OLD POINT FINANCIAL CORP (Form: 10-Q, Received: 11/09/2007 09:15:59)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2007

¨	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.)

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, former address and former fiscal year, if changed since last report)

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. x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨

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

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

4,922,592 shares of common stock ($5.00 par value) outstanding as of October 31, 2007

OLD POINT FINANCIAL CORPORATION

FORM 10-Q

INDEX


PART I—FINANCIAL INFORMATION

		Page
Item 1. Financial Statements.		1

	Consolidated Balance Sheets
	September 30, 2007 (unaudited) and December 31, 2006	1

	Consolidated Statements of Income
	Three months ended September 30, 2007 and 2006 (unaudited)
	Nine months ended September 30, 2007 and 2006 (unaudited)	2

	Consolidated Statements of Changes in Stockholders’ Equity
	Nine months ended September 30, 2007 and 2006 (unaudited)	3

	Consolidated Statements of Cash Flows
	Nine months ended September 30, 2007 and 2006 (unaudited)	4

	Notes to Consolidated Financial Statements (unaudited)	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		11

Item 3. Quantitative and Qualitative Disclosures About Market Risk.		16

Item 4. Controls and Procedures.		17

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.		18

Item 1A. Risk Factors.		18

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		18

Item 3. Defaults Upon Senior Securities.		18

Item 4. Submission of Matters to a Vote of Security Holders.		18

Item 5. Other Information.		19

Item 6. Exhibits.		19

(i)

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements.

Old Point Financial Corporation and Subsidiaries

Consolidated Balance Sheets


	September 30, 2007			December 31, 2006
	(unaudited)
Assets
Cash and due from banks	$	14,266,662		$	18,571,359
Federal funds sold		38,182,740			18,213,002

Cash and cash equivalents		52,449,402			36,784,361
Securities available-for-sale, at fair value		143,112,713			184,806,097
Securities held-to-maturity (fair value approximates $3,670,701 and $3,454,019)		3,632,000			3,432,000
Loans, net of allowance for loan losses of $5,133,009 and $4,783,685		581,870,509			578,809,269
Premises and equipment, net		26,665,380			26,409,594
Bank-owned life insurance		12,632,868			10,608,106
Other assets		7,214,658			6,671,859

	$	827,577,530		$	847,521,286

Liabilities & Stockholders’ Equity

Deposits:
Noninterest-bearing deposits	$	96,997,425		$	96,652,975
Savings deposits		189,949,008			201,273,300
Time deposits		313,751,567			290,488,326

Total deposits		600,698,000			588,414,601
Federal funds purchased, repurchase agreements and other borrowings		55,404,558			57,052,656
Federal Home Loan Bank advances		90,000,000			125,000,000
Accrued expenses and other liabilities		3,356,949			2,388,777

Total liabilities		749,459,507			772,856,034

Stockholders’ equity:
Common stock, $5 par value, 10,000,000 shares authorized; 3,944,711 and 3,992,155 shares issued		19,723,555			19,960,775
Additional paid-in capital		15,296,590			14,718,903
Retained earnings		44,095,213			42,245,413
Accumulated other comprehensive loss		(997,335	)		(2,259,839	)

Total stockholders’ equity		78,118,023			74,665,252

	$	827,577,530		$	847,521,286

See Notes to Consolidated Financial Statements.

- 1 -

Old Point Financial Corporation and Subsidiaries

Consolidated Statements of Income


	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
	(unaudited)
Interest and Dividend Income:
Interest and fees on loans	$	10,654,274	$	9,822,512	$	31,361,052	$	27,126,679
Interest on federal funds sold		346,426		102,069		643,702		235,233
Interest on securities:
Taxable		1,009,048		1,275,902		3,383,776		3,841,542
Tax-exempt		305,910		349,971		953,561		1,105,211
Dividends and interest on all other securities		102,052		112,799		323,413		291,797

Total interest and dividend income		12,417,710		11,663,253		36,665,504		32,600,462

Interest Expense:
Interest on savings deposits		630,233		608,301		1,923,466		1,672,906
Interest on time deposits		3,599,098		2,936,614		10,253,897		7,742,252
Interest on federal funds purchased, securities sold under agreement to repurchase and other borrowings		489,580		496,439		1,467,325		1,368,653
Interest on Federal Home Loan Bank advances		1,171,954		1,405,214		3,807,247		3,543,260

Total interest expense		5,890,865		5,446,568		17,451,935		14,327,071
Net interest income		6,526,845		6,216,685		19,213,569		18,273,391
Provision for loan losses		200,000		300,000		700,000		900,000

Net interest income after provision for loan losses		6,326,845		5,916,685		18,513,569		17,373,391

Noninterest Income:
Income from fiduciary activities		766,967		652,676		2,346,658		1,991,576
Service charges on deposit accounts		1,388,681		1,338,497		4,231,504		4,063,994
Other service charges, commissions and fees		608,760		461,678		1,775,907		1,715,315
Income from bank-owned life insurance		158,745		140,332		455,091		407,060
Gain on available-for-sale securities, net		0		5,406		3,168		7,302
Other operating income		112,717		114,892		435,298		340,504

Total noninterest income		3,035,870		2,713,481		9,247,626		8,525,751

Noninterest Expense:
Salaries and employee benefits		3,981,943		3,830,050		11,924,354		11,366,697
Occupancy and equipment		928,315		861,492		2,716,096		2,638,802
Service fees		94,042		174,322		260,083		543,508
Data processing		223,340		195,525		646,852		550,797
Marketing		187,964		167,620		564,346		498,827
Customer development		176,599		171,316		515,663		465,645
Employee professional development		174,607		170,645		500,211		461,929
Other		817,623		717,668		2,355,925		2,247,847

Total noninterest expenses		6,584,433		6,288,638		19,483,530		18,774,052

Income before income taxes		2,778,282		2,341,528		8,277,665		7,125,090
Income tax expense		798,062		630,500		2,353,220		1,917,872

Net income	$	1,980,220	$	1,711,028	$	5,924,445	$	5,207,218


Basic Earnings per Share:
Average shares outstanding		4,939,269		4,990,103		4,971,784		4,989,881
Net income per share of common stock	$	0.40	$	0.34	$	1.19	$	1.04

Diluted Earnings per Share:
Average shares outstanding		4,974,275		5,059,145		5,014,856		5,063,658
Net income per share of common stock	$	0.40	$	0.34	$	1.18	$	1.03

See Notes to Consolidated Financial Statements.

Note - Per share data adjusted for 5 for 4 stock split in the form of a dividend declared on August 16, 2007 and paid on October 1, 2007.

- 2 -

Old Point Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity


(Unaudited)	Shares of Common Stock		Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
FOR NINE MONTHS ENDED SEPTEMBER 30, 2007
Balance at beginning of period	3,992,155		$	19,960,775		$	14,718,903	$	42,245,413		$	(2,259,839	)	$	74,665,252
Comprehensive income:
Net income	—			—			—		5,924,445			—			5,924,445
Unrealized holding gains arising during the period (net of tax, $651,458)												1,264,595			1,264,595
Reclassification adjustment (net of tax, $1,077)	—			—			—		—			(2,091	)		(2,091	)

Total comprehensive income	—			—			—		5,924,445			1,262,504			7,186,949
Sale of common stock	17,741			88,705			548,909		(482,693	)		—			154,921
Repurchase and retirement of common stock	(65,185	)		(325,925	)				(1,366,560	)					(1,692,485	)
Nonqualified stock options	—			—			28,778		—						28,778
Cash dividends ($0.56 per share)	—			—			—		(2,225,392	)		—			(2,225,392	)

Balance at end of period	3,944,711		$	19,723,555		$	15,296,590	$	44,095,213		$	(997,335	)	$	78,118,023


FOR NINE MONTHS ENDED SEPTEMBER 30, 2006
Balance at beginning of period	4,013,553		$	20,067,765		$	14,319,580	$	39,074,325		$	(2,405,624	)	$	71,056,046
Comprehensive income:
Net income	—			—			—		5,207,218			—			5,207,218
Unrealized holding gains arising during the period (net of tax, $68,727)												133,412			133,412
Reclassification adjustment (net of tax, $2,483)	—			—			—		—			(4,819	)		(4,819	)

Total comprehensive income									5,207,218			128,593			5,335,811
Sale of common stock	12,215			61,075			358,107		(260,476	)		—			158,706
Repurchase and retirement of common stock	(33,613	)		(168,065	)				(799,624	)					(967,689	)
Nonqualified stock options	—			—			41,216		—						41,216
Cash dividends ($0.52 per share)	—			—			—		(2,074,228	)		—			(2,074,228	)

Balance at end of period	3,992,155		$	19,960,775		$	14,718,903	$	41,147,215		$	(2,277,031	)	$	73,549,862

See Notes to Consolidated Financial Statements.

- 3 -

Old Point Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows


	Nine Months Ended September 30,
	2007			2006
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	5,924,445		$	5,207,218
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,267,151			1,174,308
Provision for loan losses		700,000			900,000
Net gain on sale of available-for-sale securities		(3,168	)		(7,302	)
Net accretion of securities		(49,408	)		(38,806	)
Loss (gain) on disposal of equipment		(14,873	)		4,954
Changes in assets/liabilities:
Increase in bank-owned life insurance		(2,024,762	)		(1,007,667	)
Increase in other assets		(1,193,178	)		(1,172,343	)
Increase in other liabilities		968,172			1,367,976

Net cash provided by operating activities		5,574,379			6,428,338

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale securities		(14,797,010	)		(4,690,555	)
Purchases of held-to-maturity securities		(800,000	)		(500,000	)
Proceeds from maturities and calls of securities		56,470,854			9,415,950
Proceeds from sales of available-for-sale securities		2,585,000			1,895,000
Loans made to customers		(202,955,665	)		(243,719,248	)
Principal payments received on loans		199,194,424			164,260,571
Purchases of premises and equipment		(1,508,064	)		(6,397,912	)

Net cash provided by (used in) investing activities		38,189,539			(79,736,194	)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in noninterest-bearing deposits		344,450			2,605,928
Increase in savings deposits		(11,324,292	)		(379,483	)
Proceeds from the sale of time deposits		109,041,988			143,077,065
Payments for maturing time deposits		(85,778,747	)		(112,806,401	)
Increase (decrease) in federal funds purchased and repurchase agreements		(1,606,163	)		12,948,341
Increase (decrease) in Federal Home Loan Bank advances		(35,000,000	)		35,000,000
Decrease in interest-bearing demand notes and other borrowed money		(41,935	)		(1,162,063	)
Proceeds from issuance of common stock		154,921			158,706
Repurchase and retirement of common stock		(1,692,485	)		(967,689	)
Effect of nonqualified stock options		28,778			41,216
Cash dividends paid on common stock		(2,225,392	)		(2,074,228	)

Net cash provided by (used in) financing activities		(28,098,877	)		76,441,392

Net increase in cash and cash equivalents		15,665,041			3,133,536
Cash and cash equivalents at beginning of period		36,784,361			15,606,024

Cash and cash equivalents at end of period	$	52,449,402		$	18,739,560

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest	$	17,491,823		$	13,704,747
Income tax	$	2,475,000		$	1,975,000
SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS
Unrealized gain on investment securities	$	1,912,885		$	194,837
Loans transferred to other real estate owned	$	240,000		$	—

See Notes to Consolidated Financial Statements.

- 4 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1. General

The accompanying unaudited consolidated financial statements of Old Point Financial Corporation (the Company) and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. All significant intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications consisting of a normal and recurring nature considered necessary to present fairly the financial positions at September 30, 2007 and December 31, 2006, the results of operations for the three months and nine months ended September 30, 2007 and 2006, and statements of cash flows and changes in stockholders’ equity for the nine months ended September 30, 2007 and 2006. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year.

On August 16, 2007 the Company declared a 5 for 4 stock split in the form of a dividend payable October 1, 2007. All per share data presented in this Form 10-Q has been updated to reflect the 5 for 4 stock split in the form of a dividend.

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2006. Certain previously reported amounts have been reclassified to conform to current period presentation.

The Company maintains a website on the Internet at www.oldpoint.com . The Company makes available free of charge, on or through its website, its proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (SEC). The information available at the Company’s Internet address is not part of this Form 10-Q or any other report filed by the Company with the SEC. The public may read and copy any documents the Company files at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company’s SEC filings can also be obtained on the SEC’s website on the Internet at www.sec.gov .

Note 2. Securities

Amortized costs and fair values of securities held-to-maturity at September 30, 2007 and December 31, 2006 are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2007
Obligations of U.S. Government agencies	$	2,900	$	4	$	(5	)	$	2,899
Obligations of state and political subdivisions		732		40		—			772

Total	$	3,632	$	44	$	(5	)	$	3,671


December 31, 2006
Obligations of U.S. Government agencies	$	2,700	$	—	$	(24	)	$	2,676
Obligations of state and political subdivisions		732		46		—			778

Total	$	3,432	$	46	$	(24	)	$	3,454

- 5 -

Amortized costs and fair values of securities available-for-sale at September 30, 2007 and December 31, 2006 are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2007
U.S. Treasury securities	$	994	$	1	$	—		$	995
Obligations of U.S. Government agencies		109,759		22		(845	)		108,936
Obligations of state and political subdivisions		25,999		298		—			26,297
Money market investments		1,011		—		—			1,011
Federal Home Loan Bank stock—restricted		5,565		—		—			5,565
Federal Reserve Bank stock—restricted		169		—		—			169
Other marketable equity securities		168		—		(28	)		140

Total	$	143,665	$	321	$	(873	)	$	143,113


December 31, 2006
U.S. Treasury securities	$	981	$	—	$	—		$	981
Obligations of U.S. Government agencies		148,981		—		(2,895	)		146,086
Obligations of state and political subdivisions		29,157		458		—			29,615
Money market investments		721		—		—			721
Federal Home Loan Bank stock—restricted		7,094		—		—			7,094
Federal Reserve Bank stock—restricted		169		—		—			169
Other marketable equity securities		168		—		(28	)		140

Total	$	187,271	$	458	$	(2,923	)	$	184,806

- 6 -

Information pertaining to securities with gross unrealized losses at September 30, 2007 and December 31, 2006, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:


	September 30, 2007
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in thousands)
Securities Available-for-Sale
Debt securities:
Obligations of U.S. Government agencies	$	—	$	—	$	845	$	98,914	$	845	$	98,914

Total debt securities		—		—		845		98,914		845		98,914
Other marketable equity securities		—		—		28		22		28		22

Total securities available-for-sale	$	—	$	—	$	873	$	98,936	$	873	$	98,936


Securities Held-to-Maturity
Obligations of U.S. Government agencies	$	—	$	—	$	5	$	1,095	$	5	$	1,095

Total securities held-to-maturity	$	—	$	—	$	5	$	1,095	$	5	$	1,095

Total	$	—	$	—	$	878	$	100,031	$	878	$	100,031


	December 31, 2006
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in thousands)
Securities Available-for-Sale
Debt securities:
Obligations of U.S. Government agencies	$	—	$	—	$	2,895	$	146,087	$	2,895	$	146,087

Total debt securities		—		—		2,895		146,087		2,895		146,087
Other marketable equity securities		—		—		28		22		28		22

Total securities available-for-sale	$	—	$	—	$	2,923	$	146,109	$	2,923	$	146,109


Securities Held-to-Maturity
Obligations of U.S. Government agencies	$	1	$	499	$	23	$	1,677	$	24	$	2,176

Total securities held-to-maturity	$	1	$	499	$	23	$	1,677	$	24	$	2,176

Total	$	1	$	499	$	2,946	$	147,786	$	2,947	$	148,285

The Company has the ability and intent to hold these securities until maturity. The securities are impaired primarily due to rising interest rates after the securities were purchased. None of the securities are impaired due to credit issues. Therefore, securities with a loss are considered temporarily impaired.

- 7 -

Note 3. Loans

Loans at September 30, 2007 and December 31, 2006 are summarized as follows:


	September 30, 2007			December 31, 2006
	(in thousands)
Commercial and other loans	$	69,221		$	67,697
Real estate loans:
Construction		63,681			81,227
Farmland		47			220
Equity lines of credit		32,037			26,809
1-4 family residential		121,496			120,915
Multifamily residential		7,075			5,898
Nonfarm nonresidential		235,837			213,606
Installment loans to individuals		54,232			63,670
Tax-exempt loans		3,114			3,191

Total loans		586,740			583,233
Less: Allowance for loan losses		(5,133	)		(4,784	)
Net deferred loan costs		264			360

Loans, net	$	581,871		$	578,809

Note 4. Allowance for Loan Losses

The following summarizes activity in the allowance for loan losses for the nine months ended September 30, 2007 and for the year ended December 31, 2006:


	September 30, 2007			December 31, 2006
	(in thousands)
Balance, beginning of year	$	4,784		$	4,448
Recoveries		204			331
Provision for loan losses		700			1,200
Loans charged off		(555	)		(1,195	)

Balance, end of period	$	5,133		$	4,784

Note 5. Share-Based Compensation

Share-based compensation arrangements include stock options, restricted stock awards, performance-based awards, stock appreciation rights and employee stock purchase plans. Statement of Financial Accounting Standards (SFAS) No. 123R, “Share-Based Payment” (SFAS No. 123R) requires all share-based payments to employees to be valued using a fair value method on the date of grant and to be expensed based on that fair value over the applicable vesting period. The Company adopted SFAS No. 123R as of January 1, 2006. As of September 30, 2007, the Company had not issued any new options since SFAS No. 123R became effective.

The Company has stock option plans which have 476,086 shares of common stock reserved for grants to key employees and directors. Options to purchase 250,056 shares of common stock from these plans are outstanding at September 30, 2007. The common stock reserved for grants and common stock outstanding have been adjusted for the 5 for 4 stock split in the form of a dividend paid on October 1, 2007. The exercise price of each option equals the market price of the Company’s common stock on the date of the grant, and an option’s maximum term is ten years.

- 8 -

Stock option plan activity for the nine months ended September 30, 2007 is summarized below:


	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Options outstanding, January 1	304,676		$	17.82
Granted	—			—
Exercised	(30,870	)		11.19
Canceled or expired	(23,750	)		20.05

Options outstanding, September 30	250,056			18.43	3.90	$	834,427
Options exercisable, September 30	250,056		$	18.43	3.90	$	834,427

The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on September 30, 2007. This amount changes based on changes in the market value of the Company’s stock.

The total proceeds of options exercised during the nine months ended September 30, 2007 was $345 thousand. The intrinsic value for options exercised during the nine months ended September 30, 2007 was $327 thousand.

As of September 30, 2007, there was no unrecognized compensation expense because all outstanding options were vested.

SFAS No. 123R requires the benefits of tax deductions in excess of grant-date fair value to be reported as a financing cash flow. The Company had a $29 thousand tax benefit deduction from the exercise of stock options in the first nine months of 2007.

Note 6. Pension Plan

The Company provides pension benefits for eligible participants through a non-contributory defined benefits pension plan. The plan was frozen effective September 30, 2006; therefore no additional participants will be added to the plan. The components of net periodic pension cost are as follows:

- 9 -


Three months ended September 30,	2007			2006
	Pension Plan Cost (Benefit)
Service cost	$	—		$	126,049
Interest cost		71,948			83,788
Expected return on plan assets		(102,902	)		(96,067	)
Amortization of prior service cost		—			320
Amortization of net loss		8,606			44,789

Net periodic pension plan cost (benefit)	$	(22,348	)	$	158,879


Nine months ended September 30,	2007			2006
	Pension Plan Cost (Benefit)
Service cost	$	—		$	378,147
Interest cost		215,843			251,364
Expected return on plan assets		(308,705	)		(288,201	)
Amortization of prior service cost		—			960
Amortization of net loss		25,817			134,367

Net periodic pension plan cost (benefit)	$	(67,045	)	$	476,637

The Company has not made and, does not expect to make, any contributions to the plan in 2007.

Note 7. Earnings per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares attributable to outstanding stock options.

Potential common shares outstanding attributable to stock options of 146 thousand were not included in the diluted earnings per share calculation because they were antidilutive. The number of shares has been adjusted for the 5 for 4 stock split in the form of a stock dividend paid October 1, 2007.

Note 8. Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements but may change current practice for some entities. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those years. The Company does not expect the implementation of SFAS 157 to have a material impact on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective of this Statement is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The fair value option established by this Statement permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. The fair value option may be applied instrument by instrument and is irrevocable. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company is in the process of evaluating the impact SFAS No. 159 may have on its consolidated financial statements.

- 10 -

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion is intended to assist readers in understanding and evaluating the financial condition, changes in financial condition and the results of operations of the Company. The Company consists of the parent company and its wholly-owned subsidiaries, The Old Point National Bank of Phoebus (the Bank) and Old Point Trust & Financial Services, N. A. (Trust), collectively referred to as the Company. This discussion should be read in conjunction with the consolidated financial statements and other financial information contained elsewhere in this report.

Caution About Forward-Looking Statements

In addition to historical information, this report may contain forward-looking statements. For this purpose, any statement that is not a statement of historical fact may be deemed to be a forward-looking statement. These forward-looking statements may include statements regarding profitability, liquidity, allowance for loan losses, interest rate sensitivity, market risk, growth strategy and financial and other goals. Forward-looking statements often use words such as “believes,” “expects,” “plans,” “may,” “will,” “should,” “projects,” “contemplates,” “ anticipates,” “forecasts,” “intends” or other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, and 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 Company include, but are not limited to, changes in: interest rates, general economic conditions, monetary and fiscal policies of the U.S. Government, including policies of the Office of the Comptroller of the Currency, U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, and accounting principles, policies and guidelines. 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. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made. In addition, past results of operations are not necessarily indicative of future results.

General

The Company is the parent company of the Bank and Trust. The Bank is a locally owned and managed community bank serving the Hampton Roads localities of Hampton, Newport News, Norfolk, Virginia Beach, Chesapeake, Williamsburg/James City County, York County and Isle of Wight County. The Bank currently has 19 branch offices. Trust is a wealth management services provider.

Critical Accounting Policies and Estimates

As of September 30, 2007, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2006. That disclosure included a discussion of the accounting policy that requires management’s most difficult, subjective or complex judgments: the allowance for loan losses.

Earnings Summary

Net income for the third quarter of 2007 was $2.0 million as compared with $1.7 million earned in the comparable quarter in 2006, an increase of 15.73%. Basic and diluted earnings per share for the third quarter 2007 were $0.40. Basic and diluted earnings per share for the third quarter of 2006 were $0.34.

Net income for the nine months ending September 30, 2007 was $5.9 million as compared to $5.2 million, an increase of 13.77%. Basic and diluted earnings per share for the nine months ending September 30, 2007 were $1.19 and $1.18 as compared to $1.04 and $1.03 for the nine months ending September 30, 2006.

Net Interest Income

The principal source of earnings for the Company is net interest income. Net interest income is the difference between interest and fees generated by earning assets and interest expense paid to fund them. Changes in the volume and mix of interest-earning assets and interest-bearing liabilities, as well as their respective yields and rates, have a significant impact on the level of net interest income. The net interest margin is calculated by dividing tax equivalent net interest income by average earning assets.

- 11 -

Net interest income, on a fully tax equivalent basis, was $6.7 million in the third quarter of 2007, an increase of $286 thousand from the third quarter of 2006. The net interest margin was 3.50% in the third quarter of 2007 and 3.37% in the third quarter of 2006.

Tax equivalent interest income increased $730 thousand, or 6.15%, in the third quarter of 2007 compared to the same period of 2006. Average earning assets grew $6.0 million, or 0.79%. The average yield on earning assets during the third quarter of 2007 was 33 basis points higher than during the third quarter of 2006.

For the nine months ended September 30, 2007, net interest income on a fully tax equivalent basis increased $861 thousand, or 4.56%, over the comparable period in 2006. Comparing the first nine months of 2007 to 2006, average loans increased $53.9 million, or 10.13%, while investment securities decreased $24.4 million, or 12.47%. Average earning assets increased $39.7 million, or 5.42%, for the nine months ended September 30, 2007 as compared to the nine months ended September 30, 2006. The net interest yield decreased 2 basis points from 3.43% in 2006 to 3.41% in 2007.

Interest expense increased $444 thousand, or 8.15%, and average interest-bearing liabilities increased $9.1 million, or 1.43%, in the third quarter of 2007 compared to the same period of 2006. The cost of funding those liabilities increased 23 basis points. For the nine months ended September 30, 2007, interest expense increased $3.1 million, or 28.81%, over the same period in 2006.

The following table shows an analysis of average earning assets, interest-bearing liabilities and rates and yields. Nonaccrual loans are included in loans outstanding.

- 12 -

AVERAGE BALANCE SHEETS, NET INTEREST INCOME* AND RATES*


	For the quarter ended September 30,
	2007							2006
	Average Balance			Interest Income/ Expense		Yield/ Rate**		Average Balance			Interest Income/ Expense		Yield/ Rate**
	(in thousands)
Loans	$	586,207		$	10,673	7.28	%	$	558,962		$	9,844	7.04	%
Investment securities:
Taxable		127,249			1,111	3.49	%		163,953			1,388	3.39	%
Tax-exempt		26,291			463	7.05	%		30,203			530	7.02	%

Total investment securities		153,540			1,574	4.10	%		194,156			1,918	3.95	%
Federal funds sold		27,125			347	5.12	%		7,778			102	5.25	%

Total earning assets		766,872		$	12,594	6.57	%		760,896		$	11,864	6.24	%
Reserve for loan losses		(5,167	)						(4,586	)
Other nonearning assets		56,913							51,966

Total assets	$	818,618						$	808,276

Time and savings deposits:
Interest-bearing transaction accounts	$	10,339		$	7	0.27	%	$	8,863		$	6	0.27	%
Money market deposit accounts		147,987			574	1.55	%		149,007			552	1.48	%
Savings accounts		38,792			49	0.51	%		40,059			51	0.51	%
Time deposits, $100,000 or more		113,744			1,427	5.02	%		96,592			1,106	4.58	%
Other time deposits		189,742			2,172	4.58	%		173,314			1,830	4.22	%

Total time and savings deposits		500,604			4,229	3.38	%		467,835			3,545	3.03	%
Federal funds purchased, repurchase agreements and other borrowings		50,535			490	3.88	%		49,244			497	4.04	%
Federal Home Loan Bank advances		90,000			1,172	5.21	%		115,000			1,405	4.89	%

Total interest-bearing liabilities		641,139			5,891	3.68	%		632,079			5,447	3.45	%
Demand deposits		96,559							100,291
Other liabilities		3,248							2,673
Stockholders’ equity		77,672							73,233

Total liabilities and stockholders’ equity	$	818,618						$	808,276

Net interest income/yield				$	6,703	3.50	%				$	6,417	3.37	%


	For the nine months ended September 30,
	2007							2006
	Average Balance			Interest Income/ Expense		Yield/ Rate**		Average Balance			Interest Income/ Expense		Yield/ Rate**
	(in thousands)
Loans	$	585,707		$	31,419	7.15	%	$	531,850		$	27,187	6.82	%
Investment securities:
Taxable		143,699			3,707	3.44	%		163,768			4,133	3.36	%
Tax-exempt		27,412			1,445	7.03	%		31,710			1,674	7.04	%

Total investment securities		171,111			5,152	4.01	%		195,478			5,807	3.96	%
Federal funds sold		16,635			644	5.16	%		6,394			235	4.90	%

Total earning assets		773,453		$	37,215	6.42	%		733,722		$	33,229	6.04	%
Reserve for loan losses		(5,039	)						(4,541	)
Other nonearning assets		55,668							50,379

Total assets	$	824,082						$	779,560

Time and savings deposits:
Interest-bearing transaction accounts	$	10,855		$	21	0.26	%	$	8,712		$	17	0.26	%
Money market deposit accounts		151,890			1,754	1.54	%		151,538			1,502	1.32	%
Savings accounts		39,215			148	0.50	%		41,088			154	0.50	%
Time deposits, $100,000 or more		108,132			4,041	4.98	%		88,055			2,782	4.21	%
Other time deposits		186,060			6,213	4.45	%		168,110			4,960	3.93	%

Total time and savings deposits		496,152			12,177	3.27	%		457,503			9,415	2.74	%
Federal funds purchased, repurchase agreements and other borrowings		50,237			1,468	3.90	%		50,116			1,369	3.64	%
Federal Home Loan Bank advances		102,040			3,807	4.97	%		99,170			3,543	4.76	%

Total interest-bearing liabilities		648,429			17,452	3.59	%		606,789			14,327	3.15	%
Demand deposits		96,255							98,528
Other liabilities		2,536							2,319
Stockholders’ equity		76,862							71,924

Total liabilities and stockholders’ equity	$	824,082						$	779,560

Net interest income/yield				$	19,763	3.41	%				$	18,902	3.43	%

*	Computed on a fully taxable equivalent basis using a 34% rate

**	Annualized

- 13 -

Provision for Loan Losses

The provision for loan losses is a charge against earnings necessary to maintain the allowance for loan losses at a level consistent with management’s evaluation of the portfolio.

The provision for loan losses was $700 thousand for the first nine months of 2007, and $900 thousand in the comparable period in 2006. Loans charged off (net of recoveries) in the first nine months of 2007 were $372 thousand lower than in the first nine months of 2006. On an annualized basis, net loan charge-offs were 0.06% of total loans for the first nine months of 2007 compared with 0.13% for the same period in 2006.

On September 30, 2007, nonperforming assets totaled $2.5 million compared with $1.4 million on September 30, 2006. The September 2007 total consisted of $1.3 million in restructured debt, $735 thousand in loans still accruing interest but past due 90 days or more, $282 thousand in nonaccrual loans, and $165 thousand in a former branch site listed for sale. The September 2006 total consisted of $1.1 million in loans still accruing interest but past due 90 days or more, $158 thousand in nonaccrual loans and $165 thousand in a former branch site listed for sale. Although nonperforming assets as of September 30, 2007 were approximately $1.1 million higher than the same period in 2006, $1.3 million of this amount is due to restructured debt, which is current and paying as agreed.

The allowance for loan losses on September 30, 2007 was $5.1 million, compared with $4.6 million on September 30, 2006. As of September 30, 2007 the allowance for loan losses represented a multiple of 2.04 times nonperforming assets and 2.18 times nonperforming loans. Nonperforming loans includes nonaccrual loans, loans still accruing interest but past due 90 days or more and restructured loans. The allowance for loan losses was 0.87% and 0.81% of total loans on September 30, 2007 and 2006, respectively.

Noninterest Income

For the third quarter of 2007, noninterest income increased $322 thousand, or 11.88%, over the same period in 2006. The majority of the increase in noninterest income is attributed to fiduciary income and other service charges, commissions and fees. $114 thousand of the growth in noninterest income is attributed to income from fiduciary activities as a result of a fee increase, growth in new business and market value growth. Income from other service charges, commissions and fees was $147 thousand higher in the third quarter 2007 than in the same period of 2006. The majority of the $147 thousand in growth in other service charges, commissions and fees is related to debit card income.

For the nine months ending September 30, 2007, noninterest income increased $722 thousand or 8.47% over the same period in 2006. The majority of the increase in income is from fiduciary activities, service charges on deposit accounts and other operating income. Fee increases and growth in new business have positively affected fiduciary income. $142 thousand of the increase in service charges on deposit accounts is related to lower charge offs of nonsufficient funds charges assessed on demand deposit accounts. Other operating income increased due to increases in mortgage brokerage income.

Noninterest Expenses

For the third quarter of 2007, noninterest expenses increased only $296 thousand, or 4.70%, over the third quarter of 2006. Salaries and employee benefits increased by $152 thousand, or 3.97%, as a result of normal yearly salary increases and an increase of 6 in full time equivalent positions.

Occupancy expenses increased only $67 thousand, or 7.76%. The Company has not opened any new facilities since February 2006 and has been able to control expenses in this area. The Company plans to open an additional branch in the Virginia Beach area in the fourth quarter of this year and expects occupancy costs to rise as a result.

For the nine months ending September 30, 2007, noninterest expense was $709 thousand or 3.78% higher than the same period in 2006.

Balance Sheet Review

At September 30, 2007, the Company had total assets of $827.6 million, a decrease of 2.35% from $847.5 million at December 31, 2006. Net loans as of September 30, 2007 were $581.9 million, an increase of 0.53% from $578.8 million at December 31, 2006.

- 14 -

Average assets for the first nine months of 2007 were $824.1 million compared to $779.6 million for the first nine months of 2006. The growth in assets in 2007 was due to the growth in average loans, which increased 10.13% as compared to the same period in 2006.

Total investment securities at September 30, 2007 were $146.8 million, a decrease of 22.04% from $188.2 million on December 31, 2006. The Company’s goal is to provide maximum return on the investment portfolio within the framework of its asset/liability objectives. The objectives include managing interest sensitivity, liquidity and pledging requirements.

During 2007, one of the Company’s strategic goals is to restructure the balance sheet in order to improve the net interest margin. At the Bank, $93.2 million in government agency securities will be maturing in 2007. As of December 31, 2006, these securities had an average annual yield of 3.16%. In addition, the Bank had $125.0 million in Federal Home Loan Bank of Atlanta (FHLB) advances outstanding as of December 31, 2006 with an average annual yield of 4.81%.

During 2007, the Company is using funds from the low yielding maturing securities to pay down its high cost FHLB advances or to invest in higher yielding loans or securities. During the first nine months of 2007 the Company reduced its FHLB advances by $35.0 million.

At September 30, 2007, total deposits increased to $600.7 million, up 2.09% from $588.4 million at December 31, 2006. The majority of this growth occurred in the Company’s time deposit category.

Capital Resources

Under applicable banking regulations, Total Capital is comprised of core capital (Tier 1) and supplemental capital (Tier 2). Tier 1 capital consists of common stockholders’ equity and retained earnings less goodwill. Tier 2 capital consists of certain qualifying debt and a qualifying portion of the allowance for loan losses. The following is a summary of the Company’s capital ratios at September 30, 2007. As shown below, these ratios were all well above the regulatory minimum levels.


	2007 Regulatory Minimums		September 30, 2007
Tier 1	4.00	%	12.06	%
Total Capital	8.00	%	12.85	%
Tier 1 Leverage	3.00	%	9.66	%

Quarter-end book value per share was $19.89 in 2007 and $18.42 in 2006. Book value has not been adjusted to reflect the 5 for 4 stock split in the form of a dividend payable October 1, 2007. Cash dividends were $2.2 million or $0.56 per share for the nine months ended September 30, 2007, and $2.1 million or $0.52 per share for the nine months ended September 30, 2006. The common stock of the Company has not been extensively traded.

Liquidity

Liquidity is the ability of the Company to meet present and future financial obligations through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. Liquid assets include cash, interest-bearing deposits with banks, federal funds sold, investments in securities and loans maturing within one year.

In addition, secondary sources are available through the use of borrowed funds if the need should arise. The Company’s sources of funds include a large stable deposit base and secured advances from FHLB. As of the end of the third quarter of 2007, the Company had $156.7 million in FHLB borrowing availability. The Company has short-term unsecured borrowed funds available in the form of federal funds with correspondent banks. As of the end of the third quarter of 2007, the Company had $40.0 million available in federal funds to handle any short-term borrowing needs.

- 15 -

Management is not aware of any market or institutional trends, events or uncertainties that are expected to have a material effect on the liquidity, capital resources or operations of the Company. Nor is management aware of any current recommendations by regulatory authorities that would have a material effect on liquidity, capital resources or operations. The Company’s internal sources of such liquidity are deposits, loan and investment repayments and securities available for sale. The Company’s primary external source of liquidity is advances from the FHLB.

As a result of the Company’s management of liquid assets, availability of borrowed funds and the ability to generate liquidity through liability funding, management believes that the Company maintains overall liquidity sufficient to satisfy its depositors’ requirements and to meet its customers’ future borrowing needs.

Contractual Obligations

In the normal course of business there are various outstanding contractual obligations of the Company that will require future cash outflows. In addition, there are commitments and contingent liabilities, such as commitments to extend credit, which may or may not require cash outflows.

As of September 30, 2007, there have been no material changes outside the ordinary course of business in the Company’s contractual obligations disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2006.

Off-Balance Sheet Arrangements

As of September 30, 2007, there were no material changes in the Company’s off-balance sheet arrangements disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2006.

Other

The Company purchased property for two future branch sites in 2006. These properties were purchased with cash, not financed. The Company intends to open one of these future branch sites by the end of 2007 and the other site by the end of 2008. Funds will be used to renovate or construct branches at these locations.

In August 2007, the Company purchased one of its leased branches in Hampton. The purchase price was $740 thousand, and the Company purchased the property with cash. The Company plans to renovate this branch in 2008.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

An important element of earnings performance and the maintenance of sufficient liquidity is proper management of the interest sensitivity gap and liquidity gap. The interest sensitivity gap is the difference between interest sensitive assets and interest sensitive liabilities in a specific time interval. This gap can be managed by repricing assets or liabilities, which are variable rate instruments, by replacing an asset or liability at maturity or by adjusting the interest rate during the life of the asset or liability. Matching the amounts of assets and liabilities maturing in the same time interval helps to hedge interest rate risk and to minimize the impact of rising or falling interest rates on net interest income.

The Company determines the overall magnitude of interest sensitivity risk and then formulates policies governing asset generating and pricing, funding sources and pricing, and off-balance sheet commitments. These decisions are based on management’s expectations regarding future interest rate movements, the state of the national and regional economy, and other financial and business risk factors. The Company uses computer simulations to measure the effect of various interest rate scenarios on net interest income. This modeling reflects interest rate changes and the related impact on net interest income and net income over specified time horizons.

Based on scheduled maturities only, the Company was liability sensitive as of September 30, 2007. It should be noted, however, that non-maturing deposit liabilities totaling $190.0 million, which consist of interest checking, money market, and savings accounts, are less interest sensitive than other market driven deposits. In a rising rate environment, changes in these deposit rates have historically lagged

- 16 -

behind the changes in earning asset rates, thus mitigating the impact from the liability sensitivity position. The asset/liability model allows the Company to reflect the fact that non-maturing deposits are less rate sensitive than other deposits by using a decay rate. The decay rate is a type of artificial maturity that simulates maturities for non-maturing deposits over the number of months that more closely reflects historic data. Using the decay rate, the model reveals that the Company is asset sensitive.

When the Company is asset sensitive, net interest income should improve if interest rates rise since assets will reprice faster than liabilities. Conversely, if interest rates fall, net interest income should decline, depending on the optionality (prepayment speeds) of the assets. When the Company is liability sensitive, net interest income should fall if rates rise and rise if rates fall.

The most likely scenario represents the rate environment as management forecasts it to occur. Management uses a “static” test to measure the effects of changes in interest rates on net interest income. This test assumes that management takes no steps to adjust the balance sheet to respond to the shock by repricing assets/liabilities, as discussed in the first paragraph of this section.

Under the rate environment forecasted by management, rate shocks in 100 basis point increments are applied to see the impact on the Company’s earnings at September 30, 2007. The rate shock model reveals that a 100 basis point decrease in rates would cause an approximately 2.62% decrease in net income and a 200 basis point decrease in rates would cause an approximately 5.92% decrease in net income. The rate shock model reveals that a 100 basis point rise in rates would cause an approximately 2.88% increase in net income and that a 200 basis point rise in rates would cause an approximately 4.88% increase in net income.

Item 4.

Controls and Procedures.

The Company maintains a system of disclosure controls and procedures that is designed to ensure that material information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions to be made regarding required disclosure. As required, management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were operating effectively to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC.

The Company’s management is also responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. No changes in the Company’s internal control over financial reporting occurred during the fiscal quarter ended September 30, 2007 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all error and fraud. A control system, no matter how well conceived and operated, provides reasonable, not absolute, assurance that the objectives of the control system are met. The design of a control system reflects resource constraints and the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been or will be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will

- 17 -

succeed in achieving its stated goals under all future conditions; over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II—OTHER INFORMATION

Item 1.

Legal Proceedings.

There are no pending or threatened legal proceedings to which the Company, or any of its subsidiaries, is a party or to which the property of either the Company or its subsidiaries is subject that, in the opinion of management, may materially impact the financial condition of the Company.

Item 1A.

Risk Factors.

As of September 30, 2007, there have been no material changes in the risk factors faced by the Company from those disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2006.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

The following table, which has not been adjusted for the 5 for 4 stock split in the form of a stock dividend payable October 1, 2007, presents the Company’s share repurchases during the period ended September 30, 2007:


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Repurchase Program (1)	Maximum Number of Shares that May Yet Be Purchased Under the Repurchase Program (1)
7/1/2007 - 7/31/2007	34,400	$	25.17	34,400	134,423
8/1/2007 - 8/31/2007	—		—	—	134,423
9/1/2007 - 9/30/2007	—		—	—	134,423

Total	34,400			34,400

(1)

Replacing a similar authorization in 2006, on January 9, 2007, the Company authorized a program to repurchase during any calendar year up to an aggregate of five percent (5%) of the shares of the Company’s common stock outstanding as of January 1 of that calendar year. There is currently no stated expiration date for this program. The Company repurchased 34,400 shares of the Company’s common stock during the quarter ended September 30, 2007.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Submission of Matters to a Vote of Security Holders.

There were no matters submitted to a vote of security holders during the quarter ended September 30, 2007.

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Item 5.

Other Information.

The Company has made no changes to the procedures by which security holders may recommend nominees to its board of directors.

Item 6.

Exhibits.


Exhibit No.		Description
3.1		Articles of Incorporation of Old Point Financial Corporation, as amended April 25, 1995 (incorporated by reference to Exhibit 3 to Form 10-K filed March 26, 1999)

3.2		Bylaws of Old Point Financial Corporation, as amended and restated September 11, 2007 (incorporated by reference to Exhibit 3.2 to Form 8-K/A filed September 20, 2007)

10.6		Base Salaries of Named Executive Officers of the Registrant

10.8		Memorandum of Understanding, dated September 10, 2007, between The Old Point National Bank of Phoebus and Tidewater Mortgage Services, Inc.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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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 thereunto duly authorized.


		OLD POINT FINANCIAL CORPORATION

November 9, 2007		/s/ Robert F. Shuford
		Robert F. Shuford
		Chairman, President & Chief Executive Officer (Principal Executive Officer)

November 9, 2007		/s/ Laurie D. Grabow
		Laurie D. Grabow
		Chief Financial Officer & Senior Vice President/ Finance (Principal Financial & Accounting Officer)

- 20 -

Exhibit 3.2

BYLAWS

OLD POINT FINANCIAL CORPORATION

ARTICLE I

STOCKHOLDERS

Section 1.1. Annual Meeting . The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business authorized or required to be transacted by the stockholders shall be held in Hampton, Virginia, at the main office of the Old Point National Bank, or at any other location within or outside of the Commonwealth of Virginia authorized by the Board of Directors, on the fourth Tuesday in April of each year (or on such other day and/or in such other month as may be fixed by the Board of Directors), at such hour as may be specified in the notice thereof.

Section 1.2. Special Meetings . Special meetings of the stockholders for any purpose or purposes shall be held whenever called by the Chairman of the Board, or by the President if there is no Chairman of the Board, or by the Board of Directors or by the holders of not less than one-tenth of all the shares entitled to vote at the meeting.

Section 1.3. Notice of Meetings . Notice of the annual or any special meeting shall be given at least ten days, and not more than sixty days, prior to the date of the meeting to each registered stockholder at his address as the same appears on the books of the Corporation. If the meeting shall be called to act on an amendment to the Articles of Incorporation or on a plan of merger, consolidation or exchange, or on a reduction of stated capital, or upon a proposed sale of all or substantially all of the assets of the Corporation, notice shall be given not less than twenty-five nor more than sixty days before the date of the meeting, and such notice shall be accompanied by a copy of the proposed amendment or plan of merger, consolidation, or exchange, or the proposed plan for reduction of capital.

Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation, under any provision of the Virginia Stock Corporation Act (the “VSCA”), the Articles of Incorporation or these Bylaws, shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed revoked if (i) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (ii) such inability becomes known to the Secretary or an Assistant Secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however , the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Notice given pursuant to this paragraph shall be deemed given: (1) if by facsimile telecommunication, when directed to a number at which the

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stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting when such notice is directed to the record address of the stockholder or to such other address at which the stockholder has consented to receive notice, upon the later of such posting or the giving of such separate notice; and (4) if by any other form of electronic transmission, when consented to by the stockholder.

Section 1.4. Quorum . At any meeting of the stockholders the holders of a majority of the shares issued and outstanding, having voting power (which shall not include any treasury stock held by the Corporation), being present in person or represented by proxy, shall be a quorum for all purposes, including the election of directors.

Section 1.5. Voting . At all meetings of the stockholders, each stockholder entitled to vote shall be entitled to vote either in person or by proxy duly appointed by an instrument in writing, subscribed by such stockholder or by his authorized attorney; at all meetings of the stockholders, each stockholder entitled to vote at such meeting shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation upon any date fixed as hereinafter provided. Treasury stock held by the Corporation shall not be entitled to vote.

ARTICLE II

BOARD OF DIRECTORS

Section 2.1. Number . The business and affairs of the Corporation shall be managed and controlled by a Board of Directors which shall consist of not less than five nor more than twenty-five stockholders, the exact number within such minimum and maximum limits to be fixed and determined from time to time by the Board of Directors or by resolution of the stockholders at any meeting thereof. A director may be removed at any time with or without cause by a vote of the stockholders.

Section 2.2. Term of Office . Each director shall serve for the term of one year and until his successor shall have been duly chosen and qualified.

Section 2.3. Vacancies . In the event of a vacancy on the Board of Directors, the directors at the time in office, whether or not a quorum, may, by majority vote of the directors then in office, choose a successor who shall serve as a director until the next annual meeting of stockholders. Vacancies resulting from the increase in the number of directors shall be filled in the same manner.

Section 2.4. Stockholder Nominations of Directors . Subject to the rights of holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, nominations for the election of Directors shall be made by the Board of Directors or a

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committee appointed by the Board of Directors or by any stockholder entitled to vote in the election of Directors generally. However, any stockholder entitled to vote in the election of Directors generally may nominate one or more persons for election as Directors at a meeting of stockholders only if written notice of such stockholder’s intent to make such nomination or nominations has been given in accordance with the following paragraph.

For a nomination to be properly brought before a meeting of stockholders by a stockholder pursuant to this Section 2.4, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than forty-five days prior to the first anniversary date of the initial notice given to stockholders of record at the direction of the Board of Directors for the previous annual meeting; provided, however, that such notice by a stockholder shall not be required to be given more than ninety days prior to the annual meeting of stockholders. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period, or extend any time period, for the giving of a stockholder’s notice as described in this Section 2.4. Such stockholder’s notice must set forth: (a) as to each person whom the stockholder proposes to nominate for election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such person’s written consent to being named as a nominee and to serving as such a director if elected; and (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (1) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (2) the class and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and such beneficial owner, and (3) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation. The Chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.

ARTICLE III

DIRECTORS’ MEETINGS

Section 3.1. Regular Meetings . Regular meetings of the Board of Directors shall be held annually, immediately following each annual meeting of stockholders, or within the next 30 days, for the purpose of electing officers and carrying on such other business as may properly come before such meeting, and, if necessary, immediately following each special meeting of stockholders to consider and act upon any matter which may properly come before such meeting. Any such meeting shall be held at the place where the stockholders’ meeting was held, or other designated

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location. The Board of Directors may also adopt a schedule of additional meetings which shall be considered regular meetings, and such meetings shall be held at the time and place, within or without the Commonwealth of Virginia, as the Chairman or, in his absence, the President shall designate.

Section 3.2. Special Meetings . Special meetings of the Board of Directors shall be held on the call of the Chairman, the President, any three members of the Board of Directors or a majority of the Board of Directors at the principal office of the Corporation or at such other place as shall be designated.

Section 3.3. Telephone Meetings . The Board of Directors may participate in a meeting by means of conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting. When such a meeting is conducted by means of conference telephone or similar communications equipment, a written record shall be made of the action taken at such meeting.

Section 3.4. Notice of Meetings . No notice need be given of regular meetings of the Board of Directors.

Notice of a special meeting of the Board of Directors shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days prior to the date on which such meeting is to be held, or shall be sent addressed to him at such place by electronic transmission, or be delivered personally or by telephone, at least one day prior to the date on which such meeting is to be held. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting, unless required by the Articles of Incorporation.

Section 3.5. Quorum; Required Vote . A majority of the directors shall constitute a quorum for the transaction of business by the Board of Directors. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless the act of a greater number is required by law or these Bylaws.

Section 3.6. Waiver of Notice . Notwithstanding any other provisions of law, the Articles of Incorporation or these Bylaws, whenever notice of any meeting for any purpose is required to be given to any director a waiver thereof in writing, signed by the person entitled to said notice, whether before or after the time stated therein, shall be the equivalent to the giving of such notice.

A director who attends a meeting shall be deemed to have had timely and proper notice of the meeting unless he attends for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 3.7. Actions by Directors Without Meeting . Any action required to be taken at a

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meeting of the directors, or any action which may be taken at a meeting of the directors, may be taken without a meeting if a consent in writing, setting forth the action, shall be signed either before or after such action by all of the directors. Such consent shall have the same force and effect as a unanimous vote.

ARTICLE IV

COMMITTEES OF DIRECTORS

Section 4.1. Executive Committee . The Board of Directors, by resolution adopted by a majority of the number of directors fixed by these Bylaws, may designate four or more directors to constitute an Executive Committee. A majority of the members of the Executive Committee shall constitute a quorum. The Executive Committee shall meet on the call of any of its members. Notice of any such meeting shall be given by mail, telephone, electronic transmission or other means by the close of business on the day before such meeting is to be held. The Executive Committee shall have and may exercise all of the authority of the Board of Directors except to approve (i) an amendment of the Articles of Incorporation; (ii) a plan of merger or consolidation; (iii) a plan of exchange under which the Corporation would be acquired; (iv) the sale, lease or exchange, or the mortgage or pledge for a consideration other than money, of all, or substantially all, the property and assets of the Corporation otherwise than in the usual and regular course of its business; (v) the voluntary dissolution of the Corporation; (vi) revocation of voluntary dissolution proceedings; (vii) any employee benefit plan involving the issuance of common stock; (viii) the compensation paid to a member of the Executive Committee; or (ix) an amendment of these Bylaws.

Section 4.2. Audit Committee . The Board of Directors may appoint an Audit Committee consisting of not less than three directors, none of whom shall be officers, which Committee shall regularly review the adequacy of internal financial controls, review with the Corporation’s independent public accountants the annual audit and other financial statements, and be responsible for the selection of the Corporation’s independent public accountants.

To the extent the Audit Committee of the Board of Directors of The Old Point National Bank consists of individuals who are also directors of the Corporation and otherwise eligible, such Audit Committee may also serve as the Audit Committee for the Board of Directors of the Corporation.

Section 4.3. Other Committees . The Board of Directors may designate such other committees with limited authority as it may deem advisable.

Section 4.4. Telephone Meetings . Committees may participate in meetings by means of conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting. When such meeting is conducted by means of a conference telephone or similar communications equipment, a written record shall be made of the action taken at such meeting.

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Section 4.5. Actions by Committees Without Meetings . Any action which may be taken at a committee meeting, may be taken without a meeting if a consent in writing, setting forth the action, shall be signed either before or after such action by all of the members of the committee. Such consent shall have the same force and effect as a unanimous vote.

Section 4.6. Committee Rules . Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may adopt, amend and repeal rules for the conduct of its business. In the absence of direction by the Board of Directors or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee. Except to the extent that these Bylaws contain provisions to the contrary, in other respects each committee shall conduct its business in the same manner as the Board of Directors is required to conduct its business.

ARTICLE V

OFFICERS AND EMPLOYEES

Section 5.1. Chairman of the Board . The Board of Directors may appoint one of its members to be Chairman of the Board to serve at the pleasure of the Board. He shall preside at all meetings of the Board of Directors. The Chairman of the Board shall supervise the carrying out of the policies adopted or approved by the Board. He shall have general executive powers, as well as the specific powers conferred by these Bylaws. He shall also have and may exercise such further powers and duties as from time to time may be conferred upon or assigned to him by the Board of Directors.

Section 5.2. President . The Board of Directors shall appoint one of its members to be President of the Corporation. In the absence of the Chairman, he shall preside at any meeting of the Board. The President shall have general executive powers and shall have and may exercise any and all other powers and duties pertaining by law, regulation, or practice, to the Office of President or imposed by these Bylaws. He shall also have and may exercise such further powers and duties as from time to time may be conferred upon or assigned to him by the Board of Directors.

Section 5.3. Vice President . The Board of Directors may appoint one or more Vice Presidents. Each Vice President shall have such powers and duties as may be assigned to him by the Board of Directors. One Vice President shall be designated by the Board of Directors, in the absence of the President, to perform all the duties of the President.

Section 5.4. Secretary . The Board of Directors shall appoint a Secretary or other designated officer who shall be Secretary of the Board and of the Corporation, and shall keep accurate minutes of all meetings. He shall attend to the giving of all notices required by these

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Bylaws to be given. He shall be custodian of the corporate seal, records, documents and papers of the Corporation. He shall provide for the keeping of proper records of all transactions of the Corporation. He shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the Office of Secretary or imposed by these Bylaws. He shall also perform such other duties as may be assigned to him, from time to time, by the Board of Directors.

Section 5.5. Other Officers . The Board of Directors may appoint such other officers as from time to time may appear to the Board of Directors to be required or desirable to transact the business of the Corporation. Such officers shall respectively exercise such powers and perform such duties as to pertain to their several offices, or as may be conferred upon, or assigned to, them by the Board of Directors, the Chairman of the Board, or the President.

Section 5.6. Clerks and Agents . The Board of Directors may appoint, from time to time, such clerks, agents and employees as it may deem advisable for the prompt and orderly transaction of the business of the Corporation, define their duties, fix the salaries to be paid to them and dismiss them. Subject to the authority of the Board of Directors, the President, or any other officer of the Corporation authorized by him, may appoint and dismiss all or any clerks, agents and employees and prescribe their duties and the conditions of their employment, and from time to time fix their compensation.

Section 5.7. Tenure of Office . The President shall hold his office for the current year for which the Board of which he shall be a member was elected, unless he shall resign, become disqualified, or be removed; and any vacancy occurring in the Office of President shall be filled promptly by the Board of Directors.

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ARTICLE VI

CAPITAL STOCK

Section 6.1. Shares . Shares of the Corporation may but need not be represented by certificates.

When shares are represented by certificates, the Corporation shall issue such certificates in such form as shall be required by the Virginia Stock Corporation Act (the VSCA) and as determined by the Board, to every stockholder for the fully paid shares owned by such stockholder. Each certificate shall be signed by, or shall bear the facsimile signature of, the Chief Executive Officer, the Chairman of the Board, the President or a Vice President and the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of the Corporation and may (but need not) bear the corporate seal of the Corporation or its facsimile. All certificates for the Corporation’s shares shall be consecutively numbered or otherwise identified.

The name and address of the person to whom shares (whether or not represented by a certificate) are issued, with the number of shares and date of issue, shall be entered on the share transfer books of the Corporation. Such information may be stored or retained on discs, tapes, cards or any other approved storage device relating to data processing equipment; provided that such device is capable of reproducing all information contained therein in legible and understandable form, for inspection by stockholders or for any other corporate purpose.

When shares are not represented by certificates, then within a reasonable time after the issuance or transfer of such shares, the Corporation shall send the stockholder to whom such shares have been issued or transferred a written statement of the information required by the VSCA to be included on certificates.

Section 6.2. Stock Transfer Books and Transfer of Shares . The Corporation, or its designated transfer agent or other agent, shall keep a book or set of books to be known as the stock transfer books of the Corporation, containing the name of each stockholder of record, together with such stockholder’s address and the number and class or series of shares held by such stockholder. Shares of stock of the Corporation shall be transferable on the stock transfer books of the Corporation by the holder in person or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary or the transfer agent, but, except as hereinafter provided in the case of loss, destruction or mutilation of certificates, no transfer of stock shall be entered until the previous certificate, if any, given for the same shall have been surrendered and canceled. Transfer of shares of the Corporation represented by certificates shall be made on the stock transfer books of the Corporation only upon surrender of the certificates for the shares sought to be transferred by the holder of record thereof or by such holder’s duly authorized agent, transferee or legal representative, who shall furnish proper evidence of authority to transfer with the Secretary of the Corporation or its designated transfer agent or other agent. All certificates surrendered for transfer shall be canceled before new certificates (or

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uncertificated shares) for the transferred shares shall be issued. Upon the receipt of proper transfer instructions from the holder of record of uncertificated shares, such uncertificated shares shall be cancelled, issuance of new equivalent uncertificated shares or certificated shares shall be made to the stockholder entitled thereto and the transaction shall be recorded upon the books of the Corporation. Except as otherwise provided by law, no transfer of shares shall be valid as against the Corporation, its stockholders or creditors, for any purpose, until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

Section 6.3. Holder of Record . Except as otherwise required by the VSCA, the Corporation may treat the person in whose name shares of stock of the Corporation (whether or not represented by a certificate) stand of record on its books or the books of any transfer agent or other agent designated by the Board as the absolute owner of the shares and the person exclusively entitled to receive notification and distributions, to vote, and to otherwise exercise the rights, powers and privileges of ownership of such shares.

Section 6.4. Record Date . For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the Board may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than seventy days prior to the date on which the particular action, requiring such determination of stockholders, is to be taken. If no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, or stockholders entitled to receive payment of a dividend, the date on which notices of the meeting are mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof unless the Board fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.

Section 6.5. Lost, Destroyed or Mutilated Certificates . In case of loss, destruction or mutilation of any certificate of stock, another certificate (or uncertificated shares) may be issued in its place upon proof of such loss, destruction or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided that a new certificate (or uncertificated shares) may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do.

Section 6.6. Transfer Agent and Registrar; Regulations . The Corporation may, if and whenever the Board so determines, maintain in the Commonwealth of Virginia or any other state of the United States, one or more transfer offices or agencies and also one or more registry offices which offices and agencies may establish rules and regulations for the issue, transfer and registration of certificates. No certificates for shares of stock of the Corporation in respect of

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which a transfer agent and registrar shall have been designated shall be valid unless countersigned by such transfer agent and registered by such registrar. The Board may also make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of shares represented by certificates and shares without certificates.

Section 6.7. Recognition of Other Stock Certificates . The Corporation will recognize as its own common stock certificates those stock certificates representing shares of common stock of The Old Point National Bank of Phoebus, which certificates have not been heretofore exchanged for certificates representing shares of common stock of the Corporation.

ARTICLE VII

AMENDMENTS

Section 7.1. New Bylaws and Alterations . These Bylaws may be amended or repealed and new Bylaws may be made at any regular or special meeting of the Board of Directors by the vote of a majority thereof. However, Bylaws made by the Board of Directors may be repealed or changed and new Bylaws may be made by the stockholders and the stockholders may prescribe that any Bylaw made by them shall not be altered, amended or repealed by the directors.

ARTICLE VIII

CORPORATE SEAL

Section 8.1. The President, any Vice President, the Secretary or any Assistant Secretary, or other officer thereunto designated by the Board of Directors, shall have the authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be circular in form and shall bear the name of the Corporation.

ARTICLE IX

MISCELLANEOUS PROVISIONS

Section 9.1. Fiscal Year . The fiscal year of the Corporation shall be the calendar year.

Section 9.2. Execution of Instruments . All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted in behalf of the Corporation by the Chairman of the Board, or the President, or any Vice President, or the Secretary. Any such instruments may also be executed, acknowledged, verified, delivered or

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accepted in behalf of the Corporation in such other manner and by such other officers as the Board of Directors may from time to time direct. The provisions of this Section 9.2 are supplementary to any other provision of these Bylaws.

Section 9.3. Records . The Articles of Incorporation, the Bylaws and the proceedings of all meetings of the stockholders, the Board of Directors, and standing committees of the Board, shall be recorded in appropriate minute books provided for the purpose. The minutes of each meeting shall be signed by the Secretary or other officer appointed to act as Secretary of the meeting.

ARTICLE X

EMERGENCY BYLAWS

Section 10.1. Effect . The provision of this Article X shall be effective during any emergency resulting from an attack on the United States or any nuclear or atomic disaster (hereinafter called an “Emergency”).

Section 10.2. Board of Directors . During an Emergency, the director or directors in attendance at the meeting shall constitute a quorum. A meeting of the Board of Directors may be called by any director or officer of the Corporation. Notice of any meeting during an Emergency may be given only to such of the directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication or radio. If no director is present, the three most senior officers of the Corporation, as hereinafter defined, present shall be deemed directors for the purpose of such meeting and shall have all of the authority of the Board of Directors. As used in this Article, officers shall take seniority as follows:


President

Executive Vice President		(if the Board of Directors has elected such an officer)

Senior Vice President		(if the Board of Directors has elected such an officer)

First Vice President		(if the Board of Directors has elected such an officer)

Vice President		(if the Board of Directors has elected such an officer)

Assistant Vice President		(if the Board of Directors has elected such an officer)

Secretary

Within each officer class, officers shall take seniority on the basis of length of service in such office or, in the event of equality, length of service as an officer of the Corporation.

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Section 10.3. Executive Authority . The Board of Directors shall provide lines of succession of executive authority which, until altered by the Board of Directors either before or during an Emergency, shall be effective during an Emergency.

Section 10.4. Operations . It shall be the duty of the senior officer present at each office of the Corporation during an Emergency when communication with the President is impractical, and he is hereby authorized, to take such action as he shall think necessary or desirable to protect the assets of the Corporation and provide service to its customers.

Section 10.5. Indemnity . No officer, director or employee acting in accordance with this Article shall be liable except for willful misconduct.

As amended and restated by the Board of Directors, September 11, 2007

Exhibit 10.6

Base Salaries of Named Executive Officers of the Registrant

As of November 1, 2007, the following are the base salaries (on an annual basis) of the named executive officers (as defined in Item 402 (a)(3) of Regulation S-K) of Old Point Financial Corporation:


Robert F. Shuford	$	254,000
Chairman, President & Chief Executive Officer
Old Point Financial Corporation

Louis G. Morris	$	210,000
Executive Vice President/OPNB
Old Point Financial Corporation



Cary B. Epes		Resigned as of March 1, 2007


Senior Vice President/Business Development & Lending
Old Point Financial Corporation

Margaret P. Causby	$	145,000
Senior Vice President/Risk Management
Old Point Financial Corporation

Laurie D. Grabow	$	140,000
Chief Financial Officer & Senior Vice President/Finance
Old Point Financial Corporation

EXHIBIT 10.8

MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding (herein “MOU”) is made this 10 ^th day of September, 2007, between The Old Point National Bank of Phoebus (“Old Point”) and Tidewater Mortgage Services, Inc. (“Tidewater”).

RECITALS

The parties hereto have entered into a joint venture by forming Old Point Mortgage, LLC (“OPM”) in which Tidewater owns 51% and Old Point 49%.

The parties hereto desire to memorialize their understanding on the business to be conducted by OPM.

NOW, THEREFORE, pursuant to the foregoing premises and the covenants hereinafter set forth, the parties agree as follows:

1. OPM Formation . The parties will simultaneous with the execution of this MOU execute the Operating Agreement for OPM. Old Point will place $171,500.00 (49%) of initial capital into OPM and Tidewater will place $178,500.00 (51%) of initial capital in OPM. Old Point will own 49% of OPM and Tidewater 51%.

2. Employees . OPM will initially have five (5) employees which will be W-2d employees working full-time for OPM. There will be one Operations/Sales Manager (“OSM”) and four (4) loan originators. The OSM shall be in charge of day-to-day management and operations of OPM.

3. Member Services to OPM . Attached hereto as Schedule A is a list of services which Old Point or Tidewater will initially provide to OPM and the fees to be charged. It is agreed that all fees charged OPM shall be at fair market rates, the same as they would charge to other entities and the same as would be charged by independent third parties that provide similar services. To the extent that it is determined at any time that any fees charged by Old Point or Tidewater to OPM do not comply with the foregoing requirement, they shall be adjusted to comply. Subject to the foregoing requirement, all fees will be reviewed annually to determined the appropriateness of any changes. No fees will be charged that are not disclosed on Schedule A unless agreed by Old Point and Tidewater and they comply with RESPA.

4. RESPA . It is the parties intent to ensure that the conduct of business for OPM complies with all requirements of the Real Estate Settlement Procedures Act (“RESPA”) and that OPM constitutes a bona fide provider of settlement services under RESPA. Any and all actions or changes necessary for compliance will be implemented. Attached hereto as Schedule B is the HUD “Policy Statement on Sham Controlled Business Arrangements.” The parties shall periodically review OPM operations to maintain compliance with the Policy Statement.

5. Financial Records . OPM will provide full access to its financial records to Old Point, Tidewater and internal and external auditors of Old Point and Tidewater.

6. Offices . OPM may lease office space from Old Point or Tidewater at fair market value and operate at such location subject to compliance with RESPA.

7. Reporting . A management representative of OPM will provide production reports to Old Point and Tidewater and if requested, attend various monthly meetings of Old Point and Tidewater to present such reports.

8. Holiday Functions . OPM employees will be invited to social/holiday functions of Old Point and Tidewater.

9. Deposit Accounts . OPM will maintain deposit accounts at Old Point on the same terms as any other depositor.

10. Financial Reporting . Financial Reporting will be provided by the second business day of each month. Warehouse line reconciliation will occur daily.

11. Old Point Purchase of Loans . From time to time, Old Point may purchase an OPM originated loan in which event the purchase price shall be the same as a third party independent investor would pay for the same loan.

12. Budget . Attached as Schedule C is the initial budget prepared by OSM, Old Point and Tidewater.

13. Amendment . This MOU may be amended from time to time by the mutual agreement of Old Point and Tidewater.

IN WITNESS WHEREOF, the parties have set forth their signatures below.


THE OLD POINT NATIONAL BANK OF PHOEBUS		TIDEWATER MORTGAGE SERVICES, INC.

By	/s/ Louis G. Morris	By	/s/ Tom Harriman
	President/CEO		President

Exhibit 31.1

CERTIFICATIONS

I, Robert F. Shuford, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Old Point Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2007

/s/ Robert F. Shuford

Robert F. Shuford

Chairman, President & Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, Laurie D. Grabow, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Old Point Financial Corporation;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2007

/s/ Laurie D. Grabow

Laurie D. Grabow

Chief Financial Officer & Senior Vice President/Finance

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Old Point Financial Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on their knowledge and belief:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ Robert F. Shuford

Robert F. Shuford

Chairman, President & Chief Executive Officer

/s/ Laurie D. Grabow

Laurie D. Grabow

Chief Financial Officer & Senior Vice President/Finance

November 9, 2007

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