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.
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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 | Three | Change | Year | Year | 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 | 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 | $0.19 | $0.15 | $0.04 | $0.19 | $0.15 | $0.04 |
Balance Sheet at | Mar 31, | Dec 31, | Change | Mar 31, | Dec 31, | 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 | Three | Change | Year | Year | 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 | Three | Change | Year | Year | 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 | Three | Change | Year | Year | 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, | Dec 31, | Change | Mar 31, | Dec 31, | 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, | Dec 31, | Change | Mar 31, | Dec 31, | Change |
Nonperforming loans to | 1.38% | 0.55% | 0.83 | 0.52% | 0.34% | 0.18 |
Allowance for loan losses | 0.95% | 0.95% | 0.01 | 1.10% | 1.10% | (0.01) |
Allowance for loan losses | 69.05% | 172.23% | (103.18) | 212.38% | 323.68% | (111.31) |