Bank of the James Financial Group, Inc. Announces Results For 2nd Quarter 2005.LYNCHBURG, Va. -- Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $424,000 or $0.26 per basic share ($0.25 diluted) for the quarter ended June 30, 2005 and $767,000 or $0.49 per basic share ($0.46 diluted) year-to-date compared to net income of $439,000 or $0.28 per basic share ($0.27 diluted) and $780,000 or $0.51 per basic share ($0.48 diluted) for the respective periods a year ago. All earnings per share amounts have been adjusted to reflect the 10% stock dividend paid by the company during January, 2004 and the 50% stock split effected in the form of a dividend paid by the company in March, 2005. Robert R. Chapman, III, the Bank's President and CEO, stated "We are pleased with the results that we achieved both in the second quarter and for the year to date." Chapman further noted that management believes the company's financial performance continues to be strong, particularly in light of the increased expenses the company has incurred in 2005, including expenses related to the continued investment in infrastructure and personnel to accommodate the Bank's growth and as well as the added expense of regulatory compliance, particularly Sarbanes-Oxley Section 404. Several positive highlights for 2005 were identified despite the aforementioned increased expenses. Return on assets increased from 0.81% at the end of the 1st quarter ended March 31, 2005, to 0.94% at the end of the 2nd quarter ended June 30, 2005. Return on equity in the 2nd quarter 2005 also improved as compared to the 1st quarter 2005 increasing to 12.56% from 10.66% respectively. Bank of the James, the company's sole subsidiary, continues to attract deposits and experience strong demand for loans. Deposits increased from $153,834,000 at the year ended December 31, 2004 to $166,352,000 in the period ended June 30, 2005, an increase of 8.1%. The majority of this growth has been associated with the Main Street (downtown Lynchburg, Virginia) and Madison Heights (Amherst County, Virginia) locations. Loans, net of unearned income and loan loss provision have also increased from $140,272,000 at the year ended December 31, 2004 to $151,115,000 in the period ended June 30, 2005, an increase of 7.7%. These increases are directly responsible for the increase in total assets from $171,025,000 at the year ended December 31, 2004 to $185,507,000 in the period ended June 30, 2005, an increase of 8.4%. Net interest income for the quarter ended June 30, 2005 was $2,022,000 as compared to net interest income of $1,637,000 in the same quarter of 2004, an increase of 23.5%. The net interest margin also increased to 4.72% in the second quarter of 2005 from 4.41% in the same period a year ago. This increase is attributable to the large number of adjustable rate loans in the loan portfolio, the interest rates on which have increased as the FOMC has increased the discount rate. Management believes the Bank continues to be well positioned to take advantage of any future rate increases by the FOMC because of its percentage of adjustable rate loans in the portfolio. Non-interest income was improved through an increase in fees generated from mortgage origination volume. Non-interest income increased to $555,000 for the quarter ended June 30, 2005 as compared to $488,000 in the period ended June 30, 2004, an increase of 13.7%. Bank of the James, a wholly owned subsidiary of Bank of the James Financial Group, Inc., currently operates five full service locations as well as a mortgage division in the Lynchburg, Virginia area. 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. 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. 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"), the sole 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.
Bank of the James Financial Group, Inc.
(000's) except ratios and percent data
unaudited
Three Three
months months
ending ending
Jun 30, Jun 30,
Selected Data: 2005 2004 Change
--------------------------------------------------------------------
Interest income $2,911 $2,229 30.60%
--------------------------------------------------------------------
Interest expense 889 592 50.17%
--------------------------------------------------------------------
Net Interest income 2,022 1,637 23.52%
--------------------------------------------------------------------
Provision for loan losses 199 54 268.52%
--------------------------------------------------------------------
Noninterest income 555 488 13.73%
--------------------------------------------------------------------
Noninterest expense 1,735 1,410 23.05%
--------------------------------------------------------------------
Income taxes 219 222 -1.35%
--------------------------------------------------------------------
Net income 424 439 -3.42%
--------------------------------------------------------------------
Weighted Average Shares
Outstanding 1,600,468 1,544,436 3.63%
--------------------------------------------------------------------
Basic net income
per share $0.26 $0.28 $(0.02)
--------------------------------------------------------------------
Fully diluted net income
per share $0.25 $0.27 $(0.02)
--------------------------------------------------------------------
Year Year
to to
date date
Jun 30, Jun 30,
Selected Data: 2005 2004 Change
--------------------------------------------------------------------
Interest income $5,581 $4,388 27.19%
--------------------------------------------------------------------
Interest expense 1,650 1,176 40.31%
--------------------------------------------------------------------
Net Interest income 3,931 3,212 22.38%
--------------------------------------------------------------------
Provision for loan losses 374 131 185.50%
--------------------------------------------------------------------
Noninterest income 1,016 778 30.59%
--------------------------------------------------------------------
Noninterest expense 3,411 2,678 27.37%
--------------------------------------------------------------------
Income taxes 395 401 -1.50%
--------------------------------------------------------------------
Net income 767 780 -1.67%
--------------------------------------------------------------------
Weighted Average Shares
Outstanding 1,579,900 1,524,104 3.66%
--------------------------------------------------------------------
Basic net income
per share $0.49 $0.51 $(0.02)
--------------------------------------------------------------------
Fully diluted net income
per share $0.46 $0.48 $(0.02)
--------------------------------------------------------------------
Balance Sheet at Jun 30, Dec 31,
period end: 2005 2004 Change
----------------------------------------------------------------------
Loans, net $151,115 $140,272 7.73%
----------------------------------------------------------------------
Total securities 22,596 19,911 13.49%
----------------------------------------------------------------------
Total deposits 166,352 153,834 8.14%
----------------------------------------------------------------------
Stockholders' equity 13,865 12,786 8.44%
----------------------------------------------------------------------
Total assets 185,507 171,025 8.47%
----------------------------------------------------------------------
Shares Outstanding 1,600,468 1,548,658 51,810
----------------------------------------------------------------------
Book value per share 8.66 8.26 0.41
----------------------------------------------------------------------
Balance Sheet at Jun 30, Dec 31,
period end: 2004 2003 Change
-----------------------------------------------------------------
Loans, net $123,854 $114,604 8.07%
-----------------------------------------------------------------
Total securities 20,744 14,956 38.70%
-----------------------------------------------------------------
Total deposits 145,790 133,486 9.22%
-----------------------------------------------------------------
Stockholders' equity 12,057 11,309 6.61%
-----------------------------------------------------------------
Total assets 161,213 145,011 11.17%
-----------------------------------------------------------------
Shares Outstanding 1,544,726 1,543,790 936
-----------------------------------------------------------------
Book value per share 7.81 7.33 $0.48
-----------------------------------------------------------------
Three Three
months months
ending ending
Jun 30, Jun 30,
Daily averages: 2005 2004 Change
----------------------------------------------------------------------
Loans, net $145,035 $121,804 19.07%
----------------------------------------------------------------------
Total securities 23,103 19,006 21.56%
----------------------------------------------------------------------
Total deposits 163,576 142,535 14.76%
----------------------------------------------------------------------
Stockholders' equity 13,544 11,952 13.32%
----------------------------------------------------------------------
Interest earning assets 171,991 148,956 15.46%
----------------------------------------------------------------------
Interest bearing liabilities 144,386 127,990 12.81%
----------------------------------------------------------------------
Total Assets 181,791 157,262 15.60%
----------------------------------------------------------------------
Year Year
to to
date date
Jun 30, Jun 30,
Daily averages: 2005 2004 Change
-----------------------------------------------------------------
Loans, net $142,817 $119,132 19.88%
-----------------------------------------------------------------
Total securities 20,693 16,715 23.80%
-----------------------------------------------------------------
Total deposits 159,801 138,807 15.12%
-----------------------------------------------------------------
Stockholders' equity 13,295 11,728 13.36%
-----------------------------------------------------------------
Interest earning assets 167,664 144,263 16.22%
-----------------------------------------------------------------
Interest bearing
liabilities 141,480 124,293 13.83%
-----------------------------------------------------------------
Total Assets 177,230 152,385 16.30%
-----------------------------------------------------------------
Three Three
months months
ending ending
Jun 30, Jun 30,
Financial Ratios: 2005 2004 Change
------------------------------------------------------------------
Return on average assets 0.94% 1.12% (0.19)
------------------------------------------------------------------
Return on average equity 12.56% 14.73% (2.18)
------------------------------------------------------------------
Net Interest Margin 4.72% 4.41% 0.31
------------------------------------------------------------------
Efficiency ratio 67.33% 66.35% 0.97
------------------------------------------------------------------
Average Equity to
average assets 7.45% 7.60% (0.15)
------------------------------------------------------------------
Year Year
to to
date date
Jun 30, Jun 30,
Financial Ratios: 2005 2004 Change
-----------------------------------------------------------------
Return on average assets 0.87% 1.04% (0.16)
-----------------------------------------------------------------
Return on average equity 11.63% 13.41% (1.78)
-----------------------------------------------------------------
Net Interest Margin 4.73% 4.49% 0.24
-----------------------------------------------------------------
Efficiency ratio 68.95% 67.12% 1.83
-----------------------------------------------------------------
Average Equity to
average assets 7.50% 7.70% (0.19)
-----------------------------------------------------------------
Three Three
months months
ending ending
Jun 30, Jun 30,
Allowance for loan losses: 2005 2004 Change
------------------------------------------------------------------
Beginning balance $1,492 $1,507 -1.00%
------------------------------------------------------------------
Provision for losses 199 54 268.52%
------------------------------------------------------------------
Charge-offs (170) (31) 448.39%
------------------------------------------------------------------
Recoveries 5 13 -61.54%
------------------------------------------------------------------
Ending balance 1,526 1,543 -1.10%
------------------------------------------------------------------
Year Year
to to
date date
Jun 30, Jun 30,
Allowance for loan losses: 2005 2004 Change
-----------------------------------------------------------------
Beginning balance $1,419 $1,451 -2.21%
-----------------------------------------------------------------
Provision for losses 374 131 185.50%
-----------------------------------------------------------------
Charge-offs (278) (94) 195.74%
-----------------------------------------------------------------
Recoveries 11 55 -80.00%
-----------------------------------------------------------------
Ending balance 1,526 1,543 -1.10%
-----------------------------------------------------------------
Jun 30, Dec 31,
Nonperforming assets: 2005 2004 Change
------------------------------------------------------------------
Nonaccrual loans 418 380 10.00%
------------------------------------------------------------------
Restructured loans none none -
------------------------------------------------------------------
Total nonperforming loans 418 380 10.00%
------------------------------------------------------------------
Other real estate owned 618 85 -
------------------------------------------------------------------
Total nonperforming assets 1,036 465 122.80%
------------------------------------------------------------------
Jun 30, Dec 31,
Nonperforming assets: 2004 2003 Change
-----------------------------------------------------------------
Nonaccrual loans 832 100 732.00%
-----------------------------------------------------------------
Restructured loans none none -
-----------------------------------------------------------------
Total nonperforming loans 832 100 732.00%
-----------------------------------------------------------------
Other real estate owned none none -
-----------------------------------------------------------------
Total nonperforming assets 832 100 732.00%
-----------------------------------------------------------------
Jun 30, Dec 31,
Asset quality ratios: 2005 2004 Change
------------------------------------------------------------------
Nonperforming loans to
total loans 0.27% 0.27% 0.01
------------------------------------------------------------------
Allowance for loan losses
to total loans 1.00% 1.00% (0.00)
------------------------------------------------------------------
Allowance for loan losses
to nonperforming loans 365.07% 373.42% (8.35)
------------------------------------------------------------------
Jun 30, Dec 31,
Asset quality ratios: 2004 2003 Change
-----------------------------------------------------------------
Nonperforming loans to
total loans 0.66% 0.09% 0.58
-----------------------------------------------------------------
Allowance for loan losses
to total loans 1.23% 1.25% (0.02)
-----------------------------------------------------------------
Allowance for loan losses
to nonperforming loans 185.46% 1451.00% (1,265.54)
-----------------------------------------------------------------
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