Business Context and Reporting Period
Company: Bank of the James Financial Group, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: August 18, 2025
Event: Entry into a Material Definitive Agreement (Second Note Modification Agreement and Allonge) with The National Bank of Blacksburg (NBB).
Key Financial Metrics and Debt Structure
This filing details a modification to a specific secured promissory note rather than reporting general operating results. Key debt metrics as of the modification effective date (September 1, 2025) include:
- Outstanding Principal Balance: Approximately $8.9 million (as of August 31, 2025).
- Original Principal: $11,000,000 (issued December 29, 2021).
- New Interest Rate: 5.65% per annum (increased from 3.90%).
- New Maturity Date: August 31, 2030 (extended from December 31, 2026).
- Monthly Payment: Approximately $61,000 (reduced from approximately $81,000).
- Final Balloon Payment: Approximately $7,410,000 due at maturity.
- Collateral: First-priority lien on approximately 4.95% of the Bank's common stock.
Material Changes Versus Prior Period
The Second Allonge amends the original NBB Note with the following material changes:
- Term Extension: Maturity extended by approximately 3.7 years.
- Interest Rate Adjustment: Rate increased by 175 basis points (from 3.90% to 5.65%).
- Amortization Schedule: Re-amortized over 240 months with lower monthly installments but a significant final balloon payment.
- Recast Option: Added an option to recast the amortization schedule if the Company prepays $1,000,000 or more.
Guidance, Outlook, and Risks
Management Commentary: The filing states the original proceeds were used in part to finance the acquisition of Pettyjohn, Wood & White, Inc. The modification was executed to adjust repayment terms and extend the debt maturity.
Risks and Contingencies:
- Increased Cost of Capital: The interest rate increase will raise interest expense.
- Liquidity Risk: A substantial balloon payment of approximately $7.4 million is due at maturity in 2030.
- Collateral Risk: The debt remains secured by a significant portion (4.95%) of the Bank's common stock.
Unusual Items: The filing does not disclose other unusual items or provide forward-looking revenue guidance.
Investor Verification Checklist
- Verify the impact of the increased interest rate (5.65%) on the Company's net interest margin and overall profitability.
- Assess the Company's liquidity position and ability to service the $7.4 million balloon payment due in August 2030.
- Review the full text of the Second Allonge (Exhibit 10.1) for covenants or default provisions not summarized in the 8-K.
- Confirm the current market value of the 4.95% common stock pledged as collateral.