Bank of the James Announces Holding Company Approval and Announcement of Stock Dividend.

Business Editors

LYNCHBURG, Va.--(BUSINESS WIRE)--Dec. 17, 2003

At a special meeting of shareholders held on December 17, 2003, Bank of the James (OTCBB:BOTJ) shareholders approved the Agreement and Plan of Share Exchange Between Bank of the James Financial Group, Inc. and Bank of the James dated as of October 9, 2003, providing for Bank of the James to become a wholly-owned subsidiary of Bank of the James Financial Group, Inc., a Virginia corporation formed to serve as the holding company for Bank of the James. The transaction will be effective on January 1, 2004.

Also announced by the Board of Directors of the newly formed holding company was the approval of a 10% stock dividend on Bank of the James Financial Group, Inc. stock. This stock dividend will be paid after the effective date of the share exchange. Each shareholder of record as of January 2, 2004 will receive a stock dividend equal to 10% of the shares owned as of that date, provided that no fractional shares be issued. The dividend will be rounded up or down as applicable, to the nearest whole share. It is expected that the payment date for the stock dividend will be on or about January 27, 2004. Following this dividend, the outstanding shares of the Bank's common stock will increase by approximately 93,563 shares, from 935,630 shares outstanding to approximately 1,029,193 shares outstanding.

The Board of Directors of Bank of the James Financial Group, Inc. is pleased to declare this dividend as another method to increase shareholder value in the Bank and also increase the liquidity of the stock.

Bank of the James currently operates three full service locations in the Lynchburg, Virginia area and one mortgage division location. Subject to regulatory approval, The Bank has plans to open an additional branch location in the Forest area of Bedford County, Virginia in the first quarter of 2004. Bank of the James common stock is quoted on the Over The Counter Bulletin Board under the symbol "BOTJ" (some web sites require BOTJ.OB to quote).

Cautionary Statement Regarding Forward-Looking Statements 

This press release report 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. The Bank 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 the Bank. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Bank of the James' filings with the Federal Reserve Board.