BOTJ Q4 Earnings Rise Y/Y on Strong Margins & Lower Costs

Shares of Bank of the James Financial Group, Inc. BOTJ have gained 2.1% since the company reported its earnings for the fourth quarter of 2025. This compares to the S&P 500 Index’s 0.2% decline over the same time frame. Over the past month, the stock has rallied 13% compared to the S&P 500’s 0.9% drop, indicating notable outperformance versus the broader market following the earnings release.

For the fourth quarter of 2025, Bank of the James reported net income of $2.72 million, up 68.3% from $1.62 million in the year-ago quarter. Earnings per share for the quarter rose to 60 cents from 36 cents a year earlier. For full-year 2025, net income reached a record $9.02 million, an increase of 13.6% from $7.94 million in 2024, while full-year EPS improved to $1.99 from $1.75, also a 13.6% gain.

Net interest income for the fourth quarter jumped 11.1% year over year to $8.54 million and climbed 12.2% to $32.81 million for the full year. Total noninterest income rose 13.3% in the quarter and 4.7% for the year, reflecting growth across multiple fee-based categories.

Bank of the James Financial Group, Inc. Price, Consensus and EPS Surprise

Bank of the James Financial Group, Inc. price-consensus-eps-surprise-chart | Bank of the James Financial Group, Inc. Quote

Other Key Business Metrics of BOTJ

Balance-sheet growth remained steady during the year. Total assets increased 6.1% year over year to $1.04 billion as of Dec. 31, 2025. Loans, net of allowance for credit losses, rose 3.9% to $661.36 million, while total deposits grew 6.2% to $937.13 million, driven largely by a 7.7% increase in core deposits. Stockholders’ equity increased 23.4% to $80.05 million, supported by retained earnings growth and improved valuations in the available-for-sale securities portfolio.

Book value per share rose to $17.62 from $14.28 a year earlier. Profitability metrics also improved, with return on average assets at 1.04% for the quarter compared with 0.63% a year ago, and return on average equity rising to 13.89% from 9.39%.

BOTJ: Management Commentary

Management highlighted both revenue momentum and expense discipline as key drivers of the improved results. CEO Robert R. Chapman III noted that margin improvement stemmed from active management of deposit pricing and loan yields, along with a decline in interest expense following the retirement of approximately $10.05 million in capital notes earlier in the year. President Mike Syrek emphasized that vendor renegotiations and lower professional fees reduced noninterest expense in the fourth quarter and are expected to provide ongoing savings into 2026. Both executives underscored efficiency improvement as a continuing focus.

Factors Influencing BOTJ’s Headline Numbers

Higher net interest income was supported by improved net interest margin, which expanded to 3.44% in the fourth quarter from 3.18% a year earlier. Interest expense declined 12.1% in the quarter and 10.1% for 2025, reflecting lower deposit costs, an easing rate environment and the retirement of capital notes. Noninterest income growth was driven primarily by gains on the sale of loans held for sale, higher wealth management fees from the Pettyjohn, Wood & White subsidiary and increased service charges.

On the expense side, noninterest expense declined 4.2% year over year in the quarter due to lower data processing costs and reduced professional fees, though full-year noninterest expense rose 7% as higher salaries, benefits and investments in new banking facilities outweighed cost savings in other areas.

Other Developments at BOTJ

During the quarter, the most notable balance sheet action was the earlier retirement of capital notes, which contributed to lower interest expense and improved margins. Apart from this capital management step, the company’s activities during the period were centered on organic growth in loans, deposits and wealth management services rather than structural changes to the business.

The company suggested continued focus on pricing, cost control and credit discipline. Executives indicated that expense savings achieved through vendor negotiations and process improvements are expected to persist in the coming year, while efficiency gains remain a strategic priority.

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