Bank Of The James Financial Group Inc (NASDAQ: BOTJ)

Bank of the James Financial Group Inc is a bank holding company headquartered in Lynchburg Virginia. The company’s primary subsidiary Bank of the James offers a full range of retail and commercial banking services to the local community. In addition the firm operates a mortgage division that originates home loans and a wealth management subsidiary that provides investment advisory services. These activities are conducted under the regulatory framework applicable to Virginia chartered banks and federally registered investment advisers. The company’s business model places it within the regional banking and financial services industry.

The company generates revenue from interest earned on loans and securities, service fees on deposit accounts, and commissions from various fee based services. Its banking segment contributes interest income from commercial real estate, residential mortgage, consumer and business loans, along with fees from checking, savings, time deposit, IRA and HSA accounts. The mortgage division adds revenue from loan origination fees and related charges on home loans. The investment advisory segment earns fees based on the market value of assets under management for its clients. Additional income is derived from securities brokerage commissions and insurance agency fees.

The company operates through the following segments.

• Retail and Commercial Banking: This segment provides traditional banking services including deposit taking, commercial and consumer lending, treasury management, merchant services, and related fee based products to individuals businesses and governmental entities.

• Mortgage Brokerage: This segment originates conforming and non conforming home mortgages primarily in the Region 2000 area and earns income from loan origination fees, underwriting fees, and related charges on home loans.

• Investment Advisory: This segment provides investment advisory and wealth management services through its subsidiary Pettyjohn, Wood & White, Inc and generates revenue from fees based on assets under management, financial planning, and retirement account services.

The company holds a solid position among Virginia based community banks competing with other regional financial institutions for retail and commercial clients. Its competitive advantages stem from deep local relationships, a broad suite of banking mortgage and wealth management services, and a conservative capital profile that supports steady growth. The firm’s ability to cross sell products across its banking mortgage and wealth management lines enhances customer loyalty and revenue stability.

The company serves individuals, small and medium sized businesses, municipal entities and various non profit organizations across its Virginia market area. Its deposit and loan products are targeted to consumers seeking personal banking, entrepreneurs needing working capital, and public entities requiring treasury services. The firm also extends its reach into neighboring markets such as Charlottesville, Roanoke, and Harrisonburg to serve similar customer segments.