FRBA First Bank

First Bank (Nasdaq Global Market: FRBA) (the Bank) today announced its third quarter 2023 financial results with a net loss of $1.3 million, or a loss of $0.05 per diluted share, and losses on average assets, equity, and tangible equityi of 0.14%, 1.43%, and 1.66%, respectively. Excluding merger-related expenses and other one-time expenses, First Bank’s third quarter 2023 adjusted diluted earnings per shareii were $0.42, adjusted return on average assetsii was 1.13% and adjusted return on average tangible equityii was 13.23%.

Compared to the same period of last year, the Bank's adjusted net income and adjusted returns on assets, equity, and tangible equity were lower, reflecting broader industry headwinds, primarily due to increased funding costs. However, the Malvern Bank acquisition will provide opportunities for stronger earnings and profitability metrics going forward.

Third Quarter 2023 Performance Highlights:

• Completion of the Malvern Bancorp (Malvern) acquisition on July 17, 2023. At the acquisition date, Malvern contributed approximately $953.8 million in total assets, $727.7 million in loans and $671.9 million in deposits, after acquisition accounting adjustments.
• Total loans were $3.02 billion at September 30, 2023, marking a 24.0% increase from the end of the linked quarter at June 30, 2023.
• Total deposits ended the quarter at $2.97 billion at September 30, 2023, a 23.6% increase from the end of the linked quarter at June 30, 2023.
• Improvement in net interest margin and adjusted profitability metrics, primarily due to the benefits of the Malvern acquisition.
• Sales of certain loans and investments acquired from Malvern during the current quarter with net proceeds of approximately $165.5 million allowed for the reduction of $130.0 million in higher cost FHLB advances.

Patrick L. Ryan, President and CEO of First Bank, reflected on the quarterly results, stating, “We are excited about the successful closing of the Malvern acquisition. The transaction has expanded our presence in Southeastern Pennsylvania, creating critical mass in one of the most attractive markets in the Northeast. The acquisition also provided an opportunity to reshape the combined balance sheet and should drive significant earnings growth heading into 2024. We continue to operate in a difficult rate environment which continues to impact our margin. The combination of the rate environment, merger-related costs and the continued ramp up of new business units and information technology investments led to a net loss during the third quarter. Those strategic investments, combined with the Malvern acquisition, position us for strong financial results despite this difficult operating environment. During the third quarter our adjusted return on average assets improved 14 basis points from the second quarter to 1.13% and we believe our earnings performance can continue to improve as we realize the full impact of cost savings from the acquisition.”

Mr. Ryan added that, “I am pleased that we were able to reshape our balance sheet by executing some strategic asset sales during the third quarter that allowed us to reduce our reliance on higher cost deposits and borrowings which should positively impact our margin, efficiency ratio, and return on capital in the fourth quarter and beyond.”

Mr. Ryan concluded that, “I continue to be excited about the opportunities that lie ahead of us. The completion of the Malvern acquisition and the reshaping of our balance sheet during the quarter has allowed us to optimize our liquidity and interest rate risk positions while also enhancing future earnings potential. The current rate environment will continue to be a challenge but the Malvern acquisition, coupled with our strong team of bankers, should lead to a leaner and highly efficient company.”

Malvern Acquisition

First Bank acquired Malvern Bancorp, Inc. and its wholly owned subsidiary Malvern Bank, National Association on July 17, 2023. The combined stock and cash transaction was valued at approximately $129.7 million and expanded First Bank’s footprint in the highly affluent and desirable Mainline Philadelphia market. After acquisition accounting adjustments, at the time of the acquisition, First Bank added $953.8 million in assets, $92.0 million in investments, $727.7 million in loans, $671.9 million in deposits, $130.0 million in Federal Home Loan Bank advances, and $25.5 million in subordinated debt, and the acquisition resulted in $26.3 million in goodwill. The Malvern acquisition led to a 15% dilution in our tangible book value per shareiii from June 30, 2023 to September 30, 2023, however, the primary cause of the dilution was interest rate-related fair value adjustments. These fair value adjustments will accrete back through income and should lead to earnings per share accretion moving forward. Because the dilution was driven by interest rate adjustments, First Bank anticipates that the dilution will be earned back as loans and securities come to maturity.

Income Statement

In the third quarter of 2023, the Bank’s net interest income increased to $28.6 million, representing an increase of $4.0 million, or 16.4%, compared to the same period in 2022. The increase was primarily driven by an increase of $19.4 million in interest income on loans which outpaced the $15.7 million increase in interest expense on deposits in the third quarter of 2023 compared to the same quarter in 2022.

The Bank’s tax equivalent net interest margin in the third quarter of 2023 decreased by 61 basis points to 3.36% compared to the prior year quarter but increased by 8 basis points from the second quarter of 2023. The decrease from the prior year quarter was primarily driven by the increase in deposit costs, which was partially offset by an increase in average loan yields. The increase in the margin from the second quarter of 2023 was primarily due to the impact of the Malvern acquisition. The repositioning of the balance sheet, primarily through the aforementioned asset sales, coupled with a full quarter of accretion income from the Malvern fair value adjustments will have a positive impact on the margin moving forward, however, the inverted yield curve and deposit pricing pressures may negate some of the positive impact.

The Bank's provision for credit losses was $6.7 million in the third quarter of 2023, compared to $216,000 in the same period of the previous year and $496,000 in the preceding quarter of 2023. The increase in provision for credit losses during the current quarter was primarily due to a $5.5 million credit loss recorded to establish the allowance for credit losses on the acquired Malvern loan portfolio.

In the third quarter of 2023, non-interest income was $193,000, compared to $944,000 during the same period in 2022 and $1.1 million during the second quarter of 2023. The decrease was primarily due to losses on the sale of investments and loans of $527,000 and $704,000, respectively, which are net against non-interest income on the income statement. The losses were primarily related to the aforementioned sale of Malvern investments and residential loans.

Non-interest expense for the third quarter of 2023 was $23.5 million, an increase of $11.7 million, or 100.1%, compared to $11.7 million for the prior year quarter. The higher non-interest expense was largely due to the $7.0 million in merger-related expenses recorded during the third quarter of 2023. Merger-related expenses primarily included severance costs, data processing system termination and conversion costs, investment banker fees and legal and other professional fees. The increase was also due to salaries and employee benefits increasing $2.4 million, or 35.6%, and to a lesser extent, a $438,000 increase in occupancy and equipment expense, a $343,000 increase in regulatory fees, a $233,000 increase in data processing costs, and an increase of $997,000 in other expense. The increases were primarily due to the new employees and locations from the Malvern acquisition.

On a linked quarter basis, third quarter 2023 non-interest expense of $23.5 million increased $9.7 million, or 70.5%, compared to $13.8 million for the second quarter of 2023. The increase was also primarily attributable to an increase in merger-related expenses and, to a lesser extent, increased salaries and employee benefits, occupancy and equipment costs, data processing and other expense. These increases were also primarily due to the Malvern acquisition.

The Bank recorded an income tax benefit of $78,000 for the third quarter of 2023 compared to a $2.2 million tax expense for the second quarter of 2023. The year to date effective tax rate for the nine months ended September 30, 2023 was 25.50% compared to 24.21% for the first nine months of 2022. Income tax expense in 2023 was impacted by a $506,000 tax expense recorded due to the revaluation of the Bank’s deferred tax assets, primarily due to the impact on state taxes from the Malvern acquisition. Excluding this expense, the effective tax rate for the first nine months of 2023 would have been 22.49%. The lower adjusted effective tax rate is primarily due to the impact of the Malvern acquisition on state income tax expense.

Balance Sheet

The Bank reported total assets of $3.56 billion as of September 30, 2023, an increase of $684.0 million, or 23.8%, from $2.87 billion at June 30, 2023. The Bank’s assets grew $825.5 million, or 30.2%, for the nine months ended September 30, 2023.

The Bank's increase in loans during the three and nine month periods ended September 30, 2023 were $584.1 million and $683.0 million, respectively. Excluding the $626.3 million in loans acquired from Malvern at September 30, 2023, which is net of loan sales and pay-downs since the acquisition, net loan growth was $56.7 million during the nine months ended September 30, 2023 compared to a decline of $42.2 million during the quarter ended September 30, 2023. The decline during the current quarter was primarily due to the Bank being more selective as it relates to new relationships, as well as more active loan repayments on the part of a few existing customers due to increasing interest rates.

As of September 30, 2023, the Bank's total deposits were $2.97 billion, an increase of $673.5 million, or 29.4%, from $2.29 billion at December 31, 2022. Excluding the $671.9 million in deposits acquired from Malvern, deposit balances increased $1.6 million for the first nine months of 2023 but declined by $104.3 million during the three months ended September 30, 2023. The decline during the quarter ended September 30, 2023 was primarily due to the Bank allowing some higher cost brokered and non-core funding to leave the Bank, but the overall industry wide deposit declines and competitive pricing pressures are also impacting our total deposit levels.

As of September 30, 2023, the Bank's stockholders' equity totaled $361.0 million, an increase of $71.5 million, or 24.7%, compared to $289.6 million at December 31, 2022 and an increase of $66.9 million compared to June 30, 2023 primarily due to the equity issued in the Malvern acquisition.

As of September 30, 2023, the Bank continued to exceed all regulatory capital requirements to be considered well-capitalized with a Tier 1 Leverage ratio of 8.92%, a Tier 1 Risk-Based capital ratio of 9.00%, a Common Equity Tier 1 Capital ratio of 9.00%, and a Total Risk-Based capital ratio of 11.54%. The tangible stockholders' equity to tangible assets ratioiv was 8.72% as of September 30, 2023. All of the Bank’s capital ratios declined during the quarter due to the Malvern acquisition, however, all capital ratios remain above well-capitalized minimums. In addition, the Bank anticipates that the earnings accretion from the Malvern acquisition will contribute to enhanced capital ratios in future periods.

Asset Quality

First Bank's asset quality metrics for the third quarter of 2023 remained favorable with nonperforming loans, excluding $17.2 million of purchase credit deteriorated (PCD) loans, decreasing slightly from $8.0 million at June 30, 2023, to $7.0 million at September 30, 2023. Nonperforming loans, excluding PCD loans, as a percentage of total loans were 0.23% at September 30, 2023, compared to 0.33% at June 30, 2023. The Bank recorded net charge-offs of $1.1 million during the third quarter of 2023 compared to net recoveries of $109,000 in the second quarter of 2023 and net charge-offs of $705,000 in the in the third quarter of 2022. The allowance for credit losses on loans as a percentage of total loans increased to 1.42% at September 30, 2023 compared to 1.25% at June 30, 2023, primarily due to the impact of the allowance for credit losses on the acquired Malvern loan portfolio. The allowance for credit losses at September 30, 2023 included $6.0 million in reserves on the Bank’s PCD loans.

Liquidity and Borrowings

The Bank maintained a strong liquidity position in the third quarter of 2023. Total cash and cash equivalents declined slightly by $2.1 million during the third quarter to $180.2 million at September 30, 2023. The Bank utilized asset sales to allow some higher cost deposits to run-off and paid off a significant amount of borrowings during the third quarter of 2023. The reduction in outstanding borrowings has also increased the Bank’s available borrowing capacity. The Bank’s current liquidity position coupled with the balance sheet flexibility gained after the Malvern Bancorp acquisition provides the Bank with a strong liquidity base and a diverse source of funding options.

Overall, the Bank has a capital, liquidity, and asset quality position, which provides a solid foundation to navigate future challenges that may arise. The Bank is committed to managing risk prudently while pursuing growth opportunities and delivering value to its shareholders.

Cash Dividend Declared

On October 17, 2023, 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 November 10, 2023, payable on November 24, 2023.

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/3e846bda-0f73-493b-bc6c-c5c63f65f218 

First Bank will host its earnings call on Thursday, October 26, 2023 at 9:00 AM Eastern Time. The direct dial toll free number for the live call is 1-888-330-3273 and the access code is 7660423. For those unable to participate in the call, a replay will be available by dialing 1-800-770-2030 (access code 7660423) from one hour after the end of the conference call until January 25, 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 $3.56 billion in assets as of September 30, 2023, 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, 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 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.

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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 Adjusted diluted earnings per share, adjusted return on average assets and adjusted return on average tangible equity are non-U.S. GAAP financial measures and are calculated by dividing net income adjusted for certain merger-related expenses and other one-time gains or expenses by diluted weighted average shares, average assets and average tangible equity, respectively. For a reconciliation of these non-U.S. GAAP financial measures, 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 tangible equity (equity minus goodwill and other intangible assets) by common shares outstanding. 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 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.

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

FIRST BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data, unaudited)
		September 30, 2023				December 31, 2022
Assets
Cash and due from banks		$	23,440			$	17,577
Restricted cash			20,460				13,580
Interest bearing deposits with banks			136,310				94,759
Cash and cash equivalents			180,210				125,916
Interest bearing time deposits with banks			498				1,293
Investment securities available for sale, at fair value			87,728				98,956
Investment securities held to maturity, net of allowance for
credit losses of $227 at September 30, 2023 (fair value of $38,548 at
September 30, 2023 and $42,465 at December 31, 2022)			45,198				47,193
Restricted investment in bank stocks			8,106				6,214
Other investments			10,346				8,372
Loans, net of deferred fees and costs			3,020,778				2,337,814
Less: Allowance for credit losses			42,880				25,474
Net loans			2,977,898				2,312,340
Premises and equipment, net			21,414				10,550
Other real estate owned, net			-				-
Accrued interest receivable			14,778				8,164
Bank-owned life insurance			85,845				58,107
Goodwill			44,166				17,826
Other intangible assets, net			11,388				1,579
Deferred income taxes, net			23,861				13,155
Other assets			46,990				23,275
Total assets		$	3,558,426			$	2,732,940
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits		$	493,703			$	503,856
Interest bearing deposits			2,473,752				1,790,096
Total deposits			2,967,455				2,293,952
Borrowings			133,142				90,932
Subordinated debentures			55,263				29,731
Accrued interest payable			3,223				1,218
Other liabilities			38,306				27,545
Total liabilities			3,197,389				2,443,378
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; 27,107,983
shares issued and 24,926,919 shares outstanding at September 30, 2023 and
21,082,819 shares issued and 19,451,755 shares outstanding at December 31, 2022			134,362				104,512
Additional paid-in capital			122,416				80,695
Retained earnings			133,680				127,532
Accumulated other comprehensive loss			(8,043	)			(7,334	)
Treasury stock, 2,181,064 shares at September 30, 2023 and 1,631,064 shares at
December 31, 2022			(21,378	)			(15,843	)
Total stockholders' equity			361,037				289,562
Total liabilities and stockholders' equity		$	3,558,426			$	2,732,940

FIRST BANK
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
			2023				2022				2023				2022
Interest and Dividend Income
Investment securities—taxable		$	1,151			$	788			$	3,128			$	2,053
Investment securities—tax-exempt			86				39				158				109
Interest bearing deposits with banks,
Federal funds sold and other			2,593				498				6,029				888
Loans, including fees			46,088				26,673				111,536				72,697
Total interest and dividend income			49,918				27,998				120,851				75,747
Interest Expense
Deposits			18,470				2,737				40,574				5,008
Borrowings			1,914				258				4,939				796
Subordinated debentures			940				440				1,821				1,321
Total interest expense			21,324				3,435				47,334				7,125
Net interest income			28,594				24,563				73,517				68,622
Credit loss expense			6,650				216				8,237				2,156
Net interest income after credit loss expense			21,944				24,347				65,280				66,466
Non-Interest Income
Service fees on deposit accounts			280				236				741				731
Loan fees			152				(33	)			259				314
Income from bank-owned life insurance			544				369				1,291				1,112
Losses on sale of investment securities, net			(527	)			-				(734	)			-
Losses on sale of loans, net			(704	)			2				(393	)			292
Gains on recovery of acquired loans			24				122				95				456
Other non-interest income			424				248				1,026				769
Total non-interest income			193				944				2,285				3,674
Non-Interest Expense
Salaries and employee benefits			9,326				6,880				25,320				20,122
Occupancy and equipment			1,915				1,477				5,107				4,282
Legal fees			270				188				671				502
Other professional fees			631				619				1,880				1,998
Regulatory fees			595				252				1,345				678
Directors' fees			224				172				631				570
Data processing			907				674				2,206				1,859
Marketing and advertising			220				164				693				505
Travel and entertainment			140				91				519				290
Insurance			272				187				624				538
Other real estate owned expense, net			-				72				38				269
Merger-related expenses			7,028				-				7,710				-
Other expense			1,958				961				4,020				2,655
Total non-interest expense			23,486				11,737				50,764				34,268
Income Before Income Taxes			(1,349	)			13,554				16,801				35,872
Income tax expense			(78	)			3,348				4,284				8,685
Net Income		$	(1,271	)		$	10,206			$	12,517			$	27,187
Basic earnings per common share		$	(0.05	)		$	0.52			$	0.60			$	1.39
Diluted earnings per common share		$	(0.05	)		$	0.52			$	0.59			$	1.38
Cash dividends per common share		$	0.06			$	0.06			$	0.18			$	0.18
Basic weighted average common shares outstanding			23,902,478				19,451,189				20,928,847				19,523,069
Diluted weighted average common shares outstanding			23,902,478				19,668,133				21,057,655				19,742,399

FIRST BANK
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
		Three Months Ended Sepember 30,
			2023											2022
		Average								Average			Average								Average
		Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)		$	169,244			$	1,255			2.94	%		$	145,783			$	835			2.27	%
Loans (3)			3,003,703				46,088			6.09	%			2,224,829				26,673			4.76	%
Interest bearing deposits with banks,
Federal funds sold and other			182,128				2,395			5.22	%			74,493				406			2.16	%
Restricted investment in bank stocks			10,284				196			7.56	%			5,248				72			5.44	%
Other investments			9,162				2			0.09	%			8,223				20			0.96	%
Total interest earning assets (2)			3,374,521				49,936			5.87	%			2,458,576				28,006			4.52	%
Allowance for loan losses			(41,216	)										(25,283	)
Non-interest earning assets			232,045											142,449
Total assets		$	3,565,350										$	2,575,742
Interest bearing liabilities
Interest bearing demand deposits		$	674,417			$	4,038			2.38	%		$	338,639			$	397			0.47	%
Money market deposits			952,042				8,386			3.49	%			713,594				1,458			0.81	%
Savings deposits			174,412				490			1.11	%			182,771				228			0.49	%
Time deposits			655,288				5,556			3.36	%			350,859				654			0.74	%
Total interest bearing deposits			2,456,159				18,470			2.98	%			1,585,863				2,737			0.68	%
Borrowings			163,746				1,914			4.64	%			64,330				258			1.59	%
Subordinated debentures			51,101				940			7.36	%			29,685				440			5.93	%
Total interest bearing liabilities			2,671,006				21,324			3.17	%			1,679,878				3,435			0.81	%
Non-interest bearing deposits			507,866											590,421
Other liabilities			33,106											25,350
Stockholders' equity			353,372											280,093
Total liabilities and stockholders' equity		$	3,565,350										$	2,575,742
Net interest income/interest rate spread (2)							28,612			2.70	%							24,571			3.71	%
Net interest margin (2) (4)										3.36	%										3.97	%
Tax equivalent adjustment (2)							(18	)										(8	)
Net interest income						$	28,594										$	24,563
(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
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
		Nine Months Ended September 30,
			2023											2022
		Average								Average			Average								Average
		Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)		$	155,128			$	3,319			2.86	%		$	140,452			$	2,185			2.08	%
Loans (3)			2,590,409				111,536			5.76	%			2,179,357				72,697			4.46	%
Interest bearing deposits with banks,
Federal funds sold and other			143,922				5,403			5.02	%			101,101				627			0.83	%
Restricted investment in bank stocks			9,327				454			6.51	%			5,428				200			4.93	%
Other investments			8,902				172			2.58	%			8,129				61			1.00	%
Total interest earning assets (2)			2,907,688				120,884			5.56	%			2,434,467				75,770			4.16	%
Allowance for loan losses			(33,664	)										(24,608	)
Non-interest earning assets			174,246											145,989
Total assets		$	3,048,270										$	2,555,848
Interest bearing liabilities
Interest bearing demand deposits		$	445,318			$	6,492			1.95	%		$	322,353			$	595			0.25	%
Money market deposits			840,688				20,177			3.21	%			719,028				2,548			0.47	%
Savings deposits			155,370				1,202			1.03	%			184,767				572			0.41	%
Time deposits			586,827				12,703			2.89	%			340,822				1,293			0.51	%
Total interest bearing deposits			2,028,203				40,574			0.21	%			1,566,970				5,008			0.43	%
Borrowings			149,042				4,939			4.43	%			69,571				796			1.53	%
Subordinated debentures			36,949				1,821			6.57	%			29,659				1,321			5.94	%
Total interest bearing liabilities			2,214,194				47,334			2.86	%			1,666,200				7,125			0.57	%
Non-interest bearing deposits			490,211											593,638
Other liabilities			29,939											21,284
Stockholders' equity			313,926											274,726
Total liabilities and stockholders' equity		$	3,048,270										$	2,555,848
Net interest income/interest rate spread (2)							73,550			2.70	%							68,645			3.59	%
Net interest margin (2) (4)										3.38	%										3.77	%
Tax equivalent adjustment (2)							(33	)										(23	)
Net interest income						$	73,517										$	68,622
(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
			9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
EARNINGS
	Net interest income		$	28,594			$	22,128			$	22,795			$	23,751			$	24,563
	Credit loss expense / Provision for loan losses			6,650				496				1,091				716				216
	Non-interest income			193				1,128				964				1,446				944
	Non-interest expense			23,486				13,775				13,503				12,465				11,737
	Income tax expense			(78	)			2,186				2,176				2,916				3,348
	Net income			(1,271	)			6,799				6,989				9,100				10,206
PERFORMANCE RATIOS
	Return on average assets (1)			(0.14	%)			0.97	%			1.03	%			1.35	%			1.57	%
	Adjusted return on average assets (1) (2)			1.13	%			0.99	%			1.11	%			1.40	%			1.57	%
	Return on average equity (1)			(1.43	%)			9.23	%			9.70	%			12.61	%			14.46	%
	Adjusted return on average equity (1) (2)			11.38	%			9.46	%			10.43	%			13.11	%			14.46	%
	Return on average tangible equity (1) (2)			(1.66	%)			9.87	%			10.39	%			13.53	%			15.55	%
	Adjusted return on average tangible equity (1) (2)			13.23	%			10.13	%			11.17	%			14.07	%			15.55	%
	Net interest margin (1) (3)			3.36	%			3.28	%			3.52	%			3.69	%			3.97	%
	Total cost of deposits (1)			2.47	%			2.19	%			1.69	%			1.21	%			0.50	%
	Efficiency ratio (2)			54.71	%			58.28	%			54.42	%			47.68	%			46.01	%
SHARE DATA
	Common shares outstanding			24,926,919				19,041,343				19,569,334				19,451,755				19,447,206
	Basic earnings per share		$	(0.05	)		$	0.35			$	0.36			$	0.47			$	0.52
	Diluted earnings per share			(0.05	)			0.35				0.36				0.46				0.52
	Adjusted diluted earnings per share (2)			0.42				0.36				0.38				0.48				0.52
	Book value per share			14.48				15.45				15.03				14.89				14.44
	Tangible book value per share (2)			12.26				14.44				14.05				13.89				13.43
MARKET DATA
	Market value per share		$	10.78			$	10.38			$	10.10			$	13.76			$	13.67
	Market value / Tangible book value			87.96	%			71.91	%			71.90	%			99.07	%			101.80	%
	Market capitalization		$	268,712			$	197,649			$	197,650			$	267,656			$	265,843
CAPITAL & LIQUIDITY
	Stockholders' equity / assets			10.15	%			10.23	%			10.44	%			10.60	%			10.64	%
	Tangible stockholders' equity / tangible assets (2)			8.72	%			9.63	%			9.83	%			9.96	%			9.97	%
	Loans / deposits			101.80	%			101.53	%			106.73	%			101.91	%			103.34	%
ASSET QUALITY
	Net charge-offs (recoveries)		$	1,122			$	(109	)		$	315			$	(213	)		$	705
	Nonperforming loans			24,158				8,023				7,820				6,250				5,107
	Nonperforming assets			24,158				8,023				7,820				6,250				5,400
	Net charge offs (recoveries) / average loans (1)			0.15	%			(0.02	%)			0.05	%			(0.04	%)			0.13	%
	Nonperforming loans / total loans			0.80	%			0.33	%			0.33	%			0.27	%			0.23	%
	Nonperforming assets / total assets			0.68	%			0.28	%			0.28	%			0.23	%			0.20	%
	Allowance for credit losses on loans / total loans			1.42	%			1.25	%			1.25	%			1.09	%			1.08	%
	Allowance for credit losses on loans / nonperforming loans			177.50	%			379.55	%			382.26	%			407.58	%			480.61	%
OTHER DATA
	Total assets		$	3,558,426			$	2,874,425			$	2,816,897			$	2,732,940			$	2,638,060
	Total loans			3,020,778				2,436,708				2,392,583				2,337,814				2,263,377
	Total deposits			2,967,455				2,399,900				2,241,804				2,293,952				2,190,192
	Total stockholders' equity			361,037				294,161				294,221				289,562				280,749
	Number of full-time equivalent employees (4)			286				261				252				238				228
(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 and 8 full-time equivalent seasonal interns as of June 30, 2023 and 2022, respectively.
	Average assets			3,565,350				2,825,213				2,745,235				2,680,807				2,575,742
	Average loans			3,003,703				2,397,121				2,363,365				2,277,238				2,224,829
	Average stockholders' equity			353,372				295,560				292,174				286,283				280,093

FIRST BANK
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
		As of the Quarter Ended
		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
LOAN COMPOSITION
Commercial and industrial		$	478,120			$	419,836			$	394,734			$	354,203			$	323,984
Commercial real estate:
Owner-occupied			607,888				560,878				539,112				533,426				517,448
Investor			1,269,134				965,339				958,574				951,115				942,151
Construction and development			168,192				136,615				143,955				142,876				126,206
Multi-family			275,825				223,784				220,101				215,990				214,819
Total commercial real estate			2,321,039				1,886,616				1,861,742				1,843,407				1,800,624
Residential real estate:
Residential mortgage and first lien home equity loans			158,487				91,260				94,060				93,847				96,194
Home equity–second lien loans and revolving lines of credit			46,239				29,983				29,316				33,551				31,670
Total residential real estate			204,726				121,243				123,376				127,398				127,864
Consumer and other			20,208				12,514				16,413				16,318				14,654
Total loans prior to deferred loan fees and costs			3,024,093				2,440,209				2,396,265				2,341,326				2,267,126
Net deferred loan fees and costs			(3,315	)			(3,501	)			(3,682	)			(3,512	)			(3,749	)
Total loans		$	3,020,778			$	2,436,708			$	2,392,583			$	2,337,814			$	2,263,377
LOAN MIX
Commercial and industrial			15.8	%			17.2	%			16.5	%			15.2	%			14.3	%
Commercial real estate:
Owner-occupied			20.1	%			23.0	%			22.5	%			22.8	%			22.9	%
Investor			42.0	%			39.6	%			40.1	%			40.7	%			41.6	%
Construction and development			5.6	%			5.6	%			6.0	%			6.1	%			5.6	%
Multi-family			9.1	%			9.2	%			9.2	%			9.2	%			9.5	%
Total commercial real estate			76.8	%			77.4	%			77.8	%			78.8	%			79.6	%
Residential real estate:
Residential mortgage and first lien home equity loans			5.3	%			3.8	%			3.9	%			4.0	%			4.3	%
Home equity–second lien loans and revolving lines of credit			1.5	%			1.2	%			1.2	%			1.4	%			1.4	%
Total residential real estate			6.8	%			5.0	%			5.1	%			5.4	%			5.7	%
Consumer and other			0.7	%			0.5	%			0.7	%			0.7	%			0.6	%
Net deferred loan fees and costs			(0.1	%)			(0.1	%)			(0.1	%)			(0.1	%)			(0.2	%)
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
		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
DEPOSIT COMPOSITION
Non-interest bearing demand deposits		$	493,703			$	476,733			$	463,926			$	503,856			$	584,025
Interest bearing demand deposits			623,338				376,948				310,140				322,944				343,042
Money market and savings deposits			1,228,832				979,524				914,063				935,311				860,577
Time deposits			621,582				566,695				553,675				531,841				402,549
Total Deposits		$	2,967,455			$	2,399,900			$	2,241,804			$	2,293,952			$	2,190,193
DEPOSIT MIX
Non-interest bearing demand deposits			16.6	%			19.9	%			20.7	%			22.0	%			26.7	%
Interest bearing demand deposits			24.5	%			15.7	%			13.8	%			14.1	%			15.7	%
Money market and savings deposits			37.9	%			40.8	%			40.8	%			40.8	%			39.3	%
Time deposits			21.0	%			23.6	%			24.7	%			23.1	%			18.3	%
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
		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Return on Average Tangible Equity
Net income (numerator)		$	(1,271	)		$	6,799			$	6,989			$	9,100			$	10,206
Average stockholders' equity		$	353,372			$	295,560			$	292,174			$	286,283			$	280,093
Less: Average Goodwill and other intangible assets, net			49,491				19,324				19,379				19,533				19,669
Average Tangible stockholders' equity (denominator)		$	303,881			$	276,236			$	272,795			$	266,750			$	260,424
Return on Average Tangible equity (1)			-1.66	%			9.87	%			10.39	%			13.53	%			15.55	%
Tangible Book Value Per Share
Stockholders' equity		$	361,037			$	294,161			$	294,221			$	289,562			$	280,749
Less: Goodwill and other intangible assets, net			55,554				19,289				19,322				19,405				19,599
Tangible stockholders' equity (numerator)		$	305,483			$	274,872			$	274,899			$	270,157			$	261,150
Common shares outstanding (denominator)			24,926,919				19,041,343				19,569,334				19,451,755				19,447,206
Tangible book value per share		$	12.26			$	14.44			$	14.05			$	13.89			$	13.43
Tangible Equity / Assets
Stockholders' equity		$	361,037			$	294,161			$	294,221			$	289,562			$	280,749
Less: Goodwill and other intangible assets, net			55,554				19,289				19,322				19,405				19,599
Tangible stockholders' equity (numerator)		$	305,483			$	274,872			$	274,899			$	270,157			$	261,150
Total assets		$	3,558,426			$	2,874,425			$	2,816,897			$	2,732,940			$	2,638,060
Less: Goodwill and other intangible assets, net			55,554				19,289				19,322				19,405				19,599
Tangible total assets (denominator)		$	3,502,872			$	2,855,136			$	2,797,575			$	2,713,535			$	2,618,461
Tangible stockholders' equity / tangible assets			8.72	%			9.63	%			9.83	%			9.96	%			9.97	%
Efficiency Ratio
Non-interest expense		$	23,486			$	13,775			$	13,503			$	12,465			$	11,737
Less: Merger-related expenses			7,028				221				461				452				-
Adjusted non-interest expense (numerator)		$	16,458			$	13,554			$	13,042			$	12,013			$	11,737
Net interest income		$	28,594			$	22,128			$	22,795			$	23,751			$	24,563
Non-interest income			193				1,128				964				1,446				944
Total revenue			28,787				23,256				23,759				25,197				25,507
Add: Losses on sale of investment securities, net			527				-				207				-				-
Add: Losses on sale of acquired loans			771
Adjusted total revenue (denominator)		$	30,085			$	23,256			$	23,966			$	25,197			$	25,507
Efficiency ratio			54.71	%			58.28	%			54.42	%			47.68	%			46.01	%
(1) Annualized.

FIRST BANK
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
		For the Quarter Ended
		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income		$	(1,271	)		$	6,799			$	6,989			$	9,100			$	10,206
Add: Merger-related expenses (1)			5,552				175				364				357				-
Add: Credit loss expense on acquired loan portfolio (1)			4,323				-				-				-				-
Add: Losses on sale of acquired loans, net (1)			609				-				-				-				-
Add: Losses on sale of investment securities, net (1)			416				-				164				-				-
Add: Impact of tax rate change			506				-				-				-				-
Adjusted net income		$	10,135			$	6,974			$	7,517			$	9,457			$	10,206
Diluted weighted average common shares outstanding			24,029,910				19,434,522				19,667,194				19,649,282				19,668,133
Average assets		$	3,565,350			$	2,825,213			$	2,745,235			$	2,680,807			$	2,575,742
Average equity		$	353,372			$	295,560			$	292,174			$	286,283			$	280,093
Average Tangible Equity		$	303,881			$	276,236			$	272,795			$	266,750			$	260,424
Adjusted diluted earnings per share		$	0.42			$	0.36			$	0.38			$	0.48			$	0.52
Adjusted return on average assets (2)			1.13	%			0.99	%			1.11	%			1.40	%			1.57	%
Adjusted return on average equity (2)			11.38	%			9.46	%			10.43	%			13.11	%			14.46	%
Adjusted return on average tangible equity (2)			13.23	%			10.13	%			11.17	%			14.07	%			15.55	%
(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Annualized.