First Bank Announces Second Quarter 2024 Net Income of $11.1 Million

Results reflect a strong and stable net interest margin, a well-positioned balance sheet, and solid asset quality


HAMILTON, N.J., July 24, 2024 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) (the Bank) today announced results for the second quarter of 2024. Net income for the second quarter of 2024 was $11.1 million, or $0.44 per diluted share, compared to $6.8 million, or $0.35 per diluted share, for the second quarter of 2023. Return on average assets, return on average equity and return on average tangible equity[i] for the second quarter of 2024 were 1.23%, 11.52% and 13.40%, respectively, compared to 0.97%, 9.23% and 9.87%, respectively, for the second quarter of 2023.

Second Quarter 2024 Performance Highlights:

  • The Bank’s primary measures of profitability broadly improved from the second quarter of 2023. Return on average assets increased 26 basis points, return on average equity increased 229 basis points, return on average tangible equity increased 353 basis points, and net interest margin increased 34 basis points to 3.62%.
  • Total deposits of $2.97 billion at June 30, 2024 remained in line with balances for the linked quarter ended March 31, 2024. The mix of deposits shifted favorably, as non-interest demand deposits increased $29.0 million from the first quarter of 2024, while money market, savings, and time deposits decreased $31.6 million.
  • Total loans were $3.00 billion at June 30, 2024, and remaining in line with balances for the linked quarter. During the quarter ended June 30, 2024, the Bank sold $23.8 million of commercial real estate loans, resulting in a $1.2 million loss on the sale of loans. The Bank continued to prioritize profitable commercial and industrial lending while reducing its investor real estate portfolio.
  • Strong asset quality continued, with nonperforming assets decreasing by 0.08% to 0.56% of total assets at June 30, 2024 from 0.64% at March 31, 2024.
  • Tangible book value per share[ii] grew to $13.46 at June 30, 2024, increasing 12.32%, annualized, from $13.06 at March 31, 2024.

Patrick L. Ryan, President and CEO of First Bank, reflected on the Bank’s performance, stating, “First Bank produced outstanding second quarter results, reflecting solid core earnings power that continues to augment our strong capital position. We maintained our net interest margin in a persistently challenging rate environment, while our efficiency ratio remained below 60% for the 20th consecutive quarter. Additionally, outstanding asset quality continued, underscoring the strength of our underwriting and client relationship management. With stable deposit levels and access to diverse funding sources, we are well-positioned to support both our current, stable level of loans as well as high quality growth over time as we continue to expand our specialty niche lending businesses and grow and improve our digital banking capabilities.”

Mr. Ryan added, “Our strong profitability affords us flexibility as we continue to develop into a true, middle-market commercial bank. During this quarter, we executed $23.8 million in sales of lower-yielding commercial real estate loans acquired in the Malvern acquisition. We also continued ongoing investment in our information technology functions, improving our customer experience across the spectrum. We expect these initiatives will accelerate our evolution into a middle market commercial bank and will continue to support a meaningful return for our shareholders.”

Income Statement

In the second quarter of 2024, the Bank’s net interest income increased to $30.5 million, growing $8.4 million, or 38.0%, compared to the same period in 2023. The increase was primarily a result of a $17.0 million increase in interest income from loans due to substantial loan growth related to the Malvern acquisition in the third quarter of 2023 and higher loan yields, which were partially offset by increased interest expense related to the higher cost of deposits and an expanded deposit base. Net interest income increased $222,000, or 0.7%, over the linked first quarter of 2024. The modest increase was primarily due to $2.0 million increase in interest income related to higher loan yields, partially offset by an increase of $1.8 million in interest expense, which resulted from continued deposit pricing pressure and increased borrowing costs in the current interest rate environment.

The Bank’s tax equivalent net interest margin was 3.62% for the second quarter of 2024, 34 basis point increase and a two basis point decrease from the quarters ended June 30, 2023 and March 31, 2024, respectively. The Bank’s tax equivalent net interest margin includes the impact of amortization of premiums and discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions. Amortization of premiums and discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions totaled $3.6 million during the second quarter of 2024, compared to $23,000 for the quarter ended June 30, 2023 and $4.2 million for the quarter ended March 31, 2024. The Bank’s margin declined slightly compared to the linked first quarter as increased deposit costs offset by increased yields on loans.

The Bank recorded a credit loss expense totaling $63,000 during the second quarter of 2024, compared to a credit (benefit) loss totaling ($698,000) during the first quarter of 2024 and a $496,000 credit loss expense for the second quarter of 2023. The Bank’s strong and stable asset quality and lack of loan growth during recent quarters primarily contributed to the modest expense recorded during the second quarter of 2024 and the benefit during the linked quarter. The credit loss expense for the second quarter of 2023 was commensurate with organic loan growth during that quarter.

In the second quarter of 2024, the Bank recorded non-interest income of $689,000, compared to $1.1 million during the same period in 2023 and $2.0 million in the first quarter of 2024. The decline in non-interest income was primarily related to $1.2 million in losses realized on the sale of $23.8 million of acquired commercial real estate loans during the quarter. Partially offsetting these losses was approximately $300,000 in gains on sale of small business administration loans. Since completing the Malvern acquisition in July 2023, the Bank has executed ongoing balance sheet repositioning initiatives, including the sale of Malvern investments and lower-yielding residential and commercial investor real estate loans. Excluding the impact of these sales, non-interest income grew $793,000 from the prior year quarter, reflecting increased bank owned life insurance (BOLI) income and increased customer activity related to the Malvern acquisition. Excluding the impact of the aforementioned loan sales, non-interest income in the second quarter of 2024 decreased $43,000 compared to the first quarter of 2024, which included a $187,000 one-time BOLI death benefit. 

Non-interest expense for the second quarter of 2024 was $18.0 million, an increase of $4.2 million, or 30.3%, compared to $13.8 million for the prior year quarter. The higher non-interest expense was largely due to the increased operating expenses associated with the Malvern acquisition, including increases of $1.8 million in salaries and employee benefits due to merit increases and a larger employee base, $469,000 in occupancy and equipment due to an expanded branch network, $331,000 in other professional fees primarily related to increases in information technology project consulting fees and increases in audit and tax services, and $1.0 million in other expense. The increase in other expense was primarily due to an increase in core deposit intangible amortization, higher Pennsylvania shares tax and slight increases in miscellaneous other expenses based on the growth of the Bank. This was partially offset by the absence of merger-related expenses for the second quarter of 2024, compared to $221,000 recorded during the second quarter of 2023.

On a linked quarter basis, non-interest expense increased $143,000, or 0.8%, from $17.8 million for the first quarter of 2024. The modest linked quarter change reflects the impact of a $173,000 increase in other professional fees primarily related to consulting services and personnel placement fees, an $81,000 increase in marketing and advertising costs, and a $56,000 increase in occupancy and equipment costs. These were largely offset by modest decreases in legal fees, salaries and benefits, data processing costs, and other expenses. The decrease in salary and employee benefits was primarily due to lower payroll taxes, which were mostly offset by annual salary increases that were made at the end of the first quarter of 2024.

Income tax expense for the three months ended June 30, 2024 was $2.1 million with an effective tax rate of 16.2%, compared to $2.2 million with an effective tax rate of 24.3% for the second quarter of 2023 and $2.7 million with an effective tax rate of 17.5% for the first quarter of 2024. The effective tax rate for the second quarter of 2024 was lower due to the recently enacted New Jersey Corporate Transit Fee, which resulted in a change in tax rate and a revaluation of the Bank’s deferred tax assets. A benefit of $1.1 million was booked as a discrete item in the second quarter for this change in tax rate. The effective tax rate for the first quarter of 2024 was lower due to certain one-time adjustments primarily related to the finalization of Malvern tax returns during the period. With the negative expected ongoing impact of the New Jersey Corporate Transit Fee, we anticipate our future effective tax rate will range between 24% and 25%.

Balance Sheet

The Bank reported total assets of $3.62 billion as of June 30, 2024, an increase of $741.3 million, or 25.8%, from $2.87 billion at June 30, 2023. Total loans increased $561.3 million, or 23.0%, to $3.00 billion at June 30, 2024 compared to $2.44 billion at June 30, 2023. Increases primarily reflect growth from the Malvern acquisition, partially offset by sales of loans and investment securities totaling approximately $255.1 million over the past twelve months. Excluding loans acquired from Malvern totaling $543.8 million at June 30, 2024, which is net of loan sales and pay-downs since the acquisition, net organic loan growth was $17.5 million during the twelve months ended June 30, 2024, reflecting our prioritization of balance sheet efficiency over growth.

Total assets increased $6.4 million, or 0.2%, from December 31, 2023 to June 30, 2024. Total loans decreased $23.5 million, or 0.8%, from December 31, 2023 to June 30, 2024. A decline of commercial investor real estate loans totaling $75.3 million, including multi-family and construction and development, was partially offset by growth totaling $59.4 million across the owner-occupied commercial real estate and commercial and industrial loan portfolios during the first half of 2024. The Bank continues to prioritize relationship-based commercial and industrial lending while actively reducing our concentration in investor real estate lending.

As of June 30, 2024, the Bank's total deposits were $2.97 billion, an increase of $567.7 million, or 23.7%, from $2.40 billion at June 30 2023. Excluding $671.9 million in deposits acquired from Malvern, deposit balances declined $104.2 million during the twelve months ended June 30, 2024. The aforementioned asset sales allowed us to reduce higher cost, non-core deposit relationships, while our team continued to focus on attracting new deposit relationships and maintaining existing core balances. Heightened industry-wide pricing competition also tempered deposit growth.

While deposits remained stable at $2.97 billion during the first six months of 2024, we experienced a slight shift of customers moving into higher-yielding interest-bearing deposits. During the first six months of 2024, increases in money market and savings deposits and time deposits totaled $27.9 million and $28.7 million, respectively, offset by declines in interest-bearing demand deposits and non-interest-bearing deposits totaling $54.6 million and $2.0 million, respectively.

Total deposits declined slightly by $2.6 million during the quarter ended June 30, 2024; however, the mix of deposits shifted. Non-interest demand deposits increased $29.0 million during the quarter, offset by a decline in interest bearing deposits of $31.6 million.

During the six months ended June 30, 2024, stockholders’ equity increased by $21.6 million, primarily due to net income, partially offset by dividends.

As of June 30, 2024, the Bank continued to exceed all regulatory capital requirements to be considered well-capitalized, with a Tier 1 Leverage ratio of 9.46%, a Tier 1 Risk-Based capital ratio of 9.70%, a Common Equity Tier 1 Capital ratio of 9.70%, and a Total Risk-Based capital ratio of 11.61%. The tangible stockholders' equity to tangible assets ratio[iii] increased to 9.50% as of June 30, 2024 compared to 8.89% at December 31, 2023.

Asset Quality

First Bank's asset quality metrics for the second quarter of 2024 remained favorable. Total nonperforming loans declined from $25.0 million at December 31, 2023 to $14.2 million at June 30, 2024, while total nonperforming assets declined from $25.0 million to $20.2 million during the same period. The decrease during the current quarter was primarily due to payoffs of two non-performing loans totaling $3.0 million.

The Bank recorded net charge-offs of $175,000 during the second quarter of 2024, compared to net recoveries of $201,000, excluding a $5.5 million purchase credit deteriorated loan charge-off, during the first quarter of 2024 and compared to net recoveries of $109,000 in the second quarter of 2023. The allowance for credit losses on loans as a percentage of total loans measured 1.21% at June 30, 2024, compared to 1.22% at March 31, 2024 and 1.40% at December 31, 2023.  The decline from December 31, 2023 to June 30, 2024 reflected the aforementioned purchase credit deteriorated loan charge-off which reduced our level of specific reserves.

Liquidity and Borrowings

The Bank increased its liquidity position in the second quarter of 2024. Total cash and cash equivalents increased by $11.8 million to $240.8 million at June 30, 2024. Borrowings increased by $15.5 million compared to March 31, 2024, as the Bank increased its FHLB borrowings.

Management believes the Bank’s current liquidity position coupled with the balance sheet flexibility gained after the Malvern acquisition provides us with a strong liquidity base and a diverse source of funding options.

Cash Dividend Declared

On July 16, 2024, the Bank’s Board of Directors declared a quarterly cash dividend of $0.06 per share to common stockholders of record at the close of business on August 9, 2024, payable on August 23, 2024.

Conference Call and Earnings Release Supplement

Additional details on the quarterly results and the Bank are included in the attached earnings release supplement.

http://ml.globenewswire.com/Resource/Download/a6e0c5a0-fa3a-47af-b450-67e63c776979

First Bank will host its earnings call on Thursday, July 25, 2024 at 9:00 AM Eastern Time. The direct dial toll free number for the live call is 1-800-715-9871 and the access code is 8550862. For those unable to participate in the call, a replay will be available by dialing 1-800-770-2030 (access code 8550862) from one hour after the end of the conference call until October 23, 2024. Replay information will also be available on First Bank’s website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay of the conference call.

About First Bank

First Bank is a New Jersey state-chartered bank with 26 full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington (2), Hamilton, Lawrence, Monroe, Morristown, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Coventry, Devon, Doylestown, Glenn Mills, Lionville, Malvern, Paoli, Trevose, Warminster and West Chester, Pennsylvania; and Palm Beach, Florida. With $3.62 billion in assets as of June 30, 2024, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol “FRBA.”

Forward Looking Statements

This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First Bank’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about First Bank, any of which may change over time and some of which may be beyond First Bank’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank's investment securities portfolio; whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions, integrate acquired entities and realize anticipated efficiencies, sustain its internal growth rate, and provide competitive products and services that appeal to its customers and target markets; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the effects of the recent turmoil in the banking industry (including the failures of two financial institutions in early 2023); the impact of public health emergencies, such as COVID-19, on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank's operations, including changes in regulations affecting financial institutions and expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank's ability to comply with applicable capital and liquidity requirements, including First Bank’s ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; and possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Forward-Looking Statements” and “Risk Factors” in First Bank’s Annual Report on Form 10-K and any updates to those risk factors set forth in First Bank’s proxy statement, subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank’s behalf may issue.

_______________
i Return on average tangible equity is a non-U.S. GAAP financial measure and is calculated by dividing net income by average tangible equity (average equity minus average goodwill and other intangible assets).  For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

ii Tangible book value per share is a non-U.S. GAAP financial measure and is calculated by dividing common shares outstanding by tangible equity (equity minus goodwill and other intangible assets).  For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

iii Tangible stockholders' equity to tangible assets ratio is a non-U.S. GAAP financial measure and is calculated by dividing tangible equity (equity minus goodwill and other intangible assets) by tangible assets (total assets minus goodwill and other intangible assets).  For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

FIRST BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data, unaudited)
 
  June 30, 2024 December 31, 2023
Assets      
Cash and due from banks $24,924  $25,652 
Restricted cash  14,660   13,770 
Interest bearing deposits with banks  201,176   188,529 
Cash and cash equivalents  240,760   227,951 
Interest bearing time deposits with banks  1,241   996 
Investment securities available for sale, at fair value  96,748   94,142 
Investment securities held to maturity, net of allowance for credit losses of $206 at June 30, 2024 and $200 at December 31, 2023 (fair value of $38,068 and $38,486 at June 30, 2024 and December 31, 2023, respectively)  43,813   44,059 
Equity securities, at fair value  1,860   1,888 
Restricted investment in bank stocks  11,594   10,469 
Other investments  10,796   9,841 
Loans, net of deferred fees and costs  2,998,029   3,021,501 
Less: Allowance for credit losses  (36,252)  (42,397)
Net loans  2,961,777   2,979,104 
Premises and equipment, net  21,553   21,627 
Other real estate owned, net  6,000   - 
Accrued interest receivable  14,314   14,763 
Bank-owned life insurance  87,319   86,435 
Goodwill  44,166   44,166 
Other intangible assets, net  9,860   10,812 
Deferred income taxes, net  32,142   30,875 
Other assets  31,788   32,199 
Total assets $3,615,731  $3,609,327 
       
Liabilities and Stockholders' Equity      
Liabilities:      
Non-interest bearing deposits $499,765  $501,763 
Interest bearing deposits  2,467,869   2,465,806 
Total deposits  2,967,634   2,967,569 
Borrowings  187,064   179,140 
Subordinated debentures  29,898   55,261 
Accrued interest payable  4,259   2,813 
Other liabilities  34,387   33,644 
Total liabilities  3,223,242   3,238,427 
Stockholders' Equity:      
Preferred stock, par value $2 per share; 10,000,000 shares authorized; no shares issued and outstanding  -   - 
Common stock, par value $5 per share; 40,000,000 shares authorized; 27,326,047 shares issued and 25,144,983 shares outstanding at June 30, 2024 and 27,149,186 shares issued and 24,968,122 shares outstanding at December 31, 2023  135,202   134,552 
Additional paid-in capital  123,353   122,881 
Retained earnings  161,140   140,563 
Accumulated other comprehensive loss  (5,828)  (5,718)
Treasury stock, 2,181,064 shares at June 30, 2024 and December 31, 2023  (21,378)  (21,378)
Total stockholders' equity  392,489   370,900 
Total liabilities and stockholders' equity $3,615,731  $3,609,327 
         

 

FIRST BANK
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except for share data, unaudited)
 
  Three Months Ended Six Months Ended
  June 30, June 30,
  2024 2023 2024 2023
Interest and Dividend Income             
Investment securities—taxable $1,278  $955  $2,460  $1,977 
Investment securities—tax-exempt  36   34   74   72 
Interest bearing deposits with banks, Federal funds sold and other  3,482   2,184   6,507   3,436 
Loans, including fees  50,763   33,748   100,082   65,448 
Total interest and dividend income  55,559   36,921   109,123   70,933 
              
Interest Expense             
Deposits  22,386   12,691   43,172   22,104 
Borrowings  2,193   1,661   4,309   3,025 
Subordinated debentures  440   441   784   881 
Total interest expense  25,019   14,793   48,265   26,010 
Net interest income  30,540   22,128   60,858   44,923 
Credit loss expense (benefit)  63   496   (635)  1,587 
Net interest income after credit (benefit) loss expense  30,477   21,632   61,493   43,336 
              
Non-Interest Income             
Service fees on deposit accounts  350   233   694   461 
Loan fees  117   18   219   107 
Income from bank-owned life insurance  609   378   1,394   747 
Losses on sale of investment securities, net  -   -   -   (207)
(Losses) gains on sale of loans, net  (900)  170   (671)  311 
Gains on recovery of acquired loans  56   14   174   71 
Other non-interest income  457   315   843   602 
Total non-interest income  689   1,128   2,653   2,092 
              
Non-Interest Expense             
Salaries and employee benefits  9,968   8,122   20,006   15,994 
Occupancy and equipment  2,082   1,613   4,108   3,192 
Legal fees  240   198   556   401 
Other professional fees  929   598   1,685   1,249 
Regulatory fees  640   516   1,242   750 
Directors' fees  270   193   512   407 
Data processing  749   681   1,555   1,299 
Marketing and advertising  377   233   673   473 
Travel and entertainment  285   160   529   379 
Insurance  251   179   495   352 
Other real estate owned expense, net  129   20   217   38 
Merger-related expenses  -   221   -   682 
Other expense  2,033   1,041   4,185   2,062 
Total non-interest expense  17,953   13,775   35,763   27,278 
Income Before Income Taxes  13,213   8,985   28,383   18,150 
Income tax expense  2,140   2,186   4,798   4,362 
Net Income $11,073  $6,799  $23,585  $13,788 
              
Basic earnings per common share $0.44  $0.35  $0.94  $0.71 
Diluted earnings per common share $0.44  $0.35  $0.93  $0.71 
              
Basic weighted average common shares outstanding  25,129,199   19,332,703   25,084,558   19,417,388 
Diluted weighted average common shares outstanding  25,258,785   19,434,522   25,228,888   19,546,949 
                 

FIRST BANK
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)

  Three Months Ended June 30,
  2024 2023
  Average     Average Average     Average
  Balance Interest Rate (5) Balance Interest Rate (5)
Interest earning assets                  
Investment securities (1) (2) $146,289  $1,321   3.63% $142,209  $996   2.81%
Loans (3)  2,997,892   50,763   6.81%  2,397,121   33,748   5.65%
Interest bearing deposits with banks,                  
Federal funds sold and other  224,503   3,101   5.56%  152,623   1,924   5.06%
Restricted investment in bank stocks  11,178   243   8.74%  9,418   157   6.69%
Other investments  12,136   138   4.57%  8,898   103   4.64%
Total interest earning assets (2)  3,391,998   55,566   6.59%  2,710,269   36,928   5.47%
Allowance for credit losses  (36,784)        (30,315)      
Non-interest earning assets  263,698         145,259       
Total assets $3,618,912        $2,825,213       
                   
Interest bearing liabilities                  
Interest bearing demand deposits $591,222  $3,813   2.59% $338,392  $1,475   1.75%
Money market deposits  1,061,593   10,559   4.00%  811,385   6,804   3.36%
Savings deposits  158,158   619   1.57%  137,830   366   1.07%
Time deposits  678,197   7,395   4.39%  570,850   4,046   2.84%
Total interest bearing deposits  2,489,170   22,386   3.62%  1,858,457   12,691   2.74%
Borrowings  171,533   2,193   5.14%  151,810   1,661   4.39%
Subordinated debentures  29,880   440   5.89%  29,769   441   5.93%
Total interest bearing liabilities  2,690,583   25,019   3.74%  2,040,036   14,793   2.91%
Non-interest bearing deposits  497,205         462,692       
Other liabilities  44,480         26,925       
Stockholders' equity  386,644         295,560       
Total liabilities and stockholders' equity $3,618,912        $2,825,213       
Net interest income/interest rate spread (2)     30,547   2.85%     22,135   2.56%
Net interest margin (2) (4)        3.62%        3.28%
Tax equivalent adjustment (2)     (7)        (7)   
Net interest income    $30,540        $22,128    

(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Annualized.

FIRST BANK
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
 
  Six Months Ended June 30,
  2024 2023
  Average     Average Average     Average
  Balance Interest Rate (5) Balance Interest Rate (5)
Interest earning assets                  
Investment securities (1) (2) $146,719  $2,549   3.49% $147,953  $2,064   2.81%
Loans (3)  2,988,707   100,082   6.73%  2,380,336   65,448   5.54%
Interest bearing deposits with banks,                  
Federal funds sold and other  213,831   5,811   5.46%  124,503   3,008   4.87%
Restricted investment in bank stocks  10,800   442   8.23%  8,841   258   5.88%
Other investments  12,003   254   4.26%  8,770   170   3.91%
Total interest earning assets (2)  3,372,060   109,138   6.51%  2,670,403   70,948   5.36%
Allowance for credit losses  (37,196)        (29,826)      
Non-interest earning assets  262,465         144,867       
Total assets $3,597,329        $2,785,444       
                   
Interest bearing liabilities                  
Interest bearing demand deposits $605,081  $7,479   2.49% $328,870  $2,454   1.50%
Money market deposits  1,038,250   20,348   3.94%  784,089   11,791   3.03%
Savings deposits  160,135   1,193   1.50%  145,691   712   0.99%
Time deposits  674,872   14,152   4.22%  552,028   7,147   2.61%
Total interest bearing deposits  2,478,338   43,172   3.50%  1,810,678   22,104   2.46%
Borrowings  169,337   4,309   5.12%  141,567   3,025   4.31%
Subordinated debentures  36,175   784   4.33%  29,756   881   5.92%
Total interest bearing liabilities  2,683,850   48,265   3.62%  1,982,001   26,010   2.65%
Non-interest bearing deposits  489,353         481,237       
Other liabilities  42,534         28,330       
Stockholders' equity  381,592         293,876       
Total liabilities and stockholders' equity $3,597,329        $2,785,444       
Net interest income/interest rate spread (2)     60,873   2.89%     44,938   2.71%
Net interest margin (2) (4)        3.63%        3.39%
Tax equivalent adjustment (2)     (15)        (15)   
Net interest income    $60,858        $44,923    

(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Annualized.

FIRST BANK 
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except for share and employee data, unaudited)
 
  As of or For the Quarter Ended
  6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023
EARNINGS               
Net interest income $30,540  $30,318  $30,999  $28,594  $22,128 
Credit loss expense  63   (698)  (294)  6,650   496 
Non-interest income  689   1,964   (3,000)  193   1,128 
Non-interest expense  17,953   17,810   17,936   23,486   13,775 
Income tax expense  2,140   2,658   1,977   (78)  2,186 
Net income  11,073   12,512   8,380   (1,271)  6,799 
                
PERFORMANCE RATIOS                
Return on average assets (1)  1.23%  1.41%  0.93%  (0.14%)  0.97%
Adjusted return on average assets (1) (2)  1.31%  1.39%  1.38%  1.07%  0.97%
Return on average equity (1)  11.52%  13.36%  9.06%  (1.43%)  9.23%
Adjusted return on average equity (1) (2)  12.26%  13.17%  13.38%  10.75%  9.28%
Return on average tangible equity (1) (2)  13.40%  15.64%  10.67%  (1.66%)  9.87%
Adjusted return on average tangible equity (1) (2)  14.26%  15.41%  15.75%  12.50%  9.93%
Net interest margin (1) (3)  3.62%  3.64%  3.68%  3.36%  3.28%
Yield on loans (1)  6.81%  6.66%  6.49%  6.09%  5.65%
Total cost of deposits (1)  3.01%  2.83%  2.63%  2.47%  2.19%
Efficiency ratio (2)  55.88%  55.56%  53.79%  54.83%  58.71%
                
SHARE DATA               
Common shares outstanding  25,144,983   25,096,449   24,968,122   24,926,919   19,041,343 
Basic earnings per share $0.44  $0.50  $0.34  $(0.05) $0.35 
Diluted earnings per share  0.44   0.50   0.33   (0.05)  0.35 
Adjusted diluted earnings per share (2)  0.47   0.49   0.49   0.40   0.35 
Book value per share  15.61   15.23   14.85   14.48   15.45 
Tangible book value per share (2)  13.46   13.06   12.65   12.26   14.44 
                
MARKET DATA               
Market value per share $12.74  $13.74  $14.70  $10.78  $10.38 
Market value / Tangible book value  94.65%  105.20%  116.18%  87.96%  71.91%
Market capitalization $320,347  $344,825  $367,031  $268,712  $197,649 
                
CAPITAL & LIQUIDITY               
Stockholders' equity / assets  10.86%  10.64%  10.28%  10.15%  10.23%
Tangible stockholders' equity / tangible assets (2)  9.50%  9.27%  8.89%  8.72%  9.63%
Loans / deposits  101.02%  100.75%  101.82%  101.80%  101.53%
                
ASSET QUALITY               
Net charge-offs (recoveries) $175  $5,293  $209  $1,122  $(109)
Net charge-offs (recoveries), excluding PCD loan charge-off (5)  175   (201)  209  $1,122  $(109)
Nonperforming loans  14,227   17,054   24,989   24,158   10,342 
Nonperforming assets  20,227   23,053   24,989   24,158   10,342 
Net charge offs (recoveries) / average loans (1)  0.02%  0.72%  0.03%  0.15%  (0.02%)
Net charge offs (recoveries), excluding PCD loan charge-off / average loans (1) (5)  0.02%  (0.03%)  0.03%  0.15%  (0.02%)
Nonperforming loans / total loans  0.47%  0.57%  0.83%  0.80%  0.42%
Nonperforming assets / total assets  0.56%  0.64%  0.69%  0.68%  0.36%
Allowance for credit losses on loans / total loans  1.21%  1.22%  1.40%  1.42%  1.25%
Allowance for credit losses on loans / nonperforming loans  254.81%  213.42%  169.66%  177.50%  294.44%
                
OTHER DATA               
Total assets $3,615,731  $3,591,398  $3,609,327  $3,558,426  $2,874,425 
Total loans  2,998,029   2,992,423   3,021,501   3,020,778   2,436,708 
Total deposits  2,967,634   2,970,262   2,967,569   2,967,455   2,399,900 
Total stockholders' equity  392,489   382,254   370,900   361,037   294,161 
Number of full-time equivalent employees (4)  294   288   286   286   261 

(1) Annualized.
(2) Non-U.S. GAAP financial measure that we believe provides management and investors with information that is useful in understanding our financial performance and condition.  See accompanying table, "Non-U.S. GAAP Financial Measures," for calculation and reconciliation.
(3) Tax equivalent using a federal income tax rate of 21%.
(4) Includes 5 full-time equivalent seasonal interns as of June 30, 2023.
(5) Excludes $5.5 million in a PCD loan charge-off in first quarter of 2024, which was reserved for through purchase accounting marks at the time of the Malvern acquisition.

FIRST BANK
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
  As of the Quarter Ended
  6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023
LOAN COMPOSITION               
Commercial and industrial $530,996  $508,911  $506,849  $478,120  $419,836 
Commercial real estate:               
Owner-occupied  647,625   625,643   612,352   607,888   560,878 
Investor  1,143,954   1,172,311   1,221,702   1,269,134   965,339 
Construction and development  190,108   184,816   186,829   168,192   136,615 
Multi-family  270,238   279,668   271,058   275,825   223,784 
Total commercial real estate  2,251,925   2,262,438   2,291,941   2,321,039   1,886,616 
Residential real estate:               
Residential mortgage and first lien home equity loans  144,978   154,704   156,024   158,487   91,260 
Home equity–second lien loans and revolving lines of credit  46,882   45,869   44,698   46,239   29,983 
Total residential real estate  191,860   200,573   200,722   204,726   121,243 
Consumer and other  26,321   23,702   25,343   20,208   12,514 
Total loans prior to deferred loan fees and costs  3,001,102   2,995,624   3,024,855   3,024,093   2,440,209 
Net deferred loan fees and costs  (3,073)  (3,201)  (3,354)  (3,315)  (3,501)
Total loans $2,998,029  $2,992,423  $3,021,501  $3,020,778  $2,436,708 
                
LOAN MIX               
Commercial and industrial  17.7%  17.0%  16.8%  15.8%  17.2%
Commercial real estate:               
Owner-occupied  21.6%  20.9%  20.3%  20.1%  23.0%
Investor  38.2%  39.2%  40.4%  42.0%  39.6%
Construction and development  6.3%  6.2%  6.2%  5.6%  5.6%
Multi-family  9.0%  9.3%  9.0%  9.1%  9.2%
Total commercial real estate  75.1%  75.6%  75.9%  76.8%  77.4%
Residential real estate:               
Residential mortgage and first lien home equity loans  4.8%  5.2%  5.1%  5.3%  3.8%
Home equity–second lien loans and revolving lines of credit  1.6%  1.5%  1.5%  1.5%  1.2%
Total residential real estate  6.4%  6.7%  6.6%  6.8%  5.0%
Consumer and other  0.9%  0.8%  0.8%  0.7%  0.5%
Net deferred loan fees and costs  (0.1%)  (0.1%)  (0.1%)  (0.1%)  (0.1%)
Total loans  100.0%  100.0%  100.0%  100.0%  100.0%
                     

 

FIRST BANK
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
 
  As of the Quarter Ended
  6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023
DEPOSIT COMPOSITION               
Non-interest bearing demand deposits $499,765  $470,749  $501,763  $493,703  $476,733 
Interest bearing demand deposits  574,515   580,864   629,110   623,338   376,948 
Money market and savings deposits  1,199,382   1,219,634   1,171,440   1,228,832   979,524 
Time deposits  693,972   699,015   665,256   621,582   566,695 
Total Deposits $2,967,634  $2,970,262  $2,967,569  $2,967,455  $2,399,900 
                
DEPOSIT MIX               
Non-interest bearing demand deposits  16.8%  15.8%  16.9%  16.6%  19.9%
Interest bearing demand deposits  19.4%  19.6%  21.2%  21.0%  15.7%
Money market and savings deposits  40.4%  41.1%  39.5%  41.4%  40.8%
Time deposits  23.4%  23.5%  22.4%  21.0%  23.6%
Total Deposits  100.0%  100.0%  100.0%  100.0%  100.0%
                     

 

FIRST BANK
NON-U.S. GAAP FINANCIAL MEASURES
(in thousands, except for share data, unaudited)
 
  As of or For the Quarter Ended
  6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023
Return on Average Tangible Equity               
Net income (numerator) $11,073  $12,512  $8,380  $(1,271) $6,799 
                
Average stockholders' equity $386,644  $376,542  $366,950  $353,372  $295,560 
Less: Average Goodwill and other intangible assets, net  54,347   54,790   55,324   49,491   19,324 
Average Tangible stockholders' equity (denominator) $332,297  $321,752  $311,626  $303,881  $276,236 
                
Return on Average Tangible equity (1)  13.40%  15.64%  10.67%  -1.66%  9.87%
                
Tangible Book Value Per Share               
Stockholders' equity $392,489  $382,254  $370,900  $361,037  $294,161 
Less: Goodwill and other intangible assets, net  54,026   54,483   54,978   55,554   19,289 
Tangible stockholders' equity (numerator) $338,463  $327,771  $315,922  $305,483  $274,872 
                
Common shares outstanding (denominator)  25,144,983   25,096,449   24,968,122   24,926,919   19,041,343 
                
Tangible book value per share $13.46  $13.06  $12.65  $12.26  $14.44 
                
Tangible Equity / Tangible Assets               
Stockholders' equity $392,489  $382,254  $370,900  $361,037  $294,161 
Less: Goodwill and other intangible assets, net  54,026   54,483   54,978   55,554   19,289 
Tangible stockholders' equity (numerator) $338,463  $327,771  $315,922  $305,483  $274,872 
                
Total assets $3,615,731  $3,591,398  $3,609,327  $3,558,426  $2,874,425 
Less: Goodwill and other intangible assets, net  54,026   54,483   54,978   55,554   19,289 
Tangible total assets (denominator) $3,561,705  $3,536,915  $3,554,349  $3,502,872  $2,855,136 
                
Tangible stockholders' equity / tangible assets  9.50%  9.27%  8.89%  8.72%  9.63%
                
Efficiency Ratio               
Non-interest expense $17,953  $17,810  $17,936  $23,486  $13,775 
Less: Merger-related expenses  -   -   338   7,028   221 
Adjusted non-interest expense (numerator) $17,953  $17,810  $17,598  $16,458  $13,554 
                
Net interest income $30,540  $30,318  $30,999  $28,594  $22,128 
Non-interest income  689   1,964   (3,000)  193   1,128 
Total revenue  31,229   32,282   27,999   28,787   23,256 
Add: Losses on sale of investment securities, net  -   -   916   527   - 
Add (subtract): Losses (gains) on sale of loans, net  900   (229)  3,799   704   (170)
Adjusted total revenue (denominator) $32,129  $32,053  $32,714  $30,018  $23,086 
                
Efficiency ratio  55.88%  55.56%  53.79%  54.83%  58.71%

(1) Annualized.

FIRST BANK
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)

  For the Quarter Ended
  6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023
                
Adjusted diluted earnings per share,               
Adjusted return on average assets, and               
Adjusted return on average equity               
                
Net income $11,073  $12,512  $8,380  $(1,271) $6,799 
Add: Merger-related expenses(1)  -   -   267   5,552   175 
Add: Credit loss expense on acquired loan portfolio(1)  -   -   -   4,323   - 
Add (subtract): Losses (gains) on sale of loans, net(1)  711   (181)  3,001   556   (134)
Add: Losses on sale of investment securities, net(1)  -   -   724   416   - 
Adjusted net income $11,784  $12,331  $12,372  $9,576  $6,839 
                
Diluted weighted average common shares outstanding  25,258,785   25,199,381   25,089,495   24,029,910   19,434,522 
Average assets $3,618,912  $3,575,748  $3,561,261  $3,565,350  $2,825,213 
Average equity $386,644  $376,542  $366,950  $353,372  $295,560 
Average Tangible Equity $332,297  $321,752  $311,626  $303,881  $276,236 
                
Adjusted diluted earnings per share $0.47  $0.49  $0.49  $0.40  $0.35 
Adjusted return on average assets (2)  1.31%  1.39%  1.38%  1.07%  0.97%
Adjusted return on average equity (2)  12.26%  13.17%  13.38%  10.75%  9.28%
Adjusted return on average tangible equity (2)  14.26%  15.41%  15.75%  12.50%  9.93%

(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Annualized.

CONTACT: Andrew Hibshman, Chief Financial Officer
(609) 643-0058, andrew.hibshman@firstbanknj.com



Attachments

Q2 2024 Earnings Presentation__VF-Updated.pdf