Citizens Bancorp of Virginia : Solid Third Quarter Earnings Reported

PRESS RELEASE - FOR IMMEDIATE DISTRIBUTION

Dated: October 19, 2021

Solid Third Quarter 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 quarterly earnings of $1.258 million, or $.59 per share, for the period ended September 30, 2021 compared to $1.083 million, or $.50 per share, for the same period in 2020. The Company's return on assets for the third quarter was .92% in 2021 versus .93% in 2020. The Company reported record earnings of $4.274 million for the first nine months of 2021, or $2.00 per share, compared to $3.822 million, or $1.77 per share, for the prior year.

Earnings Highlights

The Company reported an increase of $139 thousand, or 4.1%, in net interest income for the third quarter of 2021 compared to the same quarter in 2020. The increase can be attributed to a $162 thousand increase in loan fees, almost all of which was from the PPP loan program. Noninterest income increased $121 thousand to $787 thousand in 2021 from $666 thousand in 2020. Noninterest expense increased $277 thousand to $2.889 million in 2021 from $2.612 million in 2020, mainly from the effect of pension settlement accounting. The Company's net interest margin for the third quarter of 2021 was 2.79% versus 3.19% in the third quarter of 2020.

Balance Sheet

At September 30, 2021 total Company assets were $541.5 million, an increase of $48.4 million from December 31, 2020. Gross loans ended the period at $225.6 million, a decrease of $9.2 million, and total deposits increased to $471.9 million from $419.1 million at year end 2020. Noninterest-bearing deposits increased to $114.4 million and interest-bearing deposits increased to $357.4 million.

Capital Strength

The Company's total equity at September 30, 2021 was $59.2 million and its Community Bank Leverage Ratio was approximately 11.30%. This ratio significantly exceeds the current regulatory standards for well-capitalized status.

Credit Quality

The Bank's loan portfolio has continued to perform well and remains stable. The Company reported net recoveries of $34 thousand for the quarter ended September 30, 2021 compared to net charge-offs of $14 thousand for the same period in 2020. At September 30, 2021 Other Real Estate Owned (OREO) decreased to $2.1 million, or by 29%, from December 31, 2020. Nonaccruing loans as a percentage of loans at September 30, 2021 remained flat 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 of $4.274 million for the first nine months of 2021. Growth in secondary market mortgages and fees from government-backed Paycheck Protection loans have been big contributors to the Bank's net income. Historic deposit growth has continued during the first nine months of 2021 as deposits have increased by $52.8 million. I want to thank the Board, management and staff for their dedication in

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overcoming the many challenges of the pandemic to offer uninterrupted service to our customers and communities."

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)
	September 30,		December 31,
Assets		2021			2020
Cash and due from banks	$	8,764	$	7,636
Interest-bearing deposits in banks		1,334			6,951
Federal funds sold		64,348			42,336
Securities available for sale, at fair market value		216,793			176,051
Restricted securities, at cost		403			527
Loans, net of allowance for loan losses of $2,926 in 2021
and $2,996 in 2020		222,717			231,845
Premises and equipment, net		8,570			8,953
Accrued interest receivable		1,553			1,761
Other assets		1,382			859
Bank-owned life insurance		13,537			13,255
Other real estate owned, net of valuation allowance of $158 in 2021
and $291 in 2020		2,097			2,964
Total assets	$	541,498	$	493,138
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing	$	114,445	$	99,661
Interest-bearing		357,447			319,426
Total deposits		471,892			419,087
Other borrowings		5,499			11,894
Accrued interest payable		233			321
Accrued expenses and other liabilities		4,718			3,512
Total liabilities		482,342			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, 2,131,138 for 2021 and 2,143,660 for 2020		1,065			1,072
Additional paid-in capital		-			-
Retained earnings		60,043			57,656
Accumulated other comprehensive loss		(1,952)			(404)
Total stockholders' equity		59,156			58,324
Total liabilities and stockholders' equity	$	541,498	$	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						Nine Months Ended
				September 30,							September 30,
				(Unaudited)							(Unaudited)
				2021					2020						2021								2020
Interest and Dividend Income		$	3,359		$	3,275
Loans, including fees		$	9,919			$	9,698
Investment securities:
Taxable		390					397						1,111								1,402
Tax-exempt		53					98						197								334
Federal funds sold		45					11						92								151
Other		7					28						37								62
Total interest and dividend income		3,854					3,809						11,356							11,647
Interest Expense
Deposits		293					381						931								1,217
Borrowings		5					11						23								37
Total interest expense		298					392						954							1,254
Net interest income		3,556					3,417						10,402								10,393
Provision for loan losses			(100)					150						(100)							400
Net interest income after provision
for loan losses		3,656					3,267						10,502								9,993
Noninterest Income
Service charges on deposit accounts		154					133						427								438
Net gain (loss) on calls of securities		(9)					-						(7)							31
Net gain on sales of loans		82					81						345								239
Income from bank-owned life insurance		95					95						282								282
Interchange income, net		235					199						729								574
Other		230					158						658							496
Total noninterest income		787					666						2,434							2,060
Noninterest Expense
Salaries and employee benefits		1,920					1,621						4,934								4,571
Net occupancy expense		177					177						508								516
Equipment expense		120					131						391								386
FDIC deposit insurance		34					28						96								45
Net gain on sale of other real estate owned		(44)					(87)						(236)							(213)
OREO expenses, net of rental income		8					33						28								43
Other		674					709						1,930							2,028
Total noninterest expense		2,889					2,612						7,651							7,376
Income before income taxes		1,554					1,321						5,285								4,677
Income taxes		296					238						1,011							855
Net income		$	1,258			$	1,083		$	4,274			$	3,822
Earnings per share, basic & diluted	$	0.59		$	0.50	$	2.00			$	1.77

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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

					September 30,			June 30,			March 31,			December 31,			September 30,
					2021			2021			2021			2020			2020
Per Share Data:
Earnings per weighted
average share		$0.59			$0.69			$0.72			$0.56			$0.50
Weighted average shares
outstanding		2,132,470			2,137,051			2,143,378			2,145,262			2,149,820
Actual shares oustanding		2,131,138			2,134,631			2,142,731			2,143,660			2,147,311
Book value per share
at period end	$	27.76	$	27.67	$	27.08	$	27.21	$	27.10
Dividend per share	$	0.25	$	0.25	$	0.24	$	0.24	$	0.24
Performance Ratios:
Return on average assets		0.92%			1.12%			1.25%			0.99%			0.93%
Net interest margin, (FTE)1		2.79%			2.78%			3.02%			3.17%			3.19%
Efficiency ratio2		66.31%			56.87%			54.77%			65.45%			63.58%
Capital and Other Ratios:
(Ratios are period end, unless stated otherwise)
Tier 1 leverage ratio		11.30%			11.45%			11.85%			12.28%			12.60%
Allowance for loan losses
to total loans		1.30%			1.28%			1.31%			1.28%			1.24%
Nonaccruing loans to
total loans		0.01%			0.01%			0.06%			0.07%			0.08%
Net charge-offs (net recoveries)
to average loans
(annualized)		-0.06%			0.01%			0.00%			-0.01%			0.02%

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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