v3.26.1
Business Segments
 12 Months Ended
Dec. 31, 2025
Business Segments [Abstract]  
Business Segments Note 9 – Business Segments

Segment Overview

The Company has three reportable business segments:

1.Community Banking – This segment operates through Bank of the James, providing traditional banking services including loans, deposits, investments, and insurance to retail and commercial customers throughout Region 2000 and other Central Virginia areas. The primary revenue source is net interest income from lending and deposit-taking activities.

2.Mortgage Banking – The mortgage segment originates residential mortgage loans primarily within the Region 2000, Charlottesville, and Roanoke markets. The mortgage division primarily sells these loans in the secondary market through pre-arranged purchase commitments, typically with servicing released. This structure substantially limits the Company’s exposure to credit and interest rate risk. Revenue primarily consists of gains on the sale of loans.

3.Investment Advisory (Wealth Management) – This segment provides investment advisory and financial planning services through Pettyjohn, Wood & White, Inc., a wholly-owned subsidiary. Revenue is fee-based, derived from client advisory fees related to assets under management (AUM).

The segments are integrated through cross-referral activities, with the Community Banking segment providing customer referrals to the Mortgage Banking and Investment Advisory segments, and vice versa when appropriate.

Chief Operating Decision Maker (CODM) and Segment Performance

The Company’s Chief Operating Decision Maker (CODM) is Robert R. Chapman III, President of Financial. The CODM evaluates performance and allocates resources based on segment profit, defined as income before income taxes. This profit measure was selected because it closely aligns with the measures reported in the Company’s consolidated financial statements under GAAP. Segment assets represent those assets directly attributed to each segment or allocated based on actual usage. Income taxes are allocated proportionately based on each segment’s pre-tax income. Segment accounting

Note 9 – Business Segments (continued)

policies are consistent with the significant accounting policies outlined in these consolidated financial statements, and there were no changes in segmentation or profit measurement methods during the year.

Significant Expense Categories

Consistent with ASU 2023-07, significant segment expenses reviewed regularly by the CODM and included in segment profit measures are separately presented. For the year ended December 31, 2025, these significant approximate expenses included:

Community Banking: Salaries and employee benefits ($15.95 million), data processing ($2.49 million), professional services ($3.79 million), equipment ($2.65 million), and occupancy ($2.01 million).

Mortgage Banking: Salaries and employee benefits ($3.23 million), credit-related expenses ($682,000), and occupancy costs ($117,000).

Investment Advisory: Salaries and employee benefits ($1.78 million), amortization of intangible assets ($561,000), and professional services ($123,000).

The “Other” segment represents the parent holding company, Bank of the James Financial Group, Inc. Significant items include interest expense on holding company borrowings and intercompany dividend income received from subsidiaries, which is eliminated against the subsidiaries’ equity in the Eliminations column. Remaining holding company operating expenses, primarily professional fees, are not allocated to a reportable segment.

Supplemental Segment Data

Supplemental data regularly reviewed by the CODM includes total loans held for investment, total deposits, and assets under management (AUM), as these metrics provide additional insights into segment performance:

Community Banking: Total loans held for investment, net of allowances, were $661.36 million at December 31, 2025, compared to $636.55 million at December 31, 2024. Deposits totaled $940.60 million and $889.52 million for 2025 and 2024, respectively.

Investment Advisory: AUM increased to $1.03 billion million at December 31, 2025, from $853.98 million at December 31, 2024.


‎

Note 9 – Business Segments (continued)

Segment financial information, including significant expense categories and supplemental metrics, is presented in the tables below, along with reconciliations to consolidated financial statements for the years ended December 31, 2025, and 2024.

Business Segments as of the Year Ended

December 31, 2025

Dollars in Thousands

Community Banking

Mortgage Banking

Investment Advisory

Other

Eliminations

Consolidated

Interest income

$            46,655

$            -

$                -

$                -

$                  -

$         46,655

Interest expense

13,296

-

-

552

-

13,848

Net interest income

33,359

-

-

(552)

-

32,807

Gains on sales of loans

-

4,853

-

-

-

4,853

Service charges, fees and commissions

4,273

-

-

-

-

4,273

Wealth management fees

19

-

5,328

-

-

5,347

Other noninterest income

1,647

-

-

9,628

(9,896)

1,379

Net revenue

39,298

4,853

5,328

9,076

(9,896)

48,659

Less:

Provision for (recovery of) credit losses

(35)

-

-

-

-

(35)

Noninterest expense:

Salaries and employee benefits

15,947

3,229

1,784

-

-

20,960

Occupancy

2,009

117

130

-

(120)

2,136

Equipment

2,652

60

53

-

-

2,765

Supplies

575

21

35

-

-

631

Professional and other outside expenses

3,785

-

123

207

(148)

3,967

Data processing

2,487

-

-

-

-

2,487

Marketing

799

5

13

50

-

867

Credit expense

222

682

-

-

-

904

Other real estate expenses, net

-

-

-

-

-

-

FDIC insurance expense

518

-

-

-

-

518

Amortization of intangibles

-

-

561

-

-

561

Other (insurance, travel, contributions)

1,586

40

127

-

-

1,753

Total noninterest expense

30,580

4,154

2,826

257

(268)

37,549

Segment income before income taxes

8,753

699

2,502

8,819

(9,628)

11,145

Allocated income tax expense (benefit)

1,518

147

664

(206)

-

2,123

Segment net income

$              7,235

$        552

$         1,838

$         9,025

$          (9,628)

$        9,022

Segment assets at December 31, 2025

$       1,028,122

$     3,472

$         9,611

$     104,196

$      (106,377)

$    1,039,024

Supplemental Data at December 31, 2025:

Total loans held for investment, net

$          661,357

$            -

$                -

$                -

$                  -

$       661,357

Total deposits

940,596

-

-

-

(3,467)

937,129

Assets Under Management

-

-

1,028,928

-

-

1,028,928

Note 9 – Business Segments (continued)

Business Segments as of the Year Ended

December 31, 2024

Dollars in Thousands

Community Banking

Mortgage Banking

Investment Advisory

Other

Eliminations

Consolidated

Interest income

$            44,643

$            -

$                -

$                -

$                  -

$         44,643

Interest expense

14,704

-

-

703

-

15,407

Net interest income

29,939

-

-

(703)

-

29,236

Gains on sales of loans

-

4,494

-

-

-

4,494

Service charges, fees and commissions

4,003

-

-

-

-

4,003

Wealth management fees

-

-

4,843

-

-

4,843

Other noninterest income

2,050

-

-

8,579

(8,832)

1,797

Net revenue

35,992

4,494

4,843

7,876

(8,832)

44,373

Less:

Provision for (recovery of) credit losses

(655)

-

-

-

-

(655)

Noninterest expense:

Salaries and employee benefits

14,681

2,876

1,737

-

-

19,294

Occupancy

1,842

114

104

-

(96)

1,964

Equipment

2,406

54

39

-

-

2,499

Supplies

486

20

36

-

-

542

Professional and other outside expenses

3,286

-

112

232

(159)

3,471

Data processing

3,057

-

-

-

-

3,057

Marketing

847

6

11

(96)

-

768

Credit expense

237

579

-

-

-

816

Other real estate expenses, net

-

-

-

-

-

-

FDIC insurance expense

441

-

-

-

-

441

Amortization of intangibles

-

-

560

-

-

560

Other (insurance, travel, contributions)

1,569

18

115

(9)

-

1,693

Total noninterest expense

28,852

3,667

2,714

127

(255)

35,105

Segment income before income taxes

7,795

827

2,129

7,749

(8,577)

9,923

Allocated income tax expense (benefit)

1,449

153

572

(195)

-

1,979

Segment net income

$              6,346

$        674

$         1,557

$         7,944

$          (8,577)

$           7,944

Segment assets at December 31, 2024

$          965,659

$     3,992

$       11,308

$     107,365

$      (109,080)

$       979,244

Supplemental Data at December 31, 2024:

Total loans held for investment, net

$          636,552

$            -

$                -

$                -

$                  -

$       636,552

Total deposits

889,519

-

-

-

(7,115)

882,404

Assets Under Management

-

-

853,977

-

-

853,977