LYNCHBURG, Va.--(BUSINESS WIRE)--Bank of the James Financial Group, Inc. (OTCBB:BOJF - News) (quarterly consolidated results unaudited) reported today a total net loss after tax of $1,305,000 or $0.46 per basic share ($0.45 diluted) for the quarter ended September 30, 2008 and $277,000 or $0.10 per basic share ($0.09 diluted) year-to-date compared to net income of $581,000 or $0.21 per basic share ($0.20 diluted) and $1,477,000 or $0.53 per basic share ($0.50 diluted) for the respective periods a year ago. All earnings per share amounts have been adjusted to reflect the 10% stock dividend declared by Bank of the James Financial Group, Inc. (the “Company”) at the annual shareholder’s meeting on May 20, 2008, as well as all previously declared and paid stock dividends.The results of the current quarter and year-to-date periods were driven mainly by a non-cash other-than-temporary impairment (“OTTI”) charge of $1,723,000 ($0.61 per share) related to the Company’s investments in preferred stock of Federal National Mortgage Association (the “GSE”). The value of this stock decreased sharply in September soon after the announcement that the GSE was suspending dividend payments and being placed into conservatorship by the Federal Housing Finance Agency. Following the charge, at September 30, 2008 the market and book value in GSE preferred stock was $176,000. In addition, recent legislation (the Emergency Economic Stabilization Act), will enable the Company to realize a tax benefit on a percentage of the OTTI charge in the fourth quarter. The amount of the tax benefit will be approximately $585,000 which will lower the net charge from $1,723,000 to $1,138,000. We previously disclosed this OTTI charge on Form 8-K filed on September 18, 2008.
The Company would have been profitable in the 3rd quarter and year-to-date if this charge had not been incurred. Exclusive of the charge, the Company would have had net income of $418,000, or $0.15 per basic share ($0.14 diluted), for the quarter ended September 30, 2008 and net income of $1,446,000, or $0.51 per basic share ($0.49 diluted), for the nine months ended September 30, 2008.
Despite the aforementioned charge associated with GSE stock, there were several positive trends for the quarter and year-to-date:
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