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 39.7 % Increase in

3rd Quarter 2007 Net Income

Lynchburg, Va., October 19, 2007...Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $581,000 or $0.23 per basic share ($0.22 diluted) for the quarter ended September 30, 2007 and $1,477,000 or $0.58 per basic share ($0.55 diluted) year-to-date compared to net income of $416,000 or $0.19 per basic share ($0.18 diluted) and $1,200,000 or $0.54 per basic share ($0.51 diluted) for the respective periods a year ago. The 3rd quarter and year-to-date net income amounts represent a 39.7% and 23.1% increase over 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 $215,287,000 as of September 30, 2007, an increase of $27,818,000 or 14.8%. Deposits increased from $201,789,000 as of December 31, 2006 to $223,330,000 as of September 30, 2007, an increase of $21,541,000 or 10.7%.

Net interest income increased to $2,532,000 and $7,239,000 for the three and nine months ended September 30, 2007 from $2,265,000 and $6,626,000 for the same periods in 2006. This increase was due primarily to the growth in the loan portfolio.

Robert R. Chapman III, the Company’s President, commented, “In the 3rd quarter of 2007 we achieved the highest quarterly net income in the 8 year history of our company. These earnings resulted in part from our investment in infrastructure, specifically employees and branches over the past several quarters. We believe that this investment in infrastructure will enable us to continue to grow our balance sheet in the immediate future with minimal additional overhead expense. We continue to believe the company is well positioned to increase our presence in Region 2000.”

Although 3rd quarter 2007 non-interest income did not increase significantly as compared to the same period a year ago, year-to-date non-interest income increased 21.3% from $1,637,000 in the first 9 months of 2007 compared to $1,985,000 in the first 9 months of 2007. J. Todd Scruggs, the Company’s Executive Vice President and Chief Financial Officer commented, “Given the recent decrease in short term interest rates and the continuing margin compression throughout the banking industry, non-interest income is perhaps more than ever becoming a core component of every bank’s revenue stream. We believe a 21% year over year growth in non-interest income, demonstrates our intentions to become less dependent on net interest income

which should help to continue to create value for our shareholders.” 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 3rd quarter 2007 of 0.91% and 10.01% respectively, as compared to 0.78% and 10.55% in the same period a year ago. The decrease in return on average equity 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 shares outstanding, ratios and percent data

unaudited

 

Selected Data:

   

Three

months

ending

Sep 30,

2007

   

Three

months

ending

Sep 30,

2006

    Change    

Year

to

date

Sep 30,

2007

   

Year

to

date

Sep 30,

2006

    Change  

Interest income

    $ 4,581    $ 3,786      21.00 %   $ 12,972    $ 10,675      21.52 %

Interest expense

      2,049      1,521      34.71 %     5,733      4,049      41.59 %

Net Interest income

      2,532      2,265      11.79 %     7,239      6,626      9.25 %

Provision for loan losses

      59      184      -67.93 %     304      489      -37.83 %

Noninterest income

      654      649      0.77 %     1,985      1,637      21.26 %

Noninterest expense

      2,188      2,087      4.84 %     6,621      5,918      11.88 %

Income taxes

      300      227      32.16 %     764      656      16.46 %

Net income

      581      416      39.66 %     1,477      1,200      23.08 %

Weighted Average Shares Outstanding

      2,557,396      2,218,685      15.27 %     2,550,965      2,210,971      15.38 %

Basic net income per share

    $ 0.23    $ 0.19    $ 0.04     $ 0.58    $ 0.54    $ 0.04  

Fully diluted net income per share

    $ 0.22    $ 0.18    $ 0.04     $ 0.55    $ 0.51    $ 0.04  

Balance Sheet at period end:

   

Sep 30,

2007

   

Dec 31,

2006

    Change    

Sep 30,

2006

   

Dec 31,

2005

    Change  

Loans, net

    $ 215,287    $ 187,469      14.84 %   $ 174,020    $ 155,480      11.92 %

Total securities

      29,772      26,192      13.67 %     26,490      23,919      10.75 %

Total deposits

      223,330      201,789      10.68 %     188,667      173,956      8.46 %

Stockholders’ equity

      23,837      21,931      8.69 %     16,161      14,675      10.13 %

Total assets

      261,745      232,709      12.48 %     214,349      195,852      9.44 %

Shares Outstanding

      2,558,578      2,526,090      32,488       2,221,976      2,201,440      20,536  

Book value per share

    $ 9.32    $ 8.68    $ 0.63     $ 7.27    $ 6.67    $ 0.61  

Daily averages:

   

Three

months

ending

Sep 30,

2007

   

Three

months

ending

Sep 30,

2006

    Change    

Year

to

date

Sep 30,

2007

   

Year

to

date

Sep 30,

2006

    Change  

Loans, net

    $ 209,548    $ 166,144      26.12 %   $ 200,737    $ 161,545      24.26 %

Total securities

      26,848      27,570      -2.62 %     26,168      25,678      1.91 %

Total deposits

      218,932      186,231      17.56 %     209,081      179,192      16.68 %

Stockholders’ equity

      23,030      15,643      47.22 %     22,571      15,261      47.90 %

Interest earning assets

      241,119      199,172      21.06 %     230,383      191,613      20.23 %

Interest bearing liabilities

      197,008      168,344      17.03 %     187,872      161,278      16.49 %

Total Assets

      254,024      211,013      20.38 %     243,023      202,754      19.86 %

Financial Ratios:

   

Three

months

ending

Sep 30,

2007

    

Three

months

ending

Sep 30,

2006

     Change    

Year

to

date

Sep 30,

2007

    

Year

to

date

Sep 30,

2006

     Change  

Return on average assets

      0.91 %     0.78 %   0.13       0.81 %     0.79 %   0.02  

Return on average equity

      10.01 %     10.55 %   (0.54 )     8.75 %     10.51 %   (1.76 )

Net Interest Margin

      4.17 %     4.51 %   (0.35 )     4.20 %     4.62 %   (0.42 )

Efficiency ratio

      68.68 %     71.62 %   (2.94 )     71.78 %     71.62 %   0.16  

Average Equity to average assets

      9.07 %     7.41 %   1.65       9.29 %     7.53 %   1.76  

Allowance for loan losses:

   

Three

months

ending

Sep 30,

2007

    

Three

months

ending

Sep 30,

2006

     Change    

Year

to

date

Sep 30,

2007

    

Year

to

date

Sep 30,

2006

     Change  

Beginning balance

    $ 2,176     $ 2,006     8.47 %   $ 2,091     $ 1,777     17.67 %

Provision for losses

      59       184     -67.93 %     304       489     -37.83 %

Charge-offs

      (88 )     (181 )   -51.38 %     (262 )     (295 )   -11.19 %

Recoveries

      23       4     475.00 %     37       42     -11.90 %

Ending balance

      2,170       2,013     7.80 %     2,170       2,013     7.80 %

Nonperforming assets:

   

Sep 30,

2007

    

Dec 31,

2006

     Change    

Sep 30,

2006

    

Dec 31,

2005

     Change  

Total nonperforming loans

    $ 1,016     $ 646     57.28 %   $ 668     $ 261     155.94 %

Other real estate owned

      500       535     -6.54 %     579       —       —    
                                            

Total nonperforming assets

      1,516       1,181     28.37 %     1,247       261     377.78 %
                                            

Asset quality ratios:

   

Sep 30,

2007

    

Dec 31,

2006

     Change    

Sep 30,

2006

    

Dec 31,

2005

     Change  

Nonperforming loans to total loans

      0.47 %     0.34 %   0.13       0.38 %     0.17 %   0.21  

Allowance for loan losses to total loans

      1.00 %     1.10 %   (0.11 )     1.14 %     1.13 %   0.01  

Allowance for loan losses to nonperforming loans

      213.58 %     323.68 %   (110.10 )     301.35 %     680.84 %   (379.50 )