Press Release

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 2009

Lynchburg, Va., July 23, 2009 … Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $185,000 or $0.06 per basic and diluted share for the quarter ended June 30, 2009 and $379,000 or $0.13 per basic and diluted share year-to-date compared to net income of $524,000 or $0.18 per basic share ($0.17 diluted) and $1,028,000 or $0.35 per basic share ($0.33 diluted) for the respective periods a year ago. All earnings per share amounts have been adjusted to reflect the 5% stock dividend declared by Bank of the James Financial Group, Inc. (the “Company”) at the annual shareholder’s meeting on May 19, 2009 and payable on July 21, 2009 to shareholders of record as of June 16, 2009, as well as all previously declared and paid stock dividends.

The decrease in net income is primarily attributable to increased provisions for the allowance for loan loss in the 2^nd quarter and year-to-date. In response to the current economic conditions, management continues to remain aggressive in identifying potential impairment within the loan portfolio and accounting for any impairment through provisions to the allowance for loan loss. Loan loss provisions in the 2^nd quarter and year-to-date amounted to $611,000 and $933,000, respectively as compared to $130,000 and $255,000 during the same periods a year ago. The allowance for loan loss as a percentage of total loans increased to 1.09% as of June 30, 2009 from 1.03% as of December 31, 2008.

Also contributing to the decline in net income was the uniform 5 basis point assessment charged to all FDIC member banks by the FDIC insurance fund that was required to be expensed by the end of the 2^nd quarter. The assessment amounted to approximately $180,000 and was assessed in addition to the regularly scheduled FDIC insurance premiums paid throughout the year.

Robert R. Chapman III, President of the Bank commented, “While we of course are disappointed that our net income has decreased as compared to the same three and six month periods in 2008, given the special FDIC assessment and the current economic conditions, this decrease does not come as a surprise. What has been a pleasant surprise, however, is the many opportunities we are seeing in the Region 2000 marketplace to develop new customer relationships. These opportunities are providing us with momentum as we execute our strategic plan with confidence and a continued emphasis on risk management.”

Notably, the Bank’s core business continued to expand in a manner consistent with the strategic plan. The Bank saw a significant increase in deposits and loans mainly due to its expanded presence in the Region 2000 market area. Deposits grew from $268,111,000 as of December 31,

2008 to $332,340,000 as of June 30, 2009, an increase of $64,229,000 or 24.0%. Contributing primarily to the increase in deposits was the growth experienced at the Town of Altavista location and the City of Bedford location. These two locations, which both opened in the 4^th quarter 2008, combined accounted for approximately $25,000,000 of the total growth in deposits.

Loans, net of the allowance for loan loss, also showed significant growth in the 2^nd quarter and year-to-date. Loans increased from $274,890,000 as of December 31, 2008 to $302,423,000 as of June 30, 2009, an increase of $27,533,000 or 10.0%. Requests for loans continue to be steady and in light of the current environment underwriting standards remain stringent.

Bank of the James, a wholly owned subsidiary of Bank of the James Financial Group, Inc., currently operates nine 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 also offers insurance services and products through its wholly owned subsidiary, BOTJ Insurance, Inc., also located in the 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 Jun 30, 2009		Three months ending Jun 30, 2008		Change			Year to date Jun 30, 2009		Year To Date Jun 30, 2008		Change
Interest income	$	5,101	$	4,627		10.24	%	$	9,602	$	9,177		4.63	%
Interest expense		2,256		1,998		12.91	%		4,304		3,983		8.06	%
Net interest income		2,845		2,629		8.22	%		5,298		5,194		2.00	%
Provision for loan losses		611		130		370.00	%		933		255		265.88	%
Noninterest income		806		801		0.62	%		1,691		1,540		9.81	%
Noninterest expense		2,765		2,512		10.07	%		5,493		4,951		10.95	%
Income taxes		90		264		-65.91	%		184		500		-63.20	%
Net income		185		524		-64.69	%		379		1,028		-63.13	%
Weighted average shares outstanding		2,953,402		2,948,300		0.17	%		2,952,092		2,949,322		0.09	%
Basic net income per share	$	0.06	$	0.18	$	(0.12	)	$	0.13	$	0.35	$	(0.22	)
Fully diluted net income per share	$	0.06	$	0.17	$	(0.11	)	$	0.13	$	0.33	$	(0.20	)

Balance Sheet at period end:	Jun 30, 2009		Dec 31, 2008		Change			Jun 30, 2008		Dec 31, 2007		Change
Loans, net	$	302,423	$	274,890		10.02	%	$	245,118	$	224,022		9.42	%
Total securities		48,328		22,130		118.38	%		38,216		32,227		18.58	%
Total deposits		332,340		268,111		23.96	%		239,057		228,723		4.52	%
Stockholders’ equity		24,077		24,635		-2.27	%		24,803		24,524		1.14	%
Total assets		396,965		328,605		20.80	%		306,115		270,060		13.35	%
Shares outstanding		2,953,504		2,950,768		2,736			3,089,049		3,093,847		(4,798	)
Book value per share	$	8.15	$	8.35		(0.20	)	$	8.03	$	7.93	$	0.10

Daily averages:	Three months ending Jun 30, 2009		Three months ending Jun 30, 2008		Change			Year to date Jun 30, 2009		Year to date Jun 30, 2008		Change
Loans, net	$	296,440	$	236,510		25.34	%	$	288,385	$	231,835		24.39	%
Total securities		46,708		37,237		25.43	%		41,044		32,756		25.30	%
Total deposits		319,802		236,760		35.07	%		307,619		230,587		33.41	%
Stockholders’ equity		24,171		24,891		-2.89	%		24,386		24,681		-1.20	%
Interest earning assets		359,701		279,619		28.64	%		345,701		269,836		28.12	%
Interest bearing liabilities		312,721		234,909		33.12	%		303,267		224,352		35.17	%
Total assets		381,808		294,938		29.45	%		367,903		283,504		29.77	%

E-1


Financial Ratios:	Three months ending Jun 30, 2009			Three months ending Jun 30, 2008			Change		Year to date Jun 30, 2009			Year to date Jun 30, 2008			Change
Return on average assets		0.19	%		0.71	%	(0.52	)		0.21	%		0.73	%	(0.52	)
Return on average equity		3.07	%		8.47	%	(5.40	)		3.13	%		8.38	%	(5.25	)
Net interest margin		3.29	%		3.78	%	(0.49	)		3.15	%		3.87	%	(0.72	)
Efficiency ratio		75.73	%		73.24	%	2.49			78.59	%		73.52	%	5.07
Average equity to average assets		6.33	%		8.44	%	(2.11	)		6.63	%		8.71	%	(2.08	)

Allowance for loan losses:	Three months ending Jun 30, 2009			Three months ending Jun 30, 2008			Change		Year to date Jun 30, 2009			Year to date Jun 30, 2008			Change
Beginning balance	$	3,004		$	2,244		33.87	%	$	2,859		$	2,146		33.22	%
Provision for losses		611			130		370.00	%		933			255		265.88	%
Charge-offs		(309	)		(112	)	175.89	%		(500	)		(149	)	235.57	%
Recoveries		17			13		30.77	%		31			23		34.78	%
Ending balance		3,323			2,275		46.07	%		3,323			2,275		46.07	%

Nonperforming assets:	Jun 30, 2009			Dec 31, 2008			Change		Jun 30, 2008			Dec 31, 2007			Change
Total nonperforming loans	$	2,605		$	3,859		-32.50	%	$	2,316		$	1,246		85.87	%
Other real estate owned		2,359			81		N/A			404			—		N/A
Total nonperforming assets		4,964			3,940		25.99	%		2,720			1,246		118.30	%

Asset quality ratios:	Jun 30, 2009			Dec 31, 2008			Change		Jun 30, 2008			Dec 31, 2007			Change
Nonperforming loans to total loans		0.85	%		1.39	%	(0.54	)		0.94	%		0.55	%	0.39
Allowance for loan losses to total loans		1.09	%		1.03	%	0.06			0.92	%		0.95	%	(0.03	)
Allowance for loan losses to nonperforming loans		127.56	%		74.09	%	53.48			98.23	%		172.23	%	(74.00	)

E-2