Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

Bank of the James Reports Year-Over-Year Earnings Growth, Asset


Bank of the James Reports Year-Over-Year Earnings Growth, Asset Quality Improvement in Second Quarter and First Half 2012 Financial Results

LYNCHBURG, VA -- (Marketwire) -- 07/26/12 -- Bank of the James Financial Group, Inc. (NASDAQ: BOTJ)

Financial Highlights


 
--  Net income in second quarter 2012 increased 52% to $486,000 or $0.15
    per diluted share compared with $319,000 or $0.10 per diluted share in
    second quarter 2011.
--  First half 2012 net income increased to $846,000 or $0.25 per diluted
    share compared with $754,000 or $0.23 per diluted share in the first
    half 2011.
--  Total assets were $433.20 million at June 30, 2012 compared with
    $429.63 million at June 30, 2011.
--  In second quarter 2012, the provision for loan losses declined 53% to
    $425,000 compared with $906,000 in second quarter 2011, reflecting
    improving loan quality since the beginning of 2012.
--  The ratio of allowance for loan losses to nonperforming loans improved
    to 79.19% at June 30, 2012, compared with 61.42% at March 31, 2012 and
    40.67% at June 30, 2011, reflecting a continued focus on asset quality
    and increased coverage for problem loans.
--  The company's nonperforming assets (NPAs) as a percent of total assets
    declined sharply to 2.18% at June 30, 2012, compared with 3.19% at
    December 31, 2011 and 3.84% at June 30, 2011.
--  Since June 30, 2011, the Bank's "Texas Ratio" ((NPAs + TDR):(Capital +
    ALL)) has declined by more than 50% to 24.5% at June 30, 2012 compared
    with 53.5% at June 30, 2011.
--  In first half 2012, interest expense declined 30% compared with the
    prior year's first half, reflecting strategic interest rate management
    which resulted in net interest margin improvement despite a flat
    interest-rate environment and significant pressure on margins.
--  Book value per share increased to $8.47 per share in second quarter
    2012 compared with $8.02 in fourth quarter 2011 and $8.12 in second
    quarter 2011.

Bank of the James Financial Group, Inc. (NASDAQ: BOTJ), the parent company of Bank of the James, a full-service commercial and retail bank, today announced unaudited results for the quarter and six months ended June 30, 2012.

"Our financial results and earnings growth reflect s everal key initiatives that have enabled us to operate more efficiently and remove problematic loans from our balance sheet, which has resulted in an increased bottom line," said Robert R. Chapman III, President and CEO. "Compared with a year ago, we have seen significant improvement in asset quality and a meaningful slowing of nonaccrual loans. We believe this is an encouraging sign. We successfully identified and reserved for many troubled loans and our current portfolio of loans is showing significant signs of improvement.

"Our year-over-year reduction of interest expense and our ability to grow our net interest margin to 3.95% in the first half of 2012 from a 3.84% average in the first half of 2011, despite the low-rate environment and considerable pressure on margins, enabled us to make the most of the interest income we generated. We have kept noninterest expense relatively stable year-over-year. Even as we managed costs, we never backed off investing in technology and services to remain highly competitive and provide a more diverse range of capabilities to our retail and commercial customers.

"We believe the greatest challenges with asset quality management are behind us. This should allow us to devote more time and attention to grow banking relationships and capture a greater share of lending opportunities in Region 2000. We have definitely seen an uptick in residential mortgage lending, including home purchase activity in addition to refinancing. Also, commercial lending inquiries have increased to levels that we have not seen in several years. We're excited that after several years of limited growth in our loan portfolio that we once again believe that the opportunity for growth is returning."

Financial Highlights and Overview

Net interest income before provision for loan losses was $3.84 million in second quarter 2012 compared with $3.81 million in second quarter 2011. In first half 2012, net interest income before provision for loan losses was $7.70 million compared with $7.51 million in first half 2011.

"By offering competitive rates and developing loyal customer relationships, we have been able to manage interest expense while maintaining a high level of customer retention," noted J. Todd Scruggs, CFO. "We strongly believe the goodwill we have developed in our community and our reputation for exceptional service, support and convenience has played a key role in generating customer loyalty."

Second quarter 2012 noninterest income, which includes fees from mortgage origination and gains on sales from securities, rose 11% to $843,000 compared with $758,000 in second quarter 2011. In first half 2012, noninterest income was $1.51 million, up 6% compared with $1.43 million in first half 2011.

Total loans, net of allowance for loan loss (ALL), were $319.2 million at June 30, 2012 compared with $312.2 million at March 31, 2012, $318.8 million at December 31, 2011 and $319.4 million at June 30, 2011. Scruggs noted this overall quarter-to-quarter stability in the portfolio was accomplished despite significant principal reductions in 2011 and resulted in large part from the Bank's ability to generate sufficient new loans.

Total deposits at June 30, 2012 were $384.59 million, compared with $376.55 million at June 30, 2011 and $374.23 million at December 31, 2011.

The company's balance sheet reflected reduction in nonperforming assets and improved asset quality. The Bank's focus on liquidating collateral related to troubled loans as promptly as possible along with decreasing foreclosure volume, contributed to the decrease in other owned real estate (OREO) at June 30, 2012 of $2.26 million compared with $4.28 million at June 30, 2011. This is a significant decrease from the historical high OREO balance of $5.22 million at September 30, 2011.

As previously noted, the Bank's "Texas Ratio" has declined steadily and sharply since June 30, 2011, with the improvement exceeding the company's goal for first half 2012. As a ratio to both loans and assets, total nonperforming assets declined significantly. NPAs to total loans were 2.91% at June 30, 2012 compared with 5.09% at June 30, 2011. Chapman explained that while many nonperforming loans were removed from the portfolio in 2011, the ratio of NPAs to total loans and total assets has dropped in each of the first two quarters of 2012.

"We are pleased with the positive monthly trends in loan quality this year," said Chapman. "These improvements in asset quality have strengthened our capital position and have given us greater freedom to concentrate on growing loans and assets."

At June 30, 2012, the bank's tier 1 leverage ratio was 8.04%, tier 1 risk-based capital ratio was 10.73%, and total risk-based capital was 11.98%, all ratios exceeding regulatory standards for a well-capitalized institution.

About the Company

Bank of the James, a wholly owned subsidiary of Bank of the James Financial Group, Inc., serves the greater Lynchburg, Virginia MSA, often referred to as Region 2000, which was ranked by Forbes magazine among the top 50 places in the United States for business and careers. The Bank 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. The company celebrates its 13th anniversary this year. As of January 25, 2012, Bank of the James Financial Group, Inc. common stock is listed on the NASDAQ Stock Market, LLC under the symbol "BOTJ."

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.


 
                                                                            
Bank of the James Financial Group, Inc. and Subsidiaries                    
(000's) except ratios and percent data                                      
Unaudited                                                                   
                                                                            
                  Three      Three               Year       Year            
                 months     months                to         to             
                 ending     ending               date       date            
                 Jun 30,    Jun 30,             Jun 30,    Jun 30,          
Selected Data:    2012       2011     Change     2012       2011     Change 
               ---------- ---------- -------  ---------- ---------- ------- 
Interest                                                                    
 income        $    4,645 $    4,896   -5.13% $    9,331 $    9,838   -5.15%
               ---------- ---------- -------  ---------- ---------- ------- 
Interest                                                                    
 expense              809      1,090  -25.78%      1,629      2,325  -29.94%
               ---------- ---------- -------  ---------- ---------- ------- 
Net interest                                                                
 income             3,836      3,806    0.79%      7,702      7,513    2.52%
               ---------- ---------- -------  ---------- ---------- ------- 
Provision for                                                               
 loan losses          425        906  -53.09%      1,175      1,485  -20.88%
               ---------- ---------- -------  ---------- ---------- ------- 
Noninterest                                                                 
 income               843        758   11.21%      1,514      1,430    5.87%
               ---------- ---------- -------  ---------- ---------- ------- 
Noninterest                                                                 
 expense            3,559      3,204   11.08%      6,843      6,374    7.36%
               ---------- ---------- -------  ---------- ---------- ------- 
Income taxes          209        135   54.81%        352        330    6.67%
               ---------- ---------- -------  ---------- ---------- ------- 
Net income            486        319   52.35%        846        754   12.20%
               ---------- ---------- -------  ---------- ---------- ------- 
Weighted                                                                    
 average                                                                    
 shares                                                                     
 Outstanding    3,342,415  3,323,743    0.56%  3,342,415  3,323,743    0.56%
               ---------- ---------- -------  ---------- ---------- ------- 
Basic net                                                                   
 income per                                                                 
 share         $     0.15 $     0.10 $  0.05  $     0.25 $     0.23 $  0.02 
               ---------- ---------- -------  ---------- ---------- ------- 
Fully diluted                                                               
 net income                                                                 
 per share     $     0.15 $     0.10 $  0.05  $     0.25 $     0.23 $  0.02 
               ---------- ---------- -------  ---------- ---------- ------- 

 
Balance Sheet                                                               
 at               Jun 30,    Dec 31,            Jun 30,    Dec 31,          
period end:        2012       2011    Change     2011       2010     Change 
                ---------- ---------- ------  ---------- ---------- ------- 
Loans, net      $  319,216 $  318,754   0.14% $  319,386 $  320,715   -0.41%
                ---------- ---------- ------  ---------- ---------- ------- 
Loans held for                                                              
 sale                1,164        434 168.20%        215          -     N/A 
                ---------- ---------- ------  ---------- ---------- ------- 
Total                                                                       
 securities         58,761     56,471   4.06%     58,367     52,883   10.37%
                ---------- ---------- ------  ---------- ---------- ------- 
Total deposits     384,589    374,234   2.77%    376,551    368,390    2.22%
                ---------- ---------- ------  ---------- ---------- ------- 
Stockholders'                                                               
 equity             28,299     26,805   5.57%     26,973     25,495    5.80%
                ---------- ---------- ------  ---------- ---------- ------- 
Total assets       433,204    427,436   1.35%    429,625    418,928    2.55%
                ---------- ---------- ------  ---------- ---------- ------- 
Shares                                                                      
 outstanding     3,342,415  3,342,415      -   3,323,743  3,323,743       - 
                ---------- ---------- ------  ---------- ---------- ------- 
Book value per                                                              
 share          $     8.47 $     8.02   0.45  $     8.12 $     7.67 $  0.44 
                ---------- ---------- ------  ---------- ---------- ------- 

 
                           Three    Three            Year     Year          
                          months 
  months             to       to           
                          ending   ending            date     date          
                          Jun 30,  Jun 30,          Jun 30,  Jun 30,        
Daily averages:            2012     2011   Change    2012     2011   Change 
                         -------- -------- ------  -------- -------- ------ 
Loans, net               $314,687 $320,135  -1.70% $315,470 $320,384  -1.53%
                         -------- -------- ------  -------- -------- ------ 
Loans held for sale           878      202 334.65%      825      102 708.82%
                         -------- -------- ------  -------- -------- ------ 
Total securities           59,741   56,951   4.90%   60,379   56,422   7.01%
                         -------- -------- ------  -------- -------- ------ 
Total deposits            384,795  377,053   2.05%  380,115  374,875   1.40%
                         -------- -------- ------  -------- -------- ------ 
Stockholders' equity       27,166   26,590   2.17%   26,997   26,377   2.35%
                         -------- -------- ------  -------- -------- ------ 
Interest earning assets   393,649  396,939  -0.83%  373,420  394,636  -5.38%
                         -------- -------- ------  -------- -------- ------ 
Interest bearing                                                            
 liabilities              346,095  353,011  -1.96%  345,162  351,430  -1.78%
                         -------- -------- ------  -------- -------- ------ 
Total assets              432,247  429,314   0.68%  429,177  426,526   0.62%
                         -------- -------- ------  -------- -------- ------ 

 
                           Three     Three            Year     Year         
                           months   months             to       to          
                           ending   ending            date     date         
                          Jun 30,   Jun 30,         Jun 30,  Jun 30,        
Financial Ratios:           2012     2011    Change   2012     2011   Change
                          -------  --------  ------ -------  -------  ------
Return on average assets     0.45%     0.30%   0.15    0.40%    0.36%   0.04
                          -------  --------  ------ -------  -------  ------
Return on average equity     7.18%     4.81%   2.37    6.28%    5.76%   0.52
                          -------  --------  ------ -------  -------  ------
Net interest margin          3.91%     3.85%   0.06    3.95%    3.84%   0.11
                          -------  --------  ------ -------  -------  ------
Efficiency ratio            76.06%    70.20%   5.86   74.25%   71.27%   2.98
                          -------  --------  ------ -------  -------  ------
Average equity to average                                                   
 assets                      6.28%     6.19%   0.09    6.29%    6.18%   0.11
                          -------  --------  ------ -------  -------  ------

 
                       Three     Three             Year      Year           
                      months    months              to        to            
                      ending    ending             date      date           
Allowance for loan    Jun 30,   Jun 30,           Jun 30,   Jun 30,         
 losses:               2012      2011    Change    2012      2011    Change 
                     --------  --------  ------  --------  --------  ------ 
Beginning balance    $  6,006  $  5,318   12.94% $  5,612  $  5,467    2.65%
                     --------  --------  ------  --------  --------  ------ 
Provision for losses      425       906  -53.09%    1,175     1,485  -20.88%
                     --------  --------  ------  --------  --------  ------ 
Charge-offs              (847)   (1,266) -33.10%   (1,231)   (2,005) -38.60%
                     --------  --------  ------  --------  --------  ------ 
Recoveries                109        12  808.33%      137        23  495.65%
                     --------  --------  ------  --------  --------  ------ 
Ending balance          5,693     4,970   14.55%    5,693     4,970   14.55%
                     --------  --------  ------  --------  --------  ------ 

 
                          Jun 30,  Dec 31,          Jun 30,  Dec 31,        
Nonperforming assets:      2012     2011   Change    2011     2010   Change 
                         -------- -------- ------  -------- -------- ------ 
Total nonperforming                                                         
 loans                   $  7,189 $ 10,376 -30.72% $ 12,222 $  8,366  46.09%
                         -------- -------- ------  -------- -------- ------ 
Other real estate owned     2,263    3,253 -30.43%    4,281    3,440  24.45%
                         -------- -------- ------  -------- -------- ------ 
Total nonperforming                                                         
 assets                     9,452   13,629 -30.65%   16,503   11,806  39.78%
                         -------- -------- ------  -------- -------- ------ 
Troubled debt                                                               
 restructurings -                                                           
 (performing portion)         187      783 -76.12%    4,217    4,987 -15.44%
                         -------- -------- ------  -------- -------- ------ 

 
                         Jun 30,  Dec 31,          Jun 30,  Dec 31,         
Asset quality ratios:      2012     2011   Change    2011     2010   Change 
                         -------  -------  ------  -------  -------  ------ 
Nonperforming loans to                                                      
 total loans                2.21%    3.20%  (0.99)    3.77%    2.56%   1.20 
                         -------  -------  ------  -------  -------  ------ 
Allowance for loan                                                          
 losses to total loans      1.75%    1.73%   0.02     1.53%    1.68%  (0.14)
                         -------  -------  ------  -------  -------  ------ 
Allowance for loan                                                          
 losses to nonperforming                                                    
 loans                     79.19%   54.09%  25.10    40.66%   65.35% (24.68)
                         -------  -------  ------  -------  -------  ------ 

Contact: J. Todd Scruggs Executive Vice President and CFO (434) 846-2000 tscruggs@bankofthejames.com

Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement