Exhibit 99.1

August 13, 2018

Dear Shareholder:

Your company, Uwharrie Capital Corp, ended the second quarter, June 30, 2018, with total assets of $614 million, an annualized increase of 13.19% compared to December 31, 2017. The asset quality of our balance sheet remains very strong with non-performing assets and past due loans at historically low levels and well below our state banking peers. Uwharrie Bank’s liquidity is also very strong by industry standards. Our balance sheet is comprised of excellent quality assets, funded by a solid base of core deposits and strong capital levels.

Balance sheet strength, along with the momentum of a robust economy, gave us the strategic runway and platform we needed to launch our investments into new technologies, product lines and markets that will keep our company viable and relevant long-term; however, investing in our future involves a higher level of cost short-term. Our core processing system is the heart of our ability to provide financial services. The current system is 15 years old and not able to efficiently support our operations and growth going forward. A project team began working on this conversion over a year ago, and we will convert to the new system during third quarter of 2018. Transitioning to this new core system has taken countless hours of work from our dedicated team and includes over $250 thousand of one-time expenses through June 30, 2018. This new core system will allow us to achieve new operational efficiencies while, at the same time, improving our customers’ experience.

The new team of Small Business Administration/United States Department of Agriculture Rural Development (SBA/USDA) lending specialists, which was discussed in our first quarter letter, has continued to grow and develop new business relationships for our company. Over the course of 2018, the team expects to break even and begin producing a net income contribution in 2019; however, it has taken an investment of $175 thousand in the first six months of 2018.

Our new full-service banking office on Rea Road in Ballantyne (Charlotte) is out-performing expected goals, though it is still in the initial start-up phase. The 2018 year-to-date investment impact is $370 thousand in additional operating cost. As new relationships develop and this office grows, it will become a net income contributor to the company. In the financial services industry, it is normal for a new branch to take 24 to 36 months to reach breakeven. Similarly, by our increasing the number of dedicated wealth management personnel in Charlotte and Asheboro, NC, we have impacted the company $50 thousand in 2018 year-to-date; however, this strategy allows our personalized financial services footprint to expand beyond Anson, Stanly and Cabarrus counties.

All four of our investment strategies totaled approximately $845 thousand in incremental one-time costs through June 2018 (pre-tax), or $670 thousand after adjusting for tax. When comparing June 30, 2018 to the same period in 2017, and adjusting for these one-time expenses, the company’s Net Income

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would have been $1.37 million compared to $1.25 million, a 9.60% improvement in the core earnings run rate.

Reported net income available to common shareholders of $326 thousand for the quarter ending June 30, 2018, is down from last year’s reported earnings of $484 thousand reported for the same period. For the six months ending June 30, 2018, earnings available to common shareholders of $417 thousand were reported as compared to $955 thousand for the six months ending June 30, 2017.

As discussed, the decline in earnings is not due to problems with your company, but rather a focused strategic effort to position ourselves to be a long-term survivor. During the second quarter, revenues for the overall company continued to improve and were on track with our budget and strategic plan.

All of these 2018 investments, which are short-term expenses, are part of a longer term plan to position our company for exponential growth and revenue opportunities in 2019 and beyond. Your company will remain relevant and will be in a strategic position to deliver new products and services to our client relationships, adding more value to them, while providing you a greater return on your investment in Uwharrie Capital Corp.

Please remember to refer your family, friends and neighbors to us for their financial needs. Thank you for your continued support.

Sincerely,

UWHARRIE CAPITAL CORP

This Report may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Company's goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may," ”could," ”should,” “would,” “believe," ”anticipate," "estimate," "expect," “intend,” ”plan,” ”projects," ”outlook," or similar expressions. These statements are based upon the current belief and expectations of the Company‘s management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control).

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