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, 2002   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. [ ]

         State issuer's revenues for its most recent fiscal year: $20.0 million.

         The aggregate market value of the Common Stock held by non-affiliates
of the Registrant was approximately $30,820,016 computed by reference to the
last sales price of $16.00 per share as of February 28, 2003, on The Nasdaq
Stock MarketSM, as reported in published financial sources.

         At February 28, 2003, there were 2,061,859 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
--------------------------                    ------------------------------

2003 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 lending
<PAGE>
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 generally
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.

                                       2
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         The Bank charges  origination  fees on its residential  mortgage loans.
These fees vary among loan products and with market  conditions.  Generally such
fees amount to 1.0% to 3.0% of the loan principal amount. In addition,  the Bank
charges fees to its borrowers to cover the cost of  appraisals,  credit  reports
and certain expenses related to the documentation and closing of loans.

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

         Real  Estate  Construction  Lending.  In  general,  the  Bank  does not
actively solicit or 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, 2002,  commercial  business loans were $26.7 million or 18.9% 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 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 and the overall condition of the
industry  sector.  The  Bank has  historically  made  loans to small  businesses
involved in commercial logging and timber harvesting.  This particular  industry
had been  somewhat  depressed  for the past two years,  and  accordingly  a high
percentage  of such  loans are  delinquent.  Additionally,  the  collateral  for
secured  commercial  business  loans may  depreciate

                                       3
<PAGE>

over time, and cannot be appraised  with as much  precision as residential  real
estate.  At December 31, 2002, the majority of the Bank's  non-performing  loans
were commercial loans.

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 90 full-time and 22 part-time employees at
December 31, 2002. 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.

                                       4
<PAGE>

         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  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, 2002, the Bank declared  $932,892 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

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<PAGE>
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 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,  2002,  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

                                       6
<PAGE>
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
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

                                       7
<PAGE>

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  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 market mortgage
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 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 February 28, 2003, the Company had
approximately 832 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. The dividends paid
and the high and low stock prices presented below have not been adjusted for the
five (5) percent stock dividend paid in December 2002.
<TABLE>
<CAPTION>

                                            2002                                             2001
                         --------------------------------------------    ---------------------------------------------
                                                         Dividends                                        Dividends
                          High Trade      Low Trade        Paid            High Trade      Low Trade        Paid
                          ----------      ---------        ----            ----------      ---------        ----
<S>                         <C>            <C>              <C>             <C>              <C>           <C>

First Quarter                $12.44         $10.37           $.11            $11.25           $8.875        $.11
Second Quarter                15.56          11.99            .12             12.50           10.73          .11
Third Quarter                 14.87          11.29            .12             14.25           11.50          .11
Fourth Quarter                16.00          12.99            .12             12.50           10.54          .11
</TABLE>


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

         The  Company's  net  income for the year ended  December  31,  2002 was
$3,005,164,  an increase of 48.8% compared to the previous  year's net income of
$2,019,300.  This increase  reflects a 25.2% increase in net interest  income as
well as a 37.8%  increase in other  income.  The general  stability  of interest
rates at historically  low levels during 2002 contributed to the increase in net
interest  income.  Interest and fees on loans decreased 7.4% to $10.9 million in
2002 as loans  outstanding  remained almost even from 2001 to 2002. The decrease
in loan income  reflects the effect of the reduction of the  prime-lending  rate
during the year. Interest on securities  increased 57.8% as the Company deployed
funds from deposits and  borrowings  into the investment  portfolio  which had a
57.1% increase in average balance from $61.5 million in 2001 to $96.7 million in
2002.  Other income  increased  due to growth in deposit fees and charges,  fees
from  secondary  market  mortgage  loan sales,  ATM and other card related fees,
earnings  on bank  owned  life  insurance  and  profits  from the  bank's  title
insurance  subsidiary.  Basic  earnings  per share in 2002 were $1.46 while on a
diluted  basis  earnings  per share were  $1.40.  In 2001 both basic and diluted
earnings per share were $.99.  All per share  amounts  presented  reflect the 5%
stock dividend paid December 13, 2002.

         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

                                       9
<PAGE>
expenses increased 5.8%. Net income per common share on both a basic and diluted
basis was $.99 in 2001 compared to $1.02 in 2000.

         The Company's  return on average equity was 13.5% in 2002,  compared to
10.0%  and  11.5% in 2001 and  2000,  respectively.  Return  on  average  assets
amounted to 1.12%, .93%, and 1.06% for these same periods.

         Net Interest  Income.  The Company's net interest income was $9,860,808
in 2002, compared to $7,876,279 and $7,917,254 for 2001 and 2000,  respectively.
The 25.2% increase in 2002 reflects the effects of the decline in interest rates
over the past two years.  Total interest income  increased 8.4% to $17.4 million
in 2002 as the average balance of  interest-earning  assets  increased 21.2% and
the taxable equivalent yield dropped to 7.19% from 8.05% in 2001. Total interest
expense decreased by 7.8% in spite of a 26.8% increase in the average balance of
interest-bearing liabilities. During 2001, due to management's efforts to manage
the cost of liabilities,  net interest income declined less than 1%,  reflecting
the effects of the dramatic  declines in interest  rates during the year. At the
end of 2001 the Company had adjusted its balance sheet composition to capitalize
on the prevailing 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.


















                                       10
<PAGE>

<TABLE>
<CAPTION>

                                                                Year Ended December 31,
                            ------------------------------------------------------------------------------------------------
                                        2002                              2001                             2000
                            ------------------------------    -----------------------------    -----------------------------
                             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             $5,551       $85      1.53%       $6,528      $231     3.54%       $2,416      $154    6.37%
                               ------       ---      -----       ------      ----     -----       ------      ----    -----

Securities: (5)
  U.S. Treasury and other
    U.S. government
    agencies and corporations $44,443    $3,017     6.79%       $25,540    $1,703    6.67%       $16,897    $1,089    6.44%
  States and political
    subdivisions (3)           23,705     1,671     7.05%        23,236     1,670    7.19%        23,597     1,716    7.27%
  Other securities             28,543     2,010     7.04%        12,757       955    7.49%         6,682       534    7.99%
                               ------               -----        ------       ---    -----         -----       ---    -----

    Total securities (3)       96,691     6,698     6.93%        61,533     4,328    7.03%        47,176     3,339    7.08%
                               ------     -----     -----        ------     -----    -----        ------     -----    -----

Loans (1)(2)(3)(4)            143,553    10,884     7.58%       134,670    11,770    8.74%       133,131    12,422    9.33%
                              -------    ------     -----       -------    ------    -----       -------    ------    -----

  Total interest-earning
    assets (3)               $245,795   $17,667     7.19%      $202,731   $16,329    8.05%      $182,723   $15,915    8.71%
                             ========   =======     =====      ========   =======    =====      ========   =======    =====

Interest bearing
liabilities:
Deposits:
  Interest bearing demand     $40,968      $631     1.54%       $34,536      $797    2.31%       $31,926      $925    2.90%
  Savings                      33,543       869     2.59%        20,285       624    3.08%        18,582       603    3.25%
  Other time                  120,377     5,325     4.42%       106,457     6,294    5.91%        85,271     5,026    5.89%
                              -------     -----     -----       -------     -----    -----        ------     -----    -----

    Total deposits            194,888     6,825     3.50%       161,278     7,715    4.78%       135,779     6,554    4.83%

Federal funds purchased
  and securities sold under
  repurchase agreements         1,335        26     1.95%           170         7    4.12%         1,065        64    6.01%
FHLB borrowings                20,655       696     3.37%        10,384       466    4.49%        16,602     1,081    6.51%
Long-term debt                      -         -     0.00%           12          1    8.33%            20         2   10.00%
                              -------  --------     -----     --------   --------    -----     ---------  --------   ------
   Total interest-bearing
    Liabilities              $216,878    $7,547     3.48%      $171,844    $8,198    4.77%      $153,466    $7,701    5.02%
                             ========    ======     =====      ========    ======    =====      ========    ======    =====

Net interest spread                     $10,120     3.71%                  $8,140    3.28%                  $8,214    3.69%
                                        =======     =====                  ======    =====                  ======    =====

Net interest margin                                 4.12%                            4.02%                            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 $565,453  in 2002,
     $577,506  in  2001,  and  $424,169  in  2000.
(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 percentage  of average
interest  earning  assets.  The Company's net interest margin was 4.12% in 2002,
compared  to 4.02%  during  2001 and  4.50% in  2000.  The net  interest  margin
increased in 2002 as interest rates were lowered  slightly  throughout the year.
The  yield on  average  interest-earning  assets  for the year was 7.19% in 2002
compared to 8.05% in 2001 while the average  balance  increased  21.3% to $245.8
million.  The net  interest  margin  decreased in 2001 from 2000  following  the
dramatic  reduction in interest rates during 2001. The  tax-equivalent  yield on
interest  earning assets decreased to 8.05% in 2001 from

                                       11
<PAGE>

8.71% in 2000.  The cost of funds  decreased to 3.48% in 2002 from 4.77% in 2001
and 5.02% in 2000.  These  decreases  reflect the changes in rates  during these
time periods.

         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>

                                                  2002 Compared to 2001                  2001 Compared to 2000
                                            -----------------------------------   -------------------------------------
                                             Volume        Rate         Net         Volume       Rate          Net
                                            ----------  -----------  ----------   -----------  ----------   -----------
                                                                      (dollars in thousands)
<S>                                            <C>         <C>         <C>             <C>        <C>             <C>
Interest income
Federal funds sold                              ($31)       ($115)      ($146)          $105       ($28)           $77
                                                -----       ------      ------          ----       -----           ---
Securities:  (1)
  U.S. Treasury and other U. S.
    government agencies and
    corporations                                1,282           32       1,314           575          39           614
  States and political subdivisions (2)            17         (16)           1          (26)        (20)          (46)
  Other securities                              1,108         (53)       1,055           453        (32)           421
                                                -----         ----       -----           ---        ----           ---
    Total  securities                           2,407         (37)       2,370         1,002        (13)           989
                                                -----         ----       -----         -----        ----           ---

Loans (2)                                         878      (1,764)       (886)           146       (798)         (652)
                                                  ---      -------       -----           ---       -----         -----
    Total interest income                      $3,254     ($1,916)      $1,338        $1,253      ($839)          $414
                                               ======     ========      ======        ======      ======          ====

Interest expense:
Deposits:
  Interest bearing demand                        $210       ($376)      ($166)           $87      ($215)        ($128)
  Savings                                         322         (77)         245            48        (27)            21
  Other time                                    1,047      (2,016)       (969)         1,253          15         1,268
                                                -----      -------       -----         -----          --         -----
    Total deposits                              1,579      (2,469)       (890)         1,388       (227)         1,161
Federal funds purchased and securities
   sold under repurchase agreements                21          (2)          19          (42)        (15)          (57)
FHLB advances                                     307         (77)         230         (336)       (279)         (615)
Long-term debt                                    (1)          (0)         (1)           (1)         (0)           (1)
                                                  ---          ---         ---           ---         ---           ---
    Total interest expense                     $1,906     ($2,548)      ($642)        $1,009      ($521)          $488
                                               ======     ========      ======        ======      ======          ====
Increase (decrease) in net interest
   Income                                      $1,348         $632      $1,980          $244      ($318)         ($74)
                                               ======         ====      ======          ====      ======         =====
</TABLE>
-----------------
(1) Includes securities available for sale and securities held to maturity.
(2) Fully taxable equivalent basis.

                                       12
<PAGE>
         Non-Interest  Income. For the year ended December 31,2002  non-interest
income increased  $698,789,  or 37.8% over 2001.  Significant  increases were in
sales of non-deposit investment products which increased $123,551 or 242.1% over
2001,  and the  increase  in net  cash  surrender  value  of our  investment  in
bank-owned  life  insurance  which  increased  $284,594.   The  bank-owned  life
insurance  was  purchased at the end of 2001.  In  addition,  ATM and other card
related  fees  increased  $73,995,  or 44.3% as the  Company  placed  three cash
dispensing  machines (ATM's) in retail  establishments  and a downtown  Richmond
office building.

         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  categories  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.

         Non-Interest  Expenses.  Total non-interest expenses increased 17.4% to
$7.8  million  in 2002  compared  to $6.7  million in 2001.  Salaries  and wages
increased by 17.9%,  while pensions and other employee benefits increased 33.4%.
These  increases are due in part to the personnel  additions  from the Company's
acquisition  of the  Wellesley  branch  location in July 2001, as a full year of
costs are  included in 2002 versus six months in 2001.  The increase in pensions
and other employee benefits is partially offset by the recognized  earnings from
the investment in bank-owned life  insurance.  An increase of 17.2% in occupancy
expense relates  primarily to the acquired branch.  Legal and professional  fees
increased  47.7% due in part to increased  levels of both  accounting  and legal
reviews required prior to the release of financial statements to the public.

         In  2001,  the  Company's  non-interest  expenses  increased  5.8%,  or
$363,688 compared to the previous year. This increase is primarily  attributable
to expenses  related to the 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.

         Income Taxes.  The Company reported income taxes of $1,131,313 in 2002,
compared  to  $747,429  in 2001 and  $732,629  in 2000.  These  amounts  yielded
effective tax rates of 27.4%, 27.0%, and 26.2%, 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.

                                       13
<PAGE>

         The principal  economic risk  associated with each of the categories of
loans in the  Company's  portfolio  is the  creditworthiness  of its  borrowers.
Within  each  category,  such  risk  is  increased  or  decreased  depending  on
prevailing  economic  conditions.  The risk  associated  with  the  real  estate
mortgage loans and installment loans to individuals varies based upon employment
levels,  consumer  confidence,  fluctuations in value of residential real 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 $243,548 from year-end 2001 to year-end
2002  compared  to an  increase of $7.0  million or 5.3% from  year-end  2000 to
year-end  2001.  The loan to  deposit  ratio was  59.5% at  December  31,  2002,
compared to 67.9% at December 31, 2001 and 79.8% at December 31, 2000.

         The following  table  summarizes the Company's loan  portfolio,  net of
unearned income:
<TABLE>
<CAPTION>
                                                                           At December 31,
                                                           ------------------------------------------------
                                                               2002              2001              2000
                                                               ----              ----              ----
                                                                     (dollars in thousands)
<S>                                                            <C>               <C>               <C>
           Commercial                                           $26,728           $30,879           $22,290
           Real Estate:
              Mortgage                                           66,746            60,851            60,188
              Home equity                                         5,640             5,082             4,334
              Construction                                       30,006            24,288            20,022
                                                                 ------            ------            ------
                 Total real estate                             $102,392           $90,221           $84,544
           Bank cards                                               837               845               840
           Installment                                           11,625            19,505            26,732
                                                                 ------            ------            ------
                                                                141,582           141,450           134,406
           Less unearned income                                    (88)             (200)              (364)
                                                                   ----             -----            ------
                                                                141,494           141,250           134,042
           Allowance for loan losses                            (2,102)           (1,839)            (1,658)
                                                                -------           -------           -------
           Loans, net                                          $139,392          $139,411          $132,384
                                                               ========          ========          ========
</TABLE>

         As shown in the above  table,  the total  amount of real  estate  loans
outstanding  increased  by $12.2  million  in 2002 and by $5.7  million in 2001.
During  2002,  the amount of  installment  loans  decreased by $7.9 million from
2001,  compared  to a decrease  of $7.2  million in 2001 from 2000.  Commercial,
financial and  agricultural  production  loans decreased by $4.1 million in 2002
compared to an increase of $8.6 million in 2001.

         At December 31, 2002, no  concentrations  of loans  exceeding  10.0% of
total loans existed which were not disclosed as a separate category of loans.

                                       14
<PAGE>

         The following table shows the contractual maturity distribution of loan
balances  outstanding as of December 31, 2002. Also provided are the amounts due
classified according to the sensitivity to changes in interest rates.
<TABLE>
<CAPTION>
                                                                          Maturing
                                                 -----------------------------------------------------------
                                                                After One
                                                  Within One    but Within        After
                                                     Year       Five Years      Five Years        Total
                                                     ----       ----------      ----------        -----
                                                                   (dollars in thousands)
<S>                                                   <C>           <C>            <C>           <C>

              Commercial                               $1,864        $18,645          $6,219        $26,728
              Real Estate:
                Mortgage                                  424          7,199          59,123         66,746
                Home equity                                 -            529           5,111          5,640
                Construction                            1,642         20,854           7,510         30,006
                                                        -----         ------           -----         ------
              Total real estate                         2,066         28,582          71,744        102,392

              Bank cards                                    -              -             837            837
              Installment                                 481         10,507             549         11,537
                                                          ---         ------             ---         ------
                                                       $4,411        $57,734         $79,349       $141,494
                                                       ======        =======         =======       ========
              Loans maturing with:
                Fixed interest rates                                                                $26,243
                Variable interest rates                                                             115,251
                                                                                                    -------
                                                                                                   $141,494
</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 $1,229,609 at December 31, 2002, compared
to $866,660 at  December  31, 2001 and  $1,332,871  at December  31,  2000.  The
increase in  non-performing  loans in 2002 reflects an increase in loans 90 days
past due and still accruing interest while the decrease in non-performing  loans
in 2001 reflects  changes in loans accounted for on a non-accrual  basis. 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 both

                                       15
<PAGE>

December 31, 2002 and 2001,  compared to $246,500 at December 31, 2000.  All but
one parcel of foreclosed property held at December 31, 2002 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 $2,400 in 2002,  $5,000 in  2001,and  $20,000 in 2000.  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
2002 reflects any systemic  problem in the Company's  loan  portfolio.  However,
there is some  uncertainty  with  regard to the  financial  strength  of several
borrowers  involved  in the  commercial  timber  industry,  as that  sector  has
experienced  a  significant  decline.  At December 31, 2002,  non-accrual  loans
totaled  $258,281  compared to $484,460  at  December  31, 2001 and  $950,249 at
December 31, 2000.  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, 2002.

         The following table summarizes non-performing assets:
<TABLE>
<CAPTION>

                                                                                           At December 31,
                                                                                --------------------------------------
                                                                                   2002         2001         2000
                                                                                   ----         ----         ----
                                                                                       (dollars in thousands)
<S>                                                                               <C>           <C>          <C>


Loans accounted for on a non-accrual basis                                             $258         $484         $950
Loans contractually past due 90 days or more as to interest or
   principal payments (not included in non-accrual loans above)                         971          382          383
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 non-performing loans                                                     $1,229         $866       $1,333
Other real estate owned                                                                  97           97          247
Other non-performing assets                                                             150          150            0
                                                                                        ---          ---            -
      Total non-performing assets                                                    $1,476       $1,113       $1,580
                                                                                     ======       ======       ======
</TABLE>

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

         In 2002,  $5,952 of interest income was reversed when loans were placed
on non-accrual status or upon foreclosure.  In 2001 and 2000, $2,288 and $55,522
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.

                                       16
<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,
                                                                               ----------------------------------------
                                                                                   2002          2001         2000
                                                                                   ----          ----         ----
                                                                                       (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                     $22            $36          $67
Interest income included in income on the loans                                      -              -          ---
</TABLE>


         Management is not aware of any other loans at December 31, 2002,  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 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 may be 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 1.49% at December 31, 2002, compared to 1.30% at December 31, 2001 and
1.24% at December 31, 2000.  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, 2002 the ratio of the  allowance
for loan  losses to  non-performing  loans was  171.0%,  compared  to 212.1% and
124.4%  at  December  31,  2001 and  2000,  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.

                                       17
<PAGE>

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

                                                                                2002           2001          2000
                                                                                ----           ----          ----
                                                                                      (dollars in thousands)
<S>                                                                       <C>            <C>            <C>

Balance at beginning of period                                                $1,839         $1,658          $1,487

Charge-offs:
   Commercial, financial and agricultural                                        131             28              74
   Real estate mortgage                                                            3             18              54
   Installment loans to individuals                                               75            184             165
                                                                                 ---            ---             ---
      Total                                                                      209            230             293
Recoveries on previous loan losses:
   Commercial, financial and agricultural                                          -             72              10
   Installment loans to individuals                                               32             51              52
                                                                                  --             --              --
      Total                                                                       32            123              62
                                                                                  --            ---              --
Net charge-offs                                                                (177)          (107)           (231)
Provision charged to operations                                                  440            288             402
                                                                                 ---            ---             ---
Balance at end of period                                                      $2,102         $1,839          $1,658
                                                                              ======         ======          ======
Ratio of net loan losses to average net loans outstanding:
   Net charge-offs                                                              $177           $107            $231
   Average net loans                                                         141,576        132,934         131,587
                                                                             -------        -------         -------
                                                                                0.13          0.08%           0.18%
                                                                                ----          -----           -----
Ratio of allowance for loan losses to total loans, net of unearned income:
   Allowance for loan losses                                                  $2,102         $1,839          $1,658
   Total loans at period end                                                 141,494        141,250         134,042
                                                                             -------        -------         -------
                                                                               1.49%          1.30%           1.24%
                                                                               -----          -----           -----
Ratio of allowance for loan losses to non-performing loans:
   Allowance for loan losses                                                  $2,102         $1,839          $1,658
   Non-performing loans                                                        1,229            866           1,333
                                                                               -----            ---           -----
                                                                             171.03%        212.11%         124.38%
                                                                             -------        -------         -------
</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  $440,000  for the year ended
December 31, 2002,  $288,000 and $401,500 for the years ended  December 31, 2001
and 2000, respectively.  In the opinion of

                                       18
<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,
                         --------------------------------------------------------------------------------------------------------
                                       2002                                2001                               2000
                         ---------------------------------    -------------------------------    --------------------------------
                                               Percentage
                         Reserve   Percentage  of Loans       Reserve  Percentage               Reserve   Percentage
                           for     of Reserve   Category      for      of Reserve Percentage      for     of Reserve  Percentage
                           Loan     for Loan   to Total        Loan    for Loan    of Total       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                   $451         21%         19%        $531        29%         22%        $295         18%         17%
Real estate construction      691         33%         21%         242        13%         17%         212         13%         15%
Real estate mortgage (1)      792         38%         51%         830        45%         47%         831         50%         48%
Installment (2)               169          8%          9%         236        13%         14%         320         19%         20%
                              ---          --          --         ---        ---         ---         ---         ---         ---
                           $2,103        100%        100%      $1,839       100%        100%      $1,658        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 2002, total
securities  increased  29.4%  to  $112.8  million  or  39.6%  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.  Throughout 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 2001, total
securities increased by 95.9% to $87.2 million or 35% 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

                                       19
<PAGE>

in market interest rates,  changes in the security's  prepayment risk, increases
in loan demand, general liquidity needs and other similar factors. The Company's
recent  purchases of  securities  have  generally  been limited to securities of
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          2000
                                                                  ----           ----          ----
                                                                       (dollars in thousands)
<S>                                                              <C>             <C>          <C>


          States and political subdivisions                        $12,999         $13,706      $13,420
                                                                   =======         =======      =======
</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,
                                                              ------------------------------------------
                                                                  2002           2001          2000
                                                                  ----           ----          ----
                                                                       (dollars in thousands)
<S>                                                              <C>             <C>          <C>

          U. S. Treasuries                                           $   -          $1,004        $   -
          U. S. government agencies and corporations                41,724          30,966       13,405
          Bank eligible preferred and equities                       5,680           3,022        2,876
          Mortgage-backed securities                                 8,771           7,171        2,844
          Corporate and other debt                                  29,867          20,455        2,763
          States and political subdivisions                         11,773          11,014        9,858
                                                                    ------          ------        -----
                                                                   $97,815         $73,632      $31,746
                                                                   =======         =======      =======
</TABLE>

         The book value and average yield of the Company's securities, including
securities  available for sale, at December 31, 2002, by  contractual  maturity,
are reflected in the following table. Actual maturities can differ significantly
from contractual  maturities  because certain issuers may have the right to call
or prepay debt  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.

                                       20
<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>          <C>

Due in one year or less                         $675     6.80%          $ -         0.00%           $ 300      5.13%
Due after one year through five years          4,450     6.00%             734      6.22%           3,030      3.78%
Due after five years through ten years         4.708     6.87%           1,101      6.62%           4,031      4.21%
Due after ten years                           14,939     6.69%           6,936      4.97%          34,363      6.97%
                                              ------     -----           -----      -----          ------      -----
     Total                                   $24,772     6.78%          $8,771      5.28%         $41,724      6.46%
                                             =======     =====          ======      =====         =======      =====
</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                        $ 706     6.21%          $1,681      6.25%
Due after one year through five years          7,319     7.31%          15,533      6.48%
Due after five years through ten years        13,571     7.38%          23,411      6.69%
Due after ten years                            8,271     7.00%          64,509      6.69%
                                               -----     -----          ------      -----
     Total                                   $29,867     7.22%        $105,134      6.65%
                                             =======     =====        ========      =====
</TABLE>

         As shown in the table above,  approximately  $1,681,000  or 1.6% of the
total  portfolio  will mature in one year or less while  $15.5  million or 14.8%
will mature after one year but within five years.  The fully taxable  equivalent
average yield on the entire portfolio was 6.93% for 2002,  compared to 7.03% for
2001 and 7.08% for 2000. The market value of the entire  portfolio  exceeded the
book value by  approximately  $2.5 million at December 31, 2002,  while the book
value and the market value were approximately equal at December 31, 2001.

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 20.18%
in 2002 and 17.62% in 2001. The average aggregate interest rate paid on deposits
was 3.07% in 2002,  compared to 4.17% for both 2001 and 2000. The majority (54%)
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.

                                       21
<PAGE>
         The following table is a summary of average  deposits and average rates
paid:
<TABLE>
<CAPTION>

                                                                     At December 31,
                            ---------------------------------------------------------------------------------------------------
                                        2002                               2001                              2000
                            ------------------------------    -------------------------------    ------------------------------
                             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             $27,345       $ -        -%       $23,639       $ -         -%       $21,443      $ -         -%
Interest bearing demand
  deposits                     40,968       631     1.54%        34,536       797      2.31%        31,926      925      2.90%
Savings deposits               33,543       869     2.59%        20,285       624      3.08%        18,582      603      3.25%
Time deposits                 120,377     5,325     4.42%       106,457     6,294      5.91%        85,271    5,026      5.89%
                              -------     -----     -----       -------     -----      -----        ------    -----      -----
    Total                    $222,233    $6,825     3.07%      $184,917    $7,715      4.17%      $157,222   $6,554      4.17%
                             ========    ======     =====      ========    ======      =====      ========   ======      =====
</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, 2002:

                            Time Deposits > $100,000
                                 (in thousands)

                   Three months or less                $  5,340
                   Three to twelve months                13,843
                   One year to three years                6,131
                   Over three years                       3,933
                                                       --------
                                                       $ 29,247

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 10.6% at December  31, 2002,
compared to 10.7% at December 31, 2001 and 12.6% at December 31, 2000. The Total
Capital  ratio was 11.6% at December  31,  2002,  compared to 11.8% and 13.8% at
December  31,  2001 and 2000,  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,  2002,  the Bank's  Leverage  ratio was 7.6%  compared  to 8.1% at
December  31,  2001 and 9.3% at December  31,  2000.  Each of these  exceeds the
required  minimum  leverage  ratio  of  3.00%.  The  Company,  in  view  of  the
significant  growth  experienced  over the past several  years and the resulting
impact  on  various  capital  ratios,  is  cognizant  of the  eventual  need for
additional capital to support further expansion or acquisitions.

                                       22
<PAGE>

Management has evaluated  different  means of increasing  capital in addition to
earnings  retention,  and is  prepared  to take the  necessary  action when such
additional capital is required.

         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           2002             2001            2000
                                                      -------           ----             ----            ----
<S>                                                    <C>             <C>              <C>             <C>

Consolidated
        Tier 1 risk-based capital                        4.0%           11.3%            11.5%           12.4%
        Total risk-based capital                         8.0%           12.4%            12.5%           13.4%
        Leverage ratio                                   3.0%            8.2%             8.7%           10.0%
        Stockholders' equity to total assets             N/A             8.6%             8.4%            9.5%

Central Virginia Bank
        Tier 1 risk-based capital                        4.0%           10.6%            10.7%           12.6%
        Total risk-based capital                         8.0%           11.6%            11.8%           13.8%
        Leverage ratio                                   3.0%            7.6%             8.1%            9.3%
</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 $3.7 million in 2002 as the result of earnings
retention and the improvement in accumulated other comprehensive  income.  Total
stockholders' equity increased by $1.7 million during 2001 primarily as a result
of earnings retention.  The return on average equity was 13.5% in 2002, compared
to 10.0% in 2001 and 11.5% in 2000. Total cash dividends were paid  representing
31% of net income for 2002,  while  dividends  represented 42% of net income for
2001 and 38% for 2000.  Book value per share was $11.90 at  December  31,  2002,
compared to $10.18 at December 31, 2001 and $9.44 at December 31, 2000.

         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,  2002,  the Bank  had $4.5  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

                                       23
<PAGE>

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  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 intervals.

         At December 31, 2002, 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.

                                       24
<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, 2002:
<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:
  Federal funds sold                                  $7,542       $ -             $ -             $ -               $7,542
  Securities available for sale                       25,739         18,241          24,218          31,592          99,790
  Securities held to maturity                          1,411          2,391           4,600           4,597          12,999
  Loans                                               63,528          9,825          61,554           6,587         141,494
                                                      ------          -----          ------           -----         -------
    Total interest-earning assets                    $98,220        $30,457         $90,372         $42,776        $261,825
                                                     =======        =======         =======         =======        ========

Funding Sources:
  Deposits:
    Interest bearing demand                               $-         $4,421          $4,421         $35,365         $44,207
    Savings                                                -         33,669           4,209           4,209          42,087
    Time deposits, $100,000 and over                   5,340         13,844          10,064               -          29,248
    Other time deposits                               20,469         42,308          30,197               -          92,974
  Federal funds purchased and securities
     sold under repurchase agreements                    438              -               -               -             438
  FHLB advances
     Term                                             11,000          5,000               -               -          16,000
     Overnight                                         5,000             -                -               -           5,000
                                                       -----             --              --              --           -----

    Total funding sources                            $42,247        $99,242         $48,891         $39,574        $229,954
                                                     =======        =======         =======         =======        ========

Period gap                                           $55,973      ($68,785)         $41,481          $3,202         $31,871
                                                     =======      =========         =======          ======         =======

Cumulative gap                                       $55,973      ($12,812)         $28,669         $31,871
                                                     =======      =========         =======         =======

Ratio of cumulative gap to total
  earning assets                                      21.38%         -4.89%          10.95%          12.17%
                                                      ======         ======          ======          ======
</TABLE>

         Of the amount of loans due after 12 months,  $46.2 million had floating
or adjustable rates of interest and $21.9 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

                                       25
<PAGE>

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 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, 2002 and 2001
         Consolidated Statements of Income for the Years Ended December 31,
         2002, 2001 and 2000 Consolidated Statements of Stockholders' Equity for
         the Years Ended December 31, 2002, 2001
              and 2000
         Consolidated Statements of Cash Flows for the Years Ended December 31,
              2002, 2001, 2000
         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  heading  "ELECTION  OF  DIRECTORS;
SECURITY  OWNERSHIP OF MANAGEMENT  AND CERTAIN  BENEFICIAL  OWNERS" and "Section
16(a) Beneficial  Ownership  Reporting  Compliance" of the definitive 2003 Proxy
Statement of the Registrant  furnished to  shareholders  in connection  with its
Annual  Meeting to be held on April 29,  2003 (the "2003  Proxy  Statement")  is
hereby incorporated by reference.

ITEM 10. EXECUTIVE COMPENSATION

         Information  set forth  under the  heading  "REMUNERATION"  of the 2003
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" of the 2003
Proxy Statement, is hereby incorporated by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information set forth under the heading  "Certain  Transactions" of the
2003 Proxy Statement is hereby incorporated by reference.

                                       26
<PAGE>

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).

         99.1     Statement of Chief Executive Officer Pursuant to 18 U.S.C.
                  Section 1350.

         99.2     Statement of Chief Financial Officer Pursuant to 18 U.S.C.
                  Section 1350.

(b)     Reports on Form 8-K
        -------------------

         No reports on Form 8-K were filed during the quarter ended December 31,
2002.


         With the exception of the information herein expressly  incorporated by
reference,  the 2003 Proxy Statement of the Registrant is not to be deemed filed
as part of this Annual Report on Form 10-KSB.

ITEM 14. CONTROLS AND PROCEDURES

         Within  ninety  days prior to the filing of this  Report,  the  Company
evaluated  the  effectiveness  of the design and  operations  of its  disclosure
controls and  procedures  that are designed to insure that the Company  records,
processes,  summarizes  and  reports  in  a  timely  and  effective  manner  the
information  required to be disclosed in reports  filed with or submitted to the
Securities and Exchange  Commission.  In designing and evaluating the disclosure
controls and procedures,  management recognizes any controls and procedures,  no
matter how well  designed and operated,  can provide on reasonable  assurance of
achieving the desired control objectives, and management believes it has applied
prudent  judgment  in  evaluating  the  cost-benefit  relationship  of  possible
controls and procedures.

         The Company  carried out its evaluation  under the supervision and with
the  participation of the Company's Chief Executive  Officer and Chief Financial
Officer. Based upon this evaluation, they concluded that, as of the date of this
evaluation,  the  Company's  disclosure  controls are  effective and adequate to
ensure the clarity and material  completeness of the Company's disclosure in its
periodic  reports  filed  with  or  submitted  to the  Securities  and  Exchange
Commission.

         Since  the date of this  evaluation,  there  have  been no  significant
changes  in the  Company's  internal  controls  or in other  factors  that could
significantly affect those controls.

                                       27
<PAGE>


                        CENTRAL VIRGINIA BANKSHARES, INC.

                          CONSOLIDATED FINANCIAL REPORT

                                DECEMBER 31, 2002


<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 - 33


<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, 2002 and 2001,  and the
related consolidated statements of income,  stockholders' equity, and cash flows
for each of the  three  years in the  period  ended  December  31,  2002.  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, 2002 and 2001,  and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2002, in conformity  with  accounting  principles
generally accepted in the United States of America.


/s/ Mitchell, Wiggine & Company, LLP



Richmond, Virginia
January 17, 2003





                                       -1-



<PAGE>



CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS
December 31, 2002 and 2001
<TABLE>
<CAPTION>

ASSETS                                                                              2002                 2001
------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                  <C>
Cash and due from banks                                                           $ 9,304,664          $ 8,103,189

Federal funds sold                                                                  7,542,000                    -
                                                                                  -----------          -----------

           Total cash and cash equivalents                                         16,846,664            8,103,189
                                                                                  -----------          -----------

Securities available for sale (Note 3)                                             99,789,868           73,447,242



Securities held to maturity (approximate market value
     2002 $13,499,461; 2001 $13,866,773) (Note 3)                                  12,999,437           13,705,639
                                                                                  -----------          -----------
           Total securities                                                       112,789,305           87,152,881
                                                                                  -----------          -----------



Mortgage loans held for sale                                                        1,246,580                    -
                                                                                  -----------          -----------


Loans (Notes 4, 13, and 14)
     Commercial                                                                    26,727,552           30,878,707
     Real estate:
        Mortgage                                                                   66,745,774           60,851,541
        Home equity                                                                 5,639,913            5,081,698
        Construction                                                               30,006,442           24,288,004
     Bank cards                                                                       836,852              845,022
     Installment                                                                   11,625,033           19,505,064
        Less unearned discount                                                       (87,893)            (199,912)
                                                                                  -----------          -----------

           Loans, net of unearned discount                                        141,493,673          141,250,124
     Allowance for loan losses                                                    (2,101,698)          (1,839,398)
                                                                                  -----------          -----------
           Loans, net                                                             139,391,975          139,410,726
                                                                                  -----------          -----------

Bank premises and equipment, net (Note 5)                                           5,036,663            5,212,162
Accrued interest receivable                                                         1,792,668            1,669,870
Other assets                                                                        7,982,205            7,874,558
                                                                                  -----------          -----------
                                                                                $ 285,086,060        $ 249,423,386
                                                                                =============        =============
</TABLE>

See Notes to Consolidated Financial Statements.

                                       -2-
<PAGE>

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                               2002               2001
------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>
Liabilities
     Deposits:
        Demand deposits                                                           $ 29,472,821        $ 25,997,211
        Interest bearing demand deposits, MMDA
           and NOW accounts                                                         44,207,270          38,238,658
        Savings deposits                                                            42,086,783          23,557,599
        Time deposits, $100,000 and over:  (Note 7)
           Retail certificates of deposit                                           24,745,777          23,984,491
           Retirement accounts                                                       4,501,664           3,812,803
        Other time deposits:  (Note 7)
           Retail certificates of deposit                                           78,597,282          79,978,065
           Retirement accounts                                                      14,376,780          12,458,550
                                                                                    ----------          ----------
                                                                                   237,988,377         208,027,377

     Federal funds purchased and securities
        sold under repurchase agreements                                               438,000           4,763,000
     FHLB borrowings (Note 8)                                                       21,000,000          15,000,000
     Note payable (Note 9)
                                                                                             -               9,000
     Accrued interest payable                                                          380,810             437,127
     Other liabilities                                                                 779,662             359,358
                                                                                   -----------         -----------
                                                                                   260,586,849         228,595,862
                                                                                   -----------         -----------

Commitments and Contingencies (Note 13)

Stockholders' Equity
     Common stock, $1.25 par value;
        6,000,000 shares authorized; 2,059,197
        and 1,949,229 shares issued and out-
        standing in 2002 and 2001, respectively                                      2,573,997           2,436,537
     Surplus                                                                         6,082,371           4,573,213
     Retained earnings                                                              14,541,849          13,938,489
     Accumulated other comprehensive
        income                                                                       1,300,994           (120,715)
                                                                                     ---------           --------
                                                                                    24,499,211          20,827,524
                                                                                    ----------          ----------

                                                                                 $ 285,086,060       $ 249,423,386
                                                                                 =============       =============
</TABLE>

                                       -3-

<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2002, 2001, and 2000

<TABLE>
<CAPTION>

                                                                       2002            2001             2000
<S>                                                                <C>              <C>             <C>
Interest income:
    Interest and fees on loans                                      $ 10,875,799     $ 11,748,661     $ 12,375,451

    Interest on securities and federal funds sold:
       U. S. government agencies and corporations                      3,010,418        1,688,414        1,065,319
       U. S. Treasury securities                                           6,163           14,727           23,378
       States and political subdivisions                               1,420,429        1,426,744        1,465,540
       Corporate and other                                             2,010,031          955,352          534,248
       Federal funds sold                                                 85,469          231,469          154,000
                                                                       6,532,510        4,316,706        3,242,485
                                                                     ----------------------------------------------
                                                                      17,408,309       16,065,367       15,617,936
                                                                     ----------------------------------------------

Interest expense:
    Interest on deposits                                               6,824,791        7,715,126        6,554,066
                                                                     ----------------------------------------------
    Interest on borrowings:
       Federal funds purchased and
          securities sold under repurchase agreements                     26,248            7,266           63,650
       FHLB borrowings                                                   696,282          465,796        1,081,346
       Note payable                                                          180              900            1,620
                                                                     ----------------------------------------------
                                                                         722,710          473,962        1,146,616
                                                                       7,547,501        8,189,088        7,700,682
                                                                     ----------------------------------------------
          Net interest income                                          9,860,808        7,876,279        7,917,254
                                                                     ----------------------------------------------

Provision for loan losses (Note 4)                                       440,000          288,000          401,500
                                                                     ----------------------------------------------
          Net interest income after
            provision for loan losses                                  9,420,808        7,588,279        7,515,754
                                                                     ----------------------------------------------

Other income:
    Deposit fees and charges                                           1,291,770        1,186,536        1,126,872
    Bank card fees                                                       241,015          167,020          107,549
    Increase in cash surrender value of life insurance                   288,125            3,531                -
    Secondary mortgage market loan interest and fees                     279,498          256,056          177,731
    Investment and insurance commissions                                 174,578           51,027           71,025
    Realized gain on sales of securities
       available for sale                                                114,359           28,460                -
   Other                                                                 158,135          156,061          100,701
                                                                     ----------------------------------------------
                                                                      2,547,480        1,848,691        1,583,878
                                                                     ----------------------------------------------

Other expenses:
    Salaries and wages                                                 3,239,570        2,748,789        2,670,980
    Pensions and other employee benefits                               1,088,910          816,585          655,143
    Occupancy expense                                                    361,295          308,360          297,757
    Equipment depreciation                                               591,389          587,890          546,870
    Equipment repairs and maintenance                                    281,889          264,957          221,634

</TABLE>
                                   (Continued)

                                      -4-
<PAGE>
CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (Continued)
Years Ended December 31, 2002, 2001, and 2000
<TABLE>
<CAPTION>

                                                                          2002           2001            2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>              <C>             <C>

Other expenses (Continued):
    Advertising and public relations                                     159,529         131,303        122,356
    Federal insurance premiums                                            35,862          27,548         31,143
    Office supplies, telephone, and postage                              474,088         455,036        385,384
    Taxes and licenses                                                   150,591         146,446        127,641
    Legal and professional fees                                          160,867         108,936        285,015
    Other operating expenses                                           1,287,821        1,074,391       962,630
                                                                    --------------------------------------------
                                                                       7,831,811       6,670,241      6,306,553
                                                                    --------------------------------------------
          Income before income taxes                                   4,136,477       2,766,729      2,793,079

Income taxes (Note 10)                                                 1,131,313         747,429        732,629
                                                                    --------------------------------------------

          Net income                                                 $ 3,005,164     $ 2,019,300    $ 2,060,450
                                                                    ============================================
Basic earnings per share                                                $   1.46        $   0.99       $   1.02
                                                                    ============================================
Diluted earnings per share                                              $   1.40        $   0.99       $   1.02
                                                                    ============================================

</TABLE>


See Notes to Consolidated Financial Statements.


                                       -5-
<PAGE>



CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2002, 2001, and 2000

<TABLE>
<CAPTION>
                                                                                                Accumulated
                                                                                                   Other
                                                          Common                   Retained    Comprehensive
                                                           Stock      Surplus      Earnings        Income         Total
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>         <C>          <C>           <C>             <C>
Balance, January 1, 2000                                 $ 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
    Comprehensive income:                                                                                        ----------
      Net income                                                  -           -     3,005,164               -     3,005,164
      Other comprehensive income, net of tax:
        Unrealized holding gains arising during the
           period, net of deferred income taxes of $771,278       -           -             -       1,497,186     1,497,186
        Less reclassification adjustment for gains included in
           net income, net of deferred income taxes
           of $38,882                                             -           -             -        (75,477)      (75,477)
                                                                                                                   --------
        Total comprehensive income
                                                                                                                  4,426,873
                                                                                                                  ---------
    Issuance of common stock:
      97,732 shares pursuant to 5% stock dividend           122,165   1,346,747   (1,468,912)               -             -
      12,236 shares pursuant to dividend
        reinvestment plan                                    15,295     162,411             -               -       177,706
    Payment for 191 fractional shares of common stock             -           -       (2,875)               -       (2,875)
    Cash dividends declared, $.47 per share                       -           -     (930,017)               -     (930,017)
                                                         ------------------------------------------------------------------
Balance, December 31, 2002                               $2,573,997 $14,541,849 $  6,082,371      $ 1,300,994  $ 24,499,211
                                                         ==================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

                                       -6-
<PAGE>



CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2002, 2001, and 2000
<TABLE>
<CAPTION>

                                                                          2002            2001           2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>             <C>           <C>
Cash Flows From Operating Activities
    Net income                                                            $3,005,164     $2,019,300    $ 2,060,450
    Adjustments to reconcile net income
       to net cash provided by operating activities:
       Depreciation                                                          695,370        683,956        636,795
       Amortization                                                           14,678          6,116              -
       Deferred income taxes                                                 (30,073)       (84,249)       (49,301)
       Provision for loan losses                                             440,000        288,000        401,500
       Amortization and accretion on securities                              114,862         21,021         50,194
       Realized gain on sales of securities
          available for sale                                                (114,359)       (28,460)             -
       Loss on disposal of premises and equipment                             21,320              -              -
       (Gain) loss on sale of foreclosed real estate                               -        (10,462)         4,040
       Increase in cash value, life insurance                               (299,839)       (15,245)       (34,108)
       Change in operating assets and liabilities:
          (Increase) decrease in assets:
             Mortgage loans held for sale                                 (1,246,580)       222,996        137,776
             Accrued interest receivable                                    (122,798)       (26,408)      (237,410)
             Other assets                                                   (228,605)       (68,398)      (176,081)
          Increase (decrease) in liabilities:
             Accrued interest payable                                        (56,317)       (27,575)        69,978
             Other liabilities                                               118,699        145,417       (125,731)
             Net cash provided by operating                             ------------------------------------------
                 activities                                                2,311,522      3,126,009      2,738,102
                                                                        ------------------------------------------

Cash Flows From Investing Activities
    Proceeds from maturities of
       securities held to maturity                                         2,238,800        985,000      1,435,000
    Purchase of securities held to maturity                               (1,538,846)     (1,295,925)            -
    Proceeds from sales and maturities of
       securities available for sale                                      42,974,310     24,103,349        597,628
    Purchase of securities available for sale                            (67,151,685)   (66,146,300)       (66,600)
    Purchase of bank owned life insurance                                          -     (4,750,000)             -
    Net increase in loans made to customers                                 (421,249)    (7,315,254)    (4,490,771)
    Proceeds from sale of premises and equipment                             15,175               -              -
    Net purchases of premises and equipment                                 (556,366)    (1,472,101)      (458,605)
    Proceeds from sale of foreclosed real estate                                   -        159,962        377,734
                                                                        ------------------------------------------
          Net cash (used in) investing activities                        (24,439,861)   (55,731,269)    (2,605,614)
                                                                        ------------------------------------------
</TABLE>



                            (Continued)

                                      -7-

<PAGE>



CENTRAL VIRGINIA BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 2002, 2001, and 2000
<TABLE>
<CAPTION>

                                                                    2002             2001              2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>             <C>              <C>
Cash Flows From Financing Activities
     Net increase in deposits                                        29,961,000      42,216,346         13,600,030
     Net increase (decrease) in federal funds
        purchased and securities sold
        under repurchase agreements                                  (4,325,000)      4,514,054            (24,096)
     Net proceeds (repayment) on FHLB borrowings                      6,000,000              -          (4,000,000)
     Repayment of note payable                                           (9,000)         (9,000)            (9,000)

     Net proceeds from issuance
        of common stock                                                 177,706         156,246            111,870
     Payment for purchase of fractional
        shares of common stock                                           (2,875)              -                  -
     Dividends paid                                                    (930,017)       (854,020)          (790,721)
           Net cash provided by financing                          -----------------------------------------------
              activities                                             30,871,814      46,023,626          8,888,083
                                                                   -----------------------------------------------
           Increase (decrease) in cash and
              cash equivalents                                        8,743,475      (6,581,634)         9,020,571

Cash and cash equivalents, beginning                                  8,103,189      14,684,823          5,664,252
                                                                   -----------------------------------------------
Cash and cash equivalents, ending                                  $ 16,846,664     $ 8,103,189       $ 14,684,823
                                                                   ===============================================
Supplemental Disclosures of  Cash Flow
     Information
        Interest paid                                               $ 7,603,818     $ 8,216,663        $ 7,630,704
        Income taxes paid                                             1,274,170         691,690            802,292

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, 2002
and 2001.

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, 2002, 2001, and 2000.

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 that was accrued in the current calendar year is charged back to
income,  any interest  receivable that was accrued in prior years is charged off
to the allowance for loan losses. 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 a 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.

Intangible  assets:  Intangible  assets,  which  for the  Bank  are the  cost of
acquired  customer  accounts,  are amortized on a  straight-line  basis over the
expected periods of benefit.

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 123,926 and 138,941 shares
of  common  stock as of  December  31,  2001 and  2000,  respectively,  were not
included in computing diluted EPS because their effect was antidilutive.

<TABLE>
<CAPTION>

                                                               2002            2001            2000
                                                         -------------------------------------------------
<S>                                                          <C>             <C>             <C>
Income available to common stockholders
     used in basic EPS                                        $ 3,005,164     $ 2,019,300     $ 2,060,450
                                                         =================================================

Weighted average number of common
     shares used in basic EPS                                   2,054,410       2,038,683       2,025,692

Effect of dilutive securities:
     Stock options                                                 96,504           1,654               -
                                                         -------------------------------------------------

Weighted number of common shares and
     dilutive potential stock used in diluted
     EPS                                                        2,150,914       2,040,337       2,025,692
                                                         =================================================

</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, 2002 and 2001,  the  Corporation
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.  Reclassifications

Certain  reclassifications  were made to the  accompanying  prior year financial
statements,  with no effect on net income or financial position, to conform with
classifications adopted in the current year.

Note 3.  Securities

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

<TABLE>
<CAPTION>

                                                                   December 31, 2002
                                           -------------------------------------------------------------------
                                                                  Gross           Gross        Approximate
                                               Amortized        Unrealized     Unrealized         Market
                                                  Cost            Gains          Losses           Value
                                           -------------------------------------------------------------------
<S>                                           <C>             <C>             <C>             <C>
U. S. government agencies
     and corporations                           $ 41,724,276       $ 500,732       $ 87,500      $ 42,137,508
Bank eligible preferred and
     equities                                      5,679,518         100,981         73,477         5,707,022
Mortgage-backed securities                         8,771,172         225,208          1,016         8,995,364
Corporate and other debt                          29,867,298       1,272,181        180,060        30,959,419
States and political subdivisions                 11,772,482         297,324         79,251        11,990,555
                                           -------------------------------------------------------------------
                                                $ 97,814,746     $ 2,396,426       $421,304      $ 99,789,868
                                           ===================================================================

                                                                   December 31, 2001
                                           -------------------------------------------------------------------
                                                                  Gross           Gross        Approximate
                                               Amortized        Unrealized     Unrealized         Market
                                                  Cost            Gains          Losses           Value
                                           -------------------------------------------------------------------
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
Bank eligible preferred and
     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>
                                      -14-

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 3.  Securities (Continued)

The amortized cost and approximate market value of securities available for sale
at December 31, 2002, 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.  Additionally,  many of the U. S.
Government  agency  securities held have quarterly or semiannual call provisions
that  allow the  agency to  redeem  the debt  substantially  in  advance  of the
contractual maturity.
<TABLE>
<CAPTION>

                                                                                Approximate
                                                            Amortized              Market
                                                               Cost                Value
                                                        ------------------------------------
<S>                                                       <C>                 <C>
Due in one year or less                                       $ 1,005,753       $ 1,022,987
Due after one year through five years                          11,059,243        11,375,729
Due after five years through ten years                         19,557,303        20,522,970
Due after ten years                                            51,741,757        52,165,796
Bank eligible preferred and equities                            5,679,518         5,707,022
Mortgage-backed securities                                      8,771,172         8,995,364
                                                        ------------------------------------
                                                             $ 97,814,746       $99,789,868
                                                        ====================================
</TABLE>

Gross gains of $203,664 and $58,611 were  realized on sales and  redemptions  of
securities  available for sale in 2002 and 2001,  respectively.  Gross losses of
$89,305 and $30,151 were realized on the sale of  securities  available for sale
in 2002 and 2001, respectively.

Carrying  amounts and  approximate  market  values of  securities  being held to
maturity are as follows:

<TABLE>
<CAPTION>

                                                                    December 31, 2002
                                            -------------------------------------------------------------------
                                                                  Gross           Gross         Approximate
                                                Amortized       Unrealized     Unrealized          Market
                                                   Cost           Gains          Losses            Value
                                            -------------------------------------------------------------------
<S>                                          <C>              <C>             <C>            <C>
States and political subdivisions              $ 12,999,437     $ 507,242        $ 7,218        $ 13,499,461
                                            ===================================================================

                                                                    December 31, 2001
                                            -------------------------------------------------------------------
                                                                  Gross           Gross         Approximate
                                                Amortized       Unrealized     Unrealized          Market
                                                   Cost           Gains          Losses            Value
                                            -------------------------------------------------------------------
States and political subdivisions              $ 13,705,639     $ 238,984       $ 77,850        $ 13,866,773
                                            ===================================================================

</TABLE>

                                      -15-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 3.  Securities (Continued)

The amortized  cost and  approximate  market value of  securities  being held to
maturity at December 31, 2002, by contractual maturity, are shown below.

<TABLE>
<CAPTION>
                                                                       Approximate
                                                       Amortized          Market
                                                         Cost             Value
                                                   -----------------------------------
<S>                                                 <C>                <C>
Due in one year or less                                   $ 675,000         $ 687,915
Due after one year through five years                     3,843,006         3,995,526
Due after five years through ten years                    2,649,202         2,779,848
Due after ten years                                       5,832,229         6,036,172
                                                   -----------------------------------
                                                       $ 12,999,437      $ 13,499,461
                                                   ===================================
</TABLE>

Securities with an amortized cost of $2,253,285 and $2,092,878 and a market
value of $2,328,445 and $2,131,947 at December 31, 2002 and 2001, respectively,
were pledged as collateral on public deposits and for other purposes as required
or permitted by law.

Note 4.  Loans

Major classifications of loans are summarized as follows:

<TABLE>
<CAPTION>

                                                                 December 31,
                                                    --------------------------------------
                                                           2002               2001
                                                    --------------------------------------
<S>                                                   <C>                <C>
Commercial                                                $ 26,727,552       $ 30,878,707
Real estate:
     Mortgage                                               66,745,774         60,851,541
     Home equity                                             5,639,913          5,081,698
     Construction                                           30,006,442         24,288,004
Bank cards                                                     836,852            845,022
Installment                                                 11,625,033         19,505,064
                                                    --------------------------------------
                                                           141,581,566        141,450,036
Less unearned discount                                         (87,893)          (199,912)
                                                    --------------------------------------
                                                           141,493,673        141,250,124
Allowance for loan losses                                   (2,101,698)        (1,839,398)
                                                    --------------------------------------
 Loans, net                                               $ 139,391,975      $ 139,410,726
                                                    ======================================
</TABLE>

                                      -16-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 4.  Loans (Continued)

Changes in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>

                                                       Years Ended December 31,
                                           -------------------------------------------------
                                                 2002            2001            2000
                                           -------------------------------------------------
<S>                                           <C>             <C>             <C>
Balance, beginning                              $ 1,839,398     $ 1,657,979     $ 1,486,900
     Provision charged to operations                440,000         288,000         401,500
     Loans charged off                             (209,369)       (229,305)       (292,494)
     Recoveries                                      31,669         122,724          62,073
                                           -------------------------------------------------
Balance, ending                                 $ 2,101,698     $ 1,839,398     $ 1,657,979
                                           =================================================
</TABLE>

At  December  31,  2002,  the Bank had loans  amounting  to  $258,281  that were
specifically  classified  as  impaired.  The average  balance of impaired  loans
amounted to  approximately  $284,803 for the year ended  December 31, 2002.  The
allowance  for loan  losses  related to  impaired  loans  amounted to $38,741 at
December 31, 2002.  The  following is a summary of cash  receipts on these loans
and how they were applied in 2002:

Cash receipts applied to reduce
     principal balance                        $ 424,218
Cash receipts recognized as
     interest income                             51,832
                                          --------------
Total cash receipts                           $ 476,050
                                          ==============

Nonaccruing  loans  (principally  installment,  commercial,  and mortgage loans)
totaled $258,281,  $484,460,  and $950,249 at December 31, 2002, 2001, and 2000,
respectively,  which had the effect of  reducing  net income  $22,263  ($.01 per
common  share),  $35,738 ($.02 per common  share),  and $67,007 ($.03 per common
share),  for the years then ended,  respectively.  Loans past due ninety days or
more and still accruing interest amounted to approximately  $971,000,  $382,000,
and $383,000 at December 31, 2002, 2001, and 2000, respectively.

Note 5.  Bank Premises and Equipment

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

                                                       December 31,
                                                    2002            2001
                                              -----------------------------
Land                                             $ 900,270       $ 900,270
Buildings and improvements                       3,665,499       3,665,499
Furniture and equipment                          6,082,034       5,710,778
                                              -----------------------------
                                                10,647,803      10,276,547
Less accumulated depreciation                    5,611,140       5,064,385
                                              -----------------------------
                                               $ 5,036,663     $ 5,212,162
                                              =============================

                                      -17-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 6.  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 cash surrender value of these policies of $5,032,297
and $4,750,000 at December 31, 2002 and 2001, respectively, is included in other
assets on the accompanying consolidated balance sheets.

Note 7.  Maturities of Certificates of Deposit

The scheduled maturities of certificates of deposit at December 31, 2002, are as
follows:

Year Ending
December 31
------------------------------------------------------
2003                                     $ 81,961,377
2004                                       11,492,050
2005                                       14,849,129
2006                                        2,928,041
2007 and later                             10,990,906
                                       ---------------
                                        $ 122,221,503
                                       ===============

Note 8.  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, 2002 and 2001, consist of the following:
<TABLE>
<CAPTION>

                                                                    2002                 2001
                                                              ----------------------------------------
<S>                                                              <C>                 <C>
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          $ 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            5,000,000
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            5,000,000
Interest payable and adjusts quarterly
     to LIBOR, currently 1.48%, principal
     due and payable on December 4, 2003                               1,000,000                    -
Overnight borrowing, due and payable
     on January 2, 2003, interest adjusted
     daily, currently 1.30%                                            5,000,000                    -
                                                              ----------------------------------------
                                                                    $ 21,000,000         $ 15,000,000
                                                              ========================================
</TABLE>

                                      -18-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 9.  Note Payable

The  Corporation's  subsidiary,  Central Virginia Bank, had a note payable which
was  secured  by a first deed of trust on the bank  building  in  Powhatan.  The
balance of this note was $9,000 at December 31, 2001. This note was paid in full
during the year ended December 31, 2002.

Note 10.  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,
2002, 2001, and 2000, are as follows:

                                        2002           2001           2000
                                   ---------------------------------------------
Currently payable                      $ 1,161,386     $ 831,678      $ 781,930
Deferred                                   (30,073)      (84,249)       (49,301)
                                   ---------------------------------------------
                                       $ 1,131,313     $ 747,429      $ 732,629
                                   =============================================

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,
                                                  ---------------------------------------------
                                                        2002           2001          2000
                                                  ---------------------------------------------
<S>                                                 <C>             <C>           <C>
Computed "expected" tax expense                        $ 1,406,402     $ 940,688     $ 949,647
Tax-exempt interest                                       (171,929)     (160,368)     (165,140)
Tax-exempt loan interest                                    (5,592)      (14,325)      (31,078)
Disallowance of interest expense
     deduction for the portion attributable
     to carrying tax-exempt obligations                     20,324        24,276        25,496
Other                                                     (117,892)      (42,842)      (46,296)
                                                  ---------------------------------------------
                                                       $ 1,131,313     $ 747,429     $ 732,629
                                                  =============================================
</TABLE>

                                      -19-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 10.  Income Tax Matters (Continued)

The deferred income tax provision consists of the following items:

<TABLE>
<CAPTION>
                                                                                Years Ended December 31,
                                                                        -----------------------------------------
                                                                            2002         2001          2000
                                                                        -----------------------------------------
<S>                                                                     <C>             <C>          <C>
Difference between loan loss provision charged
     to operating expense and the bad debt
     deduction taken for income tax purposes                                $(74,798)     $(80,123)     $(36,485)
Interest income on nonaccrual loans recognized
     for federal income tax purposes, but not
     recognized for financial statements until received                       10,214         1,165       (23,063)
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)
Deduction for uncollectible late charges recognized
     for financial statements, but not recognized for
     income tax purposes until realized                                          (51)        7,335          (438)
Deduction for accrued supplemental retirement expense
     recognized for financial statements, but not
     recognized for income tax purposes until paid                           (44,053)            -             -
Deduction for accrued professional fees recognized
     for financial statements, but not recognized for
     income tax purposes until paid                                          (19,045)            -             -
Increase in cash surrender value of Bank owned life
     insurance recognized for financial statements, but
     not recognized for alternative minimum tax purposes
     until realized                                                           46,163             -             -
Accretion of discount recognized for financial
     statements, but not recognized for income
     tax purposes until realized                                               4,654        (2,024)        1,591
Difference between the depreciation methods
     used for financial statements and for income
     tax purposes                                                             46,843         2,998        10,634
                                                                        -----------------------------------------
                                                                            $(30,073)     $(84,249)     $(49,301)
                                                                        ==========================================

</TABLE>
                                      -20-

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 10.  Income Tax Matters (Continued)

The components of the net deferred tax asset (liability) included in other
assets is as follows at December 31:

<TABLE>
<CAPTION>

                                                                      2002            2001
                                                                 -------------------------------
<S>                                                                 <C>             <C>
Deferred tax assets:
     Allowance for loan losses                                         $ 653,724      $ 566,533
     Less valuation allowance                                           (163,431)      (151,038)
                                                                 -------------------------------
                                                                         490,293        415,495
     Devaluation reserve on foreclosed property
        and other assets                                                  27,720         27,720
     Unrealized loss on securities
         available for sale                                                    -         63,670
     Accrued professional fees                                            19,045              -
     Accrued supplemental retirement expense                              44,053              -
     Reserve for uncollectible late charges                                8,304          8,253
     Interest income on nonaccrual loans                                  15,867         26,081
                                                                 -------------------------------
                                                                         605,282        541,219
                                                                 -------------------------------

Deferred tax liabilities:
     Property and equipment                                              173,533        126,690
     Unrealized gain on securities
        available for sale                                               674,127              -
     Cumulative increase in cash surrender value                          46,163              -
     Securities                                                           13,064          8,410
                                                                 -------------------------------
                                                                         906,887        135,100
                                                                 -------------------------------

Net deferred tax asset (liability)                                    $ (301,605)     $ 406,119
                                                                 ===============================
</TABLE>

Note 11.  Profit-Sharing and Retirement and 401K Plan

Profit-Sharing  and  Retirement  Plan:  The Bank  provides a  qualified  defined
contribution  profit-sharing  and  retirement  plan covering  substantially  all
active  full time and part time  employees  of the Bank.  Contributions  to this
plan,   administered   through  the  Virginia   Bankers   Association   Benefits
Corporation,  are made  annually to the credit of the  participant's  individual
accounts,  at the discretion of the Board of Directors.  The plan may be amended
or  terminated by the Board of Directors at any time.  Participants  vest over a
five-year  period.  Contributions  for  2002  represented  7.5  percent  of each
participant's eligible salary.


                                      -21-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 11.  Profit-Sharing and Retirement and 401K Plan (Continued)

401K Plan:  The Bank,  during the year ended  December  31,  2000,  amended  the
Profit-Sharing  and  Retirement  Plan  to  provide  a  qualified  401K  plan  in
conjunction  with  the  defined  contribution  plan  discussed  above.  Eligible
employees may, subject to statutory  limitations,  contribute a portion of their
salary on a pre and post tax basis. The Bank provides a matching contribution of
$0.75  for every  $1.00 the  participant  contributes  up to 3 percent  of their
salary. Participants are 100 percent vested in their contributions at all times,
and vest in the employer contributions over a five-year period.

The total contributions to both the above plans for the years ended December 31,
2002, 2001, and 2000, were $264,802, $265,765, and $192,405, respectively.

Note 12.  Supplemental Executive Retirement Plan

During the year ended  December 31, 2002,  the Bank  established a  Supplemental
Executive  Retirement  Plan,  (the "SERP"),  a nonqualified,  unfunded,  defined
benefit plan for certain executive and senior officers of the Bank as designated
by the Board of Directors.  The current participants covered by the SERP include
three  executive  officers  as well as five  other  senior  officers.  The costs
associated  with this plan, as well as several other  general  employee  benefit
plans are partially  offset by earnings  attributable  to the Bank's purchase of
single premium Bank Owned Life Insurance  ("BOLI").  The SERP provides an annual
benefit  equal to 25 percent of the  participant's  final  compensation  payable
monthly over a 15-year period,  following normal  retirement at age 65, provided
the  participant  has been  employed  by the Bank for a  minimum  of 8 years.  A
further  provision exists for early  retirement  beginning at age 60, subject to
the same 8-year service requirement,  but with reduced benefits depending on the
number of years  preceding age 65 the participant  elects to retire.  Should the
participant's  employment  terminate  due to  disability  or  death,  and he has
otherwise met the requirements necessary to receive a supplemental benefit under
the  SERP,  the  benefit  shall be paid to the  participant  or his  spouse.  No
benefits  are payable  should the  participant's  employment  terminate  for any
reason other than retirement, disability, death, or a change in control.
















                                      -22-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 12.  Supplemental Executive Retirement Plan (Continued)

The following  table sets forth the plan's funded status and amounts  recognized
in the consolidated balance sheet at December 31, 2002:


Projected benefit obligation:
     Beginning obligation                                             $      -
     Service cost                                                      121,093
     Interest cost                                                       8,476
                                                                    -----------
     Ending obligation                                                $129,569
                                                                    ===========

Funded status of the plan                                             $(129,569)
                                                                    ===========

Net consolidated balance sheet liability                              $(129,569)
                                                                    ===========

Net pension cost includes the following components:
     Service cost                                                    $ 121,093
     Interest cost                                                       8,476
                                                                    -----------
                                                                     $ 129,569
                                                                    ===========

Assumptions used in the determination of the supplemental  executive  retirement
plan information consist of the following:

Discount rate                                        7.0%
Rate of increase in compensation levels              5.0%


Note 13.  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.





                                      -23-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 13.  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, 2002 and 2001, is as follows:

                                               2002              2001
                                         ------------------------------------
Commitments to extend credit                  $ 49,966,190      $ 36,047,446
Standby letters of credit                        2,206,089         2,985,595
                                         ------------------------------------
                                              $ 52,172,279      $ 39,033,041
                                         ====================================


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, 2002, was approximately
$26,700,000.

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 4.  Although the
Bank has a diversified  loan  portfolio,  a substantial  portion of its debtors'
ability  to  honor  their  contracts  is  dependent  upon the  agribusiness  and
construction sectors of the economy.









                                      -24-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 14.  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,
                             ---------------------------------
                                   2002            2001
                             ---------------------------------
Balance, beginning                $ 2,208,275     $ 2,321,131
     New loans                      1,150,692         741,166
     Repayments                    (1,165,719)       (854,022)
                             ---------------------------------
Balance, ending                   $ 2,193,248     $ 2,208,275
                             =================================

Note 15.  Stock Dividend

On December 13,  2002,  the  Corporation  issued  97,732  shares of common stock
pursuant to a 5% stock  dividend for  stockholders  of record as of November 15,
2002. As a result of the stock dividend, common stock was increased by $122,165,
surplus was  increased by  $1,346,747,  and retained  earnings was  decreased by
$1,468,912. All references in the accompanying consolidated financial statements
to the number of common shares and per-share amounts for 2001 and 2000 have been
restated to reflect this stock dividend.

Note 16.  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.











                                      -25-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 16.  Incentive Stock Option Plan (Continued)

The following table presents a summary of options under the Plan at December 31:
<TABLE>
<CAPTION>

                                                                          Shares Under Options
                                                                 ---------------------------------------
                                                Option Price         2002         2001         2000
                                             -----------------------------------------------------------
<S>                                               <C>               <C>          <C>          <C>
Outstanding, beginning                              $8.69-$12.86      135,464      142,079      136,833
     Options granted                                       13.35        8,343            -        8,396
     Options exercised                                         -            -            -            -
     Options forfeited                                8.69-13.35         (945)      (6,615)      (3,150)
                                             -----------------------------------------------------------
Outstanding, ending                                 $8.69-$13.35      142,862      135,464      142,079
                                             ===========================================================

</TABLE>

Options exercisable at December 31, 2002, 2001, and 2000, were 142,862, 135,464,
and 142,079, respectively.

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 8,343 options
granted during the year ended December 31, 2002.

<TABLE>
<CAPTION>
                                               2002            2001            2000
                                         ------------------------------------------------
<S>                                         <C>            <C>              <C>
Net income
     As reported                              $ 3,005,164     $ 2,019,300     $ 2,060,450
                                         ================================================

     Pro forma                                $ 3,001,096     $ 1,976,668     $ 1,987,587
                                         ================================================

Basic earnings per share
     As reported                                   $ 1.46          $ 0.99          $ 1.02
                                         ================================================

     Pro forma                                     $ 1.46          $ 1.02          $ 1.03
                                         ================================================

Diluted earnings per share
     As reported                                   $ 1.40          $ 0.99          $ 1.02
                                         ================================================

     Pro forma                                     $ 1.40          $ 0.97          $ 0.98
                                         ================================================

</TABLE>

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 2002 and
2000:  dividend yield of 3.43% and 4.05%,  respectively,  expected volatility of
20%,  risk-free  interest rate of 3.0% and 5.0%,  respectively,  and an expected
option life of 5 years. The fair value of each option granted in 2002 was $1.15.
The fair value of each option granted in 2000 was $1.06.

                                      -26-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 17.  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.

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,  2002,  that the
Corporation meets all capital adequacy requirements to which it is subject.

As of December 31, 2002, 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.






















                                      -27-
<PAGE>

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

Note 17.  Regulatory Matters (Continued)

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, 2002:
     Total Capital (to Risk Weighted Assets)
        Consolidated                   $ 25,062   12.38%     $ 16,195    8.00%               N/A
        Central Virginia Bank            23,382   11.63%       16,083    8.00%     $ 20,104       10.00%

     Tier I Capital (to Risk Weighted Assets)
        Consolidated                     22,960   11.34%        8,099    4.00%               N/A
        Central Virginia Bank            21,280   10.58%        8,042    4.00%       12,062        6.00%

     Tier I Capital (to Average Assets)
        Consolidated                     22,960    8.17%       11,241    4.00%               N/A
        Central Virginia Bank            21,280    7.62%       11,165    4.00%       13,957        5.00%

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%

</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 $4,450,169 in
2002 without regulatory approval.

Note 18.  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.

                                      -28-
<PAGE>

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

Note 18.  Fair Value of Financial Instruments (Continued)

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.

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.










                                      -29-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 18.  Fair Value of Financial Instruments (Continued)

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, 2002 and 2001:

<TABLE>
<CAPTION>

                                                              2002                               2001
                                               -----------------------------------------------------------------------
                                                   Carrying         Estimated         Carrying          Estimated
                                                    Amount          Fair Value         Amount          Fair Value
                                               -----------------------------------------------------------------------
<S>                                               <C>              <C>                <C>               <C>
Financial assets:
     Cash and cash equivalents                      $ 16,846,664     $ 16,846,664       $ 8,103,189       $ 8,103,189
     Securities available for sale                    99,789,868       99,789,868        73,447,242        73,447,242
     Securities held to maturity                      12,999,437       13,499,461        13,705,639        13,866,773
     Mortgage loans held for sale                      1,246,580        1,246,580                 -                 -
     Loans, net                                      139,391,975      148,306,975       139,410,726       145,990,726
     Accrued interest receivable                       1,792,668        1,792,668         1,669,870         1,669,870

Financial liabilities:
     Demand and variable rate deposits               115,766,874      115,766,874        87,793,468        87,793,468
     Fixed-rate certificates of deposits             122,221,503      125,944,503       120,233,909       123,942,909
     Federal funds purchased and
         securities sold under repurchase
         agreements                                      438,000          438,000         4,763,000         4,763,000
     FHLB borrowings                                  21,000,000       21,000,000        15,000,000        15,000,000
     Note payable                                              -                -             9,000             9,000
     Accrued interest payable                            380,810          380,810           437,127           437,127

</TABLE>

At  December 31, 2002 and 2001, 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.







                                      -30-

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 19.  Condensed Parent-Only Financial Statements

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

                                                               BALANCE SHEETS
                                                                December 31,
                                                       --------------------------------
Assets                                                     2002              2001
                                                       --------------------------------
<S>                                                     <C>             <C>
     Cash                                                    $ 254,874        $ 252,365
     Investment in subsidiary                               22,777,580       19,352,835
     Securities available for sale                           1,412,073        1,154,064
     Other assets                                               79,473           69,243
                                                          -----------------------------
                                                          $ 24,524,000     $ 20,828,507
                                                          =============================

Liabilities
     Other liabilities                                        $ 24,789            $ 983

Stockholders' Equity
     Common stock, $1.25 par value;
        6,000,000 shares authorized;
        2,059,197 and 1,949,229 shares
        issued and outstanding in 2002
        and 2001, respectively                               2,573,997        2,436,537
     Surplus                                                 6,082,371        4,573,213
     Retained earnings                                      14,541,849       13,938,489
     Accumulated other comprehensive income                  1,300,994         (120,715)
                                                          ------------------------------
                                                            24,499,211       20,827,524
                                                          ------------------------------
                                                          $ 24,524,000     $ 20,828,507
                                                          ==============================
</TABLE>



                                      -31-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 19.  Condensed Parent-Only Financial Statements (Continued)

                                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                                              Years Ended December 31,
                                                                --------------------------------------------------
                                                                      2002             2001            2000
                                                                --------------------------------------------------
<S>                                                                 <C>             <C>             <C>
Income:
     Management fees                                                    $ 36,000         $ 36,000        $ 36,000
     Dividends received from subsidiary                                  932,892          854,020         790,721
     Equity in undistributed earnings of subsidiary                    2,058,905        1,112,307       1,225,981
     Dividend income                                                      77,686           81,433          81,563
     Gain (loss) on sale of securities available for sale                (12,661)           6,371               -
                                                                --------------------------------------------------
                                                                       3,092,822        2,090,131       2,134,265
Expenses:
     Operating expenses                                                  108,265           72,215          73,784
                                                                --------------------------------------------------

           Income before income taxes                                  2,984,557        2,017,916       2,060,481

Income taxes                                                             (20,607)          (1,384)             31
                                                                --------------------------------------------------
           Net income                                                 $3,005,164      $ 2,019,300     $ 2,060,450
                                                                ==================================================
</TABLE>









                                      -32-


<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 19.  Condensed Parent-Only Financial Statements (Continued)

                                             STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                              Years Ended December 31,
                                                                  -------------------------------------------------
                                                                        2002            2001            2000
                                                                  -------------------------------------------------
<S>                                                                 <C>             <C>             <C>
Cash Flows From Operating Activities
     Net income                                                        $ 3,005,164     $ 2,019,300     $ 2,060,450
     Adjustments to reconcile net income to net
        cash provided by operating activities:
        Undistributed earnings of subsidiary                            (2,058,905)     (1,112,307)     (1,225,981)
        Realized (gain) loss on sales of securities
           available for sale                                               12,661          (6,371)              -
        Change in operating assets and liabilities:
           (Increase) decrease in other assets                             (19,624)              -             364
           Increase (decrease) in other liabilities                           (983)         (1,384)        (14,349)
                                                                  -------------------------------------------------
 Net cash provided by operating activities                                  938,313         899,238         820,484
                                                                  -------------------------------------------------

Cash Flows From Investing Activities
     Proceeds from sales of securities available
        for sale                                                           306,770         325,471               -
     Purchase of securities available for sale                            (487,388)       (464,431)        (66,600)
                                                                  -------------------------------------------------
Net cash (used in) investing activities                                   (180,618)       (138,960)        (66,600)
                                                                  -------------------------------------------------

Cash Flows From Financing Activities
     Net proceeds from issuance of common stock                            177,706         156,246         111,870
     Payment for 191 fractional shares of
        common stock                                                        (2,875)              -               -
     Dividends paid                                                       (930,017)       (854,020)       (790,721)
                                                                  -------------------------------------------------
Net cash (used in) financing activities                                   (755,186)       (697,774)       (678,851)
                                                                  -------------------------------------------------

Increase in cash                                                             2,509          62,504          75,033
Cash, beginning                                                            252,365         189,861         114,828
                                                                  -------------------------------------------------

Cash, ending                                                             $ 254,874       $ 252,365       $ 189,861
                                                                  =================================================

</TABLE>









                                      -33-



<page>
                                   SIGNATURES

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


                        CENTRAL VIRGINIA BANKSHARES, INC.


Date: March 31, 2003         By:/s/ Ralph Larry Lyons
                                -----------------------------------------------
                                Ralph Larry Lyons
                                President and Chief Executive Officer

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


March 31, 2003             /s/ Ralph Larry Lyons
                           ---------------------
                           Ralph Larry Lyons
                           President and Chief Executive Officer; Director
                           (Principal Executive Officer)

March 31, 2003             /s/ Charles F. Catlett, III
                           ---------------------------
                           Charles F. Catlett, III
                           Senior Vice President and Chief Financial Officer
                           (Principal Financial Officer)

March 31, 2003             /s/ Thomas R. Thornton, Jr.
                           ---------------------------
                           Thomas R. Thornton, Jr.
                           Assistant Vice President
                           (Principal Accounting Officer)

March 31, 2003             /s/ John B. Larus
                           -----------------
                           John B. Larus
                           Chairman of the Board of Directors

________, 2003             -----------------------
                           Fleming V. Austin
                           Director

March 31, 2003             /s/ Charles W. Binford
                           ----------------------
                           Charles W. Binford
                           Director



<PAGE>
March 31, 2003             /s/ Garland L. Blanton, Jr.
                           ---------------------------
                           Garland L. Blanton, Jr.
                           Director

March 31, 2003             /s/ Charles B. Goodman
                           ----------------------
                           Charles B. Goodman
                           Director

March 31, 2003             /s/ Elwood C. May
                           -----------------
                           Elwood C. May
                           Director

March 31, 2003             /s/ James T. Napier
                           -------------------
                           James T. Napier
                           Director


<PAGE>

                                  CERTIFICATION


         I, Ralph Larry Lyons,  President and Chief Executive Officer of Central
Virginia Bankshares, Inc., certify that:

         1. I have  reviewed  this  annual  report  on Form  10-KSB  of  Central
Virginia Bankshares, Inc.;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                  (a) designed such disclosure controls and procedures to ensure
         that material  information  relating to the  registrant,  including its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
         date of this annual report (the "Evaluation Date"); and

                  (c) presented in this annual report our conclusions  about the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

                  (a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
         to  record,  process,  summarize  and  report  financial  data and have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

                  (b)  any  fraud,  whether  or  not  material,   that  involves
         management  or  other  employees  who  have a  significant  role in the
         registrant's internal controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this annual report whether there were significant  changes in internal  controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  March 31, 2003            /s/ Ralph Larry Lyons
                                 ----------------------------
                                 Ralph Larry Lyons
                                 President and Chief Executive Officer


<PAGE>


                                  CERTIFICATION


         I, Charles F. Catlett,  III,  Senior Vice President and Chief Financial
Officer of Central Virginia Bankshares, Inc., certify that:

         1. I have  reviewed  this  annual  report  on Form  10-KSB  of  Central
Virginia Bankshares, Inc.;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                  (a) designed such disclosure controls and procedures to ensure
         that material  information  relating to the  registrant,  including its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
         date of this annual report (the "Evaluation Date"); and

                  (c) presented in this annual report our conclusions  about the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

                  (a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
         to  record,  process,  summarize  and  report  financial  data and have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

                  (b)  any  fraud,  whether  or  not  material,   that  involves
         management  or  other  employees  who  have a  significant  role in the
         registrant's internal controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this annual report whether there were significant  changes in internal  controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  March 31, 2003            /s/ Charles F. Catlett, III
                                 --------------------------------
                                 Charles F. Catlett, III
                                 Senior Vice President and Chief Financial
                                 Officer



<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)

99.1     Statement of Chief Executive Officer Pursuant to 18 U.S.C. Section
         1350.

99.2     Statement of Chief Financial Officer Pursuant to 18 U.S.C. Section
         1350.