Earnings release
Page 1
Bank of the James Announces Second Quarter of 2026 and First Half of 2026 Financial Results and Declaration of Dividend Bank of the James Reports First Half 2026 Net Income of $6.01 Million, $1.32 Per Share LYNCHBURG, VA, July 30, 2026 -- Bank of the James Financial Group, Inc. (the “Company”) (NASDAQ: BOTJ), the parent company of Bank of the James (the “Bank”), a full-service commercial and retail bank, and Pettyjohn, Wood & White, Inc. (“PWW”), an SEC-registered investment advisor, today announced unaudited results of operations for the three-month and six- month periods ended June 30, 2026. The Bank serves Region 2000 (the greater Lynchburg metropolitan statistical area) and the Blacksburg, Buchanan, Charlottesville, Harrisonburg, Lexington, Nellysford, Roanoke, and Wytheville, Virginia markets. Second Quarter 2026 and First Half 2026 Highlights " Net income for the second quarter of 2026 was $3.24 million, an increase of $0.54 million from $2.70 million in the second quarter of 2025. Earnings per share were $0.71 compared with $0.60 per share one year earlier. Net income for the first half of 2026 was $6.01 million, an increase of $2.47 million from $3.55 million in the first half of 2025. Earnings per share were $1.32 compared with $0.78 per share one year earlier. The year-over-year increases reflect higher net interest income, growth in noninterest income, and lower noninterest expense. " Total assets were $1.041 billion at June 30, 2026, compared with $1.039 billion at December 31, 2025, and $1.004 billion at June 30, 2025. " Net interest income after provision for (recovery of) credit losses increased 1.4% to $8.90 million in the second quarter of 2026 from $8.78 million in the second quarter of 2025, and increased 8.7% to $17.78 million in the first half of 2026 from $16.36 million in the first half of 2025. The Company recorded a total provision for credit losses of $350,000 for the second quarter and $204,000 for the first half of 2026. Excluding reductions in the reserve for unfunded commitments, the provision for credit losses on loans were $410,000 and $318,000, respectively. " Net interest margin (tax-equivalent) was 3.71% for the second quarter of 2026 compared with 3.44% for the second quarter of 2025, and 3.64% for the first half of 2026 compared with 3.34% for the first half of 2025. " Interest expense decreased 10.5% to $3.03 million in the second quarter of 2026 from $3.39 million in the second quarter of 2025, and decreased 10.9% to $6.15 million in the first half of 2026 from $6.90 million in the first half of 2025, reflecting lower deposit costs and the retirement of approximately $10 million in capital notes in the second quarter of 2025. The decline in deposit costs was driven primarily by lower rates on renewing certificates of deposit and continued discipline in the pricing of interest-bearing transaction accounts. " Noninterest income increased 9.8% to $4.48 million in the second quarter of 2026 from $4.08 million in the second quarter of 2025, and increased 14.7% to $8.44 million in the first half of 2026 from $7.36 million in the first half of 2025. " Noninterest expense decreased 1.5% to $9.31 million in the second quarter of 2026 from $9.46 million in the second quarter of 2025, and decreased 3.1% to $18.68 million in the first half of 2026 from $19.28 million in the first half of 2025. " Wealth management fees from PWW increased 12.8% to $1.47 million in the second quarter of 2026 from $1.30 million in the second quarter of 2025, and increased 12.7% to $2.88 million in the first half of 2026 from $2.56 million in the first half of 2025. " The efficiency ratio (noninterest expense divided by the sum of net interest income and noninterest income) improved to 67.82% in the second quarter of 2026 from 76.71% in the second quarter of 2025, and to 70.67% in the first half of 2026 from 82.65% in the first half of 2025. " Loans, net of the allowance for credit losses, were $686.08 million at June 30, 2026, compared with $649.13 million at March 31, 2026, $661.36 million at December 31, 2025, and $649.09 million at June 30, 2025. " Total deposits were $935.18 million at June 30, 2026, compared with $937.13 million at December 31, 2025, and $910.53 million at June 30, 2025.
Page 2
" Nonperforming loans were $1.09 million at June 30, 2026, down from $1.70 million at December 31, 2025. The allowance for credit losses was $6.60 million at June 30, 2026, compared with $6.45 million at December 31, 2025, and represented 6.05x coverage of nonperforming loans, compared with 3.79x at December 31, 2025. The decrease in nonperforming loans was due primarily to the return to accrual status for select relationships. " Stockholders’ equity increased to $83.15 million at June 30, 2026, from $80.05 million at December 31, 2025, an increase of 3.88%. Book value per share rose to $18.30 from $17.62. " On July 28, 2026, the Company’s board of directors approved a quarterly dividend of $0.10 per common share to stockholders of record as of August 21, 2026, to be paid on September 4, 2026. Commentary from Executive Management Robert R. Chapman III, CEO of the Bank, commented: “The first half of 2026 produced record results for Bank of the James. Growth in loans and revenue from a variety of sources, along with continued sound asset quality, contributed to this performance. We remain focused on building upon these results during the remainder of 2026. In addition to our focus on financial performance, we continue to place great importance on serving a broad base of customers across our markets, including individuals and businesses in underserved areas. We are proud of the role the Bank and our employees play in supporting the communities we serve.” Mike Syrek, President of the Bank, added: “We remain focused on increasing operating efficiency through prudent expense management and thoughtful operational changes. This strategy has been successful, contributing to an improved efficiency ratio, and we continue to identify additional opportunities to operate more effectively while supporting our customers and long-term growth.” Syrek continued: “Loan growth was robust, with loan balances increasing by nearly $37 million during the second quarter. We do not expect this pace of growth to continue, as quarterly loan activity can vary based on originations, maturities, and repayments. Nevertheless, the current environment presents opportunities to originate attractive, well-structured loans, and we remain focused on pursuing those opportunities while maintaining our disciplined underwriting standards. That same discipline is reflected in our asset quality, with nonperforming loans declining.” 1
Page 3
About the Company Bank of the James, a wholly-owned subsidiary of Bank of the James Financial Group, Inc. opened for business in July 1999 and is headquartered in Lynchburg, Virginia. The Bank currently serves customers in Virginia from offices located in Altavista, Amherst, Appomattox, Bedford, Blacksburg, Buchanan, Charlottesville, Forest, Harrisonburg, Lexington, Lynchburg, Madison Heights, Nellysford, Roanoke, Rustburg, and Wytheville. The Bank offers full investment and insurance services through its BOTJ Investment Services division and BOTJ Insurance, Inc. subsidiary. The Bank provides mortgage loan origination through Bank of the James Mortgage, a division of Bank of the James. The Company provides investment advisory services through its wholly-owned subsidiary, Pettyjohn, Wood & White, Inc., an SEC-registered investment advisor. Bank of the James Financial Group, Inc. common stock is listed under the symbol “BOTJ” on the NASDAQ Stock Market, LLC. Additional information on the Company is available at: www.bankofthejames.bank. 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 date 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, changes in the value of real estate securing loans made by the Bank, as well as geopolitical conditions. 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. CONTACT: Eric J. Sorenson, Jr., Executive Vice President and Chief Financial Officer of the Bank, (434) 846-2000. FINANCIAL RESULTS FOLLOW 2
Page 4
Bank of the James Financial Group, Inc. and Subsidiaries Consolidated Balance Sheets (dollar amounts in thousands, except per share amounts) (unaudited) (audited) Assets 6/30/2026 12/31/2025 Cash and due from banks $24,675 $28,538 Federal funds sold 10,870 55,937 Total cash and cash equivalents 35,545 84,475 Securities held-to-maturity (fair value of $3,267 as of June 30, 2026 and $3,315 as of December 31, 2025), net of allowance for credit losses of $0 as of June 30, 2026 and December 31, 2025 3,581 3,590 Securities available-for-sale, at fair value 236,832 214,128 Restricted stock, at cost 1,872 1,828 Loans, net of allowance for credit losses of $6,597 as of June 30, 2026 and $6,450 as of December 31, 2025 686,084 661,357 Loans held for sale 5,651 3,472 Premises and equipment, net 19,051 19,050 Interest receivable 3,392 3,380 Cash value - bank owned life insurance 24,101 23,676 Customer relationship intangible 5,884 6,164 Goodwill 2,054 2,054 Other assets 17,260 15,850 Total assets $1,041,307 $1,039,024 Liabilities and Stockholders' Equity Deposits Noninterest bearing demand $136,390 $131,456 NOW, money market and savings 563,425 570,345 Time 235,369 235,328 Total deposits 935,184 937,129 Other borrowings 8,671 8,796 Interest payable 1,121 1,167 Other liabilities 13,178 11,884 Total liabilities $958,154 $958,976 Stockholders' equity Common stock $2.14 par value; authorized 10,000,000 shares; issued and outstanding 4,543,338 as of June 30, 2026 and December 31, 2025 9,723 9,723 Additional paid-in capital 35,253 35,253 Retained earnings 55,114 50,009 Accumulated other comprehensive loss (16,937) (14,937) Total stockholders' equity $83,153 $80,048 Total liabilities and stockholders' equity $1,041,307 $1,039,024 3
Page 5
Bank of the James Financial Group, Inc. and Subsidiaries Consolidated Statements of Income (dollar amounts in thousands, except per share amounts) (unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, Interest Income 2026 2025 2026 2025 Loans $9,737 $9,341 $19,164 $18,247 Securities US Government and agency obligations 619 548 1,252 1,002 Mortgage backed securities 741 377 1,191 764 Municipals - taxable 402 330 800 641 Municipals - tax exempt 62 24 125 43 Dividends 34 35 45 48 Corporates 152 136 297 271 Interest bearing deposits 127 127 225 250 Federal Funds sold 413 720 1,037 1,607 Total interest income 12,287 11,638 24,136 22,873 Interest Expense NOW, money market and savings $999 $1,258 $2,027 $2,506 Time deposits 1,893 1,945 3,847 4,024 Finance leases 14 17 28 34 Other borrowings 127 87 246 176 Capital notes - 81 - 163 Total interest expense 3,033 3,388 6,148 6,903 Net interest income 9,254 8,250 17,988 15,970 Provision for (recovery of) credit losses 350 (528) 204 (391) Net interest income after provision for (recovery of) credit losses 8,904 8,778 17,784 16,361 Noninterest income Gains on sale of loans held for sale $1,529 $1,589 $2,725 $2,426 Service charges, fees and commissions 1,149 975 2,143 1,956 Wealth management fees 1,466 1,300 2,879 2,555 Life insurance income 214 190 425 378 Income from small business investment company 70 - 201 - Gains on sales of securities 1 - 1 - Other 47 21 66 43 Total noninterest income 4,476 4,075 8,440 7,358 Noninterest expenses Salaries and employee benefits 5,510 5,357 11,010 10,134 Occupancy 523 497 1,131 1,067 4
Page 6
Equipment 706 654 1,453 1,324 Supplies 132 168 292 310 Professional and other outside expense 756 755 1,526 2,470 Data processing 519 782 994 1,602 Marketing 258 237 447 435 Credit expense 259 263 449 449 FDIC insurance expense 118 120 254 262 Amortization of intangibles 140 140 280 280 Other 390 482 840 948 Total noninterest expenses 9,311 9,455 18,676 19,281 Income before income taxes 4,069 3,398 7,548 4,438 Income tax expense 829 694 1,534 891 Net Income $3,240 $2,704 $6,014 $3,547 Weighted average shares outstanding - basic and diluted 4,543,338 4,543,338 4,543,338 4,543,338 Net income per common share - basic and diluted $0.71 $0.60 $1.32 $0.78 5
Page 7
Bank of the James Financial Group, Inc. and Subsidiaries Dollar amounts in thousands, except per share data unaudited Selected Data: Three months ending Jun 30, 2026 Three months ending Jun 30, 2025 Change Year to date ending Jun 30, 2026 Year to date ending Jun 30, 2025 Change Interest income $12,287 $11,638 5.58% $24,136 $22,873 5.52% Interest expense 3,033 3,388 -10.48% 6,148 6,903 -10.94% Net interest income 9,254 8,250 12.17% 17,988 15,970 12.64% Provision for (recovery of) credit losses 350 (528) -166.29% 204 (391) -152.17% Noninterest income 4,476 4,075 9.84% 8,440 7,358 14.71% Noninterest expense 9,311 9,455 -1.52% 18,676 19,281 -3.14% Income taxes 829 694 19.45% 1,534 891 72.17% Net income 3,240 2,704 19.82% 6,014 3,547 69.55% Weighted average shares outstanding - basic and diluted 4,543,338 4,543,338 - 4,543,338 4,543,338 - Basic and diluted net income per share $0.71 $0.60 $0.11 $1.32 $0.78 $0.54 Balance Sheet at period end: Jun 30, 2026 Dec 31, 2025 Change Jun 30, 2025 Dec 31, 2024 Change Loans, net $686,084 $661,357 3.74% $649,089 $636,552 1.97% Loans held for sale 5,651 3,472 62.76% 4,226 3,616 16.87% Total securities 240,413 217,718 10.42% 200,183 191,522 4.52% Total deposits 935,184 937,129 -0.21% 910,527 882,404 3.19% Stockholders' equity 83,153 80,048 3.88% 71,665 64,865 10.48% Total assets 1,041,307 1,039,024 0.22% 1,004,242 979,244 2.55% Shares outstanding 4,543,338 4,543,338 - 4,543,338 4,543,338 - Book value per share $18.30 $17.62 $0.68 $15.77 $14.28 $1.49 Daily averages: Three months ending Jun 30, 2026 Three months ending Jun 30, 2025 Change Year to date ending Jun 30, 2026 Year to date ending Jun 30, 2025 Change Loans $672,887 $653,758 2.93% $668,200 $650,292 2.75% Loans held for sale 3,978 3,657 8.78% 3,481 3,027 15.00% Total securities (book value) 266,241 224,411 18.64% 254,182 221,625 14.69% Total deposits 953,084 920,286 3.56% 950,100 921,241 3.13% Stockholders' equity 82,476 68,256 20.83% 81,811 66,526 22.98% Interest earning assets 1,002,566 961,123 4.31% 998,450 964,062 3.57% Interest bearing liabilities 818,203 795,621 2.84% 819,475 798,331 2.65% Total assets 1,058,803 1,020,390 3.76% 1,054,914 1,020,182 3.40% 6
Page 8
Financial Ratios: Three months ending Jun 30, 2026 Three months ending Jun 30, 2025 Change Year to date ending Jun 30, 2026 Year to date ending Jun 30, 2025 Change Return on average assets 1.23% 1.06% 0.17 1.15% 0.70% 0.45 Return on average equity 15.76% 15.89% -0.13 14.82% 10.75% 4.07 Net interest margin (tax- equivalent) 3.71% 3.45% 0.26 3.64% 3.34% 0.3 Efficiency ratio 67.82% 76.71% -8.89 70.67% 82.65% -11.98 Average equity to average assets 7.79% 6.69% 1.10 7.76% 6.52% 1.24 Allowance for credit losses: Three months ending Jun 30, 2026 Three months ending Jun 30, 2025 Change Year to date ending Jun 30, 2026 Year to date ending Jun 30, 2025 Change Beginning balance $6,201 $7,022 -11.69% $6,450 $7,044 -8.43% Provision for (recovery of) credit losses* 410 (555) -173.87% 318 (526) -160.46% Charge-offs (90) (160) -43.75% (312) (223) 39.91% Recoveries 76 1 7500.00% 141 13 984.62% Ending balance 6,597 6,308 4.58% 6,597 6,308 4.58% * does not include provision for or recovery of unfunded loan commitment liability Nonperforming assets: Jun 30, 2026 Dec 31, 2025 Change Jun 30, 2025 Dec 31, 2024 Change Total nonperforming loans $1,091 $1,704 -35.97% $1,846 $1,640 12.56% Other real estate owned - - N/A - - N/A Total nonperforming assets 1,091 1,704 -35.97% 1,846 1,640 12.56% Asset quality ratios: Jun 30, 2026 Dec 31, 2025 Change Jun 30, 2025 Dec 31, 2024 Change Nonperforming loans to total loans 0.16% 0.26% -0.10 0.28% 0.25% 0.02 Allowance for credit losses for loans to total loans 0.95% 0.97% -0.02 1.08% 1.09% (0.01) Allowance for credit losses for loans to nonperforming loans 604.67% 378.52% 226.15 3.90 4.30 -39.20 7