-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HgRnV/mTq+jiglBsrzsBjMrxKinPnTfg9T/hBOAk3v4DZ3b1Go7fE5mrGaTBdOzA yCIb9uLeg+JNeJ+u6XPKxw== /in/edgar/work/20000814/0000740971-00-000007/0000740971-00-000007.txt : 20000921 0000740971-00-000007.hdr.sgml : 20000921 ACCESSION NUMBER: 0000740971-00-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OLD POINT FINANCIAL CORP CENTRAL INDEX KEY: 0000740971 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 541265373 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12896 FILM NUMBER: 697129 BUSINESS ADDRESS: STREET 1: 1 WEST MELLEN ST STREET 2: P.O. BOX 3392 CITY: HAMPTON STATE: VA ZIP: 23663 BUSINESS PHONE: 7577281200 MAIL ADDRESS: STREET 1: P.O.BOX 3392 CITY: HAMPTON STATE: VA ZIP: 23663 10-Q 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarterly period Ended June 30, 2000 ------------------------------------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT of 1934 For the transition period from to Commission File No. 0-12896 (1934 Act) OLD POINT FINANCIAL CORPORATION ------------------------------- (Exact name of registrant as specified in its charter) Virginia 54-1265373 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 1 West Mellen Street, Hampton, Va. 23663 ------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (757) 722-7451 Not Applicable Former name, former address and former fiscal year, if changed since last report. Check whether the registrant (1) has filed all reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act 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 State the number of shares outstanding of each of the issuer's classes of common stock as of May 1, 2000. Class Outstanding at July 31, 2000 Common Stock, $5.00 par value 2,590,540 shares OLD POINT FINANCIAL CORPORATION FORM 10-Q INDEX PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements........................................1 Consolidated Balance Sheets June 30, 2000 and December 31, 1999....................1 Consolidated Statement of Earnings Three ended June 30, 2000 and 1999.....................2 Six months ended June 30, 2000 and 1999................2 Consolidated Statement of Cash Flows Six months ended June 30, 2000 and 1999................3 Consolidated Statements of Changes in Stockholders' Equity Six months ended June 30, 2000 and 1999................4 Notes to Consolidated Financial Statements......................5 Parent Only Balance Sheets June 3, 2000 and December 31, 1999.....................6 Parent Only Statement of Earnings Three months ended June 30, 2000 and 1999..............6 Six Months ended June 30, 2000 and 1999................6 Parent Only Statement of Cash Flows Six months ended June 30, 2000 and 1999................7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................8 Analysis of Changes in Net Interest Income..................9 Item 3. Quantitative and Qualitative Disclosures about Market Risk.12 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................14 (i)
- ------------------------------------------------------------------------------ Unaudited June 30, December 31, Consolidated Balance Sheets 2000 1999 - ------------------------------------------------------------------------------ Assets Cash and due from banks...................... $ 10,678,621 $ 10,226,423 Interest bearing balances due from banks.................................. 280,744 173,914 Investments: Securities available for sale, at market................................. 81,145,014 81,146,906 Securities to be held to maturity.......... 45,835,238 45,838,726 Trading account securities................... 0 0 Federal funds sold........................... 8,983,082 241,055 Loans, total ................................ 310,219,254 281,646,439 Less reserve for loan losses............. 3,384,856 3,110,804 ------------ ------------ Net loans............................ 306,834,398 278,535,635 Bank premises and equipment.................. 14,632,592 14,323,764 Other real estate owned...................... 353,864 353,864 Other assets................................. 6,164,496 5,453,316 ------------ ------------ Total assets............................ $474,908,049 $436,293,603 Liabilities Noninterest-bearing deposits................. $ 72,423,375 63,005,586 Savings deposits............................. 123,929,557 128,763,117 Time deposits................................ 170,231,126 169,148,814 ------------ ------------ Total deposits............................ 366,584,058 360,917,517 Federal funds purchased and securities sold under agreement to repurchase.................................. 23,252,400 22,840,778 Interest-bearing demand notes issued to the United States Treasury and other liabilities for....................... 6,399,245 3,317,437 Federal Home Loan Bank....................... 34,000,000 7,000,000 Other liabilities............................ 2,096,308 1,404,194 ------------ ------------ Total liabilities......................... 432,332,011 395,479,926 Stockholders' Equity Common stock, $5.00 par value................ 12,917,005 12,916,310 2000 1999 Shares authorized.10,000,000 6,000,000 Shares outstanding 2,583,401 2,583,262 Surplus...................................... 10,188,069 10,185,985 Undivided profits............................ 21,405,925 19,674,272 Unrealized gain/(loss) on securities......... (1,934,961) (1,962,890) ------------ ------------ Total stockholders' equity............... 42,576,038 40,813,677 ------------ ------------ Total liabilities and stockholders....... $474,908,049 $436,293,603
1
- --------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended Consolidated Statements of Earnings June 30, June 30, 2000 1999 2000 1999 - --------------------------------------------------------------------------------------------------- Interest Income Interest and fees on loans $6,385,334 $5,293,175 $12,331,676 $10,408,290 Interest on federal funds sold 29,843 30,939 49,284 92,339 Interest on securities: Interest on United States Treasury securities (taxable) 15,956 1,251,604 31,856 2,522,704 Interest on obligations of other United States Government agencies (taxable) 976,883 0 1,954,329 0 Interest on obligations of states and political subdivisions (tax exempt) 688,545 677,283 1,381,973 1,312,023 Interest on obligations of states and political subdivisions (taxable) 19,907 39,813 0 Interest on trading account securities 0 0 0 0 Dividends and interest on all other securities 87,344 0 167,958 0 ---------- ---------- ---------- ---------- Total interest on securities 1,788,635 1,928,887 3,575,929 3,834,727 Trading account securities 0 0 0 0 ---------- ---------- ---------- ---------- Total interest income 8,203,812 7,253,001 15,956,889 14,335,356 Interest Expense Interest on savings deposits 952,789 932,676 1,927,416 1,828,639 Interest on time deposits 2,333,873 2,143,927 4,584,347 4,268,727 Interest on federal funds purchased and securities sold under agreement to repurchase 369,994 235,626 659,428 473,966 Interest on Federal Home Loan Bank advances 343,458 51,869 513,541 51,869 Interest on demand notes (note balances) issued to the United States Treasury and on other borrowed 35,586 20,038 62,310 36,857 ---------- ---------- ---------- ---------- Total interest expense 4,035,700 3,384,136 7,747,042 6,660,058 Net interest income 4,168,112 3,868,865 8,209,847 7,675,298 Provision for loan losses 150,000 150,000 325,000 300,000 ---------- ---------- ---------- ---------- Net interest income after provision for loan losses 4,018,112 3,718,865 7,884,847 7,375,298 Other Income Income from fiduciary activities 630,000 599,850 1,260,000 1,109,700 Service charges on deposit accounts 553,458 552,167 1,094,733 1,077,500 Other service charges, commissions and fees 163,292 156,207 369,824 363,133 Other operating income 49,127 51,516 100,998 134,973 Security gains (losses) 6,734 0 6,734 0 Trading account income 0 0 0 0 ---------- ---------- ---------- ---------- Total other income 1,402,611 1,359,740 2,832,289 2,685,306 Other Expenses Salaries and employee benefits 2,286,757 2,154,511 4,592,608 4,225,224 Occupancy expense of Bank premises 248,237 242,617 514,605 472,762 Furniture and equipment expense 391,104 318,286 766,979 605,785 Other operating expenses 933,224 844,849 1,779,174 1,638,783 ---------- ---------- ---------- ---------- Total other expenses 3,859,322 3,560,263 7,653,366 6,942,554 ---------- ---------- ---------- ---------- Income before taxes 1,561,401 1,518,342 3,063,770 3,118,050 Applicable income taxes 319,000 282,700 606,000 634,000 ---------- ---------- ---------- ---------- Net income $1,242,401 $1,235,642 $2,457,770 $2,484,050 Per Share Based on weighted average number of common shares outstanding 2,583,401 2,576,377 2,583,396 2,576,103 Basic Earnings per Share 0.48 0.48 0.95 0.96 Diluted Earnings per Share 0.48 0.48 0.95 0.96
2
- ---------------------------------------------------------------------------------------------------------------------- OLD POINT FINANCIAL CORPORATION Six Months Ended Consolidated Statements of Cash Flows June 30, Unaudited 2000 1999 - ---------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income..................................................................... $ 2,457,770 $ 2,484,050 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization................................................ 630,526 531,145 Provision for loan losses.................................................... 325,000 300,000 (Gains) loss on sale of investment securities, net........................... (6,734) 0 Net amortization & accretion of securities .................................. 36,468 44,931 Net (increase) decrease in trading account................................... 0 0 (Increase) in other real estate owned........................................ 0 (215,056) (Increase) decrease in other assets (net of tax effect of FASB 115 adjustment)................................. (725,568) 17,512 Increase (decrease) in other liabilities..................................... 692,114 304,443 ----------- ---------- Net cash provided by operating activities.................................. 3,409,576 3,467,025 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of securities ..................................................... (712,037) (22,912,251) Proceeds from maturities & calls of securities .............................. 730,000 21,500,000 Proceeds from sales of available - for - sale securities..................... 0 0 Proceeds from sales of held - to - maturity securities....................... 0 0 Loans made to customers...................................................... (86,656,197) (83,237,793) Principal payments received on loans......................................... 58,032,434 58,503,760 Proceeds from sales of other real estate owned............................... 0 285,056 Purchases of premises and equipment.......................................... (939,354) (1,777,905) (Increase) decrease in federal funds sold.................................... (8,742,027) 5,216,072 ----------- ---------- Net cash provided by (used in) investing activities........................ (38,287,181) (22,423,061) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in non-interest bearing deposits......................... 9,417,789 1,140,971 Increase (decrease) in savings deposits...................................... 4,833,560) 3,124,769 Proceeds from the sale of certificates of deposit............................ 33,126,846 21,650,490 Payments for maturing certificates of deposit................................ (32,044,534) (16,852,904) Increase (decrease) in federal funds purchased & repurchase agreements....................................................... 411,622 2,795,053 Increase (decrease) in Federal home Loan Bank Advances...................... 27,000,000 0 Increase (decrease) in other borrowed money.................................. 3,081,808 8,661,877 Proceeds from issuance of common stock....................................... 14 15,819 Dividends paid............................................................... (723,352) (669,823) ----------- ---------- Net cash provided by financing activities.................................. 35,436,633 19,866,252 Net increase (decrease) in cash and due from banks......................... 559,028 910,216 Cash and due from banks at beginning of period............................. 10,400,337 10,310,839 Cash and due from banks at end of period................................... $10,959,365 $11,221,055 =========== =========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash payments for: Interest................................................................... $ 7,525,157 $ 6,623,481 Income taxes............................................................... 650,000 650,000
See accompanying notes 3
- --------------------------------------------------------------------------------------------------------------------------- OLD POINT FINANCIAL CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Unaudited Accumulated Other Total Common Stock Par Capital Retained Comprehensive Stockholder's Shares Value Surplus Earnings Income(Loss) Equity - --------------------------------------------------------------------------------------------------------------------------- FOR SIX MONTHS ENDED JUNE 30, 2000 Balance at beginning of period...... 2,583,262 $12,916,310 $10,185,985 $19,674,272 $(1,962,890) $40,813,677 Comprehensive Income Net income........................ 0 0 0 2,457,770 0 2,457,770 Increase (decrease) in unrealized gain on investment securities 0 0 0 0 27,929 27,929 --------- ---------- ---------- ---------- --------- ----------- Total Comprehensive Income 2,457,770 27,929 2,485,699 Sale of common stock................ 139 695 2,084 (2,765) 0 14 Cash dividends............... ...... 0 0 0 (723,352) 0 (723,352) --------- ---------- ---------- ---------- --------- ----------- Balance at end of period............ 2,583,401 $12,917,005 $10,188,069 $21,405,925 $(1,934,961) $42,576,038 FOR SIX MONTHS ENDED JUNE 30, 1999 Balance at beginning of period...... 2,575,444 $12,877,220 $10,020,066 $16,284,552 $ 831,157 $40,012,995 Comprehensive Income Net income........................ 0 0 0 2,484,050 0 2,484,050 Increase (decrease) in unrealized gain on investment securities 0 0 0 0 (1,577,572) (1,577,572) --------- ---------- ---------- ---------- --------- ----------- Total Comprehensive Income 2,484,050 (1,577,572) 906,478 Sale of common stock................ 1,264 6,320 32,909 (23,410) 0 15,819 Cash dividends............... ...... 0 0 0 (669,824) 0 (669,824) --------- ---------- ---------- ---------- ---------- ----------- Balance at end of period............ 2,576,708 $12,883,540 $10,052,975 $18,075,368 (746,415) $40,265,468
4 OLD POINT FINANCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The accounting and reporting policies of the Registrant conform to generally accepted accounting principles and to the general practices within the banking industry. The interim financial statements have not been audited; however, in the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial statements have been included. These adjustments include estimated provisions for bonus, profit sharing and pension plans that are settled at year-end. These financial statements should be read in conjunction with the financial statements included in the Registrant's 1999 Annual Report to Shareholders and Form 10-K. 2. Basic earnings per common share outstanding are computed by dividing income by the weighted average number of outstanding common shares for each period presented. Diluted earnings per share are computed using the treasury stock method. 5
- ------------------------------------------------------------------------------- OLD POINT FINANCIAL CORPORATION Parent only Balance Sheets June 30, December 31, (Unaudited) 2000 1999 - ------------------------------------------------------------------------------- Assets Cash in bank................................ $ 98,523 $ 59,502 Investment Securities....................... 2,075,000 2,105,000 Total Loans................................. 0 0 Investment in Subsidiaries.................. 40,347,892 38,550,254 Equipment................................... 0 0 Other assets................................ 54,623 25,361 ------------ ------------ Total Assets................................ $ 42,576,038 $ 40,740,117 ============ ============ Liabilities and Stockholders' Equity Total Liabilities........................... $ 0 $ 0 Stockholders' Equity........................ 42,576,038 40,740,117 ------------ ------------ Total Liabilities & Stockholders' Equity.... $ 42,576,038 $ 40,740,117 ============ ============ - ------------------------------------------------------------------------------------------------------------ OLD POINT FINANCIAL CORPORATION Three Months Ended: Six Months Ended: Parent only Income Statements June 30, June 30, (Unaudited) 2000 1999 2000 1999 - ------------------------------------------------------------------------------------------------------------ Income Cash dividends from Subsidiary.............. $ 400,000 $ 350,000 $ 800,000 $ 1,210,000 Interest and fees on loans.................. 0 0 0 0 Interest income from investment securities.. 29,594 23,758 58,567 49,865 Gains (losses) from sale of investment secur 0 0 0 0 Other income................................ 36,000 0 72,000 0 ----------- ------------ ------------ ------------ Total Income................................ 465,594 373,758 930,567 1,259,865 Expenses Salaries and employee benefits.............. 58,188 0 119,758 0 Other expenses.............................. 39,968 7,168 87,189 29,833 ----------- ------------ ------------ ------------ Total Expenses.............................. 98,156 7,168 206,947 29,833 ----------- ------------ ------------ ------------ Income before taxes & undistributed net income of subsidiaries.............. 367,438 366,590 723,620 1,230,032 Income tax.................................. (18,000) 5,500 (38,000) 6,800 ----------- ------------ ------------ ------------ Net income before undistributed net income of subsidiaries................ 385,438 361,090 761,620 1,223,232 Undistributed net income of subsidiaries.... 856,963 874,552 1,696,150 1,260,818 ----------- ------------ ------------ ------------ Net Income.................................. $ 1,242,401 $ 1,235,642 $ 2,457,770 $ 2,484,050 ============ ============ ============ ============
6
- ----------------------------------------------------------------------------- OLD POINT FINANCIAL CORPORATION Six Months Ended: Parent only Statements of Cash Flows June 30, (Unaudited) 2000 1999 - ----------------------------------------------------------------------------- Cash Flows from Operating Activities: Net Income.................................. $ 2,457,770 $ 2,484,050 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed income of subsidiaries........................ (1,696,151) (1,260,819) Depreciation.............................. 0 0 Gains(losses) on sale of securities[net] 0 0 (Increase) Decrease in other assets..... (29,261) 0 Increase (decrease in other liabilities) 0 2,500 ----------- ------------ Net cash provided by operating activities... 732,358 1,225,731 Cash flows from investing activities: (Increase)decrease in investment securities. 30,000 200,000 Investment in subsidiaries ................. 0 (1,020,000) Sale of equipment........................... 0 0 Repayment of loans by customers............. 0 0 Net cash provided by investing activities... 30,000 (820,000) ----------- ------------ Cash flows from financing activities: Proceeds from issuance of common stock...... 15 15,819 Dividends paid.............................. (723,352) (669,823) ----------- ------------ Net cash provided by financing activities... (723,337) (654,004) Net increase (decrease) in cash & due from banks................................. 39,021 (248,273) Cash & due from banks at beginning of period 59,502 293,695 ----------- ------------ Cash & due from banks at end of period...... $ 98,523 $ 45,422 ============ ============
7 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Earnings Summary Net income for the second quarter of 2000 increased .55% to $1,242,401 from $1,235,642 for the comparable period in 1999. Basic earnings per share were $0.48 in the second quarter of 2000 compared with $0.48 in 1999. For the six months ended June 30, 2000 net income decreased 1.1% to $2,457,770 from $2,484,050 in 1999. Basic earnings per share were $.95 for the first six months of 2000 compared with $.96 in 1999. Return on average assets was 1.09% for the second quarter of 2000 and 1.18% for the comparable period in 1999. Return on average equity was 11.82% for the second quarter of 2000 and 12.06% for the second quarter of 1999. For the six months ended June 30, 2000 and 1999 return on average assets was 1.10% and 1.20% respectively. Return on average equity was 11.83% in 1999 and 12.13% in 1999. Net Interest Income Net interest income, on a fully tax equivalent basis, increased $360 thousand, or 8.5%, for the second quarter of 2000 over 1999. Average earning assets increased 9.2% and the net interest yield, defined as the ratio of net interest income on a fully tax equivalent basis to total earning assets, decreased from 4.28% in 1999 to 4.25% in 2000. For the six months ended June 30, 2000 net interest income on a fully tax equivalent basis increased $581 thousand, or 7.0%, over the comparable period in 1999. Comparing the first six months of 2000 to 1999, average loans increased $45.4 million or 18.3% while investment securities decreased $8.7 million or 6.3%. Average earning assets increased 8.6% and the net interest yield decreased from 4.30% in 1999 to 4.22% in 2000. Interest expense increased $652 thousand or 19.3% in the second quarter of 2000 from the second quarter of 1999, interest bearing liabilities increased $33.6 million or 10.7 % in the second quarter of 2000 over the same period in 1999. For the six months ended June 30, 2000 interest expense increased $1.1 million, or 16.3% over the same period in 1999. The cost of funding those liabilities increased 27 basis points from 1999. Page 9 shows an analysis of average earning assets, interest bearing liabilities and rates and yields. 8
- -------------------------------------------------------------------------------------------------------------- OLD POINT FINANCIAL CORPORATION NET INTEREST INCOME ANALYSIS For the quarter ended June 30, (Fully taxable equivalent basis) * 2000 1999 Average Average Interest Rates Interest Rates Average Income/ Earned/ Average Income/ Earned/ Dollars in thousands Balance Expense Paid Balance Expense Paid - -------------------------------------------------------------------------------------------------------------- Loans (net of unearned income)** $301,102 $6,412 8.52% $254,178 $5,313 8.36% Investment securities: Taxable 72,906 1,100 6.04% 83,276 1,252 6.01% Tax-exempt 56,910 1,092 7.68% 56,138 1,026 7.31% -------- ------ -------- ------ Total investment securities 129,816 2,192 6.75% 139,414 2,278 6.54% Federal funds sold 1,795 30 6.69% 2,344 31 5.29% -------- ------ -------- ------ Total earning assets $432,713 $8,634 7.98% $395,936 $7,622 7.70% ======== ====== ======== ====== Time and savings deposits: Interest-bearing transaction accounts $ 3,923 23 2.35% $3,947 $ 23 2.33% Money market deposit accounts 96,943 735 3.03% 94,088 718 3.05% Savings accounts 28,552 194 2.72% 27,960 191 2.73% Certificates of deposit, $100,000 or more 31,647 465 5.88% 31,502 446 5.66% Other certificates of deposit 135,279 1,869 5.53% 130,234 1,698 5.22% -------- ------ -------- ----- Total time and savings deposits 296,344 3,286 4.44% 287,731 3,076 4.28% Federal funds purchased and securities sold under agreement to repurchase 28,145 371 5.27% 21,864 236 4.32% Federal Home Loan Bank advances 21,975 344 6.26% 3,889 52 0.00% Other short term borrowings 2,665 35 5.25% 2,034 20 3.93% -------- ------ -------- ------ Total interest bearing liabilities $349,129 4,036 4.62% $315,518 3384 4.29% Net interest income/yield $4,598 4.25% $4,238 4.28% ====== ====== - -------------------------------------------------------------------------------------------------------------- OLD POINT FINANCIAL CORPORATION NET INTEREST INCOME ANALYSIS For the six months ended June 30, (Fully taxable equivalent basis) * 2000 1999 Average Average Interest Rates Interest Rates Average Income/ Earned/ Average Income/ Earned/ Dollars in thousands Balance Expense Paid Balance Expense Paid - -------------------------------------------------------------------------------------------------------------- Loans (net of unearned income)** $293,154 $12,377 8.44% $247,768 $10,444 8.43% Investment securities: Taxable 63,536 2,194 6.91% 84,347 2,523 5.98% Tax-exempt 66,413 2,094 6.31% 54,311 1,988 7.32% -------- ------ -------- ------ Total investment securities 129,949 4,288 6.60% 138,658 4,511 6.51% Federal funds sold. 1,530 49 6.41% 3,690 92 4.99% -------- ------ -------- ----- Total earning assets $424,633 $16,714 7.87% $390,116 $15,047 7.71% Time and savings deposits: Interest-bearing transaction accounts $ 3,967 $ 47 2.37% $ 3,936 $ 46 2.34% Money market deposit accounts 95,245 1,492 3.13% 92,927 1,411 3.04% Savings accounts 28,535 388 2.72% 27,318 371 2.72% Certificates of deposit, $100,000 or more 31,571 890 5.64% 29,332 810 5.52% Other certificates of deposit 135,138 3,694 5.47% 131,308 3,459 5.27% -------- ------ -------- ----- Total time and savings deposits 294,455 6,511 4.42% 284,821 6,097 4.28% Federal funds purchased and securities sold under agreement to repurchase. 26,234 660 5.03% 22,372 474 4.24% Federal Home Loan Bank advance 16,934 514 6.07% 1,945 52 0.00% Other short term borrowings 2,291 62 5.41% 1,633 37 4.53% -------- ------ --------- ----- Total interest bearing liabilities $339,914 7,747 4.56% $310,771 6,660 4.29% Net interest income/yield $8,967 4.22% $ 8,387 4.30% ====== ==== ======= =====
* Tax equivalent yields based on 34% tax rate. ** Nonaccrual loans are included in the average loan balances and income on such loans is recognized on a cash basis. 9 Provision/Allowance for Loan Losses The provision for loan losses is a charge against earnings necessary to maintain the allowance for loan losses at a level consistent with management's evaluation of the portfolio. The provision for loan losses was $325 thousand for the first six months of 2000, up from $300 thousand in the comparable period in 1999. Loans charged off (net of recoveries) were $50,948 compared with loans charged off (net of recoveries) of $295,762 in the first six months of 1999. On an annualized basis net loan charge-offs were 0.03% of total loans for the first half of 2000 compared with 0.23% for the same period in 1999. On June 30, 2000 nonperforming assets totaled $833 thousand compared with $570 thousand on June 30, 1999. The June 2000 total consisted of $354 thousand in a former branch site now listed for sale, and $479 thousand in nonaccrual loans. The June 1999 total consisted of $60 thousand in foreclosed real estate, $354 thousand in a former branch site, and $156 thousand in nonaccrual loans. Loans still accruing interest but past due 90 days or more increased to $687 thousand as of June 30, 2000 compared with $679 thousand as of June 30, 1999. The allowance for loan losses on June 30, 2000 was $3.4 million compared with $2.9 million on June 30, 1999. It represented a multiple of 4.1 times nonperforming assets and 7.1 times nonperforming loans. The allowance for loan losses was 1.10% of loans on June 30, 2000 and 1999. Other Income For the second quarter of 2000 other income increased $43 thousand, or 3.2%, and for the six months ended June 30, 2000 other income increased $147 thousand or 5.5%. In both periods, the increase in income is attributed to an increase in fiduciary income as well as an increase in other commissions and fees. Other Expenses For the second quarter of 2000 other expenses increased $299 thousand or 8.4% over the second quarter of 1999. For the six months ending June 2000 other expenses increased $711 thousand or 10.2% over the same period in 1999. These increases are due to higher cost associated with opening two new branch facilities. The costs include higher salary expense to staff the new facilities and higher depreciation costs for buildings and furniture. Assets At June 30, 2000 total assets were $474.9 million, up 8.9% from $436.3 million at December 31, 1999. Total loans grew $28.6 million or 10.1%. The majority of this growth was in the installment and real estate portfolios. Federal Home Loan Bank advances increased $27 million in 2000 from year-end 1999 to fund the to the loan growth. Investment securities and federal funds sold decreased by $1.8 million, or 1.4%, in 2000. Total deposits increased $5.7 million, or 1.6% in 2000 and demand note balances to the United States Treasury increased $3.1 million from year-end 1999. 10 Capital Ratios The Company's capital position remains strong as evidenced by the regulatory capital measurements. At June 30, 2000 the Tier I capital ratio was 13.39%, the total capital ratio was 14.41% and the leverage ratio was 9.60%. These ratios were all well above the regulatory minimum levels of 4.00%, 8.00%, and 3.00%, respectively. Capital Resources The Company purchased land for a new branch site in Williamsburg, Virginia. An office building will be constructed on this site in 2001. The Company has committed to purchase an item processing system and an imaging system. Testing and implementation for these systems are expected to be completed by the end of 2000. The Company believes that it has adequate internal and external resources available to fund its capital expenditure requirements. Liquidity Liquidity is the ability of the Company to meet present and future obligations to depositors and borrowers. As stated above total loans increased $28.6 million since year-end 1999. Funding of these loans has been provided by Federal Home Loan Bank advances. Management does not expect this strong loan demand to continue. However, if this trend does continue liquidity can be provided internally by liquidation of short term investment securities as well as other means of financing such as purchase of federal funds, demand note to the US Treasury and Federal Home Loan Bank advances. Effects of Inflation Management believes that the key to achieving satisfactory performance in an inflationary environment is its ability to maintain or improve its net interest margin and to generate additional fee income. The Company's policy of investing in and funding with interest sensitive assets and liabilities is intended to reduce the risks inherent in a volatile inflationary economy. 11 Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Sensitivity Old Point Financial Corporation does not have any risk sensitive instruments entered into for trading purposes. Trading market risk is the risk to net income from changes in the fair values of assets and liabilities that are marked-to-market through the income statement. The Company does not carry a trading portfolio and is currently not exposed to trading risk. Old Point Financial Corporation does have risk sensitive instruments entered into for other than trading purposes. Based on scheduled maturities, the Company was liability sensitive as of June 30, 2000. There were $134 million more in liabilities than assets subject to repricing within three months. This is a slight improvement from the December 31, 1999. When the company is liability sensitive, net interest income should improve if interest rates fall since liabilities will reprice faster than assets. Conversely, if interest rates rise, net interest income should decline. It should be noted, however, that deposits totaling $123.9 million; which consist of interest checking, money market, and savings accounts; are less interest sensitive than other market driven deposits. In a rising rate environment these deposit rates have historically lagged behind the changes in earning asset rates, thus mitigating somewhat the impact from the liability sensitivity position. Market risk is the risk of loss due to changes in instrument values or earnings variations caused by changes in interest rates, commodity prices and market variables such as equity price risk. Old Point Financial Corporation's equity price risk is immaterial and the company's primary exposure is to interest rate risk. Non-trading market risk is the risk to net income from changes in interest rates on asset and liabilities, other than trading. The risk arises through the potential mismatch resulting from timing differences in repricing of loans and deposits. Old Point Financial Corporation monitors this risk by reviewing the timing differences and using a portfolio rate shock model that projects various changes in interest income under a changing rate environment of up to plus or minus 300 basis points. The rate shock model reveals that a 200 basis point rise in rates would cause approximately a 1.49% decease in net income. The model indicates a 300 basis point rise in rates would cause approximately a 2.29% decrease in net income at June 30, 2000. 12 PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None (b) No reports on Form 8-K were filed during the second quarter of 2000. 13 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. OLD POINT FINANCIAL CORPORATION August 11, 2000 By: /s/Louis G Morris Louis G. Morris Executive Vice President and CFO By: /s/ Laurie D Grabow Laurie D. Grabow Senior Vice President Principal Financial and Accounting Officer 14 EX-27 2 0002.txt
9 1000 YEAR DEC-31-2000 JUN-30-2000 10,679 281 8,983 0 81,145 45,835 44,187 310,219 3,385 474,908 366,584 6,399 2,096 34,000 0 0 12,917 31,594 474,908 12,332 3,576 49 15,957 6,472 7,747 8,210 325 0 7,653 3,064 3,064 0 0 2,458 .95 .95 4.22 479 687 0 3,900 3,111 175 226 3,385 0 0 1,550
-----END PRIVACY-ENHANCED MESSAGE-----