018 was $670 thousand compared to a loss of $2.0 million for the fourth quarter of 2017. Income before income taxes, excluding the costs incurred to implement the company’s early retirement program ($483 thousand) was $1.2 million¹ for the fourth quarter of 2018.

• Interest income for the three months ended December 31, 2018 was $11.7 million, on average interest-earning assets of $989.3 million, compared to $10.5 million for the three months ended December 31, 2017, on average interest-earning assets of $900.6 million. Interest income in the fourth quarter of 2018 included accretion of acquired loan discounts of $352 thousand, while interest income in the fourth quarter of 2017 included $1.0 million of accretion of acquired loan discounts. Yields on average interest-earning assets were 4.72% and 4.69% for the three months ended December 31, 2018 and 2017, respectively.

• Interest expense was $3.3 million and $1.9 million for the three months ended December 31, 2018 and 2017, respectively, and the cost of funds was 1.40% and 0.92% for the quarter-over-quarter periods. Higher funding cost in the 2018 period was primarily due to higher cost of deposits and greater use of FHLB borrowings, as noted above. Average interest-bearing liabilities were $817.2 million and $742.0 million for the fourth quarters of 2018 and 2017, respectively.

• Net interest margin was 3.41% for the fourth quarter of 2018 compared to 3.82% for the fourth quarter of 2017. Core NIM for the fourth quarter of 2018 was 3.25%¹ compared to 3.31%¹ for the same quarter of 2017. The decline in Core NIM was primarily attributable to higher cost of funds.

• Provision for loan losses was $870 thousand for the fourth quarter of 2018, while provision for loan losses in the fourth quarter of 2017 was $3.1 million. Provision for loan losses in the fourth quarter of 2018 was primarily attributable to an increase of $48.0 million of gross loans in the quarter and higher reserves attributed to certain loan types as the company’s loan portfolio mix shifts from residential and consumer loans to commercial loans. Provision for loan losses in the 2017 period included higher reserves for a certain portfolio of consumer loans.

• Noninterest income for the fourth quarters of 2018 and 2017 was $1.0 million and $562 thousand, respectively. Contributing to higher noninterest income in the 2018 period was higher income from the company’s wealth management business and losses recorded on the disposition of assets in the 2017 period.

• Noninterest expenses for the fourth quarters of 2018 and 2017 were $7.9 million and $8.0 million, respectively. Noninterest expenses in the fourth quarter of 2018 included $483 thousand of expenses incurred to implement the company’s early retirement program, while merger-related expenses were $850 thousand in the fourth quarter of 2017. Higher noninterest expenses in the 2018 period compared to the 2017 period were primarily due to higher occupancy and data processing costs due to growth, partially offset by lower advertising and marketing and consulting costs incurred in the 2017 period. Efficiency ratio for the fourth quarter of 2018 was 83.7% (78.6%¹ excluding expenses incurred to implement the early retirement program) compared to 88.2% for the same quarter of 2017 (78.7%¹ excluding merger-related expenses).

• Income taxes for the fourth quarter of 2018 were a benefit of $112 thousand. The benefit was primarily attributable to greater than estimated income tax deductions reported in the company’s 2017 federal income tax return and the adjustment to the year-to-date 2018 effective rate recorded in the fourth quarter of 2018, noted above. Income tax expense for the fourth quarter of 2017 of $391 thousand reflected the effect of the revaluation of the company’s net deferred tax asset upon the enactment of the TCJA at the end of 2017.

Balance Sheet

• Loans, net of allowance for loan losses, were $894.2 million at December 31, 2018 compared to $758.7 million at December 31, 2017, a growth rate of over 17%. Excluding the pay-down of approximately $67 million in the year of 2018 of purchased portfolio loans, including those acquired in the Merger, gross loan growth was approximately 27% for 2018.

• Total assets were $1.1 billion at December 31, 2018 compared to $970.6 million at December 31, 2017.

• Deposits were $842.2 million at December 31, 2018 compared to $761.8 million at December 31, 2017. Noninterest-bearing accounts comprised 13.6% of total deposits at December 31, 2018, slightly up from 13.5% at December 31, 2017.

• Shareholders' equity was $117.5 million and $114.6 million at December 31, 2018 and December 31, 2017, respectively. Tangible book value, calculated as shareholders' equity less goodwill and core deposit intangible assets, net of the associated deferred tax liability, divided by common shares outstanding, was $7.98¹ and $7.71¹ at December 31, 2018 and December 31, 2017, respectively. Capital ratios for Virginia Commonwealth Bank and Bay Banks of Virginia, Inc. were above regulatory minimum guidelines for well-capitalized banks and bank holding companies, respectively, as of December 31, 2018 and December 31, 2017.

• Return on average assets for the years ended December 31, 2018 and 2017 was 0.39% and (0.17)%, respectively, while return on average equity for the same periods was 3.36% and (1.58)%, respectively. Return on average assets for the fourth quarter of 2018, annualized, was 0.30% (0.44%¹excluding expenses incurred implementing the early retirement program) compared to 0.41% for the third quarter of 2018.

Asset Quality

• Nonperforming assets were $8.8 million, or 0.81% of total assets, as of December 31, 2018, compared to $7.9 million, or 0.77% of total assets, as of September 30, 2018, and $10.8 million, or 1.12% of total assets, as of December 31, 2017. Net charge-offs to average gross loans were 0.15% and 0.17% for the years ended December 31, 2018 and 2017, respectively.

• The ratio of allowance for loan losses to total gross loans was 0.88%, 0.85%, and 1.00% at December 31, 2018, September 30, 2018, and December 31, 2017, respectively. The company's allowance for loan losses does not include discounts recorded on acquired loans. The ratio of allowance for loan losses plus remaining discounts on acquired loans to total gross loans (adding the remaining discounts on acquired loans) was 1.31%¹, 1.35%¹, and 1.76%¹, as of the same three period ends, respectively.

Outlook

Greene concluded: "I am optimistic moving into 2019, in spite of mixed economic headwinds. Our team is aligned. We have a three-year plan guiding us to our goals, but we are nimble and will adjust as our markets and economic conditions require. Deposit growth could slow attainment of our goals and we are sharply focused on growing them, primarily noninterest-bearing deposits.

As I reflect on 2018, I am pleased with the accomplishments of our team. This has been a building year, building of both infrastructure and talent. I believe we now have both to take our over $1 billion company to the next level. I express my thanks to our employees for what they have accomplished in 2018, to our board for their advice and counsel, to our shareholders for their continuing support, and to our customers who trust us to meet many of their financial needs every day.”

About Bay Banks of Virginia, Inc.

Bay Banks of Virginia, Inc. is the bank holding company for Virginia Commonwealth Bank and VCB Financial Group, Inc. Founded in the 1930s, Virginia Commonwealth Bank is headquartered in Richmond, Virginia. With 20 banking offices, including one production office, located throughout the greater Richmond area, the Northern Neck region, Middlesex County, the Tri-Cities area of Petersburg, Hopewell and Colonial Heights, Suffolk, and Virginia Beach, the bank serves businesses, professionals, and consumers with a wide variety of financial services, including retail and commercial banking, and mortgage banking. VCB Financial Group provides management services for personal and corporate trusts, including estate planning, estate settlement and trust administration, and investment and wealth management services.

Caution About Forward-Looking Statements

This press release contains statements concerning the company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements may constitute "forward-looking statements" as defined by federal securities laws. These statements may address issues that involve estimates and assumptions made by management, risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of the company include, but are not limited to: changes in interest rates and general economic conditions; the legislative/regularity climate; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and Federal Reserve Board; the quality or composition of the loan or investment portfolios; demand for loan products; deposit flows; competition; demand for financial services in the company's market area; acquisitions and dispositions; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; and tax and accounting rules, principles, policies and guidelines. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

For further information, contact Randal R. Greene, President and Chief Executive Officer, at 844-404-9668 or Judy C. Gavant, Chief Financial Officer, at 804-518-2606 or inquiries@baybanks.com.

¹ See discussion of non-GAAP financial measures at the end of the Supplemental Financial Data tables that follow.

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data

CONSOLIDATED BALANCE SHEETS

	December 31, 2018			December 31, 2017
(Dollars in thousands, except share data)	(unaudited)
ASSETS
Cash and due from banks	$	7,685		$	9,396
Interest-bearing deposits		19,751			41,971
Certificates of deposit		2,976			3,224
Federal funds sold		625			6,961
Available-for-sale securities, at fair value		82,232			77,153
Restricted securities		7,600			5,787
Loans receivable, net of allowance for loan losses of $7,902 and    $7,770, respectively		894,191			758,726
Loans held for sale		368			1,651
Premises and equipment, net		18,169			17,463
Accrued interest receivable		3,172			3,194
Other real estate owned, net		3,597			4,284
Bank owned life insurance		19,270			18,773
Goodwill		10,374			10,374
Mortgage servicing rights		977			999
Core deposit intangible		2,193			2,991
Deferred tax asset, net		1,510			2,342
Other assets		5,927			5,267
Total assets	$	1,080,617		$	970,556
LIABILITIES
Noninterest-bearing deposits	$	114,122		$	103,037
Savings and interest-bearing demand deposits		359,400			299,820
Time deposits		368,670			358,989
Total deposits		842,192			761,846
Securities sold under repurchase agreements		6,089			9,498
Federal Home Loan Bank advances		100,000			70,000
Subordinated notes, net of unamortized issuance costs		6,893			6,877
Other liabilities		7,967			7,781
Total liabilities		963,141			856,002
SHAREHOLDERS' EQUITY
Common stock ($5 par value; authorized - 30,000,000 shares;    outstanding - 13,201,682 and 13,203,605 shares, respectively) (1)		66,008			66,018
Additional paid-in capital		36,972			37,142
Unearned employee stock ownership plan shares		(1,734	)		(1,129	)
Retained earnings		17,557			13,679
Accumulated other comprehensive loss, net		(1,327	)		(1,156	)
Total shareholders' equity		117,476			114,554
Total liabilities and shareholders' equity	$	1,080,617		$	970,556

(1) Preferred stock is authorized; however, none was outstanding as of December 31, 2018 and December 31, 2017.

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)	For the Three Months Ended
(Dollars in thousands, except per share data)	December 31, 2018			September 30, 2018			December 31, 2017
INTEREST INCOME
Loans, including fees	$	10,899		$	10,126		$	9,742
Securities:
Taxable		569			498			453
Tax-exempt		119			119			79
Federal funds sold		62			46			87
Interest-bearing deposit accounts		69			64			134
Certificates of deposit		17			17			19
Total interest income		11,735			10,870			10,514
INTEREST EXPENSE
Deposits		2,565			2,027			1,515
Securities sold under repurchase agreements		3			3			3
Subordinated notes		128			128			128
Federal Home Loan Bank advances		568			441			299
Total interest expense		3,264			2,599			1,945
Net interest income		8,471			8,271			8,569
Provision for loan losses		870			509			3,101
Net interest income after provision for loan losses		7,601			7,762			5,468
NON-INTEREST INCOME
Income from fiduciary activities		114			151			213
Service charges and fees on deposit accounts		261			250			204
Wealth management		284			144			70
Interchange fees, net		118			106			(84	)
Other service charges and fees		25			31			70
Secondary market sales and servicing		131			150			112
Increase in cash surrender value of bank owned life insurance		123			123			132
Net gain (loss) on disposition of other assets		11			51			(210	)
(Loss) gain on rabbi trust assets		(138	)		—			29
Other		75			(12	)		26
Total non-interest income		1,004			994			562
NON-INTEREST EXPENSE
Salaries and employee benefits		3,826			4,022			3,571
Occupancy		1,043			962			792
Data processing		589			556			361
Bank franchise tax		195			178			174
Telecommunications		143			132			93
FDIC assessments		198			151			265
Foreclosed property		66			45			33
Consulting		142			228			456
Advertising and marketing		92			126			437
Directors' fees		179			146			129
Audit and accounting		290			236			380
Legal		120			123			25
Merger-related		—			—			850
Core deposit intangible amortization		188			196			218
Net other real estate owned losses (gains)		62			(112	)		120
Other		802			543			129
Total non-interest expense		7,935			7,532			8,033
Income (loss) before income taxes		670			1,224			(2,003	)
Income tax (benefit) expense		(112	)		198			391
Net income (loss)	$	782		$	1,026		$	(2,394	)
Basic and diluted earnings (loss) per share	$	0.06		$	0.08		$	(0.16	)

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data – Continued

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Year Ended
	December 31, 2018			December 31, 2017
(Dollars in thousands, except per share data)	(unaudited)
INTEREST INCOME
Loans, including fees	$	40,752		$	31,330
Securities:
Taxable		1,961			1,399
Tax-exempt		475			423
Federal funds sold		234			164
Interest-bearing deposit accounts		311			310
Certificates of deposit		70			74
Total interest income		43,803			33,700
INTEREST EXPENSE
Deposits		7,992			4,513
Federal funds purchased		—			11
Securities sold under repurchase agreements		13			15
Subordinated notes		513			482
Federal Home Loan Bank advances		1,707			980
Total interest expense		10,225			6,001
Net interest income		33,578			27,699
Provision for loan losses		1,351			4,934
Net interest income after provision for loan losses		32,227			22,765
NON-INTEREST INCOME
Income from fiduciary activities		710			904
Service charges and fees on deposit accounts		768			900
Wealth management		842			370
Interchange fees, net		339			230
Other service charges and fees		116			145
Secondary market sales and servicing		659			469
Increase in cash surrender value of bank owned life insurance		497			473
Net gains on sale of available-for-sale securities		—			2
Net losses on disposition of other assets		(7	)		(220	)
Gain on curtailment of post-retirement benefit plan		352			—
(Loss) gain on rabbi trust assets		(138	)		180
Other		165			54
Total non-interest income		4,303			3,507
NON-INTEREST EXPENSE
Salaries and employee benefits		16,233			13,403
Occupancy		3,682			2,735
Data processing		2,531			1,258
Bank franchise tax		726			533
Telecommunications		512			308
FDIC assessments		719			580
Foreclosed property		175			147
Consulting		1,098			665
Advertising and marketing		439			664
Directors' fees		561			444
Audit and accounting		1,129			746
Legal		500			128
Merger-related		363			1,976
Core deposit intangible amortization		798			679
Net other real estate owned (gains) losses		(107	)		221
Other		2,760			2,260
Total non-interest expense		32,119			26,747
Income (loss) before income taxes		4,411			(475	)
Income tax expense		533			797
Net income (loss)	$	3,878		$	(1,272	)
Basic and diluted earnings (loss) per share	$	0.31		$	(0.14	)

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

	As of and for the Three Months Ended															As of and for the Year Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,		December 31,
(Dollars in thousands, except per share amounts)	2018			2018			2018			2018			2017			2018		2017
Select Consolidated Balance Sheet Data
Total assets	$	1,080,617		$	1,027,440		$	983,216		$	994,676		$	970,556
Cash, interest-bearing deposits and federal funds sold		28,061			22,713			38,526			63,696			58,328
Available-for-sale securities, at fair value		82,232			81,215			74,322			75,434			77,153
Loans:
Mortgage loans on real estate		713,997			682,321			644,202			624,424			609,637
Commercial and industrial		164,608			144,118			124,563			129,225			114,093
Consumer		23,740			27,920			32,767			37,011			42,566
Loans receivable		902,345			854,359			801,532			790,660			766,296
Unamortized net deferred loan (fees) costs		(252	)		(79	)		24			228			200
Allowance for loan losses (ALL)		(7,902	)		(7,287	)		(7,113	)		(7,923	)		(7,770	)
Net loans		894,191			846,993			794,443			782,965			758,726
Loans held for sale		368			—			669			414			1,651
Other real estate owned, net		3,597			3,663			3,501			2,593			4,284
Total liabilities	$	963,141		$	910,893		$	867,492		$	879,757		$	856,002
Deposits:
Noninterest-bearing demand deposits		114,122			108,602			108,943			124,572			103,037
Savings and interest-bearing deposits		359,400			330,690			296,206			299,216			299,820
Time deposits		368,670			369,836			369,917			373,163			358,989
Total deposits		842,192			809,128			775,066			796,951			761,846
Securities sold under repurchase agreements		6,089			6,083			7,008			6,551			9,498
Federal Home Loan Bank advances		100,000			80,000			70,000			60,000			70,000
Subordinated notes, net of unamortized issuance costs		6,893			6,889			6,885			6,881			6,877
Shareholders' equity		117,476			116,547			115,724			114,919			114,554
Condensed Consolidated Statements of Operations
Interest income	$	11,735		$	10,870		$	10,508		$	10,692		$	10,514		$	43,803	$	33,700
Interest expense		3,264			2,599			2,314			2,048			1,945			10,225		6,001
Net interest income		8,471			8,271			8,194			8,644			8,569			33,578		27,699
Provision for (recovery of) loan losses		870			509			(348	)		320			3,101			1,351		4,934
Non-interest income		1,004			994			1,164			1,170			562			4,303		3,507
Non-interest expense		7,935			7,532			8,563			8,120			8,033			32,119		26,747
Income (loss) before taxes		670			1,224			1,143			1,374			(2,003	)		4,411		(475	)
Income tax (benefit) expense		(112	)		198			197			250			391			533		797
Net income (loss)	$	782		$	1,026		$	946		$	1,124		$	(2,394	)	$	3,878	$	(1,272	)

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

	As of and for the Three Months Ended															As of and for the Year Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(Dollars in thousands, except per share amounts)	2018			2018			2018			2018			2017			2018			2017
Basic earnings (loss) per share	$	0.06		$	0.08		$	0.07		$	0.09		$	(0.18	)	$	0.31		$	(0.14	)
Diluted earnings (loss) per share		0.06			0.08			0.07			0.09			(0.18	)		0.31			(0.14	)
Dividends per share		—			—			—			—			0.04			—			0.12
Book value per share		8.90			8.80			8.75			8.69			8.68
Tangible book value per share (1)		7.98			7.88			7.81			7.74			7.71
Shares outstanding at end of period		13,201,682			13,238,716			13,226,096			13,223,096			13,203,605			13,201,682			13,203,605
Weighted average shares outstanding, basic		13,050,791			13,080,372			13,059,604			13,038,593			13,036,057			12,609,849			9,399,223
Weighted average shares outstanding, diluted		13,099,707			13,142,549			13,126,419			13,106,214			13,108,400			12,674,448			9,399,223
Performance Ratios (tax-equivalent basis):
Yield on average interest-earning assets		4.72	%		4.66	%		4.61	%		4.74	%		4.69	%		4.70	%		4.83	%
Cost of funds		1.40	%		1.19	%		1.08	%		0.95	%		0.92	%		1.17	%		0.91	%
Cost of deposits		1.22	%		1.03	%		0.93	%		0.83	%		0.81	%		1.01	%		0.77	%
Net interest spread		3.14	%		3.30	%		3.37	%		3.64	%		3.64	%		3.37	%		3.78	%
Net interest margin (NIM)		3.41	%		3.57	%		3.60	%		3.83	%		3.82	%		3.61	%		3.98	%
NIM, excluding acquisition accounting adjustments (1)		3.25	%		3.40	%		3.34	%		3.58	%		3.31	%		3.40	%		3.66	%
Average interest-earnings assets to total average assets		93.76	%		93.45	%		92.37	%		92.10	%		93.30	%		93.46	%		91.96	%
Return on average assets (quarter-to-date annualized)		0.30	%		0.41	%		0.38	%		0.46	%		(0.99	)%		0.39	%		(0.17	)%
Operating return on average assets (quarter-to-date annualized) (1)		0.44	%		0.41	%		0.38	%		0.57	%		(0.76	)%		0.45	%		0.00	%
Return on average equity (quarter-to-date annualized)		2.69	%		3.55	%		3.28	%		3.92	%		(8.24	)%		3.36	%		(1.58	)%
Merger-related expense	$	—		$	—		$	—		$	363		$	850		$	363		$	1,976
Efficiency ratio		83.7	%		81.3	%		91.5	%		82.7	%		88.2	%		84.8	%		85.7	%
Operating efficiency ratio (1)		78.6	%		81.3	%		91.5	%		79.0	%		78.7	%		82.6	%		79.4	%
Average assets		1,055,144			994,209			988,946			982,616			965,246			999,895			763,443
Average interest-earning assets		989,327			929,111			913,486			904,991			900,617			934,528			702,068
Average interest-bearing liabilities		817,225			761,986			747,227			747,813			742,043			768,826			568,998
Average shareholders' equity		116,291			115,454			115,321			114,736			116,171			115,468			80,503
Shareholders' equity to total assets ratio		10.87	%		11.34	%		11.77	%		11.55	%		11.80	%
Tangible shareholders' equity to tangible total assets (1)		9.86	%		10.27	%		10.64	%		10.42	%		10.63	%
Asset Quality Data and Ratios:
Nonaccrual loans	$	5,206		$	4,204		$	3,474		$	6,892		$	6,496
Loans past due 90 days or more and still accruing (excludes purchased credit-impaired loans)		—			—			—			—			48
Other real estate owned, net		3,597			3,663			3,501			2,593			4,284
Total non-performing assets		8,803			7,867			6,975			9,485			10,828
Net charge-offs (recoveries)		255			335			462			167			948			1,219			1,027
Net charge-offs to average loans (quarter-to-date annualized)		0.12	%		0.17	%		0.23	%		0.09	%		0.50	%		0.15	%		0.17	%
Total non-performing assets to total assets		0.81	%		0.77	%		0.71	%		0.95	%		1.11	%
Gross loans to total assets		83.48	%		83.15	%		81.52	%		79.49	%		78.95	%
ALL to gross loans		0.88	%		0.85	%		0.89	%		1.00	%		1.01	%
ALL plus acquisition accounting adjustments (discounts) on acquired loans to gross loans (1)		1.31	%		1.35	%		1.46	%		1.65	%		1.76	%

(1) Non-GAAP financial measure.  See GAAP to Non-GAAP financial measure reconciliation at the end of the Supplemental Financial Data tables that follow.

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

	As of and for the Three Months Ended															As of and for the Year Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(Dollars in thousands, except per share amounts)	2018			2018			2018			2018			2017			2018			2017
Reconciliation of Non-GAAP Financial Measures (1)
NIM, excluding acquisition accounting adjustments
Interest income, including fees	$	11,735		$	10,870		$	10,508		$	10,692		$	10,514		$	43,803		$	33,700
Add: tax-equivalent yield adjustment for tax-exempt securities (c)		32			30			31			32			21			125			217
Less: accretion of discounts on acquired loans		352			357			547			503			1,047			1,759			1,907
Interest income, adjusted		11,415			10,543			9,992			10,221			9,488			42,169			32,010
Average interest-earning assets	$	989,327		$	929,111		$	913,486		$	904,991		$	900,617		$	934,528		$	702,068
Yield on interest-earning assets, excluding accretion of discounts on acquired loans (quarter-to-date annualized)		4.58	%		4.54	%		4.38	%		4.52	%		4.21	%		4.51	%		4.56	%
Interest expense	$	3,264		$	2,599		$	2,314		$	2,048		$	1,945		$	10,225		$	6,001
Add: amortization of premium on acquired time deposits		37			40			42			68			88			187			308
Interest expense, adjusted		3,301			2,639			2,356			2,116			2,033			10,412			6,309
Net interest income, excluding acquisition accounting adjustments		8,114			7,904			7,637			8,105			7,455			31,757			25,701
Average interest-bearing liabilities	$	817,225		$	761,986		$	747,227		$	747,813		$	742,043		$	768,826		$	568,998
Cost of interest-bearing liabilities, excluding amortization of premium on acquired time deposits (quarter-to-date annualized)		1.60	%		1.39	%		1.26	%		1.13	%		1.10	%		1.35	%		1.11	%
NIM, excluding acquisition accounting adjustments		3.25	%		3.40	%		3.34	%		3.58	%		3.31	%		3.40	%		3.66	%
ALL plus discounts on acquired loans to gross loans
Allowance for loan losses	$	7,902		$	7,287		$	7,113		$	7,923		$	7,770
Add: discounts on acquired loans		3,922			4,280			4,655			5,212			5,792
ALL plus discounts on acquired loans		11,824			11,567			11,768			13,135			13,562
Gross loans + discounts on acquired loans	$	906,015		$	858,560		$	806,211		$	796,100		$	771,459
ALL plus discounts on acquired loans to gross loans		1.31	%		1.35	%		1.46	%		1.65	%		1.76	%
Tangible book value per share
Total shareholders' equity	$	117,476		$	116,547		$	115,724		$	114,919		$	114,554
Less: intangible assets, net of deferred tax liability on core deposit intangible (a)(b)		12,106			12,255			12,409			12,570			12,737
Tangible shareholders' equity	$	105,370		$	104,292		$	103,316		$	102,350		$	101,818
Shares outstanding at end of period		13,201,682			13,238,716			13,226,096			13,223,096			13,203,605
Tangible book value per share	$	7.98		$	7.88		$	7.81		$	7.74		$	7.71
Tangible shareholders' equity to tangible assets
Total assets	$	1,080,617		$	1,027,440		$	983,216		$	994,676		$	970,556
Less: intangible assets, net of deferred tax liability on core deposit intangible (a)(b)		12,106			12,255			12,409			12,570			12,737
Tangible assets	$	1,068,511		$	1,015,185		$	970,807		$	982,106		$	957,819
Tangible shareholders' equity	$	105,370		$	104,292		$	103,316		$	102,350		$	101,818
Tangible shareholders' equity to tangible assets		9.86	%		10.27	%		10.64	%		10.42	%		10.63	%
Select noninterest expenses, after-tax basis (ATB)
Merger-related expenses	$	—		$	—		$	—		$	363		$	850		$	363		$	1,976
Merger-related expenses (ATB) (c)		—			—			—			287			561			287			1,304
Early retirement program expenses	$	483		$	—		$	—		$	—		$	—		$	483		$	—
Early retirement program expenses (ATB) (c)		382			—			—			—			—			382			—
Operating return on average assets
Net income (loss)	$	782		$	1,026		$	946		$	1,124		$	(2,394	)	$	3,878		$	(1,272	)
Add: Early retirement program expenses (ATB)		382			—			—			—			—			382			—
Add: Merger-related expenses (ATB)		—			—			—			287			561			287			1,304
Operating net income (loss)	$	1,164		$	1,026		$	946		$	1,411		$	(1,833	)	$	4,546		$	32
Average assets	$	1,055,144		$	994,209		$	988,946		$	982,616		$	965,246		$	999,895		$	763,443
Operating return on average assets		0.44	%		0.41	%		0.38	%		0.57	%		-0.76	%		0.45	%		0.00	%
Operating efficiency ratio
Total noninterest expense	$	7,935		$	7,532		$	8,563		$	8,120		$	8,033		$	32,119		$	26,747
Less: Early retirement program expenses		483			—			—			—			—			483			—
Less:  Merger-related expenses		—			—			—			363			850			363			1,976
Operating noninterest expense		7,452			7,532			8,563			7,757			7,183			31,273			24,771
Net interest income		8,471			8,271			8,194			8,644			8,569			33,578			27,699
Non-interest income		1,004			994			1,164			1,170			562			4,303			3,507
Operating efficiency ratio		78.6	%		81.3	%		91.5	%		79.0	%		78.7	%		82.6	%		79.4	%

(a) Excludes mortgage servicing rights.

(b) Assumes a federal income tax rate of 21% for the 2018 periods and for the three months-ended December 31, 2017.

(c) Assumes a federal income tax rate of 21% for the 2018 periods and 35% for the 2017 periods.

(1) Set forth above are calculations of each of the non-GAAP (generally accepted accounting principles) financial measures included in the Supplemental Financial Data tables. NIM, excluding acquisition accounting adjustments, ALL plus discounts on acquired loans to gross loans, tangible book value per share, tangible shareholders’ equity to tangible total assets ratio, select noninterest expenses after-tax basis, operating return on average assets, and operating efficiency ratio are supplemental financial measures that are not required nor presented in accordance with GAAP.  Management believes ALL plus discounts on acquired loans as a percentage of gross loans, tangible book value per share, and tangible shareholders’ equity to tangible total assets ratios are meaningful because they are measures management uses to assess asset quality and capital levels, respectively.  Management believes that NIM, excluding acquisition accounting adjustments, select noninterest expenses after-tax basis, operating return on average assets, and operating efficiency ratios are meaningful because management uses them to assess the financial performance of the company. Calculations of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.