Community banks are navigating a backdrop shaped by competitive deposit pricing, elevated operating costs and a renewed emphasis on disciplined credit oversight. In this environment, Peoples Bancorp of North Carolina, Inc. (PEBK Quick QuotePEBK - Free Report) and Bank of the James Financial Group, Inc. (BOTJ Quick QuoteBOTJ - Free Report) stand out as two community-oriented institutions with similar community banking foundations, but different operating models that shape their risk-return profiles. PEBK operates primarily through Peoples Bank and supports its franchise with several wholly owned subsidiaries spanning investment services, real estate advisory, appraisal management and real estate holdings — creating a layered model that broadens client touchpoints beyond traditional banking. BOTJ, meanwhile, is anchored by Bank of the James and expands its platform through a mortgage division, an insurance agency and investment advisory capabilities, offering multiple fee-based channels alongside its core lending and deposit franchise.

While PEBK remains focused on deepening its North Carolina presence through a bank-first strategy supported by specialized real estate and appraisal services, BOTJ leans into a more multi-line model that blends banking with mortgage and advisory offerings to diversify customer engagement. With both positioned to benefit from improving rate dynamics and steady regional economic activity, the question remains: which stock offers the more attractive opportunity right now? Let’s take a closer look.

Stock Performance & Valuation: PEBK vs. BOTJ

PEBK (up 19.6%) has outperformed BOTJ (up 18.7%) over the past three months. However, in the past year, Peoples Bancorp stock has rallied 18.8% compared with Bank of the James’ gain of 23.5%.

Image Source: Zacks Investment Research

Meanwhile, PEBK is trading at a trailing 12-month price-to-sales (P/S) ratio of 1.8X, above its median of 1.7X over the past five years. BOTJ’s trailing 12-month P/S multiple sits at 1.4X, above its last five-year median of 1.2X. Peoples Bancorp and Bank of the James both appear to be cheap when compared with the Zacks Finance sector average of 7.1X.

Image Source: Zacks Investment Research

Factors Driving Peoples Bancorp’s Stock

Peoples Bancorp is seeing tailwinds from a more favorable rate and funding setup. Management highlights easing deposit-cost pressures following recent Federal Reserve rate cuts, while loan growth continues to provide a solid base for interest income, helping strengthen overall profitability trends without relying on aggressive balance sheet expansion.

Peoples Bancorp’s business model benefits from meaningful nonbank contribution, particularly its appraisal-management platform. Higher appraisal volumes have been a key driver of noninterest revenue, helping offset softer performance in other fee lines and reinforcing the advantage of having a service-based earnings stream that is not directly tied to lending spreads.

The bank’s disciplined capital-return approach remains a steady sentiment anchor. PEBK continues to maintain its regular cash dividend and encourages longer-term participation through its dividend reinvestment and stock purchase plan, signaling confidence in cash-flow stability and balance sheet resilience even amid a competitive operating environment.

Factors Driving Bank of the James’ Stock

Bank of the James is benefiting from a more favorable funding and margin setup. Management points to the impact of tighter deposit pricing discipline and deliberate balance-sheet actions — such as reducing interest expense through the retirement of capital notes — which have helped strengthen net interest margin and support a steadier earnings base as rate conditions evolve.

BOTJ’s business mix provides meaningful diversification beyond traditional banking. Alongside its core loan-and-deposit franchise, the company generates non-interest income from commercial treasury management services, mortgage banking activity and advisory fees through its wealth management platform, helping broaden revenue sources and deepen customer relationships across product lines.

Investor confidence on Bank of the James stock is supported by a measured growth strategy that remains anchored in sound credit oversight. Management continues to expand lending — particularly in commercial real estate — while emphasizing conservative underwriting and close monitoring of asset quality, reinforcing the bank’s focus on preserving liquidity and credit stability even as it pursues growth opportunities.

Choose PEBK Over BOTJ Now

While both Peoples Bancorp and Bank of the James are positioned to benefit from improving rate dynamics and steady community-bank demand, their current setups point to different risk-reward profiles — and PEBK appears better positioned right now. PEBK has edged out BOTJ in recent performance, reflecting firmer investor confidence in its steady operating momentum and its differentiated fee-income contributions alongside core banking. Although Peoples Bancorp is trading modestly above its historical price-to-sales median, it remains inexpensive relative to the broader Finance sector, suggesting there is still room for upside as execution continues and rates normalize.

BOTJ, meanwhile, has posted a stronger one-year gain and continues to benefit from a diversified model that includes mortgage and wealth-related revenue streams. However, that outperformance has also lifted its valuation above its long-term median, narrowing the margin of safety compared with PEBK. With stronger near-term momentum, a more balanced valuation setup versus its history and an attractive discount to sector norms, PEBK offers the more attractive and more compelling opportunity over BOTJ right now.