AI Analysis | Feedback

• Bank of America, but for central Virginia.
• A regional JPMorgan Chase, serving the Lynchburg, Virginia area.

AI Analysis | Feedback

• Deposit Accounts: Bank of the James Financial provides various deposit products including checking, savings, money market, and certificate of deposit accounts for individuals and businesses.
• Lending Services: The bank offers diverse loan products such as residential mortgages, consumer loans, commercial real estate loans, and commercial and industrial loans.
• Online & Mobile Banking: These digital platforms enable customers to conveniently manage their accounts, transfer funds, and pay bills remotely.
• Treasury Management Services: Bank of the James offers comprehensive cash management solutions, fraud protection, and payment processing specifically for its business clients.

AI Analysis | Feedback

Bank of the James Financial (symbol: BOTJ), as a community bank, serves a diverse customer base rather than having a few identifiable "major customers" that are other public companies. Its business model focuses on providing a wide range of financial products and services to individuals and businesses within its local markets in Central Virginia.

Given the nature of its operations and the typical structure of a community bank's customer base, BOTJ does not have major customers that are publicly traded companies whose names and symbols could be listed. Instead, its customer base is broadly categorized as follows:

• Individual Consumers: This category includes individuals and households who utilize a variety of personal banking services. These services encompass checking accounts, savings accounts, money market accounts, certificates of deposit, residential mortgages, home equity lines of credit, and various personal loan products.

• Small to Medium-sized Businesses (SMBs): This segment comprises local businesses, including sole proprietorships, partnerships, and privately-held corporations. They require commercial banking services such as business checking and savings accounts, commercial real estate loans, lines of credit, equipment financing, treasury management services, and merchant services. These are typically local enterprises rather than large, publicly-traded entities.

• Commercial Real Estate (CRE) Investors and Developers: This category includes individuals and businesses focused on the acquisition, development, and management of commercial properties. They often utilize specialized loan products, including construction loans, term loans for income-producing properties, and lines of credit tailored for real estate projects.

AI Analysis | Feedback

AI Analysis | Feedback

AI Analysis | Feedback

Key Risks to Bank of the James Financial (BOTJ)

Bank of the James Financial (NASDAQ: BOTJ) faces several key risks, primarily stemming from the dynamic economic and regulatory environment impacting the banking sector. Based on information from its 2023 Annual Report on Form 10-K and general industry trends for that period, the most significant risks include:

1. Interest Rate Risk and Net Interest Margin Compression: The inverted U.S. Treasury yield curve and rising interest rates in 2023 posed significant challenges for banks in managing their net interest margin and overall profitability. This environment makes it difficult for banks to maintain a healthy spread between the interest earned on assets and the interest paid on liabilities.
2. Credit Risk and Asset Quality: Weaknesses identified in loan portfolios, leading to substantial charge-offs and increased provisions for credit losses, directly impacted the net income of financial institutions in 2023. This highlights the ongoing risk associated with the quality of the bank's loan portfolio and the potential for defaults, particularly in areas such as real estate-secured loans.
3. Liquidity Risk and Industry Instability: The U.S. banking industry experienced turbulence in 2023, marked by high-profile bank failures that led to concerns about depositor confidence. This environment underscores the critical importance of effective liquidity management to mitigate the risk of unexpected deposit outflows and maintain financial stability.

AI Analysis | Feedback

• Digital-first banks and fintech platforms: These entities (e.g., Ally Bank, Chime, SoFi, various online lenders, robo-advisors) offer banking services, loans, and wealth management through highly intuitive mobile apps and web platforms. They often boast lower fees, higher interest rates on deposits, faster loan approvals, and personalized digital tools. This directly challenges BOTJ's ability to retain and attract customers who prioritize digital convenience and seamless user experience over traditional branch banking. Even within a local market, customers are increasingly willing to bank digitally with non-local entities.
• Big Tech companies integrating financial services into their ecosystems: While not full-service banks yet, companies like Apple (Apple Card, Apple Pay, Wallet services), Google (Google Pay, Google Wallet), and Amazon (lending to merchants) are steadily expanding their financial service offerings. They leverage massive user bases, integrated ecosystems, and consumer trust to provide convenient payment solutions, credit, and even savings products. This can disintermediate traditional banks by handling transactions, storing value, and offering credit outside the conventional banking system, eroding the necessity for some core banking relationships.

AI Analysis | Feedback

Bank of the James Financial (symbol: BOTJ) operates as a community bank primarily serving the Central Virginia area, with expanded operations across other regions of Virginia. Its main products and services include personal, business, and online banking, various loan types (personal, business, and mortgage), and investment services. The addressable market sizes for its key offerings within Virginia are detailed below.

Addressable Markets in Virginia:

• Commercial Banking: The commercial banking industry in Virginia had an estimated market size of $24.8 billion in 2025. This market has shown a growth rate of 7.0% annually from 2020 to 2025, with 2,062 businesses operating within this sector in Virginia in 2025.
• Deposits: The total deposit market in Virginia varies by region. As of Q2 2025, major deposit markets in Virginia include:
  • Washington-Arlington-Alexandria, DC-VA-MD-WV: approximately $314.7 billion.
  • Richmond, VA: approximately $67.7 billion.
  • Virginia Beach-Chesapeake-Norfolk, VA-NC: approximately $30 billion.
  • Roanoke, VA: approximately $8.7 billion.
  • Lynchburg, VA (where Bank of the James has a significant presence): approximately $6.1 billion.
• Mortgage Lending: The Virginia housing market saw 9,391 homes sold in September 2025, with a median home price of $455,500. In August 2025, the median home sales price in Virginia was $420,000. The average mortgage loan size in Virginia is $365,579.
• Investment Services: Null

AI Analysis | Feedback

• Continued Loan Growth, Particularly Commercial Real Estate (CRE) and Commercial Lending: The company has demonstrated consistent growth in its loan portfolio, with a specific emphasis on commercial real estate and commercial lending. This focus has been cited as a primary factor in increased total interest income. For example, the bank's Q3 2025 earnings report highlighted "higher yields on loans and commercial real estate loan growth" as a significant contributor to the rise in total interest income. Similarly, the Q2 2025 report noted that total interest income increased, driven by higher loan yields and commercial real estate growth. The CEO also specifically mentioned "continued traction in commercial lending" in Q2 2025.
• Net Interest Margin (NIM) Expansion and Effective Rate Management: Bank of the James Financial has shown an ability to improve its net interest margin through strategic management of loan yields and interest expenses. The net interest margin improved to 3.44% in Q3 2025 from 3.16% in Q3 2024, reflecting effective rate management strategies. The Q2 2025 report also indicated an improved NIM of 3.45%, attributed to effective rate management and a focus on high-quality interest-earning assets. Management has emphasized a consistent improvement in net interest margin and interest spread by keeping loan yields aligned with the prevailing interest rate environment and controlling interest expenses.
• Growth in Lower-Cost Core Deposits: A continued focus on attracting and retaining core deposits is a crucial driver for managing funding costs and enhancing profitability. Both the Q3 2025 and Q2 2025 earnings reports highlighted the bank's ongoing strategy of "growing core deposits (noninterest bearing demand deposits, NOW, money market and savings)" as a factor in increased total deposits. This approach helps to lower the overall cost of funds and improve net interest income.
• Diversification of Revenue Streams and Noninterest Income Growth: The bank benefits from a balanced approach to revenue generation beyond traditional interest income. The CEO has pointed to a "balanced revenue stream from commercial banking, wealth management, and mortgage originations" as a source of financial stability. Noninterest income saw an increase in Q3 2025, primarily driven by "fees from debit card activity and gains on loan sales." The company's offerings also include investment advisory services through its subsidiary, Pettyjohn, Wood & White, Inc.
• Strategic Geographic Footprint and Community Banking Growth: Bank of the James Financial operates across several Virginia markets, including the greater Lynchburg metropolitan statistical area, Blacksburg, Buchanan, Charlottesville, Harrisonburg, Lexington, Nellysford, Roanoke, and Wytheville. The bank has expanded its geographic footprint beyond its initial origins to serve communities across various Virginia counties. Sustained penetration and growth within these existing community banking markets are expected to contribute to future revenue expansion.

AI Analysis | Feedback

Share Repurchases

• The company repurchased 85,319 shares of its common stock in 2023.
• Combined with buybacks in 2022, Bank of the James Financial repurchased approximately 4% of its common stock over the two-year period (2022-2023).

Share Issuance

• In 2021, Bank of the James issued a 10% stock dividend.

Outbound Investments

• In December 2021, Bank of the James acquired Pettyjohn, Wood & White, Inc., an SEC-registered investment advisor. This acquisition expanded the company's services to include investment advisory and financial planning.

Capital Expenditures

• The net book value of premises and equipment was $19.378 million as of September 30, 2024, increasing from $18.141 million at December 31, 2023.