10-Q 1 brhc10043959_10q.htm 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022

or

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____________ to___________

Commission File Number: 000-12896

OLD POINT FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Virginia
  
54-1265373
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)

101 East Queen Street, Hampton, Virginia 23669
(Address of principal executive offices) (Zip Code)

(757) 728-1200
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $5.00 par value
OPOF
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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      ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes    ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 
Large accelerated filer
 ☐
Accelerated filer ☐
  
 
Non-accelerated filer
 ☒
Smaller reporting company ☒
  
   
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes     ☒  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

4,996,728 shares of common stock ($5.00 par value) outstanding as of November 1, 2022

OLD POINT FINANCIAL CORPORATION
 
FORM 10-Q
 
INDEX
 
PART I - FINANCIAL INFORMATION
 
   
Page
     
Item 1.
1
     
 
1
     
 
2
     
 
3
     
 
4
     
 
5
     
 
6
     
Item 2.
 28
     
Item 3.
45
     
Item 4.
45
     
 
PART II - OTHER INFORMATION
  
     
Item 1.
45
     
Item 1A.
46
     
Item 2.
46
     
Item 3.
47
     
Item 4.
47
     
Item 5.
47
     
Item 6.
48
     
 
49
 
i
GLOSSARY OF DEFINED TERMS

2021 Form 10-K
Annual Report on Form 10-K for the year ended December 31, 2021
ALLL
Allowance for Loan and Lease Losses
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
Bank
The Old Point National Bank of Phoebus
CET1
Common Equity Tier 1
Company
Old Point Financial Corporation and its subsidiaries
CBB
Community Bankers Bank
CBLR
Community Bank Leverage Ratio Framework
COVID-19
Novel coronavirus disease 2019
EGRRCPA
Economic Growth, Regulatory Relief, and Consumer Protection Act
EPS
earnings per share
ESPP
Employee Stock Purchase Plan
Exchange Act
Securities Exchange Act of 1934, as amended
FDIC
Federal Deposit Insurance Corporation
FHLB
Federal Home Loan Bank
FRB
Federal Reserve Bank
GAAP
Generally Accepted Accounting Principles
Incentive Stock Plan
Old Point Financial Corporation 2016 Incentive Stock Plan
IRLC
Interest Rate Lock Commitments
NIM
Net Interest Margin
Notes
The Company’s 3.50% fixed-to-floating rate subordinated notes due 2031
OAEM
Other Assets Especially Mentioned
OREO
Other Real Estate Owned
PPP
Paycheck Protection Program
PPPLF
Paycheck Protection Program Liquidity Facility
ROE
Return on Average Equity
SEC
U.S. Securities and Exchange Commission
SOFR
Secured overnight financing rate
TDR
Troubled Debt Restructuring
Wealth Management
Old Point Trust & Financial Services N.A.

PART I – FINANCIAL INFORMATION
 
Item 1.
Financial Statements.
 
Old Point Financial Corporation and Subsidiaries
Consolidated Balance Sheets

   
September 30,
    
December 31,
  
(dollars in thousands, except share data)
  
2022
    
2021
  
   
(unaudited)
        
Assets
            
             
Cash and due from banks
  
$
16,104
    
$
13,424
  
Interest-bearing due from banks
    
34,376
      
164,073
  
Federal funds sold
    
4,063
      
10,425
  
Cash and cash equivalents
    
54,543
      
187,922
  
Securities available-for-sale, at fair value
    
227,540
      
234,321
  
Restricted securities, at cost
    
1,389
      
1,034
  
Loans held for sale
    
774
      
3,287
  
Loans, net
    
945,132
      
833,661
  
Premises and equipment, net
    
31,208
      
32,134
  
Premises and equipment, held for sale
    
1,216
      
871
  
Bank-owned life insurance
    
31,293
      
28,168
  
Goodwill
    
1,650
      
1,650
  
Core deposit intangible, net
    
242
      
275
  
Other assets
    
22,019
      
14,832
  
Total assets
  
$
1,317,006
    
$
1,338,155
  
                 
Liabilities & Stockholders’ Equity
                
                 
Deposits:
                
Noninterest-bearing deposits
  
$
437,247
    
$
421,531
  
Savings deposits
    
592,239
      
586,450
  
Time deposits
    
152,822
      
169,118
  
Total deposits
    
1,182,308
      
1,177,099
  
Overnight repurchase agreements
    
3,981
      
4,536
  
Federal Reserve Bank borrowings
    
-
      
480
  
Long term borrowings
    
29,505
      
29,407
  
Accrued expenses and other liabilities
    
7,700
      
5,815
  
Total liabilities
    
1,223,494
      
1,217,337
  
                 
Stockholders’ equity:
                
Common stock, $5 par value, 10,000,000 shares authorized; 4,996,728 and 5,239,707 shares outstanding (includes 46,092 and 38,435 of nonvested restricted stock, respectively)
    
24,753
      
26,006
  
Additional paid-in capital
    
16,450
      
21,458
  
Retained earnings
    
76,156
      
71,679
  
Accumulated other comprehensive (loss) income, net
    
(23,847
)
    
1,675
  
Total stockholders’ equity
    
93,512
      
120,818
  
Total liabilities and stockholders’ equity
  
$
1,317,006
    
$
1,338,155
  

See Notes to Consolidated Financial Statements.
 
1
Old Point Financial Corporation and Subsidiaries
Consolidated Statements of Income

   
Three Months Ended
    
Nine Months Ended
  
    
September 30,
    
September 30,
  
(unaudited, dollars in thousands, except share and per share data)
  
2022
    
2021
    
2022
    
2021
  
Interest and Dividend Income:
                        
Loans, including fees
  
$
10,506
    
$
9,692
    
$
29,173
    
$
28,460
  
Due from banks
    
252
      
68
      
533
      
163
  
Federal funds sold
    
11
      
-
      
18
      
-
  
Securities:
                                
Taxable
    
1,297
      
853
      
3,409
      
2,414
  
Tax-exempt
    
272
      
186
      
732
      
558
  
Dividends and interest on all other securities
    
30
      
16
      
58
      
57
  
Total interest and dividend income
    
12,368
      
10,815
      
33,923
      
31,652
  
                                 
Interest Expense:
                                
Checking and savings deposits
    
147
      
243
      
471
      
693
  
Time deposits
    
312
      
441
      
993
      
1,536
  
Federal funds purchased, securities sold under agreements to repurchase and other borrowings
    
43
      
3
      
45
      
33
  
Long term borrowings
    295
       252
       885
       252
  
Total interest expense
    
797
      
939
      
2,394
      
2,514
  
Net interest income
    
11,571
      
9,876
      
31,529
      
29,138
  
Provision for loan losses
    
402
      
360
      
1,073
      
510
  
Net interest income after provision for loan losses
    
11,169
      
9,516
      
30,456
      
28,628
  
                                 
Noninterest Income:
                                
Fiduciary and asset management fees
    
953
      
1,032
      
3,086
      
3,110
  
Service charges on deposit accounts
    
795
      
691
      
2,278
      
1,997
  
Other service charges, commissions and fees
    
1,143
      
1,125
      
3,339
      
3,275
  
Bank-owned life insurance income
    
227
      
195
      
653
      
625
  
Mortgage banking income
    
86
      
460
      
419
      
2,029
  
Other operating income
    
161
      
103
      
605
      
242
  
Total noninterest income
    
3,365
      
3,606
      
10,380
      
11,278
  
                                 
Noninterest Expense:
                                
Salaries and employee benefits
    
6,821
      
6,558
      
19,854
      
19,012
  
Occupancy and equipment
    
1,184
      
1,185
      
3,488
      
3,510
  
Data processing
    
1,206
      
1,187
      
3,447
      
3,427
  
Customer development
    
136
      
78
      
298
      
225
  
Professional services
    
647
      
625
      
1,915
      
1,790
  
Employee professional development
    
230
      
154
      
769
      
487
  
Other taxes
    
212
      
186
      
637
      
608
  
ATM and other losses
    
112
      
68
      
226
      
224
  
Other operating expenses
    
1,017
      
887
      
2,734
      
2,738
  
Total noninterest expense
    
11,565
      
10,928
      
33,368
      
32,021
  
Income before income taxes
    
2,969
      
2,194
      
7,468
      
7,885
  
Income tax expense
    
427
      
286
      
1,003
      
1,123
  
Net income
  
$
2,542
    
$
1,908
    
$
6,465
    
$
6,762
  
                                 
Basic Earnings per Share:
                                
Weighted average shares outstanding
    
5,015,712
      
5,245,042
      
5,095,716
      
5,235,749
  
Net income per share of common stock
  
$
0.51
    
$
0.36
    
$
1.27
    
$
1.29
  
                                 
Diluted Earnings per Share:
                                
Weighted average shares outstanding
    
5,015,712
      
5,245,172
      
5,095,768
      
5,235,793
  
Net income per share of common stock
  
$
0.51
    
$
0.36
    
$
1.27
    
$
1.29
  

See Notes to Consolidated Financial Statements.

2
Old Point Financial Corporation
Consolidated Statements of Comprehensive (Loss) Income

   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
(unaudited, dollars in thousands)
  
2022
    
2021
    
2022
    
2021
  
                         
Net income
  
$
2,542
    
$
1,908
    
$
6,465
    
$
6,762
  
Other comprehensive loss, net of tax
                                
Net unrealized loss on available-for-sale securities
    
(7,997
)
    
(497
)
    
(25,522
)
    
(1,495
)
Other comprehensive loss, net of tax
    
(7,997
)
    
(497
)
    
(25,522
)
    
(1,495
)
Comprehensive (loss) income
  
$
(5,455
)
  
$
1,411
    
$
(19,057
)
  
$
5,267
  

See Notes to Consolidated Financial Statements.
3
Old Point Financial Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity

(unaudited, dollars in thousands, except share and per share data)                          
Accumulated
        
 
Shares of
          Additional           Other        
  Common     Common    
Paid-in
   
Retained
   
Comprehensive
        
 
Stock
    
Stock
    
Capital
    
Earnings
    
Income (Loss)
    
Total
  
THREE MONTHS ENDED SEPTEMBER 30, 2022
  
   
   
   
   
   
 
                                     
Balance at June 30, 2022
    
5,018,144
    
$
25,091
    
$
17,643
    
$
74,266
    
$
(15,850
)
  
$
101,150
  
Net income
    
-
      
-
      
-
      
2,542
      
-
      
2,542
  
Other comprehensive loss, net of tax
    
-
      
-
      
-
      
-
      
(7,997
)
    
(7,997
)
Employee Stock Purchase Plan share issuance
    
1,492
      
7
      
26
      
-
      
-
      
33
  
Common stock purchased     (69,000 )     (345 )     (1,340 )     -       -       (1,685 )
Restricted stock vested
    
-
      
-
      
-
      
-
      
-
      
-
  
Stock-based compensation expense
    
-
      
-
      
121
      
-
      
-
      
121
  
Cash dividends ($0.13 per share)
    
-
      
-
      
-
      
(652
)
    
-
      
(652
)
                                                 
Balance at end of period
    
4,950,636
    
$
24,753
    
$
16,450
    
$
76,156
    
$
(23,847
)
  
$
93,512
  
                                                 
THREE MONTHS ENDED SEPTEMBER 30, 2021
    
     
     
     
     
     
 
                                                 
Balance at June 30, 2021
    
5,205,532
    
$
26,028
    
$
21,372
    
$
69,457
    
$
3,071
    
$
119,928
  
Net income
    
-
      
-
      
-
      
1,908
      
-
      
1,908
  
Other comprehensive loss, net of tax
    
-
      
-
      
-
      
-
      
(497
)
    
(497
)
Employee Stock Purchase Plan share issuance
    
1,207
      
6
      
20
      
-
      
-
      
26
  
Restricted stock vested     -       -       -       -       -       -  
Stock-based compensation expense
    
-
      
-
      
84
      
-
      
-
      
84
  
Cash dividends ($0.13 per share)
    
-
      
-
      
-
      
(682
)
    
-
      
(682
)
                                                 
Balance at end of period
    
5,206,739
    
$
26,034
    
$
21,476
    
$
70,683
    
$
2,574
    
$
120,767
  

Old Point Financial Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
 
(unaudited, dollars in thousands, except share and per share data)                           Accumulated        
  Shares of 
          Additional
          Other
       
 
Common
     Common    
Paid-in
    Retained    
Comprehensive
       
 
Stock
    
Stock
   
Capital
      Earnings    
Income (Loss)
     Total  
NINE MONTHS ENDED SEPTEMBER 30, 2022
  
   
   
   
   
   
 
                                     
Balance at December 31, 2021
    
5,201,272
    
$
26,006
    
$
21,458
    
$
71,679
    
$
1,675
    
$
120,818
  
Net income
    
-
      
-
      
-
      
6,465
      
-
      
6,465
  
Other comprehensive loss, net of tax
    
-
      
-
      
-
      
-
      
(25,522
)
    
(25,522
)
Employee Stock Purchase Plan share issuance
    
4,307
      
21
      
78
      
-
      
-
      
99
  
Common stock purchased
     (268,095 )     (1,340 )     (5,315 )     -       -       (6,655 )
Restricted stock vested
    
13,152
      
66
      
(66
)
    
-
      
-
      
-
  
Stock-based compensation expense
    
-
      
-
      
295
      
-
      
-
      
295
  
Cash dividends ($0.39 per share)
    
-
      
-
      
-
      
(1,988
)
    
-