EX-99.1 2 rrd203248_24044.htm PRESS RELEASE DATED APRIL 18, 2008

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 1st Quarter 2008

Lynchburg, Va., April 18, 2008.........Bank of the James Financial Group, Inc. (OTCBB:BOJF) (the "Company") (quarterly consolidated results unaudited) reported today total net income after tax of $504,000 or $0.20 per basic share ($0.19 diluted) for the quarter ended March 31, 2008 compared to net income of $398,000 or $0.16 per basic share ($0.15 diluted) for the respective period a year ago. The $106,000 increase in earnings represents a 26.6% increase over the same period last year.

Robert R. Chapman III, the Company's President and CEO commented, "We are extremely proud of our 1st quarter earnings increase over last year. In spite of the recent negative outlook for the economy generally and the financial services industry specifically, we believe this increase in earnings is a significant accomplishment. We believe that we were able to achieve these earnings because of our employees and their consistent dedication to excellence in service to our loyal customer base. We remain focused on our longer term objective of becoming the pre-eminent financial institution in Region 2000 and continuing to build value for our shareholders."

Interest income increased $457,000 or 11.2% as compared to the same period a year ago as a direct result of the growth of our balance sheet, specifically interest-earning assets, a large majority of which are loans. Loans, net of unearned income and loan loss provision, increased from $224,022,000 as of December 31, 2007 to $232,952,000 as of March 31, 2008, an increase of $8,930,000 or 4.0%.

The growth in loans was primarily funded by our deposit base. Deposits grew from $228,723,000 as of December 31, 2007 to $229,005,000 as of March 31, 2008, an increase of $282,000, or less than 1%. The Bank made a strategic decision to lower its certificate of deposit rates in light of the recent FOMC interest rate cuts. This action, believes management, was the major contributing factor to the flat deposit growth for the quarter. The remaining loan growth was funded with federal funds purchased, overnight repurchase agreements or "sweep" accounts, and longer term borrowings from the Federal Home Loan Bank of Atlanta, the use of which, management believes, will contribute to a lower cost of funds in the upcoming quarters.

The result of the increase in loans and deposits was an increase in net interest income to $2,565,000 for the three month period ended March 31, 2008 from $2,308,000 as of the same period a year ago, which is an increase of $257,000 or 11.1%. This increase was partially offset by a decrease in the net interest margin to 3.97% for the period ended March 31, 2008 from 4.23% for the same period a year ago. The decrease in net interest margin is primarily attributable to the decrease in interest income realized on floating rate loans tied to the prime rate, which decreased 200 basis points during the first quarter of 2008 from 7.25% to 5.25%.

Return on average assets and return on average equity in the first quarter 2008 was 0.75% and 8.28% respectively, as compared to 0.69% and 7.33% in the same period a year ago. The modest increase in these ratios was expected due to the increase in equity capital as a result of the recent stock offering at the end of 2006.

The Company continues to experience increases in non-interest income, a significant contributor to the overall increase in earnings. Non-interest income increased to $739,000 for the period ended March 31, 2008 from $633,000 for the same period a year ago, an increase of $106,000 or 16.8%. 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.

Although management believes overall asset quality remains strong, non-performing assets increased by $2,150,000 during the quarter. The overall majority of this increase is related to four loans to one relationship. Management believes that these loans are adequately secured.

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. BOTJ Investment Group, Inc., also a wholly owned subsidiary of Bank of the James Financial Group, Inc. operates one investment services office within the Bank's Church Street office. 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
Mar 31,
2008

Three
months
ending
Mar 31,
2007

Change

Year
to
date
Mar 31,
2008

Year
to
date
Mar 31,
2007

Change

Interest income

$ 4,550

$ 4,093

11.17%

$ 4,550

$ 4,093

11.17%

Interest expense

1,985

1,785

11.20%

1,985

1,785

11.20%

Net Interest income

2,565

2,308

11.14%

2,565

2,308

11.14%

Provision for loan losses

125

151

-17.22%

125

151

-17.22%

Non-interest income

739

633

16.75%

739

633

16.75%

Non-interest expense

2,439

2,186

11.57%

2,439

2,186

11.57%

Income taxes

236

206

14.56%

236

206

14.56%

Net income

504

398

26.63%

504

398

26.63%

Weighted Average Shares
Outstanding

2,554,407

2,541,972

0.49%

2,554,407

2,541,972

0.49%

Basic net income per share

$0.20

$0.16

$0.04

$0.20

$0.16

$0.04

Fully diluted net income
per share

$0.19

$0.15

$0.04

$0.19

$0.15

$0.04

 

             

Balance Sheet at
period end:

Mar 31,
2008

Dec 31,
2007

Change

Mar 31,
2007

Dec 31,
2006

Change

Loans, net

$ 232,952

$ 224,022

3.99%

$ 196,549

$ 187,469

4.84%

Total securities

26,249

32,227

-18.55%

24,685

26,192

-5.75%

Total deposits

229,005

228,723

0.12%

203,729

201,789

0.96%

Stockholders' equity

24,918

24,524

1.61%

22,604

21,931

3.07%

Total assets

277,243

270,060

2.66%

236,588

232,709

1.67%

Shares Outstanding

2,552,933

2,556,898

(3,965)

2,550,461

2,526,066

24,395

Book value per share

9.76

9.59

0.17

8.86

8.68

$0.18

 

Daily averages:

Three
months
ending
Mar 31,
2008

Three
months
ending
Mar 31,
2007

Change

Year
to
date
Mar 31,
2008

Year
to
date
Mar 31,
2007

Change

Loans, net

$ 227,160

$ 192,939

17.74%

$ 227,160

$ 192,939

17.74%

Total securities

28,274

25,592

10.48%

28,274

25,592

10.48%

Total deposits

224,414

200,074

12.17%

224,414

200,074

12.17%

Stockholders' equity

24,472

22,031

11.08%

24,472

22,031

11.08%

Interest earning assets

260,049

221,517

17.39%

260,049

221,517

17.39%

Interest bearing liabilities

213,850

180,246

18.64%

213,850

180,246

18.64%

Total Assets

272,082

233,794

16.38%

272,082

233,794

16.38%

 

Financial Ratios:

Three
months
ending
Mar 31,
2008

Three
months
ending
Mar 31,
2007

Change

Year
to
date
Mar 31,
2008

Year
to
date
Mar 31,
2007

Change

Return on average assets

0.75%

0.69%

0.06

0.75%

0.69%

0.06

Return on average equity

8.28%

7.33%

0.95

8.28%

7.33%

0.95

Net Interest Margin

3.97%

4.23%

(0.26)

3.97%

4.23%

(0.26)

Efficiency ratio

73.82%

74.33%

(0.51)

73.82%

74.33%

(0.51)

Average Equity to average assets

8.99%

9.42%

(0.43)

8.99%

9.42%

(0.43)

 

Allowance for loan losses:

Three
months
ending
Mar 31,
2008

Three
months
ending
Mar 31,
2007

Change

Year
to
date
Mar 31,
2008

Year
to
date
Mar 31,
2007

Change

Beginning balance

$ 2,146

$ 2,091

2.63%

$2,146

$ 2,091

2.63%

Provision for losses

125

151

-17.22%

125

151

-17.22%

Charge-offs

(37)

(68)

-45.59%

(37)

(68)

-45.59%

Recoveries

10

5

100.00%

10

5

100.00%

Ending balance

2,244

2,179

2.98%

2,244

2,179

2.98%

 

Nonperforming assets:

Mar 31,
2008

Dec 31,
2007

Change

Mar 31,
2007

Dec 31,
2006

Change

Total nonperforming loans

3,250

1,246

160.83%

1,026

646

58.82%

Other real estate owned

146

-

N/A

536

535

-

Total nonperforming assets

3,396

1,246

172.55%

1,562

1,181

32.26%

 

Asset quality ratios:

Mar 31,
2008

Dec 31,
2007

Change

Mar 31,
2007

Dec 31,
2006

Change

Nonperforming loans to
total loans

1.38%

0.55%

0.83

0.52%

0.34%

0.18

Allowance for loan losses
to total loans

0.95%

0.95%

0.01

1.10%

1.10%

(0.01)

Allowance for loan losses
to nonperforming loans

69.05%

172.23%

(103.18)

212.38%

323.68%

(111.31)