8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 26, 2018

OLD POINT FINANCIAL CORPORATION

 (Exact name of registrant as specified in its charter)

Virginia	000-12896	54-1265373
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1 West Mellen Street

Hampton, Virginia  23663

(Address of principal executive offices)  (Zip Code)

(757) 728-1200

(Registrant's telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐

Item 2.02 Results of Operations and Financial Condition.

On April 26, 2018 Old Point Financial Corporation issued a press release reporting its earnings and financial results for the quarter ended March 31, 2018. A copy of the press release is furnished as Exhibit 99.1and is incorporated by reference into this Item 2.02.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits
	Exhibit 99.1 Press release dated April 26, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Old Point Financial Corporation
	Registrant
Date: April 26, 2018	/s/ Robert F. Shuford, Sr.
	Robert F. Shuford, Sr.
	Chairman of the Board
	President & Chief Executive Officer

EX-99.1

Exhibit 99.1

Old Point Releases First Quarter 2018 Results

Hampton, VA, April 26, 2018 (PRNewswire) Old Point Financial Corporation (the Company or Old Point) (NASDAQ "OPOF") reported net income of $942 thousand ($0.19 per diluted share) for the three months ended March 31, 2018. This compares to net income of $942 thousand ($0.19 per diluted share) for the three months ended March 31, 2017.

Net operating earnings (Non-GAAP) were $1.1 million ($0.23 per diluted share) for the first quarter of 2018, an increase of $205 thousand or 21.8% from $942 thousand ($0.19 per diluted share) for the first quarter of 2017. Net operating earnings for the first quarter of 2018 exclude $205 thousand in after-tax merger-related expenses. The Company's first quarter 2018 net operating earnings (Non-GAAP) increased $366 thousand, or 46.9%, from the preceding quarter.

Robert Shuford, Jr., President and CEO of Old Point National Bank said, "We are very pleased with our start in 2018. We continue to see momentum in building customer relationships and new account acquisition through a focus on our internal sales management processes. Revenue growth continued to be a positive in the quarter, and we experienced notable improvement in charge-off levels and past dues. Net loan growth slowed during the quarter on some accelerated pay-downs and our first sale of a pool of consumer automobile loans, but pipelines remain strong as we move into the second quarter. Certainly adding to our positive momentum is the completion of the acquisition of Citizens National Bank (Citizens) of Windsor, Virginia on April 1, 2018, which moved our Company past the $1 billion threshold in total assets for the first time. We are excited to bring the Citizens team into the Old Point family and expect their lenders to add momentum and complement our lending strategies."

Highlights of the quarter are as follows:

· Net interest income after provision for loan losses improved to $7.2 million, an increase of 12.3% over the previous quarter and 11.3% over the first quarter of 2017.

· Return on average assets (ROA) was 0.38% compared to (1.19%) in the prior quarter and 0.42% in the first quarter of 2017. Net operating ROA (Non-GAAP) was 0.46% compared to 0.32% and 0.43% in the fourth and first quarters of 2017, respectively.

· Annualized net charge-offs as a percentage of average loans improved to 0.13% from 0.41% in the fourth quarter of 2017 and 0.24% in the first quarter of 2017.

·  Total assets increased to $993.8 million, representing growth of $11.9 million, or 1.2%, from December 31, 2017 and $71.0 million, or 7.7%, from March 31, 2017.

· The Company completed its acquisition of Citizens on April 1, 2018. Under the terms of the merger agreement, Citizens shareholders received 0.1041 shares of Old Point stock and $2.19 in cash for each share of Citizens stock. Systems integration is scheduled to be completed in late May. The Company's first quarter results do not include the financial assets of Citizens.

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Net Interest Income

Net interest income for the first quarter of 2018 was $7.7 million, an increase of $79 thousand, or 1.0%, from the fourth quarter of 2017 and an increase of $608 thousand, or 8.5%, from the first quarter of 2017. The quarter-over-quarter and year-over-year increases in net interest income are attributable to higher average earning asset balances, partially offset by higher funding costs. The tax-equivalent net interest margin for the quarter was 3.48%, down from 3.57% in the prior quarter and 3.69% in the same period a year ago. The margin contractions were due to increased rates on interest-bearing deposits and borrowings. The Tax Cuts and Jobs Act also negatively impacted the margin. The lowering of the federal corporate income tax rate to 21% reduced the benefit of the Company's interest income from tax-exempt state and municipal securities.

Asset Quality

Non-performing assets (NPAs) totaled $16.5 million as of March 31, 2018, up from $16.1 million at December 31, 2017 and $15.1 million at March 31, 2017. NPAs as a percentage of total assets were 1.66%, which compares to 1.64% at December 31, 2017 and 1.63% at March 31, 2017. Non-accrual loans increased to $14.1 million from $12.9 million at December 31, 2017 and $11.0 million at March 31, 2017. Loans past due 90 days or more and still accruing interest decreased to $2.2 million from $3.2 million at December 31, 2017 and $3.0 million at March 31, 2017. Of the loans past due 90 days or more at March 31, 2018, approximately $2.0 million were government-guaranteed student loans. Other real estate owned was $203 thousand at March 31, 2018 after one property was added during the first quarter. The Company had no other real estate owned at December 31, 2017 and $1.1 million at March 31, 2017.

The allowance for loan and lease losses (ALLL) was $9.7 million at March 31, 2018 compared to $9.4 million at December 31, 2017 and $8.5 million at March 31, 2017. The ALLL as a percentage of loans held for investment was 1.33% at March 31, 2018 compared to 1.28% at December 31, 2017 and 1.34% at March 31, 2017. Net loans charged-off during the quarter totaled $243 thousand, which compares to net charge-offs of $738 thousand and $372 thousand in the preceding quarter and first quarter of 2017, respectively. On an annualized basis, net charge-offs as a percentage of average loans were 0.13% for the first quarter of 2018 compared to 0.41% in the fourth quarter of 2017 and 0.24% in the first quarter of 2017.

Noninterest Income

Total noninterest income for the quarter was $3.4 million, down $88 thousand, or 2.6%, from the previous quarter but up $192 thousand, or 6.1% from the first quarter of 2017. The quarter-over-quarter decline resulted from lower deposit service charges and mortgage banking income, which was partially offset by increases in gains from sales of available-for-sale securities, bank-owned life insurance income, and other service charges, commissions and fees. The increase in noninterest income relative to the year ago period was largely due to higher mortgage banking income and securities gains.

2

Noninterest Expense

Noninterest expense totaled $9.6 million for the first quarter of 2018. This represents a decrease of $3.2 million, or 25.1%, from the fourth quarter of 2017 and an increase of $923 thousand, or 10.6%, from the first quarter of 2017. The decline relative to the preceding quarter was principally related to a nonrecurring charge of $3.4 million in the fourth quarter of 2017 associated with the termination and settlement of the Company's defined benefit pension plan.  Increases in merger-related expenses, salaries and employee benefits, professional services, data processing, and FDIC insurance expenses were responsible for the year-over-year increase in noninterest expense.

Balance Sheet Review

Total assets as of March 31, 2018 were $993.8 million, an increase of $11.9 million, or 1.2%, from December 31, 2017. Net loans held for investment decreased $5.9 million during the quarter. The strong loan growth experienced over recent quarters moderated during the first quarter in part due to accelerated payoffs. Also, the Company sold an $8.8 million pool of consumer automobile loans during the quarter at approximately book value as part of a strategy to maintain a balanced loan portfolio. Cash and cash equivalents increased $29.0 million from December 31, 2017.

Total liabilities increased $13.3 million, or 1.5%, during the quarter. Total deposits increased $5.4 million, or 0.7%, to $789.0 million. Noninterest-bearing deposits increased $5.6 million, or 2.5%, and savings deposits increased $4.8 million, or 1.4%, while time deposits declined by $5.0 million, or 2.4%. Overnight repurchase agreements increased $15.4 million, or 74.7%, and Federal Home Loan Bank advances increased by $2.5 million, or 3.7%, from December 31, 2017.

 Total stockholders' equity declined 1.4% from December 31, 2017 to $95.0 million. This was the result of a $2.0 million increase in the net unrealized loss on available-for-sale securities, a component of accumulated other comprehensive loss on the consolidated balance sheets. This was driven by increases in market rates during the quarter.

Non-GAAP Financial Measures – In addition to the Company's results presented in accordance with GAAP, this release includes certain non-GAAP financial measures including net operating earnings, net operating earnings per share, and net operating ROA.  A schedule reconciling these non-GAAP financial measures is provided at the end of this press release.  The Company uses these non-GAAP financial measures in its internal analysis of financial and operating performance and the Company's management believes that they provide greater transparency regarding management's view of the Company's performance.  These non-GAAP financial measures should be read in conjunction with, and not as a substitute for, the Company's GAAP results.  In addition, because not all companies use identical calculations, the Company's presentation of its non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.

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Safe Harbor Statement Regarding Forward-Looking Statements - Statements in this press release which use language such as "believes," "expects," "plans," "may," "will," "should," "projects," "contemplates," "anticipates," "forecasts," "intends" and similar expressions, identify forward-looking statements. These forward-looking statements are based on the beliefs of Old Point's management, as well as estimates and assumptions made by, and information currently available to, management. These statements are inherently uncertain, and there can be no assurance that the underlying estimates or assumptions will prove to be accurate. Actual results could differ materially from historical results or those anticipated by such statements. Forward-looking statements in this release may include, without limitation: statements regarding the acquisition of Citizens National; future financial performance; future impacts of the Tax Act on the Company's operations; performance of the investment and loan portfolios, including performance of the consumer auto loan portfolio and the purchased student loan portfolio; the effects of diversifying the loan portfolio; strategic business initiatives; management's efforts to reposition the balance sheet; deposit growth; levels and sources of liquidity; use of proceeds from the sale of securities; future levels of charge-offs or net recoveries; the impact of increases in NPAs on future earnings; write-downs and expected sales of other real estate owned; and changes in interest rates.

Factors that could have a material adverse effect on the operations and future prospects of Old Point include, but are not limited to: the possibility that any of the anticipated benefits of the acquisition of Citizens will not be realized or will not be realized within the expected time period; Citizens may not be integrated into Old Point successfully or such integration may be more difficult, time-consuming, or costly than expected. Other factors that could have a material adverse effect on the operations and future prospects of Old Point include, but are not limited to, changes in: interest rates and yields; general economic and business conditions, including unemployment levels; demand for loan products; the legislative/regulatory climate; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board and any changes associated with the current administration; the quality or composition of the loan or securities portfolios; changes in the volume and mix of interest-earning assets and interest-bearing liabilities; the effects of management's investment strategy and strategy to manage the net interest margin; the U.S. Government's guarantee of repayment of student loans purchased by Old Point; the level of net charge-offs on loans; deposit flows; competition; demand for financial services in Old Point's market area; technology; reliance on third parties for key services; the use of inaccurate assumptions in management's modeling systems; the real estate market; accounting principles, policies and guidelines; and other factors detailed in Old Point's publicly filed documents, including its Annual Report on Form 10-K for the year ended December 31, 2017. 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 date of the release.

Old Point Financial Corporation ("OPOF" - Nasdaq)is theparent company of The Old Point National Bank of Phoebus, a locally owned and managed community bank serving all of Hampton Roads and Old Point Trust & Financial Services, N.A., aHampton Roads wealth management services provider. Web: www.oldpoint.com. For more information, contact Jeffrey Farrar, Chief Financial Officer & Senior Vice President/Finance of Old Point Financial Corporation at 757-728-1248, or Erin Black, Senior Vice President/Marketing Director, Old Point National Bank at 757-251-2792.

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Old Point Financial Corporation and Subsidiaries
Consolidated Balance Sheets	March 31,			December 31,
(dollars in thousands, except share and per share data)	2018			2017
	(unaudited)
Assets
Cash and due from banks	$	37,019		$	13,420
Interest-bearing due from banks		3,866			908
Federal funds sold		2,552			84
Cash and cash equivalents		43,437			14,412
Securities available-for-sale, at fair value		146,057			157,121
Restricted securities		4,023			3,846
Loans held for sale		715			779
Loans held for investment, net		723,144			729,092
Premises and equipment, net		36,754			37,197
Bank-owned life insurance		26,190			25,981
Goodwill		621			621
Other real estate owned, net		203			-
Other assets		12,629			12,777
Total assets	$	993,773		$	981,826
Liabilities & Stockholders' Equity
Deposits:
Noninterest-bearing deposits	$	231,345		$	225,716
Savings deposits		349,881			345,053
Time deposits		207,801			212,825
Total deposits		789,027			783,594
Federal funds purchased		-			10,000
Overnight repurchase agreements		36,141			20,693
Federal Home Loan Bank advances		70,000			67,500
Accrued expenses and other liabilities		3,607			3,651
Total liabilities		898,775			885,438
Commitments and contingencies
Stockholders' equity:
Common stock, $5 par value, 10,000,000 shares authorized;
5,020,784 and 5,019,703 shares outstanding
(includes 2,245 shares of nonvested restricted stock)		25,093			25,087
Additional paid-in capital		17,298			17,270
Retained earnings		55,267			54,738
Accumulated other comprehensive loss, net		(2,660	)		(707	)
Total stockholders' equity		94,998			96,388
Total liabilities and stockholders' equity	$	993,773		$	981,826

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Old Point Financial Corporation and Subsidiaries
Consolidated Statements of Operations
(dollars in thousands, except per share data)	Three Months Ended
	Mar 31, 2018		Dec 31, 2017			Mar 31, 2017
	(unaudited)					(unaudited)
Interest and Dividend Income:
Interest and fees on loans	$	7,895	$	7,659		$	6,780
Interest on due from banks		4		3			5
Interest on federal funds sold		2		2			3
Interest on securities:
Taxable		494		490			496
Tax-exempt		344		369			427
Dividends and interest on all other securities		60		57			14
Total interest and dividend income		8,799		8,580			7,725
Interest Expense:
Interest on savings deposits		104		102			64
Interest on time deposits		616		609			519
Interest on federal funds purchased, securities sold under
agreements to repurchase and other borrowings		10		12			5
Interest on Federal Home Loan Bank advances		324		191			-
Total interest expense		1,054		914			588
Net interest income		7,745		7,666			7,137
Provision for loan losses		525		1,235			650
Net interest income after provision for loan losses		7,220		6,431			6,487
Noninterest Income:
Fiduciary and asset management fees		983		966			966
Service charges on deposit accounts		870		1,030			927
Other service charges, commissions and fees		1,067		1,041			1,016
Bank-owned life insurance income		209		179			198
Mortgage banking income		141		183			6
Gain on sale of available-for-sale securities, net		80		7			-
Other operating income		5		37			50
Total noninterest income		3,355		3,443			3,163
Noninterest Expense:
Salaries and employee benefits		5,477		5,213			5,097
Pension termination settlement		-		3,350			-
Occupancy and equipment		1,477		1,517			1,449
Data processing		516		455			414
FDIC insurance		191		156			96
Customer development		182		124			144
Professional services		488		668			373
Employee professional development		192		143			236
Loan related expenses		126		133			60
Other taxes		170		141			143
ATM and other losses		97		232			177
Merger expenses		205		241			-
Other operating expenses		508		481			517
Total noninterest expense		9,629		12,854			8,706
Income (loss) before income taxes		946		(2,980	)		944
Income tax expense (benefit)		4		(91	)		2
Net income (loss)	$	942	$	(2,889	)	$	942
Basic Earnings (Loss) per Share:
Average shares outstanding		5,020,075		5,018,093			4,977,267
Net income (loss) per share of common stock	$	0.19	$	(0.58	)	$	0.19
Diluted Earnings (Loss) per Share:
Average shares outstanding		5,020,146		5,018,093			4,991,864
Net income (loss) per share of common stock	$	0.19	$	(0.58	)	$	0.19
Cash Dividends Declared per Share:	$	0.11	$	0.11		$	0.11

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Old Point Financial Corporation and Subsidiaries
Average Balance Sheets, Net Interest Income* And Rates*
	For the quarter ended March 31,
				2018								2017
				Interest								Interest
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate**			Balance			Expense		Rate**
						(dollars in thousands)
ASSETS
Loans held for investment*	$	744,620		$	7,901		4.24	%	$	616,357		$	6,811		4.42	%
Loans held for sale		756			9		4.76	%		-			-		0.00	%
Investment securities:
Taxable		94,387			494		2.09	%		107,141			496		1.85	%
Tax-exempt*		57,929			436		3.01	%		72,441			647		3.57	%
Total investment securities		152,316			930		2.44	%		179,582			1,143		2.55	%
Interest-bearing due from banks		1,150			4		1.39	%		2,108			5		0.95	%
Federal funds sold		455			2		1.76	%		1,598			3		0.75	%
Other investments		4,415			60		5.44	%		970			14		5.77	%
Total earning assets		903,712		$	8,906		3.94	%		800,615		$	7,976		3.98	%
Allowance for loan losses		(9,842	)							(8,392	)
Other non-earning assets		93,388								108,220
Total assets	$	987,258							$	900,443
LIABILITIES AND STOCKHOLDERS' EQUITY
Time and savings deposits:
Interest-bearing transaction accounts	$	27,597		$	3		0.04	%	$	28,226		$	2		0.03	%
Money market deposit accounts		231,035			91		0.16	%		236,060			52		0.09	%
Savings accounts		85,505			10		0.05	%		79,997			10		0.05	%
Time deposits		211,641			616		1.16	%		207,138			519		1.00	%
Total time and savings deposits		555,778			720		0.52	%		551,421			583		0.42	%
Federal funds purchased, repurchase
agreements and other borrowings		28,353			10		0.14	%		20,632			5		0.10	%
Federal Home Loan Bank advances		80,333			324		1.61	%		-			-		0.00	%
Total interest-bearing liabilities		664,464			1,054		0.63	%		572,053			588		0.41	%
Demand deposits		223,056								228,062
Other liabilities		3,452								5,846
Stockholders' equity		96,286								94,482
Total liabilities and stockholders' equity	$	987,258							$	900,443
Net interest margin				$	7,852		3.48	%				$	7,388		3.69	%
*Computed on a fully tax-equivalent basis using a 21% rate in 2018 and a 34% rate in 2017
**Annualized

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Old Point Financial Corporation and Subsidiaries
Selected Ratios	March 31,			December 31,			March 31,
	2018			2017			2017
		(unaudited)						(unaudited)
Net interest margin (FTE)		3.48	%		3.57	%		3.69	%
NPAs/total assets		1.66	%		1.64	%		1.63	%
Annualized net charge offs/average total loans		0.13	%		0.41	%		0.24	%
Allowance for loan losses/total loans		1.33	%		1.28	%		1.34	%
Efficiency ratio (FTE)		86.04	%		113.76	%		82.76	%
Non-Performing Assets (NPAs) (in thousands)
Nonaccrual loans	$	14,131		$	12,882		$	11,032
Loans > 90 days past due, but still accruing interest		2,167			3,182			2,957
Non-performing restructured loans		-			-			-
Other real estate owned		203			-			1,067
Total non-performing assets	$	16,501		$	16,064		$	15,056
Other Selected Numbers (in thousands)
Loans charged off during the quarter, net of recoveries	$	243		$	738		$	372
Quarterly average loans	$	745,376		$	719,619		$	616,357
Quarterly average assets	$	987,258		$	968,290		$	900,443
Quarterly average earning assets	$	903,712		$	884,348		$	800,615
Quarterly average deposits	$	778,834		$	785,475		$	779,483
Quarterly average equity	$	96,287		$	97,560		$	94,482

Old Point Financial Corporation and Subsidiaries
Reconciliations of GAAP Measures to Non-GAAP Measures
(dollars in thousands, except per share data)
	Three Months Ended
	Mar 31, 2018			Dec 31, 2017			Mar 31, 2017
	(unaudited)						(unaudited)
Net income (loss)	$	942		$	(2,889	)	$	942
Less:
Compensation expense for benefit plan termination (after tax)		-			2,211			-
Merger-related costs (after tax)		205			241			-
Tax expenses for tax asset reevaluation		-			1,218			-
Net operating earnings	$	1,147		$	781		$	942
Weighted average shares outstanding (assuming dilution)		5,020,146			5,018,603			4,991,864
Earnings per share (GAAP)	$	0.19		$	(0.58	)	$	0.19
Net operating earnings per share (Non-GAAP)	$	0.23		$	0.16		$	0.19
Quarterly average assets	$	987,258		$	968,290		$	900,443
ROA (GAAP)		0.38	%		(1.19	%)		0.42	%
Net operating ROA (non-GAAP)		0.46	%		0.32	%		0.42	%
Efficiency ratio (FTE)		86.04	%		113.76	%		82.76	%
Operating efficiency ratio (FTE)		84.21	%		92.06	%		82.76	%

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