Old Point Financial (OPOF) 8-K Old Point Records Profit for Fourth Quarter and the Year

Old Point Records Profit for Fourth Quarter and the Year

·Deposits grow

·Net interest margin improves

·Fourth quarter 2010 net income up 19.4%

February 10, 2011 Hampton, VA                         Old Point Financial Corporation (Nasdaq "OPOF") posted a profit of $450 thousand, or $0.09 per diluted share, in the quarter that ended December 31, 2010, as compared to $377 thousand or $0.08 per diluted share in the fourth quarter of 2009, an increase of 19.4%.  Assets as of December 31, 2010 were $886.84 million, a decrease of $34.58 million, or 3.8%, over assets as of December 31, 2009.  Securities available-for-sale, consisting mainly of short term government agency securities, increased $32.32 million, or 18.6% when comparing year end 2010 to year end 2009.  Deposits grew by $16.71 million, or 2.5% when comparing those same time periods.  Additionally, the Bank paid off $30.00 million in Federal Home Loan Bank (FHLB) advances in 2010, reducing the advances from $65.00 million to $35.00 million.

For the twelve months ending December 31, 2010, earnings per diluted share were $0.31 and net income was $1.55 million compared to $0.34 and $1.68 million for 2009.  When comparing the year ending December 31, 2010 to the year ending December 31, 2009, net interest income before the provision for loan losses increased 13.0%, to $30.91 million.  The net interest margin grew by 19 basis points to 3.63% year end over year end.

“Despite the challenges of 2010, we recorded a profit for the fourth quarter and for the year as a whole,” said Robert F. Shuford, Chairman and President of Old Point Financial Corporation.  “We accomplished this even though we increased our provision for loan losses by $1.93 million over 2009.  That action was prudent due to the continued uncertain economy and the difficulties facing our borrowers.  It should also be noted that the allowance for loan loss increased $5.36 million over 2009.

“During 2010, Old Point introduced e-statements and Old Point Mobile Banking.  Also, we keep our focus on future growth, with the work on our new five-story headquarters in downtown Hampton.  Old Point’s new building is expected to be completed in 2012.  As part of the project and in honor of the City of Hampton’s 400th anniversary, an archaeological team commissioned by Old Point completed a dig at the site where the headquarters will rise and made significant discoveries dating back to the 1750s.  Thousands of members of the public visited the dig location during the 2010 Blackbeard Pirate Festival, for which Old Point was the presenting sponsor.”

Other items of note for the fourth quarter 2010:

Non-performing Assets (NPAs) as of December 31, 2010 were $34.04 million, up from $15.41 on December 31, 2009.

Allowance for Loan and Lease Losses (ALLL) on December 31, 2010 was 2.25% of total loans; as of December 31, 2009, that measure was 1.24%.  The Company has continued building the ALLL throughout 2010.

Net loans charged off/provision for loan losses: For the year ended December 31, 2010, net loans charged off total $3.44 million, compared to $5.42 million during the twelve months ended December 31, 2009.  The provision for loan losses in the fourth quarter 2010 of $1.30 million represents a $575 thousand reduction to the provision over the fourth quarter of 2009.

Net interest margin (NIM) for the twelve months ended December 31, 2010 was 3.63% as compared to 3.44% the same period ended December 31, 2009.

Safe Harbor Statement Regarding Forward-Looking Statements. Statements in this press release which express “belief,” “intention,” “expectation,” and similar expressions, identify forward-looking statements.  These forward-looking statements are based on the beliefs of the corporation's management, as well as estimates and assumptions made by, and information currently available to, the corporation's 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. Factors that could have a material adverse effect on the operations and fut ure prospects of the corporation include, but are not limited to, changes in: interest rates; 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; the quality or composition of the loan or investment portfolios; the level of net charge-offs on loans; deposit flows; competition; demand for financial services in the corporation’s market area; technology; reliance on third parties for key services; the real estate market; the corporation’s expansion initiatives; accounting principles, policies and guidelines; and other factors detailed in the corporation's publicly filed documents, including its Annual Report on Form 10-K for the year ended December 31, 2009. These risks and uncertainties should be considered in evaluatin g 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 Old Point National Bank, a locally owned and managed community bank serving Hampton Roads with 21 branches and more than 60 ATMs throughout Hampton Roads and Old Point Trust & Financial Services, N.A., aHampton Roads wealth management services provider. Web: www.oldpoint.com. For more informatio n, contact Erin Black Old Point National Bank at 757- 728-1792.

Old Point Financial Corporation and Subsidiaries
Consolidated Balance Sheet
(dollars in thousands, except share data)	December 31,			December 31,
	2010			2009
	(unaudited)
Assets
Cash and due from banks	$	15,603		$	13,224
Federal funds sold		12,828			34,412
Cash and cash equivalents		28,431			47,636
Securities available-for-sale, at fair value		206,092			173,775
Securities held-to-maturity
(fair value approximates $1,957 and $2,233)		1,952			2,212
Restricted securities		4,320			4,815
Loans, net of allowance for loan losses of $13,228 and $7,864		573,391			627,378
Premises and equipment, net		29,616			30,397
Bank owned life insurance		18,020			16,291
Foreclosed assets, net of valuation allowance of $2,124 and $860		11,448			7,623
Other assets		13,572			11,295
	$	886,842		$	921,422
Liabilities & Stockholders' Equity
Deposits:
Noninterest-bearing deposits	$	129,208		$	111,637
Savings deposits		225,210			205,648
Time deposits		324,796			345,217
Total deposits		679,214			662,502
Federal funds purchased and other borrowings		731			1,019
Overnight repurchase agreements		50,757			49,560
Term repurchase agreements		38,959			59,859
Federal Home Loan Bank advances		35,000			65,000
Accrued expenses and other liabilities		1,229			1,874
Total liabilities		805,890			839,814
Commitments and contingencies
Stockholders' equity:
Common stock, $5 par value, 10,000,000 shares authorized;
4,936,989 and 4,916,535 shares issued		24,685			24,583
Additional paid-in capital		16,026			15,769
Retained earnings		42,810			42,519
Accumulated other comprehensive loss		(2,569	)		(1,263	)
Total stockholders' equity		80,952			81,608
	$	886,842		$	921,422

Old Point Financial Corporation and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except per share data)	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
	2010		2009			2010		2009
	(unaudited)					(unaudited)
Interest and Dividend Income:
Interest and fees on loans	$	9,099	$	9,636		$	37,081	$	38,103
Interest on federal funds sold		10		21			75		54
Interest on securities:
Taxable		912		613			3,419		2,566
Tax-exempt		47		104			268		538
Dividends and interest on all other securities		13		47			47		421
Total interest and dividend income		10,081		10,421			40,890		41,682
Interest Expense:
Interest on savings and interest-bearing demand deposits		111		82			413		361
Interest on time deposits		1,454		2,175			6,624		9,951
Interest on federal funds purchased, securities sold under
agreements to repurchase and other borrowings		75		174			545		566
Interest on Federal Home Loan Bank advances		430		848			2,400		3,445
Total interest expense		2,070		3,279			9,982		14,323
Net interest income		8,011		7,142			30,908		27,359
Provision for loan losses		1,300		1,875			8,800		6,875
Net interest income, after provision for loan losses		6,711		5,267			22,108		20,484
Noninterest Income:
Income from fiduciary activities		754		757			3,074		2,987
Service charges on deposit accounts		1,096		1,358			4,760		5,473
Other service charges, commissions and fees		682		613			2,846		2,511
Income from bank owned life insurance		157		405			972		956
Gain on available-for-sale securities, net		0		290			541		290
Other operating income		135		119			446		397
Total noninterest income		2,824		3,542			12,639		12,614
Noninterest Expense:
Salaries and employee benefits		4,604		4,504			18,296		17,781
Occupancy and equipment		1,019		1,055			4,254		4,128
FDIC insurance		315		513			1,365		1,630
Data processing		330		278			1,248		1,089
Customer development		183		188			839		798
Advertising		126		106			654		619
Loan expenses		149		174			630		648
Other outside service fees		264		90			621		354
Employee professional development		112		108			491		500
Postage and courier expenses		118		152			511		550
Legal and audit expenses		309		140			874		479
Loss (gain) on write-down/sale of foreclosed assets		1,012		622			1,442		680
Other		402		534			1,826		1,949
Total noninterest expenses		8,943		8,464			33,051		31,205
Income before income taxes		592		345			1,696		1,893
Income tax expense (benefit)		142		(32	)		149		211
Net income	$	450	$	377		$	1,547	$	1,682
Basic Earnings per Share:
Average shares outstanding		4,937		4,909			4,928		4,908
Net income per share of common stock	$	0.09	$	0.08		$	0.31	$	0.34
Diluted Earnings per Share:
Average shares outstanding		4,937		4,929			4,932		4,935
Net income per share of common stock	$	0.09	$	0.08		$	0.31	$	0.34
Cash Dividends Declared	$	0.05	$	0.10		$	0.25	$	0.47

Old Point Financial Corporation and Subsidiaries
Selected Ratios	December 31,			December 31,
	2010			2009
Net Interest Margin		3.63	%		3.44	%
NPAs/Total Assets		3.84	%		1.67	%
Annualized Net Charge Offs/Total Loans		0.59	%		0.85	%
Allowance for Loan Losses/Total Loans		2.25	%		1.24	%
Non-Performing Assets (NPAs) (in thousands)
Nonaccrual Loans	$	20,881		$	4,917
Loans> 90 days past due, but still accruing interest		73			389
Restructured Loans		1,639			2,480
Foreclosed Assets		11,448			7,623
Total Non-Performing Assets	$	34,041		$	15,409
Loans Charged Off (net of recoveries) (in thousands)	$	3,436		$	5,417