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 39.7 % Increase in
3rd Quarter 2007 Net Income
Lynchburg, Va., October 19, 2007...Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $581,000 or $0.23 per basic share ($0.22 diluted) for the quarter ended September 30, 2007 and $1,477,000 or $0.58 per basic share ($0.55 diluted) year-to-date compared to net income of $416,000 or $0.19 per basic share ($0.18 diluted) and $1,200,000 or $0.54 per basic share ($0.51 diluted) for the respective periods a year ago. The 3rd quarter and year-to-date net income amounts represent a 39.7% and 23.1% increase over 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 $215,287,000 as of September 30, 2007, an increase of $27,818,000 or 14.8%. Deposits increased from $201,789,000 as of December 31, 2006 to $223,330,000 as of September 30, 2007, an increase of $21,541,000 or 10.7%.
Net interest income increased to $2,532,000 and $7,239,000 for the three and nine months ended September 30, 2007 from $2,265,000 and $6,626,000 for the same periods in 2006. This increase was due primarily to the growth in the loan portfolio.
Robert R. Chapman III, the Company’s President, commented, “In the 3rd quarter of 2007 we achieved the highest quarterly net income in the 8 year history of our company. These earnings resulted in part from our investment in infrastructure, specifically employees and branches over the past several quarters. We believe that this investment in infrastructure will enable us to continue to grow our balance sheet in the immediate future with minimal additional overhead expense. We continue to believe the company is well positioned to increase our presence in Region 2000.”
Although 3rd quarter 2007 non-interest income did not increase significantly as compared to the same period a year ago, year-to-date non-interest income increased 21.3% from $1,637,000 in the first 9 months of 2007 compared to $1,985,000 in the first 9 months of 2007. J. Todd Scruggs, the Company’s Executive Vice President and Chief Financial Officer commented, “Given the recent decrease in short term interest rates and the continuing margin compression throughout the banking industry, non-interest income is perhaps more than ever becoming a core component of every bank’s revenue stream. We believe a 21% year over year growth in non-interest income, demonstrates our intentions to become less dependent on net interest income
which should help to continue to create value for our shareholders.” 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 3rd quarter 2007 of 0.91% and 10.01% respectively, as compared to 0.78% and 10.55% in the same period a year ago. The decrease in return on average equity 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 shares outstanding, ratios and percent data
unaudited
Selected Data: | Three months ending Sep 30, 2007 | Three months ending Sep 30, 2006 | Change | Year to date Sep 30, 2007 | Year to date Sep 30, 2006 | Change | ||||||||||||||
Interest income | $ | 4,581 | $ | 3,786 | 21.00 | % | $ | 12,972 | $ | 10,675 | 21.52 | % | ||||||||
Interest expense | 2,049 | 1,521 | 34.71 | % | 5,733 | 4,049 | 41.59 | % | ||||||||||||
Net Interest income | 2,532 | 2,265 | 11.79 | % | 7,239 | 6,626 | 9.25 | % | ||||||||||||
Provision for loan losses | 59 | 184 | -67.93 | % | 304 | 489 | -37.83 | % | ||||||||||||
Noninterest income | 654 | 649 | 0.77 | % | 1,985 | 1,637 | 21.26 | % | ||||||||||||
Noninterest expense | 2,188 | 2,087 | 4.84 | % | 6,621 | 5,918 | 11.88 | % | ||||||||||||
Income taxes | 300 | 227 | 32.16 | % | 764 | 656 | 16.46 | % | ||||||||||||
Net income | 581 | 416 | 39.66 | % | 1,477 | 1,200 | 23.08 | % | ||||||||||||
Weighted Average Shares Outstanding | 2,557,396 | 2,218,685 | 15.27 | % | 2,550,965 | 2,210,971 | 15.38 | % | ||||||||||||
Basic net income per share | $ | 0.23 | $ | 0.19 | $ | 0.04 | $ | 0.58 | $ | 0.54 | $ | 0.04 | ||||||||
Fully diluted net income per share | $ | 0.22 | $ | 0.18 | $ | 0.04 | $ | 0.55 | $ | 0.51 | $ | 0.04 | ||||||||
Balance Sheet at period end: | Sep 30, 2007 | Dec 31, 2006 | Change | Sep 30, 2006 | Dec 31, 2005 | Change | ||||||||||||||
Loans, net | $ | 215,287 | $ | 187,469 | 14.84 | % | $ | 174,020 | $ | 155,480 | 11.92 | % | ||||||||
Total securities | 29,772 | 26,192 | 13.67 | % | 26,490 | 23,919 | 10.75 | % | ||||||||||||
Total deposits | 223,330 | 201,789 | 10.68 | % | 188,667 | 173,956 | 8.46 | % | ||||||||||||
Stockholders’ equity | 23,837 | 21,931 | 8.69 | % | 16,161 | 14,675 | 10.13 | % | ||||||||||||
Total assets | 261,745 | 232,709 | 12.48 | % | 214,349 | 195,852 | 9.44 | % | ||||||||||||
Shares Outstanding | 2,558,578 | 2,526,090 | 32,488 | 2,221,976 | 2,201,440 | 20,536 | ||||||||||||||
Book value per share | $ | 9.32 | $ | 8.68 | $ | 0.63 | $ | 7.27 | $ | 6.67 | $ | 0.61 | ||||||||
Daily averages: | Three months ending Sep 30, 2007 | Three months ending Sep 30, 2006 | Change | Year to date Sep 30, 2007 | Year to date Sep 30, 2006 | Change | ||||||||||||||
Loans, net | $ | 209,548 | $ | 166,144 | 26.12 | % | $ | 200,737 | $ | 161,545 | 24.26 | % | ||||||||
Total securities | 26,848 | 27,570 | -2.62 | % | 26,168 | 25,678 | 1.91 | % | ||||||||||||
Total deposits | 218,932 | 186,231 | 17.56 | % | 209,081 | 179,192 | 16.68 | % | ||||||||||||
Stockholders’ equity | 23,030 | 15,643 | 47.22 | % | 22,571 | 15,261 | 47.90 | % | ||||||||||||
Interest earning assets | 241,119 | 199,172 | 21.06 | % | 230,383 | 191,613 | 20.23 | % | ||||||||||||
Interest bearing liabilities | 197,008 | 168,344 | 17.03 | % | 187,872 | 161,278 | 16.49 | % | ||||||||||||
Total Assets | 254,024 | 211,013 | 20.38 | % | 243,023 | 202,754 | 19.86 | % | ||||||||||||
Financial Ratios: | Three months ending Sep 30, 2007 | Three months ending Sep 30, 2006 | Change | Year to date Sep 30, 2007 | Year to date Sep 30, 2006 | Change | ||||||||||||||||
Return on average assets | 0.91 | % | 0.78 | % | 0.13 | 0.81 | % | 0.79 | % | 0.02 | ||||||||||||
Return on average equity | 10.01 | % | 10.55 | % | (0.54 | ) | 8.75 | % | 10.51 | % | (1.76 | ) | ||||||||||
Net Interest Margin | 4.17 | % | 4.51 | % | (0.35 | ) | 4.20 | % | 4.62 | % | (0.42 | ) | ||||||||||
Efficiency ratio | 68.68 | % | 71.62 | % | (2.94 | ) | 71.78 | % | 71.62 | % | 0.16 | |||||||||||
Average Equity to average assets | 9.07 | % | 7.41 | % | 1.65 | 9.29 | % | 7.53 | % | 1.76 | ||||||||||||
Allowance for loan losses: | Three months ending Sep 30, 2007 | Three months ending Sep 30, 2006 | Change | Year to date Sep 30, 2007 | Year to date Sep 30, 2006 | Change | ||||||||||||||||
Beginning balance | $ | 2,176 | $ | 2,006 | 8.47 | % | $ | 2,091 | $ | 1,777 | 17.67 | % | ||||||||||
Provision for losses | 59 | 184 | -67.93 | % | 304 | 489 | -37.83 | % | ||||||||||||||
Charge-offs | (88 | ) | (181 | ) | -51.38 | % | (262 | ) | (295 | ) | -11.19 | % | ||||||||||
Recoveries | 23 | 4 | 475.00 | % | 37 | 42 | -11.90 | % | ||||||||||||||
Ending balance | 2,170 | 2,013 | 7.80 | % | 2,170 | 2,013 | 7.80 | % | ||||||||||||||
Nonperforming assets: | Sep 30, 2007 | Dec 31, 2006 | Change | Sep 30, 2006 | Dec 31, 2005 | Change | ||||||||||||||||
Total nonperforming loans | $ | 1,016 | $ | 646 | 57.28 | % | $ | 668 | $ | 261 | 155.94 | % | ||||||||||
Other real estate owned | 500 | 535 | -6.54 | % | 579 | — | — | |||||||||||||||
Total nonperforming assets | 1,516 | 1,181 | 28.37 | % | 1,247 | 261 | 377.78 | % | ||||||||||||||
Asset quality ratios: | Sep 30, 2007 | Dec 31, 2006 | Change | Sep 30, 2006 | Dec 31, 2005 | Change | ||||||||||||||||
Nonperforming loans to total loans | 0.47 | % | 0.34 | % | 0.13 | 0.38 | % | 0.17 | % | 0.21 | ||||||||||||
Allowance for loan losses to total loans | 1.00 | % | 1.10 | % | (0.11 | ) | 1.14 | % | 1.13 | % | 0.01 | |||||||||||
Allowance for loan losses to nonperforming loans | 213.58 | % | 323.68 | % | (110.10 | ) | 301.35 | % | 680.84 | % | (379.50 | ) | ||||||||||