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Bank of the James Financial Group, Inc. Announces Results For 4th Quarter 2010

^{Published on 2011-01-28 12:10:48 - Market Wire}
 

LYNCHBURG, Va.--([ BUSINESS WIRE ])--Bank of the James Financial Group, Inc. (OTCBB:BOJF) (the aCompanya) (quarterly and 2010 year-to-date consolidated results unaudited) reported today total net income after tax of $178,000 or $0.05 per basic and diluted share for the quarter ended December 31, 2010 and net income of $1,820,000 or $0.55 per basic and diluted share year-to-date compared to net income of $183,000 or $0.06 per basic and diluted share and a net loss of $642,000 or $0.20 per basic and diluted share for the respective periods a year ago. All earnings per share amounts have been adjusted to reflect the increase in shares resulting from the 10% stock dividend declared by the Company at the annual shareholdera™s meeting on May 18, 2010 as well as all previously declared and paid stock dividends.

The decrease in net income for the 4^th quarter 2010 as compared to the same period a year ago is attributable to the higher provision to the loan loss reserve during the quarter as detailed below.

Despite the slight decrease in net income in the quarter ended December 31, 2010 as compared to the same period a year ago, net interest income was $3,996,000 in the 4^th quarter of 2010 as compared to $3,109,000 in the 4^th quarter 2009, an increase of 28.5%. For the full year 2010 net interest income increased to $15,201,000 from $11,329,000 in 2009, an increase of 34.2%. The increases are primarily attributable to a decrease in the cost of interest bearing deposits, specifically certificates of deposit and savings accounts. Interest income decreased from $5,614,000 in the 4^th quarter 2009 to $5,356,000 in the 4^th quarter 2010, a decrease of 4.6%. For the full year, interest income increased from $20,581,000 in 2009 to $21,589,000 in 2010, an increase of 4.9%. Interest expense decreased from $2,505,000 in the 4^th quarter 2009 to $1,360,000 in the 4^th quarter 2010, a decrease of 45.7%. For the full year 2010 interest expense was $6,388,000 as compared to $9,252,000 in 2009, a decrease of 31.0%. The net interest margin in the 4^th quarter 2010 and year to date 2010 was 4.04% and 3.94% as compared to 3.03% and 3.06% in the 4^th quarter 2009 and year to date, respectively.

Robert R. Chapman III, the Companya™s president commented, aWe are pleased with our performance for both the quarter and for the year in light of the continued difficult economic conditions which dictated the increase in our provision for loan losses. We are pleased that our core earnings remain strong, as reflected in our net interest income and net interest margin. This success is directly attributable to our loyal team of employees and the support of our customers throughout the region.a

The addition to the loan loss reserve in the 4^th quarter 2010 was $1,348,000 as compared to $718,000 for the same period a year ago and the addition to the loan loss reserve was $2,783,000 for the year ended December 31, 2010 as compared to $4,151,000 for the same period in 2009. This increase in the 4^th quarter was in response to an increase in non-performing assets in the quarter and the ongoing effort to identify potential impairment within the loan portfolio and provide for the impairment accordingly within the reserve. The allowance for loan loss reserve has been increased to a level that management deems appropriate to absorb any potential future losses and known impairment within the loan portfolio whether or not the losses are actually ever realized. As of December 31, 2010, the loan loss reserve stands at 1.68% of loans outstanding, up from 1.33% as of December 31, 2009.

Non-performing assets including other real estate owned increased from $9,731,000 at the end of the 3^rd quarter 2010 to $11,806,000 at the end of the 4^th quarter. During 2010 charge-offs of non-performing loans were $1,899,000 as compared to $2,797,000 in 2009.

Total assets decreased to $418,928,000 as of December 31, 2010 from $437,681,000, a decrease of 4.3%. The decrease was attributable to a decrease in deposits from $375,772,000 as of December 31, 2009 to $368,390,000 as of December 31, 2009, a decrease of 2.0%, and the companya™s decision to repay a $10,000,000 advance from the Federal Home Loan Bank of Atlanta. Loans increased slightly during the year growing from $318,452,000 as of December 31, 2009 to $320,715,000 as of December 31, 2010, an increase of 0.7%.

The Company also benefited from new market tax credits related to a project in Lynchburg. These historic and new market tax credits increased net after tax income in the fourth quarter by $44,000.

Bank of the James, a wholly owned subsidiary of Bank of the James Financial Group, Inc., currently operates nine full service locations and one limited service location as well as a mortgage origination office in Forest, Virginia and an investment services division in downtown Lynchburg. Bank of the James Financial Group, Inc. common stock is quoted on the Over The Counter Bulletin Board under the symbol aBOJFa (some web sites require BOJF.OB to quote).

Selected financial highlights are shown below.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains statements that constitute aforward-looking statementsa within the meaning of the Private Securities Litigation Reform Act of 1995. The words abelieve,a aestimate,a aexpect,a aintend,a aanticipate,a aplana 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 aCompanya) 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 aBanka), 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 Companya™s filings with the Securities and Exchange Commission and previously filed by the Bank (as predecessor of the Company) with the Federal Reserve Board.