1275101--3/26/2009--BANK_OF_THE_JAMES_FINANCIAL_GROUP

related topics

{loan, real, estate}

{regulation, change, law}

{competitive, industry, competition}

{condition, economic, financial}

{acquisition, growth, future}

{financial, litigation, operation}

{customer, product, revenue}

{personnel, key, retain}

{control, financial, internal}

Risks Related to Our Business The Company s Business May Be Adversely Affected by Conditions in the Financial Markets and Economic Conditions Generally The markets for our services are highly competitive and we face substantial competition In attracting deposits, we compete with insured depository institutions such as banks, savings institutions, and credit unions, as well as institutions offering uninsured investment alternatives, including money market funds We have a limited operating history upon which to base any estimate of our future success Opening new branches may not result in increased assets or revenues for us Our plans for future expansion depend, in some instances, on factors beyond our control, and an unsuccessful attempt to achieve growth could have a material adverse effect on our business, financial condition, results of operations and future prospects We could suffer loan losses from a decline in credit quality Additional growth may require us to raise additional capital in the future, and capital may not be available when it is needed, which could adversely affect our financial condition, and results of operations If the value of real estate in our core market were to decline materially, a significant portion of our loan portfolio could become under-collateralized, which could have a material adverse effect on our business, financial condition and results of operations In addition to considering the financial strength and cash flow characteristics of borrowers, we often secure loans with real estate collateral Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the teamwork and increased productivity fostered by our culture, which could harm our business If we fail to retain our key employees, our growth and profitability could be adversely affected As a community bank, the Bank has different lending risks than larger banks. We provide services to our local communities We manage our credit exposure through careful monitoring of loan applicants and loan concentrations in particular industries, and through loan approval and review procedures Risks Related to Our Industry Our profitability is vulnerable to interest rate fluctuations We are subject to extensive regulation that could limit or restrict our activities and impose financial requirements or limitations on the conduct of our business, which limitations or restrictions could adversely affect our profitability The laws and regulations applicable to the banking industry could change at any time, and we cannot predict the effects of these changes on our business and profitability The costs of being a public company are proportionately higher for small companies like us due to the requirements of the Sarbanes-Oxley Act Changes in monetary policies may have an adverse effect on our business, financial condition and results of operations

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1275101--3/26/2009--BANK_OF_THE_JAMES_FINANCIAL_GROUP_INC