To Our Shareholders  I would like to say thank you to all employees, officers, and directors, both past and present, as  we celebrate our 120* anniversary. Their hard work and dedication to the bank is the primary  reason we have been successful for so long. I would also like to thank our shareholders for your  confidence in the bank, and last but certainly not least, our customers. This is certainly a  milestone not many companies are able to achieve.  The financial crisis that began in 2007 continues to have an effect on the U. S. economy. Many  banks have failed over this period of time, and others are still struggling to regain profitability.  This has resulted in perhaps the most significant regulatory changes the banking industry has  seen in the past 70 years. The Dodd-Frank Act and the Consumer Credit Protection Act have  created tremendous additional expenses on banks as we move forward. Blue Ridge Bank was  certainly not the cause of the new regulations, but the cost of complying will certainly have an  effect on our bottom line as we move forward.  Our Charlottesville Office continues to progress very well after a little over a year of operation.  We moved into a more visible location during the past year at 1807 Seminole Trail. This  location also provides additional space as we continue to grow in the Charlottesville/Albemarle  County market.  Blue Ridge Bank and Blue Ridge Bankshares continue to outperform many of its peers. Strong  asset quality has been a big driving source of our success. Total assets for year-end 2012 was  $208,228,537, which represents an increase of 4% over 2011. Net year-end income was  $1,516,362, which was an increase of 31% over 2011. Retum on average assets increased fi-om  .66% in 2011 to .74% in 2012, while retum on average equity increased from 7.84% to 8.44%.  The book value per common share increased from $13.74 in 2011 to $14.85 in 2012.  We are optimistic about 2013. The inroads we have made in Charlottesville over the past year  and our strong asset quality should have us positioned for another sfrong year.  As always, I encourage you to contact me with any questions, concems, or suggestions that you  have regarding the Company. Please remember the best way to add value to your investment is  to conduct your financial business with, and refer others, to Blue Ridge Bank.  Sincerely,  Monte L. Layman  President/CEO 