Bank of the James Financial Group, Inc.

AI-generated fair value estimate for this company.

Method: Residual-income (excess-return on book value) model: BV0=$17.89/share (total stockholders' equity $81.28M / 4.543M shares, Q1 2026 10-Q); normalized ROE=13% (TTM net income $11.49M vs. average equity, blending the FY2025 ~11.9% ROE with the stronger recent-quarter run-rate); cost of equity r=9.5% (CAPM-style proxy appropriate for a small, thinly-traded community bank, since its reported beta of 0.18 understates true risk given ~23k shares/day volume); long-run book-value growth g=3.5% (modest, capital-constrained community-bank asset growth in its mature Lynchburg VA-area market). V0 = BV0 x (ROE-g)/(r-g) = 17.89 x (0.13-0.035)/(0.095-0.035) = $28.33/share.

Reasoning: BOTJ is a bank holding company, so its value comes from the spread its equity earns above its cost of capital rather than from unlevered free cash flow, making a residual-income/excess-return model on book value the appropriate framework rather than a generic DCF; inputs are anchored to the bank's actual Q1 2026 book value per share and trailing profitability, with a discount rate and terminal book-value growth rate calibrated to a small, illiquid, capital-constrained community bank rather than a national bank.