8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report: April 22, 2005

BANK OF THE JAMES FINANCIAL GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Virginia	000-50548	20-0500300
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

828 Main Street, Lynchburg, VA	24504
(Address of principal executive offices)	(Zip Code)

(434) 846-2000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 - Results of Operations and Financial Condition

On Friday, April 22, 2005, Bank of the James Financial Group, Inc. (the “Company”) issued a press release announcing its earnings for the fiscal quarter ended March 31, 2005, the Company’s first fiscal quarter. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 - Financial Statements and Exhibits.

(a) Financial statements of businesses acquired – not applicable

(b) Pro forma financial information – not applicable

(c) Exhibits

Exhibit No.	Exhibit Description
99.1	Press Release dated April 22, 2005

SIGNATURE

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 22, 2005	BANK OF THE JAMES FINANCIAL GROUP, INC.
	By	/s/ J. Todd Scruggs
		J. Todd Scruggs Secretary-Treasurer

EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	Bank of the James press release dated April 22, 2005

EX-99.1

Exhibit 99.1

Bank of the James Financial Group, Inc. announces results for 1st Quarter 2005

Lynchburg Va., April 22, 2005.

Bank of the James Financial Group, Inc. (OTCBB:BOJF) (quarterly consolidated results unaudited) reported today total net income after tax of $343,000 or $0.22 per basic share ($0.21 diluted) for the quarter ending March 31, 2005 compared to net income of $341,000 or $0.22 per basic share ($0.21 diluted) for the same period a year ago. All earnings per share amounts have been adjusted to reflect the 10% stock dividend paid by the company during January, 2004 and the 50% stock split effected in the form of a dividend paid by the company in March, 2005. Return on average assets (“ROAA”) and return on average equity (“ROAE”) for the quarter ended March 31, 2005 were 0.81% and 10.66% respectively. The Company has felt, and may continue to feel, downward pressure on ROAA and ROAE due to the ongoing burden and expense associated with regulatory compliance, specifically costs associated with Sarbanes-Oxley Section 404.

Net interest income for the quarter ended March 31, 2005 was $1,909,000 as compared to net interest income of $1,575,000 in the same quarter of 2004, an increase of 21.2%. The increase in net interest income is attributable to an increase in average interest earning assets from $139,569,000 in the first quarter 2004 to $163,281,000, an increase of 17.0%, for the same period in 2005. Interest earning assets are composed primarily of loans and investments. Similar growth was experienced in average interest bearing liabilities which grew from $120,597,000 in the first quarter 2004 to $138,439,000, an increase of 14.8%, for the first quarter 2005. Interest expense and interest income increased $177,000 and $511,000 respectively, from the first quarter 2004 as compared to the first quarter 2005. The result of these increases was an increase in the net interest margin of 21 basis points in the first quarter 2005 from the same period a year ago.

Total assets as of March 31, 2005 were $179,342,000 compared to $171,025,000 at the end of 2004, an increase of $13,494,000, or 4.9%. The increase is attributable to deposit growth from $153,834,000 for the period ended December 31, 2004 to $162,606,000 at the end of the first quarter, 2005, for an increase of 5.7%

Loans, net of unearned income and loan loss provision, increased from $140,272,000 as of December 31, 2004 to $142,903,000 as of March 31, 2005, an increase of 1.9%. The loan loss provision of $1,492,000 represented 1.03% of total loans at the end of the first quarter, 2005. Management deems this provision to be adequate.

Bank of the James, the sole subsidiary of Bank of the James Financial Group, Inc., currently operates five full service locations as well as a mortgage division in the Lynchburg, Virginia area. Bank of the James Financial Group, Inc. common stock is quoted on the Over The Counter Bulletin Board under the symbol “BOJF” (some web sites require BOJF.OB to quote).

# # #

Cautionary Statement Regarding Forward-Looking Statements

This press release report contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “plan” and similar expressions and variations thereof identify certain of such forward-looking statements which speak only as of the dates on which they were made. Bank of the James Financial Group, Inc. (the “Company”) undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Such factors include, but are not limited to competition, general economic conditions, potential changes in interest rates, and changes in the value of real estate securing loans made by the Bank. Additional information is contained in the Company’s filings with the Securities and Exchange Commission and previously filed by Bank of the James (predecessor of the Company) with the Federal Reserve Board concerning factors that could cause actual results to materially differ from those in the forward-looking statements.

# # #

Bank of the James Financial Group, Inc.

(000’s) except ratios and percent data

unaudited

	Three months ending Mar 31, 2005		Three months ending Mar 31, 2004		Change			Year to date Mar 31, 2005		Year to date Mar 31, 2004		Change
Selected Data:
Interest income	$	2,670	$	2,159		23.67	%	$	2,670	$	2,159		23.67	%
Interest expense		761		584		30.31	%		761		584		30.31	%
Net Interest income		1,909		1,575		21.21	%		1,909		1,575		21.21	%
Provision for loan losses		175		77		127.27	%		175		77		127.27	%
Noninterest income		461		290		58.97	%		461		290		58.97	%
Noninterest expense		1,676		1,268		32.18	%		1,676		1,268		32.18	%
Income taxes		176		179		-1.68	%		176		179		-1.68	%
Net income		343		341		0.59	%		343		341		0.59	%
Weighted Average Shares Outstanding		1,559,104		1,543,901		0.98	%		1,559,104		1,543,901		0.98	%
Basic net income per share	$	0.22	$	0.22	$	—		$	0.22	$	0.22	$	—
Fully diluted net income per share	$	0.21	$	0.21	$	—		$	0.21	$	0.21	$	—
	Mar 31, 2005		Dec 31, 2004		Change			Mar 31, 2004		Dec 31, 2003		Change
Balance Sheet at period end:
Loans, net	$	142,903	$	140,272		1.88	%	$	118,974	$	114,604		3.81	%
Total securities		21,618		19,911		8.57	%		16,547		14,956		10.64	%
Total deposits		162,606		153,834		5.70	%		143,858		133,486		7.77	%
Stockholders’ equity		13,328		12,786		4.24	%		11,711		11,309		3.55	%
Total assets		179,342		171,025		4.86	%		158,505		145,011		9.31	%
Shares Outstanding		1,600,468		1,548,658		51,810			1,543,790		1,543,790		—
Book value per share		8.33		8.26		0.07			7.59		7.33	$	0.26
	Three months ending Mar 31, 2005		Three months ending Mar 31, 2004		Change			Year to date Mar 31, 2005		Year to date Mar 31, 2004		Change
Daily averages:
Loans, net	$	140,574	$	116,459		20.71	%	$	140,574	$	116,459		20.71	%
Total securities		18,256		14,423		26.58	%		18,256		14,423		26.58	%
Total deposits		155,984		135,080		15.48	%		155,984		135,080		15.48	%
Stockholders’ equity		13,045		11,504		13.40	%		13,045		11,504		13.40	%
Interest earning assets		163,281		139,569		16.99	%		163,281		139,569		16.99	%
Interest bearing liabilities		138,439		120,597		14.79	%		138,439		120,597		14.79	%
Total Assets		172,618		147,508		17.02	%		172,618		147,508		17.02	%

	Three months ending Mar 31, 2005			Three months ending Mar 31, 2004			Change		Year to date Mar 31, 2005			Year to date Mar 31, 2004			Change
Financial Ratios:
Return on average assets		0.81	%		0.93	%	(0.12	)		0.81	%		0.93	%	(0.12	)
Return on average equity		10.66	%		11.89	%	(1.23	)		10.66	%		11.89	%	(1.23	)
Net Interest Margin		4.74	%		4.53	%	0.22			4.74	%		4.53	%	0.22
Efficiency ratio		70.72	%		67.99	%	2.73			70.72	%		67.99	%	2.73
Average Equity to average assets		7.56	%		7.80	%	(0.24	)		7.56	%		7.80	%	(0.24	)
	Three months ending Mar 31, 2005			Three months ending Mar 31, 2004			Change		Year to date Mar 31, 2005			Year to date Mar 31, 2004			Change
Allowance for loan losses:
Beginning balance	$	1,419		$	1,451		-2.21	%	$	1,419		$	1,451		-2.21	%
Provision for losses		175			77		127.27	%		175			77		127.27	%
Charge-offs		(108	)		(63	)	71.43	%		(108	)		(63	)	71.43	%
Recoveries		6			42		-85.71	%		6			42		-85.71	%
Ending balance		1,492			1,507		-1.00	%		1,492			1,507		-1.00	%
	Mar 31, 2005			Dec 31, 2004			Change		Mar 31, 2004			Dec 31, 2003			Change
Nonperforming assets:
Nonaccrual loans		222			380		-41.58	%		38			85		-55.29	%
Restructured loans		none			none		—			none			none		—
Total nonperforming loans		222			380		-41.58	%		38			85		-55.29	%
Other real estate owned		618			85		—			none			none		—
Total nonperforming assets		840			465		80.65	%		38			85		-55.29	%
	Mar 31, 2005			Dec 31, 2004			Change		Mar 31, 2004			Dec 31, 2003			Change
Asset quality ratios:
Nonperforming loans to total loans		0.15	%		0.27	%	(0.11	)		0.03	%		0.07	%	(0.04	)
Allowance for loan losses to total loans		1.03	%		1.00	%	0.03			1.25	%		1.25	%	0.00
Allowance for loan losses to nonperforming loans		672.07	%		373.42	%	298.65			3965.79	%		1707.06	%	2,258.73