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 2nd Quarter 2007

Lynchburg, Va., July 20, 2007………Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $498,000 or $0.20 per basic share ($0.18 diluted) for the quarter ended June 30, 2007 and $896,000 or $0.35 per basic share ($0.33 diluted) year-to-date compared to net income of $428,000 or $0.19 per basic share ($0.18 diluted) and $784,000 or $0.36 per basic share ($0.33 diluted) for the respective periods a year ago. All earnings per share amounts have been adjusted to reflect the 10% stock dividend declared by Bank of the James Financial Group, Inc. (the “Company”) at the annual shareholder’s meeting on May 15, 2007, as well as all previously declared and paid stock dividends.

The growth in net income as compared to the same periods a year ago is primarily attributable to an increase in interest earning assets as a result of balance sheet growth. Loans, net of unearned income and loan loss provision, increased from $187,469,000 as of December 31, 2006 to $203,360,000 as of June 30, 2007, an increase of $15,981,000 or 8.5%. Deposits increased from $201,789,000 as of December 31, 2006 to $213,104,000 as of June 30, 2007, an increase of $11,315,000 or 5.6%.

Robert R. Chapman III, the Company’s President commented, “Total balance sheet growth, specifically loan and deposit growth, remained on target with the strategic plan despite the competitive interest rate environment in which we continue to operate. One of the highlights of our quarter is the success we have had gathering deposits and establishing new relationships at our newest location in the Town of Amherst. We have received an overwhelming response at this new location and continue to attract new business at our previously existing locations as well. As we celebrate our 8th birthday on July 22nd, we thank the people of Region 2000 for their continued support and confidence they have shown in us.”

Another significant component of the increase in net income was the increase in non interest income. Non interest income increased to $698,000 for the quarter ended June 30, 2007 and $1,331,000 year-to-date compared to $539,000 and $988,000 for the respective periods a year ago. J. Todd Scruggs, the Company’s Executive Vice President and Chief Financial Officer commented, “A 35% year-to-date growth in non interest income over the same time last year is something of which we are very proud given the net interest margin compression being experienced throughout our industry. Non interest income, we believe, increasingly is becoming a necessary core component of a high performing bank’s revenue stream. For this reason our strategic plan is intensely focused on growing that part of our business.” Non interest income is mainly comprised of fees generated through the origination of mortgage loans at Bank of the James Mortgage, a division of Bank of the James, and commissions on the sale of investment products through the Company’s wholly-owned subsidiary, BOTJ Investment Group, Inc.

As set forth in the attached financial highlights, the Company had a return on average assets and return on average equity in the 2nd quarter 2007 of 0.83% and 8.83% respectively, as compared to 0.85% and 11.30% in the same period a year ago. The decrease in these ratios as compared to the same periods a year ago was expected due to the increased equity capital resulting from the recent stock offering.

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

Jun 30,

2007

   

Three
months
ending

Jun 30,

2006

    Change    

Year to

date

Jun 30,

2007

   

Year to

date

Jun 30,

2006

    Change  

Interest income

    $ 4,298    $ 3,547      21.17 %   $ 8,391    $ 6,889      21.80 %

Interest expense

      1,899      1,320      43.86 %     3,684      2,528      45.73 %

Net Interest income

      2,399      2,227      7.72 %     4,707      4,361      7.93 %

Provision for loan losses

      94      87      8.05 %     245      305      -19.67 %

Noninterest income

      698      539      29.50 %     1,331      988      34.72 %

Noninterest expense

      2,247      2,018      11.35 %     4,433      3,831      15.71 %

Income taxes

      258      233      10.73 %     464      429      8.16 %

Net income

      498      428      16.36 %     896      784      14.29 %

Weighted Average Shares Outstanding

      2,553,271      2,210,769      15.49 %     2,547,635      2,207,051      15.43 %

Basic net income per share

    $ 0.20    $ 0.19    $ 0.01     $ 0.35    $ 0.36    $ (0.01 )

Fully diluted net income per share

    $ 0.18    $ 0.18    $ —       $ 0.33    $ 0.33    $ —    

Balance Sheet at period end:

   

Jun 30,

2007

   

Dec 31,

2006

    Change    

Jun 30,

2006

   

Dec 31,

2005

    Change  

Loans, net

    $ 203,360    $ 187,469      8.48 %   $ 161,949    $ 155,480      4.16 %

Total securities

      25,283      26,192      -3.47 %     24,282      23,919      1.52 %

Total deposits

      213,104      201,789      5.61 %     181,427      173,956      4.29 %

Stockholders’ equity

      23,015      21,931      4.94 %     15,398      14,675      4.93 %

Total assets

      245,695      232,709      5.58 %     204,279      195,852      4.30 %

Shares Outstanding

      2,556,204      2,526,208      29,996       2,214,592      2,201,440      13,152  

Book value per share

      9.00      8.68      0.32       6.95      6.67    $ 0.29  

Daily averages:

   

Three
months
ending

Jun 30,

2007

   

Three
months
ending

Jun 30,

2006

    Change    

Year to

date

Jun 30,

2007

   

Year to

date

Jun 30,

2006

    Change  

Loans, net

    $ 199,540    $ 159,463      25.13 %   $ 196,258    $ 159,206      23.27 %

Total securities

      25,604      24,833      3.10 %     25,822      24,718      4.47 %

Total deposits

      208,031      178,196      16.74 %     204,074      175,613      16.21 %

Stockholders’ equity

      22,631      15,188      49.01 %     22,335      15,068      48.23 %

Interest earning assets

      228,466      189,566      20.52 %     225,014      187,775      19.83 %

Interest bearing liabilities

      186,244      159,673      16.64 %     183,228      157,686      16.20 %

Total Assets

      241,108      201,070      19.91 %     237,438      198,548      19.59 %

Financial Ratios:

    Three
months
ending
Jun 30,
2007		    

Three
months
ending

Jun 30,
2006

     Change    

Year to
date

Jun 30,
2007

    

Year to
date

Jun 30,
2006

     Change  

Return on average assets

      0.83 %     0.85 %   (0.03 )     0.76 %     0.80 %   (0.04 )

Return on average equity

      8.83 %     11.30 %   (2.48 )     8.09 %     10.49 %   (2.40 )

Net Interest Margin

      4.21 %     4.71 %   (0.50 )     4.22 %     4.68 %   (0.47 )

Efficiency ratio

      72.55 %     72.96 %   (0.40 )     73.42 %     71.62 %   1.80  

Average Equity to average assets

      9.39 %     7.55 %   1.83       9.41 %     7.59 %   1.82  

Allowance for loan losses:

    Three
months
ending
Jun 30,
2007		    

Three
months
ending

Jun 30,
2006

     Change    

Year to
date

Jun 30,
2007

    

Year to
date

Jun 30,
2006

     Change  

Beginning balance

    $ 2,179     $ 1,965     10.89 %   $ 2,091     $ 1,777     17.67 %

Provision for losses

      94       87     8.05 %     245       305     -19.67 %

Charge-offs

      (107 )     (53 )   101.89 %     (175 )     (114 )   53.51 %

Recoveries

      10       7     42.86 %     15       38     -60.53 %

Ending balance

      2,176       2,006     8.47 %     2,176       2,006     8.47 %

Nonperforming assets:

    Jun 30,
2007		     Dec 31,
2006		     Change     Jun 30,
2006		     Dec 31,
2005		     Change  

Total nonperforming loans

      595       646     -7.89 %     552       261     111.49 %

Other real estate owned

      962       535     79.81 %     560       —       —    

Total nonperforming assets

      1,557       1,181     31.84 %     1,112       261     326.05 %

Asset quality ratios:

    Jun 30,
2007		     Dec 31,
2006		     Change     Jun 30,
2006		     Dec 31,
2005		     Change  

Nonperforming loans to total loans

      0.29 %     0.34 %   (0.05 )     0.34 %     0.17 %   0.17  

Allowance for loan losses to total loans

      1.06 %     1.10 %   (0.04 )     1.22 %     1.13 %   0.09  

Allowance for loan losses to nonperforming loans

      365.71 %     323.68 %   42.03       363.41 %     680.84 %   (317.44 )