Bank of the James Financial Group, Inc. (the “Company”)
(NASDAQ:BOTJ), the parent company of Bank of the James, a
full-service commercial and retail bank serving the greater
Lynchburg area (Region 2000), and the Charlottesville,
Harrisonburg, and Roanoke, Virginia markets, today announced
unaudited results for the three months ended March 31, 2017.
Net income for the three months ended March 31, 2017 was
$760,000 or $0.17 per diluted share compared with $887,000 or $0.20
per diluted share for the three months ended March 31, 2016.
Robert R. Chapman III, President and CEO, stated: “Our financial
performance in the first quarter continued to demonstrate the
Company’s focus on steady, long-term growth of our balance sheet,
which reflected meaningful year-over-year growth of loans, deposits
and assets. An emphasis on growing commercial banking was
evident.
“Year-over-year net income comparison reflected higher
noninterest expense related to investments to expand our market
reach, including building our banking teams in several markets. We
are seeing positive results from our investment in growth, and
anticipate that increased productivity and accelerating revenue
will enhance profitability.”
Highlights
- Interest income from earning assets increased 5.2% in the first
quarter of 2017 compared with the first quarter of 2016.
- Net interest income before the provision for loan losses for
the three months ended March 31, 2017 was $4.84 million, up 3.2%
from $4.69 million for the three months ended March 31, 2016.
- Driven primarily by increased commercial lending, total loans,
net of the allowance for loan losses, were a Company record $466.24
million at March 31, 2017, up from $464.35 million at December 31,
2016, and $433.70 million a year earlier.
- Commercial loans (primarily C&I) increased 12%
year-over-year, while owner occupied real estate, led by commercial
real estate (CRE) portfolio growth, rose 13% at March 31, 2017
compared with March 31, 2016.
- Total assets rose to $578.43 million at March 31, 2017, the
highest in Company history.
- Asset quality ratios reflected continuing loan portfolio
strength, with a 0.67% ratio of nonperforming loans to total
loans.
- Total stockholders’ equity was $50.19 million, up from $49.42
million at December 31, 2016 and $49.46 million at March 31, 2016.
Book value per share rose to $11.46 at March 31, 2017 from $11.29
at December 31, 2016.
- Based on the results achieved in the first quarter, on April
18, 2017 the Company’s board of directors approved a $0.06 per
share dividend payable to shareholders of record on June 9, 2017,
to be paid on June 23, 2017.
Chapman noted: “Additional loans drove year-over-year net
interest income growth, although both commercial and residential
loan demand in the first quarter of 2017 was somewhat slower than
anticipated. In particular, slower residential mortgage activity –
perhaps partially related to the area’s current lean housing
inventory – impacted originations and subsequent noninterest income
from gains on mortgage sales to the secondary market. We entered
the second quarter with good pipelines in commercial and
residential lending, and feel confident about ongoing lending
activity.”
First Quarter 2017 Operational Review
Total interest income was $5.51 million in the first quarter of
2017, growing 5.2% compared with total interest income of $5.24
million in the first quarter of 2016. Average rates earned on
loans, including fees, was 4.46% in the first quarter of 2017, down
slightly from 4.60% in the first quarter of 2016, and consistent
with 4.48% in the fourth quarter of 2016. The average rate earned
on total earning assets in the first quarter of 2017 was 4.16%,
consistent with the fourth quarter of 2016 and down slightly from
4.35% in the first quarter of 2016.
“Considering the competitive lending market and continued
pricing pressure in a low interest rate environment, we have been
pleased with our ability to lend while maintaining relatively
stable pricing and attracting quality loans,” commented J. Todd
Scruggs, Executive Vice President and CFO. “We believe our ability
to add value through excellent service and customized financial
solutions remains a strong selling point for us.”
Total interest expense was $671,000 for the three months ended
March 31, 2017, compared with $548,000 for the three months ended
March 31, 2016. The increase partially reflected interest paid on
capital notes issued in February 2017. Year-over-year growth in
lower-interest bearing demand deposits and rate reductions in time
deposits contributed to an average rate paid on interest bearing
accounts of 0.62% in the first quarter of 2017. The Company’s net
interest margin was 3.65% and net interest spread was 3.50%,
consistent with the fourth quarter of 2016.
Net interest income was $4.84 million for the three months ended
March 31, 2017, a 3.2% increase from $4.69 million for the three
months ended March 31, 2016. Net interest income after provision
for loan losses was $4.74 million for the three months ended March
31, 2017 compared with $4.49 million for the three months ended
March 31, 2016.
Noninterest income from fees, service charges and commissions,
including gains from the sale of residential mortgages to the
secondary market, and income from the bank's line of treasury
management services for commercial customers, was $881,000 in the
first quarter of 2017 compared with $1.01 million in the first
quarter of 2016. Fee income increased year-over-year, however,
slower residential mortgage origination resulted in lower gains
from the sale of loans in the first quarter of 2017 compared with a
year earlier.
Noninterest expense for the three months ended March 31, 2017
was $4.52 million, an increase of 7.8% from the same period a year
earlier. Higher expenses primarily reflected costs related to the
Company's market expansion, including increased employee
compensation, an expanded commercial banking team, and additional
staff and management in the bank’s served markets. Occupancy costs
increased moderately year-over-year, primarily reflecting
additional facilities. The Company increased marketing expenditures
to build brand visibility throughout an expanded geographic
market.
Balance Sheet Reflects Consistent Growth
Loans held for investment, net of the allowance for loan losses,
were a Company record $466.24 million at March 31, 2017, compared
with $464.35 million at December 31, 2016, and up 7.5% compared
with $433.70 million at March 31, 2016. The Company’s commercial
loan portfolio was $89.00 million at March 31, 2017, up $9.51
million from March 31, 2016. Owner occupied real estate loans, led
by CRE, increased to $142.39 million in the first quarter of 2017,
up $16.39 million from $126.01 million a year earlier. Non-owner
occupied real estate (primarily commercial and investment property)
increased to $144.68 million, up 7.2% from $135.00 million a year
ago. Total construction loans were down 16.8%, while consumer lines
of credit (primarily home equity) grew 4.9% year-over-year.
Total deposits at March 31, 2017 were $521.20 million compared
with $523.11 million at December 31, 2016, and up from $473.45
million at March 31, 2016. The Bank continued to attract
noninterest bearing deposits, which increased to $105.28 million at
March 31, 2017 from $102.65 million at December 31, 2016. Core
deposits (noninterest bearing, NOW, money market and savings
deposits) of $356.19 million comprised approximately 68% of the
Company’s total deposits.
“Continuing growth of core deposits has been a meaningful
highlight for the Company, providing attractive funding for loans,
and reflecting new banking relationships and growth in
Harrisonburg, Charlottesville and Roanoke,” Chapman said. “An
expanding presence in Appomattox should further support deposit
growth and new banking relationships.”
Total assets were a record $578.43 million at March 31, 2017, up
from $574.20 million at December 31, 2016 and $524.61 million at
March 31, 2016. Asset growth primarily reflected increased retained
loans and increased securities available-for-sale.
The Company's asset quality remained sound, with a 0.67% ratio
of nonperforming loans to total loans at March 31, 2017. The
Company's allowance for loan losses to total loans was 1.21%, and
the Company's allowance for loan losses as a percent of
nonperforming loans was 182%.
Total nonperforming loans were $3.15 million at March 31, 2017,
compared with $2.55 million at December 31, 2016. The increase
primarily reflected one classified commercial loan being moved to
nonperforming status during the first quarter of 2017. Total
nonperforming assets were $5.90 million and other real estate owned
was $2.75 million. The Bank's regulatory capital ratios continued
to exceed accepted regulatory standards for a well-capitalized
institution.
The Company grew measures of shareholder value, including
tangible book value per share and total stockholders' equity. Total
stockholders' equity increased to $50.19 million at March 31, 2017,
compared with $49.42 million at December 31, 2016 and $49.46
million at March 31, 2016. Retained earnings rose to $10.65 million
at March 31, 2017 from $10.16 million at December 31, 2016.
About the Company
Bank of the James, a wholly owned subsidiary of Bank of the
James Financial Group, Inc., serves Lynchburg, Charlottesville,
Harrisonburg, Roanoke, Appomattox and other markets in Virginia.
The bank operates 13 full service locations, two limited service
branches, two loan production offices, and an investment/insurance
services division. Bank of the James Financial Group, Inc. common
stock is listed under the symbol "BOTJ" on the NASDAQ Stock Market,
LLC.
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, Inc. (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 the Company. 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.
CONTACT: J. Todd ScruggsExecutive Vice
President and Chief Financial Officer(434)
846-2000 tscruggs@bankofthejames.com
FINANCIAL STATEMENTS FOLLOW
Bank of the James Financial Group, Inc. and
Subsidiaries(000's) except ratios and percent
dataunaudited
Selected Data: |
ThreemonthsendingMar
31,2017 |
ThreemonthsendingMar
31,2016 |
Change |
Interest income |
$ |
5,509 |
$ |
5,235 |
|
5.23 |
% |
Interest expense |
|
671 |
|
548 |
|
22.45 |
% |
Net interest income |
|
4,838 |
|
4,687 |
|
3.22 |
% |
Provision for loan losses |
|
100 |
|
200 |
|
-50.00 |
% |
Noninterest income |
|
881 |
|
1,008 |
|
-12.60 |
% |
Noninterest expense |
|
4,517 |
|
4,190 |
|
7.80 |
% |
Income taxes |
|
342 |
|
418 |
|
-18.18 |
% |
Net income |
|
760 |
|
887 |
|
-14.32 |
% |
Weighted average shares outstanding |
|
4,378,436 |
|
4,378,436 |
|
0.00 |
% |
Basic net income per share |
$ |
0.17 |
$ |
0.20 |
$ |
(0.03 |
) |
Fully diluted net income per share |
$ |
0.17 |
$ |
0.20 |
$ |
(0.03 |
) |
Balance Sheet atperiod end: |
Mar 31,2017 |
Dec 31,2016 |
Change |
Mar 31,2016 |
Dec 31,2015 |
Change |
Loans, net |
$ |
466,244 |
$ |
464,353 |
0.41 |
% |
$ |
433,701 |
$ |
430,445 |
|
0.76 |
% |
Loans held for sale |
|
1,633 |
|
3,833 |
-57.40 |
% |
|
3,706 |
|
1,964 |
|
88.70 |
% |
Total securities |
|
51,513 |
|
44,075 |
16.88 |
% |
|
40,280 |
|
38,515 |
|
4.58 |
% |
Total deposits |
|
521,199 |
|
523,112 |
-0.37 |
% |
|
473,451 |
|
467,610 |
|
1.25 |
% |
Stockholders' equity |
|
50,191 |
|
49,421 |
1.56 |
% |
|
49,456 |
|
48,196 |
|
2.61 |
% |
Total assets |
|
578,433 |
|
574,195 |
0.74 |
% |
|
524,611 |
|
527,143 |
|
-0.48 |
% |
Shares outstanding |
|
4,378,436 |
|
4,378,436 |
- |
|
|
4,378,436 |
|
4,378,436 |
|
- |
|
Book value per share |
$ |
11.46 |
$ |
11.29 |
0.17 |
|
$ |
11.30 |
$ |
11.01 |
$ |
0.29 |
|
Daily averages: |
Threemonths endingMar 31,2017 |
ThreemonthsendingMar 31,2016 |
Change |
Loans, net |
$ |
464,293 |
$ |
432,188 |
7.43 |
% |
Loans held for sale |
|
1,390 |
|
2,302 |
-39.62 |
% |
Total securities |
|
50,916 |
|
40,182 |
26.71 |
% |
Total deposits |
|
520,881 |
|
455,650 |
14.32 |
% |
Stockholders' equity |
|
50,970 |
|
48,731 |
4.59 |
% |
Interest earning assets |
|
537,758 |
|
488,598 |
10.06 |
% |
Interest bearing liabilities |
|
416,261 |
|
378,539 |
9.97 |
% |
Total assets |
|
576,567 |
|
519,396 |
11.01 |
% |
Financial Ratios: |
ThreemonthsendingMar 31,2017 |
ThreemonthsendingMar 31,2016 |
Change |
Return on average assets |
0.53 |
% |
0.68 |
% |
(0.15 |
) |
Return on average equity |
6.05 |
% |
7.30 |
% |
(1.25 |
) |
Net interest margin |
3.65 |
% |
3.89 |
% |
(0.24 |
) |
Efficiency ratio |
78.98 |
% |
73.57 |
% |
5.41 |
|
Average equity to average assets |
8.84 |
% |
9.38 |
% |
(0.54 |
) |
Allowance for loan losses: |
ThreemonthsendingMar 31,2017 |
ThreemonthsendingMar 31,2016 |
Change |
Beginning balance |
$ |
5,716 |
|
$ |
4,683 |
|
22.06 |
% |
Provision for losses |
|
100 |
|
|
200 |
|
-50.00 |
% |
Charge-offs |
|
(130 |
) |
|
(251 |
) |
-48.21 |
% |
Recoveries |
|
30 |
|
|
118 |
|
-74.58 |
% |
Ending balance |
|
5,716 |
|
|
4,750 |
|
20.34 |
% |
Nonperforming assets: |
Mar 31,2017 |
Dec
31, 2016 |
Change |
Mar 31,2016 |
Dec 31,2015 |
Change |
Total nonperforming loans |
$ |
3,147 |
$ |
2,550 |
23.41 |
% |
$ |
2,587 |
$ |
3,406 |
-24.05 |
% |
Other real estate owned |
|
2,750 |
|
2,370 |
16.03 |
% |
|
2,355 |
|
1,965 |
19.85 |
% |
Total nonperforming assets |
|
5,897 |
|
4,920 |
19.86 |
% |
|
4,942 |
|
5,371 |
-7.99 |
% |
Troubled debt restructurings - (performing portion) |
|
452 |
|
455 |
-0.66 |
% |
|
642 |
|
646 |
-0.62 |
% |
Asset quality ratios: |
Mar 31,2017 |
Dec 31,2016 |
Change |
Mar 31,2016 |
Dec 31,2015 |
Change |
Nonperforming loans to total loans |
0.67 |
% |
0.54 |
% |
0.13 |
|
0.59 |
% |
0.78 |
% |
(0.19 |
) |
Allowance for loan losses to total loans |
1.21 |
% |
1.22 |
% |
(0.01 |
) |
1.08 |
% |
1.08 |
% |
0.00 |
|
Allowance for loan losses to nonperforming loans |
181.63 |
% |
224.16 |
% |
(42.53 |
) |
183.61 |
% |
137.49 |
% |
46.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank of the James Financial Group, Inc. and
SubsidiariesConsolidated Balance
Sheets(dollar amounts in thousands, except per
share amounts)
Assets |
(unaudited)3/31/2017 |
|
|
|
12/31/2016 |
|
|
|
Cash and due from
banks |
$ |
19,751 |
|
|
|
|
$ |
16,938 |
|
Federal funds sold |
|
5,508 |
|
|
|
|
|
11,745 |
|
Total
cash and cash equivalents |
|
25,259 |
|
|
|
|
|
28,683 |
|
|
|
|
|
|
|
Securities
held-to-maturity (fair value of $3,272 in 2017 and $3,273 in
2016) |
|
3,293 |
|
|
|
|
|
3,299 |
|
Securities
available-for-sale, at fair value |
|
48,220 |
|
|
|
|
|
40,776 |
|
Restricted stock, at
cost |
|
1,415 |
|
|
|
|
|
1,373 |
|
Loans, net of allowance
for loan losses of $5,716 in 2017 and 2016 |
|
466,244 |
|
|
|
|
|
464,353 |
|
Loans held for
sale |
|
1,633 |
|
|
|
|
|
3,833 |
|
Premises and equipment,
net |
|
11,034 |
|
|
|
|
|
10,771 |
|
Software, net |
|
209 |
|
|
|
|
|
176 |
|
Interest
receivable |
|
1,365 |
|
|
|
|
|
1,378 |
|
Cash value - bank owned
life insurance |
|
12,759 |
|
|
|
|
|
12,673 |
|
Other real estate
owned |
|
2,750 |
|
|
|
|
|
2,370 |
|
Income taxes
receivable |
|
872 |
|
|
|
|
|
1,214 |
|
Deferred tax asset |
|
2,234 |
|
|
|
|
|
2,374 |
|
Other assets |
|
1,146 |
|
|
|
|
|
922 |
|
Total assets |
$ |
578,433 |
|
|
|
|
$ |
574,195 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Deposits |
|
|
|
|
|
Noninterest bearing demand |
|
105,276 |
|
|
|
|
|
102,654 |
|
NOW,
money market and savings |
|
250,911 |
|
|
|
|
|
255,429 |
|
Time |
|
165,012 |
|
|
|
|
|
165,029 |
|
Total deposits |
|
521,199 |
|
|
|
|
|
523,112 |
|
|
|
|
|
|
|
Capital notes |
|
5,000 |
|
|
|
|
|
- |
|
Interest payable |
|
77 |
|
|
|
|
|
88 |
|
Other liabilities |
|
1,966 |
|
|
|
|
|
1,574 |
|
Total liabilities |
$ |
528,242 |
|
|
|
|
$ |
524,774 |
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
|
|
|
Common
stock $2.14 par value; authorized 10,000,000 shares; issued and
outstanding |
|
|
|
|
|
4,378,436 as of March 31, 2017 and December 31, 2016 |
|
9,370 |
|
|
|
|
|
9,370 |
|
Additional paid-in-capital |
|
31,495 |
|
|
|
|
|
31,495 |
|
Accumulated other comprehensive (loss) |
|
(1,327 |
) |
|
|
|
|
(1,600 |
) |
Retained
earnings |
|
10,653 |
|
|
|
|
|
10,156 |
|
Total
stockholders' equity |
$ |
50,191 |
|
|
|
|
$ |
49,421 |
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity |
$ |
578,433 |
|
|
|
|
$ |
574,195 |
|
|
|
|
|
|
|
|
|
|
|
Bank of the James Financial Group, Inc. and
SubsidiariesConsolidated Statements of
Income(dollar amounts in thousands, except per
share amounts)
|
For the Three
MonthsEnded March 31, |
|
Interest
Income |
|
2017 |
|
|
2016 |
Loans |
$ |
5,188 |
|
$ |
4,978 |
Securities |
|
|
|
US
Government and agency obligations |
|
113 |
|
|
139 |
Mortgage
backed securities |
|
66 |
|
|
52 |
Municipals |
|
80 |
|
|
44 |
Dividends |
|
7 |
|
|
6 |
Other
(Corporates) |
|
27 |
|
|
6 |
Interest
bearing deposits |
|
15 |
|
|
6 |
Federal
Funds sold |
|
13 |
|
|
4 |
Total interest income |
|
5,509 |
|
|
5,235 |
|
|
|
|
Interest
Expense |
|
|
|
Deposits |
|
|
|
NOW,
money market savings |
|
169 |
|
|
136 |
Time
Deposits |
|
402 |
|
|
369 |
Federal
Funds purchased |
|
- |
|
|
4 |
Brokered
time deposits |
|
63 |
|
|
31 |
Capital
notes 6% due 4/1/2017 |
|
- |
|
|
8 |
Capital
notes 4% due 1/24/2022 |
|
37 |
|
|
- |
Total interest expense |
|
671 |
|
|
548 |
|
|
|
|
Net interest income |
|
4,838 |
|
|
4,687 |
|
|
|
|
Provision for loan
losses |
|
100 |
|
|
200 |
|
|
|
|
Net interest income after provision for loan
losses |
|
4,738 |
|
|
4,487 |
|
|
|
|
Noninterest
income |
|
|
|
Gains on
sale of loans held for sale |
|
371 |
|
|
491 |
Service
charges, fees and commissions |
|
405 |
|
|
372 |
Increase
in cash value of life insurance |
|
86 |
|
|
65 |
Other |
|
9 |
|
|
15 |
Gain on
sales of available-for-sale securities |
|
10 |
|
|
65 |
|
|
|
|
Total noninterest income |
|
881 |
|
|
1,008 |
|
|
|
|
Noninterest
expenses |
|
|
|
Salaries
and employee benefits |
|
2,380 |
|
|
2,237 |
Occupancy |
|
372 |
|
|
332 |
Equipment |
|
348 |
|
|
319 |
Supplies |
|
134 |
|
|
119 |
Professional, data processing, and other outside expense |
|
680 |
|
|
662 |
Marketing |
|
148 |
|
|
119 |
Credit
expense |
|
114 |
|
|
83 |
Other
real estate expenses |
|
12 |
|
|
1 |
FDIC
insurance expense |
|
103 |
|
|
92 |
Other |
|
226 |
|
|
226 |
Total noninterest expenses |
|
4,517 |
|
|
4,190 |
|
|
|
|
Income before income taxes |
|
1,102 |
|
|
1,305 |
|
|
|
|
Income tax expense |
|
342 |
|
|
418 |
|
|
|
|
Net Income |
$ |
760 |
|
$ |
887 |
|
|
|
|
Weighted average shares
outstanding - basic |
|
4,378,436 |
|
|
4,378,436 |
|
|
|
|
Weighted average shares
outstanding - diluted |
|
4,378,535 |
|
|
4,378,436 |
|
|
|
|
Income per common share
- basic |
$ |
0.17 |
|
$ |
0.20 |
|
|
|
|
Income per common share
- diluted |
$ |
0.17 |
|
$ |
0.20 |
Bank of the James Financ... (NASDAQ:BOTJ)
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From Mar 2024 to Apr 2024
Bank of the James Financ... (NASDAQ:BOTJ)
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From Apr 2023 to Apr 2024