SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB

            ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1996     Commission file number:  33-9686


                        CENTRAL VIRGINIA BANKSHARES, INC.
                 (Name of small business issuer in its charter)

             Virginia                                     54-1467806
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                    Identification No.)


    U.S. Route 60 at Flat Rock, Post Office Box 39, Powhatan, Virginia 23139
               (Address of principal executive offices) (Zip Code)

          Issuer's telephone number including area code: (804) 794-6266


         Securities registered under Section 12(b) of the Exchange Act:
                                      None

         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $2.50 par value


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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.

Yes  _X_    No  ___

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

         State issuer's revenues for its most recent fiscal year: $11.0 million

         The aggregate  market value of the Common Stock held by  non-affiliates
of the Registrant  was  approximately  $19,069,300  computed by reference to the
last  sales  price of  $21.375  per share as of March 14,  1997,  on The  Nasdaq
SmallCap Market, as reported in published financial sources.

         At March 14, 1997, there were 949,140 shares of the Registrant's Common
Stock outstanding.

         Transitional Small Business Disclosure Format (check one)
         Yes ___    No  _X_


<PAGE>


                       DOCUMENTS INCORPORATED BY REFERENCE


Document of the Registrant                       Form 10-KSB Reference Location
--------------------------                       ------------------------------

1997 Proxy Statement                             Part III


<PAGE>


                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

General

         The  Company  and the Bank.  Central  Virginia  Bankshares,  Inc.  (the
"Company") was incorporated as a Virginia  corporation on March 7, 1986,  solely
to acquire all of the issued and outstanding  shares of Central  Virginia Bank's
(the "Bank") capital stock.  The Bank was incorporated on June 1, 1972 under the
laws of Virginia and, since opening for business on September 17, 1973, its main
and  administrative  office has been located on U.S.  Route 60 at Flat Rock,  in
Powhatan  County,  Virginia.  In  May  1996,  the  administrative  offices  were
relocated to the Corporate Center in the Powhatan  Commercial Center located off
Route 60 near the main  office.  The Company does plan to open one new branch in
Cumberland  County in 1997 and  expects  to  continue  to  provide  the  banking
services described herein.

         Principal  Market  Area.  The Bank's  primary  service area is Powhatan
County  and  extends  into  Chesterfield  and  Cumberland   counties  which  had
populations of 15,328,  209,274 and 7,825,  respectively,  according to the 1990
census.  Both Powhatan and Chesterfield  counties'  populations are projected by
the Virginia  Department  of Planning and Budget to grow faster than the State's
average  through the year 2000. The Bank's main office is located in the Village
of Flat Rock in Powhatan  County which is on U.S.  Route 60, eight miles west of
the Village of Midlothian in  Chesterfield  County.  Flat Rock is the commercial
hub of Powhatan  County.  The Bank's  branch  offices are located in the Village
Marketplace  Shopping  Center in the Village of Midlothian and the Market Square
Shopping  Center  in  Brandermill,  both  in  Chesterfield  County,  and  in the
Cartersville  community in Cumberland County. The Bank's present intention is to
continue  concentrating  its activities in its current  service area,  which the
Bank believes is an attractive area in which to operate.

         Banking  Services.  The  principal  business  of the Bank is to attract
deposits  and to loan or invest those  deposits on  profitable  terms.  The Bank
offers a wide  range of  services,  including  checking  and  savings  accounts,
certificates  of  deposits,   as  well  as  credit  cards,   installment  loans,
construction and permanent residential mortgage loans and other consumer lending
services.  The Bank  also  makes  seasonal  and term  loans,  both  alone and in
conjunction  with other  banks or  governmental  agencies.  The Bank also offers
other related services,  such as travelers' checks, safe deposit boxes,  deposit
transfer, customer note payment, annuities,  collections, notary public, escrow,
drive-in  facility and other  customary  banking  services.  The Bank's  lending
policies,  deposit  products and related services are intended to meet the needs
of  individuals  and  businesses  in its market area.  The Bank  provides  trust
services  to its  customers  through an  affiliation  with The Trust  Company of
Virginia.

         The Bank's  plan of  operation  for future  periods is to  continue  to
operate as a community  bank and to focus its lending and deposit  activities in
its primary  service area. As the Bank's primary  service area shifts from rural
to suburban in nature, the Bank will compete  aggressively for customers through
its traditional personal service and extended hours of operation.  The Bank will
also emphasize the origination of residential  mortgages and construction  loans
as the area  becomes  more  developed.  Consistent  with its focus on  providing
community based financial services, the Bank does not plan to diversify its loan
portfolio  geographically  by making  significant  loans  outside of its primary
service area. While the Bank and its borrowers will be directly  affected by the
economic  conditions and the real estate market prevailing in the area, the Bank
is  better  able  to  monitor  the  financial  condition  of  its  borrowers  by
concentrating its lending activities in its primary service area. At the present
time, the Bank does not anticipate  extending operations beyond Powhatan County,
the western portion of Chesterfield  County and Cumberland  County.  The Bank is
planning  to  establish  an  additional  branch  in  Cumberland  County  and may
establish additional branches in locations if attractive sites become available.


<PAGE>


Lending Activities

         Loan  Portfolio.  The  Company is an active  residential  mortgage  and
residential  construction  lender and also extends consumer loans and commercial
loans to small and medium sized businesses  within its primary service area. The
Company's commercial lending activity extends across its primary service area of
Powhatan,  Cumberland and western  Chesterfield  Counties.  Consistent  with its
focus on  providing  community-based  financial  services,  the Company does not
attempt to diversify its loan  portfolio  geographically  by making  significant
amounts of loans to borrowers outside of its primary service area. The principal
economic risk  associated  with each of the categories of loans in the Company's
portfolio is the creditworthiness of its borrowers.  Within each category,  such
risk is increased or decreased depending on prevailing economic  conditions.  In
an effort to manage this risk,  the Bank's  policy  gives loan  amount  approval
limits to  individual  loan  officers  based on their level of  experience.  All
unsecured  loans in  excess  of  $100,000  and all  secured  loans in  excess of
$500,000 must be approved by the Board of Directors.  The risk  associated  with
the real estate mortgage loans and installment loans to individuals varies based
upon  employment  levels,   consumer   confidence,   fluctuations  in  value  of
residential  real  estate  and other  conditions  that  affect  the  ability  of
consumers to repay indebtedness. The risk associated with commercial,  financial
and agricultural  loans varies based upon the strength and activity of the local
economies of the Company's  market areas.  The risk  associated with real estate
construction  loans  varies  based upon the supply of and demand for the type of
real estate  under  construction.  Most of the Bank's  real estate  construction
loans are for pre-sold or contract homes.

         Residential  Mortgage  Loans.  Residential  mortgage  loans are made in
amounts up to 80.0% of the appraised value of the security property. Residential
mortgage loans are underwritten  using specific  qualification  guidelines which
are intended to assure that such loans are eligible for sale into the  secondary
mortgage  market.  The Bank  requires that the borrower  obtain title,  fire and
casualty  insurance coverage in an amount equal to the loan amount and in a form
acceptable to the Bank. The Bank originates  residential mortgage loans that are
sold  in the  secondary  market.  These  loans  are  generally  either  one-year
adjustable  rate  mortgages  ("ARMs")  or  fifteen  to thirty  year  fixed  rate
mortgages. All permanent residential mortgages made for the Bank's own portfolio
are made as three-year ARMs.

         The  Bank's  ARMs are  subject  to  limitations  of 2.0% per three year
period on interest rate  increases and  decreases.  In addition,  ARMs currently
originated  by the Bank  provide  for a  lifetime  cap of 6.0% or less  from the
borrower's initial interest rate. All changes in the interest rate must be based
on the movement of an index agreed to by the Bank and the borrower.

         There are risks  resulting  from  increased  costs to a  borrower  as a
result of the periodic repricing mechanisms of these loans. Despite the benefits
of ARMs to an  institution's  asset/liability  management,  they pose additional
risks,  primarily because as interest rates rise, the underlying payments by the
borrowers  rise,  increasing  the potential for default.  At the same time,  the
marketability  of the  underlying  property may be adversely  affected by higher
interest rates.

         The Bank charges  origination  fees on its residential  mortgage loans.
These fees vary among loan products and with market  conditions.  Generally such
fees amount to 1.0% to 3.0% of the loan principal amount. In addition,  the Bank
charges fees to its borrowers to cover the cost of  appraisals,  credit  reports
and certain expenses related to the documentation and closing of loans.

         Commercial  Mortgage Loans.  The Bank does not actively seek commercial
permanent  mortgage  loans on  income-producing  properties  such as apartments,
shopping centers, hotels and office buildings. Such requests from Bank customers
and  concerning  properties  in the  Bank's  established  trade  area  would  be
considered.

         Real  Estate  Construction  Lending.  In  general,  the  Bank  does not
actively  originate  construction loans on  income-producing  properties such as
apartments, shopping centers, hotels and office buildings.

         In order to promote its permanent mortgage lending business and because
of  the  attractive   adjustable  interest  rates  available,   the  Bank  makes
construction and small  development  loans for residential  purposes.  The large
majority of the Bank's  construction  loans are to  experienced  builders.  Such
loans  normally  carry an  interest  rate of 1.0% to 3.0%  over the  prime  bank
lending rate, adjusted daily.  Construction  lending entails significant risk as
compared with residential mortgage lending. Construction loans typically involve
larger loan  balances  concentrated  with single  borrowers or groups of related
borrowers.  Construction loans involve additional risks attributable to the fact
that loan funds are advanced  upon the security of the home under  construction,
which is of uncertain value prior to the completion of construction. Thus, it is
more difficult to evaluate  accurately the total



                                      -2-
<PAGE>


loan funds required to complete a project and related  loan-to-value  ratios. To
minimize  risks  associated  with  construction  lending,  the Bank  limits loan
amounts to 75.0% of appraised value on unsold homes and 80.0% of appraised value
on pre-sold  homes,  in addition to its usual credit  analysis of its borrowers.
The Bank  always  obtains  a first  lien on the  property  as  security  for its
construction loans.

         Consumer  Lending.  The Bank  currently  offers  most types of consumer
demand,  time  and  installment  loans  for a  variety  of  purposes,  including
automobile loans and home equity lines of credit.

         Commercial Business Lending. As a full-service community bank, the Bank
makes  commercial loans to qualified small businesses in the Bank's market area.
At December 31, 1996, commercial business loans were $15.3 million or 19% of the
Bank's  total loan  portfolio,  a majority of which were secured by real estate.
Commercial   business  loans  generally  have  a  higher  degree  of  risk  than
residential  mortgage loans but have  commensurately  higher  yields.  To manage
these risks, the Bank secures appropriate  collateral and carefully monitors the
financial  condition of its business  borrowers  and the  concentration  of such
loans in the Bank's portfolio.  Residential mortgage loans generally are made on
the basis of the  borrower's  ability to make  repayment from his employment and
other  income and are  secured by real  property  whose value tends to be easily
ascertainable.  In contrast, commercial business loans typically are made on the
basis of the  borrower's  ability  to make  repayment  from the cash flow of its
business  and are  either  unsecured  or  secured by  business  assets,  such as
accounts receivable,  equipment and inventory.  As a result, the availability of
funds for the  repayment  of  commercial  business  loans  may be  substantially
dependent on the success of the business  itself.  Further,  the  collateral for
secured  commercial  business  loans may  depreciate  over  time,  and cannot be
appraised  with as much precision as  residential  real estate.  At December 31,
1996, the majority of the Bank's nonperforming loans were commercial loans.

Competition

         The Bank encounters strong  competition for its banking services within
its primary service area. In Powhatan and Cumberland Counties, the bank competes
with Jefferson  National Bank,  which is the only bank that has branches  within
these two markets other than the Bank.  The Bank is the only  community  bank in
the two counties.  In Chesterfield County there are several community banks that
compete with the Bank.  The Bank also  competes  with many large banks in nearby
Richmond to where many  residents in the Bank's  primary  service area  commute.
Financial  companies,  mortgage  companies,  credit  unions and savings and loan
associations also compete with the Bank for loans and deposits.  In addition, in
some  instances,  the Bank must  compete for deposits  with money market  mutual
funds  that  are  marketed  nationally.  Most  of the  Bank's  competitors  have
substantially greater resources than the Bank.

Employees

         The Bank had 58 officers and full-time  employees at December 31, 1996.
Employee relations have been good. The Bank sponsors a Profit Sharing/Retirement
Plan for its employees.

Regulation and Supervision

         Bank holding  companies and banks are extensively  regulated under both
federal and state law. The  following  is a summary of certain  federal laws and
regulations  that govern the Company and the Bank.  However,  to the extent that
the following  information describes statutory or regulatory  provisions,  it is
qualified  in  its  entirety  by  reference  to  the  particular  statutory  and
regulatory  provisions.  Any change in applicable  law or regulation  may have a
material effect on the business and prospects of the Company and the Bank.

         Bank Holding  Companies.  The Company is  registered  as a bank holding
company  under the Bank Holding  Company Act of 1956 (the "BHCA") and as such is
subject to  regulation by the Board of Governors of the Federal  Reserve  System
(the  "Federal  Reserve  Board").  As a bank  holding  company,  the  Company is
required  to file  with the  Federal  Reserve  Board an annual  report  and such
additional  information as the Federal Reserve Board may require pursuant to the
BHCA. The Federal Reserve Board may also make examinations of the Company.

         The BHCA  requires the prior  approval of the Federal  Reserve Board in
any case where a bank  holding  company  proposes to acquire  direct or indirect
ownership or control of more than 5% of the voting shares of any bank (unless it
owns a majority of such bank's voting  shares) or otherwise to control a bank or
to merge or  consolidate  with any other bank  holding  company.  The BHCA would
prohibit  the Federal  Reserve  Board from  approving  an  application  from the
Company to acquire shares of a bank located outside of Virginia,  unless such an



                                      -3-
<PAGE>

acquisition is specifically authorized by statute of the state in which the bank
whose  shares are to be acquired is located.  However,  under  recently  enacted
federal  legislation,   the  restriction  on  interstate  acquisitions  will  be
abolished effective September 1995, and thereafter,  bank holding companies from
any state will be able to acquire  banks and bank holding  companies  located in
any other state,  subject to certain conditions,  including nationwide and state
imposed  concentration  limits.  Banks also will be able to branch  across state
lines by  acquisition,  merger or de novo,  effective June 1, 1997 (unless state
law would  permit  such  interstate  branching  at an earlier  date),  providing
certain  conditions are met,  including the applicable  state law must expressly
permit such interstate branching.

         The  BHCA  also  prohibits  a  bank  holding   company,   with  certain
exceptions, from acquiring more than 5% of the voting shares of any company that
is not a bank and from  engaging in any business  other than banking or managing
or controlling banks. Under the BHCA, the Federal Reserve Board is authorized to
approve the  ownership  of shares by a bank  holding  company in any company the
activities of which the Federal  Reserve  Board has  determined to be so closely
related  to  banking  or to  managing  or  controlling  banks  as to be a proper
incident  thereto.  The Federal Reserve Board has by regulation  determined that
certain  activities  are  closely  related to banking  within the meaning of the
BHCA.

         Banks.  The Bank is supervised  and  regularly  examined by the Federal
Reserve  Board and the Bureau of  Financial  Institutions  of  Virginia's  State
Corporation  Commission.  The various laws and  regulations  administered by the
regulatory  agencies affect corporate  practices,  such as payment of dividends,
incurring debt and acquisition of financial  institutions  and other  companies,
and affect  business  practices,  such as payment of interest on  deposits,  the
charging of  interest on loans,  types of  business  conducted  and  location of
offices.

         FDIC  Insurance  Assessments.  The  Bank is  subject  to  FDIC  deposit
insurance assessments.  It is possible that insurance assessments could increase
in  future  years,  and it is  possible  that  there may be  special  additional
assessments.  Additional  assessments  could  have  an  adverse  impact  on  the
Company's results of operations.

         Governmental  Policies.  The operations of the Company and the Bank are
affected not only by general  economic  conditions,  but also by the policies of
various  regulatory  authorities.  In  particular,  the  Federal  Reserve  Board
regulates  money and credit and  interest  rates in order to  influence  general
economic  conditions.  These  policies have a  significant  influence on overall
growth and  distribution of loans,  investments and deposits and affect interest
rates charged on loans or paid for time and savings  deposits.  Federal  Reserve
Board monetary  policies have had a significant  effect on the operating results
of  commercial  banks in the past and are  expected  to continue to do so in the
future.

         Limits on Dividends and Other  Payments.  The Company is a legal entity
separate and distinct from the Bank. Most of the Company's  revenues result from
dividends  paid to the  Company  by the  Bank.  The  right of the  Company,  and
consequently  the  right  of  creditors  and  shareholders  of the  Company,  to
participate  in any  distribution  of the assets or earnings of the Bank through
the payment of such dividends or otherwise is  necessarily  subject to the prior
claims of creditors of the Bank, except to the extent that claims of the Company
in its capacity as a creditor may be recognized.

         The amount of dividends payable by the Bank to the Company depends upon
the Bank's  earnings and capital  position,  and is limited by federal and state
law, regulations and policies.

         As a state  member  bank  subject  to the  regulations  of the  Federal
Reserve  Board,  the Bank must obtain the approval of the Federal  Reserve Board
for any dividend if the total of all  dividends  declared in any  calendar  year
would  exceed the total of its net  profits,  as defined by the Federal  Reserve
Board,  for that year,  combined with its retained net profits for the preceding
two years.  In  addition,  the Bank may not pay a dividend in an amount  greater
than its  undivided  profits  then on hand  after  deducting  its losses and bad
debts.  For this  purpose,  bad debts  are  generally  defined  to  include  the
principal  amount of loans which are in arrears  with respect to interest by six
months or more  unless  such  loans  are fully  secured  and in the  process  of
collection. Moreover, for purposes of this limitation, the Bank is not permitted
to add the balance in its  allowance  for loan losses  account to its  undivided
profits then on hand; however, it may net the sum of its bad debts as so defined
against the  balance in its  allowance  for loan losses  account and deduct from
undivided  profits  only bad debts as so defined in excess of that  account.  At
December  31,  1996,  the Bank had $3.4  million of  retained  earnings  legally
available for the payment of dividends.

         In addition, the Federal Reserve Board is authorized to determine under
certain circumstances  relating to the financial condition of a national bank, a
state member bank or a bank holding  company that the payment of



                                      -4-
<PAGE>

dividends  would be an  unsafe  or  unsound  practice  and to  prohibit  payment
thereof.  The payment of dividends  that deplete a bank's  capital base could be
deemed to constitute  such an unsafe or unsound  practice.  The Federal  Reserve
Board has indicated that banking  organizations  should  generally pay dividends
only out of current operating earnings.

         Borrowings by the Company.  There are various legal restrictions on the
extent to which the Company can borrow or otherwise obtain credit from the Bank.
In general,  these restrictions  require that any such extensions of credit must
be secured by designated amounts of specified  collateral and are limited, as to
the  Company,  to 10% of the Bank's  capital  stock and  surplus,  and as to the
Company and any nonbanking  subsidiaries in the aggregate,  to 20% of the Bank's
capital stock and surplus.  Federal law also requires that transactions  between
the Bank and the Company or any nonbanking subsidiaries, including extensions of
credit,  sales of  securities  or  assets  and the  provision  of  services,  be
conducted  on terms at least as  favorable  to the Bank as those  that  apply or
would apply to comparable transactions with unaffiliated parties.

         Capital   Requirements.   The  Federal   Reserve  Board  has  published
risk-based  capital  guidelines which are applicable to bank holding  companies.
The  Federal  Reserve  Board  guidelines  redefine  the  components  of capital,
categorize  assets into different risk classes and include  certain  off-balance
sheet items in the  calculation of  risk-weighted  assets.  The minimum ratio of
qualified total capital to risk-weighted  assets (including  certain off balance
sheet items,  such as standby  letters of credit) is 8.00%. At least half of the
total  capital  must be  comprised  of common  equity,  retained  earnings and a
limited amount of permanent  preferred stock,  less goodwill ("Tier 1 capital").
The remainder ("Tier 2 capital") may consist of a limited amount of subordinated
debt, other preferred stock,  certain other  instruments and a limited amount of
loan and lease losses reserves. The Company's Tier 1 and Total Capital ratios as
of December 31, 1996 were 16.4% and 17.7%, respectively.

         In addition, the Federal Reserve Board has established minimum Leverage
ratio (Tier 1 capital to quarterly average assets less goodwill)  guidelines for
bank holding  companies.  These guidelines  provide for a minimum ratio of 3.00%
for bank holding companies that meet certain specified criteria,  including that
they have the highest  regulatory  rating.  All other bank holding companies are
required to maintain a Leverage ratio of 3.00% plus an additional  cushion of at
least 100 to 200 basis points.  The Company's  Leverage ratio as of December 31,
1996  was  11.2%.  The  guidelines  also  provide  that  banking   organizations
experiencing internal growth or making acquisitions will be expected to maintain
strong capital positions  substantially  above the minimum  supervisory  levels,
without significant reliance on intangible assets.

         The Bank is  subject  to capital  requirements  adopted by the  Federal
Reserve Board that are the same as those that apply to the Company.  At December
31,  1996 the Bank's  total  capital,  Tier 1 capital and  leverage  ratios were
16.4%, 17.7% and 11.2%, respectively.

         Each  federal  regulatory  agency is required to revise its  risk-based
capital  standards  to ensure  that those  standards  take  adequate  account of
interest rate risk, concentration of credit risk and the risk of non-traditional
activities,  as well as to reflect the actual  performance  and expected risk of
loss on  multi-family  mortgages.  The Federal  Reserve  Board and the FDIC have
jointly solicited comments on a proposed framework for implementing the interest
rate risk component of the risk-based capital guidelines. Under the proposal, an
institution's  assets,  liabilities,  and  off-balance  sheet positions would be
weighted by risk factors that approximate the instruments'  price sensitivity to
a one hundred basis point change in interest rates.  Institutions  with interest
rate risk  exposure in excess of the  threshold  level would be required to hold
additional  capital  proportional  to that risk.  In 1994,  the Federal  Reserve
Board,  FDIC, and related agencies  solicited comments on a proposed revision to
the risk-based  capital  guidelines to take account of  concentration  of credit
risk and the risk of non-traditional  activities. The revision proposed to amend
each  agency's   risk-based   capital   standards  by   explicitly   identifying
concentration  of  credit  risk  and  the  risk  arising  from   non-traditional
activities,  as well as an  institution's  ability  to manage  those  risks,  as
important  factors  to be taken  into  account  by the  agency in  assessing  an
institution's overall capital adequacy. The proposal was adopted as a final rule
by the Federal Reserve Board and the FDIC and  subsequently  became effective on
January 17, 1995.  The Company and the Bank do not expect the final rule to have
a material impact on their respective capital requirements.

         Under Federal Reserve Board policy,  a bank holding company is required
to serve as a source of  financial  and  managerial  strength to its  subsidiary
banks and may not  conduct its  operations  in an unsafe or unsound  manner.  In
addition,  it is the Federal Reserve Board's policy that, in serving as a source
of strength to its subsidiary  banks, a bank holding  company should stand ready
to use available  resources to provide  adequate capital funds to its subsidiary
banks.  This  support  may be required  during  periods of  financial  stress or
adversity,  in  circumstances  where the  Company  might  not do so absent  such
policy. A bank holding company is expected to maintain the financial flexibility
and  capital-raising  capacity to obtain additional  resources for assisting its



                                      -5-
<PAGE>

subsidiary  banks. The failure of a bank holding company to serve as a source of
strength to its  subsidiary  banks would  generally be considered by the Federal
Reserve  Board to be an unsafe and unsound  banking  practice,  a  violation  of
Federal Reserve Board regulations, or both.

ITEM 2.  DESCRIPTION OF PROPERTIES

         The main  office of the Company and the Bank was built in 1978 and is a
two-story building of brick  construction,  with approximately 8,500 square feet
of  floor  space.  It is  located  on Route 60 in the  Village  of Flat  Rock in
Powhatan  County.  On March 6, 1992,  the Bank  purchased  the  deposits  of the
Powhatan  office of the former Coreast  Federal Savings Bank from the Resolution
Trust Corporation  assuming  approximately $9.0 million in deposit  liabilities.
The Bank also  negotiated the purchase of that branch site and its furniture and
equipment at a price at or slightly below market value.  The branch  facility is
located in the Village of Flat Rock across Route 60 from the Bank's main office.
This facility allows the Bank to service  westbound traffic on Route 60 with its
drive-in teller facility,  and also houses the Bank's secondary  mortgage market
loan origination operation. In April 1993, the Bank acquired the branch facility
of the former  Investors  Federal  Savings  Bank  located  in the Market  Square
Shopping  Center  in   Chesterfield   County,   through  the  Resolution   Trust
Corporation.  This one-story building contains  approximately  1,600 square feet
and opened for business on November 1, 1993.  The Bank's two other  branches are
located in the Village of Midlothian in Chesterfield County and in Cartersville,
Cumberland  County.  The Midlothian  branch is a one and one-half story building
with  approximately  3,000 square feet.  The  Cartersville  location,  which was
originally  opened in 1985,  was  replaced  in mid-1994  with a one-story  brick
building with approximately 1,600 square feet.

         In May 1996 the  Company  moved  its  administrative  staff to a 15,000
square foot two-story Corporate Center in the Powhatan Commercial Center located
off U.S. Route 60 near the main office. The Corporate Center houses the computer
operations,  loan  administration and bookkeeping  departments all of which were
formerly located in the main office.

ITEM 3.  LEGAL PROCEEDINGS

         There are no material legal proceedings  pending at this time involving
either  the  Company or the Bank as a party or  affecting  any  property  of the
Company of the Bank.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of securities  holders  through the
solicitation  of proxies or  otherwise  during the fourth  quarter of the fiscal
year covered by this report.



                                      -6-
<PAGE>

                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER  MATTERS

Common Stock

         The common Stock commenced listing on the NASDAQ Small Cap system under
the symbol "CVBK" on April 14, 1993.  Effective  May 10, 1995,  the common stock
was listed on the Nasdaq  National  Market also under the symbol  "CVBK".  As of
March 14, 1997, the Company had approximately 1,736 shareholders of record.

         The  following  table  show  dividends  paid and the high and low trade
prices by quarter for the past two years  according to the National  Association
of Securities Dealers, Inc.:
<TABLE>

                                           1996                                              1995
                        -------------------------------------------       -------------------------------------------
                                                       Dividends                                         Dividends
                          High Trade     Low Trade       Paid              High Trade     Low Trade        Paid

<S>                         <C>            <C>            <C>                 <C>           <C>             <C>
First Quarter               $21.25         $18.00         $.165               $16.50        $13.50          $.15
Second Quarter               20.75          18.25          .165                17.50         15.00           .15
Third Quarter                20.75          18.75          .18                 18.50         16.00           .165
Fourth Quarter               20.75          19.00          .18                 19.50         17.25           .165
</TABLE>


ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations

         The Company's net income  totaled  $1,710,797 in 1996, a decrease of 9%
from 1995.  These results  reflect a decrease in the net interest  yield for the
year caused  primarily by an increase in the average  balance of  lower-yielding
federal  funds sold and an increase in other  operating  expenses as a result of
the opening of our new $1.05  million  Corporate  Center.  Net income per common
share was $1.81 in 1996 compared to $2.00 in 1995.  The  computation of earnings
per share is based on weighted-average shares outstanding of 946,077 in 1996 and
940,071 in 1995.

         In 1995, the Company earned  $1,880,160,  an increase of 14% over 1994.
This  increase was  primarily  attributable  to an  improvement  in net interest
income,  which  increased  9% from 1994,  as well as a modest  increase of 3% in
non-interest expenses.  Earnings per share increased $.24 from 1994 to $2.00 per
share. Weighted-average shares outstanding in 1994 were 937,890.

         The Company's  return on average equity was 12.5% in 1996,  compared to
15.1%  and  14.5% in 1995 and  1994,  respectively.  Return  on  average  assets
amounted to 1.37%, 1.65% and 1.58% for these same years.

         Net Interest  Income.  The Company's net interest income was $5,498,547
in 1996, compared to $5,443,510 and $5,013,036, for 1995 and 1994, respectively.

         The following table sets forth the Company's  average  interest earning
assets (on a tax equivalent basis) and average interest bearing liabilities, the
average yields earned on such assets and rates paid on such liabilities, and the
net interest margin, all for the periods indicates.


                                      -7-
<PAGE>

<TABLE>
<CAPTION>
                                                          Years Ended December 31,
                          -----------------------------------------------------------------------------------------
                                     1996                          1995                           1994
                          ----------------------------  ----------------------------   ----------------------------
                          Average            Yield/      Average            Yield/      Average            Yield/
                           Balance   Interest  Rate      Balance  Interest   Rate       Balance  Interest   Rate
                                                           (Dollars in thousands)
<S>                          <C>        <C>     <C>        <C>        <C>     <C>         <C>        <C>     <C>
Interest earning assets:
Federal funds sold           $15,862    $848    5.35%      $6,171     $354    5.74%       $4,775     $185    3.87%
                             -------    ----               ------     ----                ------     ----
Securities: (5)
  Obligations of other
  U.S. governmental
  agencies and corporations    6,812     473    6.94        9,280      640    6.90        10,116      690    6.82
  Obligations of states
  and political
  subdivisions(3)              9,747     553    8.60        8,777      514    8.87         8,055      487    9.16
  Other securities               227      11    4.85          227       11    4.85           227       11    4.85
                              ------   -----               ------    -----                ------    -----
    Total securities (3)      16,786   1,037    7.88       18,284    1,165    7.82        18,398    1,188    7.82
                              ------   -----               ------    -----                ------    -----
Loans (1)(2)(4)               83,323   8,207    9.85       82,855    8,278    9.99        74,268    6,943    9.35
                              ------   -----               ------    -----                ------    -----
  Total interest-earning
  assets                    $115,971 $10,092    8.70%    $107,310   $9,797    9.13%      $97,441   $8,316    8.53%
                            ======== =======             ========   ======               =======   ======
Interest bearing liabilities:
Deposits:
  Interest bearing demand    $20,630    $611    2.96%     $20,600     $649    3.15%      $23,329     $701    3.00%
  Savings                     12,189     394    3.23       11,001      355    3.23        12,012      387    3.22
  Other time                  61,985   3,544    5.72       57,085    3,306    5.79        45,063    2,186    4.85
                              ------   -----               ------    -----                ------    -----
    Total deposits            94,804   4,549    4.80       88,686    4,310    4.86        80,404    3,274    4.07
Securities sold under
  repurchase agreements          815      39    4.79          571       30    5.25           699       23    3.29
Short-term borrowings              -       -    -             135        8    5.93             -        -        -
Long-term debt                    56       5    8.93           65        5    7.69            74        6    8.11
                              ------   -----               ------    -----                ------    -----
  Total interest-bearing
    liabilities              $95,675  $4,593    4.80%     $89,457   $4,353    4.87%      $81,177   $3,303    4.07%
                             =======  ======              =======   ======               =======   ======
Net interest margin                   $5,499    3.90%               $5,444    4.26%                $5,013    4.46%
                                      ======                        ======                         ======
Net interest yield                              4.99%                         5.32%                          5.40%
</TABLE>

--------------------
(1)      Installment loans are stated net of unearned income.
(2)      Average loan balances include non-accrual loans.
(3)      Tax-exempt income has been adjusted to a tax-equivalent basis using an
         incremental rate of 34%.
(4)      Interest income on loans includes loan fees of  $425,320 in 1996,
         $406,251 in 1995, and $574,064 in 1994.
(5)      Includes investment securities and securities available for sale.

         The increase in net interest  income in 1996 and 1995 was  attributable
primarily to an increase in the volume of the Company's  interest earning assets
as shown in the  previous  table.  Average  interest  earning  assets rose 8% to
$116.0  million  in 1996 and 10% to $107.3  million  in 1995.  The  increase  in
average loans was  primarily  the result of an increase in consumer  installment
loans and mortgage loans.

         The  net  interest   margin  is  a  measure  of  net  interest   income
performance. It represents the difference between interest income, including net
loan fees earned,  and interest  expense,  reflected as a percentage  of average
interest  earning  assets.  The Company's net interest margin was 3.90% in 1996,
compared  to 4.26%  during  1995 and  4.46% in  1994.  The net  interest  margin
decreased  in  1996  due  to  the  157%  increase  in  the  average  balance  of
lower-yielding  federal  funds  sold.  In  addition  to the  increase in average
balance of federal funds sold to 13.7% of total interest-earning  assets in 1996
from 5.8% in 1995,  the yield on these funds  decreased 7% to 5.35% in 1996.  In
1995, the net interest  margin  decreased due to the 26% increase in the average
balance of higher-yielding time deposits.

         Net  interest  income is affected by changes in both  average  interest
rates and  average  volumes  of  interest-earning  assets  and  interest-bearing
liabilities.  The following  table sets forth the amounts of the total change in
interest income that can be attributed to rate (change in rate multiplied by old
volume)  and volume  (change in volume  multiplied  by old rate) for the periods
indicated.  The amount of change not  solely due to rate or volume  changes  was
allocated  between the change due to rate and the change due to volume  based on
the relative size of the rate and volume changes.

                                      -8-
<PAGE>
<TABLE>
<CAPTION>

                                                        1996 Compared to 1995              1995 Compared to 1994
                                                   ---------------------------------    -----------------------------
                                                       Volume       Rate       Net         Volume     Rate      Net
                                                                        (Dollars in Thousands)
<S>                                                      <C>        <C>        <C>           <C>      <C>       <C>
Interest Income:
Federal funds sold                                       $556       $(62)      $494          $54      $115      $169
Securities: (1)
Obligations of other U.S. government agencies
  and corporations                                      (170)           3     (167)         (57)         7      (50)
Obligations of states and political subdivisions           57        (18)        39           44      (17)        27
Other                                                       -           -        -             -         -         -
                                                        -----        ----     -----         ----      ----      ----
  Total securities                                      (113)        (15)     (128)         (13)      (10)      (23)
                                                        -----        ----     -----         ----      ----      ----
Loans                                                      47       (118)      (71)          805       530     1,335
                                                           --       -----      ----          ---       ---     -----
  Total interest income                                  $490      $(195)      $295         $846      $635    $1,481
                                                         ====      ======      ====         ====      ====    ======
Interest Bearing Liabilities:
Deposits:
  Interest bearing demand                                  $1       $(39)     $(38)        $(82)       $31     $(51)
  Savings                                                  39           0        39         (33)         1      (32)
  Other time                                              283        (45)       238          583       537     1,120
                                                          ---        ----       ---          ---       ---     -----
  Total deposits                                          323        (84)       239          468       569     1,037
Securities sold under repurchase agreements                13         (4)         9          (4)        11         7
Short-term borrowing                                      (8)           0       (8)            8         0         8
Long-term debt                                            (1)           1         0          (1)         0       (1)
                                                        -----        ----     -----         ----      ----      ----
  Total interest expense                                 $327       $(87)      $240         $471      $579    $1,051
                                                         ====       =====      ====         ====      ====    ======
Increase(decrease) in net interest income                $163      $(108)       $55         $375       $55      $430
                                                         ====      ======       ===         ====       ===      ====
</TABLE>

--------------------

(1)      Includes securities available for sale and securities held to maturity.

         Non-Interest  Income. In 1996 the Company's total  non-interest  income
increased  12.8%  without  the  effect of a $25,000  gain on sale of a  security
available  for sale and  16.2%  given  the  effect of the  security  gain.  This
increase is primarily the result of an increase in service charges  collected on
checking  accounts  for  overdrafts.  In  1995,  non-interest  income  decreased
slightly  by 1.2%  despite a 6% increase  in service  charges and other  banking
fees.

         Non-Interest   Expenses.  In  1996  the  Company's  total  non-interest
expenses increased  $456,048,  or 13.6%,  compared to 1995.  Expenses related to
employee salaries and benefits increased 9.9% reflecting normal salary increases
as well as a small increase in the number of personnel.  Occupancy and equipment
expenses  increased 31.2% in 1996 primarily due the opening of the $1.05 million
Corporate Center in May 1996.

         In 1995, the Company's total non-interest expenses increased $97,689 or
3%,  compared  to 1994.  Expenses  related to  salaries  and  employee  benefits
increased 8.8%.  Federal insurance  premiums  decreased $80,743 or 41% primarily
due to a premium refund of approximately $54,000 received in September 1995.

         Income Taxes.  The Company  reported income taxes of $684,917 for 1996,
compared to $796,166  in 1995,  and  $711,154  in 1994.  These  amounts  yielded
effective tax rates of 28.6%, 29.7%, and 30.1%, respectively.

Financial Condition

         Loan  Portfolio.  The  Company is an active  residential  mortgage  and
residential  construction lender and generally extends commercial loans to small
and medium sized  businesses  within its primary  service  area.  The  Company's
commercial lending activity extends across its primary service area of Powhatan,
Cumberland  and  western  Chesterfield  Counties.  Consistent  with its focus on
providing  community-based  financial services,  the Company does not attempt to
diversify its loan portfolio  geographically  by making  significant  amounts of
loans to borrowers outside of its primary service area.

         The principal  economic risk  associated with each of the categories of
loans in the  Company's  portfolio  is the  creditworthiness  of its  borrowers.
Within  each  category,  such  risk  is  increased  or  decreased  depending  on
prevailing  economic  conditions.  The risk  associated  with  the  real  estate
mortgage loans and installment loans to individuals varies based upon employment
levels,  consumer  confidence,  fluctuations in value of residential real



                                      -9-
<PAGE>

estate and other  conditions  that  affect the  ability  of  consumers  to repay
indebtedness.  The risk associated with  commercial,  financial and agricultural
loans varies based upon the strength and activity of the local  economies of the
Company's market areas. The risk associated with real estate  construction loans
varies  based upon the supply of and  demand for the type of real  estate  under
construction. Most of the Bank's real estate construction loans are for pre-sold
or contract homes.

         Loans  increased  $1.3 million,  or 1.5% from year-end 1995 to year-end
1996,  compared  to an increase of $3.5  million or 4.4% from  year-end  1994 to
year-end  1995.  The loan to  deposit  ratio was  76.8% at  December  31,  1996,
compared to 77.1% at December 31, 1995 and 84.6% at December 31, 1994.

         The following  table  summarizes the Company's loan  portfolio,  net of
unearned income:
<TABLE>
<CAPTION>

                                                                       At December 31
                                                       -----------------------------------------------
                                                            1996           1995            1994
                                                                   (Dollars in Thousands)
<S>                                                           <C>            <C>              <C>
               Real Estate:
                 Mortgage                                     $37,884        $35,979          $33,454
                 Home equity                                    6,315          6,477            5,959
                 Construction                                  10,078          9,768            7,381
                                                               ------          -----            -----
               Total Real Estate                              $54,237        $52,224          $46,794
               Commercial                                      15,314         15,914           17,802
               Installment                                     16,400         16,592           16,677
                                                               ------         ------           ------
                                                              $85,951        $84,730          $81,273
               Less unearned discount                           (401)          (528)            (640)
                                                                -----          -----            -----
                                                               85,550         84,202           80,633
               Allowance for loan losses                      (1,212)        (1,127)          (1,066)
                                                              -------        -------          -------
               Loans, net                                     $84,338        $83,075          $79,567
                                                              =======        =======          =======
</TABLE>

         As shown in the above  table,  the total  amount  of  outstanding  real
estate loans  increased by $2.0 million in 1996 and increased by $5.4 million in
1995.  During 1996, the amount of outstanding  installment  loans to individuals
decreased  by  $192,000,  compared to a decrease of $85,000 in 1995  compared to
1994. Commercial, financial and agricultural loans decreased by $600,000 in 1996
and by $1.8 million in 1995.

         At December 31, 1996, no  concentrations  of loans  exceeding  10.0% of
total loans existed which were not disclosed as a separate category of loans.

         The  following  table  shows the  maturity of loans  outstanding  as of
December 31, 1996. Also provided are the amounts due classified according to the
sensitivity to changes in interest rates.
<TABLE>
<CAPTION>

                                                                       Maturing
                                               ---------------------------------------------------------
                                                               After One
                                                Within One     but Within    After Five
                                                   Year        Five Years      Years          Total
                                                                (Dollars in Thousands)

<S>                                                  <C>           <C>            <C>           <C>
            Real estate mortgage                     $10,610       $18,757        $8,477        $37,844
            Installment                                5,269        10,053         1,078         16,400
            Other (1)                                 31,707             -             -         31,707
                                                      ------       -------        ------        -------
                                                     $47,586       $28,810        $9,555        $85,951
                                                     =======       =======        ======        =======
            Loans maturing with:
              Fixed interest rates                                                              $19,543
              Variable interest rates                                                            66,408
                                                                                                 ------
                                                                                                $85,951
                                                                                                =======
</TABLE>

---------------------

(1)      Includes home equity, real estate construction and commercial loans.

       Asset Quality.  Non-performing  loans include non-accrual loans, loans 90
days or more past due and  restructured  loans.  Non-accrual  loans are loans on
which interest  accruals have been  discontinued.  Loans which reach non-accrual
status may not be restored to accrual status until all delinquent  principal and
interest has been paid, or the loan becomes both well secured and in the process
of collection. Restructured loans are loans with


                                      -10-
<PAGE>

respect to which a borrower has been granted a concession  on the interest  rate
or the original repayment terms because of financial difficulties.

         Non-performing  loans totaled $1,643,000 at December 31, 1996, compared
to  $1,126,000  at December  31, 1995,  and  $569,000 at December 31, 1994.  The
increase in non-performing  loans reflects a number of loans 90 days past due at
December 31, 1996.

         Management  forecloses on  delinquent  real estate loans when all other
repayment  possibilities  have been  exhausted.  Real  estate  acquired  through
foreclosure  (OREO) was $372,546 at December 31, 1996,  compared to $284,466 and
$370,933 at December 31 1995 and 1994,  respectively.  All  foreclosed  property
held at  December  31,  1996  was in the  Company's  primary  service  area  and
consisted of two residential  properties.  The Bank has not incurred significant
current  period  expenses  related to  carrying  OREO on its  books.  The Bank's
practice is to value real estate  acquired  through  foreclosure at the lower of
(i) an independent  current  appraisal or market analysis less anticipated costs
of disposal,  or (ii) the existing loan balance.  The Bank is actively marketing
all foreclosed real estate and does not anticipate material write-downs in value
before disposition.

         Management does not believe that the level of  non-performing  loans in
1996  reflects  any  systematic  problem in the  Company's  loan  portfolio.  At
December 31, 1996,  non-accrual  loans totaled $708,000  compared to $648,000 at
December  31, 1995 and  $569,000  at  December  31,  1994.  Management  does not
anticipate a material increase in non-performing assets, although it may move to
foreclose on borrowers whose loans were on a non-accrual  status at December 31,
1996.

         The following table summarizes non-performing loans:

<TABLE>
<CAPTION>
                                                                                          At December 31
                                                                              ---------------------------------------
                                                                                 1996          1995         1994
                                                                                 ----          ----         ----
                                                                                      (Dollars in Thousands)

<S>                                                                                <C>           <C>          <C>
Loans accounted for on a non-accrual basis                                           $708          $648         $569
Loans contractually past due 90 days or more as to interest or principal
  payments (not included in non-accrual loans above)                                  935           478            -
Loans restructured and in compliance with modified terms (not included in
  non-accrual loans or loans contractually past due 90 days or more above)              -             -            -
                                                                                   ------        ------         ----
    Total                                                                          $1,643        $1,126         $569
                                                                                   ======        ======         ====
</TABLE>

         Since 1992,  loans 90 days or more past due were placed on  non-accrual
status unless well secured and in the process of collection.  In 1996, $3,502 of
interest  income was reversed  when loans were placed on  non-accrual  status or
upon  foreclosure.  In 1995 and 1994,  $269 and  $4,200 of  interest  income was
reversed under the same circumstances,  respectively. Since the Company operates
in a rural to suburban  area, it has  generally  been well  acquainted  with its
principal  borrowers and has not had such a large number of problem credits that
management has not been able to stay well informed  about,  and in contact with,
troubled  borrowers.   Additionally,  because  the  Company  generally  requires
collateral for loans,  the Company has been able to recover a sufficient  amount
of loans previously  charged off so that the provision for loan losses each year
exceeds net charge-offs.  However, with the continued growth of the Company, the
decision  was made in 1992 that a loan not well  secured  and in the  process of
collection  should be placed on a non-accrual  status when it is 90 days or more
delinquent, rather than after 180 days, as had been the practice before 1992.

         The  following  table sets forth the  amounts  of  contracted  interest
income and  interest  income  reflected  in income on loans  accounted  for on a
non-accrual basis and loans restructured and in compliance with modified terms:
<TABLE>
<CAPTION>

                                                                                     For the Year Ended December 31
                                                                                     --------------------------------
                                                                                       1996       1995       1994
                                                                                       ----       ----       ----
                                                                                         (Dollars in Thousands)

<S>                                                                                        <C>        <C>        <C>
Gross interest income that would have been recorded if the loans had been current
  and in accordance with their original terms                                              $56        $63        $39
Interest income included in income on the loans                                              -          -          -
</TABLE>



                                      -11-
<PAGE>

         Management  is not aware of any other loans at December  31, 1996 which
involve  serious  doubts as to the ability of such  borrowers to comply with the
existing payment terms.

         Management  has analyzed the  potential  risk of loss on the  Company's
loan  portfolio,  given  the  loan  balances  and the  value  of the  underlying
collateral,  and has recognized losses where appropriate.  Non-performing  loans
are closely  monitored on an ongoing basis as part of the Company's  loan review
process.  Management  reviews the loan loss  allowance at the end of each month.
Based primarily on the Company's loan  classification  system,  which classifies
problem credits as substandard,  doubtful,  or loss,  additional  provisions for
losses  are made  monthly.  Furthermore,  past  experiences  led  management  to
conclude  that as a general  matter it is prudent to operate with a higher level
of  reserves  than the  Company  has  maintained  in the past.  The ratio of the
allowance  for loan  losses  to total  loans  was 1.42% at  December  31,  1996,
compared  to 1.34% at  December  31, 1995 and 1.32% at  December  31,  1994.  At
December 31, 1996 the ratio of the allowance  for loan losses to  non-performing
loans was 73.8%,  compared to 100.08% and 187.3% at December  31, 1995 and 1994,
respectively.  The decrease in the ratio for 1996 is due to the amount of 90 day
past due loans previously discussed.  Management evaluates  non-performing loans
relative  to their  collateral  value and makes  appropriate  reductions  in the
carrying value of those loans based on that review.  Management believes,  based
on its  review,  that the  Company  has  adequate  reserves  to cover any future
write-down that may be required on these loans.

         The  following  table  summarizes  changes  in the  allowance  for loan
losses:
<TABLE>
<CAPTION>

                                                                                     Year Ended December 31
                                                                            -----------------------------------------
                                                                                1996          1995          1994
                                                                                ----          ----          ----
                                                                                     (Dollars in Thousands)

<S>                                                                               <C>           <C>             <C>
Balance at beginning of period                                                    $1,127        $1,066          $926
                                                                                  ------        ------          ----
Charge-offs:
  Commercial, financial and agricultural                                               8             -             -
  Real estate mortgage                                                                30            53             -
  Installment loans to individuals                                                    64           100            45
                                                                                    ----          ----          ----
    Total                                                                           $102          $153           $45
                                                                                    ----          ----           ---
Recoveries on previous loan losses:
  Commercial, financial and agricultural                                         $     -           $21          $  3
  Installment loans to individuals                                                    22            28            23
                                                                                      --            --            --
Total                                                                                $22           $49           $26
                                                                                     ---           ---           ---
Net charge-offs                                                                    $(80)        $(104)         $(19)
Provision charged to operations                                                      165           165           159
                                                                                    ----          ----           ---
Balance at end of period                                                          $1,212        $1,127        $1,066
                                                                                  ======        ======        ======
Ratio of net loan losses to average net loans outstanding:
  Net charge-offs                                                                    $80          $104           $19
  Average net loans                                                               81,701        81,725        73,276
                                                                                  ------        ------        ------
                                                                                   0.09%         0.13%         0.03%
Ratio of allowance for loan losses to total loans, net of unearned income:
  Allowance for loan losses                                                       $1,212        $1,127        $1,066
  Total loans at period end                                                       85,550        84,202        80,632
                                                                                  ------        ------        ------
                                                                                   1.42%         1.34%         1.32%
Ratio of allowance for loan losses to non-performing loans:
  Allowance for loan losses                                                       $1,212        $1,127        $1,066
  Non-performing loans                                                             1,643         1,126           569
                                                                                   -----        ------        ------
                                                                                  73.77%       100.08%       187.35%
</TABLE>

         For each period  presented,  the provision  for loan losses  charged to
operations,  is based on management's  judgment after taking into  consideration
all  factors  connected  with  the  collectibility  of the  existing  portfolio.
Management evaluates the loan portfolio in light of economic conditions, changes
in the nature and value of the portfolio,  industry standards and other relevant
factors.  Specific  factors  considered by management in determining the amounts
charged to operations include internally generated loan review reports, previous
loan loss  experience  with the  borrower,  the status of past due  interest and
principal payments on the loan, the quality of financial information supplied by
the borrower and the general financial condition of the borrower.

         The  provision  for loan losses  totaled  $165,000  for the years ended
December 31, 1996 and 1995, and $158,786 for 1994. In the opinion of management,
the provision  charged to operations  has been  sufficient to absorb the current
year's net loan losses while  continuing  to increase the  allowance  for future
loan losses.


                                      -12-
<PAGE>

         The following  table shows the balance and  percentage of the Company's
allowance for loan losses allocated to each category of loans:
<TABLE>
<CAPTION>

                                                                    At December 31
                             -------------------------------------------------------------------------------------------------
                                         1996                              1995                              1994
                             -----------------------------     -----------------------------     -----------------------------
                                                 Percent                           Percent                           Percent
                                                of Loans                          of Loans                          of Loans
                                                   in                                in                                in
                                       Percent  category                 Percent  category                 Percent  category
                                         of        to                      of        to                      of        to
                                       Allow-     Total                  Allow-     Total                  Allow-     Total
                              Amount    ance      Loans         Amount    ance      Loans         Amount    ance      Loans
                              ------    ----      -----         ------    ----      -----         ------    ----      -----
                                                               (Dollars in Thousands)

<S>                            <C>       <C>        <C>          <C>       <C>        <C>          <C>       <C>      <C>
Commercial                     $212      18%        19%          $219      20%        19%          $267      25%        22%
Real estate construction        125       10         12            99        9         12            61        6          9
Real estate mortgage (1)        660       54         47           623       55         50           590       55         48
Installment                     215       18         22           186       16         19           148       14         21
                                ---                               ---                               ---
                             $1,212     100%       100%        $1,127     100%       100%        $1,066     100%       100%
                             ======                            ======                            ======
</TABLE>

--------------

(1)      Includes home-equity loans.

         The Company has allocated the allowance  according to the amount deemed
to be  reasonably  necessary  to provide  for the  possibility  of losses  being
incurred  within each of the above  categories of loans.  The  allocation of the
allowance as shown in the table above should not be interpreted as an indication
that loan losses in future years will occur in the same  proportions or that the
allocation indicates future loss trends.  Furthermore,  the portion allocated to
each loan  category is not the total  amount  available  for future  losses that
might  occur  within  such  categories  since the total  allowance  is a general
allowance applicable to the entire portfolio.

Securities

         The Company's securities portfolio serves several purposes. Portions of
the portfolio secure certain public and trust deposits.  The remaining  portions
are held as  investments  or used to assist the Company in  liquidity  and asset
liability management.  During 1996, total securities increased to $17.9 million,
or 14.2% of total  assets at December 31, 1996.  During 1995,  total  securities
decreased to $14.9 million, or 12.1% of assets at December 31, 1995.

         The  securities  portfolio  consists  of  two  components,   securities
available for sale and securities held to maturity. Securities are classified as
held to maturity when  management has the intent and the Company has the ability
at the time of purchase  to hold the  securities  to  maturity.  Securities  are
carried  at  cost  adjusted  for  amortization  of  premiums  and  accretion  of
discounts.  Securities to be held for indefinite  periods of time are classified
as available  for sale and  accounted  for at the lower of cost or market value.
Securities available for sale include securities that may be sold in response to
changes in market interest  rates,  changes in the security's  prepayment  risk,
increases in loan demand, general liquidity needs and other similar factors. The
Company's  recent  purchases  of  securities  have  generally  been  limited  to
securities of high credit quality with short to medium term maturities.

         The  following  table  summarizes  the  book  value  of  the  Company's
securities held to maturity at the date indicated:


                                      -13-
<PAGE>

<TABLE>
<CAPTION>

                                                                    Book Value at December 31
                                                             -----------------------------------------
                                                                 1996          1995          1994
                                                                 ----          ----          ----
                                                                      (Dollars in Thousands)
<S>                                                           <C>            <C>          <C>
         U. S. government agencies and corporations           $         -    $         -  $         -
         Obligations of states and political subdivisions          10,208         10,009        8,225
         Mortgage-backed securities                                     -              -            -
         Other                                                          -              -            -
                                                                ---------      ---------    ---------
                                                                  $10,208        $10,009       $8,225
                                                                  =======        =======       ======
</TABLE>

         The  following  table  summarizes  the  book  value  of  the  Company's
securities available for sale at the dates indicated.
<TABLE>
<CAPTION>

                                                                    Book Value at December 31
                                                             -----------------------------------------
                                                                 1996          1995          1994
                                                                 ----          ----          ----
                                                                      (Dollars in Thousands)
<S>                                                              <C>            <C>          <C>
         U. S. government agencies and corporations              $6,717         $1,999       $8,428
         Mortgage-backed securities                                 962          2,902        2,203
                                                                  -----          -----        -----
                                                                 $7,679         $4,901      $10,631
                                                                 ======         ======      =======
</TABLE>

         The book value and average yield of the Company's securities, including
securities  available for sale, at December 31, 1996, by  contractual  maturity,
are  reflected  in the  following  table.  Actual  maturities  will  differ from
contractual  maturities  because certain borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>

                                               Obligations of state and               U. S. government agencies
                                                political subdivisions                     and corporations
                                           ----------------------------------     -----------------------------------
                                                               Weighted                               Weighted
                                              Amount        Average Yield             Amount        Average Yield
                                                                    (Dollars in Thousands)

<S>                                             <C>              <C>                  <C>
Due in one year or less                         $    440         5.15%                $        -            -
Due after one year through five years              4,096         5.67%                     2,194         6.83%
Due after five years through ten years             4,102         5.57%                     2,540         7.54%
Due after ten years                                1,570         6.15%                     2,945         7.73%
                                                   -----                                   -----
                                                 $10,208         5.68%                    $7,679         7.41%
                                                 =======                                  ======
</TABLE>

         As shown in the  table  above,  approximately  $440,000  or 2.5% of the
total portfolio will mature in one year or less while $6.3 million or 35.2% will
mature  after one year but  within  five  years.  The fully  taxable  equivalent
average yield on the entire portfolio was 7.88% for 1996,  compared to 7.82% for
1995 and 7.82% for 1994.  The market  value of the  portfolio  exceeded the book
value by $174,630 at December 31, 1996.

Deposits and Short-Term Borrowings

         The Company's  predominate source of funds is depository accounts.  The
Company's deposit base is comprised of demand deposits, savings and money market
accounts  and other time  deposits.  The  Company's  deposits  are  provided  by
individuals and businesses located within the communities served.

         As shown in the following table, average total deposits grew by 8.9% in
1996 and 9.4% in 1995. The average aggregate  interest rate paid on deposits was
4.13% in 1996, compared to 4.26% for 1995 and 3.54% in 1994. The majority of the
Company's  deposits  are  higher  yielding  time  deposits  because  most of its
customers are  individuals  who seek higher yields than those offered on savings
and demand accounts.


                                      -14-
<PAGE>

         The following table is a summary of average  deposits and average rates
paid:
<TABLE>
<CAPTION>

                                                            For the Year Ended December 31
                          ----------------------------------------------------------------------------------------------------
                                      1996                               1995                               1994
                          ------------------------------     ------------------------------    -------------------------------
                           Average    Interest Average        Average   Interest  Average       Average   Interest   Average
                           Balance     Paid      Rate         Balance     Paid      Rate        Balance     Paid      Rate
                                                                (Dollars in Thousands)

<S>                          <C>      <C>        <C>           <C>       <C>         <C>         <C>      <C>           <C>
Non-interest bearing
  demand deposits            $15,371  $     -        -%        $12,462   $     -        -%       $12,060  $      -         -%
Interest bearing demand
  deposits                    20,630      611     2.96%         20,600       649     3.15%        23,329       701      3.00%
Savings deposits              12,189      394     3.23%         11,001       355     3.23%        12,012       387      3.22%
Time deposits                 61,985    3,544     5.72%         57,085     3,306     5.79%        45,063     2,186      4.85%
                              ------    -----                   ------     -----                  ------     -----
    Total                   $110,175   $4,549     4.13%       $101,148    $4,310     4.26%       $92,464    $3,274      3.54%
                            ========   ======                 ========    ======                 =======    ======
</TABLE>

         The  following  table is a summary  of time  deposits  of  $100,000  or
more by remaining maturities at December 31, 1996:

                                   Time Deposits >$100,000
                                        (in Thousands)

                          Three months or less                  $1,262
                          Three to six months                    2,019
                          Six to twelve months                   2,552
                          Over twelve months                     4,378
                                                              --------
                                                               $10,211

Capital Resources

         The assessment of capital  adequacy depends on a number of factors such
as asset  quality,  liquidity,  earnings  performance  and changing  competitive
conditions and economic  forces.  The Company seeks to maintain a strong capital
base to support its growth and  expansion  activities,  to provide  stability to
current operations and to promote public confidence.

         The   Bank's   capital   position   continues   to  exceed   regulatory
requirements.  The primary indicators relied on by the Federal Reserve Board and
other bank regulators in measuring  strength of capital  position are the Tier 1
Capital,  Total Capital,  and Leverage ratios. Tier 1 Capital consists of common
and  qualifying  preferred  stockholders'  equity less  goodwill.  Total Capital
consists of Tier 1 Capital,  qualifying  subordinated  debt and a portion of the
allowance  for loan  losses.  Risk-based  capital  ratios  are  calculated  with
reference to risk-weighted assets which consist of both on and off-balance sheet
risks.  The  Company's  Tier 1 Capital  ratio was 16.4% at  December  31,  1996,
compared to 14.4% at December  31, 1995,  and 13.5% at December  31,  1994.  The
Total Capital ratio was 17.7% at December 31, 1996,  compared to 15.6% and 14.7%
at December 31, 1995 and 1994,  respectively.  These ratios are in excess of the
mandated  minimum  requirements of 4.00% and 8.00%,  respectively.  The Leverage
ratio  consists  of Tier 1 capital  divided  by  quarterly  average  assets.  At
December  31, 1996,  the Bank's  Leverage  ratio was 11.2%  compared to 10.7% at
December  31,  1995 and 11.0% at December  31,  1994.  Each of these  exceed the
required minimum leverage ratio of 3.00%.

         The following  table shows risk based capital  ratios and  stockholders
equity to total assets:
<TABLE>
<CAPTION>


                                                                           December 31
                                                 ----------------------------------------------------------------
                                                   Regulatory
                                                     Minimum           1996             1995           1994
                                                     -------           ----             ----           ----
<S>                                                     <C>            <C>              <C>            <C>
       Tier 1 risk-based capital                        4.0%           16.4%            14.4%          13.5%
       Total risk-based capital                         8.0%           17.7%            15.6%          14.7%
       Leverage ratio                                   3.0%           11.2%            10.7%          11.0%
       Stockholders' equity to total assets            N/A             11.4%            10.8%          11.1%
</TABLE>

                                      -15-
<PAGE>

         The capital management function is an ongoing process.  Central to this
process is internal equity generation accomplished by earnings retention. During
1996, total stockholders' equity increased by $1,130,113,  primarily as a result
of earnings  retention.  Total  stockholders'  equity increased by $1,599,723 in
1995 also due to earnings  retention.  The return on average equity was 12.5% in
1996,  compared to 15.1% in 1995 and 14.5% in 1994.  Total cash  dividends  were
paid representing 38% of net income for 1996,  compared to 31% of net income for
1995 and 33% for 1994.  Book value per share was $15.22 at  December  31,  1996,
compared to $14.11 at December 31, 1995, and $12.49 at December 31, 1994.

         The Company's principal source of cash income is dividend payments from
the Bank.  Certain  limitations  exist under  applicable  law and  regulation by
regulatory agencies regarding dividend payments to a parent by its subsidiaries.
As of  December  31,  1996,  the Bank  had $3.4  million  of  retained  earnings
available for distribution to the Company as dividends  without prior regulatory
approval.

Liquidity and Interest Rate Sensitivity

         Liquidity.  Liquidity  is  the  ability  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, and loans maturing within one year. The Company's ability to obtain
deposits  and  purchase  funds  at  favorable  rates  determines  its  liability
liquidity.  As a result of the  Company's  management  of liquid  assets and the
ability to generate  liquidity through liability  funding,  management  believes
that  the  Company  maintains  overall  liquidity   sufficient  to  satisfy  its
depositors' requirements and meet its customers' credit needs.

         Additional sources of liquidity  available to the Company include,  but
are not limited to, loan repayments,  the ability to obtain deposits through the
adjustment of interest  rates and the  purchasing of federal  funds.  To further
meet its  liquidity  needs,  the company also has access to the Federal  Reserve
System.  In the past,  growth in  deposits  and  proceeds  from the  maturity of
investment securities have been sufficient to fund the net increase in loans.

         Interest  Rate   Sensitivity.   In  conjunction   with   maintaining  a
satisfactory  level of  liquidity,  management  must also  control the degree of
interest  rate risk assumed on the balance  sheet.  Managing  this risk involves
regular  monitoring  of the  interest  sensitive  assets  relative  to  interest
sensitive liabilities over specific time interval.

         At December 31, 1996,  the Company had a positive gap  position.  Since
the largest amount of interest  sensitive assets and liabilities  reprice within
12  months,  the  Company  monitors  this area  closely.  The  Company  does not
emphasize  interest  sensitivity  analysis  beyond  this time  frame  because it
believes   various    unpredictable    factors   could   result   in   erroneous
interpretations.  Early  withdrawal of deposits,  prepayments  of loans and loan
delinquencies  are some of the  factors  that  could  have such and  effect.  In
addition,  changes in rates on interest sensitive assets and liabilities may not
be equal,  which  could  result in a change in net  interest  margin.  While the
Company does not match each of its interest  sensitive  assets against  specific
interest sensitive liabilities,  it does seek to enhance the net interest margin
while minimizing exposure to interest rate fluctuations.

Effects of Inflation

         Inflation  significantly  affects industries having high proportions of
fixed  assets  or high  levels  of  inventories.  Although  the  Company  is not
significantly  affected  in these  areas,  inflation  does have an impact on the
growth of assets.  As assets  grow  rapidly,  it becomes  necessary  to increase
equity capital at  proportionate  levels to maintain the  appropriate  equity to
asset ratios.  Traditionally,  the Company's earnings and high capital retention
levels have enabled the Company to meet these needs.

         The  Company's   reported   earnings  results  have  been  affected  by
inflation,  but isolating the effect is difficult. The different types of income
and  expense  are  affected  in various  ways.  Interest  rates are  affected by
inflation,  but the timing and  magnitude of the changes may not  coincide  with
changes in the consumer price index.  Management actively monitors interest rate
sensitivity,  as  illustrated  by the Gap  Analysis,  in order to  minimize  the
effects of inflationary  trends on interest  rates.  Other areas of non-interest
expenses may be more directly affected by inflation.


                                      -16-
<PAGE>

         The following  table  summarizes  the  contractual  repayment  terms or
nearest  repricing dates of the Company's  interest  earning assets and interest
bearing liabilities at December 31, 1996:
<TABLE>
<CAPTION>

                                                                   Maturing or Repricing In:
                                            -------------------------------------------------------------------------
                                                   Within          4-12           1-5           Over
                                                  3 Months        Months         Years         5 Years         Total
                                                  --------        ------         -----         -------         -----
                                                                     (Dollars in Thousands)
<S>                                               <C>         <C>         <C>           <C>                  <C>
Interest Earning Assets
  Federal funds sold                              $12,287     $        -  $          -  $           -        $12,287
  Securities available for sale                         -              -         2,141          5,545          7,686
  Securities held to maturity                           -            440         4,097          5,671         10,208
  Loans                                            32,364          3,762        45,616          2,596         84,338
                                                   ------          -----        ------          -----         ------
    Total interest-earning assets                 $44,651         $4,202       $51,854        $13,812       $114,519
                                                  =======         ======       =======        =======       ========

Interest Bearing Liabilities
  Deposits:
    Interest bearing demand                       $20,937   $          -  $          -   $          -        $20,937
    Savings                                        13,065              -             -              -         13,065
    Time deposits, $100,000 and over                1,262          4,571         4,378              -         10,211
    Other time deposits                             8,990         22,705        18,268              2         49,965
  Long-term debt                                        -              9            36              9             54
                                                  -------        -------        ------         ------         ------
    Total interest-bearing liabilities            $44,254        $27,285       $22,682            $11        $94,232
                                                  =======        =======       =======            ===        =======
Period gap                                           $397      $(23,083)       $29,172        $13,801        $20,287
                                                     ====      =========       =======        =======        =======
Cumulative gap                                       $397      $(22,686)        $6,486        $20,287
                                                     ====      =========        ======        =======
Ratio of cumulative gap to total earning
  assets                                             .35%       (19.81%)         5.66%         17.71%
</TABLE>

         Of the amount of loans due after 12 months,  $34.2 million had floating
or adjustable rates of interest and $14.0 million had fixed rates of interest.

ITEM 7.           FINANCIAL STATEMENTS

         The  following   consolidated   financial  statements  and  independent
auditors' report thereon are filed as a part of this report following Item 13:

         Independent Auditors' Report
         Consolidated Balance Sheets as of December 31, 1996 and 1995
         Consolidated  Statements  of Income for the Years  Ended  December  31,
         1996, 1995 and 1994
         Consolidated Statements of Stockholder's Equity for the  Years  Ended
         December  31,  1996,  1995  and  1994
         Consolidated Statements of Cash Flows for the Years Ended  December 31,
         1996,  1995 and 1994
         Notes to Consolidated Financial Statements



ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

         There  were  no  changes  in  or  disagreements   with  accountants  on
accounting and financial disclosure as defined by Item 304 of Regulation S-B.



                                      -17-
<PAGE>


                                    PART III

ITEM 9.           DIRECTORS,  EXECUTIVE  OFFICERS, PROMOTERS AND CONTROL PERSON;
                  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         Information  set  forth  under  the  caption  "ELECTION  OF  DIRECTORS;
SECURITY  OWNERSHIP  OF  MANAGEMENT  AND CERTAIN  BENEFICIAL  OWNERS" on pages 2
through 6 of the definitive 1997 Proxy Statement of the Registrant  furnished to
shareholders  in connection with its Annual Meeting to be held on April 22, 1996
(the "1997 Proxy Statement") is hereby incorporated by reference.

ITEM 10.          EXECUTIVE COMPENSATION

         Information set forth under the heading  "Remuneration"  on pages 6
through 8 of the 1997 Proxy Statement is hereby incorporated by reference.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information  set  forth  under  the  heading  "Security   Ownership  of
Management" and "Security Ownership of Certain Beneficial Owners" on pages 4 and
5,  respectively,  of the  1997  Proxy  Statement,  is  hereby  incorporated  by
reference.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information set forth under the heading  "Certain  Transactions"  on
page 7 of the 1997 Proxy Statement is hereby incorporated by reference.

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         The following  documents are attached hereto or incorporated  herein by
reference as Exhibits:

         3.1      Articles  of  Incorporation,   including   amendments  thereto
                  (incorporated   herein  by  reference  to  Exhibit  2  to  the
                  Registrant's Form 8-A filed with the SEC on May 2, 1994).
         3.2      Bylaws  (incorporated  herein by reference to Exhibit 3 to the
                  Registrant's  Form 8-A filed with the SEC on May 2, 1994).
         4.1      Specimen   of    Registrant's    Common   Stock    Certificate
                  (incorporated   herein  by  reference  to  Exhibit  1  to  the
                  Registrant's Form 8-A filed with the SEC on May 2, 1994).
         21.1     Subsidiaries of the Registrant (filed herewith).
         23.1     Consent of Mitchell, Wiggins & Company, LLP (filed herewith)

(b)      Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter ended December 31,
1996.


         With the exception of the information herein expressly  incorporated by
reference,  the 1997 Proxy Statement of the Registrant is not to be deemed filed
as part of this Annual Report on Form 10-KSB.



                                      -18-
<PAGE>

                        CENTRAL VIRGINIA BANKSHARES, INC.

                          CONSOLIDATED FINANCIAL REPORT

                                DECEMBER 31, 1996



<PAGE>







                                    C O N T E N T S


 -------------------------------------------------------------------------
 INDEPENDENT AUDITORS' REPORT                                         F-1
 -------------------------------------------------------------------------

 CONSOLIDATED FINANCIAL STATEMENTS

    Consolidated balance sheets                                 F-2 - F-3

    Consolidated statements of income                           F-4 - F-5

    Consolidated statements of stockholders' equity                   F-6

    Consolidated statements of cash flows                       F-7 - F-8

    Notes to consolidated financial statements                 F-9 - F-25
 -------------------------------------------------------------------------


<PAGE>


                                [GRAPHIC OMITTED]


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
Central Virginia Bankshares, Inc.
Powhatan, Virginia

We have audited the accompanying consolidated balance sheets of Central Virginia
Bankshares,  Inc.,  and  subsidiary  as of December  31, 1996 and 1995,  and the
related consolidated statements of income,  stockholders' equity, and cash flows
for each of the  three  years in the  period  ended  December  31,  1996.  These
financial statements are the responsibility of the Corporation's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of Central Virginia
Bankshares,  Inc.,  and  subsidiary  as of December  31, 1996 and 1995,  and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31,  1996,  in  conformity  with  generally  accepted
accounting principles.


/s/ Mitchell, Wiggins & Company LLP
Richmond, Virginia
January 17, 1997








                                       F-1


<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
<TABLE>
<CAPTION>

ASSETS                                                     1996               1995
------------------------------------------------------------------------------------------
<S>                                                      <C>             <C>
Cash and due from banks                                  $   5,418,921   $      4,252,555


Federal funds sold                                          12,287,000         15,810,000
                                                    --------------------------------------
           Total cash and cash equivalents                  17,705,921         20,062,555


Securities available for sale                                7,685,684          4,961,659


Securities held to maturity
    (approximate market value 1996
    $10,375,793; 1995 $10,247,942)                          10,207,765         10,008,592


Mortgage loans held for sale                                   201,798            868,594


Loans, net                                                  84,337,859         83,075,152


Bank premises and equipment, net                             3,560,609          2,118,801


Accrued interest receivable                                    803,191            787,544


Other assets                                                 1,812,689          1,111,654
                                                    --------------------------------------
                                                          $126,315,516     $  122,994,551
                                                    --------------------------------------

</TABLE>


See Notes to Consolidated Financial Statements.





                                       F-2


<PAGE>

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                               1996               1995
--------------------------------------------------------------------------------------------------

<S>                                                               <C>             <C>
Liabilities
    Deposits:
        Demand deposits                                           $ 15,703,040    $    14,024,208
        Interest bearing demand deposits
           and NOW accounts                                         20,936,589         19,159,338
        Savings deposits                                            13,065,401         11,321,484
        Time deposits, $100,000 and over                            10,210,956         12,016,094
        Other time deposits                                         49,964,954         51,285,081
                                                            --------------------------------------
                                                                   109,880,940        107,806,205
    Securities sold under repurchase agreements                      1,534,479          1,435,307
    Note payable                                                        54,000             63,000
    Accrued interest payable                                           232,946            263,420
    Other liabilities                                                  169,544            113,125
                                                            --------------------------------------
                                                                   111,871,909        109,681,057
                                                            --------------------------------------

Commitments and Contingencies (Note 10)

Stockholders' Equity
    Common stock, $2.50 par value;
        3,000,000 shares authorized; 949,140
        and 943,733 shares issued and out-
        standing in 1996 and 1995, respectively                      2,372,850          2,359,332
    Surplus                                                          4,091,019          3,996,803
    Retained earnings                                                7,975,381          6,917,211
    Net unrealized  gain on securities
        available for sale, net of tax                                   4,357             40,148
                                                            --------------------------------------
                                                                    14,443,607         13,313,494
                                                            --------------------------------------

                                                                  $126,315,516     $  122,994,551
                                                            --------------------------------------
</TABLE>


                                       F-3


<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1996, 1995, and 1994

                                                                     1996             1995             1994
------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>           <C>              <C>
Interest income:
    Interest and fees on loans                                       $8,206,531    $   8,277,868    $   6,942,852
    Interest on securities:
        U. S. government agencies and corporations                      473,056          639,748          690,172
        States and political subdivisions                               553,370          514,364          486,770
        Other                                                            10,916           10,888           10,809
    Interest on federal funds sold                                      847,727          353,977          185,361
                                                               ---------------------------------------------------
                                                                     10,091,600        9,796,845        8,315,964
                                                               ---------------------------------------------------

Interest expense:
    Interest on deposits                                              4,549,567        4,309,812        3,274,240
    Interest on securities sold under
        repurchase agreements                                            38,986           30,207           16,457
    Interest, other                                                           -            8,096            6,144
    Interest on note payable                                              4,500            5,220            6,087
                                                               ---------------------------------------------------
                                                                      4,593,053        4,353,335        3,302,928
                                                               ---------------------------------------------------
           Net interest income                                        5,498,547        5,443,510        5,013,036

Provision for loan losses                                               165,000          165,000          158,786
                                                               ---------------------------------------------------
           Net interest income after
              provision for loan losses                               5,333,547        5,278,510        4,854,250
                                                               ---------------------------------------------------

Other income:
    Service charges                                                     598,981          552,278          521,479
    Realized gain on sale of security
        available for sale                                               25,000                -                -
    Other                                                               239,427          190,731          230,600
                                                               ---------------------------------------------------
                                                                        863,408          743,009          752,079
                                                               ---------------------------------------------------
Other expenses:
    Salaries and wages                                                1,434,644        1,309,833        1,195,312
    Pensions and other employee benefits                                386,712          347,066          327,693
    Occupancy expense                                                   219,579          158,455          160,730
    Equipment depreciation                                              258,635          190,707          196,454
    Equipment repairs and maintenance                                   165,222          141,002          128,409
    Advertising and public relations                                    140,841          127,305          120,597
    Federal insurance premiums                                           69,869          118,177          198,920
    Office supplies, telephone, and postage                             310,174          252,244          229,542
    Taxes and licenses                                                  119,408          103,652          105,481
    Other operating expenses                                            696,157          596,752          584,366
                                                               ---------------------------------------------------
                                                                      3,801,241        3,345,193        3,247,504
                                                               ---------------------------------------------------

</TABLE>
                                                   (Continued)


                                       F-4


<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.
<TABLE>
<CAPTION>

CONSOLIDATED  STATEMENTS OF INCOME  (Continued)
Years Ended December 31, 1996, 1995, and 1994

                                                                           1996             1995              1994
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>               <C>              <C>
           Income before income taxes                                       2,395,714         2,676,326        2,358,825

Income taxes                                                                  684,917           796,166          711,154
                                                                     ----------------------------------------------------

           Net income                                                      $1,710,797     $   1,880,160    $   1,647,671
                                                                     ----------------------------------------------------

Net income per share of common stock                                       $     1.81     $        2.00    $        1.76
                                                                     ----------------------------------------------------

Average shares outstanding                                                    946,077           940,071          937,890
                                                                     ----------------------------------------------------
</TABLE>



See Notes to Consolidated Financial Statements.




                                       F-5


<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1996, 1995, and 1994

<TABLE>
<CAPTION>
                                                                                                        Net Unrealized
                                                                                                        Gain (Loss) On
                                                                                                          Securities
                                                           Common                          Retained     Available for
                                                            Stock          Surplus         Earnings    Sale, Net of Tax    Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>            <C>                 <C>         <C>
Balance, January 1, 1994                                 $  2,344,725   $  3,930,215   $  4,525,595        $   --      $ 10,800,535
    Net income                                                   --             --        1,647,671            --         1,647,671
    Cash dividends declared, $.58 per share                      --             --         (543,976)           --          (543,976)
    Net unrealized loss on securities
        available for sale, net of tax                           --             --             --          (190,459)       (190,459)
                                                         --------------------------------------------------------------------------
Balance, December 31, 1994                                  2,344,725      3,930,215      5,629,290        (190,459)     11,713,771
    Issuance of common stock:
        2,699 shares pursuant to exercise
           of stock options                                     6,747         17,543           --              --            24,290
        60 shares in employee bonuses                             150            870           --              --             1,020
        3,084 shares pursuant to dividend
           reinvestment plan                                    7,710         48,175           --              --            55,885
    Net income                                                   --             --        1,880,160            --         1,880,160
    Cash dividends declared, $.63 per share                      --             --         (592,239)           --          (592,239)
    Change in unrealized gain on securities
        available for sale, net of tax                           --             --             --           230,607         230,607
                                                         --------------------------------------------------------------------------
Balance, December 31, 1995                                  2,359,332      3,996,803      6,917,211          40,148      13,313,494
    Issuance of common stock:
        9 shares in employee bonuses                               23            153           --              --               176
        5,398 shares pursuant to dividend
           reinvestment plan                                   13,495         94,063           --              --           107,558
    Net income                                                   --             --        1,710,797            --         1,710,797
    Cash dividends declared, $.69 per share                      --             --         (652,627)           --          (652,627)
    Change in unrealized gain on securities
        available for sale, net of tax                           --             --             --           (35,791)        (35,791)
                                                         --------------------------------------------------------------------------
 Balance, December 31, 1996                              $  2,372,850   $  4,091,019   $  7,975,381    $      4,357    $ 14,443,607
                                                         --------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.



                                       F-6


<PAGE>


CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1996, 1995, and 1994
<TABLE>
<CAPTION>

                                                            1996              1995          1994
------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>             <C>             <C>
Cash Flows From Operating Activities
    Net income                                          $  1,710,797    $  1,880,160    $  1,647,671
    Adjustments to reconcile net income
        to net cash provided by operating activities:
        Depreciation                                         330,092         242,581         249,117
        Amortization                                          16,600          16,600          16,600
        Deferred income taxes                                (28,623)          3,437         (27,202)
        Provision for loan losses                            165,000         165,000         158,786
        Amortization and accretion on securities              (2,093)        (31,645)        (21,654)
        Realized gain on sale of security
           available for sale                                (25,000)           --              --
        Loss on sale of foreclosed
            real estate                                       16,211           9,041           2,572
        Changes in operating assets and liabilities:
           (Increase) decrease in assets:
              Mortgage loans held for sale                   666,796        (769,000)        974,576
              Accrued interest receivable                    (15,647)        (14,860)       (172,834)
              Other assets                                  (592,763)         22,540        (107,058)
           Increase (decrease) in liabilities:
              Accrued interest payable                       (30,474)         84,941          24,473
              Other liabilities                               56,419        (107,836)         83,183
                                                          -------------------------------------------
           Net cash provided by
              operating activities                         2,267,315       1,500,959       2,828,230
                                                          -------------------------------------------


Cash Flows From Investing Activities
    Proceeds from maturities of
        securities held to maturity                          910,000         475,000         220,000
    Purchase of securities held to maturity               (1,104,736)     (2,240,000)     (1,205,000)
    Proceeds from sales and maturities of
        securities available for sale                      3,031,996       6,708,356       1,133,630
    Purchase of securities available for sale             (5,787,595)       (965,859)     (2,246,475)
    Net increase in loans made to customers               (1,796,896)     (3,921,415)    (12,735,634)
    Net purchases of premises and equipment               (1,771,900)       (201,553)       (592,304)
    Proceeds from sale of foreclosed real estate             291,233         324,212          27,428
    Net expenditures on foreclosed real estate               (22,978)         (8,438)           --
    Proceeds received from cancellation
        of life insurance policies                            19,564          29,120            --
    Increase in cash value, life insurance                   (12,651)        (10,729)         (3,270)
                                                          -------------------------------------------
           Net cash provided by (used in)
              investing activities                        (6,243,963)        188,694     (15,401,625)
                                                          -------------------------------------------

</TABLE>


                                   (Continued)

                                       F-7


<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 1996, 1995, and 1994
<TABLE>
<CAPTION>

                                                             1996           1995             1994
-------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>            <C>              <C>
Cash Flows From Financing Activities
    Net increase in deposits                               2,074,735      13,791,379       5,485,256
    Net increase (decrease) in securities sold
        under repurchase agreements                           99,172         587,631      (2,086,614)
    Repayment of note payable                                 (9,000)         (9,000)         (9,000)
    Net proceeds from issuance
        of common stock                                      107,734          81,195            --
    Dividends paid                                          (652,627)       (592,239)       (543,976)
                                                          -------------------------------------------
           Net cash provided by financing
              activities                                   1,620,014      13,858,966       2,845,666
                                                          -------------------------------------------

           Increase (decrease) in cash
              and cash equivalents                        (2,356,634)     15,548,619      (9,727,729)

Cash and cash equivalents, beginning                      20,062,555       4,513,936      14,241,665
                                                          -------------------------------------------

Cash and cash equivalents, ending                       $ 17,705,921     $ 20,062,555   $  4,513,936
                                                          -------------------------------------------

Supplemental Disclosures Of
    Cash Flow Information
        Interest paid                                   $  4,623,527    $  4,268,394    $  3,278,455

        Income taxes paid                                    692,356         813,748         775,187

Supplemental Schedule Of Noncash
    Investing Activities
        Other real estate, equipment
           and investments acquired
           in settlement of loans                            369,189         247,810         138,150

</TABLE>


See Notes to Consolidated Financial Statements.



                                       F-8


<PAGE>


VIRGINIA BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Significant Accounting Policies

Nature of Operations:  Central Virginia Bankshares,  Inc., is a one bank holding
company   headquartered  in  Powhatan  County,   Virginia.   The   Corporation's
subsidiary,  Central  Virginia Bank provides a variety of financial  services to
individuals  and corporate  customers  through its five branches  located in the
Virginia counties of Powhatan,  Chesterfield, and Cumberland. The Bank's primary
deposit products are checking  accounts,  savings accounts,  and certificates of
deposit.  Its primary lending products are residential  mortgage,  construction,
installment and commercial business loans.

Central Virginia Bank's subsidiary,  CVB Title Services,  Inc., is a corporation
organized  under the laws of the State of Virginia.  The  Corporation's  primary
purpose is to own a partnership interest in a title insurance company.

Basis of  consolidation:  The  accompanying  consolidated  financial  statements
include the accounts of Central Virginia  Bankshares,  Inc., and its subsidiary,
Central Virginia Bank,  including its subsidiary,  CVB Title Services,  Inc. All
significant  intercompany  transactions  and balances  have been  eliminated  in
consolidation.

Cash and cash equivalents: For purposes of reporting the consolidated statements
of cash flows,  the Corporation  includes cash on hand,  amounts due from banks,
federal  funds sold and all highly  liquid  debt  instruments  purchased  with a
maturity  of  three  months  or  less  as  cash  and  cash  equivalents  on  the
accompanying consolidated balance sheets. Cash flows from deposits and loans are
reported net.

The Bank maintains  amounts due from banks which, at times, may exceed federally
insured limits. The Bank has not experienced any losses in such accounts.

Use of Estimates:  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Material  estimates that are  particularly  susceptible  to  significant  change
relate  to the  determination  of the  allowance  for  losses  on loans  and the
valuation  of  real  estate  acquired  in  connection  with  foreclosures  or in
satisfaction of loans. In connection  with the  determination  of the allowances
for losses on loans and foreclosed real estate,  management obtains  independent
appraisals for significant properties.






                                       F-9
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Significant Accounting Policies (Continued)

A majority of the Bank's loan  portfolio  consist of  single-family  residential
loans in the Virginia counties of Powhatan,  Chesterfield, and Cumberland. There
is also a significant  concentration  of loans to builders and developers in the
region. Accordingly, the ultimate collectibility of a substantial portion of the
Bank's loan portfolio and the recovery of a substantial  portion of the carrying
amount of  foreclosed  real estate are  susceptible  to changes in local  market
conditions.

While  management  uses available  information to recognize  losses on loans and
foreclosed  real estate,  future  additions to the  allowances  may be necessary
based on changes in local economic conditions. In addition, regulatory agencies,
as an integral part of their examination process, periodically review the Bank's
allowances  for losses on loans and  foreclosed  real estate.  Such agencies may
require  the  Bank to  recognize  additions  to the  allowances  based  on their
judgments about  information  available to them at the time of their examination
Because of these  factors,  it is reasonably  possible that the  allowances  for
losses on loans and  foreclosed  real estate may change  materially  in the near
term.

Accounting  Change and  Securities:  Effective  January 1, 1994, the Corporation
adopted FASB Statement No. 115,  Accounting for Certain  Investments in Debt and
Equity Securities. This statement establishes accounting and reporting standards
for  investments in debt  securities and  investments in equity  securities that
have readily determinable fair values. Statement 115 requires that securities be
classified as either Held to Maturity, Available for Sale, or Trading.

Securities are classified as held to maturity when management has the intent and
the Bank has the ability at the time of purchase to hold them until  maturity or
on a  long-term  basis.  These  securities  are  carried  at cost  adjusted  for
amortization  of premium and  accretion  of  discount,  computed by the interest
method  over  their  contractual  lives.  Gains  and  losses on the sale of such
securities are determined by the specific identification method.

Securities to be held for indefinite periods of time and not intended to be held
to maturity or on a long-term  basis are  classified  as available  for sale and
accounted for at market value on an aggregate  basis.  These include  securities
used as part of the Bank's  asset/liability  management strategy and may be sold
in response to changes in interest rates, prepayment risk, the need or desire to
increase capital, to satisfy regulatory  requirements and other similar factors.
Unrealized   gains  or  losses  are   reported  as  increases  or  decreases  in
stockholders' equity, net of the related deferred tax effect. Realized gains and
losses of  securities  available for sale are included in net  securities  gains
(losses) based on the specific identification method.

Trading securities,  which are generally held for the short term in anticipation
of market gains,  are carried at fair value.  Realized and unrealized  gains and
losses on trading  account  assets are  included in  interest  income on trading
account securities.  The Corporation held no trading securities during the years
ended December 31, 1996, 1995, and 1994.





                                      F-10
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Significant Accounting Policies (Continued)

Mortgage loans held for sale: Mortgage loans originated and held for sale in the
secondary market are reported at the lower of cost or market value determined on
an aggregate basis.

Accounting change and loans and allowance for loan losses:  Effective January 1,
1995, the  Corporation  adopted FASB Statement No. 114,  Accounting by Creditors
for  Impairment of a Loan.  This statement as amended by FASB Statement No. 118,
establishes  accounting  and reporting  standards for impaired  loans. A loan is
impaired  when it is  probable  the  creditor  will be  unable  to  collect  all
contractual  principal and interest payments due in accordance with the terms of
the loan agreement. Loans are stated at the amount of unpaid principal,  reduced
by unearned discount and fees and an allowance for possible loan losses.

Loans are placed on  nonaccrual  when a loan is  specifically  determined  to be
impaired or when  principal or interest is delinquent  for 90 days or more.  Any
unpaid  interest  previously  accrued on those  loans is reversed  from  income.
Interest  income  generally is not recognized on specific  impaired loans unless
the  likelihood of further loss is remote.  Interest  payments  received on such
loans are applied as a reduction of the loan principal balance.  Interest income
on other nonaccrual loans is recognized only to the extent of interest  payments
received.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management  believes  that  collectibility  of the  principal is  unlikely.  The
allowance  is an amount  that  management  believes  will be  adequate to absorb
estimated  losses on  existing  loans  that may become  uncollectible,  based on
management's  evaluation of the collectibility of the loan portfolio,  including
the nature of the portfolio,  credit  concentrations,  trends in historical loss
experience,  specific  impaired loans, and economic  conditions.  Allowances for
impaired  loans  are  generally  determined  based on  collateral  values or the
present value of estimated cash flows. The allowance is increased by a provision
for loan losses, which is charged to expense, and reduced by charge-offs, net of
recoveries.

Unearned  interest on  discounted  loans is amortized to income over the life of
the loans, using the interest method.  For all other loans,  interest is accrued
daily on the outstanding balances. Accrual of interest is discontinued on a loan
when payments of interest and/or principal have remained delinquent for a period
of 90 days or more and are not well secured and in the process of collection.

Loan origination and commitment fees and certain direct loan  origination  costs
are being deferred and the net amount  amortized as an adjustment of the related
loan's yield.  The Bank is generally  amortizing  these amounts over the average
contractual life.








                                      F-11
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Significant Accounting Policies (Continued)

Bank premises and equipment: Bank premises and equipment are stated at cost less
accumulated  depreciation.  Depreciation  is  computed  using the  straight-line
method over the following estimated useful lives.

                                       Years
                                       -----
Buildings and improvements             5 - 39
Furniture and equipment                3 - 10


Foreclosed real estate:  Foreclosed real estate represents  properties  acquired
through  foreclosure or other  proceedings.  Foreclosed  real estate is held for
sale and is  recorded  at the lower of the  recorded  amount of the loan or fair
value of the properties less estimated costs of disposal. Any write-down to fair
value at the time of  transfer  to  foreclosed  real  estate is  charged  to the
allowance  for loan  losses.  Property  is  evaluated  regularly  to ensure  the
recorded amount is supported by its current fair value and valuation  allowances
to reduce the carrying  amount to fair value less estimated costs to dispose are
recorded as necessary.  Foreclosed  real estate is included with other assets on
the accompanying consolidated balance sheets.

Income taxes: Deferred taxes are provided on a liability method whereby deferred
tax assets are  recognized for deductible  temporary  differences  and operating
loss and tax credit  carryforwards  and deferred tax  liabilities are recognized
for taxable  temporary  differences.  Temporary  differences are the differences
between  the  reported  amounts of assets and  liabilities  and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management,  it is more likely than not that some portion or all of the deferred
tax  assets  will not be  realized.  Deferred  tax assets  and  liabilities  are
adjusted  for the  effects  of  changes  in tax  laws  and  rates on the date of
enactment.

Earnings per share:  Earnings per share are based on the weighted average number
of shares  outstanding.  The stock  options  mentioned  in Note 12 have not been
included in the  computation  because they would not have a materially  dilutive
effect.

Current  accounting  developments:   In  June  1996,  the  Financial  Accounting
Standards Board issued its Statement of Financial  Accounting  Standards No. 125
(SFAS 125),  "Accounting  for Transfers  and  Servicing of Financial  Assets and
Extinguishments  of  Liabilities."   This  Statement  provides   accounting  and
reporting  standards  for  transfers  and  servicing  of  financial  assets  and
extinguishments of liabilities.  After a transfer of financial assets, an entity
recognizes the financial and servicing assets it controls and the liabilities it
has incurred,  derecognizes  financial assets when control has been surrendered,
and  derecognizes  liabilities  when  extinguished.  In addition,  a transfer of
financial assets in which the transferor surrenders control over those assets is
accounted for as a sale to the extent that  consideration  other than beneficial
interests  in the  transferred  assets  is  received  in  exchange.  SFAS 125 is
effective for transfers and servicing of financial assets and extinguishments of
liabilities   occurring   after   December  31,  1996,  and  is  to  be  applied
prospectively.  Management does not expect the application of this pronouncement
to have a material effect on the financial statements of the Bank.


                                      F-12


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2.  Restrictions on Cash and Cash Equivalents

The Bank is required to maintain  average reserve and clearing  balances in cash
with the Federal  Reserve Bank.  The total of these  balances,  after  receiving
credit for vault cash on hand,  was  approximately  $50,000 at December 31, 1996
and 1995.

Note 3.  Securities

Carrying amounts and approximate market values of securities  available for sale
are as follows:

<TABLE>
<CAPTION>
                                                           December 31, 1996
                                     ---------------------------------------------------------------
                                                          Gross          Gross        Approximate
                                        Amortized      Unrealized     Unrealized        Market
                                           Cost           Gains         Losses           Value
                                     ---------------------------------------------------------------
<S>                                     <C>            <C>            <C>            <C>
U. S. government agencies
    and corporations                    $  6,717,452   $     70,579   $     43,574   $    6,744,457
Mortgage-backed securities                   961,630              -         20,403          941,227
                                     ---------------------------------------------------------------
                                        $  7,679,082   $     70,579   $     63,977   $    7,685,684
                                     ---------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                           December 31, 1995
                                     ---------------------------------------------------------------
                                                          Gross          Gross        Approximate
                                        Amortized      Unrealized     Unrealized        Market
                                           Cost           Gains         Losses           Value
                                     ---------------------------------------------------------------
<S>                                     <C>           <C>             <C>            <C>
U. S. government agencies
    and corporations                    $  1,998,787  $       9,940   $     10,990   $    1,997,737
Mortgage-backed securities                 2,902,041         61,881              -        2,963,922
                                     ---------------------------------------------------------------
                                        $  4,900,828   $     71,821   $     10,990   $    4,961,659
                                     ---------------------------------------------------------------
</TABLE>


The amortized cost and approximate market value of securities available for sale
at December 31, 1996, by contractual maturity,  are shown below.  Maturities may
differ from contractual  maturities in  mortgage-backed  securities  because the
mortgages  underlying  the  securities  may be  called  or  repaid  without  any
penalties.  Therefore,  these  securities  are  not  included  in  the  maturity
categories in the following maturity summary.

                                                                 Approximate
                                                 Amortized          Market
                                                   Cost              Value
                                             ----------------------------------
Due in one year or less                       $             -  $             -
Due after one year through five years               2,193,709        2,185,959
Due after five years through ten years              1,578,353        1,608,369
Due after ten years                                 2,945,390        2,950,129
Mortgage-backed securities                            961,630          941,227
                                             ----------------------------------
                                                 $  7,679,082   $    7,685,684
                                             ----------------------------------


                                      F-13


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3.  Securities (Continued)

Securities available for sale with a carrying amount of $941,227 and  $2,570,47
at December  31, 1996 and 1995,  respectively,  were  pledged as  collateral  on
public deposits and for other purposes as required or permitted by law.

Carrying  amounts and  approximate  market  values of  securities  being held to
maturity are as follows:
<TABLE>
<CAPTION>
                                                                         December 31, 1996
                                           ---------------------------------------------------------------------------
                                                                      Gross               Gross        Approximate
                                                Amortized           Unrealized         Unrealized         Market
                                                  Cost                Gains              Losses           Value
                                            --------------------------------------------------------------------------
<S>                                            <C>            <C>                  <C>              <C>
States and political subdivisions              $  10,207,765  $            211,044 $     43,016     $  10,375,793
                                            --------------------------------------------------------------------------

                                                                         December 31, 1995
                                            --------------------------------------------------------------------------
                                                                      Gross               Gross        Approximate
                                                Amortized           Unrealized         Unrealized         Market
                                                  Cost                Gains              Losses           Value
                                            --------------------------------------------------------------------------
States and political subdivisions              $  10,008,592  $            286,029 $     46,679     $  10,247,942
                                            --------------------------------------------------------------------------

</TABLE>



The amortized  cost and  approximate  market value of  securities  being held to
maturity at December 31, 1996, by contractual maturity, are shown below.

                                                                Approximate
                                               Amortized           Market
                                                  Cost             Value
                                        ------------------------------------
Due in one year or less                   $       440,000   $       441,371
Due after one year through five years           4,096,331         4,162,795
Due after five years through ten years          4,101,159         4,151,954
Due after ten years                             1,570,275         1,619,673
                                        ------------------------------------
                                            $  10,207,765     $  10,375,793
                                        ------------------------------------

Securities  being held to  maturity  with a carrying  amount of  $1,480,000  and
$2,120,047  at  December  31,  1996 and  1995,  respectively,  were  pledged  as
collateral on public deposits and for other purposes as required or permitted by
law.

                                      F-14
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4.  Loans

Major classifications of loans are summarized as follows:

                                                December 31,
                                   -------------------------------------
                                          1996               1995
                                   -------------------------------------
Commercial                             $    15,314,303    $  15,914,163
Real estate:
    Mortgage                                44,157,608       42,456,232
    Construction                            10,078,318        9,767,735
Installment                                 16,399,849       16,592,126
                                   -------------------------------------
                                            85,950,078       84,730,256
Less unearned discount                        (400,544)        (528,232)
                                   -------------------------------------
                                            85,549,534       84,202,024
Allowance for loan losses                   (1,211,675)      (1,126,872)
                                   -------------------------------------
Loans, net                             $    84,337,859    $  83,075,152
                                   -------------------------------------


Changes in the allowance for loan losses were as follows:
<TABLE>
<CAPTION>


                                                       Years Ended December 31,
                                           -------------------------------------------------
                                                    1996             1995            1994
                                           -------------------------------------------------
<S>                                           <C>              <C>            <C>
Balance, beginning of year                    $  1,126,872     $  1,065,754   $     926,425
    Provision charged to operations                165,000          165,000         158,786
    Loans charged off                             (101,558)        (152,655)        (44,857)
    Recoveries                                      21,361           48,773          25,400
                                           -------------------------------------------------
Balance, end of year                          $  1,211,675     $  1,126,872    $  1,065,754
                                           -------------------------------------------------

</TABLE>


At  December  31,  1996,  the Bank had loans  amounting  to  $577,034  that were
specifically classified as impaired. The average balance of these loans amounted
to  approximately  $609,232 for the year ended  December 31, 1996. The allowance
for loan losses  related to impaired  loans amounted to $252,733 at December 31,
1996.  The  following is a summary of cash  receipts on these loans and how they
were applied in 1996:

Cash receipts applied to reduce
    principal balance                        $  422,283
Cash receipts recognized as
    interest income                                   -
                                          --------------
Total cash receipts                          $  422,283
                                          --------------


Nonaccruing loans (principally  commercial and mortgage loans) totaled $708,476,
$647,732, and $569,042 at December 31, 1996, 1995, and 1994, respectively, which
had the effect of reducing net income $55,518 ($.06 per common  share),  $62,711
($.07 per common share),  and $39,484 ($.04 per common share) for the years then
ended, respectively.


                                      F-15
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5.  Bank Premises and Equipment

Major  classifications  of bank premises and equipment and the total accumulated
depreciation are summarized as follows:


                                                  December 31,
                                    --------------------------------
                                         1996            1995
                                    --------------------------------
Land                                  $     502,859   $     447,754
Buildings and improvements                2,577,809       1,564,737
Furniture and equipment                   2,870,470       2,180,455
                                    --------------------------------
Totals                                    5,951,138       4,192,946
Less accumulated depreciation             2,390,529       2,074,145
                                    --------------------------------
                                       $  3,560,609    $  2,118,801
                                    --------------------------------

Note 6.  Maturities of Certificates of Deposits

The scheduled  maturities of  certificates of deposits at December 31, 1996, are
as follows:

Year Ended December 31,
    1997                              $  37,543,940
    1998                                 13,030,651
    1999                                  4,601,530
    2000                                  3,655,341
    2001 and later                        1,344,448
                                   -----------------
                                      $  60,175,910
                                   -----------------

Note 7.  Note Payable

The Corporation's subsidiary, Central Virginia Bank, has a note payable which is
secured by a first deed of trust on the bank  building in Powhatan and is due in
annual  principal  installments  of $9,000  plus  interest at the rate of 8% per
annum through the year 2002.  At December 31, 1996 and 1995,  the balance of the
note was $54,000 and $63,000, respectively.

Note 8.  Income Tax Matters

The Corporation  and Subsidiary  file a consolidated  federal income tax return.
The  consolidated  provision  for income taxes for the years ended  December 31,
1996, 1995, and 1994, are as follows:


                                   1995        1996         1994
                          ------------------------------------------
Currently payable            $  713,540    $  792,729    $  738,356
Deferred                        (28,623)        3,437       (27,202)
                          ------------------------------------------
                             $  684,917    $  796,166    $  711,154
                          ------------------------------------------




                                      F-16
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8.  Income Tax Matters (Continued)

A  reconciliation  of the  expected  income tax  expense  computed at 34% to the
income tax  expense  included  in the  consolidated  statements  of income is as
follows:

<TABLE>
<CAPTION>
                                                    Years Ended December 31,
                                              ------------------------------------------
                                                  1996          1995          1994
                                              ------------------------------------------
<S>                                              <C>           <C>           <C>
Computed "expected" tax expense                  $  814,543    $  909,951    $  802,001
Tax-exempt interest                                (148,044)     (136,610)     (127,135)
Disallowance of interest expense
    deduction for the portion attributable
    to carrying tax-exempt obligations               20,001        19,130        14,460
Other                                                (1,583)         3,695       21,828
                                              ------------------------------------------
                                                 $  684,917    $  796,166    $  711,154
                                              ------------------------------------------
</TABLE>


The deferred income tax provision consists of the following items:
<TABLE>
<CAPTION>

                                                                     Years Ended December 31,
                                                             -------------------------------------------
                                                                 1996           1995          1994
                                                             -------------------------------------------
<S>                                                             <C>            <C>           <C>
Difference between loan loss provision
    charged to operating expense and the
    bad debt deduction taken for income
    tax purposes                                                $  (19,223)    $  (24,844)   $  (22,264)
Interest income on nonaccrual loans
    recognized for federal income tax pur-
    poses, but not recognized for financial
    statements until received                                      (10,458)         7,802       (26,289)
Accretion of discount recognized for
    financial statements, but not recognized
    for income tax purposes until realized                            (689)         1,060         2,428
Difference between the depreciation methods
    used for financial statements and for income
    tax purposes                                                     1,747         19,419        18,923
                                                             -------------------------------------------
                                                                $  (28,623)  $      3,437    $  (27,202)
                                                             -------------------------------------------
</TABLE>



                                      F-17


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8.  Income Tax Matters (Continued)

The  component  of the net  deferred  tax asset  included in other  assets is as
follows at December 31:


                                                   1996          1995
                                              ---------------------------
Deferred tax assets:
    Allowance for loan losses                  $  354,732     $  325,899
    Less valuation allowance                     (118,232)      (108,622)
                                            -----------------------------
                                                  236,500        217,277
    Interest income on nonaccrual loans            28,944         18,486
                                            -----------------------------
                                                  265,444        235,763
                                            -----------------------------

Deferred tax liabilities:
    Property and equipment                         72,982         71,235
    Securities                                      2,245          8,189
    Unrealized gain on securities
        available for sale                          7,500         20,682
                                            -----------------------------
                                                   82,727        100,106
                                            -----------------------------

Net deferred tax asset                         $  182,717     $  135,657
                                            -----------------------------


Note 9.  Profit-Sharing Plan

The Bank has a profit-sharing  plan for those employees who meet the eligibility
requirements set forth in the Plan.  Substantially  all the full-time  employees
are covered.  Contributions  to the Trust fund are  determined  each year by the
Board of  Directors.  The plan may be  amended  or  terminated  by the  Board of
Directors at any time. The  contributions for the years ended December 31, 1996,
1995, and 1994, were $118,824, $103,626, and $96,027, respectively.

Note 10.  Commitments and Contingencies

Financial  instruments  with  off-balance-sheet  risk:  The  Bank  is  party  to
financial  instruments  with  off-balance  sheet  risk in the  normal  course of
business  to  meet  the  financing  needs  of  its  customers.  These  financial
instruments  include commitments to extend credit and standby letters of credit.
These instruments involve, to varying degrees, elements of credit risk in excess
of the amount recognized in the consolidated balance sheets.










                                      F-18
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10.  Commitments and Contingencies (Continued)

The Bank's exposure to credit loss in the event of  nonperformance  by the other
party to the financial  instrument for  commitments to extend credit and standby
letters of credit is represented by the contractual amount of those instruments.
The Bank uses the same credit  policies in making  commitments  and  conditional
obligations as they do for on-balance-sheet instruments. A summary of the Bank's
commitments at December 31, 1996 and 1995, is as follows:

                                                   1996              1995
                                         -----------------------------------
Commitments to extend credit                $  22,664,435     $  21,749,280
Standby letters of credit                       3,077,256         3,490,959
                                         -----------------------------------
                                            $  25,741,691     $  25,240,239
                                         -----------------------------------

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition  established in the contract.  Since many
of the  commitments  are expected to expire  without being drawn upon, the total
commitment amounts do not necessarily  represent future cash  requirements.  The
Bank evaluates each customer's  credit-worthiness  on a case-by-case  basis. The
amount of collateral obtained, if deemed necessary by the Bank upon extension of
credit, is based on management's credit evaluation of the party. Collateral held
varies,  but may  include  accounts  receivable,  crops,  livestock,  inventory,
property and equipment,  residential real estate and income-producing commercial
properties.

Standby  letters of credit  are  conditional  commitments  issued by the Bank to
guarantee the performance of a customer to a third party.  Those  guarantees are
primarily  issued to support  public and  private  borrowing  arrangements.  The
credit risk  involved in issuing  letters of credit is  essentially  the same as
that involved in extending loan facilities to customers.  Collateral held varies
as specified above and is required in instances which the Bank deems necessary.

Concentrations  of credit risk:  All of the Bank's loans,  commitments to extend
credit,  and standby letters of credit have been granted to customers within the
state and, more  specifically,  the area  surrounding  Richmond,  Virginia.  The
concentrations  of credit by type of loan are set forth in Note 4.  Although the
Bank has a diversified  loan  portfolio,  a substantial  portion of its debtors'
ability  to  honor  their  contracts  is  dependent  upon the  agribusiness  and
construction sectors of the economy.




                                      F-19
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Related Party Transactions

The  Corporation's  subsidiary,  Central  Virginia  Bank,  has  had,  and may be
expected to have in the future,  banking  transactions in the ordinary course of
business  with  directors,  principal  officers,  their  immediate  families and
affiliated companies in which they are principal stockholders (commonly referred
to as related parties), all of which have been, in the opinion of management, on
the same terms, including interest rates and collateral,  as those prevailing at
the time for comparable transactions with others.

Aggregate loan transactions with related parties were as follows:

                                      Years Ended December 31,
                                       1996             1995
                             ----------------------------------
Balance, beginning              $   1,361,547    $   1,320,816
    New loans                       2,006,810          335,992
    Repayments                     (1,882,546)        (295,261)
                             ----------------------------------
Balance, ending                 $   1,485,811    $   1,361,547
                             ----------------------------------


Note 12. Stock Option Plan

The Corporation  has a stock option plan which  authorizes the granting of stock
options to key employees and directors up to a maximum of 7,500 shares of common
stock.  The  options are  exercisable  at the date of grant and expire ten years
thereafter.  On July 14, 1987,  7,500 options were granted at an option price of
$9 per share.

During the year ended  December 31,  1996,  no options  were  exercised  for the
purchase of common  stock.  Options  were  exercised  for the  purchase of 2,669
shares of common stock at $9 per share during the year ended  December 31, 1995.
At December 31, 1996,  unexercised  options had been granted for 3,111 shares at
$9 per share.

The  Corporation  did not grant any options  during the years ended December 31,
1996 and 1995. Therefore,  the transition provisions of FASB Statement 123 would
not be applicable.



                                      F-20

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13.  Regulatory Matters

The Bank is subject to various regulatory capital  requirements  administered by
its primary federal regulator, the Federal Reserve Bank. Failure to meet minimum
capital  requirements can initiate certain mandatory,  and possibly,  additional
discretionary  actions by regulators  that, if  undertaken,  could have a direct
material  effect on the Bank's  financial  statements.  Under  capital  adequacy
guidelines and the regulatory  framework for prompt corrective  action, the Bank
must meet specific capital guidelines that involve quantitative  measures of the
Bank's assets,  liabilities,  and certain  off-balance sheet items as calculated
under  regulatory   accounting   practices.   The  Bank's  capital  amounts  and
classification are also subject to qualitative judgments by the regulators about
components, risk weightings, and other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require  the Bank to  maintain  minimum  amounts  and ratios as set forth in the
table  below of total  and Tier I  capital  as  defined  in the  regulations  to
risk-weighted  assets as  defined,  and of Tier I capital  as defined to average
assets as defined.  Management believes,  as of December 31, 1996, that the Bank
meets all capital adequacy requirements to which it is subject.

As of December 31, 1996, the most recent  notification  from the Federal Reserve
Bank categorized the Bank as well capitalized under the regulatory framework for
prompt corrective  action. To be categorized as well capitalized,  the Bank must
maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios
as set  forth in the  table.  There  are no  conditions  or  events  since  that
notification that management believes have changed the institution's category.

The Bank's actual capital amounts and ratios are also presented in the table.
<TABLE>
<CAPTION>

                                                                                   To Be Well Capitalized
                                                                 For Capital       Under Prompt Corrective
                                              Actual          Adequacy Purposes      Action Provisions
                                      -------------------------------------------------------------------
                                        Amount     Ratio      Amount     Ratio      Amount     Ratio
                                      -------------------------------------------------------------------
                                                              (Dollars in Thousands)
<S>                                      <C>        <C>         <C>        <C>        <C>        <C>
As of December 31, 1996:
    Total Capital
        (to Risk Weighted Assets)        $15,247    17.68%      $ 6,842    8.00%      $ 8,553   10.00%
    Tier I Capital
        (to Risk Weighted Assets)         14,176    16.43%        3,421    4.00%        5,132    6.00%
    Tier I Capital
        (to Average Assets)               14,176    11.33%        5,005    4.00%        6,256    5.00%

As of December 31, 1995:
    Total Capital
        (to Risk Weighted Assets)          14,228   15.59%        7,301    8.00%        9,126   10.00%
    Tier I Capital
        (to Risk Weighted Assets)          13,101   14.36%        3,651    4.00%        5,476    6.00%
    Tier I Capital
        (to Average Assets)                13,101   11.36%        4,614    4.00%        5,768    5.00%

</TABLE>

Banking  laws and  regulations  limit the amount of  dividends  that may be paid
without prior approval of the Bank's regulatory  agency.  Under that limitation,
the Bank could have declared additional dividends of approximately $3,449,786 in
1996 without regulatory approval.

                                      F-21
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14.  Fair Value of Financial Instruments

FASB Statement No. 107,  Disclosures about Fair Value of Financial  Instruments,
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate that value. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly  affected by the assumptions used,  including
the  discount  rate and  estimates  of future cash flows.  In that  regard,  the
derived  fair  value  estimates   cannot  be   substantiated  by  comparison  to
independent  markets  and,  in many cases,  could not be  realized in  immediate
settlement  of  the  instrument.   Statement  107  excludes  certain   financial
instruments and all nonfinancial  instruments from its disclosure  requirements.
Accordingly,  the aggregate  fair value  amounts  presented do not represent the
underlying value of the Bank.

The following  methods and  assumptions  were used by the Bank in estimating the
fair value of its financial instruments:

Cash and cash  equivalents:  The carrying  amounts reported in the balance sheet
for cash and short-term instruments approximate their fair values.

Investment securities (including  mortgage-backed  securities):  Fair values for
investment  securities are based on quoted market prices,  where  available.  If
quoted market prices are not  available,  fair values are based on quoted market
prices of comparable instruments.

Loans receivable:  For variable-rate  loans that reprice  frequently and with no
significant change in credit risk, fair values are based on carrying values. The
fair values for other loans are determined  using  estimated  future cash flows,
discounted at the interest rates  currently being offered for loans with similar
terms to borrowers with similar credit  quality.  The carrying amount of accrued
interest receivable approximates it fair value.

Deposit  liabilities:  The fair values of demand  deposits  equal their carrying
amounts which represents the amount payable on demand.  The carrying amounts for
variable-rate  fixed-term  money  market  accounts and  certificates  of deposit
approximate  their fair values at the reporting date. Fair values for fixed-rate
certificates of deposit are estimated  using a discounted cash flow  calculation
that  applies  interest  rates  currently  being  offered on  certificates  to a
schedule of aggregated expected maturities on time deposits. The carrying amount
of accrued interest payable approximates its fair value.











                                      F-22
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14.  Fair Value of Financial Instruments (Continued)

Note payable: The carrying amount of note payable approximates its fair value.

The following is a summary of the carrying  amounts and estimated fair values of
the Bank's financial assets and liabilities at December 31, 1996 and 1995:


<TABLE>
<CAPTION>

                                                              1996                                 1995
                                              ----------------------------------------------------------------------
                                                  Carrying          Estimated          Carrying        Estimated
                                                   Amount           Fair Value          Amount        Fair Value
                                              ----------------------------------------------------------------------
<CAPTION>
<S>                                               <C>              <C>                  <C>             <C>
Financial assets:
    Cash and cash equivalents                     $  17,705,921    $    17,705,921      $20,062,555     $20,062,555
    Securities available for sale                     7,685,684          7,685,684        4,961,659       4,961,659
    Securities held to maturity                      10,207,765         10,375,793       10,008,592      10,247,942
    Mortgage loans held for sale                        201,798            201,798          868,594         868,594
    Loans, net                                       84,337,859         86,182,000       83,075,152      85,494,000
    Accrued interest receivable                         803,191            803,191          787,544         787,544

Financial liabilities:
    Demand and variable rate deposits             $  49,705,030    $    49,705,030      $44,505,030     $44,505,030
    Fixed-rate certificates of deposits              60,175,910         60,408,000       63,301,175      64,146,000
    Securities sold under repurchase
       agreements                                     1,534,479          1,534,479        1,435,307       1,435,307
    Note payable                                         54,000             54,000           63,000          63,000
    Accrued interest payable                            232,946            232,946          263,420         263,420

</TABLE>



At December 31, 1996 and 1995, the Corporation had outstanding
standby  letters of credit and commitments to extend credit.  These  off-balance
sheet  financial  instruments  are  generally  exercisable  at the  market  rate
prevailing  at the date  the  underlying  transaction  will be  completed,  and,
therefore, they were deemed to have no current fair market value.
















                                      F-23

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15.  Condensed Parent-Only Financial Statements

Financial statements for Central Virginia  Bankshares,  Inc., (not consolidated)
are presented below.


                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                        December 31,
                                            ------------------------------------
Assets                                            1996              1995
                                            ------------------------------------
<S>                                           <C>               <C>
    Cash                                      $       173,005   $       101,692
    Investment in subsidiary                       14,183,162        13,160,782
    Other assets                                       87,440            51,020
                                            ------------------------------------
                                                $  14,443,607     $  13,313,494
                                            ------------------------------------

Stockholders' Equity
    Common stock, $2.50 par value;
        3,000,000 shares authorized;
        949,140 and 943,733 shares
        issued and outstanding in 1996
        and 1995, respectively                 $    2,372,850    $    2,359,332
    Surplus                                         4,091,019         3,996,803
    Retained earnings                               7,975,381         6,917,211
    Net unrealized gain on
        securities available for sale
        held by subsidiary, net of tax                  4,357            40,148
                                            ------------------------------------
                                                $  14,443,607     $  13,313,494
                                            ------------------------------------

</TABLE>

<TABLE>
<CAPTION>

                              STATEMENTS OF INCOME

                                                                            Years Ended December 31,
                                                                -------------------------------------------------
                                                                     1996            1995             1994
                                                                -------------------------------------------------
Income:
<S>                                                              <C>             <C>              <C>
    Management fees                                              $       46,456  $       66,260   $       24,000
    Dividends received from subsidiary                                  652,627         592,239          588,976
    Equity in undistributed earnings of subsidiary                    1,058,170       1,287,921        1,068,046
    Interest income                                                           -               -               58
                                                                -------------------------------------------------
                                                                      1,757,253       1,946,420        1,681,080

Expenses:
    Operating expenses                                                   46,456          66,260           38,227
                                                                -------------------------------------------------
Income before income taxes                                            1,710,797       1,880,160        1,642,853

Income taxes (benefit)                                                        -               -           (4,818)
                                                                -------------------------------------------------

Net income                                                         $  1,710,797    $  1,880,160     $  1,647,671
                                                                -------------------------------------------------
</TABLE>





                                      F-24
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15.  Condensed Parent-Only Financial Statements (Continued)


                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                 -------------------------------------------------
                                                                       1996            1995            1994
                                                                 -------------------------------------------------

<S>                                                                  <C>             <C>             <C>
Cash Flows From Operating Activities
    Net income                                                       $  1,710,797    $  1,880,160    $  1,647,671
    Adjustments to reconcile net income
        to net cash provided by operating
        activities:
        Undistributed earnings of subsidiary                           (1,058,170)     (1,287,921)     (1,068,046)
        Changes in operating assets and liabilities:
           (Increase) decrease in other assets                            (36,420)          3,798         (53,163)
                                                                 -------------------------------------------------
Net cash provided by operating activities                                 616,207         596,037         526,462
                                                                 -------------------------------------------------

Cash Flows From Financing Activities
    Net proceeds from issuance of common stock                            107,733          81,195               -
    Dividends paid                                                       (652,627)       (592,239)       (543,976)
                                                                 -------------------------------------------------
Net cash (used in) financing activities                                  (544,894)       (511,044)       (543,976)
                                                                 -------------------------------------------------

Increase (decrease) in cash                                                71,313          84,993         (17,514)

Cash, beginning                                                           101,692          16,699          34,213
                                                                 -------------------------------------------------

Cash, ending                                                        $     173,005   $     101,692  $       16,699
                                                                 -------------------------------------------------
</TABLE>







                                      F-25


<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  the Registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                              CENTRAL VIRGINIA BANKSHARES, INC.



Date:  March 28, 1997         By: /s/ Ralph Larry Lyons
                                 ----------------------
                                  Ralph Larry Lyons
                                  President and Chief Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.

March 28, 1997                /s/ Ralph Larry Lyons
                              ---------------------
                              Ralph Larry Lyons
                              President and Chief Executive Officer; Director
                              (Chief Financial Officer)

March 28, 1997                /s/ F. William Kidd
                              -------------------
                              F. William Kidd
                              Vice President and Cashier
                              (Chief Accounting Officer)

March 28, 1997                /s/ John B. Larus
                              -----------------
                              John B. Larus
                              Chairman of the Board of Directors

March 28, 1997                /s/ Fleming V. Austin
                              ---------------------
                              Fleming V. Austin
                              Director

March 28, 1997                /s/ Charles W. Binford
                              ----------------------
                              Charles W. Binford
                              Director

March __, 1997                ----------------------
                              Garland L. Blanton, Jr.
                              Director

March 28, 1997                /s/ Charles B. Goodman
                              ----------------------
                              Charles B. Goodman
                              Director

March 28, 1997                /s/ Elwood C. May
                              -----------------
                              Elwood C. May
                              Director


<PAGE>



                                 EXHIBITS INDEX


Item No.      Description
--------      -----------


3.1           Articles of Incorporation, including amendments thereto
              (incorporated herein by reference to Exhibit 2 to the Registrant's
              Form 8-A filed with the SEC on May 2, 1994)
3.2           Bylaws (incorporated herein by reference to Exhibit 3 to the
              Registrant's Form 8-A filed with the SEC on May 2, 1994)
4.1           Specimen of Registrant's Common Stock Certificate (incorporated
              herein by reference to Exhibit 1 to the Registrant's Form 8-A
              filed with the SEC on May 2, 1994)
21.1          Subsidiaries of the Registrant (filed herewith)
23.1          Consent of Mitchell, Wiggins & Company, LLP (filed herewith)