Old Point Releases 2013 Results

Noninterest income for 2013 was down when compared to 2012, due primarily to income from bank-owned life insurance and gains and losses on the sales of securities. During 2012, Old Point sold securities for a pre-tax gain of $2.3 million. In comparison, $26 thousand of losses on sales of securities were recognized during 2013. The securities sold during 2013 were sold as part of a plan to reduce the portfolio's susceptibility to interest rate risk.

Most other areas of noninterest income increased when comparing 2013 to the prior year. The largest increases were in the categories of income from fiduciary activities and other service charges, commissions and fees. Accounts managed by Old Point Trust are assessed fees based on the market value of the account's assets. Improvements in the equities markets led to higher asset values and thus higher fee income. The increase in other service charges, commissions and fees was mainly due to higher merchant processing income.

Total noninterest expense decreased $1.1 million between 2013 and 2012, with large decreases in several categories. The largest decrease was seen in salaries and employee benefits. In 2012, Old Point made early retirement offers to eligible employees, which elevated salaries and benefits expenses in that year while reducing expenses in subsequent years. In addition, due to improved efficiencies and the consolidation of six branches into three, the number of full-time equivalent employees was reduced from 310 at December 31, 2012 to 292 at December 31, 2013.

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FDIC insurance, legal and audit expenses, other outside services, and employee professional development also declined in 2013, when compared to 2012. These decreases were partially offset by an increase of $568 thousand in losses on the sale/write-down of other real estate owned, due to the write-down on a single piece of property during the last quarter of 2013. The value of this property declined sharply due to the foreclosure by other banks of similar property in the area.

Assets as of December 31, 2013 were $864.3 million, a decrease of $43.2 million, or 4.76%, compared to assets as of December 31, 2012. Net loans increased $30.1 million, from $463.8 million at December 31, 2012 to $493.9 million at December 31, 2013. In 2013, loan demand continued to increase, but until loan demand recovers significantly, Old Point will likely continue to manage the interest margin by allowing higher cost funds, such as time deposits, to decrease. High-cost time deposits decreased $52.0 million between December 31, 2012 and December 31, 2013, while low-cost funds in the form of noninterest-bearing and savings deposits increased $23.6 million in the same time period.

In 2013, Old Point focused on diversifying income and reducing expenses. To this end, in the fourth quarter of 2013, Old Point Trust acquired Penact, a company that provides valuation services for retirement plans, to complement its existing product offerings. As part of the effort to reduce expenses, the Bank consolidated three of its branches in 2013. In each case, the market area was also served by another Old Point branch. With more customers taking advantage of Old Point's online and mobile banking services, these branches could be consolidated without affecting customer service.

As a community bank, we believe that to succeed, the community around us must thrive. Old Point National Bank supports many organizations through sponsorships and charitable donations. Approximately 31% of our giving is earmarked for education, 27% for community development, 26% for arts & culture, and 16% for health & wellness. Additionally in 2013, Old Point National Bank was awarded the following accomplishments: the Velocity Award for volunteerism in Hampton Roads, Best Places to Work in Virginia, Best Places to Work In Hampton Roads, Best Banks to Work For, Best Bank and Best Mortgage Company in the Daily Press CHOICE Awards, Best Financial Institution and Best Mortgage Company in the Virginian Pilot's Best of Hampton Roads, Best Bank in Hampton Roads Magazine's Best of the 757, Best Financial Institution in the Virginia Gazette's Best in Williamsburg, Business of the Year from the United Way of Greater Williamsburg, and many other corporate and individual awards.

In addition, Old Point received an outstanding rating from the OCC during our Community Reinvestment Act performance evaluation. For more information about our commitment to the community, pick up a copy of Old Point's Community Engagement Report in any of our branches or request a PDF via email (lwright@oldpoint.com). For information about upcoming initiatives, please visit our website (www.oldpoint.com), our Facebook page (www.facebook.com/oldpoint), or join us on Twitter (www.twitter.com/opnb).

Other items of note:

Net interest margin (NIM) on a fully tax-equivalent basis for 2013 was 3.23%, compared to 3.40% for 2012.

Non-Performing Assets (NPAs) as of December 31, 2013 were $18.3 million, up from $17.7 million on December 31, 2012. Despite this increase in NPAs, Old Point's asset quality improved, as seen by the significant improvement in the internally assigned risk ratings between 2013 and 2012. Loans classified as special mention and substandard decreased both in terms of dollars and as a percent of total loans. NPAs do not include restructured loans that are performing in accordance with their modified terms.

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Allowance for Loan and Lease Losses (ALLL) as of December 31, 2013 and 2012 was 1.36% and 1.55% of total loans, respectively.

Net loans charged off as a percent of total loans were 0.36% for the year ended December 31, 2013, compared to 0.76% for the year ended December 31, 2012.

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 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. 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; 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 Old Point's market area; technology; reliance on third parties for key services; the real estate market; Old Point's expansion initiatives; 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, 2012. 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.

Non-GAAP Financial Measure. The financial measure income before insurance death benefit, gain or loss on the sale of available-for-sale securities, and taxes is determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This non-GAAP financial measure should not be viewed as a substitute for operating results determined in accordance with GAAP. An item which management excludes when computing non-GAAP performance measures can be of substantial importance to Old Point's results for any particular quarter or year. Old Point's non-GAAP performance measure is not necessarily comparable to non-GAAP performance measures which may be presented by other companies. Management believes that income before insurance death benefit, gain or loss on the sale of available-for-sale securities, and taxes provides useful information regarding the results of core operations of Old Point Financial Corporation.

Old Point Financial Corporation ("OPOF" - Nasdaq) is the parent 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., a Hampton Roads wealth management services provider. Web: www.oldpoint.com. For more information, contact Erin Black, Vice President/Marketing Director, Old Point National Bank at 757- 251-2792.

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