Margin Gains & Core Deposit Growth Drive BOTJ's Solid Q4 Earnings

Core Insights - Bank of the James Financial Group, Inc. (BOTJ) reported a 2.1% increase in shares following strong fourth-quarter 2025 results, driven by higher net interest income, expanding margins, and disciplined expense management [1] - The company achieved record annual earnings and steady balance sheet growth, indicating improving operating performance [1] Financial Performance - For Q4 2025, BOTJ's net income reached $2.72 million, up from $1.62 million in Q4 2024, with earnings per share increasing to $0.60 from $0.36 [4] - Annual net income for 2025 rose 13.6% to a record $9.02 million from $7.94 million in 2024, with earnings per share improving to $1.99 from $1.75 [4] Income and Expenses - Net interest income grew 11.1% year over year to $8.54 million in Q4 2025, and for the full year, it increased 12.2% to $32.81 million from $29.24 million in 2024 [5] - Non-interest income increased 13.3% in Q4 to $4.33 million and rose 4.7% for the year to $15.85 million, with wealth management fees climbing 10.4% year over year to $5.35 million in 2025 [6] - Non-interest expenses declined 4.2% year over year in Q4 to $9.11 million, leading to an improved efficiency ratio of 70.81% from 82.62% in the prior-year quarter [6] Asset and Deposit Growth - As of December 31, 2025, total assets increased 6.1% year over year to $1.04 billion, with loans rising 3.9% to $661.36 million and total deposits growing 6.2% to $937.13 million [7] Asset Quality and Capital Position - The allowance for credit losses was $6.45 million at December 31, 2025, down from $7.04 million at the end of 2024, while total non-performing loans slightly increased to $1.70 million [8] - Stockholders' equity rose 23.4% year over year to $80.05 million, with book value per share increasing to $17.62 from $14.28 [8] Conclusion - Overall, BOTJ delivered record annual earnings in 2025, supported by margin expansion, lower interest expenses, steady loan and deposit growth, and improved operating efficiency, positioning the company favorably for 2026 [10]