Old Point Financial (OPOF) 8-K Old Point Posts Profit, Sees Assets & Deposits Rise in 3rd Quarter

CONTACT:  Lani Chisman Davis, 757-728-1286

Old Point Posts Profit, Sees Assets & Deposits Rise in 3rd Quarter

· Profit of $1 Million

· Assets Increase 5.4%

· Deposits Climb 11.4%

· Rise in Net Interest Margin

October 18, 2010,  Hampton, VA   Old Point Financial Corporation (Nasdaq "OPOF") reported a profit for the third quarter of 2010 and assets and net interest income increased over the same period a year ago.  Officials with Old Point say signals continue to point toward improvement in the economy, but that challenges remain.

Old Point’s profit for the quarter ending September 30, 2010 was $1.0 million, or $0.21 per diluted share.  September 30, 2010 assets rose by $47.0 million to $918.7 million, or 5.4%, over September, 2009 assets and deposits increased 11.4%, to $696.7 million.  When comparing the third quarter of 2010 to the third quarter of 2009, net interest income after provision for loan losses increased to $6.4 million, a rise of 6.2%, and the net interest margin grew by 19 basis points to 3.77%.

“From our third-quarter 2010 results, we are seeing evidence that the economic slowdown is abating,” said Robert F. Shuford, Chairman and President of Old Point Financial Corporation.  “We remain cautious, though, knowing that challenges remain.  We keep our traditional focus on prudent management for both the short- and long-term. We also continue to add products and services that increase customer convenience.”  In the fourth quarter, Old Point will begin offering e-statements to customers through Old Point Online Banking.

Also during this time period, the archaeological dig Old Point commissioned at the site of its future five-story headquarters at 101 E. Queen St. in downtown Hampton entered its wind-down phase.  More than 4,000 members of the public have visited the project since it began during the summer and two educational events, including programming for children, have been held at the location.

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Over a thousand archaeological features, such as a structure from the early 18th century, three wells, a cellar, and a refuse pit that may date to the 17th century have been discovered by the James River Institute for Archaeology, the organization Old Point retained to conduct the excavation.  Among the many artifacts found are a stein from the Queen Anne period, prior to 1750, and cowry shells, which were used as status ornaments and currency in Africa.

Other activities and support in the community’s interest by Old Point and its staff during the third-quarter included participation with the United Way Day of Caring; Hampton Roads Freedom Walks; the Day of Service & Remembrance at Fort Monroe; CHIP (Comprehensive Health Investment Project) of Chesapeake; Seton Youth Shelter; American Red Cross, Hampton Roads Chapter; H.E.L.P., Inc.; Thomas Nelson Community College; and others.

Additional items of note for the third quarter of 2010:

Non-performing Assets (NPAs) as of September 30, 2010 were $34.0 million, up from $31.7 million on June 30, 2010 and $27.9 million on March 31, 2010.  The Company continues to be proactive in identifying and managing problem credits.

Allowance for Loan and Lease Losses (ALLL) as of September 30, 2010 was 1.96% of total loans, up from 1.87% as of June 30, 2010 and 1.76% as of March 31, 2010.  The Company has continued building the ALLL throughout 2010.

Net loans charged off/provision for loan losses:  For the nine months ended September 30, 2010, loans charged off totaled $3.3 million, compared to $3.7 million for the like period of 2009.  The provision for loan losses in the third quarter 2010 of $1.5 million represents a $500 thousand addition to the provision over the third quarter of 2009.

Net interest margin (NIM) for the third quarter of 2010 was 3.77% as compared with 3.58% for the comparable quarter in 2009.

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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 future 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 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 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 information, contact Lani Chisman Davis at Old Point National Bank at 757- 728-1286.

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Old Point Financial Corporation and Subsidiaries

Consolidated Balance Sheet

(dollars in thousands, except share data)	September 30,			September 30,
	2010			2009
	(unaudited)			(unaudited)
Assets
Cash and due from banks	$	12,106		$	20,445
Federal funds sold		31,128			25,740
Cash and cash equivalents		43,234			46,185
Securities available-for-sale, at fair value		194,610			129,433
Securities held-to-maturity
(fair value approximates $2,107 and $2,006)		2,082			1,967
Restricted Securities		4,482			4,815
Loans, net of allowance for loan losses of $12,105 and $7,754		604,631			627,372
Premises and equipment, net		29,725			29,717
Bank owned life insurance		17,863			16,569
Foreclosed assets, net of valuation allowance of $1,203 and $165		10,140			8,486
Other assets		11,950			7,202
	$	918,717		$	871,746
Liabilities & Stockholders' Equity
Deposits:
Noninterest-bearing deposits	$	129,202		$	110,426
Savings deposits		224,067			186,441
Time deposits		343,393			328,750
Total deposits		696,662			625,617
Federal funds purchased and other borrowings		1,077			1,115
Overnight repurchase agreements		51,146			41,552
Term repurchase agreements		50,204			53,669
Federal Home Loan Bank advances		35,000			65,000
Accrued expenses and other liabilities		1,499			2,313
Total liabilities		835,588			789,266
Commitments and contingencies
Stockholders' equity:
Common stock, $5 par value, 10,000,000 shares authorized;
4,936,989 and 4,909,035 shares issued		24,685			24,545
Additional paid-in capital		15,997			15,666
Retained earnings		42,607			42,672
Accumulated other comprehensive loss		(160	)		(403	)
Total stockholders' equity		83,129			82,480
	$	918,717		$	871,746

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Old Point Financial Corporation and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except per share data)	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2010		2009			2010		2009
	(unaudited)					(unaudited)
Interest and Dividend Income:
Interest and fees on loans	$	9,237	$	9,649		$	27,982	$	28,467
Interest on federal funds sold		16		11			64		33
Interest on securities:
Taxable		854		584			2,508		1,953
Tax-exempt		53		121			221		435
Dividends and interest on all other securities		12		107			34		374
Total interest and dividend income		10,172		10,472			30,809		31,262
Interest Expense:
Interest on savings and interest-bearing demand deposits		108		86			302		279
Interest on time deposits		1,605		2,341			5,169		7,776
Interest on federal funds purchased, securities sold under
agreements to repurchase and other borrowings		109		151			471		392
Interest on Federal Home Loan Bank advances		430		848			1,970		2,597
Total interest expense		2,252		3,426			7,912		11,044
Net interest income		7,920		7,046			22,897		20,218
Provision for loan losses		1,500		1,000			7,500		5,000
Net interest income, after provision for loan losses		6,420		6,046			15,397		15,218
Noninterest Income:
Income from fiduciary activities		718		702			2,320		2,230
Service charges on deposit accounts		1,069		1,403			3,663		4,115
Other service charges, commissions and fees		719		630			2,164		1,898
Income from bank owned life insurance		216		199			816		551
Gain on available-for-sale securities, net		541		-			541		-
Other operating income		130		69			311		274
Total noninterest income		3,393		3,003			9,815		9,068
Noninterest Expense:
Salaries and employee benefits		4,539		4,463			13,692		13,277
Occupancy and equipment		1,085		1,027			3,235		3,073
FDIC insurance		404		264			1,050		1,117
Data processing		316		287			918		810
Customer development		215		228			656		610
Advertising		177		161			528		513
Loan expenses		118		173			481		474
Other outside service fees		158		96			357		265
Legal and audit expenses		245		139			564		339
Loss (gain) on write-down/sale of foreclosed assets		481		(83	)		430		58
Other		664		687			2,197		2,201
Total noninterest expenses		8,402		7,442			24,108		22,737
Income before income taxes		1,411		1,607			1,104		1,549
Income tax expense		376		449			7		243
Net income	$	1,035	$	1,158		$	1,097	$	1,306
Basic Earnings per Share:
Average shares outstanding		4,930,578		4,909,035			4,925,571		4,908,094
Net income per share of common stock	$	0.21	$	0.24		$	0.22	$	0.27
Diluted Earnings per Share:
Average shares outstanding		4,931,851		4,934,522			4,930,450		4,936,247
Net income per share of common stock	$	0.21	$	0.24		$	0.22	$	0.26

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Old Point Financial Corporation and Subsidiaries
Selected Ratios	September 30,			June 30,			March 31,			December 31,
	2010			2010			2010			2009
NPAs/Total Assets		3.70	%		3.47	%		2.93	%		1.67	%
Annualized Net Charge Offs/Total Loans		0.70	%		0.69	%		0.90	%		0.85	%
Allowance for Loan Losses/Total Loans		1.96	%		1.87	%		1.76	%		1.24	%
Non-Performing Assets (NPAs) (in thousands)
Nonaccrual Loans	$	23,636		$	18,677		$	17,534		$	4,917
Loans> 90 days past due, but still accruing interest	$	243		$	659		$	266		$	389
Restructured Loans	$	-		$	2,480		$	2,480		$	2,480
Foreclosed Assets	$	10,140		$	9,884		$	7,571		$	7,623
Total Non-Performing Assets	$	34,019		$	31,700		$	27,851		$	15,409
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2010			2009			2010			2009
Loans Charged Off (net of recoveries) (in thousands)	$	1,102		$	521		$	3,259		$	3,652
Net Interest Margin (FTE)		3.77	%		3.58	%		3.57	%		3.43	%

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