Citizens Bancorp of Virginia : Record 2021 Earnings Reported

PRESS RELEASE - FOR IMMEDIATE DISTRIBUTION

Dated: January 25, 2022

Record 2021 Earnings Reported by Citizens Bancorp of Virginia, Inc.

Blackstone, Virginia Citizens Bancorp of Virginia, Inc. (the "Company") (OTCBB: CZBT), the parent company of Citizens Bank and Trust Company (the "Bank"), reported record earnings of $5.627 million in 2021 compared to $5.020 million in 2020. Earnings per share were $2.63 for the year ended December 31, 2021 versus $2.33 for the same period in 2020, or an increase of 12.9%. The Company's return on assets decreased to 1.06% in 2021 from 1.11% in 2020 as total assets increased by 15.0%. Earnings for the quarter ended December 31, 2021 were $1.353 million, or $.63 per share, compared to $1.198 million, or $.56 per share, for the same period in 2020.

Earnings Highlights

For the year, net interest income increased $133 thousand in 2021 compared to 2020. Interest income decreased by $1.017 million as the COVID-related decrease in rates had a material effect on interest earned across all asset classes. Interest expense decreased by $393 thousand. Loan fee income increased by $757 thousand, all of which was from the PPP loan program. Noninterest income increased $417 thousand to $3.275 million from $2.858 million in 2020 primarily as a result of increased interchange fees and gains on the sale of secondary market mortgage loans. Noninterest expense increased $403 thousand to $10.608 million in 2021 from $10.205 million in 2020, mainly from the effect of pension settlement accounting. As the result of the improvement in economic conditions during 2021 and the reduction in the size of the loan portfolio, the Bank reduced the allowance for loan losses by $265 thousand. The Company's net interest margin decreased to 2.84% in 2021 from 3.35% in 2020.

The Company reported an increase of $124 thousand, or 3.5%, in net interest income for the fourth quarter of 2021 compared to the same quarter in 2020. The Company's net interest margin for the fourth quarter of 2021 was 2.80% versus 3.17% in the fourth quarter of 2020.

Balance Sheet

At December 31, 2021 total Company assets were $566.9 million, an increase of $73.8 million from December 31, 2020. Gross loans ended the period at $212.8 million, a decrease of $22.1 million, as PPP loans were forgiven by the SBA and some existing borrowers refinanced their home loans at a fixed rate which were then sold into the secondary market. Total deposits increased to $495.8 million from $419.1 million at year end 2020, or by 18.3%. Total deposits have grown by 44.3% since the end of 2019. Noninterest-bearing deposits increased to $121.4 million and interest-bearing deposits increased to $374.4 million.

Capital Strength

The Company's total equity at December 31, 2021 was $60.0 million and its Community Bank Leverage Ratio was approximately 11.18%. This ratio significantly exceeds the current regulatory standards for well-capitalized status.

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Credit Quality

The Bank's loan portfolio has continued to perform well and remains stable. At December 31, 2021 Other Real Estate Owned (OREO) decreased to $2.1 million, or by 29%, from December 31, 2020. Nonaccruing loans as a percentage of total loans at December 31, 2021 remained flat at a very low .03%.

President and CEO Joseph D. Borgerding commented, "Management is pleased to report that Citizens Bank & Trust Company had record earnings of $5.627 million for 2021, which is a 12.1% increase over 2020. Growth in secondary market mortgages and fees from government-backed Paycheck Protection loans have been big contributors to the Bank's net income. The Bank experienced historic deposit growth as deposits increased by $76.7 million, or 18.3%. I want to thank the Board, management and staff for their dedication in overcoming the many challenges of the pandemic to offer uninterrupted service to our customers and communities. The new year will bring challenges to the banking industry as the bulk of the fees generated by the Paycheck Protection loans have been realized and the current yield curve continues to put pressure on margins. Our Bank remains uniquely positioned through our strong balance sheet and efficient operations to maintain solid performance."

About Citizens Bancorp of Virginia, Inc. and Citizens Bank and Trust Company

Citizens Bank and Trust Company was founded in 1873 and is the second oldest independent bank in Virginia. The Bank has eleven locations in the Counties of Amelia, Chesterfield, Nottoway, Mecklenburg, Powhatan and Prince Edward and one location in the City of Colonial Heights, Virginia. Citizens Bancorp of Virginia, Inc. is the parent company of the Bank and is headquartered in Blackstone, Virginia. The Company's stock trades on the OTC Bulletin Board under the symbol "CZBT". Additional information on the Company and the Bank is also available at its website: www.cbtva.com.

Cautionary Statement about Forward-Looking Statements

We caution you that certain statements in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that our expectations with respect to these forward-looking statements are based upon reasonable assumptions within the bounds of our business operations, there can be no assurance that the actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For more details on factors that could affect expectations, see the Company's Annual Report for the year ended December 31, 2020.

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CITIZENS BANCORP OF VIRGINIA, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Dollars in thousands, except share data)

		(Unaudited)
	December 31,		December 31,
Assets		2021			2020
Cash and due from banks	$	9,052	$	7,636
Interest-bearing deposits in banks		1,337			6,951
Federal funds sold		72,376			42,336
Securities available for sale, at fair market value		246,574			176,051
Restricted securities, at cost		403			527
Loans, net of allowance for loan losses of $2,761 in 2021
and $2,996 in 2020		210,002			231,845
Premises and equipment, net		8,537			8,953
Accrued interest receivable		1,526			1,761
Other assets		1,387			859
Bank-owned life insurance		13,635			13,255
Other real estate owned, net of valuation allowance of $164 in 2021
and $291 in 2020		2,103			2,964
Total assets	$	566,932	$	493,138
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing	$	121,380	$	99,661
Interest-bearing		374,452			319,426
Total deposits		495,832			419,087
Other borrowings		7,547			11,894
Accrued interest payable		224			321
Accrued expenses and other liabilities		3,354			3,512
Total liabilities		506,957			434,814
Stockholders' Equity
Preferred stock, $0.50 par value; authorized 1,000,000 shares;
none outstanding		-			-
Common stock, $0.50 par value; authorized 10,000,000 shares;
issued and outstanding, 2,130,888 for 2021 and 2,143,660 for 2020		1,065			1,072
Additional paid-in capital		-			-
Retained earnings		60,857			57,656
Accumulated other comprehensive loss		(1,947)			(404)
Total stockholders' equity		59,975			58,324
Total liabilities and stockholders' equity	$	566,932	$	493,138

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CITIZENS BANCORP OF VIRGINIA, INC. AND SUBSIDIARY

Consolidated Statements of Income

(Dollars in thousands, except per share data)

			Three Months Ended							Twelve Months Ended
				December 31,								December 31,
				(Unaudited)								(Unaudited)
			2021							2020							2021								2020
Interest and Dividend Income		$	3,375		$	3,380
Loans, including fees		$	13,294			$	13,078
Investment securities:
Taxable		426						364							1,537								1,766
Tax-exempt		48						91							245								425
Federal funds sold		46						10							138								161
Other		7						26							44								88
Total interest and dividend income		3,902						3,871							15,258							15,518
Interest Expense
Deposits		274						359							1,205								1,576
Borrowings		3						11							26								48
Total interest expense		277						370							1,231							1,624
Net interest income		3,625						3,501							14,027								13,894
Provision for loan losses			(165)						-							(265)							400
Net interest income after provision
for loan losses		3,790						3,501							14,292								13,494
Noninterest Income
Service charges on deposit accounts		166						128							593								566
Net gain (loss) on calls of securities		2						-							(5)							31
Net gain on sales of loans		87						115							432								354
Income from bank-owned life insurance		98						94							380								376
Interchange income, net		240						205							969								779
Other		248						256							906							752
Total noninterest income		841						798							3,275							2,858
Noninterest Expense
Salaries and employee benefits		1,682						1,617							6,616								6,188
Net occupancy expense		212						185							720								701
Equipment expense		173						172							564								558
FDIC deposit insurance		35						28							131								73
Net gain on sale of other real estate owned		-						(47)							(236)							(260)
OREO expenses, net of rental income		14						14							42								57
Other		841						860							2,771							2,888
Total noninterest expense		2,957						2,829							10,608							10,205
Income before income taxes		1,674						1,470							6,959								6,147
Income taxes		321						272							1,332							1,127
Net income		$	1,353			$	1,198		$	5,627			$	5,020
Earnings per share, basic & diluted	$	0.63		$	0.56	$	2.63			$	2.33

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CITIZENS BANCORP OF VIRGINIA, INC. AND SUBSIDIARY

Consolidated Regulatory Capital Ratios

And Performance Ratios

(Dollars in thousands, except per share data)

Three Months Ended

					December 31,			September 30,			June 30,			March 31,			December 31,
					2021			2021			2021			2021			2020
Per Share Data:
Earnings per weighted
average share		$0.63			$0.59			$0.69			$0.72			$0.56
Weighted average shares
outstanding		2,130,961			2,132,470			2,137,051			2,143,378			2,145,262
Actual shares oustanding		2,130,888			2,131,138			2,134,631			2,142,731			2,143,660
Book value per share
at period end	$	28.15	$	27.76	$	27.67	$	27.08	$	27.21
Dividend per share	$	0.25	$	0.25	$	0.25	$	0.24	$	0.24
Performance Ratios:
Return on average assets		0.97%			0.92%			1.12%			1.25%			0.99%
Net interest margin, (FTE)1		2.80%			2.79%			2.78%			3.02%			3.17%
Efficiency ratio2		66.03%			66.31%			56.87%			54.77%			65.45%
Capital and Other Ratios:
(Ratios are period end, unless stated otherwise)
Tier 1 leverage ratio		11.18%			11.30%			11.45%			11.85%			12.28%
Allowance for loan losses
to total loans		1.30%			1.30%			1.28%			1.31%			1.28%
Nonaccruing loans to
total loans		0.03%			0.01%			0.01%			0.06%			0.07%
Net charge-offs (net recoveries)
to average loans
(annualized)		0.00%			-0.06%			0.01%			0.00%			-0.01%

1. The net interest margin is reported on a fully taxable equivalent basis.
2. Computed by dividing noninterest expense by the sum of net interest income (on a fully taxable equivalent basis) and noninterest income.

CONTACT: Geoffrey C. Warner

EVP and Chief Financial Officer

Voice: 434-292-8100 or E-mail:[e-mail]

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