First Bank (Nasdaq Global Market: FRBA) (the Bank) today announced results for the first quarter of 2022, including net income of $8.2 million, or $0.41 per diluted share. Return on average assets, return on average equity and return on average tangible equityi for the first quarter of 2022 were 1.31%, 12.25% and 13.22%, respectively. In the first quarter of 2021, the Bank reported net income of $9.7 million, or $0.49 per diluted share, and return on average assets, return on average equity and return on average tangible equityi of 1.66%, 16.21% and 17.52%, respectively.

First Quarter 2022 Performance Highlights:

  • Total loans of $2.15 billion at March 31, 2022 reflected growth of $39.8 million, or 1.9%, from December 31, 2021. Loan growth, excluding the decline in Paycheck Protection Program (PPP) loans, totaled $65.3 million in the first quarter of 2022, representing a 12.8% annualized increase.
  • Total deposits of $2.18 billion at March 31, 2022 were up $63.3 million, or 3.0%, from December 31, 2021. Non-interest bearing demand deposits increased to 27.4% of total deposits at March 31, 2022, compared to 26.4% at December 31, 2021, while time deposits decreased to 15.1% at March 31, 2022 from 18.5% at December 31, 2021.
  • Asset quality metrics remained solid during the quarter, with net charge offs making up 0.05% of average loans on an annualized basis and nonperforming loans declining to 0.59% of total loans at March 31, 2022 from 0.62% at December 31, 2021.
  • Continued focus on managing expenses resulted in the fifth consecutive quarter of an efficiency ratioii below 50%, at 49.62% for the first quarter of 2022.
  • Tangible book value per shareiii of $12.79, up $0.12 from the end of the linked fourth quarter of 2021 and up $1.20 from March 31, 2021.

“Our first quarter performance was highlighted by strong earnings, continued organic loan growth, further enhancement of our deposit mix and solid asset quality metrics,” said Patrick L. Ryan, President and Chief Executive Officer. “Our team’s focus on expanding relationships with new and existing customers supported solid balance sheet expansion, with non-PPP loans up an annualized 12.8% and deposits up an annualized 12.1% from the linked fourth quarter. Organic loan growth was led by investor and owner-occupied commercial real estate lending, while our deposit mix continued to shift toward lower cost, non-time deposits.”

Mr. Ryan continued, “As expected, PPP loans and associated fees declined in the first quarter of 2022 as customers’ loans through this federal program continue to be forgiven. Offsetting this decline was strong organic loan growth in the fourth quarter of 2021 and first quarter of 2022, creating a larger average earning asset base. This loan growth, combined with our continued low funding costs, led to net interest income expansion for the quarter. We also saw an improvement in our net interest margin which was 3.43%, excluding PPP fees, in the first quarter of 2022 compared to 3.34% in the fourth quarter of 2021 and we see opportunity to improve the margin through rising asset yields. While non-interest revenues were softer in the first three months of the year, we believe this was partially a timing issue and remain optimistic about opportunities to expand U.S. Small Business Administration loan sale activity and continue to generate loan swap fee income. As we seek to drive continued revenue growth, we remain focused on effectively managing expenses, even as we respond to inflationary and competitive pressures to retain and recruit top talent in our markets.”

“Loan growth continues to come from high-quality customers and, accordingly, our asset quality metrics remain strong. Our nonperforming loans to total loans ratio improved during the quarter to 0.59%. Net charge-offs remain relatively low as annualized charge offs were 0.05% of average loans during the quarter ended March 31, 2022 and primarily related to one loan.”

“We are very pleased with our performance so far in 2022 and the opportunities we see ahead for continued growth. Our two newest branches, acquired in late 2021, continue to perform well and have led to some expanded customer relationships and with our robust lending pipelines, we believe we can continue to drive organic commercial loan growth. Our confidence is due in large part to the exceptional talent we have and continue to attract. We have been able to capitalize on market disruption, adding a number of relationship managers over the last several quarters from larger institutions that have already hit the ground running.”

“Our entire team is focused on maintaining our earnings and profitability strength as we seek to drive long-term shareholder value. As such, we were pleased to again announce a $0.06 quarterly dividend, reflecting an annualized yield of 1.68% based on our April 19, 2022 closing price.”

Income Statement

First Bank’s net interest income for the first quarter of 2022 was $21.1 million, an increase of $1.1 million, or 5.5%, compared to $20.0 million in the first quarter of 2021, due primarily to a $1.1 million decrease in total interest expense. The reduction in interest expense was primarily a result of a 46 basis point reduction in the average rate paid on time deposits, along with a decrease of $157.7 million in the average balance of time deposits. As a result of the Bank’s concerted effort to drive down deposit costs in a comparatively much lower interest rate environment, interest expense on all other interest bearing deposits also declined. Interest income was consistent with the year-ago quarter even with a lower level of PPP loan fees, as average loan growth of $93.7 million between the comparative periods was partially offset by a 20 basis point decline in the average loan yields. Impacting interest income from loans in the first quarter of 2022 was $860,000 in PPP loan fees compared to $1.6 million in the first quarter of 2021 and $1.1 million in the linked fourth quarter of 2021. Also impacting loan interest income in the first quarter of 2022 was loan prepayment income of $459,000, compared to $673,000 for the quarter ended March 31, 2021 and $312,000 for the quarter ended December 31, 2021.

The first quarter 2022 tax equivalent net interest margin was 3.57%, a modest decrease of three basis points compared to the prior year quarter and an increase of five basis points from the fourth quarter of 2021. The Bank’s margin continues to benefit from higher average non-interest bearing deposits and an overall lower cost of funds.

The Bank reported a provision for loan losses of $642,000 for the first quarter of 2022, compared to $1.1 million credit to the provision for loan losses in the first quarter of 2021 and a provision of $825,000 for the linked fourth quarter 2021. The provision for the quarter ended March 31, 2022 reflects consistent organic loan growth and continued strong asset quality.

First quarter 2022 non-interest income of $1.3 million compares to $2.3 million during the first quarter 2021. The decrease between the periods was primarily the result of a $497,000 decrease in gains on sale of loans reflecting lower U.S. Small Business Administration (SBA) loan sales, a $436,000 decrease in loan fees primarily reflecting lower loan swap fees in the first quarter 2022, and a $246,000 decrease in gains on the recovery of acquired loans.

Non-interest expense for first quarter 2022 of $11.1 million increased $472,000, or 4.4%, compared to $10.7 million for the prior year quarter. The higher non-interest expense compared to first quarter 2021 was primarily a result of a $776,000, or 13.5%, increase in salaries and employee benefits which was partially offset by reduced occupancy and equipment and legal fees. The increase in salaries and employee benefits was due primarily to merit-based salary compensation, a slightly higher number of total employees and increases in employee benefit costs.

On a linked quarter basis, first quarter 2022 non-interest expense decreased $703,000, or 5.9%, compared to $11.8 million for the fourth quarter of 2021, when the Bank recorded higher performance related compensation and merger-related expenses associated with our acquisition of two branches. Excluding merger-related expenses incurred in the fourth quarter of 2021, adjusted non-interest expenseiv decreased 1.8% between the comparable periods.

Income tax expense for the three months ended March 31, 2022 was $2.5 million with an effective tax rate of 23.4%, compared to $3.1 million with an effective tax rate of 24.2% for the first quarter of 2021 and $2.4 million with an effective tax rate of 23.2% for the fourth quarter of 2021.

Balance Sheet

Total assets at March 31, 2022 were $2.57 billion, an increase of $168.3 million, or 7.0%, compared to $2.41 billion at March 31, 2021 and $63.5 million, or 2.5%, from December 31, 2021, respectively. Total loans increased $129.6 million, or 6.4%, to $2.15 billion at March 31, 2022 compared to $2.02 billion at March 31, 2021. The increase in loans during the twelve month period ended March 31, 2022 reflects net non-PPP organic growth of $286.7 million and approximately $11.3 million in acquired loans, offset by a net decline in PPP loans of $168.4 million, as such loans continue to be forgiven. Total loans as of March 31, 2022 increased $39.8 million, or 1.9%, from $2.11 billion at December 31, 2021, reflecting organic, net non-PPP loan growth of $65.3 million, offset by a net decline in PPP loans of $25.5 million. PPP loans outstanding at March 31, 2022 were $25.5 million.

Total deposits were $2.18 billion at March 31, 2022, an increase of $207.4 million, or 10.5%, from $1.97 billion at March 31, 2021, and an increase of $63.3 million, or 3.0%, compared to $2.11 billion at December 31, 2021, respectively. Non-interest-bearing deposits totaled $597.3 million at March 31, 2022, an increase of $97.3 million, or 19.5%, from March 31, 2021, and an increase of $38.6 million, or 6.9%, from December 31, 2021. The Bank continues to focus on enhancing its deposit mix and, as of March 31, 2022, has grown non-interest bearing deposits to 27.4% and lowered time deposits to 15.1% of total deposits.

Stockholders’ equity was $271.1 million at March 31, 2022, compared to $266.7 million at December 31, 2021. The growth of $4.4 million, or 1.7%, was primarily a result of first quarter 2022 net income of $8.2 million, partially offset by a $3.2 million increase in accumulated other comprehensive loss and cash dividends paid of $1.2 million during the three months ended March 31, 2022. The increase in accumulated other comprehensive loss was due to an increase in unrealized losses on the Bank’s available for sale investment securities.

As of March 31, 2022, the Bank continued to exceed all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 10.15%, a Tier 1 Risk-Based capital ratio of 10.60%, a Common Equity Tier 1 Capital ratio of 10.60%, and a Total Risk-Based capital ratio of 12.86%.

Asset Quality

First Bank’s asset quality metrics remained stable and favorable during the three months ended March 31, 2022. Net charge offs of $247,000 for the first quarter of 2022 were 0.05% of average loans on an annualized basis. This compares to net recoveries of $5,000, or an annualized 0.00% of average loans, for the first quarter of 2021 and net charge offs of $6,000, or an annualized 0.00%, for the fourth quarter of 2021. Nonperforming loans were $12.6 million at March 31, 2022, up from $10.7 million on March 31, 2021, and down from $13.0 million at December 31, 2021. Nonperforming loans as a percentage of total loans at March 31, 2022 were 0.59%, compared with 0.53% at March 31, 2021 and 0.62% at December 31, 2021, respectively. The allowance for loan losses to nonperforming loans was 191.72% at March 31, 2022, compared with 214.74% at the end of first quarter 2021, and 182.65% at December 31, 2021, respectively.

COVID-19 Response

First Bank participated in the PPP, established by the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act), during 2020 and 2021. The PPP was a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the SBA. The PPP provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover compensation and other business-related operating costs. The PPP ended on May 31, 2021 but the PPP loan forgiveness process is ongoing. As of March 31, 2022, First Bank had 205 PPP loans with outstanding balances of $25.5 million. During the quarter ended March 31, 2022, PPP loans totaling $25.5 million were forgiven and the Bank realized $860,000 in loan fees on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of March 31, 2022, the Bank had $829,000 in remaining unamortized fees associated with outstanding balances of PPP loans.

First Bank continues to monitor and analyze its COVID-19 related financial hardship payment deferrals (COVID-19 deferrals). As of March 31, 2022, the Bank’s population of COVID-19 deferrals consisted of one loan totaling $222,000, or 0.00% of total loans, down from $1.6 million, or 0.08% of total loans, at December 31, 2021.

Cash Dividend Declared

On April 19, 2022, First 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 May 13, 2022, payable on May 27, 2022.

Conference Call

First Bank will host its earnings call on Tuesday, April 26, 2022 at 9:00 AM eastern time. The direct dial toll free number for the live call is 1-844-200-6205 and the access code is 794535. For those unable to participate in the call, a replay will be available by dialing 1-866-813-9403 (access code 750010) from one hour after the end of the conference call until July 25, 2022. 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 18 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington (2), Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.6 billion in assets as of March 31, 2022, 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: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions, 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 impact of disease pandemics, including 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; 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; 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 The efficiency ratio is a non-U.S. GAAP financial measure and is calculated by dividing non-interest expense less merger-related expenses by adjusted total revenue (net interest income plus non-interest income). 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 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.

iv Adjusted non-interest expense is a non-U.S. GAAP financial measure and is calculated by subtracting merger-related expenses from total non-interest expense. 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 AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data, unaudited)
 
             
        March 31, 2022   December 31, 2021
Assets        
Cash and due from banks $ 32,531     $ 25,076  
Interest bearing deposits with banks   149,726       129,431  
    Cash and cash equivalents   182,257       154,507  
Interest bearing time deposits with banks   1,740       2,170  
Investment securities available for sale, at fair value   86,622       94,584  
Investment securities held to maturity (fair value of $40,112      
  at March 31, 2022 and $39,718 at December 31, 2021)   41,468       39,547  
Restricted investment in bank stocks   5,517       5,856  
Other investments   8,078       8,062  
Loans, net of deferred fees and costs   2,151,751       2,111,991  
  Less: Allowance for loan losses   24,140       23,746  
    Net loans   2,127,611       2,088,245  
Premises and equipment, net   9,774       9,883  
Other real estate owned, net   293       772  
Accrued interest receivable   5,796       5,681  
Bank-owned life insurance   57,006       56,633  
Goodwill   17,826       17,826  
Other intangible assets, net   2,028       2,145  
Deferred income taxes   12,106       11,081  
Other assets   15,723       13,306  
    Total assets $ 2,573,845     $ 2,510,298  
             
Liabilities and Stockholders' Equity      
Liabilities:      
Non-interest bearing deposits $ 597,333     $ 558,775  
Interest bearing deposits   1,580,562       1,555,827  
    Total deposits   2,177,895       2,114,602  
Borrowings   74,306       81,835  
Subordinated debentures   29,647       29,620  
Accrued interest payable   799       399  
Other liabilities   20,130       17,176  
    Total liabilities   2,302,777       2,243,632  
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; 21,014,086    
  shares issued and 19,634,744 shares outstanding at March 31, 2022 and      
  20,851,506 shares issued and 19,472,364 shares outstanding at December 31, 2021   104,138       103,704  
Additional paid-in capital   79,757       79,563  
Retained earnings   102,914       95,924  
Accumulated other comprehensive loss   (3,420 )     (206 )
Treasury stock, 1,379,342 shares at March 31, 2022 and 1,379,142 shares      
  at December 31, 2021   (12,321 )     (12,319 )
    Total stockholders' equity   271,068       266,666  
    Total liabilities and stockholders' equity $ 2,573,845     $ 2,510,298  
             
FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)
 
          
     Three Months Ended
     March 31,
       2022     2021  
Interest and Dividend Income      
Investment securities—taxable $ 576   $ 475  
Investment securities—tax-exempt   37     48  
Interest bearing deposits with banks,      
  Federal funds sold and other   130     171  
Loans, including fees   22,143     22,157  
  Total interest and dividend income   22,886     22,851  
          
Interest Expense      
Deposits    1,009     1,850  
Borrowings   288     514  
Subordinated debentures   440     440  
  Total interest expense   1,737     2,804  
Net interest income   21,149     20,047  
Provision for loan losses   642     (1,053 )
  Net interest income after provision for loan losses   20,507     21,100  
          
Non-Interest Income      
Service fees on deposit accounts   252     176  
Loan fees    245     681  
Income from bank-owned life insurance   373     329  
Gains on sale of loans   37     534  
Gains on recovery of acquired loans   124     370  
Other non-interest income   236     210  
  Total non-interest income   1,267     2,300  
          
Non-Interest Expense      
Salaries and employee benefits   6,544     5,768  
Occupancy and equipment   1,424     1,938  
Legal fees   142     247  
Other professional fees   687     531  
Regulatory fees   193     268  
Directors' fees   218     216  
Data processing   596     535  
Marketing and advertising   164     188  
Travel and entertainment   88     15  
Insurance    165     154  
Other real estate owned expense, net   83     51  
Other expense   818     739  
  Total non-interest expense   11,122     10,650  
Income Before Income Taxes   10,652     12,750  
Income tax expense   2,494     3,089  
Net Income $ 8,158   $ 9,661  
          
Basic earnings per common share $ 0.42   $ 0.49  
Diluted earnings per common share $ 0.41   $ 0.49  
Cash dividends per common share $ 0.06   $ 0.03  
          
Basic weighted average common shares outstanding   19,532,811     19,672,017  
Diluted weighted average common shares outstanding   19,768,452     19,834,319  
          
FIRST BANK AND SUBSIDIARIES  
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES  
(dollars in thousands, unaudited)  
                         
                         
  Three Months Ended March 31,  
    2022       2021    
  Average       Average Average       Average
  Balance   Interest   Rate (5)   Balance   Interest   Rate (5)  
Interest earning assets                        
Investment securities (1) (2) $ 134,033     $ 621     1.88 %   $ 97,756     $ 533     2.21 %  
Loans (3)   2,131,014       22,143     4.21 %     2,037,318       22,157     4.41 %  
Interest bearing deposits with banks,                        
Federal funds sold and other   121,422       50     0.17 %     108,793       69     0.26 %  
Restricted investment in bank stocks   5,616       63     4.55 %     8,447       87     4.18 %  
Other investments   8,073       17     0.85 %     6,510       15     0.93 %  
Total interest earning assets(2)   2,400,158       22,894     3.87 %     2,258,824       22,861     4.10 %  
Allowance for loan losses   (24,057 )             (24,600 )          
Non-interest earning assets   146,674               132,193            
Total assets $ 2,522,775             $ 2,366,417            
                         
Interest bearing liabilities                        
Interest bearing demand deposits $ 298,274     $ 61     0.08 %   $ 201,247     $ 65     0.13 %  
Money market deposits   706,368       448     0.26 %     591,752       520     0.36 %  
Savings deposits   190,222       164     0.35 %     168,993       204     0.49 %  
Time deposits   350,223       336     0.39 %     507,949       1,061     0.85 %  
Total interest bearing deposits   1,545,087       1,009     0.26 %     1,469,941       1,850     0.51 %  
Borrowings   76,492       288     1.53 %     145,632       514     1.43 %  
Subordinated debentures   29,632       440     5.94 %     29,519       440     5.96 %  
Total interest bearing liabilities   1,651,211       1,737     0.43 %     1,645,092       2,804     0.69 %  
Non-interest bearing deposits   583,543               464,157            
Other liabilities   17,874               15,494            
Stockholders' equity   270,147               241,674            
Total liabilities and stockholders' equity $ 2,522,775             $ 2,366,417            
Net interest income/interest rate spread (2)       21,157     3.44 %         20,057     3.41 %  
Net interest margin (2) (4)         3.57 %           3.60 %  
Tax equivalent adjustment (2)       (8 )             (10 )      
Net interest income     $ 21,149             $ 20,047        
                         
(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 AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except for share and employee data, unaudited)
                     
    As of or For the Quarter Ended
    3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
EARNINGS                    
Net interest income   $ 21,149     $ 20,641     $ 20,781     $ 20,421     $ 20,047  
Provision for loan losses     642       825       158       (162 )     (1,053 )
Non-interest income     1,267       2,211       1,901       1,342       2,300  
Non-interest expense     11,122       11,825       10,522       10,155       10,650  
Income tax expense     2,494       2,363       2,966       2,877       3,089  
Net income     8,158       7,839       9,036       8,893       9,661  
                     
PERFORMANCE RATIOS                    
Return on average assets (1)     1.31 %     1.27 %     1.46 %     1.48 %     1.66 %
Adjusted return on average assets (1) (2)     1.31 %     1.33 %     1.48 %     1.48 %     1.66 %
Return on average equity (1)     12.25 %     11.77 %     13.86 %     14.26 %     16.21 %
Adjusted return on average equity (1) (2)     12.25 %     12.36 %     14.04 %     14.26 %     16.21 %
Return on average tangible equity (1) (2)     13.22 %     12.63 %     14.90 %     15.37 %     17.52 %
Adjusted return on average tangible equity (1) (2)     13.22 %     13.26 %     15.09 %     15.37 %     17.52 %
Net interest margin (1) (3)     3.57 %     3.52 %     3.54 %     3.57 %     3.60 %
Total cost of deposits (1)     0.19 %     0.21 %     0.25 %     0.30 %     0.39 %
Efficiency ratio (2)     49.62 %     49.57 %     45.75 %     46.66 %     47.66 %
                     
SHARE DATA                    
Common shares outstanding     19,634,744       19,472,364       19,464,388       19,678,528       19,663,065  
Basic earnings per share   $ 0.42     $ 0.40     $ 0.46     $ 0.45     $ 0.49  
Diluted earnings per share     0.41       0.40       0.46       0.45       0.49  
Adjusted diluted earnings per share (2)     0.41       0.42       0.46       0.45       0.49  
Tangible book value per share (2)     12.79       12.67       12.45       12.02       11.59  
Book value per share     13.81       13.69       13.37       12.94       12.51  
                     
MARKET DATA                    
Market value per share   $ 14.22     $ 14.51     $ 14.09     $ 13.54     $ 12.17  
Market value / Tangible book value     111.14 %     114.53 %     113.21 %     112.61 %     104.97 %
Market capitalization   $ 279,206     $ 282,544     $ 274,253     $ 266,447     $ 239,300  
                     
CAPITAL & LIQUIDITY                    
Tangible stockholders' equity / tangible assets (2)     9.84 %     9.91 %     10.01 %     9.76 %     9.55 %
Stockholders' equity / assets     10.53 %     10.62 %     10.67 %     10.42 %     10.23 %
Loans / deposits     98.80 %     99.88 %     97.96 %     100.87 %     102.62 %
                     
ASSET QUALITY                    
Net charge-offs (recoveries)   $ 247     $ 6     $ (121 )   $ 116     $ (5 )
Nonperforming loans     12,591       13,001       11,488       9,558       10,676  
Nonperforming assets     12,884       13,773       11,967       10,038       11,251  
Netcharge offs (recoveries) / average loans (1)     0.05 %     0.00 %     (0.02 %)     0.02 %     0.00 %
Nonperforming loans / total loans     0.59 %     0.62 %     0.57 %     0.47 %     0.53 %
Nonperforming assets / total assets     0.50 %     0.55 %     0.49 %     0.41 %     0.47 %
Allowance for loan losses / total loans     1.12 %     1.12 %     1.14 %     1.10 %     1.13 %
Allowance for loan losses / total loans (excluding PPP loans)   1.13 %     1.15 %     1.19 %     1.18 %     1.24 %
Allowance for loan losses / nonperforming loans     191.72 %     182.65 %     199.57 %     236.95 %     214.74 %
                     
OTHER DATA                    
Total assets   $ 2,573,845     $ 2,510,298     $ 2,438,020     $ 2,443,047     $ 2,405,576  
Total loans     2,151,751       2,111,991       2,004,289       2,053,938       2,022,187  
Total deposits     2,177,895       2,114,602       2,045,966       2,036,228       1,970,491  
Total stockholders' equity     271,068       266,666       260,179       254,571       245,997  
Number of full-time equivalent employees     219       217       209       215       211  
                     
(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%.                    
                     
FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
                       
      As of the Quarter Ended
      3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
LOAN COMPOSITION                    
Commercial and industrial   $ 321,979     $ 350,103     $ 308,991     $ 379,916     $ 432,869  
Commercial real estate:                    
  Owner-occupied     493,999       470,022       444,635       427,094       399,042  
  Investor     888,622       848,021       832,727       814,762       771,599  
  Construction and development     96,585       109,292       112,112       127,329       123,930  
  Multi-family     193,865       173,728       145,245       142,015       125,493  
  Total commercial real estate     1,673,071       1,601,063       1,534,719       1,511,200       1,420,064  
Residential real estate:                    
  Residential mortgage and first lien home equity loans     99,992       106,204       103,890       108,842       117,756  
  Home equity–second lien loans and revolving lines of credit     30,485       31,375       29,998       29,422       29,306  
  Total residential real estate     130,477       137,579       133,888       138,264       147,062  
Consumer and other     30,096       27,762       31,946       31,584       29,213  
  Total loans prior to deferred loan fees and costs     2,155,623       2,116,507       2,009,544       2,060,964       2,029,208  
Net deferred loan fees and costs     (3,872 )     (4,516 )     (5,255 )     (7,026 )     (7,021 )
  Total loans   $ 2,151,751     $ 2,111,991     $ 2,004,289     $ 2,053,938     $ 2,022,187  
                       
LOAN MIX                    
Commercial and industrial     15.0 %     16.6 %     15.4 %     18.5 %     21.4 %
Commercial real estate:                    
  Owner-occupied     23.0 %     22.3 %     22.2 %     20.8 %     19.7 %
  Investor     41.3 %     40.1 %     41.5 %     39.7 %     38.2 %
  Construction and development     4.5 %     5.2 %     5.6 %     6.2 %     6.1 %
  Multi-family     9.0 %     8.2 %     7.2 %     6.9 %     6.2 %
  Total commercial real estate     77.8 %     75.8 %     76.5 %     73.5 %     70.2 %
Residential real estate:                    
  Residential mortgage and first lien home equity loans     4.6 %     5.0 %     5.2 %     5.3 %     5.8 %
  Home equity–second lien loans and revolving lines of credit     1.4 %     1.5 %     1.5 %     1.4 %     1.4 %
  Total residential real estate     6.1 %     6.5 %     6.7 %     6.7 %     7.2 %
Consumer and other     1.4 %     1.4 %     1.7 %     1.6 %     1.5 %
Net deferred loan fees and costs     (0.2 %)     (0.3 %)     (0.3 %)     (0.3 %)     (0.3 %)
  Total loans     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
                       
FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
                       
      As of the Quarter Ended
      3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
DEPOSIT COMPOSITION                    
Non-interest bearing demand deposits   $ 597,333     $ 558,775     $ 536,905     $ 534,475     $ 500,008  
Interest bearing demand deposits     314,564       293,647       241,869       211,074       208,443  
Money market and savings deposits     936,848       871,074       845,607       817,424       767,603  
Time deposits     329,150       391,106       421,585       473,255       494,437  
  Total Deposits   $ 2,177,895     $ 2,114,602     $ 2,045,966     $ 2,036,228     $ 1,970,491  
                       
DEPOSIT MIX                    
Non-interest bearing demand deposits     27.4 %     26.4 %     26.3 %     26.3 %     25.4 %
Interest bearing demand deposits     14.5 %     13.9 %     11.8 %     10.4 %     10.6 %
Money market and savings deposits     43.0 %     41.2 %     41.3 %     40.1 %     38.9 %
Time deposits     15.1 %     18.5 %     20.6 %     23.2 %     25.1 %
  Total Deposits     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
                       
FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(in thousands, except for share data, unaudited)
                   
  As of or For the Quarter Ended
  3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
Return on Average Tangible Equity                  
Net income (numerator) $ 8,158     $ 7,839     $ 9,036     $ 8,893     $ 9,661  
                   
Average stockholders' equity $ 270,147     $ 264,216     $ 258,596     $ 250,143     $ 241,674  
Less: Average Goodwill and other intangible assets, net   19,916       17,910       17,937       18,001       18,023  
Average Tangible stockholders' equity (denominator) $ 250,231     $ 246,306     $ 240,659     $ 232,142     $ 223,651  
                   
Return on Average Tangible equity (1)   13.22 %     12.63 %     14.90 %     15.37 %     17.52 %
                   
Tangible Book Value Per Share                  
Stockholders' equity $ 271,068     $ 266,666     $ 260,179     $ 254,571     $ 245,997  
Less: Goodwill and other intangible assets, net   19,854       19,971       17,920       17,965       18,024  
Tangible stockholders' equity (numerator) $ 251,214     $ 246,695     $ 242,259     $ 236,606     $ 227,973  
                   
Common shares outstanding (denominator)   19,634,744       19,472,364       19,464,388       19,678,528       19,663,065  
                   
Tangible book value per share $ 12.79     $ 12.67     $ 12.45     $ 12.02     $ 11.59  
                   
                   
Tangible Equity / Assets                  
Stockholders' equity $ 271,068     $ 266,666     $ 260,179     $ 254,571     $ 245,997  
Less: Goodwill and other intangible assets, net   19,854       19,971       17,920       17,965       18,024  
Tangible stockholders' equity (numerator) $ 251,214     $ 246,695     $ 242,259     $ 236,606     $ 227,973  
                   
Total assets $ 2,573,845     $ 2,510,298     $ 2,438,020     $ 2,443,047     $ 2,405,576  
Less: Goodwill and other intangible assets, net   19,854       19,971       17,920       17,965       18,024  
Tangible total assets (denominator) $ 2,553,991     $ 2,490,327     $ 2,420,100     $ 2,425,082     $ 2,387,552  
                   
Tangible stockholders' equity / tangible assets   9.84 %     9.91 %     10.01 %     9.76 %     9.55 %
                   
                   
Efficiency Ratio                  
Non-interest expense $ 11,122     $ 11,825     $ 10,522     $ 10,155     $ 10,650  
Less: Merger-related expenses   -       498       145       -       -  
Adjusted non-interest expense (numerator) $ 11,122     $ 11,327     $ 10,377     $ 10,155     $ 10,650  
                   
Net interest income $ 21,149     $ 20,641     $ 20,781     $ 20,421     $ 20,047  
Non-interest income   1,267       2,211       1,901       1,342       2,300  
Total revenue $ 22,416     $ 22,852     $ 22,682     $ 21,763     $ 22,347  
                   
Efficiency ratio   49.62 %     49.57 %     45.75 %     46.66 %     47.66 %
                   
(1) Annualized.                  
FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
                   
                   
  For the Quarter Ended
  3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
                   
Adjusted diluted earnings per share,                  
Adjusted return on average assets, and                  
Adjusted return on average equity                  
                   
Net income $ 8,158     $ 7,839     $ 9,036     $ 8,893     $ 9,661  
Add: Merger-related expenses(1)   -       393       115       -       -  
Adjusted net income $ 8,158     $ 8,232     $ 9,151     $ 8,893     $ 9,661  
                   
Diluted weighted average common shares outstanding   19,768,452       19,725,294       19,842,817       19,883,076       19,834,319  
Average assets $ 2,522,775     $ 2,447,399     $ 2,456,617     $ 2,410,353     $ 2,366,417  
Average equity $ 270,147     $ 264,216     $ 258,596     $ 250,143     $ 241,674  
Average Tangible Equity $ 250,231     $ 246,306     $ 240,659     $ 232,142     $ 223,651  
                   
Adjusted diluted earnings per share $ 0.41     $ 0.42     $ 0.46     $ 0.45     $ 0.49  
Adjusted return on average assets(2)   1.31 %     1.33 %     1.48 %     1.48 %     1.66 %
Adjusted return on average equity(2)   12.25 %     12.36 %     14.04 %     14.26 %     16.21 %
Adjusted return on average tangible equity(2)   13.22 %     13.26 %     15.09 %     15.37 %     17.52 %
                   
(1) Items are tax-effected using a federal income tax rate of 21%.                
(2) Annualized.                  
                   

CONTACT: Patrick L. Ryan, President and CEO (609) 643-0168, patrick.ryan@firstbanknj.com

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