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, 2001    Commission file number: 000-24002


                        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.)


     2036 New Dorset Road, Post Office Box 39, Powhatan, Virginia 23139-0039
               (Address of principal executive offices) (Zip Code)

          Issuer's telephone number including area code: (804) 598-4216

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

         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $1.25 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: $17.9 million.

         The aggregate  market value of the Common Stock held by  non-affiliates
of the Registrant  was  approximately  $21,693,093  computed by reference to the
last sales  price of $11.90 per share as of March 1, 2002,  on The Nasdaq  Stock
MarketSM, as reported in published financial sources.

         At March 1,  2002,  there  were  1,949,229  shares of the  Registrant's
Common Stock outstanding.

         Transitional Small Business Disclosure Format (check one)
         Yes _____  No __X__



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                       DOCUMENTS INCORPORATED BY REFERENCE


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

2002 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.

         Principal  Market  Area.  The Bank's  primary  service area is Powhatan
County and extends into Chesterfield,  Cumberland and Henrico Counties which had
populations of 22,377,  259,903, 9,017 and 262,300,  respectively,  according to
the 2000 census.  The growth rate of these counties was 46.0%,  24.2%, 15.2% and
20.4%,  respectively from the 1990 census. Similar growth rates are expected for
the foreseeable future. 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,  on U.S. Route 60
near the  courthouse  and in  Cartersville,  both in Cumberland  County,  and in
Wellesley in Henrico  County.  The Wellesley  location was acquired from another
financial  institution in July 2001. 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
engages in a general community and commercial  banking  business,  targeting the
banking needs of individuals and small to medium sized businesses in its primary
service area. The Bank offers all traditional  loan and deposit banking services
as well as newer services such as Internet banking,  telephone banking and debit
cards.  During 2000,  the Bank began  offering a  non-deposit  investment  sales
program in  partnership  with UVEST,  a registered  broker-dealer  and member of
NASD,  SIPC.  The  Bank  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 ATMs,  travelers'  checks,  safe deposit boxes,
deposit transfer, notary public, escrow, drive-in facilities 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 prevailing real estate market in the area, the Bank
is  better  able  to  monitor  the  financial  condition  of  its  borrowers  by
concentrating its


<PAGE>

lending  activities  in its  primary  service  area.  The Bank will  continue to
evaluate the feasibility of entering into other markets as  opportunities  to do
so become available.

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, western Chesterfield and Henrico 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 $30,000 and all secured loans in excess of $150,000
are approved by the Bank's Senior Loan Committee.  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. Many 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 that are
intended to assure that such loans may be eligible  for sale into the  secondary
mortgage market.  The Bank generally requires an appraisal by a licensed outside
appraiser for all loans secured by real estate. In some isolated instances where
the Bank is familiar with the subject property, the current assessed value or an
assessment by Bank lenders may be accepted.  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.  Substantially  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 external index contractually agreed to by the Bank and the
borrower at the origination of the loan.

         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
borrower  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



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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 are 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 .5% to 1.5% 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 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, home equity lines of credit, and credit cards.

         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, 2001,  commercial  business loans were $30.9 million or 21.9% 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 employment income and
other  sources 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,
2001, the majority of the Bank's non-performing loans were commercial loans.



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Competition

         The Bank encounters strong  competition for its banking services within
its primary  service  area from other  community  banks and larger  banks in the
Richmond  metropolitan area.  Financial  companies,  mortgage companies,  credit
unions and savings and loan  associations  also  compete with the Bank for loans
and deposits. In addition,  the Bank must compete for deposits with money market
mutual funds that are marketed  nationally.  Many of the Bank's competitors have
substantially greater resources than the Bank. Additionally, new community banks
have  recently  opened in both  Powhatan  and  Midlothian.  The internet is also
providing an  increasing  amount of price  oriented  competition  which the Bank
anticipates to become more intense.  The success of the Bank in the past and its
plans for success in the future is dependent  upon providing  superior  customer
service and convenience.

Employees

         The Company and the Bank had 81 full-time and 22 part-time employees at
December 31, 2001. Employee relations have been good. The Bank sponsors a Profit
Sharing/Retirement Plan for its employees as well as a 401(k) plan.

Regulation and Supervision

         General.  As  a  bank  holding  company,  the  Company  is  subject  to
regulation  under the Bank Holding Company Act of 1956, as amended (the "BHCA"),
and the examination and reporting  requirements of the Board of Governors of the
Federal  Reserve System (the "Federal  Reserve  Board").  Under the BHCA, a bank
holding company may not directly or indirectly  acquire  ownership or control of
more than 5% of the voting shares or substantially all of the assets of any bank
or merge or  consolidate  with another bank  holding  company  without the prior
approval  of the  Federal  Reserve  Board.  The BHCA also  generally  limits the
activities of a bank holding company to that of banking, managing or controlling
banks,  or any other  activity  which is determined to be so closely  related to
banking or to managing or  controlling  banks that an  exception  is allowed for
those activities.

         As  a   state-chartered   commercial  bank,  the  Bank  is  subject  to
regulation,  supervision  and  examination  by the  Virginia  State  Corporation
Commission's Bureau of Financial Institutions. It also is subject to regulation,
supervision and examination by the Federal Reserve Board.  State and federal law
also governs the activities in which the Bank engages,  the investments  that it
makes and the  aggregate  amount of loans that may be  granted to one  borrower.
Various  consumer and  compliance  laws and  regulations  also affect the Bank's
operations.

         The earnings of the Company's subsidiaries,  and therefore the earnings
of  the  Company,  are  affected  by  general  economic  conditions,  management
policies,  changes  in state and  federal  legislation  and  actions  of various
regulatory  authorities,  including  those  referred  to  above.  The  following
description summarizes the significant state and federal and state laws to which
the Company and the Bank are subject. To the extent that statutory or regulatory
provisions  or proposals  are  described,  the  description  is qualified in its
entirety by reference to the  particular  statutory or regulatory  provisions or
proposals.

         Payment of  Dividends.  The  Company  is a legal  entity  separate  and
distinct from its banking and other subsidiaries. Virtually all of the Company's
revenues will result from dividends paid to the Company by the Bank. The Bank is
subject to laws and  regulations  that limit the amount of dividends that it can
pay.  In  addition,  both  the  Company  and the  Bank are  subject  to  various
regulatory  restrictions  relating  to  the  payment  of  dividends,   including
requirements  to  maintain  capital  at or above  regulatory



                                      -4-
<PAGE>

minimums.  Banking regulators have indicated that banking  organizations  should
generally  pay  dividends  only if the  organization's  net income  available to
common  shareholders  over the past year has been  sufficient  to fully fund the
dividends,  and the prospective rate of earnings  retention  appears  consistent
with the  organization's  capital  needs,  asset  quality and overall  financial
condition.  The Company does not expect that any of these laws,  regulations  or
policies will materially affect the ability of the Bank to pay dividends. During
the year ended  December  31,  2001,  the Bank  declared  $854,020 in  dividends
payable to the Company.

         Insurance of Accounts,  Assessments  and  Regulation  by the FDIC.  The
deposits  of the Bank are  insured by the FDIC up to the limits set forth  under
applicable  law. The  deposits of the Bank are subject to the deposit  insurance
assessments of the Bank Insurance Fund ("BIF") of the Federal Deposit  Insurance
Corporation (the "FDIC").

         The FDIC has  implemented  a risk-based  deposit  insurance  assessment
system  under  which the  assessment  rate for an insured  institution  may vary
according to  regulatory  capital  levels of the  institution  and other factors
(including supervisory evaluations).  Depository institutions insured by the BIF
that are "well  capitalized",  are  required to pay only the  statutory  minimum
assessment of $2,000 annually for deposit  insurance,  while all other banks are
required to pay premiums ranging from .03% to .27% of domestic  deposits.  These
rate schedules are subject to future  adjustments by the FDIC. In addition,  the
FDIC has authority to impose  special  assessments  from time to time.  However,
because the legislation  enacted in 1996 requires that both Savings  Association
Insurance  Fund insured and  BIF-insured  deposits pay a pro rata portion of the
interest due on the obligations issued by the Financing Corporation, the FDIC is
assessing  BIF-insured  deposits  an  additional  1.30 basis  points per $100 of
deposits to cover those obligations.

         The FDIC is authorized  to prohibit any  BIF-insured  institution  from
engaging in any activity that the FDIC determines by regulation or order to pose
a serious threat to the respective  insurance fund.  Also, the FDIC may initiate
enforcement actions against banks, after first giving the institution's  primary
regulatory  authority an opportunity to take such action. The FDIC may terminate
the deposit  insurance of any depository  institution if it determines,  after a
hearing,  that the  institution  has engaged or is engaging in unsafe or unsound
practices,  is in an unsafe or unsound condition to continue operations,  or has
violated any  applicable  law,  regulation,  order or any  condition  imposed in
writing by the FDIC. It also may suspend deposit  insurance  temporarily  during
the  hearing  process  for  the  permanent  termination  of  insurance,  if  the
institution has no tangible  capital.  If deposit  insurance is terminated,  the
deposits  at the  institution  at  the  time  of  termination,  less  subsequent
withdrawals,  shall  continue  to be insured for a period from six months to two
years,  as  determined  by the FDIC.  Management  is not  aware of any  existing
circumstances that could result in termination of any Bank's deposit insurance.

         Capital.  The Federal Reserve Board has issued  risk-based and leverage
capital guidelines applicable to banking organizations that it supervises. Under
the risk-based capital requirements, the Company and the Bank are each generally
required to maintain a minimum  ratio of total capital to  risk-weighted  assets
(including  certain  off-balance  sheet  activities,  such as standby letters of
credit) of 8%. At least half of the total  capital  must be  composed  of common
equity, retained earnings and qualifying perpetual preferred stock, less certain
intangibles   ("Tier  1  capital").   The   remainder  may  consist  of  certain
subordinated  debt,  certain hybrid  capital  instruments  and other  qualifying
preferred  stock  and a  limited  amount  of the loan  loss  allowance  ("Tier 2
capital," which, together with Tier 1 capital, composes "total capital").

         In  addition,  each of the  federal  banking  regulatory  agencies  has
established  minimum  leverage capital  requirements for banking  organizations.
Under these requirements, banking organizations must



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maintain a minimum ratio of Tier 1 capital to adjusted average  quarterly assets
equal  to  3% to  5%,  subject  to  federal  bank  regulatory  evaluation  of an
organization's overall safety and soundness.

         The  risk-based   capital   standards  of  the  Federal  Reserve  Board
explicitly  identify  concentrations  of credit risk and the risk  arising  from
non-traditional  activities, as well as an institution's ability to manage these
risks, as important  factors to be taken into account by the agency in assessing
an institution's  overall capital adequacy.  The capital guidelines also provide
that an institution's exposure to a decline in the economic value of its capital
due to  changes in  interest  rates be  considered  by the agency as a factor in
evaluating a banking organization's capital adequacy.

         Other  Safety  and  Soundness  Regulations.   There  are  a  number  of
obligations  and  restrictions  imposed  on bank  holding  companies  and  their
depository  institution  subsidiaries by federal law and regulatory  policy that
are  designed  to reduce  potential  loss  exposure  to the  depositors  of such
depository  institutions  and to the FDIC insurance  funds in the event that the
depository  institution is insolvent or is in danger of becoming insolvent.  For
example,  under the  requirements  of the Federal  Reserve Board with respect to
bank holding company operations,  a bank holding company is required to serve as
a source of financial strength to its subsidiary depository  institutions and to
commit resources to support such  institutions in  circumstances  where it might
not do so otherwise.  In addition,  the "cross-guarantee"  provisions of federal
law require insured  depository  institutions  under common control to reimburse
the FDIC for any loss suffered or reasonably anticipated by the FDIC as a result
of the insolvency of commonly controlled insured depository  institutions or for
any assistance  provided by the FDIC to commonly  controlled  insured depository
institutions  in  danger  of  failure.  The  FDIC may  decline  to  enforce  the
cross-guarantee  provision  if it  determines  that  a  waiver  is in  the  best
interests of the deposit  insurance  funds.  The FDIC's claim for  reimbursement
under the cross  guarantee  provisions is superior to claims of  shareholders of
the insured depository  institution or its holding company but is subordinate to
claims  of  depositors,   secured   creditors  and   nonaffiliated   holders  of
subordinated debt of the commonly controlled insured depository institutions.

         The federal  banking  agencies  also have broad  powers  under  current
federal  law to take  prompt  corrective  action to resolve  problems of insured
depository  institutions.  The extent of these  powers  depends upon whether the
institution   in  question   is  well   capitalized,   adequately   capitalized,
undercapitalized, significantly undercapitalized or critically undercapitalized,
as defined by the law. As of December  31,  2001,  the Company and the Bank were
classified as well capitalized.

         State banking  regulators also have broad  enforcement  powers over the
Bank,  including  the  power to  impose  fines  and  other  civil  and  criminal
penalties, and to appoint a conservator.

         Interstate  Banking  and  Branching.  Current  federal  law  authorizes
interstate  acquisitions of banks and bank holding companies without  geographic
limitation.  Effective  June 1,  1997,  a bank  headquartered  in one  state was
authorized  to merge  with a bank  headquartered  in another  state,  as long as
neither of the states had opted out of such interstate merger authority prior to
such  date.  After  a bank  has  established  branches  in a  state  through  an
interstate  merger  transaction,  the bank may establish and acquire  additional
branches at any location in the state where a bank  headquartered  in that state
could have established or acquired  branches under  applicable  federal or state
law.

         Gramm-Leach-Bliley Act of 1999. The Gramm-Leach-Bliley Act of 1999 (the
"Act") was signed into law on November 12, 1999. The Act covers a broad range of
issues,  including a repeal of most of the  restrictions on  affiliations  among
depository institutions,  securities firms and insurance companies.  Most of the
Act's  provisions  require  the  federal  bank  regulatory  agencies  and  other



                                      -6-
<PAGE>

regulatory bodies to adopt regulations to implement the Act, and for that reason
an assessment of the full impact on the Company of the Act must await completion
of that regulatory process.

         The Act  repeals  sections  20 and 32 of the  Glass-Stegall  Act,  thus
permitting unrestricted affiliations between banks and securities firms. The Act
also  permits  bank  holding  companies  to elect to  become  financial  holding
companies.  A financial  holding company may engage in or acquire companies that
engage in a broad range of financial services,  including securities  activities
such as underwriting,  dealing, brokerage,  investment and merchant banking; and
insurance  underwriting,  sales and brokerage  activities.  In order to become a
financial  holding  company,  the bank holding company and all of its affiliated
depository  institutions  must be  well-capitalized,  well-managed,  and have at
least a satisfactory Community Reinvestment Act rating.

         The Act  provides  that the states  continue to have the  authority  to
regulate insurance  activities,  but prohibits the states in most instances from
preventing or significantly  interfering with the ability of a bank, directly or
through   an   affiliate,   to  engage   insurance   sales,   solicitations   or
cross-marketing  activities.  Although the states  generally  must regulate bank
insurance  activities in a nondiscriminatory  manner, the states may continue to
adopt and enforce rules that specifically  regulate bank insurance activities in
certain areas identified in the Act. The Act directs the federal bank regulatory
agencies to adopt insurance consumer protection  regulations that apply to sales
practices, solicitations, advertising and disclosures.

         The Act  adopts a system  of  functional  regulation  under  which  the
Federal  Reserve  Board is  confirmed as the umbrella  regulator  for  financial
holding   companies,   but  financial  holding  company  affiliates  are  to  be
principally  regulated  by  functional  regulators  such as the FDIC  for  state
nonmember bank affiliates, the Securities and Exchange Commission for securities
affiliates  and state  insurance  regulators for insurance  affiliates.  The Act
repeals  the broad  exemption  of banks from the  definitions  of  "broker"  and
"dealer" for purposes of the  Securities  Exchange Act of 1934, as amended,  but
identifies a set of specific  activities,  including  traditional bank trust and
fiduciary  activities,  in  which a bank  may  engage  without  being  deemed  a
"broker",  and a set of  activities  in which a bank may  engage  without  being
deemed a "dealer".  The Act also makes conforming  changes in the definitions of
"broker" and "dealer" for  purposes of the  Investment  Company Act of 1940,  as
amended, and the investment Advisers Act of 1940, as amended.

         The Act contains  extensive  customer  privacy  protection  provisions.
Under these provisions,  a financial  institution must provide to its customers,
at the  inception of the customer  relationship  and  annually  thereafter,  the
institution's  policies and  procedures  regarding  the  handling of  customers'
nonpublic  personal  financial  information.  The Act provides that,  except for
certain  limited  exceptions,  an  institution  may not  provide  such  personal
information to unaffiliated  third parties unless the  institution  discloses to
the customer that such  information may be so provided and the customer is given
the opportunity to opt out of such  disclosure.  An institution may not disclose
to a  non-affiliated  third party,  other than to a consumer  reporting  agency,
customer  account  numbers or other similar  account  identifiers  for marketing
purposes.  The Act also  provides  that the  states may adopt  customer  privacy
protections  that are more strict than those  contained in the Act. The Act also
makes  a  criminal  offense,  except  in  limited  circumstances,  obtaining  or
attempting to obtain customer information of a financial nature by fraudulent or
deceptive means.

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



                                      -7-
<PAGE>

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  Brandermill  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  other  branches are located in the Village of  Midlothian  in
Chesterfield   County  and  on  U.S.   Route  60  near  the  courthouse  and  in
Cartersville,  both in 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 June 1998 the
Bank  opened a 4,800  square  foot  branch  located on U. S. Route 60  (Anderson
Highway) near the courthouse in Cumberland County,  Virginia.  In July 2001, the
Bank acquired a one-story,  2,800 square foot,  two-year old branch  facility of
another  financial  institution  located on  Lauderdale  Drive in  Wellesley  in
Henrico County.

         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
executive   offices,   finance  and  accounting,   computer   operations,   loan
administration and bookkeeping departments all of which were formerly located in
the main office.

ITEM 3.     LEGAL PROCEEDINGS

         As previously reported in the Company's Quarterly Report on Form 10-QSB
for the period  ended June 30, 2000,  the Bank was a party to lawsuits  filed by
Old Republic National Title Insurance Company,  in its own name and on behalf of
twelve mortgage  lenders  insured by Old Republic,  in the Circuit Court for the
County of  Chesterfield,  Virginia and by the trustee in bankruptcy for Alliance
Title and Escrow,  Ltd. in the United  States  Bankruptcy  Court for the Eastern
District  of  Virginia.   Both  lawsuits   arose   primarily  from  the  alleged
misappropriation  of funds by the president of Alliance  Title from the Alliance
Title accounts maintained with the Bank.

         In August 2000,  the Bank,  Old Republic and the trustee in  bankruptcy
for Alliance  Title reached an agreement to settle the lawsuits.  The settlement
agreements  have been  signed and both court  proceedings  have been  dismissed.
Although  the  parties  are  required  to  keep  the  terms  of  the  settlement
confidential,  the  settlement  does not have a material  adverse  impact on the
Company.

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.



                                      -8-
<PAGE>

                                     PART II

ITEM 5.      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Common Stock

         Central  Virginia  Bankshares,  Inc common  stock  trades on The Nasdaq
Stock  MarketSM  under the symbol  "CVBK".  As of March 2, 2002, the Company had
approximately 847 shareholders of record.

         The  following  table shows  dividends  paid and the high and low trade
prices by quarter for the past two years according to Nasdaq:
<TABLE>
<CAPTION>
                                            2001                                             2000
                          ----------------------------------------         ----------------------------------------
                                                         Dividends                                        Dividends
                          High Trade      Low Trade        Paid            High Trade      Low Trade        Paid
                          ----------      ---------        ----            ----------      ---------        ----
<S>                          <C>             <C>           <C>             <C>              <C>             <C>
First Quarter                $11.25          $8.875        $.11            $10.00           $8.625          $.10
Second Quarter                12.50          10.73          .11              9.375           8.125           .10
Third Quarter                 14.25          11.50          .11              9.125           8.375           .10
Fourth Quarter                12.50          10.54          .11             10.00            8.75            .11
</TABLE>

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

         For the year ended  December 31,  2001,  net income was  $2,019,300,  a
decrease of 2.0% from the previous year. The continual decline in interest rates
throughout  the year  resulted in a decrease in net interest  income in spite of
record  levels  of  interest-earning  assets.  Average  interest-earning  assets
increased  10.95%  from  $182.7 in 2000 to $202.7  million in 2001.  The primary
source of this increase was a 30.4%  increase in average  investment  securities
from  $47.2  million  in  2000  to  $61.5  million  in  2001.  The  increase  in
interest-earning assets was funded by a 17.6% increase in average total deposits
which  increased  from an average of $157.2 million in 2000 to $184.9 million in
2001.  In addition to the effects of net  interest  income on net income for the
year, other income increased 16.7% and other expenses increased 5.8%. Net income
per common share was $1.04 in 2001 compared to $1.07 in 2000.

         The  Company's  net  income for the year ended  December  31,  2000 was
$2,060,450,  an  increase  of 5.1% from  1999.  This  increase  reflects  a 4.6%
increase in net interest  income,  which was primarily due to a 4.9% increase in
average interest earning assets for the year. In addition,  non-interest  income
rose 18.3%  primarily due to a 14.7%  increase in deposit fees and other service
charges on deposit  accounts and a 30.4% increase in the "other"  category which
includes the results of our non-deposit  investment sales program which began in
May 2000.

         The Company's  return on average equity was 10.0% in 2001,  compared to
11.5%  and  11.3% in 2000 and  1999,  respectively.  Return  on  average  assets
amounted to .93%, 1.06% and 1.05% for these same years.

         Net Interest  Income.  The Company's net interest income was $7,876,279
in 2001, compared to $7,917,254 and $7,570,848 for 2000 and 1999,  respectively.
Due to  management's  efforts to manage the cost of  liabilities,  net  interest
income in 2001  declined  less than 1%,  reflecting  the effects of the dramatic



                                      -9-
<PAGE>

declines in interest  rates during the year.  At the end of the year the Company
has adjusted its balance  sheet  composition  to  capitalize  on the current low
interest rate environment.

         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 indicated.
<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                ------------------------------------------------------------------------------------------------
                                             2001                             2000                            1999
                                ------------------------------   ------------------------------   ------------------------------
                                 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              $    6,528  $      231    3.54%  $    2,416  $      154    6.37%  $       56  $        3    5.36%
                                ----------  ----------  ------   ----------  ----------  ------   ----------  ----------  ------

Securities: (5)
  U.S. Treasury and other
    U.S. government
    agencies and corporations   $   25,540  $    1,703    6.67%  $   16,897  $    1,089    6.44%  $   22,028  $    1,415    6.42%
  States and political
    subdivisions (3)                23,236       1,670    7.19%      23,597       1,716    7.27%      25,029       1,833    7.32%
  Other securities                  12,757         955    7.49%       6,682         534    7.99%       5,231         391    7.47%
                                ----------  ----------  ------   ----------  ----------  ------   ----------  ----------  ------

    Total securities (3)            61,533       4,328    7.03%      47,176       3,339    7.08%      52,288       3,639    6.96%
                                ----------  ----------  ------   ----------  ----------  ------   ----------  ----------  ------

Loans (1)(2)(3)(4)                 134,670      11,770    8.74%     133,131      12,422    9.33%     121,783      10,871    8.93%
                                ----------  ----------  ------   ----------  ----------  ------   ----------  ----------  ------

  Total interest-earning
    assets (3)                  $  202,731  $   16,329    8.05%  $  182,723  $   15,915    8.71%  $  174,127  $   14,513    8.33%
                                ==========  ==========  ======   ==========  ==========  ======   ==========  ==========  ======

Interest bearing
liabilities:
Deposits:
  Interest bearing demand       $   34,536  $      797    2.31%  $   31,926  $      925    2.90%  $   33,789  $      974    2.88%
  Savings                           20,285         624    3.08%      18,582         603    3.25%      18,949         613    3.24%
  Other time                       106,457       6,294    5.91%      85,271       5,026    5.89%      80,986       4,334    5.35%
                                ----------  ----------  ------   ----------  ----------  ------   ----------  ----------  ------

    Total deposits                 161,278       7,715    4.78%     135,779       6,554    4.83%     133,724       5,921    4.43%

Federal funds purchased
  and securities sold under
  repurchase agreements                170           7    4.12%       1,065          64    6.01%       6,094         325    5.33%
FHLB borrowings                     10,384         466    4.49%      16,602       1,081    6.51%       7,338         427    5.82%
Long-term debt                          12           1    8.33%          20           2   10.00%          29           2    6.90%
                                ----------  ----------  ------   ----------  ----------  ------   ----------  ----------  ------
  Total interest-bearing
    liabilities                 $  171,844  $    8,189    4.77%  $  153,466  $    7,701    5.02%  $  147,185  $    6,675    4.54%
                                ==========  ==========  ======   ==========  ==========  ======   ==========  ==========  ======

Net interest spread                         $    8,140   3.28%                   $8,214    3.69%              $    7,838    3.79%
                                            ==========  ======               ==========  ======               ==========  ======

Net interest margin                                      4.02%                             4.50%                            4.50%
                                                        ======                           ======                           ======
</TABLE>
____________________
(1)  Installment loans are stated net of unearned income.
(2)  Average loan balances include nonaccrual 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 $577,506 in 2001,  $424,169
     in 2000, and $727,800 in 1999.
(5)  Includes securities available for sale and securities held to maturity.

         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

                                      -10-
<PAGE>

percentage of average interest earning assets. The Company's net interest margin
was 4.02% in 2001,  compared  to 4.50%  during  2000 and 4.50% in 1999.  The net
interest margin decreased in 2001 due to the unprecedented reduction in interest
rates during the year. The yield on average interest-earning assets for the year
was 8.05% in 2001 compared to 8.71% in 2000 while the average balance  increased
10.95% to $202.7  million.  The net interest margin remained the same in 2000 as
in 1999 as the  tax-equivalent  yield on interest  earning  assets  increased to
8.71% in 2000  from  8.33% in 1999 and the cost of funds  increased  to 5.02% in
2000 from 4.54% in 1999. These increases  reflect the general increases in rates
in 2000.

         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.
<TABLE>
<CAPTION>
                                                 2001 Compared to 2000                  2000 Compared to 1999
                                          -----------------------------------    -----------------------------------
                                           Volume        Rate          Net        Volume        Rate          Net
                                          ---------    ---------    ---------    ---------    ---------    ---------
                                                                      (dollars in thousands)
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
Interest income
Federal funds sold                        $     105    ($     28)   $      77    $     150    $       1    $     151
                                          ---------    ---------    ---------    ---------    ---------    ---------
Securities: (1)
  U.S. Treasury and other U. S
    government agencies and
    corporations                                575           39          614         (331)           5         (326)
  States and political subdivisions (2)         (26)         (20)         (46)        (104)         (13)        (117)
  Other securities                              453          (32)         421          114           29          143
                                          ---------    ---------    ---------    ---------    ---------    ---------
    Total  securities                         1,002          (13)         989         (321)          21         (300)
                                          ---------    ---------    ---------    ---------    ---------    ---------

Loans (2)                                       146         (798)        (652)       1,044          507        1,551
                                          ---------    ---------    ---------    ---------    ---------    ---------
    Total interest income                 $   1,253    ($    839)   $     414    $     873    $     529    $   1,402
                                          =========    =========    =========    =========    =========    =========

Interest expense:
Deposits:
  Interest bearing demand                 $      87    ($    215)   ($    128)   ($     54)   $       5    ($     49)
  Savings                                        48          (27)          21          (12)           2          (10)
  Other time                                  1,253           15        1,268          237          455          692
                                          ---------    ---------    ---------    ---------    ---------    ---------
    Total deposits                            1,388         (227)       1,161          171          462          633
Federal funds purchased and securities
   sold under repurchase agreements             (42)         (15)         (57)        (308)         (47)        (261)
FHLB advances                                  (336)        (279)        (615)         597           57          654
Long-term debt                                   (1)          (0)          (1)           0           (0)           0
                                          ---------    ---------    ---------    ---------    ---------    ---------
    Total interest expense                $   1,009    ($    521)   $     488    $     460    $     566    $   1,026
                                          =========    =========    =========    =========    =========    =========
Increase (decrease) in net interest
   income                                 $     244    ($    318)   ($     74)   $     413    ($     37)   $     376
                                          =========    =========    =========    =========    =========    =========
</TABLE>
_____________________
(1)  Includes securities available for sale and securities held to maturity.
(2)  Fully taxable equivalent basis.



                                      -11-
<PAGE>

         Non-Interest Income. The Company's non-interest income increased 16.7%,
or $264,813 to $1,848,691  in 2001 compared to $1,583,878 in 2000.  Deposit fees
and  charges  increased  5.3%  while  the  "other"  category   increased  38.7%.
Primarily,  this  increase  is  attributed  to  our  secondary  mortgage  market
originations,  ATM and other card related  fees,  and earnings of our  insurance
subsidiary.  In addition,  the Company  realized gains on sales of securities in
the amount of $28,460 during 2001 whereas there was no activity in this category
in the previous year.

         For the year ended December 31, 2000, the Company's non-interest income
increased  18.3% to  $1,583,878  from  $1,339,124  in 1999.  Service  charges on
deposit accounts  increased 14.7% and other income increased 30.4%. The increase
in service charges  relates to an increase in the number of deposit  accounts as
well as an increase in the amount of many of the individual charges that had not
been increased in several years.  Our new non-deposit  investment  sales program
contributed to the increase in other income.

         Non-Interest  Expenses.  The Company's  non-interest expenses increased
5.8%,  or  $363,688 in 2001  compared to the  previous  year.  This  increase is
primarily  attributable to expenses related to our new Wellesley branch location
in Henrico County, which was acquired from another financial institution in July
2001.  In  addition to  expenses  related to the new branch and it's  personnel,
pensions and other  employee  benefits  increased  24.6% due to increases in the
costs  of  medical  insurance  coverage  and a full  year  of  company  matching
contributions  to the 401-K plan  adopted in April 2000.  Increases in equipment
repairs and maintenance of 19.6%,  office  supplies,  telephone,  and postage of
18.1% and taxes and licenses of 14.7% all are  attributable to the growth of the
company, including the new branch office.

         Non-interest  expenses for the year ended  December 31, 2000  increased
6.4% from 1999.  The  Company's  efforts to control  non-interest  expenses  are
reflected in the fact that advertising expenses decreased 30.0%, office supplies
and postage expenses  decreased 11.9%, and professional fees and other operating
expenses both decreased less than 1%.  Professional fees include legal fees paid
to defend the Bank in a lawsuit filed in May 1999.  This suit was settled in the
third  quarter  of 2000 with no  significant  financial  impact on the  Company.
Employee  salaries and benefits  expenses  increased 13.5% in 2000 due to normal
turnover and subsequent  replacement  coupled with general increases in the cost
of benefits.  Occupancy and equipment  related  expenses  increased  9.8% as the
depreciation  expense  related to new equipment  placed into service in 1999 was
recognized for a full year.

         Income Taxes.  The Company  reported  income taxes of $747,429 in 2001,
compared  to  $732,629  in 2000 and  $714,045  in 1999.  These  amounts  yielded
effective tax rates of 27.0%, 26.2%, and 26.7%, 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 , western Chesterfield, and western Henrico Counties. Consistent with
its focus on providing community-based financial services, the Company generally
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



                                      -12-
<PAGE>

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.  Many of the  Company's  real  estate  construction  loans are for
pre-sold or  contract  homes.  Builders  are limited as to the number and dollar
amount  of loans  for  speculative  home  construction  based  on the  financial
strength of the borrower and the prevailing market conditions.

         Net loans outstanding increased $7.0 million or 5.3% from year-end 2000
to year-end 2001 compared to an increase of $3.8 million,  or 3.0% from year-end
1999 to year-end 2000. The loan to deposit ratio was 67.0% at December 31, 2001,
compared to 79.8% at December 31, 2000 and 84.5% at December 31, 1999.

         The following  table  summarizes the Company's loan  portfolio,  net of
unearned income:
<TABLE>
<CAPTION>
                                                          At December 31,
                                               -----------------------------------
                                                 2001          2000         1999
                                                 ----          ----         ----
                                                       (dollars in thousands)
<S>                                            <C>          <C>          <C>
         Commercial                            $  30,879    $  22,290    $  20,109
         Real Estate:
            Mortgage                              60,851       60,188       58,058
            Home equity                            5,082        4,334        4,632
            Construction                          24,288       20,022       19,029
                                               ---------    ---------    ---------
               Total real estate               $  90,221    $  84,544    $  81,719
         Bank cards                                  845          840          795
         Installment                              19,505       26,732       27,723
                                               ---------    ---------    ---------
                                                 141,450      134,406      130,346
         Less unearned income                       (200)        (364)        (291)
                                               ---------    ---------    ---------
                                                 141,250      134,042      130,055
         Allowance for loan losses                (1,839)      (1,658)      (1,487)
                                               ---------    ---------    ---------
         Loans, net                            $ 139,411    $ 132,384    $ 128,568
                                               =========    =========    =========
</TABLE>

         As shown in the above  table,  the total  amount of real  estate  loans
outstanding  increased  by $5.7  million  in 2001 and by $2.8  million  in 2000.
During  2001,  the amount of  installment  loans  decreased by $7.2 million from
2000,  compared  to a decrease  of $1.0  million in 2000 from 1999.  Commercial,
financial and  agricultural  loans increased by $8.6 million in 2000 compared to
an increase of $2.2 million in 2000.

         At December 31, 2001, no  concentrations  of loans  exceeding  10.0% of
total loans existed which were not disclosed as a separate category of loans.



                                      -13-
<PAGE>

         The following table shows the contractual maturity distribution of loan
balances  outstanding as of December 31, 2001. Also provided are the amounts due
classified according to the sensitivity to changes in interest rates.
<TABLE>
<CAPTION>
                                                       Maturing
                                     ----------------------------------------------
                                                 After One
                                      Within     but Within    After
                                     One Year    Five Years  Five Years    Total
                                     --------    ----------  ----------    -----
                                                (dollars in thousands)
<S>                                  <C>         <C>         <C>         <C>
         Commercial                  $  12,351   $  10,874   $   7,654   $  30,879
         Real Estate:
           Mortgage                        403       2,001      58,447      60,851
           Home equity                      13         298       4,771       5,082
           Construction                 24,288           -           -      24,288
                                     ---------   ---------   ---------   ---------
         Total real estate              24,704       2,299      63,218      90,221

         Bank cards                          -           -         845         845
         Installment                     1,433      16,400       1,472      19,305
                                     ---------   ---------   ---------   ---------
                                     $  38,488   $  29,573   $  73,189   $ 141,250
                                     =========   =========   =========   =========
         Loans maturing with:
           Fixed interest rates                                          $  46,258
           Variable interest rates                                          94,992
                                                                         ---------
                                                                         $ 141,250
                                                                         =========
</TABLE>

         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 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 $866,660 at December 31, 2001, compared to
$1,332,871  at  December  31, 2000 and  $1,789,292  at December  31,  1999.  The
decrease in non-performing  loans in 2001 reflects a decrease in loans accounted
for on a  non-accrual  basis.  The  decrease  in  non-performing  loans  in 2000
reflects  an  increase  in loans  accounted  for on a  non-accrual  basis  and a
decrease in loans contractually past due 90 days or more. All of these loans are
well secured by real estate and no significant losses are anticipated regardless
of the resolution.

         During 2001,  management  became aware that a small business  financing
revenue bond had defaulted on its interest payments. Subsequently, in accordance
with  the  trust  indenture,  the  trustee  has  foreclosed  on  the  underlying
collateral  securing the bond and the property is currently  being  marketed for
sale.  The bond  was  initially  placed  in  non-accrual  status,  is  currently
classified as a component of other assets, and the principal was written down to
its  anticipated  liquidation  value.  The purchase price of the bond in January
1999 was $190,000 and its current carrying value is $150,000.  No further losses
are anticipated from this bond.

         Management  forecloses on  delinquent  real estate loans when all other
repayment  possibilities  have been  exhausted.  Real  estate  acquired  through
foreclosure  (OREO) was $97,000 at December 31,



                                      -14-
<PAGE>

2001,  compared  to  $246,500  and  $369,274  at  December  31,  2000 and  1999,
respectively.  All but one parcel of  foreclosed  property  held at December 31,
2001  was  in  the  Company's   primary   service  area  and  consisted  of  two
single-family  dwellings  and one building  lot.  The Bank has incurred  current
period expenses related to carrying OREO on its books of $5,000 in 2001, $20,000
in 2000 and  $11,000  in 1999.  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
2001 reflects any systemic problem in the Company's loan portfolio.  At December
31, 2001,  non-accrual  loans totaled $484,460  compared to $950,249 at December
31, 2000 and $108,932 at December 31,  1999.  Based on our present  knowledge of
the status of  individual  and  corporate  creditors  and the  overall  economy,
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, 2001.

         The following table summarizes non-performing loans:
<TABLE>
<CAPTION>
                                                                                       At December 31,
                                                                                ------------------------------
                                                                                2001        2000         1999
                                                                                ----        ----         ----
                                                                                   (dollars in thousands)
<S>                                                                             <C>        <C>          <C>
Loans accounted for on a non-accrual basis                                      $484       $  950       $  109
Loans contractually past due 90 days or more as to interest or
   principal payments (not included in non-accrual loans above)                  382          383        1,680
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                                                                     $866       $1,333       $1,789
                                                                                ====       ======       ======
</TABLE>

         Loans 90 days or more past due are placed on non-accrual  status unless
well secured and in the process of collection.

         In 2001,  $2,288 of interest income was reversed when loans were placed
on non-accrual status or upon foreclosure. In 2000 and 1999, $55,522 and $12,103
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 usually exceeds net charge-offs.



                                      -15-
<PAGE>

         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,
                                                                               ----------------------------------------
                                                                                   2001          2000         1999
                                                                                   ----          ----         ----
                                                                                       (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                      $36           $67           $6
Interest income included in income on the loans                                       -             -            -
</TABLE>

         Management is not aware of any other loans at December 31, 2001,  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 adequacy of its 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
high level of  reserves.  The ratio of the  allowance  for loan  losses to total
loans was 1.30% at December 31, 2001, compared to 1.24% at December 31, 2000 and
1.14% at December 31, 1999.  Management  feels that the growth of the  allowance
for loan losses, while not at the same rate as the portfolio growth, is adequate
to provide for future  losses.  At December 31, 2001 the ratio of the  allowance
for loan losses to non-performing loans was 212.4%, compared to 124.4% and 83.1%
at December 31, 2000 and 1999, respectively. 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.










                                      -16-
<PAGE>

         The  following  table  summarizes  changes  in the  allowance  for loan
losses:
<TABLE>
<CAPTION>
                                                                  2001            2000           1999
                                                                  ----            ----           ----
                                                                         (dollars in thousands)
<S>                                                             <C>             <C>             <C>
Balance at beginning of period                                  $   1,658       $   1,487       $   1,267

Charge-offs:
   Commercial, financial and agricultural                              28              74              61
   Real estate mortgage                                                18              54               -
   Installment loans to individuals                                   184             165              65
                                                                ---------       ---------       ---------
      Total                                                           230             293             126
Recoveries on previous loan losses:
   Commercial, financial and agricultural                              72              10               2
   Installment loans to individuals                                    51              52              36
                                                                ---------       ---------       ---------
      Total                                                           123              62              38
                                                                ---------       ---------       ---------
Net charge-offs                                                      (107)           (231)            (88)
Provision charged to operations                                       288             402             308
                                                                ---------       ---------       ---------
Balance at end of period                                        $   1,839       $   1,658       $   1,487
                                                                =========       =========       =========
Ratio of net loan losses to average net loans outstanding:
   Net charge-offs                                              $     107       $     231       $      88
   Average net loans                                              132,934         131,587         128,411
                                                                ---------       ---------       ---------
                                                                     0.08%           0.18%           0.07%
                                                                ---------       ---------       ---------
Ratio of allowance for loan losses to total loans, net of
   unearned income:
   Allowance for loan losses                                    $   1,839       $   1,658       $   1,487
   Total loans at period end                                      141,250         134,042         130,055
                                                                ---------       ---------       ---------
                                                                     1.30%           1.24%           1.14%
                                                                ---------       ---------       ---------
Ratio of allowance for loan losses to non-performing loans:
   Allowance for loan losses                                    $   1,839       $   1,658       $   1,487
   Non-performing loans                                               866           1,333           1,789
                                                                ---------       ---------       ---------
                                                                   212.36%         124.38%          83.12%
                                                                ---------       ---------       ---------
</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  collectability  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  $288,000  for the year ended
December 31, 2001,  $401,500 and $308,000 for the years ended  December 31, 2000
and 1999, respectively.  In the opinion of



                                      -17-
<PAGE>

management,  the provision  charged to operations has been  sufficient to absorb
the current  year's net loan losses while  continuing  to provide for  potential
future loan losses in view of a somewhat uncertain economy.

         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,
                          ---------------------------------------------------------------------------------------------------------
                                        2001                                2000                                 1999
                          ---------------------------------   ---------------------------------   ---------------------------------
                                                 Percentage
                                     Percentage   of Loans              Percentage                          Percentage
                          Reserve    of Reserve   Category   Reserve    of Reserve  Percentage   Reserve    of Reserve  Percentage
                          for Loan    for Loan    to Total   for Loan    for Loan    of Total    for Loan    for Loan    of Total
                           Losses      Losses       Loans     Losses      Losses      Loans       Losses      Losses      Loans
                           ------      ------       -----     ------      ------      -----       ------      ------      -----
                                                               (dollars in thousands)
<S>                        <C>             <C>         <C>    <C>             <C>         <C>     <C>             <C>         <C>
Commercial                 $  531          29%         22%    $  295          18%         17%     $  205          14%         16%
Real estate                   242          13%         17%       212          13%         15%        196          13%         15%
  construction
Real estate mortgage (1)      830          45%         47%       831          50%         48%        786          53%         48%
Installment (2)               236          13%         14%       320          19%         20%        300          20%         21%
                           ------      ------      ------     ------      ------      ------      ------      ------      ------
                           $1,839         100%        100%    $1,658         100%        100%     $1,487         100%        100%
                           ======      ======      ======     ======      ======      ======      ======      ======      ======
</TABLE>
_____________________
(1)  Includes home-equity loans.
(2)  Includes bank cards.

         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 investment  securities portfolio serves several purposes,
primarily,  liquidity,  safety, and yield. Certain of the securities are pledged
to secure public deposits and others are  specifically  identified as collateral
for repurchase agreements with customers. The remaining portion of the portfolio
is held for investment  yield,  availability  for sale in the event liquidity is
needed, and for general asset liability management purposes.  During 2001, total
securities increased 95.9% to $87.2 million or 35% of total assets,  principally
due to the influx of funds  available  for  investment as a result of the strong
deposit growth coupled with minimal growth in loans. Towards the end of the year
the  Company  has  consciously  increased  its  marketable  securities  holdings
supported  by  borrowings,  in  light  of the  historically  low  interest  rate
environment,  to increase net interest income. During the prior year 2000, total
securities declined by 2% to 44.5 million or 22.1% of total assets.

         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  so
classified  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



                                      -18-
<PAGE>

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
investment grade credit quality with short to intermediate term maturities.

         The  following  table  summarizes  the  book  value  of  the  Company's
securities held to maturity at the date indicated:
<TABLE>
<CAPTION>
                                                                    Book Value at December 31,
                                                              -------------------------------------
                                                                2001           2000          1999
                                                                ----           ----          ----
                                                                       (dollars in thousands)
<S>                                                           <C>           <C>           <C>
         U. S. Treasury and other U. S. government
           agencies and corporations                          $       -     $       -     $   2,006
         Corporate and other debt                                     -             -         1,678
         States and political subdivisions                       13,706        13,420        23,019
                                                              ---------     ---------     ---------
                                                              $  13,706     $  13,420     $  26,703
                                                              =========     =========     =========
</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,
                                                              -------------------------------------
                                                                 2001          2000          1999
                                                                 ----          ----          ----
                                                                       (dollars in thousands)
<S>                                                           <C>           <C>           <C>
         U. S. Treasuries                                     $   1,004     $       -     $       -
         U. S. government agencies and corporations              30,966        13,405        12,413
         Equities                                                 3,022         2,876         2,809
         Mortgage-backed securities                               7,171         2,844         3,444
         Corporate and other debt                                20,455         2,763         1,813
         State and political subdivision                         11,014         9,858             -
                                                              ---------     ---------     ---------
                                                              $  73,632     $  31,746     $  20,479
                                                              =========     =========     =========
</TABLE>

         The book value and average yield of the Company's securities, including
securities  available for sale, at December 31, 2001, by  contractual  maturity,
are  reflected  in the  following  table.  Actual  maturities  will  differ from
contractual  maturities  because  certain  issuers may have the right to call or
prepay obligations with or without call or prepayment penalties. The table below
categorizes  securities according to their contractual maturity,  without regard
for certain  issuers having  unilateral  optional call  provisions  prior to the
bond's contractual maturity, which they may or may not exercise depending on the
overall market level of interest rates at the call date.






                                      -19-
<PAGE>

<TABLE>
<CAPTION>
                                                                                                U. S. Treasury and
                                            States and Political         Mortgage-Backed       other U. S. Agencies
                                                Subdivisions               Securities            and Corporations
                                           -----------------------   -----------------------  ----------------------
                                                        Weighted                 Weighted                Weighted
                                                         Average                  Average                 Average
                                               Amount     Yield         Amount     Yield         Amount    Yield
                                               ------     -----         ------     -----         ------    -----
                                                                    (Dollars in thousands)
<S>                                           <C>         <C>          <C>         <C>          <C>
Due in one year or less                       $   967     7.69%        $   128     6.99%        $     -        -
Due after one year through five years           4,228     6.93%            742     6.27%          2,304     4.18%
Due after five years through ten years          6,896     6.90%            156     8.15%         11,450     7.29%
Due after ten years                            12,629     7.11%          6,145     5.69%         18,216     7.13%
                                              -------     ----         -------     ----         -------     ----
     Total                                    $24,720     7.05%        $ 7,171     5.83%        $31,970     6.97%
                                              =======     ====         =======     ====         =======     ====
</TABLE>
<TABLE>
<CAPTION>
                                                 Corporate
                                                    Debt                     Totals
                                           -----------------------   -----------------------
                                                       Weighted                  Weighted
                                                        Average                   Average
                                               Amount    Yield         Amount     Yield
                                               ------    -----         ------     -----
                                                        (Dollars in thousands)
<S>                                           <C>         <C>          <C>         <C>
Due in one year or less                       $     -        -         $ 1,095     7.61%
Due after one year through five years           7,779     6.65%         15,053     6.33%
Due after five years through ten                5,360     7.90%         23,862     7.32%
years
Due after ten years                             7,316     7.17%         44,306     6.93%
                                              -------     ----         -------     ----
     Total                                    $20,455     7.16%        $84,316     6.94%
                                              =======     ====         =======     ====
</TABLE>

         As shown in the table above,  approximately  $1,095,000  or 1.3% of the
total  portfolio  will mature in one year or less while $15.05  million or 17.9%
will mature after one year but within five years.  The fully taxable  equivalent
average yield on the entire portfolio was 7.03% for 2001,  compared to 7.08% for
2000 and 6.96% for 1999.  The book  value  and the  market  value of the  entire
portfolio were  approximately  equal at December 31, 2001,  while the book value
exceeded the market value by approximately $599,000 at December 31, 2000.

Deposits and Short-Term Borrowings

         The  Company's  predominate  source of funds is deposit  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 17.62%
in 2001 and 1.31% in 2000. The average aggregate  interest rate paid on deposits
was 4.17% in 2001,  compared to 4.17% for 2000 and 3.82% in 1999.  The  majority
(57%) of the Company's  deposits are higher yielding time deposits  because many
of its  customers are  individuals  who seek higher yields than those offered on
savings and demand accounts.






                                      -20-
<PAGE>

         The following table is a summary of average  deposits and average rates
paid:
<TABLE>
<CAPTION>
                                                                       At December 31,
                             ------------------------------------------------------------------------------------------------------
                                          2001                                2000                               1999
                             ------------------------------      ------------------------------      ------------------------------
                             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           $ 23,639     $      -        -%     $ 21,443     $      -        -%     $ 21,469     $      -       -%
Interest bearing demand
  deposits                    34,536          797     2.31%       31,926          925     2.90%       33,789          974    2.88%
Savings deposits              20,285          624     3.08%       18,582          603     3.25%       18,949          613    3.24%
Time deposits                106,457        6,294     5.91%       85,271        5,026     5.89%       80,986        4,334    5.35%
                            --------     --------     ----      --------     --------     ----      --------     --------    ----
    Total                   $184,917     $  7,715     4.17%     $157,222     $  6,554     4.17%     $155,193     $  5,921    3.82%
                            ========     ========     ====      ========     ========     ====      ========     ========    ====
</TABLE>

         The company  does not solicit nor does it have any  brokered  deposits.
The  following  table is a  summary  of time  deposits  of  $100,000  or more by
remaining maturities at December 31, 2001:

                            Time Deposits > $100,000
                            ------------------------
                                 (in thousands)

                 Three months or less                    $  4,491
                 Three to twelve months                    14,616
                 One year to three years                    5,216
                 Over three years                           3,474
                                                         --------
                                                         $ 27,797

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 Bank's Tier 1 Capital  ratio was 10.7% at December  31, 2001,
compared to 12.6% at December 31, 2000 and 12.3% at December 31, 1999. The Total
Capital  ratio was 11.8% at December  31,  2001,  compared to 13.8% and 13.3% at
December  31,  2000 and 1999,  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,  2001,  the Bank's  Leverage  ratio was 8.1%  compared  to 9.3% at
December  31,  2000 and 9.1% at December  31,  1999.  Each of these  exceeds the
required minimum leverage ratio of 3.00%.




                                      -21-
<PAGE>

         The following  tables show risk based capital  ratios and  stockholders
equity to total assets for the Company and it's  principal  subsidiary,  Central
Virginia Bank:
<TABLE>
<CAPTION>
                                                                            December 31,
                                                  -----------------------------------------------------------------
                                                    Regulatory
                                                      Minimum           2001             2000            1999
                                                      -------           ----             ----            ----
<S>                                                      <C>            <C>              <C>             <C>
Consolidated
        Tier 1 risk-based capital                        4.0%           11.5%            12.4%           11.8%
        Total risk-based capital                         8.0%           12.5%            13.4%           12.8%
        Leverage ratio                                   3.0%            8.7%            10.0%            9.5%
        Stockholders' equity to total assets             N/A             8.4%             9.5%            9.0%

Central Virginia Bank
        Tier 1 risk-based capital                        4.0%           10.7%            12.6%           12.3%
        Total risk-based capital                         8.0%           11.8%            13.8%           13.3%
        Leverage ratio                                   3.0%            8.1%             9.3%            9.1%
</TABLE>

         The capital management function is an ongoing process.  Central to this
process is internal equity generation accomplished by earnings retention.  Total
stockholders'  equity  increased  by $1.7  million  in 2001 and by $2.1  million
during 2000 primarily as a result of earnings  retention.  The return on average
equity  was 10.0% in 2001,  compared  to 11.5% in 2000 and 11.3% in 1999.  Total
cash  dividends  were  paid  representing  42% of net  income  for  2001,  while
dividends  represented  38% of net income for 2000 and 39% for 1999.  Book value
per share was $10.69 at December  31,  2001,  compared to $9.91 at December  31,
2000 and $8.88 at December 31, 1999.

         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,  2001,  the Bank  had $3.5  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,  borrowing  from the  Federal  Home Loan  Bank,
purchasing of federal funds, and selling securities under repurchase agreements.
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 has been sufficient to fund the net increase in loans.
However,  in 2000 the Company had to make use of its borrowing  availability  as
the flow of deposits slowed.  In 2001,  although the flow of deposits  increased



                                      -22-
<PAGE>

sufficiently  to fund loan growth,  the Company used  portions of its  borrowing
availability  to purchase  marketable  securities  in an effort to increase  net
interest income.

         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, 2001, the Company had a negative 12-month 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 an  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.







                                      -23-
<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, 2001:
<TABLE>
<CAPTION>
                                              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:
  Securities available for sale              $ 17,198      $ 12,318      $ 21,702      $ 22,229      $ 73,447
  Securities held to maturity                     652         3,591         4,325         5,138        13,706
  Loans                                        57,741        11,512        51,268        20,729       141,250
                                             --------      --------      --------      --------      --------
    Total interest-earning assets            $ 75,591      $ 27,421      $ 77,295      $ 48,096      $228,403
                                             ========      ========      ========      ========      ========

Interest Bearing Liabilities:
  Deposits:
    Interest bearing demand                  $      -      $  3,823      $  3,823      $ 30,593      $ 38,239
    Savings                                         -        23,558             -             -        23,558
    Time deposits, $100,000 and over            4,491        14,616         8,690             -        27,797
    Other time deposits                        16,637        46,409        29,391             -        92,437
  Federal funds purchased and securities
     sold under repurchase agreements           4,763             -             -             -         4,763
  FHLB advances                                10,000         5,000             -             -        15,000
  Long-term debt                                    -             9             -             -             9
                                             --------      --------      --------      --------      --------

    Total interest-bearing liabilities       $ 35,891      $ 88,415      $ 46,904      $ 30,593      $201,803
                                             ========      ========      ========      ========      ========

Period gap                                   $ 39,700      ($60,994)     $ 30,391      $ 17,503      $ 26,600
                                             ========      ========      ========      ========      ========

Cumulative gap                               $ 39,700      ($21,294)     $  9,097      $ 26,600
                                             ========      ========      ========      ========

Ratio of cumulative gap to total
  earning assets                               17.38%        -9.32%         3.98%        11.65%
                                             ========      ========      ========      ========
</TABLE>

         Of the amount of loans due after 12 months,  $20.3 million had floating
or adjustable rates of interest and $51.7 million had fixed rates of interest.

Forward-Looking Statements

         Certain information  contained in this discussion and elsewhere in this
filing may include  "forward-looking  statements"  within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements are generally
identified by phrases such as "the Company  expects," "the Company  believes" or
words of similar  import.  Such  forward-looking  statements  involve  known and
unknown risks  including,  but not limited to,  changes in general  economic and
business  conditions,  interest rate  fluctuations,  competition within and from
outside the banking industry, new products and services in the banking industry,
risk inherent in making loans such as repayment risks and fluctuating collateral
values,  problems with  technology  utilized by the Company,  changing trends in
customer profiles and changes in laws and regulations applicable to the Company.
Although  the  Company  believes  that  its  expectations  with  respect  to the
forward-looking statements are based upon reliable assumptions within the bounds
of



                                      -24-
<PAGE>

its  knowledge of its business and  operations,  there can be no assurance  that
actual  results,  performance  or  achievements  of the Company  will not differ
materially  from any future results,  performance or  achievements  expressed or
implied by such forward-looking statements.

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, 2001 and 2000
         Consolidated  Statements  of Income for the Years  Ended  December  31,
           2001, 2000 and 1999
         Consolidated  Statements  of  Stockholders' Equity  for the Years Ended
           December 31, 2001, 2000 and 1999
         Consolidated Statements of Cash Flows for the Years Ended December 31,
           2001, 2000, 1999
         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.


                                    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 2002 Proxy Statement of the Registrant  furnished to
shareholders  in connection with its Annual Meeting to be held on April 30, 2002
(the "2002 Proxy Statement") is hereby incorporated by reference.

ITEM 10.     EXECUTIVE COMPENSATION

         Information  set forth  under  the  heading  "REMUNERATION"  on pages 6
through 7 of the 2002 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 page 4, of
the 2002 Proxy Statement, is hereby incorporated by reference.




                                      -25-
<PAGE>

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information set forth under the heading "Certain  Transactions" on page
7 of the 2002 Proxy Statement is hereby incorporated by reference.

ITEM 13.     EXHIBITS, LIST 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,
2001.

         With the exception of the information herein expressly  incorporated by
reference,  the 2002 Proxy Statement of the Registrant is not to be deemed filed
as part of this Annual Report on Form 10-KSB.





                                      -26-
<PAGE>







                        CENTRAL VIRGINIA BANKSHARES, INC.

                          CONSOLIDATED FINANCIAL REPORT

                                DECEMBER 31, 2001


<PAGE>




                          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, 2001 and 2000,  and the
related consolidated statements of income,  stockholders' equity, and cash flows
for each of the  three  years in the  period  ended  December  31,  2001.  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 auditing standards generally accepted
in the  United  States of  America.  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, 2001 and 2000,  and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2001, in conformity  with  accounting  principles
generally accepted in the United States of America.




/s/ Mitchell, Wiggins & Company LLP

Richmond, Virginia
January 16, 2002





                                       -1-

<PAGE>

                           C O N T E N T S



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

CONSOLIDATED FINANCIAL STATEMENTS

     Consolidated balance sheets                                          2 - 3

     Consolidated statements of income                                    4 - 5

     Consolidated statements of stockholders' equity                          6

     Consolidated statements of cash flows                                7 - 8

     Notes to consolidated financial statements                          9 - 30
--------------------------------------------------------------------------------


<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS
December 31, 2001 and 2000
<TABLE>
<CAPTION>
ASSETS                                                      2001             2000
-------------------------------------------------------------------------------------
<S>                                                    <C>              <C>
Cash and due from banks                                $   8,103,189    $   7,107,823

Federal funds sold                                                 -        7,577,000
                                                       ------------------------------

           Total cash and cash equivalents                 8,103,189       14,684,823
                                                       ------------------------------



Securities available for sale (Note 2)                    73,447,242       31,062,943



Securities held to maturity (Note 2)                      13,705,639       13,420,115
                                                       ------------------------------
           Total securities                               87,152,881       44,483,058
                                                       ------------------------------



Mortgage loans held for sale                                       -          222,996
                                                       ------------------------------


Loans: (Notes 3, 11, and 12)
     Commercial                                           30,878,707       22,290,303
     Real estate:
        Mortgage                                          60,851,541       60,187,376
        Home equity                                        5,081,698        4,334,434
        Construction                                      24,288,004       20,022,335
     Bank cards                                              845,022          839,621
     Installment                                          19,505,064       26,731,480
        Less unearned discount                              (199,912)        (364,098)
                                                       ------------------------------
           Loans, net of unearned discount               141,250,124      134,041,451
     Allowance for loan losses                            (1,839,398)      (1,657,979)
                                                       ------------------------------
           Loans, net                                    139,410,726      132,383,472
                                                       ------------------------------

Bank premises and equipment, net (Note 4)                  5,212,162        4,424,017
Accrued interest receivable                                1,669,870        1,643,462
Other assets                                               7,874,558        3,091,553
                                                       ------------------------------
                                                       $ 249,423,386    $ 200,933,381
                                                       ==============================
</TABLE>

See Notes to Consolidated Financial Statements.


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                              2001             2000
-------------------------------------------------------------------------------------------
<S>                                                          <C>              <C>
Liabilities
     Deposits:
        Demand deposits                                      $  25,997,211    $  24,725,340
        Interest bearing demand deposits, MMDA
           and NOW accounts                                     38,238,658       30,510,260
        Savings deposits                                        23,557,599       18,109,743
        Time deposits, $100,000 and over:  (Note 6)
           Retail certificates of deposit                       23,984,491       14,934,724
           Retirement accounts                                   3,812,803        3,251,152
        Other time deposits:  (Note 6)
           Retail certificates of deposit                       79,978,065       63,826,839
           Retirement accounts                                  12,458,550       10,452,973
                                                             ------------------------------

                                                               208,027,377      165,811,031


     Federal funds purchased and securities
        sold under repurchase agreements                         4,763,000          248,946
     FHLB borrowings (Note 7)                                   15,000,000       15,000,000
     Note payable (Note 8)                                           9,000           18,000
     Accrued interest payable                                      437,127          464,702
     Other liabilities                                             359,358          213,941
                                                             ------------------------------
                                                               228,595,862      181,756,620
                                                             ------------------------------

Commitments and Contingencies (Note 11)

Stockholders' Equity
     Common stock, $1.25 par value;
        6,000,000 shares authorized; 1,949,229
        and 1,935,799 shares issued and out-
        standing in 2001 and 2000, respectively                  2,436,537        2,419,749
     Surplus                                                     4,573,213        4,433,755
     Retained earnings                                          13,938,489       12,773,209
     Accumulated other comprehensive
        income                                                    (120,715)        (449,952)
                                                             ------------------------------
                                                                20,827,524       19,176,761
                                                             ------------------------------

                                                             $ 249,423,386    $ 200,933,381
                                                             ==============================
</TABLE>


                                      -3-
<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2001, 2000, and 1999
<TABLE>
<CAPTION>
                                                                         2001           2000          1999
--------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>            <C>            <C>
Interest income:
     Interest and fees on loans                                     $ 11,748,661   $ 12,375,451   $ 10,871,174
     Interest on securities:
        U. S. government agencies and corporations                     1,688,414      1,065,319      1,289,021
        U. S. Treasury securities                                         14,727         23,378        126,067
        States and political subdivisions                              1,426,744      1,465,540      1,565,620
        Other                                                            955,352        534,248        390,833
     Interest on federal funds sold                                      231,469        154,000          2,694
                                                                    ------------------------------------------
                                                                      16,065,367     15,617,936     14,245,409
                                                                    ------------------------------------------

Interest expense:
     Interest on deposits                                              7,715,126      6,554,066      5,921,585
     Interest on federal funds purchased and
        securities sold under repurchase agreements                        7,266         63,650        323,991
     Interest on FHLB borrowings                                         465,796      1,081,346        426,645
     Interest on note payable                                                900          1,620          2,340
                                                                    ------------------------------------------
                                                                       8,189,088      7,700,682      6,674,561
                                                                    ------------------------------------------
           Net interest income                                         7,876,279      7,917,254      7,570,848

Provision for loan losses (Note 3)                                       288,000        401,500        308,000
                                                                    ------------------------------------------
           Net interest income after
             provision for loan losses                                 7,588,279      7,515,754      7,262,848
                                                                    ------------------------------------------

Other income:
     Deposit fees and charges                                          1,186,536      1,126,872        982,788
     Realized gain on sales of securities
        available for sale                                                28,460              -          5,788
     Other                                                               633,695        457,006        350,548
                                                                    ------------------------------------------
                                                                       1,848,691      1,583,878      1,339,124
                                                                    ------------------------------------------

Other expenses:
     Salaries and wages                                                2,748,789      2,670,980      2,330,686
     Pensions and other employee benefits                                816,585        655,143        600,662
     Occupancy expense                                                   308,360        297,757        267,921
     Equipment depreciation                                              587,890        546,870        482,864
     Equipment repairs and maintenance                                   264,957        221,634        220,749

</TABLE>
                                   (Continued)


                                      -4-
<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED  STATEMENTS OF INCOME (Continued)
Years Ended  December 31, 2001, 2000, and 1999
<TABLE>
<CAPTION>


                                                                        2001            2000           1999
--------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>            <C>            <C>
Other expenses (Continued):
     Advertising and public relations                                    131,303        122,356        174,857
     Federal insurance premiums                                           27,548         31,143         22,410
     Office supplies, telephone, and postage                             455,036        385,384        437,606
     Taxes and licenses                                                  146,446        127,641        134,325
     Legal and professional fees                                         108,936        285,015        285,551
     Other operating expenses                                          1,074,391        962,630        970,206
                                                                    ------------------------------------------
                                                                       6,670,241      6,306,553      5,927,837
                                                                    ------------------------------------------
           Income before income taxes                                  2,766,729      2,793,079      2,674,135

Income taxes (Note 9)                                                    747,429        732,629        714,045
                                                                    ------------------------------------------

           Net income                                               $  2,019,300   $  2,060,450   $  1,960,090
                                                                    ==========================================

Basic earnings per share                                            $       1.04   $       1.07   $       1.02
                                                                    ==========================================

Diluted earnings per share                                          $       1.04   $       1.07   $       1.02
                                                                    ==========================================
</TABLE>

See Notes to Consolidated Financial Statements.










                                      -5-
<PAGE>


CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2001, 2000, and 1999
<TABLE>
<CAPTION>

                                                                                                        Accumulated
                                                                                                           Other
                                                                 Common                      Retained   Comprehensive
                                                                 Stock        Surplus        Earnings       Income        Total
---------------------------------------------------------------------------------------------------------------------------------
<S>              <C>                                             <C>           <C>            <C>            <C>            <C>
Balance, January 1, 1999                                  $  2,392,684   $ 4,238,689   $ 10,310,831   $    174,927   $ 17,117,131
                                                                                                                     ------------
    Comprehensive income:
      Net income                                                     -             -      1,960,090              -      1,960,090
      Other comprehensive income, net of tax:
        Unrealized holding losses arising during the period,
          net of deferred income taxes of $694,932                   -             -              -     (1,329,420)    (1,329,420)
        Less reclassification adjustment for gains included in
          net income, net of deferred income taxes of $1,968         -             -              -         (3,820)        (3,820)
                                                                                                                     ------------

        Total comprehensive income                                                                                        626,850
                                                                                                                     ------------
    Issuance of common stock:
      14 shares in employee bonuses                                 18           154              -              -            172
      8,995 shares pursuant to dividend
        reinvestment plan                                       11,243        98,846              -              -        110,089
    Cash dividends declared, $.40 per share                          -             -       (767,441)             -       (767,441)
                                                          -----------------------------------------------------------------------
Balance, December 31, 1999                                   2,403,945     4,337,689     11,503,480     (1,158,313)    17,086,801
                                                                                                                     ------------
    Comprehensive income:
      Net income                                                     -             -      2,060,450              -      2,060,450
      Other comprehensive income, net of tax:
        Unrealized holding gains arising during the period,
          net of deferred income taxes of $340,181                   -             -              -        660,352        660,352
        Add adjustment for reclassification of securities
          from held to maturity to available for sale,
          net of deferred income taxes of $24,732                    -             -              -         48,009         48,009
                                                                                                                     ------------

        Total comprehensive income                                                                                      2,768,811
                                                                                                                     ------------
    Issuance of common stock:
      21 shares in employee bonuses                                 26           159              -              -            185
      12,622 shares pursuant to dividend
        reinvestment plan                                       15,778        95,907              -              -        111,685
    Cash dividends declared, $.41 per share                          -             -       (790,721)             -       (790,721)
                                                          -----------------------------------------------------------------------
Balance, December 31, 2000                                   2,419,749     4,433,755     12,773,209       (449,952)    19,176,761
                                                                                                                     ------------
    Comprehensive income:
      Net income                                                     -             -      2,019,300              -      2,019,300
      Other comprehensive income, net of tax:
        Unrealized holding gains arising during the period,
          net of deferred income taxes of $179,284                   -             -              -        348,021        348,021
        Less reclassification adjustment for gains included in
          net income, net of deferred income taxes of $9,676         -             -              -        (18,784)       (18,784)
                                                                                                                     ------------

        Total comprehensive income                                                                                      2,348,537
                                                                                                                     ------------
    Issuance of common stock:
      13,430 shares pursuant to dividend
        reinvestment plan                                       16,788       139,458              -              -        156,246
    Cash dividends declared, $.44 per share                          -             -       (854,020)             -       (854,020)
                                                          -----------------------------------------------------------------------
Balance, December 31, 2001                                $  2,436,537   $ 4,573,213   $ 13,938,489   $   (120,715)  $ 20,827,524
                                                          ===============================================================--------

</TABLE>


                                      -6-
<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED  STATEMENTS OF CASH FLOWS
Years Ended December 31, 2001,  2000, and 1999
<TABLE>
<CAPTION>
                                                                2001            2000           1999
-------------------------------------------------------------------------------------------------------
<S>                                                        <C>             <C>             <C>
Cash Flows From Operating Activities
     Net income                                            $  2,019,300    $  2,060,450    $  1,960,090
     Adjustments to reconcile net income
        to net cash provided by operating activities:
        Depreciation                                            683,956         636,795         574,155
        Amortization                                              6,116               -               -
        Deferred income taxes                                   (84,249)        (49,301)        (63,822)
        Provision for loan losses                               288,000         401,500         308,000
        Amortization and accretion on securities                 21,021          50,194          87,306
        Realized gain on sales of securities
           available for sale                                   (28,460)              -          (5,788)
        (Gain) loss on sale of foreclosed real estate           (10,462)          4,040          32,775
        Change in operating assets and liabilities:
           (Increase) decrease in assets:
               Mortgage loans held for sale                     222,996         137,776         398,694
               Accrued interest receivable                      (26,408)       (237,410)         61,543
               Other assets                                     (68,398)       (176,081)       (679,071)
           Increase (decrease) in liabilities:
               Accrued interest payable                         (27,575)         69,978          18,947
               Other liabilities                                145,417        (125,731)         46,079
                                                           --------------------------------------------
               Net cash provided by operating
                   activities                                 3,141,254       2,772,210       2,738,908
                                                           --------------------------------------------

Cash Flows From Investing Activities
     Proceeds from maturities of
        securities held to maturity                             985,000       1,435,000       2,189,100
     Purchase of securities held to maturity                 (1,295,925)              -      (1,304,877)
     Proceeds from sales and maturities of
        securities available for sale                        24,103,349         597,628       8,757,685
     Purchase of securities available for sale              (66,146,300)        (66,600)       (638,900)
     Purchase of bank owned life insurance                   (4,750,000)              -               -
     Net increase in loans made to customers                 (7,315,254)     (4,490,771)    (19,310,090)
     Net purchases of premises and equipment                 (1,472,101)       (458,605)       (649,593)
     Proceeds from sale of foreclosed real estate               159,962         377,734         163,950
     Net expenditures on foreclosed real estate                       -               -         (86,274)
     Increase in cash value, life insurance                     (15,245)        (34,108)        (19,331)
                                                           --------------------------------------------
           Net cash (used in) investing activities          (55,746,514)     (2,639,722)    (10,898,330)
                                                           --------------------------------------------
</TABLE>

                                   (Continued)


                                      -7-
<PAGE>

CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 2001, 2000, and 1999
<TABLE>
<CAPTION>

                                                               2001            2000            1999
------------------------------------------------------------------------------------------------------
<S>                                                       <C>             <C>             <C>
Cash Flows From Financing Activities
     Net increase (decrease) in deposits                    42,216,346      13,600,030      (2,515,800)
     Net increase (decrease) in federal funds
        purchased and securities sold
        under repurchase agreements                          4,514,054         (24,096)     (4,807,150)
     Net proceeds (repayment) on FHLB borrowings                     -      (4,000,000)     14,000,000
     Repayment of note payable                                  (9,000)         (9,000)         (9,000)
     Net proceeds from issuance
        of common stock                                        156,246         111,870         110,261
     Dividends paid                                           (854,020)       (790,721)       (767,441)
                                                          --------------------------------------------
           Net cash provided by financing
               activities                                   46,023,626       8,888,083       6,010,870
                                                          --------------------------------------------

           Increase (decrease) in cash and
               cash equivalents                             (6,581,634)      9,020,571      (2,148,552)

Cash and cash equivalents, beginning                        14,684,823       5,664,252       7,812,804
                                                          --------------------------------------------

Cash and cash equivalents, ending                         $  8,103,189    $ 14,684,823    $  5,664,252
                                                          ============================================

Supplemental Disclosures Of
     Cash Flow Information
        Interest paid                                     $  8,216,663    $  7,630,704    $  6,655,614
        Income taxes paid                                      691,690         802,292         777,546

Supplemental Schedule Of Noncash
     Investing Activities
        Other real estate, equipment
           and investments acquired
           in settlement of loans                                    -         274,000               -
</TABLE>

See Notes to Consolidated Financial Statements.






                                      -8-
<PAGE>

CENTRAL 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 seven branches  located in the
Virginia counties of Powhatan, Chesterfield, Henrico, 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  Commonwealth  of Virginia.  The  Corporation's
primary purpose is to own membership interests in two insurance-related  limited
liability companies.

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.

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, 2001
and 2000.

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.



                                       -9-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 1.  Significant Accounting Policies (Continued)

A majority of the Bank's loan portfolio  consists of  single-family  residential
loans  in  the  Virginia  counties  of  Powhatan,  Chesterfield,   Henrico,  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.

Securities:  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, 2001, 2000, and 1999.

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.




                                      -10-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 1.  Significant Accounting Policies (Continued)

Loans and  allowance  for loan losses:  Loans are stated at the amount of unpaid
principal,  reduced by unearned  discount and fees and an allowance for possible
loan losses.

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.

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.  The allowance is
increased  by a provision  for loan  losses,  which is charged to  expense,  and
reduced by charge-offs, net of recoveries.

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.

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. Impaired loans are measured based on the present value of
payments  expected to be received,  using the historical  effective loan rate as
the discount rate.  Alternatively,  measurement  also may be based on observable
market  prices or, for loans that are solely  dependent  on the  collateral  for
repayment,  measurement  may be based on the fair value of the  collateral.  The
Bank does not  aggregate  loans for risk  classification.  Loans  that are to be
foreclosed  are  measured  based on the fair  value  of the  collateral.  If the
recorded  investment in the impaired  loan exceeds the measure of fair value,  a
valuation  allowance is  established  as a component of the  allowance  for loan
losses.

The basic policy of the Bank is to charge off loans when the loss can be readily
determined.  Changes in the allowance for loan losses relating to impaired loans
are charged or credited to the provision for loan losses.

Loans,  including impaired loans, are generally classified as nonaccrual if they
are past due as to maturity or payment of  principal or interest for a period of
more than 90 days,  unless  such loans are well  secured  and in the  process of
collection.  Loans that are on a current payment status or past due less than 90
days may also be  classified  as  nonaccrual  if  repayment in full of principal
and/or  interest is in doubt.  Loans may be returned to accrual  status when all
principal  and interest  amounts  contractually  due are  reasonably  assured of
repayment.




                                     -11-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 1.  Significant Accounting Policies (Continued)

When a loan  is  classified  as  nonaccrual,  all  interest  receivable  on that
particular  loan is  charged  back to  income  at that  time.  When  the  future
collectibility of the recorded loan balance is expected,  interest income may be
recognized on a cash basis. On charged-off loans, cash receipts in excess of the
amount  charged to the allowance for loan losses are recognized as income on the
cash basis.

Bank premises and equipment: Bank premises and equipment are stated at cost less
accumulated  depreciation.  Expenditures  for betterments and major renewals are
capitalized  and ordinary  maintenance  and repairs are charged to operations as
incurred.  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.

Advertising costs:  Advertising costs are expensed as incurred.

Income  taxes:  The  provision  for income taxes relates to items of revenue and
expenses recognized for financial  accounting purposes during each of the years.
The  actual  current  liability  may be more or less  than  the  charge  against
earnings due to the effect of deferred 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.




                                      -12-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 1.  Significant Accounting Policies (Continued)

Earnings  per share:  The  following  data show the  amounts  used in  computing
earnings per share and the effect on income and the weighted  average  number of
shares of dilutive  potential  common stock.  Options on 118,025,  132,325,  and
127,325  shares  of  common  stock as of  December  31,  2001,  2000,  and 1999,
respectively,  were not included in computing  diluted EPS because  their effect
was antidilutive.
<TABLE>
<CAPTION>
                                                         2001           2000          1999
                                                    ------------------------------------------
<S>                                                 <C>            <C>            <C>
Income available to common stockholders
     used in basic EPS                              $  2,019,300   $  2,060,450   $  1,960,090
                                                    ==========================================

Weighted average number of common
     shares used in basic EPS                          1,941,603      1,929,230      1,919,132

Effect of dilutive securities:
     Stock options                                         1,575              -              -
                                                    ------------------------------------------

Weighted number of common shares and
     dilutive potential stock used in diluted
     EPS                                               1,943,178      1,929,230      1,919,132
                                                    ==========================================
</TABLE>

New accounting standards: In June 1998, the Financial Accounting Standards Board
(FASB)  issued  Financial  Accounting  Standard  ("FAS")  133,  "Accounting  for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative  instruments and hedging activities.  Certain
provisions  of FAS 133 were  amended by FAS 137 and FAS 138.  Under FAS 133,  as
amended,  derivatives  are  recognized  on the balance sheet at fair value as an
asset or liability. Changes in the fair value of derivatives will be reported as
a component of other comprehensive  income or recognized as earnings through the
income statement  depending on the nature of the instrument.  Additionally,  FAS
133  permits  the  reclassification  of  securities  from  held to  maturity  to
available  for sale upon  adoption.  FAS 133 is  effective  for all  quarters of
fiscal years beginning after June 15, 2001, with earlier adoption permitted.

Upon  adoption of FAS 133 and as of December 31, 2001 and 2000,  the Company did
not have any derivatives  and did not  participate in any hedging  activities as
defined in FAS 133.

During the year ended  December 31, 2000,  held to maturity  securities  with an
amortized  cost  of  $11,617,625   and  a  market  value  of  $11,690,366   were
reclassified as available for sale as permitted under  applicable  provisions of
FAS 133. The unrealized  gain of $72,741 less related  deferred  income taxes of
$24,732 was recorded as an increase to accumulated other comprehensive income.




                                      -13-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 2.  Securities

Carrying amounts and approximate market values of securities  available for sale
are as follows:
<TABLE>
<CAPTION>
                                                                    December 31, 2001
                                       -----------------------------------------------------------------
                                                             Gross           Gross          Approximate
                                           Amortized       Unrealized      Unrealized         Market
                                             Cost            Gains           Losses            Value
                                       -----------------------------------------------------------------
<S>                                    <C>              <C>              <C>              <C>
U. S. treasuries                       $    1,004,174   $        8,016   $            -   $    1,012,190
U. S. government agencies
     and corporations                      30,965,957          116,414          181,283       30,901,088
Equities                                    3,021,561           42,385          126,932        2,937,014
Mortgage-backed securities                  7,171,494           79,812           57,205        7,194,101
Corporate and other debt                   20,454,519          199,540          253,884       20,400,175
States and political subdivisions          11,013,921          160,724          171,971       11,002,674
                                       -----------------------------------------------------------------
                                       $   73,631,626   $      606,891   $      791,275   $   73,447,242
                                       =================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                                    December 31, 2000
                                       -----------------------------------------------------------------
                                                            Gross            Gross          Approximate
                                          Amortized       Unrealized       Unrealized         Market
                                            Cost            Gains            Losses            Value
                                       -----------------------------------------------------------------
<S>                                    <C>              <C>              <C>              <C>
U. S. government agencies
     and corporations                  $   13,404,535   $        8,110   $      374,861   $   13,037,784
Equities                                    2,876,230            8,400          264,427        2,620,203
Mortgage-backed securities                  2,843,993            4,958           36,433        2,812,518
Corporate and other debt                    2,763,357           32,177          108,054        2,687,480
States and political subdivisions           9,857,721          156,658          109,421        9,904,958
                                       -----------------------------------------------------------------
                                       $   31,745,836   $      210,303   $      893,196   $   31,062,943
                                       =================================================================
</TABLE>







                                      -14-

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 2.  Securities (Continued)

The amortized cost and approximate market value of securities available for sale
at December 31, 2001, 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              10,544,048        10,401,864
Due after five years through ten years             20,084,483        20,203,821
Due after ten years                                32,810,040        32,710,442
Equities                                            3,021,561         2,937,014
Mortgage-backed securities                          7,171,494         7,194,101
                                             -----------------------------------
                                                $  73,631,626     $  73,447,242
                                             -----------------------------------


Carrying  amounts and  approximate  market  values of  securities  being held to
maturity are as follows:
<TABLE>
<CAPTION>
                                                                   December 31, 2001
                                            ------------------------------------------------------------------
                                                                  Gross           Gross         Approximate
                                                Amortized       Unrealized     Unrealized         Market
                                                   Cost           Gains          Losses            Value
                                            ------------------------------------------------------------------
<S>                                            <C>              <C>             <C>            <C>
States and political subdivisions              $ 13,705,639     $ 238,984       $  77,850      $ 13,866,773
                                            ==================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                                   December 31, 2000
                                            ------------------------------------------------------------------
                                                                  Gross           Gross         Approximate
                                                Amortized       Unrealized     Unrealized         Market
                                                   Cost           Gains          Losses            Value
                                            ------------------------------------------------------------------
<S>                                            <C>              <C>             <C>            <C>
States and political subdivisions              $ 13,420,115     $ 197,632       $ 113,727      $ 13,504,020
                                            ==================================================================
</TABLE>









                                      -15-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 2.  Securities (Continued)

The amortized  cost and  approximate  market value of  securities  being held to
maturity at December 31, 2001, by contractual maturity, are shown below.

                                                                   Approximate
                                                  Amortized           Market
                                                    Cost               Value
                                               ---------------------------------
Due in one year or less                         $     966,790      $    980,522
Due after one year through five years               3,768,083         3,858,489
Due after five years through ten years              3,620,617         3,639,598
Due after ten years                                 5,350,149         5,388,164
                                               ---------------------------------
                                                $  13,705,639      $ 13,866,773
                                               =================================


Securities  with an amortized  cost of $2,092,878  and  $2,485,373  and a market
value of $2,131,947 and $2,498,931 at December 31, 2001 and 2000,  respectively,
were pledged as collateral on public deposits and for other purposes as required
or permitted by law.

Note 3.  Loans

Major classifications of loans are summarized as follows:

                                                         December 31,
                                             -----------------------------------
                                                    2001               2000
                                             -----------------------------------
Commercial                                     $  30,878,707       $ 22,290,303
Real estate:
     Mortgage                                     60,851,541         60,187,376
     Home equity                                   5,081,698          4,334,434
     Construction                                 24,288,004         20,022,335
Bank cards                                           845,022            839,621
Installment                                       19,505,064         26,731,480
                                             -----------------------------------
                                                 141,450,036        134,405,549
Less unearned discount                              (199,912)          (364,098)
                                             -----------------------------------
                                                 141,250,124        134,041,451
Allowance for loan losses                         (1,839,398)        (1,657,979)
                                             -----------------------------------
Loans, net                                     $ 139,410,726      $ 132,383,472
                                             ===================================





                                      -16-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 3.  Loans (Continued)

Changes in the allowance for loan losses were as follows:

                                             Years Ended December 31,
                                     -------------------------------------------
                                          2001           2000           1999
                                     -------------------------------------------
Balance, beginning                    $ 1,657,979    $ 1,486,900    $ 1,267,192
   Provision charged to operations        288,000        401,500        308,000
   Loans charged off                     (229,305)      (292,494)      (126,639)
   Recoveries                             122,724         62,073         38,347
                                     -------------------------------------------
Balance, ending                       $ 1,839,398    $ 1,657,979    $ 1,486,900
                                     ===========================================


At  December  31,  2001,  the Bank had loans  amounting  to  $484,460  that were
specifically  classified  as  impaired.  The average  balance of impaired  loans
amounted to  approximately  $711,102 for the year ended  December 31, 2001.  The
allowance  for loan  losses  related to  impaired  loans  amounted to $72,668 at
December 31, 2001.  The  following is a summary of cash  receipts on these loans
and how they were applied in 2001:

Cash receipts applied to reduce
     principal balance                      $   312,166
Cash receipts recognized as
     interest income                             38,756
                                            -----------
Total cash receipts                         $   350,922
                                            ===========


Nonaccruing  loans  (principally  installment,  commercial,  and mortgage loans)
totaled $484,460,  $950,249,  and $108,932 at December 31, 2001, 2000, and 1999,
respectively,  which had the effect of  reducing  net income  $35,738  ($.02 per
common  share),  $67,007 ($.03 per common  share),  and $5,975 ($.003 per common
share), for the years then ended, respectively.

Note 4.  Bank Premises and Equipment

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

                                                    December 31,
                                               2001             2000
                                          ------------------------------
Land                                        $   900,270     $   544,802
Buildings and improvements                    3,665,499       3,120,849
Furniture and equipment                       5,710,778       5,140,566
                                          ------------------------------
                                             10,276,547       8,806,217
Less accumulated depreciation                 5,064,385       4,382,200
                                          ------------------------------
                                            $ 5,212,162     $ 4,424,017
                                          ==============================




                                      -17-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 5.  Investment in Bank Owned Life Insurance

On December 28, 2001, the Bank invested  $4,750,000 in bank owned life insurance
policies.  The earnings from these policies will be used to offset  increases in
employee  benefit costs. The investment in bank owned life insurance is included
in other assets on the accompanying  consolidated  balance sheet at December 31,
2001.

Note 6.  Maturities of Certificates of Deposits

The scheduled  maturities of  certificates of deposits at December 31, 2001, are
as follows:

Year Ending
December 31
----------------------------------------------
2002                            $  82,152,265
2003                               20,304,318
2004                                6,693,253
2005                                8,775,888
2006 and later                      2,308,185
                              ----------------
                                $ 120,233,909
                              ================

Note 7.  FHLB Borrowings

The borrowings from the Federal Home Loan Bank of Atlanta,  Georgia, are secured
by the mortgage  loan  portfolio of Central  Virginia  Bank.  The  borrowings at
December 31, 2001 and 2000, consist of the following:
<TABLE>
<CAPTION>
                                                                    2001                2000
                                                             -------------------------------------
<S>                                                            <C>                  <C>
Interest payable quarterly at a variable rate
     (currently  6.28%), principal due
     and payable on July 8, 2002                               $           -        $ 5,000,000
Interest payable monthly at a fixed rate
     of 6.83%, principal due and payable
     on January 17, 2001                                                   -          5,000,000
Interest payable daily at a variable rate
     (currently 6.35%), principal due and
     payable on September 19, 2001                                         -          5,000,000
Interest payable quarterly at a fixed rate
     of 4.45%, principal due and payable
     on January 5, 2011, callable quarterly
     beginning January 7, 2002                                     5,000,000                  -
Interest payable quarterly at a fixed rate
     of 4.03%, principal due and payable
     on March 8, 2011, callable quarterly
     beginning September 10, 2001                                  5,000,000                  -

</TABLE>


                                      -18-

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 7.  FHLB Borrowings (Continued)

                                                      2001            2000
                                                 -------------------------------
Interest payable  quarterly at a fixed rate
     of 3.14%,  principal due and payable
     on December 5, 2011, callable quarterly
     beginning December 5, 2003                       5,000,000               -
                                                 -------------------------------
                                                   $ 15,000,000    $ 15,000,000
                                                 ===============================

Note 8.  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, 2001 and 2000,  the balance of the
note was $9,000 and $18,000, respectively.

Note 9.  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,
2001, 2000, and 1999, are as follows:

                                            2001          2000          1999
                                      ------------------------------------------
Currently payable                         $ 831,678     $ 781,930     $ 777,867
Deferred                                    (84,249)      (49,301)      (63,822)
                                      ------------------------------------------
                                          $ 747,429     $ 732,629     $ 714,045
                                      ------------------------------------------


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,
                                               -----------------------------------------
                                                   2001           2000          1999
                                               -----------------------------------------
<S>                                              <C>            <C>           <C>
Computed "expected" tax expense                  $ 940,688      $ 949,647     $ 909,250
Tax-exempt interest                               (160,368)      (165,140)     (175,510)
Tax-exempt loan interest                           (14,325)       (31,078)      (31,446)
Disallowance of interest expense
     deduction for the portion attributable
     to carrying tax-exempt obligations             24,276         25,496        23,275
Other                                              (42,842)       (46,296)      (11,524)
                                               -----------------------------------------
                                                 $ 747,429      $ 732,629     $ 714,045
                                               -----------------------------------------
</TABLE>


                                      -19-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 9.  Income Tax Matters (Continued)

The deferred income tax provision consists of the following items:
<TABLE>
<CAPTION>
                                                                        Years Ended December 31,
                                                               ------------------------------------------
                                                                     2001          2000          1999
                                                               ------------------------------------------
<S>                                                                <C>           <C>           <C>
Difference between loan loss provision charged
     to operating expense and the bad debt
     deduction taken for income tax purposes                       $ (80,123)    $ (36,485)    $ (49,803)
Interest income on nonaccrual loans
     recognized for federal income tax pur-
     poses, but not recognized for financial
     statements until received                                         1,165       (23,063)        5,648
Decrease in value of foreclosed real estate and
     other assets recognized for financial statements,
     but not recognized for income tax purposes until
     realized                                                        (13,600)       (1,540)      (12,580)
Deduction for uncollectible late charges
     recognized for financial statements, but not
     recognized for income tax purposes until realized                 7,335          (438)      (15,150)
Accretion of discount recognized for
     financial statements, but not recognized
     for income tax purposes until realized                           (2,024)        1,591       (11,219)
Difference between the depreciation methods
     used for financial statements and for income
     tax purposes                                                      2,998        10,634        19,282
                                                               ------------------------------------------
                                                                   $ (84,249)    $ (49,301)    $ (63,822)
                                                               ==========================================
</TABLE>



                                      -20-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 9.  Income Tax Matters (Continued)

The  components  of the net  deferred  tax asset  included in other assets is as
follows at December 31:
<TABLE>
<CAPTION>
                                                             2001          2000
                                                        ---------------------------
<S>                                                        <C>           <C>
Deferred tax assets:
     Allowance for loan losses                             $ 566,533     $ 503,033
     Less valuation allowance                               (151,038)     (167,661)
                                                        ---------------------------
                                                             415,495       335,372
     Devaluation reserve on foreclosed property
        and other assets                                      27,720        14,120
     Unrealized loss on securities
         available for sale                                   63,670       232,941
     Reserve for uncollectible late charges                    8,253        15,588
     Interest income on nonaccrual loans                      26,081        27,246
                                                        ---------------------------
                                                             541,219       625,267
                                                        ---------------------------

Deferred tax liabilities:
     Property and equipment                                  126,690       123,692
     Securities                                                8,410        10,434
                                                        ---------------------------
                                                             135,100       134,126
                                                        ---------------------------

Net deferred tax asset                                     $ 406,119     $ 491,141
                                                        ===========================
</TABLE>

Note 10.  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 full-time  employees are
covered.  During the year ended December 31, 2000, the plan was amended to allow
additional  employee  voluntary  contributions  through a 401(k) plan.  The Bank
matches employees'  contributions based on a percentage of salary contributed by
participants.  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 total  contributions for the years ended December 31,
2001, 2000, and 1999, were $265,765, $192,405, and $184,372, respectively.

Note 11.  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.



                                      -21-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 11.  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, 2001 and 2000, is as follows:

                                              2001              2000
                                       ----------------------------------
Commitments to extend credit              $ 36,047,446      $ 22,725,094
Standby letters of credit                    2,985,595         1,118,314
                                       ----------------------------------
                                          $ 39,033,041      $ 23,843,408
                                       ==================================


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.

Borrowing facilities:  The Bank has entered into various borrowing  arrangements
with other financial institutions for Fed Funds, and other borrowings. The total
amount of borrowing facilities available at December 31, 2001, was approximately
$23,300,000.

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 3.  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.






                                      -22-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 12.  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,
                             -----------------------------
                                  2001            2000
                             -----------------------------
Balance, beginning            $ 2,321,131     $ 2,355,505
     New loans                    741,166       1,619,110
     Repayments                  (854,022)     (1,653,484)
                             -----------------------------
Balance, ending               $ 2,208,275     $ 2,321,131
                             -----------------------------


Note 13.  Incentive Stock Option Plan

The  Corporation has a Stock Plan that provides for the grant of Incentive Stock
Options up to a maximum of 190,000 shares of common stock. This Plan was adopted
to foster  and  promote  the  long-term  growth  and  financial  success  of the
Corporation by assisting in recruiting and retaining directors and key employees
by enabling  individuals  who  contribute  significantly  to the  Corporation to
participate in its future success and to associate their interests with those of
the  Corporation.  The options  were  granted at the market value on the date of
each grant.  The maximum  term of the options is ten years and  one-third of the
options vest at the grant date.  Another  one-third of the options vest upon the
first  anniversary  of the grant date and the  remaining  options  vest upon the
second  anniversary of the grant date.  Options were granted in 2000 to officers
that  comprised  the Bank's Y2K  committee.  Options were granted in 1999 to all
directors,  officers,  full and part-time  employees with a minimum of two years
experience at the date of grant.

The following table presents a summary of options under the Plan at December 31:

                                                     Shares Under Options
                                             -----------------------------------
                              Option Price       2001         2000        1999
                            ----------------------------------------------------
Outstanding, beginning        $           -    132,325      127,325           -
     Options granted            9.125-13.50          -        8,000     132,475
     Options exercised                    -          -            -           -
     Options forfeited                13.50     (6,300)      (3,000)     (5,150)
                            ----------------------------------------------------
Outstanding, ending           $9.125-$13.50    126,025      132,325     127,325
                            ----------------------------------------------------

Options exercisable at December 31, 2001, 2000, and 1999, were 123,358,  85,550,
and 42,441, respectively.


                                      -23-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 13.  Incentive Stock Option Plan (Continued)

The Corporation applies APB Opinion 25 and related interpretations in accounting
for its  plan.  Accordingly,  no  compensation  cost  has been  recognized.  Had
compensation cost for the Corporation's  stock option plan been determined based
on the  fair  value at the  grant  date  consistent  with  the  methods  of FASB
Statement 123, the  Corporation's net income and net income per share would have
been reduced to the pro forma amounts  indicated  below.  In accordance with the
transition  provisions  of FASB  Statement  123, the pro forma  amounts  reflect
options with grant dates  subsequent  to January 1, 1995.  There were no options
granted during the year ended December 31, 2001.

                                        2001            2000            1999
                                  ----------------------------------------------
Net income
     As reported                    $ 2,019,300     $ 2,060,450     $ 1,960,090
                                  ==============================================

     Pro forma                      $ 1,976,668     $ 1,987,587     $ 1,891,012
                                  ==============================================

Basic earnings per share
     As reported                    $      1.04     $      1.07     $      1.02
                                  ==============================================

     Pro forma                      $      1.02     $      1.03     $      0.99
                                  ==============================================

Diluted earnings per share
     As reported                    $      1.04     $      1.07     $      1.02
                                  ==============================================

     Pro forma                      $      1.02     $      1.03     $      0.99
                                  ==============================================


For purposes of computing the pro forma amounts  indicated above, the fair value
of each  option  on the date of  grant  is  estimated  using  the  Black-Scholes
option-pricing  model with the following  assumptions for the grants in 2000 and
1999:  dividend yield of 4.05%,  expected  volatility of 20%, risk-free interest
rate of 5.0% and an  expected  option  life of 5 years.  The fair  value of each
option granted in 2000 was $1.06.  The fair value of each option granted in 1999
was approximately $1.57.

Note 14.  Regulatory Matters

The  Corporation  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 Corporation's  financial  statements.
Under  capital  adequacy  guidelines  and the  regulatory  framework  for prompt
corrective  action,  the Corporation must meet specific capital  guidelines that
involve  quantitative  measures of the Corporation's  assets,  liabilities,  and
certain  off-balance  sheet  items as  calculated  under  regulatory  accounting
practices. The Corporation's capital amounts and classification are also subject
to qualitative  judgments by the regulators about  components,  risk weightings,
and other factors.  Prompt  corrective  action  provisions are not applicable to
bank holding companies.


                                      -24-

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 14.  Regulatory Matters (Continued)

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the  Corporation 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,  2001,  that the
Corporation meets all capital adequacy requirements to which it is subject.

As of December 31, 2001, the most recent  notification  from the Federal Reserve
Bank  categorized  the  Corporation  as well  capitalized  under the  regulatory
framework for prompt  corrective  action. To be categorized as well capitalized,
the Corporation 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  Corporation's  and  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, 2001:
     Total Capital (to Risk Weighted Assets)
        Consolidated                            $ 22,462   12.50%     $ 14,376    8.00%              N/A
        Central Virginia Bank                     21,003   11.77%       14,276    8.00%     $ 17,845    10.00%

     Tier I Capital (to Risk Weighted Assets)
        Consolidated                              20,623   11.48%        7,186    4.00%              N/A
        Central Virginia Bank                     19,164   10.74%        7,137    4.00%       10,706     6.00%

     Tier I Capital (to Average Assets)
        Consolidated                              20,623    8.69%        9,493    4.00%              N/A
        Central Virginia Bank                     19,164    8.13%        9,429    4.00%       11,786     5.00%

As of December 31, 2000:
     Total Capital (to Risk Weighted Assets)
        Consolidated                              21,286   13.39%       12,718    8.00%              N/A
        Central Virginia Bank                     19,767   13.79%       11,467    8.00%       14,334    10.00%

     Tier I Capital (to Risk Weighted Assets)
        Consolidated                              19,627   12.35%        6,357    4.00%              N/A
        Central Virginia Bank                     18,109   12.63%        5,735    4.00%        8,603     6.00%

     Tier I Capital (to Average Assets)
        Consolidated                              19,627   10.00%        7,851    4.00%              N/A
        Central Virginia Bank                     18,109    9.29%        7,796    4.00%        9,745     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 $3,493,186 in
2001 without regulatory approval.


                                      -25-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 15.  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 Corporation and subsidiary.

The  following  methods  and  assumptions  were  used  by  the  Corporation  and
subsidiary in estimating the fair value of 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.

Mortgage  loans held for sale:  The carrying  amount of mortgage  loans held for
sale approximate their fair values.

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.

Accrued interest  receivable and accrued interest payable:  The carrying amounts
of accrued interest  receivable and accrued interest payable  approximate  their
fair values.

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.

Federal funds purchased and securities  sold under  repurchase  agreements:  The
carrying   amounts  for  federal  funds  purchased  and  securities  sold  under
repurchase agreements approximate their fair values.


                                      -26-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 15.  Fair Value of Financial Instruments (Continued)

FHLB borrowings:  The carrying amount of FHLB borrowings  approximate their fair
values.

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

The following is a summary of the carrying  amounts and estimated fair values of
the Corporation and  subsidiary's  financial  assets and liabilities at December
31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                                 2001                             2000
                                                   -------------------------------------------------------------------
                                                       Carrying       Estimated          Carrying         Estimated
                                                        Amount        Fair Value          Amount          Fair Value
                                                   -------------------------------------------------------------------
<S>                                                 <C>              <C>               <C>               <C>
Financial assets:
     Cash and cash equivalents                      $  8,103,189     $  8,103,189      $ 14,684,823      $ 14,684,823
     Securities available for sale                    73,447,242       73,447,242        31,062,943        31,062,943
     Securities held to maturity                      13,705,639       13,866,773        13,420,115        13,504,020
     Mortgage loans held for sale                              -                -           222,996           222,976
     Loans, net                                      139,410,726      145,990,726       132,383,472       135,671,472
     Accrued interest receivable                       1,669,870        1,669,870         1,643,462         1,643,462

Financial liabilities:
     Demand and variable rate deposits                87,793,468       87,793,468        73,345,343        73,345,343
     Fixed-rate certificates of deposits             120,233,909      123,942,909        92,465,688        94,032,000
     Federal funds purchased and
         securities sold under repurchase
         agreements                                    4,763,000        4,763,000           248,946           248,946
     FHLB borrowings                                  15,000,000       15,000,000        15,000,000        15,000,000
     Note payable                                          9,000            9,000            18,000            18,000
     Accrued interest payable                            437,127          437,127           464,702           464,702
</TABLE>

At December 31, 2001 and 2000, 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.







                                      -27-

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 16.  Condensed Parent-Only Financial Statements

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

                                          BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                  December 31,
                                                     -----------------------------------
Assets                                                     2001              2000
                                                     -----------------------------------
<S>                                                       <C>              <C>
     Cash                                                 $    252,365     $    189,861
     Investment in subsidiary                               19,352,835       17,907,812
     Securities available for sale                           1,154,064        1,014,340
     Other assets                                               69,243           67,115
                                                     -----------------------------------
                                                          $ 20,828,507     $ 19,179,128
                                                     -----------------------------------
Liabilities
     Other liabilities                                    $        983     $      2,367
                                                     -----------------------------------

Stockholders' Equity
     Common stock, $1.25 par value;
        6,000,000 shares authorized;
        1,949,229 and 1,935,799 shares
        issued and outstanding in 2001
        and 2000, respectively                               2,436,537        2,419,749
     Surplus                                                 4,573,213        4,433,755
     Retained earnings                                      13,938,489       12,773,209
     Accumulated other comprehensive income                   (120,715)        (449,952)
                                                     -----------------------------------
                                                            20,827,524       19,176,761
                                                     -----------------------------------
                                                          $ 20,828,507     $ 19,179,128
                                                     -----------------------------------

</TABLE>



                                      -28-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16.  Condensed Parent-Only Financial Statements (Continued)


                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                                            Years Ended December 31,
                                                                ---------------------------------------------------
                                                                      2001             2000             1999
                                                                ---------------------------------------------------
<S>                                                                   <C>              <C>              <C>
Income:
     Management fees                                                  $   36,000       $   36,000       $   36,000
     Dividends received from subsidiary                                  854,020          790,721          767,441
     Equity in undistributed earnings of subsidiary                    1,112,307        1,225,981        1,154,895
     Dividend income                                                      81,433           81,563           73,540
     Gain on sale of securities available for sale                         6,371                -                -
                                                                ---------------------------------------------------
                                                                       2,090,131        2,134,265        2,031,876
Expenses:
     Operating expenses                                                   72,215           73,784           66,909
                                                                ---------------------------------------------------
            Income before income taxes                                 2,017,916        2,060,481        1,964,967

Income taxes                                                              (1,384)              31            4,877
                                                                ---------------------------------------------------
           Net income                                                 $2,019,300       $2,060,450       $1,960,090
                                                                ---------------------------------------------------
</TABLE>



                                      -29-


<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16.  Condensed Parent-Only Financial Statements (Continued)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                               Years Ended December 31,
                                                                  -------------------------------------------------
                                                                         2001            2000             1999
                                                                  -------------------------------------------------
<S>                                                                   <C>             <C>              <C>
Cash Flows From Operating Activities
     Net income                                                       $ 2,019,300     $ 2,060,450      $ 1,960,090
     Adjustments to reconcile net income to net
        cash provided by operating activities:
        Undistributed earnings of subsidiary                           (1,112,307)     (1,225,981)      (1,154,895)
        Realized gain on sales of securities available
           for sale                                                        (6,371)              -                -
        Change in operating assets and liabilities:
           (Increase) decrease in other assets                                  -             364             (172)
           Increase (decrease) in other liabilities                        (1,384)        (14,349)           2,654
                                                                  -------------------------------------------------
Net cash provided by operating activities                                 899,238         820,484          807,677
                                                                  -------------------------------------------------

Cash Flows From Investing Activities
     Proceeds from sales of securities available
        for sale                                                          325,471               -                -
     Purchase of securities available for sale                           (464,431)        (66,600)         (91,150)
                                                                  -------------------------------------------------
Net cash (used in) investing activities                                  (138,960)        (66,600)         (91,150)
                                                                  -------------------------------------------------

Cash Flows From Financing Activities
     Net proceeds from issuance of common stock                           156,246         111,870          110,261
     Dividends paid                                                      (854,020)       (790,721)        (767,441)
                                                                  -------------------------------------------------
Net cash (used in) financing activities                                  (697,774)       (678,851)        (657,180)
                                                                  -------------------------------------------------

Increase in cash                                                           62,504          75,033           59,347
Cash, beginning                                                           189,861         114,828           55,481
                                                                  -------------------------------------------------

Cash, ending                                                            $ 252,365       $ 189,861        $ 114,828
                                                                  -------------------------------------------------
</TABLE>


                                      -30-



<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: April 1, 2002            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.


April 1, 2002                  /s/ Ralph Larry Lyons
                               -------------------------------------------------
                               Ralph Larry Lyons
                               President and Chief Executive Officer; Director
                               (Principal Executive Officer)

April 1, 2002                  /s/ Charles F. Catlett, III
                               -------------------------------------------------
                               Charles F. Catlett, III
                               Senior Vice President and Chief Financial Officer
                               (Principal Financial Officer)

April 1, 2002                  /s/ Thomas R. Thornton, Jr.
                               -------------------------------------------------
                               Thomas R. Thornton, Jr.
                               Assistant Vice President
                               (Principal Accounting Officer)

April 1, 2002                  /s/ John B. Larus
                               -------------------------------------------------
                               John B. Larus
                               Chairman of the Board of Directors

_______, 2002
                               -------------------------------------------------
                               Fleming V. Austin
                               Director

_______, 2002
                               -------------------------------------------------
                               Charles W. Binford
                               Director



<PAGE>


April 1, 2002                  /s/ Garland L. Blanton, Jr.
                               -------------------------------------------------
                               Garland L. Blanton, Jr.
                               Director

April 1, 2002                  /s/ Charles B. Goodman
                               -------------------------------------------------
                               Charles B. Goodman
                               Director

April 1, 2002                  /s/ Elwood C. May
                               -------------------------------------------------
                               Elwood C. May
                               Director

April 1, 2002                  /s/ James T. Napier
                               -------------------------------------------------
                               James T. Napier
                               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)