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

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 BANKCONSOLIDATED 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 BANKCONSOLIDATED 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 BANKAVERAGE 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 BANKAVERAGE 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 BANKQUARTERLY 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 BANKQUARTERLY 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 BANKNON-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 BANKNON-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	%