EX-99.1 2 rrd144843_18127.htm

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 2006 - Quarterly Net Income is Highest in Company's History

Lynchburg, Va., January 26, 2007.........Bank of the James Financial Group, Inc. (OTCBB:BOJF) (the "Company") (quarterly and 2006 year-to-date consolidated results unaudited) reported today total net income after tax of $565,000 or $0.28 per basic share ($0.26 diluted) for the quarter ended December 31, 2006 and $1,765,000 or $0.88 per basic share ($0.82 diluted) year-to-date compared to net income of $535,000 or $0.27 per basic share ($0.26 diluted) and $1,791,000 or $0.90 per basic share ($0.86 diluted) for the respective periods a year ago.

The Company's net interest margin decreased 14 basis points from 4.73% for the 12 month period ended December 31, 2005 to 4.59% for the period ended December 31, 2006. This decrease contributed to the 1.5% decline in year-to-date net income from 2005 to 2006. The Bank's President and CEO, Robert R. Chapman III, commented "Despite the slight decline in net earnings from 2006 to 2005, we were satisfied with our performance this past year, particularly the increase in net income in the fourth quarter. We recognized that 2006 would be challenging given our expansion plans and the rising interest rate environment. However, with the additional equity raised in the recent capital offering, we believe the company remains strategically positioned to accommodate our future growth plans."

The fourth quarter 2006 net income figure represents the highest quarterly net income achieved in the Company's history. Return on average assets and return on average equity in the fourth quarter 2006 was 1.01% and 13.52% respectively, as compared to 1.10% and 14.62% in the same period a year ago.

Strong balance sheet growth in the fourth quarter 2006, specifically loan growth, contributed to the increased quarterly earnings. Loans, net of unearned income and loan loss provision, increased from $155,480,000 as of December 31, 2005 to $187,469,000 as of the end of December 31, 2006, an increase of 20.6%. Approximately $13,449,000 of this increase occurred in the fourth quarter 2006. In addition, management expects that the additional equity raised in the recent capital offering, approximately $5,147,000, will allow the Bank, among other things, to continue to grow its loan portfolio.

Deposits, which funded the increase in loans, increased from $173,956,000 as of December 31, 2005 to $201,789,000 as of December 31, 2006, an increase of 16.0%. As a result of the capital offering, the Company's book value per share increased from $7.33 as of December 31, 2005 to $9.55 as of December 31, 2006, an increase of $2.22 per share.

The growth in loans, deposits and equity capital contributed to the overall growth of the balance sheet. Total assets as of December 31, 2006 were $232,709,000 compared to $195,852,000 at the end of 2005, an increase of $36,857,000 or 18.8%.

Non interest income also increased from $2,091,000 in the period ended December 31, 2005 to $2,314,000 in the period ended December 31, 2006, an increase of 10.7%. The increase is attributable to fees derived from increased mortgage origination volume as well as revenue from the Bank's investment in a title insurance company.

Bank of the James, a wholly owned subsidiary of Bank of the James Financial Group, Inc., currently operates seven full service locations as well as mortgage origination offices in Forest and Moneta, Virginia. 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.

# # #

Cautionary Statement Regarding Forward-Looking Statements

This press release 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. Bank of the James Financial Group (the "Company") 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 Bank of the James (the "Bank"), a subsidiary of Bank of the James Financial Group, Inc. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission and previously filed by the Bank (as predecessor of the Company) with the Federal Reserve Board.

# # #

 

Bank of the James Financial Group, Inc. and Subsidiaries

(000's) except ratios and percent data

unaudited

Selected Data:

Three

months

ending

Dec 31,

2006

Three

months

ending

Dec 31,

2005

Change

Year

to

date

Dec 31,

2006

Year

to

date

Dec 31,

2005

Change

Interest income

$4,005

$3,300

21.36%

$14,680

$12,028

22.05%

Interest expense

1,635

1,124

45.46%

5,684

3,779

50.41%

Net Interest income

2,370

2,176

8.92%

8,996

8,249

9.06%

Provision for loan losses

141

174

-18.97%

630

803

-21.54%

Noninterest income

677

481

40.75%

2,314

2,091

10.66%

Noninterest expense

2,015

1,672

20.51%

7,933

6,826

16.22%

Income taxes

326

276

18.12%

982

920

6.74%

Net income

565

535

5.61%

1,765

1,791

-1.45%

Weighted Average Shares Outstanding

2,028,993

2,001,309

1.38%

2,014,768

1,988,118

1.34%

Basic net income per share

$0.28

$0.27

$0.01

$0.88

$0.90

$(0.02)

Fully diluted net income per share

$0.26

$0.26

$-

$0.82

$0.86

$(0.04)

 

Balance Sheet at

period end:

Dec 31,

2006

Dec 31,

2005

Change

Dec 31,

2005

Dec 31,

2004

Change

Loans, net

$187,469

$155,480

20.57%

$155,480

$140,272

10.84%

Total securities

26,191

23,919

9.50%

23,919

19,911

20.13%

Total deposits

201,789

173,956

16.00%

173,956

153,834

13.08%

Stockholders' equity

21,931

14,676

49.44%

14,675

12,786

14.77%

Total assets

232,709

195,852

18.82%

195,852

171,025

14.52%

Shares Outstanding

2,296,424

2,001,309

295,115

2,001,309

1,935,824

65,485

Book value per share

9.55

7.33

2.22

7.33

6.60

$0.73

 

 

 

Daily averages:

Three

months

ending

Dec 31,

2006

Three

months

ending

Dec 31,

2005

Change

Year

to

date

Dec 31,

2006

Year

to

date

Dec 31,

2005

Change

Loans, net

$178,634

$155,574

14.82%

$155,852

$147,813

5.44%

Total securities

27,285

25,010

9.10%

26,083

23,282

12.03%

Total deposits

194,288

169,489

14.63%

182,997

164,169

11.47%

Stockholders' equity

16,585

14,520

14.22%

15,594

13,830

12.76%

Interest earning assets

209,743

183,645

14.21%

196,180

174,547

12.39%

Interest bearing liabilities

172,529

152,025

13.49%

164,117

145,838

12.53%

Total Assets

221,118

192,498

14.87%

207,381

183,770

12.85%

 

Financial Ratios:

Three

months

ending

Dec 31,

2006

Three

months

ending

Dec 31,

2005

Change

Year

to

date

Dec 31,

2006

Year

to

date

Dec 31,

2005

Change

Return on average assets

1.01%

1.10%

(0.09)

0.85%

0.97%

(0.12)

Return on average equity

13.52%

14.62%

(1.10)

11.32%

12.95%

(1.63)

Net Interest Margin

4.48%

4.70%

(0.22)

4.59%

4.73%

(0.14)

Efficiency ratio

66.13%

62.93%

3.20

70.14%

66.02%

4.13

Average Equity to average assets

7.50%

7.54%

(0.04)

7.52%

7.53%

(0.01)

 

Allowance for loan losses:

Three

months

ending

Dec 31,

2006

Three

months

ending

Dec 31,

2005

Change

Year

to

date

Dec 31,

2006

Year

to

date

Dec 31,

2005

Change

Beginning balance

$2,013

$1,684

19.54%

$1,777

$1,419

25.23%

Provision for losses

141

174

-18.97%

630

803

-21.54%

Charge-offs

(108)

(93)

16.13%

(403)

(485)

-16.91%

Recoveries

45

12

275.00%

87

40

117.50%

Ending balance

2,091

1,777

17.67%

2,091

1,777

17.67%

 

 

Nonperforming assets:

Dec 31,

2006

Dec 31,

2005

Change

Dec 31,

2005

Dec 31,

2004

Change

Nonaccrual loans

646

261

147.51%

261

380

-31.32%

Restructured loans

none

none

-

none

none

-

Total nonperforming loans

646

261

147.51%

261

380

-31.32%

Other real estate owned

535

none

-

none

85

-

Total nonperforming assets

1,181

261

352.49%

261

465

-43.87%

 

Asset quality ratios:

Dec 31,

2006

Dec 31,

2005

Change

Dec 31,

2005

Dec 31,

2004

Change

Nonperforming loans to total loans

0.34%

0.17%

0.17

0.17%

0.27%

(0.10)

Allowance for loan losses to total loans

1.10%

1.13%

(0.03)

1.13%

1.00%

0.13

Allowance for loan losses to nonperforming loans

323.68%

680.84%

(357.16)

680.84%

373.42%

307.42