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 2007
Lynchburg, Va., April 20, 2007.........Bank of the James Financial Group, Inc. (OTCBB:BOJF) (the "Company") (quarterly consolidated results unaudited) reported today total net income after tax of $398,000 or $0.17 per basic share ($0.16 diluted) for the quarter ended March 31, 2007 compared to net income of $356,000 or $0.18 per basic share ($0.17 diluted) for the respective period a year ago.
We are pleased that same quarter net income increased by 11.8%. The slight decrease in earnings per basic and diluted share primarily resulted from the increase in additional shares outstanding as a result of the common stock offering which concluded at the end of December, 2006.
Robert R. Chapman III, the Company's President commented, "To see a double digit increase in our earnings from same quarter last year affirms our belief that Region 2000 continues to be an attractive banking market. We believe that we have an opportunity to increase our presence as long as we continue to provide exceptional customer service at Bank of the James, Bank of the James Mortgage, and BOTJ Investment Group. We believe this strategy will keep us on the path of achieving our long range strategic plan of becoming the pre-eminent financial institution in Region 2000."
Our net interest income increased as compared to the same period a year ago as a direct result of the growth of our balance sheet, specifically our interest-earning assets. Loans, net of unearned income and loan loss provision, increased from $187,469,000 as of December 31, 2006 to $196,549,000 as of March 31, 2007, an increase of $9,080,000 or 4.8%. Management expects that the additional equity raised in the recent capital offering, approximately $5,147,000, will allow the Bank, among other things, to continue to grow its loan portfolio.
The growth in loans was partially funded by a modest increase in deposits which grew from $201,789,000 as of December 31, 2006 to $203,729,000 as of $1,940,000 or 1.0%. The remaining loan growth was funded with federal funds purchased, overnight repurchase agreements or "sweep" accounts, as well as the additional equity capital mentioned above.
The result of the increase in loans and deposits was an increase in net interest income to $2,308,000 for the three month period ended March 31, 2007 from $2,134,000 as of the same period a year ago, which is an increase of $174,000 or 8.2%. This increase was partially offset by a decrease in the net interest margin to 4.23% for the period ended March 31, 2007 from 4.64% for the same period a year ago. The decrease in net interest margin is primarily attributable to maturing certificates of deposit repricing at higher rates.
Return on average assets and return on average equity in the first quarter 2007 was 0.69% and 7.33% respectively, as compared to 0.74% and 9.66% in the same period a year ago. The decrease in these ratios was expected due to the increase in equity capital as a result of the recent stock offering.
A significant portion of the increase in net income was the direct result of the increase in non interest income. Non interest income increased to $633,000 for the period ended March 31, 2007 from $449,000 for the same period a year ago, an increase of $184,000 or 41.0%. 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.
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.
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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 competit ion, 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.
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Bank of the James Financial Group, Inc. and Subsidiaries
(000's) except ratios and percent data
unaudited
Selected Data: | Three months ending Mar 31, 2007 | Three months ending Mar 31, 2006 | Change | Year to date Mar 31, 2007 | Year to date Mar 31, 2006 | Change |
Interest income | $4,093 | $3,342 | 22.47% | $4,093 | $3,342 | 22.47% |
Interest expense | 1,785 | 1,208 | 47.76% | 1,785 | 1,208 | 47.76% |
Net Interest income | 2,308 | 2,134 | 8.15% | 2,308 | 2,134 | 8.15% |
Provision for loan losses | 151 | 218 | -30.73% | 151 | 218 | -30.73% |
Noninterest income | 633 | 449 | 40.98% | 633 | 449 | 40.98% |
Noninterest expense | 2,186 | 1,813 | 20.57% | 2,186 | 1,813 | 20.57% |
Income taxes | 206 | 196 | 5.10% | 206 | 196 | 5.10% |
Net income | 398 | 356 | 11.80% | 398 | 356 | 11.80% |
Weighted Average Shares Outstanding | 2,310,884 | 2,002,993 | 15.37% | 2,310,884 | 2,002,993 | 15.37% |
Basic net income per share | $0.17 | $0.18 | $(0.01) | $0.17 | $0.18 | $(0.01) |
Fully diluted net income per share | $0.16 | $0.17 | $(0.01) | $0.16 | $0.17 | $(0.01) |
Balance Sheet at period end: | Mar 31, 2007 | Dec 31, 2006 | Change | Mar 31, 2006 | Dec 31, 2005 | Change |
Loans, net | $196,549 | $187,469 | 4.84% | $161,901 | $155,480 | 4.13% |
Total securities | 24,685 | 26,192 | -5.75% | 23,604 | 23,919 | -1.32% |
Total deposits | 203,729 | 201,789 | 0.96% | 180,091 | 173,956 | 3.53% |
Stockholders' equity | 22,604 | 21,931 | 3.07% | 14,965 | 14,675 | 1.98% |
Total assets | 236,588 | 232,709 | 1.67% | 202,616 | 195,852 | 3.45% |
Shares Outstanding | 2,318,601 | 2,296,424 | 22,177 | 2,003,764 | 2,001,309 | 2,455 |
Book value per share | 9.75 | 9.55 | 0.20 | 7.47 | 7.33 | $0.14 |
Daily averages: | Three months ending Mar 31, 2007 | Three months ending Mar 31, 2006 | Change | Year to date Mar 31, 2007 | Year to date Mar 31, 2006 | Change |
Loans, net | $192,939 | $158,948 | 21.38% | $192,939 | $158,948 | 21.38% |
Total securities | 26,043 | 24,602 | 5.86% | 26,043 | 24,602 | 5.86% |
Total deposits | 200,074 | 173,000 | 15.65% | 200,074 | 173,000 | 15.65% |
Stockholders' equity | 22,031 | 14,949 | 47.37% | 22,031 | 14,949 | 47.37% |
Interest earning assets | 221,517 | 186,321 | 18.89% | 221,517 | 186,321 | 18.89% |
Interest bearing liabilities | 180,246 | 155,677 | 15.78% | 180,246 | 155,677 | 15.78% |
Total Assets | 233,794 | 195,994 | 19.29% | 233,794 | 195,994 | 19.29% |
Financial Ratios: | Three months ending Mar 31, 2007 | Three months ending Mar 31, 2006 | Change | Year to date Mar 31, 2007 | Year to date Mar 31, 2006 | Change |
Return on average assets | 0.69% | 0.74% | (0.05) | 0.69% | 0.74% | (0.05) |
Return on average equity | 7.33% | 9.66% | (2.33) | 7.33% | 9.66% | (2.33) |
Net Interest Margin | 4.23% | 4.64% | (0.42) | 4.23% | 4.64% | (0.42) |
Efficiency ratio | 74.33% | 70.19% | 4.14 | 74.33% | 70.19% | 4.14 |
Average Equity to average assets | 9.42% | 7.63% | 1.80 | 9.42% | 7.63% | 1.80 |
Allowance for loan losses: | Three months ending Mar 31, 2007 | Three months ending Mar 31, 2006 | Change | Year to date Mar 31, 2007 | Year to date Mar 31, 2006 | Change |
Beginning balance | $2,091 | $1,777 | 17.67% | $2,091 | $1,777 | 17.67% |
Provision for losses | 151 | 218 | -30.73% | 151 | 218 | -30.73% |
Charge-offs | (68) | (61) | 11.48% | (68) | (61) | 11.48% |
Recoveries | 5 | 31 | -83.87% | 5 | 31 | -83.87% |
Ending balance | 2,179 | 1,965 | 10.89% | 2,179 | 1,965 | 10.89% |
Nonperforming assets: | Mar 31, 2007 | Dec 31, 2006 | Change | Mar 31, 2006 | Dec 31, 2005 | Change |
Total nonperforming loans | 1,026 | 646 | 58.82% | 487 | 261 | 86.59% |
Other real estate owned | 536 | 535 | 0.19% | 375 | - | - |
Total nonperforming assets | 1,562 | 1,181 | 32.26% | 862 | 261 | 230.27% |
Asset quality ratios: | Mar 31, 2007 | Dec 31, 2006 | Change | Mar 31, 2006 | Dec 31, 2005 | Change |
Nonperforming loans to total loans | 0.52% | 0.34% | 0.18 | 0.30% | 0.17% | 0.13 |
Allowance for loan losses to total loans | 1.10% | 1.10% | (0.01) | 1.20% | 1.13% | 0.07 |
Allowance for loan losses to nonperforming loans | 212.38% | 323.68% | (111.31) | 403.49% | 680.84% | (277.35) |