Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ Form 10-Q ______________________ (Mark one) ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2025 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from BANK OF THE JAMES FINANCIAL GROUP, INC. (Exact Name of Registrant as Specified in Its Charter) _____ ...

Core Insights - Bank of the James Financial Group, Inc. reported strong financial performance for the second quarter and first half of 2025, with net income increasing to $2.70 million or $0.60 per share, compared to $2.15 million or $0.47 per share in the same period of 2024 [2][3][10] - The company demonstrated growth in commercial lending, mortgage originations, and core deposits, establishing a solid base for continued positive financial performance [3][6] - The net interest margin improved to 3.45% in the second quarter of 2025, the highest in several quarters, reflecting effective management of loan yields and interest expenses [4][15] Financial Performance - Net interest income for the second quarter of 2025 was $8.25 million, up 16% from $7.09 million in the second quarter of 2024, while total interest income rose to $11.64 million, a 6% increase year-over-year [10][11][35] - Total interest expense decreased by 12% to $3.39 million in the second quarter of 2025, contributing to a net interest income after recovery of credit losses of $8.78 million, up 22% from the previous year [13][35] - Noninterest income remained stable at $4.08 million in the second quarter of 2025, with contributions from commercial treasury services and wealth management fees [16][35] Asset Quality and Growth - Loans, net of allowance for credit losses, increased to $649.09 million at June 30, 2025, from $636.55 million at December 31, 2024, driven by growth in commercial real estate loans [10][18][19] - The ratio of nonperforming loans to total loans was 0.28% at June 30, 2025, indicating strong asset quality, with no other real estate owned [22][23] - Total assets reached $1.004 billion at June 30, 2025, up from $979.24 million at December 31, 2024, reflecting increases in securities and loan growth [18][36] Shareholder Value - Stockholders' equity grew to $71.67 million at June 30, 2025, from $64.87 million at December 31, 2024, with a book value per share of $15.77, up from $14.28 [25][36] - The company declared a quarterly dividend of $0.10 per common share, payable on September 26, 2025, to stockholders of record as of September 12, 2025 [10][35] Strategic Initiatives - The company successfully retired approximately $10 million in capital notes, expected to reduce annual interest expenses by approximately $327,000, enhancing financial stability [7][8] - A balanced revenue stream from various sources, including commercial and retail banking, has provided predictable earnings amid economic challenges [6][10]

Exhibit 99.1 Bank of the James Announces Second Quarter, First Half of 2025 Financial Results Loan Growth, Asset Quality, Declaration of Quarterly Dividend LYNCHBURG, VA, August 4, 2025 -- Bank of the James Financial Group, Inc. (the "Company") (NASDAQ:BOTJ), the parent company of Bank of the James (the "Bank"), a full- service commercial and retail bank, and Pettyjohn, Wood & White, Inc. ("PWW"), an SEC- registered investment advisor, today announced unaudited results of operations for the three month and ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ Form 10-Q ______________________ (Mark one) BANK OF THE JAMES FINANCIAL GROUP, INC. (Exact Name of Registrant as Specified in Its Charter) ______________________ (State or other jurisdiction of incorporation or organization) Virginia 001-35402 20-0500300 (Commission file number) (I.R.S. Employer Identification No.) 828 Main Street, Lynchburg, VA 24504 (Address of principal executive offices) (Zip ...

Financial Performance - Net income for Q1 2025 was $842,000, down from $2.19 million in Q1 2024, resulting in earnings per share of $0.19 compared to $0.48 a year earlier[2] - Net income decreased by 61.50% to $842 thousand for the three months ended March 31, 2025, down from $2,187 thousand in the prior year[36] - Basic net income per share decreased to $0.19 for the three months ended March 31, 2025, down from $0.48 in the same period of 2024[36] Interest Income and Margin - Total interest income increased by 6.90% to $11.23 million in Q1 2025, up from $10.51 million in Q1 2024, driven by higher yields on loans and growth in commercial real estate[11] - Net interest margin improved to 3.25% in Q1 2025, up from 3.02% in Q1 2024, while interest spread rose to 2.95% from 2.73% year-over-year[11] - Net interest income rose to $7,719 thousand for the three months ended March 31, 2025, reflecting an 11.06% increase compared to $6,950 thousand in the same period of 2024[34] Asset and Loan Growth - Total assets grew by 3% to $1.01 billion at March 31, 2025, compared to $979.24 million at December 31, 2024[19] - Total assets increased to $1,011,726 thousand as of March 31, 2025, up 3.32% from $979,244 thousand at December 31, 2024[32] - Loans, net of allowance for credit losses, increased to $642.39 million at March 31, 2025, from $636.55 million at December 31, 2024[19] - Loans held for sale increased significantly by 31.06% to $4,739 thousand compared to $3,616 thousand in the previous quarter[36] Deposits and Equity - Total deposits reached $911.68 million at March 31, 2025, up from $882.40 million at December 31, 2024, reflecting growth in core deposits[24] - Total deposits grew to $911,683 thousand, a 3.32% increase from $882,404 thousand at the end of 2024[36] - Stockholders' equity increased to $68.35 million at March 31, 2025, from $64.87 million at December 31, 2024, with book value per share rising to $15.04 from $14.28[25] Asset Quality - Nonperforming loans to total loans ratio was 0.28% at March 31, 2025, indicating strong asset quality[23] - Nonperforming loans rose to $1,799 thousand, a 9.70% increase from $1,640 thousand at December 31, 2024[38] Expenses and Efficiency - Noninterest expenses increased by 21.49% to $9,826 thousand for the three months ended March 31, 2025, compared to $8,088 thousand in the same period of 2024[35] - The efficiency ratio worsened to 89.31% for the three months ended March 31, 2025, compared to 78.85% in the same period of 2024[37] Future Projections and Savings - The company anticipates $5 million in savings over the 65-month term of a new contract with its core service provider, despite a one-time expense of approximately $1 million in Q1 2025[11] - The company plans to pay off approximately $10 million of capital notes in June 2025, reducing annual interest expense by approximately $327,000[5] Credit Loss Provision - The provision for credit losses was $137 thousand, a significant recovery from a negative provision of $553 thousand in the prior year[36]

Core Insights - The company reported a net income of $842,000 for Q1 2025, a significant decrease from $2.19 million in Q1 2024, resulting in earnings per share of $0.19 compared to $0.48 a year earlier [2][14] - The decrease in earnings was primarily due to a one-time expense of approximately $1 million related to a consultant for negotiating a contract with the core service provider, which is expected to yield long-term cost savings [4][10] - The company maintained a strong cash position, allowing it to pay off approximately $10 million of capital notes without raising new capital, which will reduce annual interest expenses by about $327,000 [5] Financial Performance - Total interest income increased by 6.90% to $11.23 million in Q1 2025 from $10.51 million in Q1 2024, driven by higher yields on loans and growth in commercial real estate loans [12][14] - Net interest income after provision for credit losses rose to $7.58 million, compared to $7.50 million a year earlier, with a net interest margin improvement to 3.25% from 3.02% [11][15] - Noninterest income was stable at $3.28 million, with contributions from commercial treasury services and wealth management activities [16][14] Asset Quality and Growth - Total assets grew by 3% to $1.01 billion at March 31, 2025, from $979.24 million at December 31, 2024, with loans net of allowance for credit losses increasing to $642.39 million [18][24] - The ratio of nonperforming loans to total loans was 0.28%, indicating strong asset quality, with total nonperforming loans at $1.80 million [22][24] - The company added two experienced commercial relationship managers to enhance its commercial lending capabilities and expand market share [8][9] Shareholder Value - Stockholders' equity increased to $68.35 million at March 31, 2025, up from $64.87 million at December 31, 2024, with a book value per share rising to $15.04 from $14.28 [24][14] - The board of directors approved a quarterly dividend of $0.10 per common share, reflecting the company's commitment to returning value to shareholders [14]

Financial Performance - Total interest income increased to $44,643,000 in 2024 from $39,362,000 in 2023, representing a growth of 8.2%[380] - Net income decreased to $7,944,000 in 2024 compared to $8,704,000 in 2023, a decline of 8.7%[381] - Noninterest income rose to $15,137,000 in 2024, up from $12,867,000 in 2023, marking an increase of 17.7%[381] - Total noninterest expenses increased to $35,105,000 in 2024 from $32,507,000 in 2023, reflecting a rise of 8.1%[381] - Earnings per common share decreased to $1.75 in 2024 from $1.91 in 2023, a decline of 8.4%[381] - The net revenue for the consolidated entity was $44.373 million in 2024, up from $42.607 million in 2023, reflecting an increase of approximately 4.1%[503] Assets and Liabilities - The Bank's total assets increased to $979.2 million as of December 31, 2024, compared to $969.4 million as of December 31, 2023, reflecting a growth of approximately 1.8%[379] - The Bank's total liabilities increased to $914.4 million in 2024 from $909.3 million in 2023, reflecting a growth of approximately 0.6%[379] - The Bank's gross loan portfolio is approximately $643.6 million with an allowance for credit losses of $7.0 million as of December 31, 2024[369] - The balance of cash and cash equivalents at the end of the period was $73,309,000 in 2024, slightly down from $74,838,000 in 2023[388] Deposits and Loans - The Bank's total deposits rose to $882.4 million in 2024, up from $878.5 million in 2023, indicating an increase of about 0.5%[379] - Total loans as of December 31, 2024, amounted to $643,596,000, an increase from $609,333,000 as of December 31, 2023[463] - Total loans held for investment, net of allowances, increased to $636.6 million at December 31, 2024, up from $601.9 million in 2023, representing a growth of approximately 5.8%[501] Credit Quality and Allowance for Credit Losses - The allowance for credit losses decreased to $7,044,000 as of December 31, 2024, from $7,412,000 as of December 31, 2023[465] - The company actively monitors credit risk through comprehensive underwriting standards and regular portfolio reviews[461] - The total provision for credit losses included charge-offs of $236 million and recoveries of $209 million, highlighting the bank's management of credit risk[467] - The allowance for credit losses for unfunded loan commitments was $543,000 and $665,000 at December 31, 2024 and 2023, respectively[487] Investments and Securities - The Bank's securities available-for-sale decreased to $187.9 million in 2024 from $216.5 million in 2023, a decline of about 13.2%[379] - The company’s total amortized cost of securities as of December 31, 2024, was $216,921,000, with a fair value of $187,916,000, reflecting gross unrealized losses of $29,014,000[450] - The total available-for-sale securities decreased from $216,510,000 in 2023 to $187,916,000 in 2024, reflecting a reduction of about 13.2%[555] Branch Growth and Strategic Plans - The Bank plans to evaluate additional locations for future branch growth and may open a new branch within the next 18 months if a suitable location is found[208] - The Bank is utilizing the internet to enhance growth plans, offering online account access and management functions[209] Capital Ratios and Compliance - As of December 31, 2024, the Bank's total capital to risk-weighted assets ratio was 12.84%, exceeding the minimum requirement of 10.50%[534] - The Bank's Tier 1 capital to risk-weighted assets ratio was 11.92%, above the required minimum of 8.50%[534] - The Bank is categorized as well capitalized under the regulatory framework for prompt corrective action as of December 31, 2024[533] Miscellaneous - The company reported a total of $1,664 million in special mention loans, indicating a focus on monitoring potential credit risks[476] - The company recorded no liabilities for unrecognized tax benefits as of December 31, 2024, and 2023[430] - The Bank had no Other Real Estate Owned (OREO) as of December 31, 2024 and 2023, maintaining a consistent position[489]

Financial Performance - Net income for the fourth quarter of 2024 was $1.62 million, down 23.2% from $2.11 million in the same quarter of 2023, while full-year net income decreased to $7.94 million from $8.70 million [2][12]. - Net income decreased by 8.73% to $7,944,000 in 2024 compared to $8,704,000 in 2023 [40]. - Return on average assets decreased to 0.63% in 2024 from 0.87% in 2023, a decline of 0.24 percentage points [42]. - Return on average equity fell to 9.39% in 2024 compared to 16.69% in 2023, a decrease of 7.30 percentage points [42]. Income and Revenue - Total interest income for 2024 increased by 13% to $44.64 million compared to $39.36 million in 2023, driven by higher commercial loan interest rates and new loans [12][14]. - Noninterest income rose 18% year-over-year to $15.14 million in 2024, supported by gains on loan sales and wealth management fees [5][18]. - Total interest income increased by 13.42% to $44,643,000 in 2024 from $39,362,000 in 2023 [39]. - Noninterest income grew by 17.64% to $15,137,000 in 2024 from $12,867,000 in 2023 [41]. Loans and Assets - Total loans, net of allowance for credit losses, increased by 6% to $636.55 million at December 31, 2024, with commercial real estate loans growing by 9% [6][22]. - Loans, net increased by 5.75% to $636,552,000 as of December 31, 2024, up from $601,921,000 in 2023 [41]. - Total assets increased by 1.02% to $979,244,000 as of December 31, 2024, from $969,371,000 in 2023 [41]. - Loans held for sale increased significantly by 187.44% to $3,616,000 in 2024 from $1,258,000 in 2023 [41]. Deposits and Equity - Total deposits increased to $882.40 million at December 31, 2024, up from $878.46 million a year earlier, reflecting a focus on core deposits [9][27]. - Total deposits rose by 0.45% to $882,404,000 in 2024 from $878,459,000 in 2023 [41]. - Stockholders' equity rose by 8% to $64.87 million at December 31, 2024, with book value per share increasing to $14.28 from $13.21 a year earlier [10][28]. - Stockholders' equity increased by 8.04% to $64,865,000 in 2024 compared to $60,039,000 in 2023 [41]. - Book value per share improved to $14.28 in 2024 from $13.21 in 2023, reflecting a $1.07 increase [41]. Expenses and Efficiency - Noninterest expense for the full year of 2024 was $35.11 million, up from $32.51 million in 2023, impacted by a one-time payment related to a debit card processing contract [20][12]. - Interest expense surged by 60.12% to $15,407,000 in 2024 from $9,622,000 in 2023 [41]. - The efficiency ratio increased to 82.62% in 2024, up from 79.64% in 2023, reflecting a rise of 2.98 percentage points [42]. Credit Quality - The ratio of nonperforming loans to total loans was 0.25% at December 31, 2024, indicating strong asset quality management [26]. - Total nonperforming loans surged by 319.44% to $1,640 million in 2024 from $391 million in 2023 [42]. - Nonperforming loans to total loans ratio increased to 0.25% in 2024 from 0.06% in 2023, an increase of 0.19 percentage points [42]. - The allowance for credit losses for loans to total loans decreased to 1.09% in 2024 from 1.22% in 2023, a change of -0.12 percentage points [42]. - The ending balance of allowance for credit losses dropped by 4.96% to $7,044 million in 2024 from $7,412 million in 2023 [42]. - Provision for credit losses showed a recovery of $39 million in 2024 compared to a provision of $123 million in 2023, a change of -131.71% [42]. - Charge-offs were recorded at $0 million in 2024, a significant decrease from $40 million in 2023, marking a -100.00% change [42]. Future Outlook - The company anticipates recognizing up to $438,000 in incentive payments from a new card processing contract, with expected long-term benefits of $2.1 million [12].

Core Insights - The company reported a decline in net income for both the fourth quarter and the full year of 2024 compared to the previous year, with net income of $1.62 million ($0.36 per share) for Q4 2024, down from $2.11 million ($0.45 per share) in Q4 2023, and full-year net income of $7.94 million ($1.75 per share), down from $8.70 million ($1.91 per share) in 2023 [2][10][37] Financial Performance - Total interest income increased to $44.64 million for the full year of 2024, up 13% from $39.36 million in 2023, primarily due to higher rates on commercial loans and new loans reflecting the prevailing rate environment [13][17] - Noninterest income rose 18% to $15.14 million in 2024, driven by gains on loan sales, commercial treasury services, and wealth management fees [5][18][19] - Total loans, net of allowance for credit losses, increased by 6% to $636.55 million at the end of 2024, with commercial real estate loans growing by 9% [6][17][21] Asset Quality and Management - The ratio of nonperforming loans to total loans was 0.25% at the end of 2024, indicating strong asset quality, although this was an increase from 0.06% at the end of 2023 [25][40] - The allowance for credit losses on loans to total loans was 1.09% at the end of 2024, down from 1.22% a year earlier, reflecting effective credit management [25][40] Shareholder Value - Stockholders' equity increased by 8% to $64.87 million at the end of 2024, with retained earnings rising to $42.80 million from $36.68 million a year earlier [9][27][28] - The company declared a quarterly dividend of $0.10 per share, reflecting its commitment to returning value to shareholders [10][28] Operational Highlights - The company opened new strategic locations in Buchanan and Nellysford, Virginia, enhancing its deposit-gathering capabilities [8] - Noninterest expense for the full year of 2024 was $35.11 million, up from $32.51 million in 2023, influenced by a one-time payment related to a contract with a debit card processor [20][37]

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% of total deposits as of September 30, 2024[173]. - Total liabilities rose to $925.568 billion in 2024, compared to $894.115 billion in 2023, marking an increase of about 3.5%[207]. - Stockholders' equity increased to $60.564 billion in 2024 from $51.274 billion in 2023, showing a growth of approximately 18.1%[207]. - The allowance for credit losses decreased to $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].