Bank of the James Financial (BOTJ) - 2024 Q3 - Quarterly Report

Financial Performance - The company reported a significant increase in net interest income, driven by a rise in interest rates, contributing to a year-over-year growth of 15%[132]. - Net income for the three and nine months ended September 30, 2024, was $1,990,000 and$6,326,000, respectively, compared to $2,078,000 and$6,596,000 for the same periods in 2023[182]. - Interest income increased to $11,563,000 and$33,007,000 for the three and nine months ended September 30, 2024, driven by higher interest rates on loans[185]. - Interest expense rose significantly to $4,054,000 and$11,457,000 for the three and nine months ended September 30, 2024, due to increased deposit balances and interest rates[186]. - Net interest income for the three and nine months ended September 30, 2024, was $7,509,000 and$21,550,000, with a net interest margin of 3.16% and 3.07%, respectively[187]. - Noninterest income increased to $3,823,000 and$11,321,000 for the three and nine months ended September 30, 2024, primarily due to growth in wealth management fees and gains on sales of loans[190]. - Noninterest expense increased to $8,776,000 and$25,602,000 for the three and nine months ended September 30, 2024, representing increases of 7.81% and 6.27% respectively compared to the same periods in 2023[198]. - The effective tax rate for the three and nine months ended September 30, 2024, was 19.24% and 19.44%, lower than the rates of 19.74% and 19.82% for the same periods in 2023[202]. Asset and Liability Management - Total assets increased by 3.99% to $1,008,063,000 as of September 30, 2024, compared to$969,371,000 at December 31, 2023[148]. - Total deposits rose by 3.32% to $907,610,000 from$878,459,000 during the same period, driven by increases in time deposits and savings deposits[149]. - Total loans, excluding loans held for sale, increased by 4.07% to $634,190,000 from$609,333,000, primarily due to growth in commercial real estate and residential loans[150]. - Total uninsured deposits were approximately $267,498,000, representing about 29.47$925.568 billion in 2024, compared to $894.115 billion in 2023, marking an increase of about 3.5$60.564 billion in 2024 from $51.274 billion in 2023, showing a growth of approximately 18.1$7.091 billion in 2024 from $7.611 billion in 2023, a reduction of approximately 6.8%[206]. Branch Expansion and Strategy - The company plans to open a new branch in Lynchburg, Virginia, in 2025, following the acquisition of a property previously used as a bank branch[137]. - The company has identified additional potential branch locations in Virginia, including Nellysford, with plans to relocate the Temporary Nellysford Branch by fall 2025[137]. - The company continuously evaluates potential new branch locations to enhance its service offerings and market presence[135]. - The Bank anticipates that each new branch will become profitable within 12 to 18 months of operation, with potential expansion in the next 12 months[139]. - The company has a community-oriented banking strategy, focusing on providing services to individuals and small businesses in Central Virginia and expanding to new areas[128]. Risk Management - The allowance for credit losses (ACLL) is estimated using a discounted cash flow model, reflecting management's expectations of probable losses in the loan portfolio[125]. - The company is subject to various risks, including economic and regulatory changes, which could materially affect future financial results[121]. - The Bank maintains a strong credit underwriting process and actively monitors its commercial real estate loan portfolio to manage risk effectively[155]. Compliance and Reporting - The company emphasized its commitment to compliance with the Sarbanes-Oxley Act, as evidenced by certifications from key executives[31.1][31.2]. - The financial report is formatted in eXtensible Business Reporting Language (XBRL), enhancing data accessibility and analysis[101]. - The company is focused on maintaining transparency and accuracy in its financial reporting practices[31.1][31.2]. - The report included consolidated statements of cash flows for the nine months ended September 30, 2024, indicating cash management and liquidity status[101]. - The report was signed by the President and Principal Executive Officer, Robert R. Chapman III, and the Principal Financial Officer, J. Todd Scruggs, ensuring accountability[214].