EX-99.1 2 dex991.htm PRESS RELEASE

Press Release

Exhibit 99.1

Contact: J. Todd Scruggs, Executive Vice President and CFO

(434) 846-2000 tscruggs@bankofthejames.com

For Immediate Release

Bank of the James Financial Group, Inc. Announces Results

For 4th Quarter 2004 & 50% Stock Dividend

Lynchburg Va., January 21, 2005.........Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $491,000 or $0.48 per basic share ($0.45 diluted) for the quarter ended December 31, 2004 and $1,472,000 or $1.44 per basic share ($1.35 diluted) year-to-date compared to net income of $314,000 or $0.34 per basic share ($0.30 diluted) and $1,416,000 or $1.51 per basic share ($1.47 diluted) for the respective periods a year ago. Earnings per share amounts for 2004 reflect the 10% stock dividend paid by the company during January, 2004.

The 56.4% increase in net income in the fourth quarter 2004 is attributed to an increasing net interest margin as a result of the recent FOMC rate increases. A large number of adjustable rate loans in the portfolio were affected by the increase in the prime rate which helped to increase the net interest margin. Also contributing to the increase was strong non-interest income generated by the Bank’s mortgage division. Management believes the Bank’s balance sheet is poised to take advantage of future rate increases in 2005.

Total assets as of December 31, 2004 were $170,986,000 compared to $145,011,000 at the end of 2003, an increase of $25,975,000 or 17.9%. The increase is attributed to deposit growth related to the opening of the Forest, VA and Main Street branches in the spring and fall of 2004 respectively, as well as the increasing interest rate environment. Deposits grew from $133,486,000 at the period ended December 31, 2003 to $153,834,000 at the end of the fourth quarter, 2004, for an increase of 15.2%. A majority of new deposits in 2004 were gathered via the Bank’s signature savings product, “Peaks Savings” which pays an above market interest rate.

Loans, net of unearned income and loan loss provision, increased from $114,604,000 as of December 31, 2003 to $140,272,000 as of December 31, 2004, an increase of 22.4%. This increase can be attributed to the Bank’s increased presence in the market and the Bank’s reputation for service, both of which have resulted in additional opportunities for the Bank to participate in quality credit requests. The loan loss reserve of $1,419,000 represented 1.00% of total loans at the end of the fourth quarter 2004 as compared with $1,454,000 or 1.09% at the end of the third quarter 2004. The decrease in the loan loss reserve is a result of management’s decision to charge off $206,000 in non-performing loans during the fourth quarter 2004. The loan loss reserve is maintained in accordance with specifically identified impairment as mandated by FASB 114. Management deems this provision to be adequate.

Management also announced the board of director’s approval of a 3 for 2 stock split to be effected as a 50% stock dividend scheduled to be paid on March 4, 2005 for shareholders of record on February 4, 2005.

Bank of the James, a wholly owned subsidiary of Bank of the James Financial Group, Inc., currently operates five full service locations as well as a mortgage division in the Lynchburg,

Virginia area. The Bank’s most recent branch, located at 828 Main Street in the downtown area of the City of Lynchburg, opened in the fourth quarter 2004. Bank of the James Financial Group, Inc. common stock is quoted on the Over The Counter Bulletin Board under the symbol “BOJF” (some web sites require BOJF.OB to quote).

Selected financial highlights are shown below.

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Cautionary Statement Regarding Forward-Looking Statements

This press release report contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “plan” and similar expressions and variations thereof identify certain of such forward-looking statements which speak only as of the dates on which they were made. The Bank undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Such factors include, but are not limited to competition, general economic conditions, potential changes in interest rates, and changes in the value of real estate securing loans made by the Bank. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Bank of the James’ filings with the Federal Reserve Board.

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Bank of the James Financial Group, Inc.

(000’s) except ratios and percent data

Unaudited

Selected Data:		Three months ending Dec 31, 2004			Three months ending Dec 31, 2003			Change				Year to date Dec 31, 2004			Year to date Dec 31, 2003			Change
Interest income		$	2,638		$	2,056			28.31	%		$	9,433		$	7,754			21.65	%
Interest expense			694			561			23.71	%			2,511			2,269			10.67	%
Net Interest income			1,944			1,495			30.03	%			6,922			5,485			26.20	%
Provision for loan losses			120			118			1.69	%			754			552			36.59	%
Noninterest income			524			325			61.23	%			1,830			1,626			12.55	%
Noninterest expense			1,604			1,228			30.62	%			5,768			4,405			30.94	%
Income taxes			253			160			58.13	%			758			738			2.71	%
Net income			491			314			56.37	%			1,472			1,416			3.95	%
Weighted Average Shares Outstanding			1,031,991			935,630			10.30	%			1,023,879			935,630			9.43	%
Basic net income per share *		$	0.48		$	0.34		$	0.14			$	1.44		$	1.51		$	(0.07	)
Fully diluted net income per share		$	0.45		$	0.30		$	0.15			$	1.35		$	1.47		$	(0.12	)
Balance Sheet at period end:		Dec 31, 2004			Dec 31, 2003			Change				Dec 31, 2003			Dec 31, 2002			Change
Loans, net		$	140,272		$	114,604			22.40	%		$	114,604		$	85,750			33.65	%
Total securities			19,911			14,956			33.13	%			14,956			16,478			-9.24	%
Total deposits			153,834			133,486			15.24	%			133,486			103,509			28.96	%
Stockholders’ equity			12,786			11,309			13.06	%			11,309			9,973			13.40	%
Total assets			170,986			145,011			17.91	%			145,011			114,071			27.12	%
Shares Outstanding			1,032,182			935,630			96,552				935,630			935,630			—
Book value per share			12.39			12.09			0.30				12.09			10.66		$	1.43
Daily averages:		Three months ending Dec 31, 2004			Three months ending Dec 31, 2003			Change				Year to date Dec 31, 2004			Year to date Dec 31, 2003			Change
Loans, net		$	136,436		$	108,899			25.29	%		$	125,896		$	100,522			25.24	%
Total securities			23,359			12,600			85.39	%			20,294			11,508			76.35	%
Total deposits			153,985			126,813			21.43	%			145,066			112,320			29.15	%
Stockholders’ equity			12,610			11,247			12.12	%			12,101			10,729			12.79	%
Interest earning assets			161,849			130,791			23.75	%			151,677			117,089			29.54	%
Interest bearing liabilities			135,933			110,692			22.80	%			128,926			97,948			31.63	%
Total Assets			170,731			138,286			23.46	%			159,948			123,954			29.04	%

Financial Ratios:		Three months ending Dec 31, 2004				Three months ending Dec 31, 2003				Change			Year to date Dec 31, 2004				Year to date Dec 31, 2003				Change
Return on average assets			1.14	%			0.90	%		0.24				0.92	%			1.14	%		(0.22	)
Return on average equity			15.49	%			11.08	%		4.41				12.16	%			13.20	%		(1.03	)
Net Interest Margin			4.78	%			4.53	%		0.24				4.56	%			4.68	%		(0.12	)
Efficiency ratio			64.99	%			67.47	%		(2.48	)			65.90	%			61.95	%		3.96
Average Equity to average assets			7.39	%			8.13	%		(0.75	)			7.57	%			8.66	%		(1.09	)
Allowance for loan losses:		Three months ending Dec 31, 2004				Three months ending Dec 31, 2003				Change			Year to date Dec 31, 2004				Year to date Dec 31, 2003				Change
Beginning balance		$	1,454			$	1,376			5.67	%		$	1,451			$	1,081			34.23	%
Provision for losses			120				118			1.69	%			754				552			36.59	%
Charge-offs			(206	)			(62	)		232.26	%			(889	)			(263	)		238.02	%
Recoveries			51				19			168.42	%			103				81			27.16	%
Ending balance			1,419				1,451			-2.21	%			1,419				1,451			-2.21	%
Nonperforming assets:		Dec 31, 2004				Dec 31, 2003				Change			Dec 31, 2003				Dec 31, 2002				Change
Nonaccrual loans			380				85			347.06	%			85				42			102.38	%
Restructured loans			none				none			—				none				none			—
Total nonperforming loans			380				85			347.06	%			85				42			102.38	%
Other real estate owned			85				none			—				none				none			—
Total nonperforming assets			465				85			447.06	%			85				42			102.38	%
Asset quality ratios:		Dec 31, 2004				Dec 31, 2003				Change			Dec 31, 2003				Dec 31, 2002				Change
Nonperforming loans to total loans			0.27	%			0.07	%		0.19				0.07	%			0.05	%		0.02
Allowance for loan losses to total loans			1.00	%			1.25	%		(0.25	)			1.25	%			1.24	%		0.01
Allowance for loan losses to nonperforming loans			373.42	%			1707.06	%		(1,333.64	)			1707.06	%			2573.81	%		(866.75	)

* Basic EPS is calculated using the average shares outstanding for the period. Average shares outstanding increased in 2004 due to the effects of the 10% stock dividend paid on 1/27/04.