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 4th Quarter 2009

Lynchburg, Va., January 26, 2010…Bank of the James Financial Group, Inc. (OTCBB:BOJF) (the “Company”) (quarterly and 2009 year-to-date consolidated results unaudited) reported today total net income after tax of $183,000 or $0.06 per basic and diluted share for the quarter ended December 31, 2009 and a net loss of $642,000 or $0.22 per basic and diluted share year-to-date compared to net income of $501,000 or $0.17 per basic share ($0.16 diluted) and $224,000 or $0.08 per basic share ($0.07 diluted) for the respective periods a year ago. All earnings per share amounts have been adjusted to reflect the 5% stock dividend declared by the Company at the annual shareholder’s meeting on May 19, 2009 as well as all previously declared and paid stock dividends.

The decrease in net income from 2008 to 2009 full years is primarily attributable to the high level of noncash charges to increase the allowance for loan loss reserve. The higher level of provisions to the reserve was in response to increased charge-offs in 2009 and an increased effort to identify potential impairment within the loan portfolio and provide for the impairment accordingly within the reserve. During 2009 charge-offs of non-performing loans were $2,797,000 as compared to $689,000 in 2008. The amount of provisions to the loan loss reserve was $4,151,000 in 2009 as compared to $1,355,000 for the same period in 2008. The allowance for loan loss reserve has been increased to a level that management deems appropriate to absorb any potential future losses and known impairment within the loan portfolio whether or not the losses are actually ever realized.

Also contributing to the decrease in net income was the higher level of insurance premiums assessed by the FDIC in 2009. In the year 2009 the Bank expensed $805,000 in premiums, which also included a one-time special assessment of $184,000 levied by the FDIC to help replenish the Bank Insurance Fund due to the many recent bank failures, as compared to total premium expense of $176,000 in 2008, an increase of 357.4%.

Robert R. Chapman III the Company’s president commented, “Despite the diverse economy in Region 2000, neither the region nor the Bank has been immune to the adverse effects of this deep recession and we have increased our loan loss reserve accordingly. We remain extremely confident in our Region 2000 market, its strong business base, and our diligent employees as we look forward into 2010. We are proud of the fact that we were profitable in the 4th quarter in spite of the large provision for loan loss recorded during the quarter and the increased FDIC insurance premiums in 2009.”

Non-performing assets increased from $3,940,000 as of December 31, 2008 to $6,353,000 as of December 31, 2009, an increase of 61.2%. Although non-performing loans as a percentage of total loans increased slightly from 1.39% as of December 31, 2008 to 1.76% as of December 31, 2009, management believes that the current loan loss reserve of 1.33% of total loans is sufficient given the underlying collateral associated with the non-performing loans.

Asset gathering remained strong in 2009 as the “flight to quality” mentality of customers continued throughout the year. Deposits increased from $268,111,000 as of December 31, 2008 to $375,772,000 as of December 31, 2009, an increase of 40.2%. The increase may be attributed to a combination of the Bank’s business development efforts and to the success of the Bank’s “2010 Savings” product which offers a more liquid alternative to certificates of deposit and an interest rate comparable to current certificates of deposit offered by competitors in the local market. The increase in deposits has been used to fund the Bank’s loan and investment portfolio growth. Loans, net of unearned income and loan loss reserve, were at $318,452,000 as of December 31, 2009 as compared to $274,890,000 as of the end of 2008, an increase of 15.9% and investments were at $60,789,000 as of December 31, 2009 as compared to $22,130,000 as of the end of 2008, an increase of 174.7%.

The Company also benefited from new market tax credits related to a project in Lynchburg. These historic and new market tax credits increased our net after tax income in the fourth quarter by $44,000.

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
Dec 31,
2009		     Three
months
ending
Dec 31,
2008		     Change     Year
to
date
Dec 31,
2009		     Year
to
date
Dec 31,
2008		     Change  

Interest income

    $ 5,614      $ 4,693        19.62 %    $ 20,581      $ 18,594        10.69 % 

Interest expense

      2,505        2,008        24.75 %      9,252        8,018        15.39 % 

Net interest income

      3,109        2,685        15.79 %      11,329        10,576        7.12 % 

Provision for loan losses

      718        882        -18.59 %      4,151        1,355        206.35 % 

Noninterest income

      800        531        50.66 %      2,958        954        210.06 % 

Noninterest expense

      3,066        2,623        16.89 %      11,277        10,028        12.46 % 

Amortization of tax credit investment

      196        785        -75.03 %      196        785        -75.03 % 

Income taxes

      (254 )      (1,575 )      -83.87 %      (695 )      (862 )      -19.37 % 

Net income

      183        501        -63.47 %      (642 )      224        -386.61 % 

Weighted average shares Outstanding

      3,013,824        3,050,551        -1.20 %      2,960,565        3,022,425        -2.05 % 

Basic net income per share

    $ 0.06      $ 0.17      $ (0.11 )    $ (0.22 )    $ 0.08      $ (0.30 ) 

Fully diluted net income per share

    $ 0.06      $ 0.16      $ (0.10 )    $ (0.22 )    $ 0.07      $ (0.29 ) 

 

Balance Sheet at period end:

    Dec 31,
2009		    Dec 31,
2008		    Change     Dec 31,
2008		    Dec 31,
2007		    Change  

Loans, net

    $ 318,452    $ 274,890    15.85 %    $ 274,890    $ 224,022      22.71 % 

Total securities

      60,789      22,130    174.69 %      22,130      32,227      -31.33 % 

Total deposits

      375,772      268,111    40.16 %      268,111      228,723      17.22 % 

Stockholders’ equity

      23,725      24,635    -3.69 %      24,635      24,524      0.45 % 

Total assets

      437,681      328,605    33.19 %      328,605      270,060      21.68 % 

Shares outstanding

      2,990,788      2,950,768    40,020        2,950,768      2,953,217      (2,449 ) 

Book value per share

    $ 7.93    $ 8.35    (0.42 )    $ 8.35    $ 8.30    $ 0.04   

Daily averages:

    Three
months
ending
Dec 31,
2009		    Three
months
ending
Dec 31,
2008		    Change     Year
to
date
Dec 31,
2009		    Year
to
date
Dec 31,
2008		    Change  

Loans, net

    $ 315,376    $ 268,650    17.39 %    $ 300,113    $ 245,845    22.07 % 

Total securities

      61,521      32,487    89.37 %      50,047      34,508    45.03 % 

Total deposits

      371,528      258,563    43.69 %      335,051      241,061    38.99 % 

Stockholders’ equity

      23,984      23,419    2.41 %      24,662      24,395    1.09 % 

Interest earning assets

      407,502      305,988    33.18 %      371,426      285,274    30.20 % 

Interest bearing liabilities

      367,818      263,247    39.72 %      334,539      240,505    39.10 % 

Total assets

      435,455      324,386    34.24 %      399,844      300,575    33.03 % 

 

Financial Ratios:

    Three
months
ending
Dec 31,
2009		     Three
months
ending
Dec 31,
2008		     Change     Year
to
date
Dec 31,
2009		     Year
to
date
Dec 31,
2008		     Change  

Return on average assets

    0.17 %    0.61 %    (0.44 )    -0.16 %    0.07 %    (0.23 ) 

Return on average equity

    3.03 %    8.51 %    (5.48 )    -2.60 %    0.92 %    (3.52 ) 

Net interest margin

    3.03 %    3.48 %    (0.45 )    3.06 %    3.71 %    (0.65 ) 

Efficiency ratio

    78.43 %    81.56 %    (3.13 )    78.93 %    86.97 %    (8.04 ) 

Average equity to average assets

    5.51 %    7.22 %    (1.71 )    6.17 %    8.12 %    (1.95 ) 

Allowance for loan losses:

    Three
months
ending
Dec 31,
2009		     Three
months
ending
Dec 31,
2008		     Change     Year
to
date
Dec 31,
2009		     Year
to
date
Dec 31,
2008		     Change  

Beginning balance

    $ 5,300      $ 2,406      120.28 %    $ 2,859      $ 2,146      33.22 % 

Provision for losses

      718        882      -18.59 %      4,151        1,355      206.35 % 

Charge-offs

      (1,742 )      (443 )    293.23 %      (2,797 )      (689 )    305.95 % 

Recoveries

      12        14      -14.29 %      75        47      59.57 % 

Ending balance

      4,288        2,859      49.98 %      4,288        2,859      49.98 % 

Nonperforming assets:

    Dec 31,
2009		    Dec 31,
2008		    Change     Dec 31,
2008		    Dec 31,
2007		    Change  

Total nonperforming loans

    $ 5,687    $ 3,859    47.37 %    $ 3,859    $ 1,246    209.71 % 

Other real estate owned

      666      81    N/A        81      -    N/A   

Total nonperforming assets

      6,353      3,940    61.24 %      3,940      1,246    216.21 % 

Asset quality ratios:

    Dec 31,
2009		     Dec 31,
2008		     Change    Dec 31,
2008		     Dec 31,
2007		     Change  

Nonperforming loans to total loans

    1.76 %    1.39 %    0.37    1.39 %    0.55 %    0.84   

Allowance for loan losses to total loans

    1.33 %    1.03 %    0.30    1.03 %    0.95 %    0.08   

Allowance for loan losses to nonperforming loans

    75.40 %    74.09 %    1.31    74.09 %    172.23 %    (98.14 )