Bank of the James Financial Group net income up 43.7%
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Net income for the three months ended December 31, 2014 was $951,000 or $0.28 per diluted share, an increase of 43.7% compared with net income of $662,000 or $0.20 per diluted share for the three months ended December 31, 2013.
For the twelve months of 2014, net income rose to $3.41 million or $1.01 per diluted share.
Robert R. Chapman III, president and CEO, commented: "It was gratifying to mark our company's 15th year of operation with record earnings and the highest asset, loan and deposit totals in our history.
"Our financial results reflect a companywide commitment to deliver strong results for all our stakeholders. This includes winning and retaining new business relationships, operating productively and efficiently, and delivering consistent and sustainable growth in our franchise value.
Net interest income in fourth quarter 2014 was $4.28 million, up 3.2% from $4.14 million in fourth quarter 2013. Interest income increased 2.0% to $4.85 million at December 31, 2014 compared with $4.75 million a year ago.
Total interest expense declined to $570,000 in the three months ended December 31, 2014, compared with $607,000 for the three months ended December 31, 2013, primarily reflecting a year-over-year reduction in interest expense related to time deposits. The company had no provision for loan losses in fourth quarter 2014, versus a $250,000 loan loss provision in fourth quarter 2013.
For the twelve months ended December 31, 2014, net interest income rose to $16.40 million compared with $15.99 million for the twelve months of 2013, reflecting 1.6% growth in interest income from loans coupled with 4.7% lower interest expense.
The company's net interest margin was 3.99% for the twelve months of 2014, with a net interest spread of 3.87%, compared with 4.08% and 3.97%, respectively, for the twelve months of 2013. Net interest margin in fourth quarter 2014 was 4.04%.
In fourth quarter 2014, noninterest income increased 17.1% to $984,000 compared with $840,000 a year ago, reflecting positive contributions from mortgage origination fees, service charges and commissions, and fees from the bank's expanded line of treasury management services for commercial customers.
For the twelve months of 2014, noninterest income was $3.59 million compared with $3.48 million for the twelve months of 2013. Fee income during the 2014 period increased, while gains on sales of securities from the bank's investment portfolio were significantly lower in 2014 versus the prior year's period when the company capitalized on opportunities to generate selective gains from securities sales.
Noninterest expense in fourth quarter 2014 was $3.88 million compared with $3.81 million in fourth quarter 2013. For the twelve months of 2014, noninterest expense was $14.99 million compared with $14.58 for the twelve months of 2013. Both periods reflected increased employee compensation, directly related to variable compensation attributable to increased mortgage origination volume.
These increases were partially offset by year-over-year declines in FDIC insurance expenses and lower costs related to other real estate owned (OREO) as the company continued to reduce these owned assets. Reduced OREO expenses and accelerating productivity of the Charlottesville and Roanoke, Virginia offices opened in late 2013, contributed to an improved efficiency ratio, which in fourth quarter was 73.79% compared with 76.40% in fourth quarter 2013.
Total assets at December 31, 2014 were $460.87 million, up from $434.51 million at December 31, 2013. The company continued to demonstrate strong asset quality, reflected by a ratio of nonperforming assets to total assets of 0.97%, and remained fully reserved for problem loans, with an allowance for loan losses to non-accruing loans of 136.7%. ■