Bank of the James Financial (BOTJ) 8-K Bank of the James Financial Group, Inc. Announces Results

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 2007

Lynchburg, Va., July 20, 2007………Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $498,000 or $0.20 per basic share ($0.18 diluted) for the quarter ended June 30, 2007 and $896,000 or $0.35 per basic share ($0.33 diluted) year-to-date compared to net income of $428,000 or $0.19 per basic share ($0.18 diluted) and $784,000 or $0.36 per basic share ($0.33 diluted) for the respective periods a year ago. All earnings per share amounts have been adjusted to reflect the 10% stock dividend declared by Bank of the James Financial Group, Inc. (the “Company”) at the annual shareholder’s meeting on May 15, 2007, as well as all previously declared and paid stock dividends.

The growth in net income as compared to the same periods a year ago is primarily attributable to an increase in interest earning assets as a result of balance sheet growth. Loans, net of unearned income and loan loss provision, increased from $187,469,000 as of December 31, 2006 to $203,360,000 as of June 30, 2007, an increase of $15,981,000 or 8.5%. Deposits increased from $201,789,000 as of December 31, 2006 to $213,104,000 as of June 30, 2007, an increase of $11,315,000 or 5.6%.

Robert R. Chapman III, the Company’s President commented, “Total balance sheet growth, specifically loan and deposit growth, remained on target with the strategic plan despite the competitive interest rate environment in which we continue to operate. One of the highlights of our quarter is the success we have had gathering deposits and establishing new relationships at our newest location in the Town of Amherst. We have received an overwhelming response at this new location and continue to attract new business at our previously existing locations as well. As we celebrate our 8^th birthday on July 22^nd, we thank the people of Region 2000 for their continued support and confidence they have shown in us.”

Another significant component of the increase in net income was the increase in non interest income. Non interest income increased to $698,000 for the quarter ended June 30, 2007 and $1,331,000 year-to-date compared to $539,000 and $988,000 for the respective periods a year ago. J. Todd Scruggs, the Company’s Executive Vice President and Chief Financial Officer commented, “A 35% year-to-date growth in non interest income over the same time last year is something of which we are very proud given the net interest margin compression being experienced throughout our industry. Non interest income, we believe, increasingly is becoming a necessary core component of a high performing bank’s revenue stream. For this reason our strategic plan is intensely focused on growing that part of our business.” 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.

As set forth in the attached financial highlights, the Company had a return on average assets and return on average equity in the 2nd quarter 2007 of 0.83% and 8.83% respectively, as compared to 0.85% and 11.30% in the same period a year ago. The decrease in these ratios as compared to the same periods a year ago was expected due to the increased equity capital resulting from the recent stock offering.

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 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.

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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 Jun 30, 2007		Three months ending Jun 30, 2006		Change			Year to date Jun 30, 2007		Year to date Jun 30, 2006		Change
Interest income	$	4,298	$	3,547		21.17	%	$	8,391	$	6,889		21.80	%
Interest expense		1,899		1,320		43.86	%		3,684		2,528		45.73	%
Net Interest income		2,399		2,227		7.72	%		4,707		4,361		7.93	%
Provision for loan losses		94		87		8.05	%		245		305		-19.67	%
Noninterest income		698		539		29.50	%		1,331		988		34.72	%
Noninterest expense		2,247		2,018		11.35	%		4,433		3,831		15.71	%
Income taxes		258		233		10.73	%		464		429		8.16	%
Net income		498		428		16.36	%		896		784		14.29	%
Weighted Average Shares Outstanding		2,553,271		2,210,769		15.49	%		2,547,635		2,207,051		15.43	%
Basic net income per share	$	0.20	$	0.19	$	0.01		$	0.35	$	0.36	$	(0.01	)
Fully diluted net income per share	$	0.18	$	0.18	$	—		$	0.33	$	0.33	$	—
Balance Sheet at period end:	Jun 30, 2007		Dec 31, 2006		Change			Jun 30, 2006		Dec 31, 2005		Change
Loans, net	$	203,360	$	187,469		8.48	%	$	161,949	$	155,480		4.16	%
Total securities		25,283		26,192		-3.47	%		24,282		23,919		1.52	%
Total deposits		213,104		201,789		5.61	%		181,427		173,956		4.29	%
Stockholders’ equity		23,015		21,931		4.94	%		15,398		14,675		4.93	%
Total assets		245,695		232,709		5.58	%		204,279		195,852		4.30	%
Shares Outstanding		2,556,204		2,526,208		29,996			2,214,592		2,201,440		13,152
Book value per share		9.00		8.68		0.32			6.95		6.67	$	0.29
Daily averages:	Three months ending Jun 30, 2007		Three months ending Jun 30, 2006		Change			Year to date Jun 30, 2007		Year to date Jun 30, 2006		Change
Loans, net	$	199,540	$	159,463		25.13	%	$	196,258	$	159,206		23.27	%
Total securities		25,604		24,833		3.10	%		25,822		24,718		4.47	%
Total deposits		208,031		178,196		16.74	%		204,074		175,613		16.21	%
Stockholders’ equity		22,631		15,188		49.01	%		22,335		15,068		48.23	%
Interest earning assets		228,466		189,566		20.52	%		225,014		187,775		19.83	%
Interest bearing liabilities		186,244		159,673		16.64	%		183,228		157,686		16.20	%
Total Assets		241,108		201,070		19.91	%		237,438		198,548		19.59	%

Financial Ratios:	Three months ending Jun 30, 2007			Three months ending Jun 30, 2006			Change		Year to date Jun 30, 2007			Year to date Jun 30, 2006			Change
Return on average assets		0.83	%		0.85	%	(0.03	)		0.76	%		0.80	%	(0.04	)
Return on average equity		8.83	%		11.30	%	(2.48	)		8.09	%		10.49	%	(2.40	)
Net Interest Margin		4.21	%		4.71	%	(0.50	)		4.22	%		4.68	%	(0.47	)
Efficiency ratio		72.55	%		72.96	%	(0.40	)		73.42	%		71.62	%	1.80
Average Equity to average assets		9.39	%		7.55	%	1.83			9.41	%		7.59	%	1.82
Allowance for loan losses:	Three months ending Jun 30, 2007			Three months ending Jun 30, 2006			Change		Year to date Jun 30, 2007			Year to date Jun 30, 2006			Change
Beginning balance	$	2,179		$	1,965		10.89	%	$	2,091		$	1,777		17.67	%
Provision for losses		94			87		8.05	%		245			305		-19.67	%
Charge-offs		(107	)		(53	)	101.89	%		(175	)		(114	)	53.51	%
Recoveries		10			7		42.86	%		15			38		-60.53	%
Ending balance		2,176			2,006		8.47	%		2,176			2,006		8.47	%
Nonperforming assets:	Jun 30, 2007			Dec 31, 2006			Change		Jun 30, 2006			Dec 31, 2005			Change
Total nonperforming loans		595			646		-7.89	%		552			261		111.49	%
Other real estate owned		962			535		79.81	%		560			—		—
Total nonperforming assets		1,557			1,181		31.84	%		1,112			261		326.05	%
Asset quality ratios:	Jun 30, 2007			Dec 31, 2006			Change		Jun 30, 2006			Dec 31, 2005			Change
Nonperforming loans to total loans		0.29	%		0.34	%	(0.05	)		0.34	%		0.17	%	0.17
Allowance for loan losses to total loans		1.06	%		1.10	%	(0.04	)		1.22	%		1.13	%	0.09
Allowance for loan losses to nonperforming loans		365.71	%		323.68	%	42.03			363.41	%		680.84	%	(317.44	)