Updated 3/6/25
Bank of the James Financial Group (NASDAQ: BOTJ) is a regional bank that primarily serves communities in Virginia. It provides a full suite of banking services, including personal and business banking, mortgage lending, and investment management.
Smaller banks like BOTJ often fly under the radar, but they can be attractive for dividend investors looking for steady income. With a market cap of around $59 million, BOTJ is a micro-cap stock that operates on a much smaller scale than the large national banks. However, its consistent dividend, strong financials, and low payout ratio make it a stock worth analyzing for income investors.
📊 Key Dividend Metrics
💰 Dividend Yield: 3.07%
💵 Annual Dividend Per Share: $0.40
📈 5-Year Average Dividend Yield: 2.46%
📆 Ex-Dividend Date: March 7, 2025
🛡 Payout Ratio: 22.86%
Dividend Overview
BOTJ currently pays an annual dividend of $0.40 per share, giving it a yield of 3.07%. This is slightly above its five-year average yield of 2.46%, which could suggest the stock is trading at a slight discount.
The bank’s payout ratio sits at a conservative 22.86%, meaning it distributes less than a quarter of its earnings to shareholders. This low payout ratio gives the company flexibility to maintain or even grow its dividend, even if earnings fluctuate.
Investors should be aware of the upcoming ex-dividend date on March 7, 2025. To receive the next dividend payment, shares must be purchased before this date.
Dividend Growth and Safety
When looking at dividend safety, BOTJ appears to be in a strong position. Its return on equity (ROE) of 12.72% is solid, indicating efficient capital use. The company also has a healthy profit margin of 17.64%, which suggests it is generating consistent earnings to support its dividend.
One potential concern is the recent 23.2% year-over-year decline in quarterly earnings. While one quarter doesn’t necessarily indicate a long-term trend, if earnings continue to fall, the company may need to reassess its dividend strategy. However, the low payout ratio means that even with some earnings pressure, there’s still a comfortable cushion to keep the dividend intact.
BOTJ has not been an aggressive dividend grower, instead prioritizing consistency. While some investors may prefer stocks with faster dividend growth, others value a steady and predictable payout, which BOTJ has delivered.
Chart Analysis
Price Action
The price of Bank of the James Financial Group (BOTJ) has gone through a significant uptrend followed by a noticeable correction. Earlier in the year, the stock saw a strong breakout, pushing above both its 50-day and 200-day moving averages. The momentum carried it to new highs, but it eventually lost steam and has been in a downtrend since.
Over the past few months, the stock has been attempting to find support around the 200-day moving average. The latest close at $13.08 suggests that price is stabilizing after dipping below the 50-day moving average. While it’s not in a freefall, the stock has yet to confirm a strong reversal back to prior highs.
Moving Averages
The 50-day moving average (orange line) had been acting as dynamic support for most of the uptrend, but after rolling over, it is now trending downward. This shift signals that the short-term momentum has weakened. The 200-day moving average (blue line), however, has held up as a key support level.
The stock is currently trading between these two moving averages, a zone that often leads to consolidation before a clearer trend emerges. If price can reclaim the 50-day moving average, it could suggest renewed strength. On the flip side, if it loses support at the 200-day moving average, there could be more downside ahead.
Volume Activity
Volume has tapered off compared to the spikes seen during the peak of the rally. There was a noticeable increase in selling volume during the pullback, which suggests that profit-taking was in play. However, recent volume bars have been relatively low, meaning there isn’t a strong conviction in either direction.
A surge in volume along with an upward move would be a more convincing sign that buyers are stepping back in. Until then, the stock may continue to move sideways or drift lower.
Relative Strength Index (RSI)
The RSI has been trending lower from its previously overbought levels but is now hovering in neutral territory. It’s not indicating extreme weakness, but it’s also not showing strong buying pressure. A move back above the 50 level would suggest increasing momentum, while a drop toward oversold conditions could mean further downside before a reversal attempt.
Recent Candlestick Behavior
Looking at the most recent candles, there have been signs of indecision. The latest candlestick has a small body with wicks on both sides, showing that neither buyers nor sellers had full control. This type of price action is common when a stock is testing a major support level, as investors wait to see which direction will gain momentum.
The past five candles show a mix of small-bodied sessions, suggesting consolidation. However, if the next few candles start forming higher lows and stronger closes, it could indicate a shift in momentum back to the upside.
Chart Analysis
Price Movement and Trend
Bank of Utica (BKUTK) has been on a steady uptrend over the past year, with the price climbing from around $350 to its current level of $465. The stock reached a peak above $500 before pulling back and stabilizing near its 50-day moving average. The long-term 200-day moving average is still rising, indicating a broader bullish trend, but the recent consolidation phase suggests some hesitation in further upside momentum.
Moving Averages
The 50-day moving average (orange line) has been providing support over the last few months, though recent price action briefly dipped below it. That suggests short-term weakness, but the stock quickly rebounded, which could indicate buyers stepping in at key technical levels. The 200-day moving average (blue line) remains well below the price, reinforcing the long-term uptrend.
A flattening 50-day moving average, however, signals that upward momentum is not as strong as it was during the steep rally at the end of last year. A failure to hold above the 50-day moving average in the coming sessions could mean a deeper pullback toward the 200-day moving average.
Volume and Market Activity
One of the most striking elements of this chart is the recent surge in volume. The latest trading session saw a significant spike, far above normal levels. Prior to this, volume had been relatively low, in line with the stock’s typical low-liquidity profile. A sudden increase in trading activity often indicates a shift in sentiment, whether due to institutional interest, a large individual investor, or a fundamental catalyst.
If this volume spike is followed by more buying in the coming sessions, it could signal renewed bullish momentum. Conversely, if it was a one-off event without follow-through, the stock may continue to consolidate or drift lower.
Relative Strength Index (RSI)
The RSI indicator remains in a neutral range, neither overbought nor oversold. This suggests that the stock isn’t experiencing extreme conditions, and there is still room for movement in either direction. The RSI has been trending lower from its highs, aligning with the recent pullback, but it has yet to enter oversold territory. If the RSI starts rising again, it could indicate renewed buying pressure.
Recent Candlestick Behavior
Looking at the last five trading sessions, the candlestick patterns indicate some indecision. There have been longer wicks on both ends of recent candles, which suggests that buyers and sellers are battling for control. The latest candle is relatively strong, closing at the high of the day, which could point to short-term bullish momentum. However, the low trading volume outside of the recent spike means that price movements should be taken with caution.
Analyst Ratings
📉 Bank of the James Financial Group (BOTJ) has not received any recent upgrades or downgrades from major analysts.
📊 Currently, there is no widely available consensus price target for the stock.
🔍 The lack of analyst coverage is not unusual for micro-cap stocks like BOTJ, which has a market capitalization of approximately $59 million. Smaller financial institutions often operate outside the focus of major Wall Street firms, leading to limited publicly available research and ratings.
💡 Without analyst upgrades or downgrades, investors need to rely on their own due diligence, including reviewing the company’s earnings reports, dividend history, and sector performance.
🏦 Since BOTJ operates in the regional banking space, factors such as interest rate trends, loan growth, and overall economic conditions will play a significant role in shaping future stock performance. Without direct analyst price targets, investors often look at historical valuation metrics and financial stability to determine potential upside or downside risk.
Earnings Report Summary
Bank of the James Financial Group, Inc. (BOTJ) recently released its earnings report for the fourth quarter and full year of 2024, highlighting both achievements and challenges.
Fourth Quarter Performance
In the fourth quarter of 2024, BOTJ reported a net income of $1.62 million, translating to earnings per share (EPS) of $0.36. This reflects a decrease from the same period in 2023, where net income was $2.11 million, or $0.45 per share. The decline is primarily attributed to increased noninterest expenses, notably a substantial fee associated with a new contract for credit and debit card processing.
Full Year Overview
For the entire year of 2024, the company posted a net income of $7.94 million, or $1.75 per share, down from $8.70 million, or $1.91 per share, in 2023. Despite the drop in net income, BOTJ achieved a 13% increase in total interest income, reaching $44.64 million. This growth was driven by higher interest rates on commercial loans and expansion in both commercial real estate and residential mortgage sectors. However, the net interest margin declined to 3.11% from 3.29% in the previous year, indicating pressure from elevated interest expenses.
Noninterest Income and Loan Growth
Noninterest income saw an 18% rise, amounting to $15.14 million. This uptick was supported by gains on loan sales, enhanced commercial treasury services, and increased wealth management fees. The company’s total loans, net of allowance for credit losses, grew by 6% to $636.55 million, with commercial real estate loans leading this growth.
Balance Sheet Highlights
As of December 31, 2024, BOTJ’s total assets stood at $979.24 million, up from $969.37 million at the end of 2023. Total deposits experienced a slight increase, reaching $882.40 million. The company maintained high asset quality, with nonperforming loans constituting just 0.25% of total loans. Stockholders’ equity rose by 8% to $64.87 million, resulting in a book value per share of $14.28.
Management’s Perspective
Reflecting on the year’s performance, CEO Robert R. Chapman III commented that the company delivered high-quality earnings driven by a diverse range of banking products and services. He emphasized that these revenue sources, supported by a broad base of commercial and retail clients, enabled BOTJ to achieve strong financial performance and enhance shareholder value, despite economic challenges.
In summary, while BOTJ faced increased expenses that impacted net income, the company demonstrated resilience through loan growth, deposit expansion, and maintaining high asset quality. These factors position BOTJ well for future growth opportunities.
Financial Health and Stability
The bank’s balance sheet looks strong, with $73.31 million in cash compared to just $19.35 million in total debt. Having more cash than debt is a great sign for long-term stability, particularly in a sector where financial strength is critical.
Revenue has grown by 10.6% year-over-year, which is encouraging. Even though earnings have dipped recently, the top-line growth shows that BOTJ is still expanding its business.
The return on assets (ROA) is a bit low at 0.82%, which indicates the company isn’t generating massive profits from its assets. However, this is common for regional banks that focus on steady operations rather than aggressive expansion.
Overall, BOTJ’s financial position appears solid, with no red flags that would suggest major trouble on the horizon.
Valuation and Stock Performance
At a price-to-earnings (P/E) ratio of 7.44, BOTJ appears to be trading at a reasonable valuation. Regional banks tend to trade at lower P/E multiples compared to larger financial institutions, but this number suggests the stock could be undervalued.
The stock is also trading below book value, with a price-to-book (P/B) ratio of 0.91. When a bank trades under its book value, it can indicate a buying opportunity, as the market is pricing the company at less than the value of its assets.
Over the past year, the stock has ranged from $9.65 to $17.05, showing some volatility. Currently, shares are trading at $13.05, which is closer to the lower end of that range. The 50-day moving average is $13.79, and the 200-day moving average is $13.21, suggesting some near-term weakness in stock price momentum.
With a beta of 0.78, BOTJ is less volatile than the overall market. This lower volatility can make it a more stable choice for dividend investors who don’t want extreme price swings.
Risks and Considerations
Despite its solid dividend and financial position, there are a few risks to keep in mind.
Earnings have declined recently, which could become a bigger issue if it turns into a longer-term trend. While the dividend is well-covered right now, further drops in profitability could eventually put pressure on payouts.
As a micro-cap stock with a market cap of just $59 million, liquidity is lower than larger stocks. This means that shares may be more susceptible to price swings, and buying or selling large positions could impact the stock price more than it would with a bigger bank.
Regional banks are also sensitive to changes in interest rates, economic conditions, and local market dynamics. If there’s a downturn in the areas where BOTJ operates, it could impact loan demand, deposit growth, and overall profitability.
Institutional ownership is relatively low at 23.19%, which means fewer large investors are backing the stock. While this isn’t necessarily a problem, it does mean that big money isn’t flowing into BOTJ at the same rate as larger banks.
Final Thoughts
Bank of the James Financial Group is not a household name, but for dividend investors, it has some attractive qualities. It offers a stable 3.07% yield with a low payout ratio, suggesting that its dividend is well-supported by earnings. The balance sheet is strong, and the bank’s valuation appears reasonable compared to historical levels.
While earnings have taken a hit recently, the company’s long-term track record of managing capital conservatively provides some reassurance. For those looking for a steady, low-volatility regional bank that delivers consistent income, BOTJ could be a stock worth keeping on the radar.
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