Bank of the James ($BOTJ)
Bank of the James
It’s a small bank located in Lynchburg, Virginia that was formed in 1998. The lending area of the bank includes the Region 2000 Area in Virginia and adjacent counties to the north and south of the Region 2000. It’s a relatively young bank (the average age of banks in the U.S. is 100 years old) that is tucked away in a college filled area of Virginia, with schools like Liberty University and Randolph College. The colleges in the area are large and give a good indication that the bank may be lending to them on a rather consistent basis. This isn’t necessarily a bad thing, assuming a bank has prudent lending standards and avoids concentrating their loan book into lending to colleges. Bank of the James makes working capital loans and focuses rather heavily in C&I and CRE lending, two types of lending that have historically given banks favorable returns and in doing so has given shareholders favorable returns on equity. “Historically” is the operative word. Bank of the James is a small bank with under $1B in assets, which poses a problem for shareholders expecting large returns on equity.