REFLECTIONS
F I N A N C I A L G R O U P ,
I N C .
2 0 1 9 M E
S
S A G E
T O
S H A R E H O L D E R S
IN MEMORIAM 2019
Wanda Evans
Appomattox Office, Employee
Betty Henderson
Boonsboro Office, Employee
Wilma Rucker
Main Street Office, Employee
Muriel Payne
Altavista, Advisory Board
Everyone leaves footprints in your memory, but the ones that leave footprints in your heart are the ones you will
truly remember.
- Nicholas Sperling
COVER PHOTO BY CLARK LUPTON
ANNUAL REPORT 2019
CONTENTS
President’s Message .................................................................. 3
Reflections to Our Shareholders........................................... 6
Reflections to Our Employees................................................ 8
Reflections to Our Customers..............................................10
Reflections to Our Community............................................12
A History of Service .................................................................14
Our Leadership..........................................................................15
Community Advisory Boards ...............................................16
Banking Offices .........................................................................18
Timeline .......................................................................................19
Shareholder and Corporate Information .........................20
BANK OF THE JAMES REFLECTIONS
THIS PAGE INTENTIONALLY LEFT BLANK.
BANK OF THE JAMES REFLECTIONS
ANNUAL REPORT 2019
PRESIDENT’S MESSAGE
Dear Shareholders, Customers and Communities,
Bank of the James Financial Group, Inc. executed its
strategy throughout 2019 to generate balanced,
sustainable revenue growth from retail, mortgage
and commercial banking, manage interest and
noninterest expense, and maintain strong asset
quality to drive stable, predictable earnings growth
and build shareholder value. We concluded our 20th
year of operations with Company-record earnings,
net loans, total deposits and total interest and
noninterest income.
Our vision to be the financial institution of choice has
stood the test of time, fueling steady growth. We have
expanded the size and scope of our franchise,
established a thriving commercial banking business,
and consistently grown shareholder value.
The commitment to superior service and providing
personalized financial solutions drove solid
commercial loan growth and record residential
mortgage originations. These were the two major
forces behind Company-record net income in 2019 of
$5.61 million or $1.28 per diluted share, up from $5.30
million or $1.21 per diluted share in 2018.
Achieving record earnings was a meaningful
accomplishment in a year that included allocating a
portion of earnings to investment in continued growth
and the ability to serve a larger customer base. The
Company established a presence in the Lexington,
Virginia market, opened an office in Rustburg, Virginia
to enhance deposit-gathering capabilities in Campbell
County, relocated a limited-service office in
Charlottesville, Virginia, converting it to a full-service
office, and opened a second office in Roanoke, Virginia.
Over the years, making prudent investments in the
Company’s future has fueled growth and made the
Company increasingly valuable to our shareholders.
Our core Region 2000 market has provided a strong
and growing base for Bank of the James, while the
success of our expansion into Charlottesville, Roanoke
and Harrisonburg has driven significant growth in both
commercial and retail banking.
BANK OF THE JAMES REFLECTIONS
Strong earnings enabled us to create shareholder
value in immediate, tangible ways. During 2019, the
Company paid quarterly cash dividends to
shareholders, as we have since 2014. The Company
also repurchased 21,000 shares of its common stock.
Total stockholders’ equity increased to $61.55 million
at December 31, 2019 from $55.14 million at
December 31, 2018. A significant measure of the
Company’s intrinsic value, tangible book value per
share, rose to $14.13 at December 31, 2019 from
$12.59 at December 31, 2018. Retained earnings
increased to $20.90 million at December 31, 2019,
up from $16.52 million a year earlier.
Our focus in 2020 is to enhance the productivity of
our infrastructure and continue expanding banking
relationships with customers to earn a greater share of
their banking, lending and financial services business.
Lending Activity Drives Growth
Total assets increased to a Company-record $725.39
million at December 31, 2019, up 7.5% from $674.90
million a year earlier. Asset growth primarily reflected
the growth in retained commercial loans and
increased originated and closed residential mortgages
available for sale to the secondary market.
Loans, net of allowance for loan losses, increased 8%
to $573.27 million at December 31, 2019, up $43.26
million from $530.02 million at December 31, 2018.
The Company’s allowance for loan losses was $4.83
million, with a lower year-over-year provision for losses
and a significant decline in charge-offs. Strong credit
review and monitoring has played an important role in
preserving the quality of loans.
Strong residential mortgage originations, which
generate loans available for sale to the secondary
market, were reflected in loans held-for-sale at
December 31, 2019 of $4.22 million compared with
$1.67 million at December 31, 2018. We retain a select
number of residential mortgages. The balance on the
retained mortgages increased 3% over 2018.
A successful strategy in the past several years has been
to focus on being the purchase mortgage originator of
3
choice, providing superior service and efficient loan
processing. By placing the majority of the mortgage
loans we make with the secondary market, we improve
our interest rate risk profile and eliminate costs related
to servicing loans while generating fee income from
originations and gains from the sale of quality loans.
Led by commercial lending, the Company’s portfolio
of retained loans generated balanced performance
and year-over-year growth. Commercial real estate
loans, both owner-occupied and non-owner-occupied,
increased to $193.80 million at December 31, 2019
from $182.92 million. Commercial & industrial loans
increased 19% to $84.73 million from $71.14 million,
construction and land loans of $42.57 million were
up 24%, and multi-family mortgages grew 19% to
$55.76 million.
Our commitment to growth while maintaining
strong asset quality through careful credit and risk
management has enabled us to maintain a
high-performing loan portfolio.
Total nonperforming loans were $1.3 million at
December 31, 2019, compared with $2.9 million a
year earlier. The amount of owned foreclosed real
estate declined slightly, and total nonperforming
assets declined 32% year-over-year. Asset quality
ratios reflected the portfolio’s continued strength,
including a ratio of nonperforming loans to total
loans that improved to 0.23% at year-end from
0.55% a year earlier.
We believe the indicators of asset quality, which have
been strong and improving during the past several
years, demonstrate that consistent credit review and
ongoing monitoring practices, coordinated
throughout the Company and all served markets,
have effectively mitigated credit risk.
To provide an additional buffer against risk, we have
maintained strong reserves against potential loan
losses. At December 31, 2019, the Company’s
allowance for loan losses to nonperforming loans
stood at 371%. Maintaining safe, secure operations
has been a hallmark of our operation.
Focus on Deposit Growth
Deposits, which provide funding for our lending,
increased in 2019 to record levels. Reflecting the
Company’s focus on organic deposit growth, total
deposits rose to $649.46 million at December 31, 2019,
compared with $612.04 million at December 31, 2018.
Lower-cost core deposits (noninterest-bearing
demand, NOW, savings and money market accounts)
represent our most cost-effective source of funding.
They comprised approximately 70% of the Company’s
total deposits. Interest-bearing demand deposits were
$362.82 million at December 31, 2019 compared with
$331.30 million at December 31, 2018. Noninterest
bearing demand deposits, which are frequently tied to
commercial banking relationships, grew to $93.94
million at December 31, 2019 compared with $91.36
million at December 31, 2018.
In 2019, as in 2018, we were able to fund our lending
through deposit growth. Expanding customer
relationships that include core deposit business is one
of our highest priorities in 2020, as deposits are the
lifeblood of any financial institution.
Driving Revenue Growth
Total interest income, driven by lending, was a
Company-record $29.82 million in 2019, up 11% from
$26.97 million in 2018. In 2019, net interest income
rose 5.9% to $24.55 million. The growth of net interest
income was lower than that of total interest income
due to higher year-over-year interest expense that
primarily reflected deposit growth and higher rates on
interest-bearing liabilities.
The Company’s net interest margin in 2019 was 3.77%
compared with 3.75% in 2018. Margin compression
has presented a challenge as rate adjustments led to
increased cost of liabilities and downward pressure on
loan yields. We emphasize managing interest expense
by paying competitive but prudent rates on deposits,
closely managing costlier time deposits, and focusing
on generating lower-cost core deposits.
We were encouraged with the contribution
value per share and retained earnings all increased in
noninterest income made, including gains from the
2019 from the previous year. The Bank's regulatory
sale of residential mortgages to the secondary market,
capital ratios continued to exceed accepted regulatory
revenue contributions from BOTJ Investment Services,
standards for a well-capitalized institution.
and fee income from the Bank’s line of treasury
management services for commercial customers.
Noninterest income increased 37% to $7.19 million in
2019 compared with $5.24 million in 2018. In 2019,
gains on sale of loans held for sale were $4.25 million,
up from $2.92 million in 2018, reflecting the strength
of mortgage originations.
Our mission is to be the preeminent bank in the
communities we serve through superior customer
service. Through this service, that we take very
seriously, we are the best place to do business. We
work hard to create a working environment that takes
care of our employees and their families. We also strive
to be the best community servant we can be by
As anticipated, noninterest expense in 2019 increased
sponsoring numerous events and giving of our
from the year before, primarily reflecting increased
volunteer time. We are grateful for the support
personnel, marketing, and equipment costs related
from our long-time shareholders and welcome the
to market expansion as well as increased credit
confidence in our prospects demonstrated by newer
expenses associated with origination of residential
shareholders. As we enter the Company’s third decade,
mortgage loans.
The Company’s efficiency ratio was higher compared
to a year earlier, primarily reflecting the addition of
personnel and facilities and an increase in variable
compensation related to increased production in
the mortgage and investment divisions. We anticipate
that as productivity increases, we will improve the
efficiency ratio and return on average asset and
equity ratios.
As previously noted, measures of shareholder value
reflected our growth and positive financial
performance. Total stockholders’ equity, tangible book
we look forward to continuing our tradition of service,
building banking relationships and creating value for
you, our shareholders.
Sincerely,
Robert R. Chapman III
President and CEO
Dear Shareholders, Customers and Communities,
Strong earnings enabled us to create shareholder
Bank of the James Financial Group, Inc. executed its
strategy throughout 2019 to generate balanced,
sustainable revenue growth from retail, mortgage
and commercial banking, manage interest and
noninterest expense, and maintain strong asset
value in immediate, tangible ways. During 2019, the
Company paid quarterly cash dividends to
shareholders, as we have since 2014. The Company
also repurchased 21,000 shares of its common stock.
Total stockholders’ equity increased to $61.55 million
quality to drive stable, predictable earnings growth
at December 31, 2019 from $55.14 million at
and build shareholder value. We concluded our 20th
December 31, 2018. A significant measure of the
year of operations with Company-record earnings,
Company’s intrinsic value, tangible book value per
net loans, total deposits and total interest and
noninterest income.
Our vision to be the financial institution of choice has
stood the test of time, fueling steady growth. We have
share, rose to $14.13 at December 31, 2019 from
$12.59 at December 31, 2018. Retained earnings
increased to $20.90 million at December 31, 2019,
up from $16.52 million a year earlier.
expanded the size and scope of our franchise,
Our focus in 2020 is to enhance the productivity of
established a thriving commercial banking business,
our infrastructure and continue expanding banking
and consistently grown shareholder value.
The commitment to superior service and providing
personalized financial solutions drove solid
commercial loan growth and record residential
mortgage originations. These were the two major
forces behind Company-record net income in 2019 of
$5.61 million or $1.28 per diluted share, up from $5.30
million or $1.21 per diluted share in 2018.
Achieving record earnings was a meaningful
accomplishment in a year that included allocating a
portion of earnings to investment in continued growth
and the ability to serve a larger customer base. The
Company established a presence in the Lexington,
Virginia market, opened an office in Rustburg, Virginia
to enhance deposit-gathering capabilities in Campbell
County, relocated a limited-service office in
relationships with customers to earn a greater share of
their banking, lending and financial services business.
Lending Activity Drives Growth
Total assets increased to a Company-record $725.39
million at December 31, 2019, up 7.5% from $674.90
million a year earlier. Asset growth primarily reflected
the growth in retained commercial loans and
increased originated and closed residential mortgages
available for sale to the secondary market.
Loans, net of allowance for loan losses, increased 8%
to $573.27 million at December 31, 2019, up $43.26
million from $530.02 million at December 31, 2018.
The Company’s allowance for loan losses was $4.83
million, with a lower year-over-year provision for losses
and a significant decline in charge-offs. Strong credit
review and monitoring has played an important role in
Charlottesville, Virginia, converting it to a full-service
preserving the quality of loans.
office, and opened a second office in Roanoke, Virginia.
Strong residential mortgage originations, which
Over the years, making prudent investments in the
generate loans available for sale to the secondary
Company’s future has fueled growth and made the
market, were reflected in loans held-for-sale at
Company increasingly valuable to our shareholders.
Our core Region 2000 market has provided a strong
and growing base for Bank of the James, while the
success of our expansion into Charlottesville, Roanoke
and Harrisonburg has driven significant growth in both
commercial and retail banking.
December 31, 2019 of $4.22 million compared with
$1.67 million at December 31, 2018. We retain a select
number of residential mortgages. The balance on the
retained mortgages increased 3% over 2018.
A successful strategy in the past several years has been
to focus on being the purchase mortgage originator of
ANNUAL REPORT 2019
PRESIDENT’S MESSAGE
choice, providing superior service and efficient loan
processing. By placing the majority of the mortgage
loans we make with the secondary market, we improve
our interest rate risk profile and eliminate costs related
to servicing loans while generating fee income from
originations and gains from the sale of quality loans.
Led by commercial lending, the Company’s portfolio
of retained loans generated balanced performance
and year-over-year growth. Commercial real estate
loans, both owner-occupied and non-owner-occupied,
increased to $193.80 million at December 31, 2019
from $182.92 million. Commercial & industrial loans
increased 19% to $84.73 million from $71.14 million,
construction and land loans of $42.57 million were
up 24%, and multi-family mortgages grew 19% to
$55.76 million.
Our commitment to growth while maintaining
strong asset quality through careful credit and risk
management has enabled us to maintain a
high-performing loan portfolio.
Total nonperforming loans were $1.3 million at
December 31, 2019, compared with $2.9 million a
year earlier. The amount of owned foreclosed real
estate declined slightly, and total nonperforming
assets declined 32% year-over-year. Asset quality
ratios reflected the portfolio’s continued strength,
including a ratio of nonperforming loans to total
loans that improved to 0.23% at year-end from
0.55% a year earlier.
We believe the indicators of asset quality, which have
been strong and improving during the past several
years, demonstrate that consistent credit review and
ongoing monitoring practices, coordinated
throughout the Company and all served markets,
have effectively mitigated credit risk.
To provide an additional buffer against risk, we have
maintained strong reserves against potential loan
losses. At December 31, 2019, the Company’s
allowance for loan losses to nonperforming loans
stood at 371%. Maintaining safe, secure operations
has been a hallmark of our operation.
4
Focus on Deposit Growth
Deposits, which provide funding for our lending,
increased in 2019 to record levels. Reflecting the
Company’s focus on organic deposit growth, total
deposits rose to $649.46 million at December 31, 2019,
compared with $612.04 million at December 31, 2018.
Lower-cost core deposits (noninterest-bearing
demand, NOW, savings and money market accounts)
represent our most cost-effective source of funding.
They comprised approximately 70% of the Company’s
total deposits. Interest-bearing demand deposits were
$362.82 million at December 31, 2019 compared with
$331.30 million at December 31, 2018. Noninterest
bearing demand deposits, which are frequently tied to
commercial banking relationships, grew to $93.94
million at December 31, 2019 compared with $91.36
million at December 31, 2018.
In 2019, as in 2018, we were able to fund our lending
through deposit growth. Expanding customer
relationships that include core deposit business is one
of our highest priorities in 2020, as deposits are the
lifeblood of any financial institution.
Driving Revenue Growth
Total interest income, driven by lending, was a
Company-record $29.82 million in 2019, up 11% from
$26.97 million in 2018. In 2019, net interest income
rose 5.9% to $24.55 million. The growth of net interest
income was lower than that of total interest income
due to higher year-over-year interest expense that
primarily reflected deposit growth and higher rates on
interest-bearing liabilities.
The Company’s net interest margin in 2019 was 3.77%
compared with 3.75% in 2018. Margin compression
has presented a challenge as rate adjustments led to
increased cost of liabilities and downward pressure on
loan yields. We emphasize managing interest expense
by paying competitive but prudent rates on deposits,
closely managing costlier time deposits, and focusing
on generating lower-cost core deposits.
BANK OF THE JAMES REFLECTIONS
We were encouraged with the contribution
value per share and retained earnings all increased in
noninterest income made, including gains from the
2019 from the previous year. The Bank's regulatory
sale of residential mortgages to the secondary market,
capital ratios continued to exceed accepted regulatory
revenue contributions from BOTJ Investment Services,
standards for a well-capitalized institution.
and fee income from the Bank’s line of treasury
management services for commercial customers.
Noninterest income increased 37% to $7.19 million in
2019 compared with $5.24 million in 2018. In 2019,
gains on sale of loans held for sale were $4.25 million,
up from $2.92 million in 2018, reflecting the strength
of mortgage originations.
Our mission is to be the preeminent bank in the
communities we serve through superior customer
service. Through this service, that we take very
seriously, we are the best place to do business. We
work hard to create a working environment that takes
care of our employees and their families. We also strive
to be the best community servant we can be by
As anticipated, noninterest expense in 2019 increased
sponsoring numerous events and giving of our
from the year before, primarily reflecting increased
volunteer time. We are grateful for the support
personnel, marketing, and equipment costs related
from our long-time shareholders and welcome the
to market expansion as well as increased credit
confidence in our prospects demonstrated by newer
expenses associated with origination of residential
shareholders. As we enter the Company’s third decade,
mortgage loans.
The Company’s efficiency ratio was higher compared
to a year earlier, primarily reflecting the addition of
personnel and facilities and an increase in variable
compensation related to increased production in
the mortgage and investment divisions. We anticipate
that as productivity increases, we will improve the
efficiency ratio and return on average asset and
equity ratios.
As previously noted, measures of shareholder value
reflected our growth and positive financial
performance. Total stockholders’ equity, tangible book
we look forward to continuing our tradition of service,
building banking relationships and creating value for
you, our shareholders.
Sincerely,
Robert R. Chapman III
President and CEO
Dear Shareholders, Customers and Communities,
Strong earnings enabled us to create shareholder
Bank of the James Financial Group, Inc. executed its
strategy throughout 2019 to generate balanced,
sustainable revenue growth from retail, mortgage
and commercial banking, manage interest and
noninterest expense, and maintain strong asset
value in immediate, tangible ways. During 2019, the
Company paid quarterly cash dividends to
shareholders, as we have since 2014. The Company
also repurchased 21,000 shares of its common stock.
Total stockholders’ equity increased to $61.55 million
quality to drive stable, predictable earnings growth
at December 31, 2019 from $55.14 million at
and build shareholder value. We concluded our 20th
December 31, 2018. A significant measure of the
year of operations with Company-record earnings,
Company’s intrinsic value, tangible book value per
net loans, total deposits and total interest and
noninterest income.
Our vision to be the financial institution of choice has
stood the test of time, fueling steady growth. We have
share, rose to $14.13 at December 31, 2019 from
$12.59 at December 31, 2018. Retained earnings
increased to $20.90 million at December 31, 2019,
up from $16.52 million a year earlier.
expanded the size and scope of our franchise,
Our focus in 2020 is to enhance the productivity of
established a thriving commercial banking business,
our infrastructure and continue expanding banking
and consistently grown shareholder value.
The commitment to superior service and providing
personalized financial solutions drove solid
commercial loan growth and record residential
mortgage originations. These were the two major
forces behind Company-record net income in 2019 of
$5.61 million or $1.28 per diluted share, up from $5.30
million or $1.21 per diluted share in 2018.
Achieving record earnings was a meaningful
accomplishment in a year that included allocating a
portion of earnings to investment in continued growth
and the ability to serve a larger customer base. The
Company established a presence in the Lexington,
Virginia market, opened an office in Rustburg, Virginia
to enhance deposit-gathering capabilities in Campbell
County, relocated a limited-service office in
relationships with customers to earn a greater share of
their banking, lending and financial services business.
Lending Activity Drives Growth
Total assets increased to a Company-record $725.39
million at December 31, 2019, up 7.5% from $674.90
million a year earlier. Asset growth primarily reflected
the growth in retained commercial loans and
increased originated and closed residential mortgages
available for sale to the secondary market.
Loans, net of allowance for loan losses, increased 8%
to $573.27 million at December 31, 2019, up $43.26
million from $530.02 million at December 31, 2018.
The Company’s allowance for loan losses was $4.83
million, with a lower year-over-year provision for losses
and a significant decline in charge-offs. Strong credit
review and monitoring has played an important role in
Charlottesville, Virginia, converting it to a full-service
preserving the quality of loans.
office, and opened a second office in Roanoke, Virginia.
Strong residential mortgage originations, which
Over the years, making prudent investments in the
generate loans available for sale to the secondary
Company’s future has fueled growth and made the
market, were reflected in loans held-for-sale at
Company increasingly valuable to our shareholders.
Our core Region 2000 market has provided a strong
and growing base for Bank of the James, while the
success of our expansion into Charlottesville, Roanoke
and Harrisonburg has driven significant growth in both
commercial and retail banking.
December 31, 2019 of $4.22 million compared with
$1.67 million at December 31, 2018. We retain a select
number of residential mortgages. The balance on the
retained mortgages increased 3% over 2018.
A successful strategy in the past several years has been
to focus on being the purchase mortgage originator of
choice, providing superior service and efficient loan
processing. By placing the majority of the mortgage
loans we make with the secondary market, we improve
our interest rate risk profile and eliminate costs related
to servicing loans while generating fee income from
originations and gains from the sale of quality loans.
Led by commercial lending, the Company’s portfolio
of retained loans generated balanced performance
and year-over-year growth. Commercial real estate
loans, both owner-occupied and non-owner-occupied,
increased to $193.80 million at December 31, 2019
from $182.92 million. Commercial & industrial loans
increased 19% to $84.73 million from $71.14 million,
construction and land loans of $42.57 million were
up 24%, and multi-family mortgages grew 19% to
$55.76 million.
Our commitment to growth while maintaining
strong asset quality through careful credit and risk
management has enabled us to maintain a
high-performing loan portfolio.
Total nonperforming loans were $1.3 million at
December 31, 2019, compared with $2.9 million a
year earlier. The amount of owned foreclosed real
estate declined slightly, and total nonperforming
assets declined 32% year-over-year. Asset quality
ratios reflected the portfolio’s continued strength,
including a ratio of nonperforming loans to total
loans that improved to 0.23% at year-end from
0.55% a year earlier.
We believe the indicators of asset quality, which have
been strong and improving during the past several
years, demonstrate that consistent credit review and
ongoing monitoring practices, coordinated
throughout the Company and all served markets,
have effectively mitigated credit risk.
To provide an additional buffer against risk, we have
maintained strong reserves against potential loan
losses. At December 31, 2019, the Company’s
allowance for loan losses to nonperforming loans
stood at 371%. Maintaining safe, secure operations
has been a hallmark of our operation.
Focus on Deposit Growth
Deposits, which provide funding for our lending,
increased in 2019 to record levels. Reflecting the
Company’s focus on organic deposit growth, total
deposits rose to $649.46 million at December 31, 2019,
compared with $612.04 million at December 31, 2018.
Lower-cost core deposits (noninterest-bearing
demand, NOW, savings and money market accounts)
represent our most cost-effective source of funding.
They comprised approximately 70% of the Company’s
total deposits. Interest-bearing demand deposits were
$362.82 million at December 31, 2019 compared with
$331.30 million at December 31, 2018. Noninterest
bearing demand deposits, which are frequently tied to
commercial banking relationships, grew to $93.94
million at December 31, 2019 compared with $91.36
million at December 31, 2018.
In 2019, as in 2018, we were able to fund our lending
through deposit growth. Expanding customer
relationships that include core deposit business is one
of our highest priorities in 2020, as deposits are the
lifeblood of any financial institution.
Driving Revenue Growth
Total interest income, driven by lending, was a
Company-record $29.82 million in 2019, up 11% from
$26.97 million in 2018. In 2019, net interest income
rose 5.9% to $24.55 million. The growth of net interest
income was lower than that of total interest income
due to higher year-over-year interest expense that
primarily reflected deposit growth and higher rates on
interest-bearing liabilities.
The Company’s net interest margin in 2019 was 3.77%
compared with 3.75% in 2018. Margin compression
has presented a challenge as rate adjustments led to
increased cost of liabilities and downward pressure on
loan yields. We emphasize managing interest expense
by paying competitive but prudent rates on deposits,
closely managing costlier time deposits, and focusing
on generating lower-cost core deposits.
We were encouraged with the contribution
noninterest income made, including gains from the
sale of residential mortgages to the secondary market,
revenue contributions from BOTJ Investment Services,
and fee income from the Bank’s line of treasury
management services for commercial customers.
Noninterest income increased 37% to $7.19 million in
2019 compared with $5.24 million in 2018. In 2019,
gains on sale of loans held for sale were $4.25 million,
up from $2.92 million in 2018, reflecting the strength
of mortgage originations.
As anticipated, noninterest expense in 2019 increased
from the year before, primarily reflecting increased
personnel, marketing, and equipment costs related
to market expansion as well as increased credit
expenses associated with origination of residential
mortgage loans.
The Company’s efficiency ratio was higher compared
to a year earlier, primarily reflecting the addition of
personnel and facilities and an increase in variable
compensation related to increased production in
the mortgage and investment divisions. We anticipate
that as productivity increases, we will improve the
efficiency ratio and return on average asset and
equity ratios.
As previously noted, measures of shareholder value
reflected our growth and positive financial
performance. Total stockholders’ equity, tangible book
value per share and retained earnings all increased in
2019 from the previous year. The Bank's regulatory
capital ratios continued to exceed accepted regulatory
standards for a well-capitalized institution.
Our mission is to be the preeminent bank in the
communities we serve through superior customer
service. Through this service, that we take very
seriously, we are the best place to do business. We
work hard to create a working environment that takes
care of our employees and their families. We also strive
to be the best community servant we can be by
sponsoring numerous events and giving of our
volunteer time. We are grateful for the support
from our long-time shareholders and welcome the
confidence in our prospects demonstrated by newer
shareholders. As we enter the Company’s third decade,
we look forward to continuing our tradition of service,
building banking relationships and creating value for
you, our shareholders.
Sincerely,
Robert R. Chapman III
President and CEO
BANK OF THE JAMES REFLECTIONS
5
ANNUAL REPORT 2019
SHAREHOLDERS
Reflections to Our Shareholders
Bank of the James is grateful to the investors and shareholders who,
throughout the years, have tangibly demonstrated their confidence in
our vision and our people through their investments and stock ownership
that have funded the Company’s operations and financed growth. With a
foundation of financial commitments from investors, the Bank opened its
doors in 1999 and broadened its shareholder base as it became a public
company with shares trading on the OTC Bulletin Board.
Over the years, Bank of the James Financial Group, Inc., the Bank’s parent
company, has received strong and loyal support from investors and
shareholders. In its first decade of operation, the Company grew, built
value, and expanded its base of shareholders. It faced the challenges
presented by the recession head-on by addressing asset quality, paying
down Federal Home Loan Bank debt, and focusing on maintaining safety,
security and capital strength to the benefit of all stakeholders.
Demonstrating its commitment to long-term shareholder value, the
Company in 2010 paid off debt to the Federal Home Loan Bank and
thanked shareholders for their loyalty with a 10% stock dividend.
The Company emerged from the recession with renewed strength and
commitment to growth, which included establishing a commercial
banking operation and looking to expand into new Virginia markets.
In 2012, the Company expanded its scope and appeal to investors
when it became a member of the NASDAQ Stock Market which
provided improved trading liquidity and exposed the Company’s
stock to a broader audience of investors.
With strong asset quality and revenue and earnings on the rise, the
Company was proud to declare its first quarterly cash dividend on
common stock in July 2014. It has continued to pay quarterly cash
dividends, with periodic increases reflecting the Company’s continued
earnings growth.
There are many opportunities to build long-term shareholder value,
including prudent reinvestment to position the Company for continued
growth and profitability. The Company has made strategic investments
in technology to enhance efficiency and ensure security, in people to
provide superior service and drive revenue, and in market expansion
that has generated new opportunities and consistent earnings growth.
Philomena (Mena) Hughes has been
a customer of Bank of the James
since the Bank opened in 1999. She
is also a shareholder of the Bank.
She inherited BOTJ stock from her
mother and she plans to hold on to
her shares to provide for the next
generation in her family. She came
to Bank of the James because she
knew many members of the man-
agement team and had complete
trust in their direction with this new
local bank. She is a big cheerleader
of supporting local and this was the
bank for her.
“The employees at Bank of the James
are knowledgeable, so friendly, and
provide the very best of service. They
genuinely care about me and go out
of their way to meet my needs.”
Mena Hughes
Customer and Shareholder
Culinary Assistant Professor
Central Virginia Community College
Lynchburg, Virginia
MENA
HUGHES
6
BANK OF THE JAMES REFLECTIONS
Reflections to Our Shareholders
Bank of the James is grateful to the investors and shareholders who,
throughout the years, have tangibly demonstrated their confidence in
our vision and our people through their investments and stock ownership
that have funded the Company’s operations and financed growth. With a
foundation of financial commitments from investors, the Bank opened its
doors in 1999 and broadened its shareholder base as it became a public
company with shares trading on the OTC Bulletin Board.
Over the years, Bank of the James Financial Group, Inc., the Bank’s parent
company, has received strong and loyal support from investors and
shareholders. In its first decade of operation, the Company grew, built
value, and expanded its base of shareholders. It faced the challenges
presented by the recession head-on by addressing asset quality, paying
down Federal Home Loan Bank debt, and focusing on maintaining safety,
security and capital strength to the benefit of all stakeholders.
Demonstrating its commitment to long-term shareholder value, the
Company in 2010 paid off debt to the Federal Home Loan Bank and
thanked shareholders for their loyalty with a 10% stock dividend.
The Company emerged from the recession with renewed strength and
commitment to growth, which included establishing a commercial
banking operation and looking to expand into new Virginia markets.
In 2012, the Company expanded its scope and appeal to investors
when it became a member of the NASDAQ Stock Market which
provided improved trading liquidity and exposed the Company’s
stock to a broader audience of investors.
With strong asset quality and revenue and earnings on the rise, the
Company was proud to declare its first quarterly cash dividend on
common stock in July 2014. It has continued to pay quarterly cash
dividends, with periodic increases reflecting the Company’s continued
earnings growth.
There are many opportunities to build long-term shareholder value,
including prudent reinvestment to position the Company for continued
growth and profitability. The Company has made strategic investments
in technology to enhance efficiency and ensure security, in people to
provide superior service and drive revenue, and in market expansion
that has generated new opportunities and consistent earnings growth.
Raymond and James Slaughter
have been shareholders of Bank of
the James since 1999. Both brothers
worked at Parker Hannifin in
Lynchburg for over 40 years and
both are retired. They are also
customers of the Bank and came to
Bank of the James because of the
Bank’s local presence, local decision
making, and they knew quite a few
of the employees who worked at the
bank. While the brothers do look
identical, they are not twins.
“We were there when the Bank
opened their doors and they have
been good to us. We knew that
buying shares in a local bank was a
good investment and we were right.
In fact, we have made several stock
purchases throughout the years.
The atmosphere at the Bank is
welcoming and the employees
are nice and helpful.”
James and Raymond Slaughter
Customers and Shareholders
Retired
Lynchburg, Virginia
JAMES and
RAYMOND SLAUGHTER
BANK OF THE JAMES REFLECTIONS
7
ANNUAL REPORT 2019
EMPLOYEES
Reflections to Our Employees
The heart of successful community banking is having skilled, dedicated,
experienced employees able to provide superior financial solutions. To
ensure employees’ success, Bank of the James provides the technology,
processes, infrastructure, training and compensation to enhance their
ability to serve customers and perform effectively.
When the Bank opened for business in 1999, we started with a dozen
employees. Today, we have over 150. From our tellers to our financial
service representatives to our lenders and managers, each employee is
important and essential to the success of our organization.
Our experienced bankers have the market knowledge, expertise and
technological tools to go the extra mile. We empower employees to
contribute ideas and make recommendations to help them be more
productive and help Bank of the James achieve continuous improvement.
We actively support our employees with a wellness program titled
“A Healthier You.” Employees are offered incentives for making good
health choices such as managing weight, walking and or running,
having annual checkups and eating healthily. Employees can earn
points for participating and can redeem points for incentive time and
prizes throughout the year. The Bank will also pay for entry fees for
employees on races and walks that the Bank sponsors throughout
the year.
The Bank provides our employees with competitive compensation,
opportunities for performance-based compensation, and benefits that
support health and well-being. The Bank also offers retirement benefits
including a 401(k) program. We recognize the hard work and dedication
of our employees and provide employees opportunities for personal
and professional growth. Employees participate in a number of training
classes and education programs throughout the year.
The success and workplace satisfaction of our employees leads to
success for the Company, our customers and for our shareholders.
Brandon Farmer is an employee of
Bank of the James and joined the
Bank in 1998 as an intern. He
worked part time at the Bank during
his Junior and Senior years at
Virginia Tech, and came to work full
time in 2001. What started as an
internship turned into a promising
and fulfilling banking career for
Brandon as he is currently a member
of the Bank’s Executive Team and is
head of the Bank’s Operations
Division. He is also responsible for
the opening of all new branches for
Bank of the James.
“I am so glad that Jim Hughes called
me in 2000 to see if I wanted to come
to work full time for the Bank. I said
YES and that was 20 years ago. The
time has gone by quickly. I have
enjoyed being a part of the growth
of this organization, working with
smart bankers and seeing the
difference this bank has made in
the communities we serve. Here’s
to many more years of growth
and local banking.”
Brandon Farmer
Employee
Bank of the James
Lynchburg, Virginia
Executive Vice President and
Chief Operations Officer
BRANDON
FARMER
8
BANK OF THE JAMES REFLECTIONS
Reflections to Our Employees
The heart of successful community banking is having skilled, dedicated,
experienced employees able to provide superior financial solutions. To
ensure employees’ success, Bank of the James provides the technology,
processes, infrastructure, training and compensation to enhance their
ability to serve customers and perform effectively.
When the Bank opened for business in 1999, we started with a dozen
employees. Today, we have over 150. From our tellers to our financial
service representatives to our lenders and managers, each employee is
important and essential to the success of our organization.
Our experienced bankers have the market knowledge, expertise and
technological tools to go the extra mile. We empower employees to
contribute ideas and make recommendations to help them be more
productive and help Bank of the James achieve continuous improvement.
We actively support our employees with a wellness program titled
“A Healthier You.” Employees are offered incentives for making good
health choices such as managing weight, walking and or running,
having annual checkups and eating healthily. Employees can earn
points for participating and can redeem points for incentive time and
prizes throughout the year. The Bank will also pay for entry fees for
employees on races and walks that the Bank sponsors throughout
the year.
The Bank provides our employees with competitive compensation,
opportunities for performance-based compensation, and benefits that
support health and well-being. The Bank also offers retirement benefits
including a 401(k) program. We recognize the hard work and dedication
of our employees and provide employees opportunities for personal
and professional growth. Employees participate in a number of training
classes and education programs throughout the year.
The success and workplace satisfaction of our employees leads to
success for the Company, our customers and for our shareholders.
DESIREE
PERKINS
BANK OF THE JAMES REFLECTIONS
Desiree Perkins joined Bank of the
James shortly after the bank opened
in 1999. Located at the bank’s first
branch location on Church Street in
downtown Lynchburg, Desiree
worked in the Operations Division.
One of her responsibilities was to key
in and scan checks received at the
bank that day and send the actual
checks to the Federal Reserve that
evening. The year was 2000 and
how times have changed. Desiree
has worked hard and today is a Vice
President and a certified BSA and
OFAC Officer for the bank.
“Twenty years ago, I was
approached by three of the original
Bank of the James employees to
come on board and to work for this
newly formed local bank. I said “no”
three times before finally saying, Ok,
I will try it. I am extremely proud of
this bank and what we have
become. We are known throughout
this region as a bank that delivers
amazing customer service and
believe it or not, we still answer
our phones.”
Desiree Perkins
Employee
Bank of the James
Lynchburg, Virginia
Vice President
BSA/OFAC Officer
9
ANNUAL REPORT 2019
CUSTOMERS
Reflections to Our Customers
From the outset, Bank of the James has maintained a concise,
customer-focused vision to be the financial institution of choice.
As the groundwork for the Bank was being laid, a letter to the community
from the Bank’s founders boldly stated: “Many of you have encouraged us to
bring a new style of hometown banking back to our community. We pledge to
offer a new blend of high-tech, old-fashioned banking, where our employees
really know the customer and strive to meet each customer’s needs.”
We have kept that pledge. During two decades of operation, we have
expanded our range of products and services, built a thriving commercial
banking business to complement our strength in retail banking, grown
our franchise throughout Central Virginia and beyond and utilized the best
and latest technologies to provide secure, efficient operation and the most
advanced e-banking capabilities for retail and commercial customers. We
also offer customers a full line of treasury and insurance products.
As we have grown, expanded our capabilities and product offerings, and
incorporated technology, we have recognized that enhancing the financial
well-being of the people we serve is paramount.
From enabling people to remotely bank from home or office to
providing customized financial and investment/insurance solutions
for individuals and business owners, putting the customer’s needs
first is the best way to attract and retain customers.
Residential mortgage lending has been a cornerstone of the Bank’s
business for many years. The Bank’s reputation for excellence in
customer service in mortgage origination has followed the Bank
as it expanded beyond Lynchburg into new markets. The Bank’s
commitment to service, efficient loan processing and personal
support from our mortgage bankers combine to support
mortgage origination leadership.
Commercial banking for businesses and non-profit organizations
requires a special level of expertise and customer commitment.
Bank of the James focuses on relationship banking. We partner with
customers to create customized financial solutions to enhance their
day-to-day efficiency with treasury services, provide deposit options
that help manage cash flow, and provide financing for working
capital and growth.
Our commitment to customers supports their success, and ours.
WILSON
AND CAROLYN
SHEPHERD
and family
BANK OF THE JAMES REFLECTIONS
Meet the Shepherd Family – Wilson,
Carolyn, Sam and Carson. Both
Wilson and Carolyn have careers in
the insurance industry, Sam is in the
2nd grade and Carson is a first-year
college student. A busy family. A
busy life. When they needed a bank
to purchase investment property,
they turned to Bank of the James
Mortgage. What they gained was
a responsive, experienced team that
understood their finances and gave
them exactly what they needed.
They returned to BOTJ Mortgage
again when they were working on
a kitchen renovation project and
needed financing.
“We cannot say enough about this
mortgage team. Over the years,
we have worked with both Bianca
Allison and Brian Cash who are both
knowledgeable, responsive, and
professional. Their customer service
level is unmatched. Bianca made us
feel as if we were her only customer
and Brian’s level of customer service
was exceptional. They gave us
invaluable guidance during this
process and we highly recommend
Bank of the James Mortgage.”
Carolyn Shepherd
Mortgage and Bank Customer
Insurance and Marketing Rep
Optum
Forest, Virginia
10
Reflections to Our Customers
From the outset, Bank of the James has maintained a concise,
customer-focused vision to be the financial institution of choice.
As the groundwork for the Bank was being laid, a letter to the community
from the Bank’s founders boldly stated: “Many of you have encouraged us to
bring a new style of hometown banking back to our community. We pledge to
offer a new blend of high-tech, old-fashioned banking, where our employees
really know the customer and strive to meet each customer’s needs.”
We have kept that pledge. During two decades of operation, we have
expanded our range of products and services, built a thriving commercial
banking business to complement our strength in retail banking, grown
our franchise throughout Central Virginia and beyond and utilized the best
and latest technologies to provide secure, efficient operation and the most
advanced e-banking capabilities for retail and commercial customers. We
also offer customers a full line of treasury and insurance products.
As we have grown, expanded our capabilities and product offerings, and
incorporated technology, we have recognized that enhancing the financial
well-being of the people we serve is paramount.
From enabling people to remotely bank from home or office to
providing customized financial and investment/insurance solutions
for individuals and business owners, putting the customer’s needs
first is the best way to attract and retain customers.
Residential mortgage lending has been a cornerstone of the Bank’s
business for many years. The Bank’s reputation for excellence in
customer service in mortgage origination has followed the Bank
as it expanded beyond Lynchburg into new markets. The Bank’s
commitment to service, efficient loan processing and personal
support from our mortgage bankers combine to support
mortgage origination leadership.
Commercial banking for businesses and non-profit organizations
requires a special level of expertise and customer commitment.
Bank of the James focuses on relationship banking. We partner with
customers to create customized financial solutions to enhance their
day-to-day efficiency with treasury services, provide deposit options
that help manage cash flow, and provide financing for working
capital and growth.
Our commitment to customers supports their success, and ours.
WISTAR
NELLIGAN
Wistar Nelligan has been a customer
of Bank of the James since the Bank
opened in 1999. In fact, Wistar was
one the first customers to walk into
our branch on Church Street. Before
coming to BOTJ, Wistar was banking
at one of the big banks in town. He
switched immediately to Bank of the
James since he personally knew a
number of the management team
members who were starting the
Bank and he knew the new local
bank would be in very capable
hands. As a small business owner,
Wistar needed a bank that he could
trust and one that was willing to
work with him. He found this at
Bank of the James.
“Everyone at BOTJ is knowledgeable
and friendly. I needed a bank that
could help me both personally and
with my business. Bank of the James
has been there for us since the very
beginning. Our relations with the
Bank have been built on trust,
friendship and support. I would not
hesitate to recommend the Bank to
anyone who is looking for a secure,
local and community-minded bank.
Thank you, Bank of the James.”
Wistar Nelligan
Bank Customer
President & Owner
Nelligan Insulation, Inc.
Lynchburg, Virginia
BANK OF THE JAMES REFLECTIONS
11
ANNUAL REPORT 2019
COMMUNITY
Reflections to Our Community
Our commitment to service extends to the communities that make it
possible to run a successful, growing banking business. Key elements of
our operating philosophy are to be a positive force in the communities
we serve, and to give back to the charitable and civic-minded
organizations dedicated to service. It is who we are.
At Bank of the James, our commitment to providing excellence in service
extends beyond banking. We believe that as a business and an integral
part of the community, a bank has a particularly important role to serve
and support. Bank of the James contributes to our communities financially
and through the generous volunteer service of employees.
Our financial donations and sponsorships have supported the activities of
more than 200 organizations throughout our regions to further economic
development, education and academic achievement, arts and culture
enrichment, and to enhance the community’s health and human services.
The Bank’s Ronald V. Dolan Award annually recognizes and provides cash
awards to local high school students who have demonstrated
outstanding citizenship and community service. Mr. Dolan, one of our
Bank’s founders, was dedicated to serving the community throughout
his life, and we have been proud to recognize that spirit of commitment
to the community in his memory.
Throughout the year, employees provide support for local causes. For
example, our employees donate and collect items from backpacks to
blankets. They volunteer hundreds of hours of their time and talents
to support civic, charitable, educational and cultural organizations.
Our regional advisory boards, comprised of community leaders, help
us stay in touch with what is important to the individuals, businesses,
non-profits and communities we serve.
We believe that giving back to the community is both our duty and
our privilege. As we continue to grow, so does the impact we have
on our communities.
JUBILEE FAMILY
DEVELOPMENT
CENTER
BANK OF THE JAMES REFLECTIONS
The Jubilee Center was founded in
1999 in response to our community’s
overwhelming need for a program that
would target at-risk youth and offer
them programs and services to help
develop their academic and social
skills. Everyday, Jubilee programs and
volunteers are leading young people
into futures filled with hopes and goals.
They are loved, tutored, mentored,
challenged and motivated as they
strive to overcome many obstacles.
The Jubilee Concept works. It focuses
on each child, assessing their needs
and teaches them to do for themselves
and rise above difficult odds.
“It is good to have a community bank
as a partner. Both the Jubilee Center
and Bank of the James opened in
1999 and we have been connected ever
since. The Bank’s support has allowed
hundreds of students and their families
to have access to programming and
resources they would have never had.
This access has allowed our kids to go
on to college or have a career, and has
helped unemployed or underemployed
members of our community to have a
chance to receive skills training. Both
Bank of the James and Jubilee are
strong grassroots organizations and
are investing in the community by
providing a service filled with
passion and commitment.”
Sterling A. Wilder
Executive Director
Jubilee Family Development Center
Lynchburg, Virginia
12
Reflections to Our Community
Our commitment to service extends to the communities that make it
possible to run a successful, growing banking business. Key elements of
our operating philosophy are to be a positive force in the communities
we serve, and to give back to the charitable and civic-minded
organizations dedicated to service. It is who we are.
At Bank of the James, our commitment to providing excellence in service
extends beyond banking. We believe that as a business and an integral
part of the community, a bank has a particularly important role to serve
and support. Bank of the James contributes to our communities financially
and through the generous volunteer service of employees.
Our financial donations and sponsorships have supported the activities of
more than 200 organizations throughout our regions to further economic
development, education and academic achievement, arts and culture
enrichment, and to enhance the community’s health and human services.
The Bank’s Ronald V. Dolan Award annually recognizes and provides cash
awards to local high school students who have demonstrated
outstanding citizenship and community service. Mr. Dolan, one of our
Bank’s founders, was dedicated to serving the community throughout
his life, and we have been proud to recognize that spirit of commitment
to the community in his memory.
Throughout the year, employees provide support for local causes. For
example, our employees donate and collect items from backpacks to
blankets. They volunteer hundreds of hours of their time and talents
to support civic, charitable, educational and cultural organizations.
Our regional advisory boards, comprised of community leaders, help
us stay in touch with what is important to the individuals, businesses,
non-profits and communities we serve.
We believe that giving back to the community is both our duty and
our privilege. As we continue to grow, so does the impact we have
on our communities.
NATIONAL
D-DAY
MEMORIAL
BANK OF THE JAMES REFLECTIONS
The National D-Day Memorial is a
congressionally approved national
war memorial located in Bedford,
Virginia. This Memorial was
constructed in honor of those who
died on June 6, 1944 in one of the
most pivotal battles of World War II.
In 2019, the National D-Day
Memorial commemorated a
milestone – the 75th anniversary
of D-Day during which 4,414 service
members lost their lives. The
Memorial exists today to honor
their valor, fidelity and sacrifice.
On June 6, 2019, over 100 WWII
veterans were in attendance at
the D-Day Memorial, more than
20 vintage WWII aircrafts flew over
the Memorial, and a special visit
and speech was delivered by the
Vice President of the United States.
Bank of the James was proud to be
a primary sponsor of this event.
“Bank of the James and the
National D-Day Memorial have
been community partners since
the Memorial’s inception more than
twenty years ago. Not only has the
Bank supported the Memorial
philanthropically over the years,
they have also served as one of our
primary banking institutions. Bank
of the James made it possible for the
Memorial to be built, to grow and to
thrive. We are so appreciative for all
that Bank of the James has done for
the Memorial. The leadership and
employees of the Bank truly make
this partnership special.”
Brandon P. Gregory
Director of Development
National D-Day Memorial
Bedford, Virginia
13
ANNUAL REPORT 2019
A HISTORY OF SERVICE
Bank of the James, a wholly owned subsidiary of
Bank of the James Financial Group, Inc. (NASDAQ:
BOTJ) serves the greater Lynchburg, Virginia Statistical
Metropolitan Area, commonly called Region 2000,
and the Charlottesville, Harrisonburg, Lexington and
Roanoke, Virginia markets. Its geographical reach
covers a region of more than 5,000 square miles with
a population of more than 800,000, includes four of
Virginia’s 10 largest metropolitan areas, and features
a diverse range of businesses, educational institutions
and not-for-profits.
The Bank opened for business in July 1999 with a
commitment to serving the community by providing
access to dedicated, experienced professionals,
building value for its shareholders, and giving back
through community involvement. From a start-up
team of 12 employees and 10 directors, the Company
has grown to more than 150 employees, a 13-member
Board of Directors, and over 40 business and
community leaders who comprise its regional
advisory boards.
Consistent investment in reaching out to new markets,
expanding its team of expert bankers, implementing
new technology and enhancing its range of business
banking solutions have generated consistent growth
and positive financial performance.
With 19 offices and $725.39 million in assets,
Bank of the James is known for our employees, our
dedication to our communities, and our ability to
provide the highest quality of customer service.
The employees who work for Bank of the James are
knowledgeable, smart bankers and we are just like
you. We are little league coaches, church choir
members and PTA members. We are neighbors
and serve on local boards throughout our cities
and towns. We are family.
The Bank services customers in Virginia from offices
located in Altavista, Amherst, Appomattox, Bedford,
Blacksburg, Charlottesville, Forest, Harrisonburg,
Lexington, Lynchburg, Madison Heights, Roanoke
and Rustburg. 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 Bank celebrated it’s 20th anniversary in July 2019.
14
BANK OF THE JAMES REFLECTIONS
LEADERSHIP
EXECUTIVE MANAGEMENT TEAM
Robert R. Chapman III
President and Chief Executive Officer
Brian E. Cash
President, Bank of the James
Mortgage
Brandon P. Farmer
Executive Vice President and
Chief Operations Officer
Angelia R. Johnson
Executive Vice President and
Retail Branch Administrator
J. Todd Scruggs
Executive Vice President and
Chief Financial Officer
Michael A. Syrek
Executive Vice President and
Chief Loan Officer
Harry P. “Chip” Umberger
Executive Vice President and
Chief Credit Officer
REGIONAL MARKET PRESIDENTS
Trevania F. Cottrill
Market President, Lexington
Jared R. Feury
Market President, Charlottesville
Bradford K. Harris
Market President, Roanoke
Thomas D. Rea
Market President, Harrisonburg/
Shenandoah Valley
BOTJ INVESTMENT SERVICES
Kenneth L. Harvey
Senior Vice President
BOARD OF DIRECTORS
The continued support and guidance of our Board of Directors has been critical to the success of Bank of the James.
Their collective expertise and experience serves as an exceptional resource, offering insight and a connection to the
markets we serve.
Lewis C. Addison
Retired Chief Financial Officer
Centra Health, Inc.
John R. Alford, Jr.
Vice President and Partner
Caskie & Frost, P.C.
William C. Bryant III
President
The Counts Realty and Auction Group
Robert R. Chapman III
President and Chief Executive Officer
Bank of the James
President
Bank of the James Financial Group, Inc.
A. Douglas Dalton III
Operations Manager
English Construction Co., Inc.
BANK OF THE JAMES REFLECTIONS
James F. Daly
President
Daly Seven, Inc.
Julie P. Doyle
President and Executive Director
The Education & Research
Foundation, Inc.
Watt R. Foster, Jr.
President and Chief Executive Officer
Foster Fuels, Inc.
Phillip C. Jamerson
Retired Co-Owner and Founder
Jamerson-Lewis Construction
Lydia K. Langley
Retired Owner
Langley Rentals
Augustus A. Petticolas, Jr., D.D.S.
Dentist
Vice Chairman, Board of Directors
Bank of the James
Thomas W. Pettyjohn, Jr.
Retired Investment Advisor
Chairman, Board of Directors
Bank of the James
J. Todd Scruggs
Executive Vice President and
Chief Financial Officer
Bank of the James
Secretary-Treasurer
Bank of the James
Financial Group, Inc.
15
Joseph D. Aboid
President
JTL, Inc.
Paul R. Denham
President and CEO
Southern Air, Inc.
Commercial Glass & Plastics, Inc.
Kidd’s Services
Robert L. Hiller
President
Terry L. Marsh
Retired President
Lewis Marsh & Associates, Inc.
Daniel R. Taylor
Owner
Randall T. Trost
Attorney At Law
Randall J. Trost, P.C.
Robert L. Driskill, MD
President
Edgar J. T. Perrow, Jr., P.E.
Edward R. Turner
President
Agent
Oakwood Radiotherapy, PLLC
Perrow Consulting Services, LLC
New York Life Insurance
ANNUAL REPORT 2019
COMMUNITY ADVISORY BOARDS
The Community Advisory Boards of Bank of the James are comprised of prominent businessmen and businesswomen
who live and work in the communities we serve. These board members assist our bank in the development of
personal and business relationships within their markets and are community advocates for the bank.
LYNCHBURG ADVISORY BOARD
ALTAVISTA ADVISORY BOARD
AMHERST ADVISORY BOARD
BEDFORD ADVISORY BOARD
Rita T. English
Retired Business Owner
Ralph M. Farmer
Retired
Ralph M. Farmer Painting & Wallpaper
Robert L. Jennings
Retired Banker
First National Bank of Altavista
Madeline C. Key
Retired Educator
Campbell County School System
J. Michael Kinlaw
President
Kinlaw Insurance Agency
Walter L. Maddy
Self Employed
Michael E. Mattox
Owner and President
E & S Market
Aubrey J. Rosser, Jr.
Attorney At Law
Aubrey J. Rosser, Jr., Attorney At Law
Evelyn B. Vaden, C.P.A.
Owner
Evelyn Vaden Accounting Services
Donald G. Wilkerson
Apprenticeship Coordinator
Campbell County Schools
Leif Aagaard, Jr.
Director of Reseller Relationships
BMS Direct
Anthony D. Bailey, DDS
General Dentist
PeaksView Dental
Thomas P. Green
Owner
Sam Green Vault Corp.
Discount Portable Restrooms
and Septic
Calvin M. Kennon, Jr.
President/General Manager
Specialty Exterminating
J. Paul Kilgore, Jr.
Owner, Snap Fitness, Amherst, VA
Ruth E. Martineau
Owner, Community Maps
Co-owner, Martineau, Inc.
Kerry D. Scott
President, Narrow Gate Tack, Inc.
Program Manager,
MAS Labor H-2A, LLC
Managing Partner, Scott Family
Investments, LLC
Rachel E. Thompson
Practice Manager, DT &
Company PLC
Owner, Managing Member, Lily’s
Properties, LLC
Harold W. Woody
Retired Banker
T. Henry Clarke IV
Retired Attorney
W. Courtney Holdren
Commercial and Personal Insurance
Sales Executive
Bankers Insurance, LLC
Paul H. Lilly, MD, MPH
Col., USAF, Retired
James A. Mercadante
General Manager
Cintas Corporation
Michael C. Moldenhauer
Retired President
Sam Moore Furniture
Michael F. Moorman
Retired Chairman and CEO
Peebles Department Stores, Inc.
Dr. H. Paul Rhodes
Retired Radiologist
Bedford Memorial Hospital
Kevin H. Turner
President
Century 21-All Service
Sue Hillsman Woods
Hillsman Properties
16
BANK OF THE JAMES REFLECTIONS
Sam Green Vault Corp.
Discount Portable Restrooms
W. Courtney Holdren
Commercial and Personal Insurance
ALTAVISTA ADVISORY BOARD
AMHERST ADVISORY BOARD
BEDFORD ADVISORY BOARD
Leif Aagaard, Jr.
Anthony D. Bailey, DDS
Director of Reseller Relationships
General Dentist
Ralph M. Farmer Painting & Wallpaper
Owner
BMS Direct
Thomas P. Green
Rita T. English
Retired Business Owner
Ralph M. Farmer
Retired
Robert L. Jennings
Retired Banker
First National Bank of Altavista
and Septic
Madeline C. Key
Retired Educator
Campbell County School System
J. Michael Kinlaw
President
Kinlaw Insurance Agency
Walter L. Maddy
Self Employed
Michael E. Mattox
Owner and President
E & S Market
Aubrey J. Rosser, Jr.
Attorney At Law
Aubrey J. Rosser, Jr., Attorney At Law
Evelyn B. Vaden, C.P.A.
Owner
Evelyn Vaden Accounting Services
Donald G. Wilkerson
Apprenticeship Coordinator
Campbell County Schools
Calvin M. Kennon, Jr.
President/General Manager
Specialty Exterminating
J. Paul Kilgore, Jr.
Owner, Snap Fitness, Amherst, VA
Ruth E. Martineau
Owner, Community Maps
Co-owner, Martineau, Inc.
Kerry D. Scott
President, Narrow Gate Tack, Inc.
Program Manager,
MAS Labor H-2A, LLC
Managing Partner, Scott Family
Investments, LLC
Rachel E. Thompson
Practice Manager, DT &
Company PLC
Properties, LLC
Harold W. Woody
Retired Banker
Owner, Managing Member, Lily’s
PeaksView Dental
T. Henry Clarke IV
Retired Attorney
Sales Executive
Bankers Insurance, LLC
Paul H. Lilly, MD, MPH
Col., USAF, Retired
James A. Mercadante
General Manager
Cintas Corporation
Michael C. Moldenhauer
Retired President
Sam Moore Furniture
Michael F. Moorman
Retired Chairman and CEO
Peebles Department Stores, Inc.
Dr. H. Paul Rhodes
Retired Radiologist
Bedford Memorial Hospital
Kevin H. Turner
President
Century 21-All Service
Sue Hillsman Woods
Hillsman Properties
LYNCHBURG ADVISORY BOARD
Joseph D. Aboid
President
JTL, Inc.
Paul R. Denham
President and CEO
Southern Air, Inc.
Robert L. Driskill, MD
President
Oakwood Radiotherapy, PLLC
Robert L. Hiller
President
Commercial Glass & Plastics, Inc.
Terry L. Marsh
Retired President
Lewis Marsh & Associates, Inc.
Edgar J. T. Perrow, Jr., P.E.
President
Perrow Consulting Services, LLC
Daniel R. Taylor
Owner
Kidd’s Services
Randall T. Trost
Attorney At Law
Randall J. Trost, P.C.
Edward R. Turner
Agent
New York Life Insurance
Celebrating 20 Years of Community Banking 1999-2019
BANK OF THE JAMES REFLECTIONS
17
ANNUAL REPORT 2019
BANKING OFFICES
Forest
17000 Forest Road, Suite A
Forest, VA 24551
(434) 534-8080
Forest – Mortgage
17000 Forest Road, Suite B
Forest, VA 24551
(434) 534-8090
Harrisonburg
1391 South High Street
Harrisonburg, VA 22801
(540) 437-9886
Lexington
158 S. Main Street
Lexington, VA 24450
(540) 707-3144
LYNCHBURG
Boonsboro Office
4935 Boonsboro Road
Lynchburg, VA 24503
(434) 384-8588
Fort Avenue
5204 Fort Avenue
Lynchburg, VA 24502
(434) 237-1144
Main Office
828 Main Street
Lynchburg, VA 24504
(434) 846-2000 or
Toll Free: 1-877-266-0765
Westminster Canterbury
501 VES Road
Lynchburg, VA 24503
(434) 386-3450
Open for residents
and employees of
Westminster Canterbury
Altavista
1110 Main Street
Altavista, VA 24517
(434) 369-7300
Amherst
164 S. Main Street
Amherst, VA 24521
(434) 946-9777
Appomattox
1745 Confederate Boulevard
Appomattox, VA 24522
(434) 352-5500
Bedford
1405 Ole Dominion Boulevard
Bedford, VA 24523
(540) 587-8646
Blacksburg – Mortgage
2001 S. Main Street
Suite 107
Blacksburg, VA 24060
(540) 953-7023
CHARLOTTESVILLE
5th Street Station
225 Merchant Walk Avenue
Charlottesville, VA 22902
(434) 202-0424
Water Street
550 E. Water Street, Suite 100
Charlottesville, VA 22902
(434) 995-5423
Westminster Canterbury
250 Pantops Mountain Road
Charlottesville, VA 22911
(434) 972-2844
Open for residents
and employees of
Westminster Canterbury
18
Madison Heights
4698 S. Amherst Highway
Madison Heights, VA 24572
(434) 846-8887
ROANOKE
Oak Grove
2101 Electric Road
Roanoke, VA 24018
(540) 900-4223
Promenade Park
3562 Electric Road
Roanoke, VA 24018
(540) 989-2026
Rustburg
13 Village Highway
Rustburg, VA 24588
(434) 455-7690
INSURANCE AND
INVESTMENT SERVICES
BOTJ Insurance, Inc.
828 Main Street
Lynchburg, VA 24504
(434) 846-2646
Toll free: 1-888-384-6990
BOTJ Investment Services
828 Main Street
Lynchburg, VA 24504
(434) 846-2279
Toll Free: 1-888-384-6990
BANK OF THE JAMES REFLECTIONS
ANNUAL REPORT 2019
TIMELINE
July 1999
Opened Church Street Office
Lynchburg, VA
April 2001
Opened Bank of the James Mortgage
Lynchburg, VA
December 2003
Bank of the James becomes
a wholly-owned subsidiary of
Bank of the James Financial Group, Inc.
October 2004
Opened Downtown Main Street Office
Lynchburg, VA
April 2006
Opened BOTJ Investment Services Office
Lynchburg, VA
October 2008
Opened Bedford Office
Bedford, VA
December 2008
Opened BOTJ Insurance, Inc.
Lynchburg, VA
January 2012
Bank of the James Financial Group, Inc
Stock Listed on NASDAQ
May 2014
Bank of the James Announced
First Cash Dividend
October 2015
Opened Harrisonburg Office
Harrisonburg, VA
December 2016
Opened Charlottesville
5th Street Station Office
Charlottesville, VA
October 2017
Opened Appomattox Office
Appomattox, VA
June 2019
Opened Roanoke Oak Grove Office
Roanoke, VA
Opened Charlottesville Water Street Office
Charlottesville, VA
November 2019
Opened Rustburg Office
Rustburg, VA
1999
2000
2001
2002
2003
2004
2004
2006
2006
2007
2008
2008
2008
2010
2012
2014
2014
2015
2015
2016
2016
2017
2017
2018
2019
2019
2019
November 2000
Opened Fort Avenue Office
Lynchburg, VA
June 2002
Opened Madison Heights Office
Madison Heights, VA
February 2004
Opened Forest Office
Forest, VA
April 2006
Opened Boonsboro Office
Lynchburg, VA
January 2007
Opened Amherst Office
Amherst, VA
November 2008
Opened Altavista Office
Altavista, VA
June 2010
Opened Westminster Canterbury Office
Lynchburg, VA
January 2014
Opened Charlottesville Office
Charlottesville, VA
July 2015
Opened Westminster Canterbury Office
Charlottesville, VA
October 2016
Opened Temporary Office
Appomattox, VA
February 2017
Opened Roanoke Promenade Park Office
Roanoke, VA
March 2018
Opened Mortgage Office
Blacksburg, VA
July 2019
Opened Lexington Office
Lexington, VA
19
EQUAL OPPORTUNITY EMPLOYER
and/or mental disability, genetic information, age,
Bank of the James, Bank of the James Financial Group,
gender identity, sexual orientation, or protected
Inc., BOTJ Investment Services, and BOTJ Insurance, Inc.
veteran status.
are Equal Opportunity Employers. All personnel
actions, including but not limited to compensation,
benefits, training and other terms and conditions of
employment will be administered without regard to
race, color, religion, sex, national origin, physical
Bank of the James is an Equal Housing Lender.
Bank of the James is a member of the Federal Deposit
Insurance Corporation.
ANNUAL REPORT 2019
SHAREHOLDER and
CORPORATE INFORMATION
CORPORATE HEADQUARTERS
Bank of the James Financial Group, Inc.
828 Main Street
Lynchburg, Virginia 24504
Telephone: 434-846-2000
Toll Free: 1-877-266-0765
INDEPENDENT PUBLIC ACCOUNTANTS
Yount, Hyde & Barbour, P.C.
50 South Cameron Street
Post Office Box 2560
Winchester, Virginia 22601
Telephone: 540-662-3417
www.yhbcpa.com
LEGAL COUNSEL
Woods Rogers, PLC
828 Main Street
Lynchburg, Virginia 24504
Post Office Box 958
Lynchburg, Virginia 24505
Telephone: 434-846-9000
www.woodsrogers.com
STOCK EXCHANGE LISTING
Bank of the James Financial Group, Inc. common stock
is listed on the NASDAQ Capital Market under the
symbol BOTJ. There were approximately 1,423 active
shareholders of record of Bank of the James Financial
Group, Inc. on December 31, 2019.
ANNUAL MEETING
Please refer to the proxy materials for information on
how to attend. Financial will also provide information
on how to attend the meeting on the Bank’s website,
www.bankofthejames.bank, under Investor Relations.
INVESTOR INQUIRIES
Financial analysts and portfolio managers may contact:
J. Todd Scruggs
Executive Vice President and Chief Financial Officer
Telephone: 434-846-2000 or 1-877-266-0765
tscruggs@bankofthejames.com
20
News and media representatives should contact:
James T. Davis III
Vice President and Marketing Director
Telephone: 434-846-2000 or 1-877-266-0765
jdavis@bankofthejames.com
Requests for printed materials including annual
reports, proxy statements, 10-K and 10-Q reports: visit
our investor relations feature under
www.bankofthejames.bank or visit www.sec.gov.
STOCK TRANSFER AGENT
Shareholders requesting information on stock
transfers, lost certificates, dividends, change of address
and other shareholder matters should contact:
Broadridge Corporate Issuer Solutions, Inc.
Post Office Box 1342
Brentwood, New York 11717
Telephone: 1-877-830-4936
Email: shareholder@broadridge.com
www.shareholder.broadridge.com
INTERNET ADDRESS
Additional information regarding Bank of the James
Financial Group, Inc. and Bank of the James is available
on the internet at www.bankofthejames.bank.
ANNUAL REPORT
Bank of the James Financial Group, Inc. files a Form
10-K Annual Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 with the Securities
& Exchange Commission each year. The annual report
includes the audited consolidated financial statements
of Bank of the James Financial Group, Inc. and other
information. A copy of the annual report accompanies
this Message to Shareholders, and additional copies
are available at www.bankofthejames.bank.
Management is responsible for the accuracy and
reliability of the financial statements presented in the
annual report. Management is also responsible for the
consistency of all presentations and financial
information in that report. Yount, Hyde & Barbour, P.C.
audited the Company’s 2019 and 2018 year-end
financial statements.
BANK OF THE JAMES REFLECTIONS
CORPORATE HEADQUARTERS
Bank of the James Financial Group, Inc.
828 Main Street
Lynchburg, Virginia 24504
Telephone: 434-846-2000
Toll Free: 1-877-266-0765
INDEPENDENT PUBLIC ACCOUNTANTS
Yount, Hyde & Barbour, P.C.
50 South Cameron Street
Post Office Box 2560
Winchester, Virginia 22601
Telephone: 540-662-3417
www.yhbcpa.com
LEGAL COUNSEL
Woods Rogers, PLC
828 Main Street
Lynchburg, Virginia 24504
Post Office Box 958
Lynchburg, Virginia 24505
Telephone: 434-846-9000
www.woodsrogers.com
STOCK EXCHANGE LISTING
News and media representatives should contact:
James T. Davis III
Vice President and Marketing Director
Telephone: 434-846-2000 or 1-877-266-0765
jdavis@bankofthejames.com
Requests for printed materials including annual
reports, proxy statements, 10-K and 10-Q reports: visit
our investor relations feature under
www.bankofthejames.bank or visit www.sec.gov.
STOCK TRANSFER AGENT
Shareholders requesting information on stock
transfers, lost certificates, dividends, change of address
and other shareholder matters should contact:
Broadridge Corporate Issuer Solutions, Inc.
Post Office Box 1342
Brentwood, New York 11717
Telephone: 1-877-830-4936
Email: shareholder@broadridge.com
www.shareholder.broadridge.com
INTERNET ADDRESS
Additional information regarding Bank of the James
Financial Group, Inc. and Bank of the James is available
Bank of the James Financial Group, Inc. common stock
on the internet at www.bankofthejames.bank.
is listed on the NASDAQ Capital Market under the
symbol BOTJ. There were approximately 1,423 active
shareholders of record of Bank of the James Financial
Group, Inc. on December 31, 2019.
ANNUAL MEETING
ANNUAL REPORT
Bank of the James Financial Group, Inc. files a Form
10-K Annual Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 with the Securities
& Exchange Commission each year. The annual report
Please refer to the proxy materials for information on
includes the audited consolidated financial statements
how to attend. Financial will also provide information
of Bank of the James Financial Group, Inc. and other
on how to attend the meeting on the Bank’s website,
information. A copy of the annual report accompanies
www.bankofthejames.bank, under Investor Relations.
this Message to Shareholders, and additional copies
Financial analysts and portfolio managers may contact:
INVESTOR INQUIRIES
J. Todd Scruggs
Executive Vice President and Chief Financial Officer
Telephone: 434-846-2000 or 1-877-266-0765
tscruggs@bankofthejames.com
are available at www.bankofthejames.bank.
Management is responsible for the accuracy and
reliability of the financial statements presented in the
annual report. Management is also responsible for the
consistency of all presentations and financial
information in that report. Yount, Hyde & Barbour, P.C.
audited the Company’s 2019 and 2018 year-end
financial statements.
EQUAL OPPORTUNITY EMPLOYER
Bank of the James, Bank of the James Financial Group,
Inc., BOTJ Investment Services, and BOTJ Insurance, Inc.
are Equal Opportunity Employers. All personnel
actions, including but not limited to compensation,
benefits, training and other terms and conditions of
employment will be administered without regard to
race, color, religion, sex, national origin, physical
and/or mental disability, genetic information, age,
gender identity, sexual orientation, or protected
veteran status.
Bank of the James is an Equal Housing Lender.
Bank of the James is a member of the Federal Deposit
Insurance Corporation.
Cautionary Statement Regarding Forward-Looking Statements
This document 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 dates 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, and changes in the value of real estate securing
loans made by Bank of the James (the "Bank"), a subsidiary of the Company. 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 and previously filed by the Bank (as predecessor of
the Company) with the Federal Reserve Board.
BANK OF THE JAMES REFLECTIONS
B A N K O F
T H E
J A M E
S
. B A N K