BOTJ · Bank of the James Financial Group, Inc.

Bank of the James Financial Group delivered its strongest first quarter in over 26 years, with net income surging to $2.77 million ($0.61 per share) from $842,000 ($0.19 per share) in Q1 2025. This performance was propelled by a 13.15% increase in net interest income to $8.73 million, fueled by higher yields on loans and securities alongside a 11.38% drop in interest expense to $3.12 million, aided by lower deposit costs and the retirement of $10.05 million in capital notes in Q2 2025. Net interest margin expanded 32 basis points to 3.57%, reflecting improved asset yields and reduced funding costs. Noninterest income rose 20.74% to $3.96 million, driven by $1.20 million in mortgage gains on loan sales (up $359,000 YoY), 12.59% higher wealth management fees of $1.41 million from Pettyjohn, Wood & White (AUM grew to $1.01 billion), and $131,000 from an SBIC fund. Noninterest expense fell 4.69% to $9.37 million, with sharp declines in professional fees (down 54.2%) and data processing (down 44.2%) following core processing contract renegotiation, offsetting higher salaries from production incentives. A $146,000 credit loss recovery versus a prior-year provision further boosted results, yielding ROA above 1% and ROE near 14%. Balance sheet growth featured total assets at $1.06 billion (up 4.89% YoY), deposits at $956.55 million (up 4.92%), and net loans stable at $649.13 million amid payoffs that funded higher-yielding investments. Credit quality strengthened with nonperforming loans at $1.45 million (0.22% of loans) and ACL coverage at 4.28x. The board's $0.10 quarterly dividend underscores confidence in sustained profitability and capital strength, with book value per share at $17.89.