Citizens Bancorp of Virginia : Record Earnings Reported

PRESS RELEASE - FOR IMMEDIATE DISTRIBUTION

Dated: July 19, 2022

Record 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 for both the second quarter and the first six months of 2022. The Company reported earnings of $1.859 million, or $.87 per share, for the period ended June 30, 2022 compared to $1.471 million, or $.69 per share, for the same period in 2021. The Company's return on assets for the second quarter was 1.28% in 2022 versus 1.12% in 2021. The Company reported earnings of $3.236 million, or $1.52 per share, for the first six months of 2022, compared to $3.016 million, or $1.41 per share, for the first six months of 2021.

Earnings Highlights

The Company reported an increase of $501 thousand, or 14.8%, in net interest income for the second quarter of 2022 compared to the same quarter in 2021. This was primarily due to the increased income on securities and overnight investments driven by rising rates. Loan fees decreased by $147 thousand as a result of a reduction in fees related to the forgiveness of Paycheck Protection Program (PPP) loans. Noninterest income decreased by $19 thousand from $857 thousand in 2021 to $838 thousand for the second quarter of 2022 as a result of a decline in gains on the sale of secondary market loans. Noninterest expense increased $149 thousand to $2.573 million in the second quarter of 2022 from $2.424 million in 2021. Due to the continued stability in the quality of the Bank's loan portfolio, $160 thousand was released from the allowance for loan losses. Management will continue monitoring key economic metrics and the performance of the portfolio to determine if any further adjustments in the allowance may be warranted. The Company's net interest margin for the second quarter of 2022 was 2.81% versus 2.78% in the second quarter of 2021, as the Bank continues to benefit from a rising rate environment.

Balance Sheet

At June 30, 2022 total Company assets were $579.3 million, an increase of $12.4 million from December 31, 2021. Gross loans ended the period at $211.8 million, a decrease of $963 thousand as PPP loans were forgiven, and total deposits increased $22 million to $517.8 million from $495.8 at year end 2021. Interest-bearing and noninterest-bearing deposits increased from $374.4 million to $386.1 million and $121.3 million to $131.6 million, respectively. Total stockholders' equity decreased from $59.9 million on December 31, 2021 to $52.4 million. The decrease is due to the increase in unrealized losses on the securities portfolio resulting from the increase in interest rates. The Bank's intent is to hold securities to maturity, which alleviates the unrealized losses created by changes in rates.

Capital Strength

The Company's total equity at June 30, 2022 was $52.4 million and its Community Bank Leverage Ratio was approximately 10.92%. 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 June 30, 2022 Other Real Estate Owned (OREO) decreased to $1.4 million, or by 32%, from December 31, 2021. Nonaccruing loans as a percentage of loans at June 30, 2022 remained at a very low .01%.

President and CEO Joseph D. Borgerding commented, "Management is pleased to report that Citizens Bank & Trust Company had record earnings for the second quarter and the first six months of 2022. The record quarterly earnings exceed last year's second quarter earnings by $388,000, or 26%. The Bank has benefited from rising rates, as interest income on securities and overnight funds for the first six months increased by $944,000, or 103%. Our Bank is well-positioned if interest rates continue to rise. We are pleased with the Bank's performance ratios, which can be attributed to disciplined management and efficient operations."

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, 2021.

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CITIZENS BANCORP OF VIRGINIA, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Dollars in thousands, except share data)

		(Unaudited)
		June 30,		December 31,
Assets		2022			2021
Cash and due from banks	$	10,763	$	9,052
Interest-bearing deposits in banks		305			1,337
Federal funds sold		125,872			72,376
Securities available for sale, at fair market value		201,323			246,574
Restricted securities, at cost		440			403
Loans, net of allowance for loan losses of $2,401 in 2022
and $2,761 in 2021		209,401			210,002
Premises and equipment, net		8,278			8,537
Accrued interest receivable		1,715			1,526
Other assets		3,995			1,387
Bank-owned life insurance		15,842			13,635
Other real estate owned, net of valuation allowance of $107 in 2022
and $164 in 2021		1,424			2,103
Total assets	$	579,358	$	566,932
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing	$	131,605	$	121,380
Interest-bearing		386,182			374,452
Total deposits		517,787			495,832
Other borrowings		4,534			7,547
Accrued interest payable		182			224
Accrued expenses and other liabilities		4,413			3,354
Total liabilities		526,916			506,957
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, 2,128,263 for 2022 and 2,130,888 for 2021		1,065			1,065
Additional paid-in capital		-			-
Retained earnings		62,964			60,857
Accumulated other comprehensive loss		(11,587)			(1,947)
Total stockholders' equity		52,442			59,975
Total liabilities and stockholders' equity	$	579,358	$	566,932

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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							Six Months Ended
				June 30,								June 30,
				(Unaudited)								(Unaudited)
			2022							2021							2022								2021
Interest and Dividend Income		$	2,935		$	3,234
Loans, including fees		$	5,951			$	6,560
Investment securities:
Taxable		860						364							1,409								721
Tax-exempt		42						66							83								144
Federal funds sold		297						29							364								47
Other		5						10							11								30
Total interest and dividend income		4,139						3,703							7,818							7,502
Interest Expense
Deposits		247						307							495								638
Borrowings		3						8							7								18
Total interest expense		250						315							502							656
Net interest income		3,889						3,388							7,316								6,846
Provision for loan losses			(160)						-							(360)							-
Net interest income after provision
for loan losses		4,049						3,388							7,676								6,846
Noninterest Income
Service charges on deposit accounts		164						133							327								273
Net gain on calls of securities		-						-							1								2
Net gain on sales of loans		53						125							120								263
Income from bank-owned life insurance		111						93							207								187
Interchange income, net		286						276							509								494
Other		224						230							404							428
Total noninterest income		838						857							1,568							1,647
Noninterest Expense
Salaries and employee benefits		1,749						1,540							3,431								3,014
Net occupancy expense		159						153							325								331
Equipment expense		126						131							260								271
FDIC deposit insurance		38						32							79								62
Net gain on sale of other real estate owned		(223)						(111)							(301)							(192)
OREO expenses, net of rental income		27						6							49								20
Other		697						673							1,380							1,256
Total noninterest expense		2,573						2,424							5,223							4,762
Income before income taxes		2,314						1,821							4,021								3,731
Income taxes		455						350							785							715
Net income		$	1,859			$	1,471		$	3,236			$	3,016
Earnings per share, basic & diluted	$	0.87		$	0.69	$	1.52			$	1.41

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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

					June 30,			March 31,			December 31,			September 30,			June 30,
					2022			2022			2021			2021			2021
Per Share Data:
Earnings per weighted
average share		$0.87			$0.65			$0.63			$0.59			$0.69
Weighted average shares
outstanding		2,128,560			2,130,378			2,130,961			2,132,470			2,137,051
Actual shares oustanding		2,128,263			2,129,613			2,130,888			2,131,138			2,134,631
Book value per share
at period end	$	24.64	$	25.72	$	28.15	$	27.76	$	27.67
Dividend per share	$	0.25	$	0.25	$	0.25	$	0.25	$	0.25
Performance Ratios:
Return on average assets		1.28%			0.98%			0.97%			0.92%			1.12%
Net interest margin, (FTE)1		2.81%			2.59%			2.80%			2.79%			2.78%
Efficiency ratio2		54.31%			63.59%			66.03%			66.31%			56.87%
Capital and Other Ratios:
(Ratios are period end, unless stated otherwise)
Tier 1 leverage ratio		10.92%			10.94%			11.18%			11.30%			11.45%
Allowance for loan losses
to total loans		1.14%			1.23%			1.30%			1.30%			1.28%
Nonaccruing loans to
total loans		0.01%			0.02%			0.03%			0.01%			0.01%
Net charge-offs (net recoveries)
to average loans
(annualized)		-0.01%			0.01%			0.00%			-0.06%			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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