First Bank Announces First Quarter 2024 Net Income of $12.5 Million
April 22, 2024 at 04:37 pm EDT
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HAMILTON, N.J., April 22, 2024 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) (the Bank) today announced results for the first quarter of 2024. Net income for the first quarter of 2024 was $12.5 million, or $0.50 per diluted share, compared to $7.0 million, or $0.36 per diluted share, for the first quarter of 2023. Return on average assets, return on average equity and return on average tangible equity[i] for the first quarter of 2024 were 1.41%, 13.36% and 15.64%, respectively, compared to 1.03%, 9.70% and 10.39%, respectively, for the first quarter of 2023.
First Quarter 2024 Performance Highlights:
The Bank’s primary measures of profitability broadly improved from the first quarter of 2023. Return on average assets grew by 38 basis points, return on average equity grew by 366 basis points, return on average tangible equity grew by 525 basis points, and net interest margin expanded by 12 basis points to 3.64%.
Total deposits of $2.97 billion at March 31, 2024 remained in line with balances for the linked quarter ended December 31, 2023.
Total loans measured $2.99 billion at March 31, 2024, declining 1% from the linked quarter as the Bank continued to prioritize profitable commercial lending and reduced its investor real estate portfolio.
Strong asset quality continued, with nonperforming assets declining to 0.64% of total assets at March 31, 2024 compared to 0.69% at December 31, 2023.
Net recoveries, excluding purchase credit deteriorated (PCD) loans, as a percentage of average loans measuring (0.03)% for first quarter 2024, and a credit loss benefit measuring $698,000 recorded for the quarter.
Tangible book value per share[ii] grew to $13.06 at March 31, 2024, increasing 13.0%, annualized, from $12.65 at December 31, 2023.
Patrick L. Ryan, President and CEO of First Bank, reflected on the Bank’s performance, stating, “First Bank’s first quarter 2024 performance demonstrated our ability to deliver outstanding results in a challenging environment. We entered 2024 primed for profitability with a reconfigured balance sheet, an expanded customer base, outstanding asset quality, and a solid liquidity position. During the first quarter we continued to drive core deposits, produced a solid net interest margin of 3.64%, grew tangible book value per share by an annualized 13%, and maintained an efficiency ratio under 60% for the nineteenth consecutive quarter — all without growing the balance sheet. Our results demonstrate our ability to build on the momentum we created in 2023.”
Mr. Ryan added, “We continue to seek ways to optimize our franchise, as demonstrated by the recent quarter’s subordinated notes redemption, which eliminated a costly source of acquired debt. Our continued focus on core deposit generation should further support our liquidity position, particularly as we continue to grow our specialty niche lending businesses and grow and improve our online banking capabilities. Likewise, we maintain a steady focus on quality lending – loans that are attractively priced and structured, to the most creditworthy customers. We expect our well-positioned balance sheet, alongside thoughtful investments in business units and information technology, will continue to support a meaningful return for our shareholders.”
Income Statement
In the first quarter of 2024, the Bank’s net interest income increased to $30.3 million, growing $7.5 million, or 33.0%, compared to the same period in 2023. Growth reflects an increase of $17.6 million in interest income on loans which outpaced the $11.4 million increase in interest expense on deposits in the first quarter of 2024 compared to the same quarter in 2023. The increase was primarily a result of higher 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 expanded deposit base. Net interest income decreased $681,000, or 2.2%, over the linked fourth quarter of 2023. The decrease was primarily driven by an increase of $1.1 million in interest expense on deposits, which resulted from continued deposit pricing pressure and the gradual shift of deposit mix towards higher-cost, interest-bearing deposits in the current interest rate environment.
The Bank’s tax equivalent net interest margin measured 3.64% for the first quarter of 2024, increasing by 12 basis points compared to the prior year quarter and decreasing by four basis points from 3.68% for the fourth quarter of 2023. Impacting our tax equivalent margin was loan prepayment penalty fees and amortization of premiums and discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions. For the quarter ended March 31, 2024 loan prepayment penalty fees totaled $445,000 compared to $198,000 for the quarter ended March 31, 2023 and $238,000 for the three months ended December 31, 2023. Amortization of premiums and discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions totaled $4.2 million during the first quarter of 2024 compared to $25,000 for the quarter ended March 31, 2023 and $3.9 million for the quarter ended December 31, 2023. Excluding the impact of purchase accounting accretion, we continued to see pressure on the net interest margin, primarily driven by increased deposit costs which outpaced increased yields on interest-earning assets.
The Bank recorded a credit loss benefit totaling $698,000 during the first quarter of 2024, compared to a credit loss expense totaling $1.1 million for the same period of the previous year and a $294,000 credit loss benefit for the fourth quarter of 2023. The benefits during the current and linked quarters were primarily due to the Bank’s strong and stable asset quality and lack of loan growth during the quarters. The credit loss expense for the first quarter of 2023 was commensurate with organic loan growth during the quarter.
In the first quarter of 2024, the Bank recorded non-interest income totaling $2.0 million, compared to $1.0 million during the same period in 2023 and non-interest income measuring $(3.0) million during the fourth quarter of 2023. Non-interest income grew $1.0 million from the prior year quarter, reflecting increased customer activity related to the Malvern acquisition and a $187,000 one-time bank-owned life insurance (BOLI) death benefit in first quarter 2024. Results for the fourth quarter of 2023 included $4.7 million in combined losses on the sale of investments and loans, which were netted against non-interest income on the consolidated statements of income. The losses were primarily related to the Bank’s 2023 balance sheet repositioning initiatives, which included the sale of Malvern investments and lower-yielding residential and commercial investor real estate loans.
Non-interest expense for the first quarter of 2024 was $17.8 million, an increase of $4.3 million, or 31.9%, compared to $13.5 million for the prior year quarter. Higher non-interest expense was largely due to the increased operating expenses associated with the Malvern acquisition, including increases of $2.2 million in salaries and employee benefits due to a larger employee base, $447,000 in occupancy and equipment due to an expanded network of facilities, $368,000 in regulatory fees, and $1.1 million in other expense. The increase in other expense was primarily due to an increase in core deposit intangible amortization and higher Pennsylvania shares tax. This was partially offset by the absence of merger-related expenses for the first quarter of 2024, compared to $461,000 recorded during the first quarter of 2023.
On a linked quarter basis, non-interest expense declined $126,000, or 0.7%, from $17.9 million for the fourth quarter of 2023. The linked quarter change reflects the largely offsetting impact of a $1.0 million increase in salaries and benefits and decreases of $338,000 in merger-related expenses, $241,000 in regulatory fees, $236,000 in other professional fees, $172,000 in marketing and advertising costs, and $213,000 in other expenses. These declines primarily related to the full impact of cost savings realized from the Malvern acquisition coupled with some one-time/non-recurring expenses during the fourth quarter of 2023. The increase in salary and employee benefits was due to a combination of companywide year-end salary increases at the beginning of March 2024, higher payroll taxes due to bonus payments made in the first quarter of 2024 and to a lesser extent increases in bonus expense and other employee benefit costs.
Income tax expense for the three months ended March 31, 2024 was $2.7 million with an effective tax rate of 17.5%, compared to $2.2 million with an effective tax rate of 23.7% for the first quarter of 2023 and $2.0 million with an effective tax rate of 19.1% for the fourth quarter of 2023. 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. We expect our effective tax rate to be in-line with historic levels between 23-25% going forward.
Balance Sheet
The Bank reported total assets of $3.59 billion as of March 31, 2024, an increase of $774.5 million, or 27.5%, from $2.82 billion at March 31, 2023. Total loans increased $599.8 million, or 25.1%, to $2.99 billion at March 31, 2024 compared to $2.39 billion at March 31, 2023. Increases primarily reflect growth from the Malvern acquisition, partially offset by sales of loans and investment securities totaling approximately $238.2 million during 2023. Excluding loans acquired from Malvern totaling $582.3 million at March 31, 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 March 31, 2024 which reflects our prioritization of balance sheet efficiency over growth.
Total assets decreased $17.9 million, or 0.5%, from December 31, 2023 to March 31, 2024. Total loans decreased $29.1 million, or 1.0%, from December 31, 2023 to March 31, 2024. A decline of commercial investor real estate loans totaling $42.8 million, including multi-family and construction and development, was partially offset by growth totaling $15.4 million across the owner-occupied commercial real estate and commercial and industrial loan portfolios during the first quarter of 2024. The Bank continues to prioritize relationship-based commercial lending while actively reducing our concentration in investor real estate lending.
As of March 31, 2024, the Bank's total deposits were $2.97 billion, an increase of $728.5 million, or 32.5%, from $2.24 billion at March 31, 2023. Excluding $671.9 million in deposits acquired from Malvern, deposit balances increased $56.6 million, or 2.5% for the twelve months ended March 31, 2024. Organic deposit growth was primarily due to our team’s success in attracting new deposit relationships and maintaining existing balances while also allowing some higher-cost and non-core funding to leave the Bank. Heightened industry-wide pricing competition also tempered deposit growth.
While deposits remained stable at $2.97 billion compared to December 31, 2023, we experienced a slight shift of customers moving into higher-yielding interest-bearing deposits. During the first quarter of 2024, increases in money market deposits and savings, and time deposits totaling $48.2 million and $33.7 million, respectively, were offset by declines in interest-bearing demand deposits and non-interest-bearing deposits totaling $48.2 million and $31.0 million, respectively.
During the three months ended March 31, 2024, stockholders’ equity increased by $11.4 million, primarily due to net income, partially offset by dividends.
As of March 31, 2024, the Bank continued to exceed all regulatory capital requirements to be considered well-capitalized, with a Tier 1 Leverage ratio of 9.27%, a Tier 1 Risk-Based capital ratio of 9.46%, a Common Equity Tier 1 Capital ratio of 9.46%, and a Total Risk-Based capital ratio of 11.39%. The tangible stockholders' equity to tangible assets ratio[iii] increased to 9.27% as of March 31, 2024 compared to 8.89% at December 31, 2023.
Asset Quality
First Bank's asset quality metrics for the first quarter of 2024 remained favorable. Total nonperforming loans declined from $25.0 million at December 31, 2023 to $17.1 million at March 31, 2024 while total nonperforming assets declined from $25.0 million to $23.1 million. The decline in nonperforming loans was primarily attributable to the transfer of an $11.5 million Malvern-acquired PCD loan with a $5.5 million specific reserve, which was reserved for through acquisition accounting marks at the time of the Malvern acquisition, to other real estate owned (OREO). This transfer increased OREO by $6.0 million, reduced the Bank’s total nonperforming loans and the $5.5 million specific reserve was charged-off through the allowance for credit losses.
PCD loans totaled $5.4 million at March 31, 2024 and $17.0 million at December 31, 2023. Excluding PCD loans, nonperforming loans increased from $8.0 million at December 31, 2023 to $11.7 at March 31, 2024. Nonperforming loans, excluding PCD loans, as a percentage of total loans were 0.39% at March 31, 2024, compared to 0.26% at December 31, 2023 and 0.33% at March 31, 2023. The Bank recorded net recoveries of $202,000 during the first quarter of 2024, excluding the $5.5 million PCD loan charge-off, compared to net charge-offs of $209,000 in the fourth quarter of 2023 and net charge-offs of $315,000 in the first quarter of 2023. The allowance for credit losses on loans as a percentage of total loans measured 1.22% at March 31, 2024, compared to 1.40% at December 31, 2023 and 1.25% at March 31, 2023. The decline from December 31, 2023 to March 31, 2024 reflected the elimination of the Bank’s reserves on the PCD loan transferred to OREO during the period.
Liquidity and Borrowings
On February 15, 2024, the Bank retired $25 million of subordinated notes inherited from Malvern as part of its balance sheet repositioning initiative. The notes carried a 9.79% interest rate at the time of redemption.
The Bank maintained its stable liquidity position in the first quarter of 2024. Despite utilizing cash to retire the subordinated debt, total cash and cash equivalents increased by $1.0 million to $229.0 million at March 31, 2024. Borrowings declined by $7.5 million compared to December 31, 2023.
The Bank’s current liquidity position coupled with the balance sheet flexibility gained after the Malvern acquisition provides the Bank with a strong liquidity base and a diverse source of funding options.
Cash Dividend Declared
On April 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 May 10, 2024, payable on May 24, 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/20eab30a-184c-424d-a537-7ed0c4fd1d53
First Bank will host its earnings call on Tuesday, April 23, 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 July 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 $3.59 billion in assets as of March 31, 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.
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)
March 31, 2024
December 31, 2023
Assets
Cash and due from banks
$
21,592
$
25,652
Restricted cash
16,040
13,770
Interest bearing deposits with banks
191,332
188,529
Cash and cash equivalents
228,964
227,951
Interest bearing time deposits with banks
996
996
Investment securities available for sale, at fair value
94,867
94,142
Investment securities held to maturity, net of allowance for credit losses of $194 at March 31, 2024 and $200 at December 31, 2023 (fair value of $37,462 and $38,486 at March 31, 2024 and December 31, 2023, respectively
43,128
44,059
Equity securities, at fair value
1,868
1,888
Restricted investment in bank stocks
10,130
10,469
Other investments
10,040
9,841
Loans, net of deferred fees and costs
2,992,423
3,021,501
Less: Allowance for credit losses
(36,396)
(42,397)
Net loans
2,956,027
2,979,104
Premises and equipment, net
21,487
21,627
Other real estate owned, net
5,999
-
Accrued interest receivable
15,193
14,763
Bank-owned life insurance
86,710
86,435
Goodwill
44,166
44,166
Other intangible assets, net
10,317
10,812
Deferred income taxes, net
31,032
30,875
Other assets
30,474
32,199
Total assets
$
3,591,398
$
3,609,327
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits
$
470,749
$
501,763
Interest bearing deposits
2,499,513
2,465,806
Total deposits
2,970,262
2,967,569
Borrowings
171,614
179,140
Subordinated debentures
29,870
55,261
Accrued interest payable
4,012
2,813
Other liabilities
33,386
33,644
Total liabilities
3,209,144
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; 27,277,513 shares issued and 25,096,449 shares outstanding at March 31, 2024 and 27,149,186 shares issued and 24,968,122 shares outstanding at December 31, 2023
135,004
134,552
Additional paid-in capital
122,913
122,881
Retained earnings
151,576
140,563
Accumulated other comprehensive loss
(5,861)
(5,718)
Treasury stock, 2,181,064 shares at March 31, 2024 and December 31, 2023
(21,378)
(21,378)
Total stockholders' equity
382,254
370,900
Total liabilities and stockholders' equity
$
3,591,398
$
3,609,327
FIRST BANK CONSOLIDATED STATEMENTS OF INCOME (LOSS) (in thousands, except for share data, unaudited)
Three Months Ended
March 31,
2024
2023
Interest and Dividend Income
Investment securities—taxable
$
1,182
$
1,022
Investment securities—tax-exempt
38
38
Interest bearing deposits with banks,
Federal funds sold and other
3,025
1,252
Loans, including fees
49,319
31,700
Total interest and dividend income
53,564
34,012
Interest Expense
Deposits
20,786
9,413
Borrowings
2,116
1,364
Subordinated debentures
344
440
Total interest expense
23,246
11,217
Net interest income
30,318
22,795
Credit loss (benefit) expense
(698)
1,091
Net interest income after credit loss expense
31,016
21,704
Non-Interest Income
Service fees on deposit accounts
344
228
Loan fees
102
89
Income from bank-owned life insurance
785
369
Losses on sale of investment securities, net
-
(207)
(Losses) gains on sale of loans, net
229
141
Gains on recovery of acquired loans
118
57
Other non-interest income
386
287
Total non-interest income
1,964
964
Non-Interest Expense
Salaries and employee benefits
10,038
7,872
Occupancy and equipment
2,026
1,579
Legal fees
316
203
Other professional fees
756
651
Regulatory fees
602
234
Directors' fees
242
214
Data processing
806
618
Marketing and advertising
296
240
Travel and entertainment
244
219
Insurance
244
173
Other real estate owned expense, net
88
18
Merger-related expenses
-
461
Other expense
2,152
1,021
Total non-interest expense
17,810
13,503
Income Before Income Taxes
15,170
9,165
Income tax expense
2,658
2,176
Net Income
$
12,512
$
6,989
Basic earnings per common share
$
0.50
$
0.36
Diluted earnings per common share
$
0.50
$
0.36
Basic weighted average common shares outstanding
25,039,949
19,503,013
Diluted weighted average common shares outstanding
25,199,381
19,667,194
FIRST BANK AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES (dollars in thousands, unaudited)
Three Months Ended March 31,
2024
2023
Average
Average
Average
Average
Balance
Interest
Rate (5)
Balance
Interest
Rate (5)
Interest earning assets
Investment securities (1) (2)
$
147,147
$
1,228
3.36%
$
153,760
$
1,068
2.82%
Loans (3)
2,979,522
49,319
6.66%
2,363,365
31,700
5.44%
Interest bearing deposits with banks,
Federal funds sold and other
203,158
2,710
5.37%
96,071
1,084
4.58%
Restricted investment in bank stocks
10,421
199
7.68%
8,257
101
4.96%
Other investments
11,870
116
3.93%
8,641
67
3.14%
Total interest earning assets (2)
3,352,118
53,572
6.43%
2,630,094
34,020
5.25%
Allowance for credit losses
(37,607)
(29,331)
Non-interest earning assets
261,237
144,472
Total assets
$
3,575,748
$
2,745,235
Interest bearing liabilities
Interest bearing demand deposits
$
618,941
$
3,666
2.38%
$
319,242
$
979
1.24%
Money market deposits
1,014,906
9,789
3.88%
756,490
4,987
2.67%
Savings deposits
162,113
574
1.42%
153,639
346
0.91%
Time deposits
671,546
6,757
4.05%
532,997
3,101
2.36%
Total interest bearing deposits
2,467,506
20,786
3.39%
1,762,368
9,413
2.17%
Borrowings
167,141
2,116
5.09%
131,211
1,364
4.22%
Subordinated debentures
42,470
344
3.24%
29,742
440
5.92%
Total interest bearing liabilities
2,677,117
23,246
3.49%
1,923,321
11,217
2.37%
Non-interest bearing deposits
481,503
499,989
Other liabilities
40,586
29,751
Stockholders' equity
376,542
292,174
Total liabilities and stockholders' equity
$
3,575,748
$
2,745,235
Net interest income/interest rate spread (2)
30,326
2.94%
22,803
2.88%
Net interest margin (2) (4)
3.64%
3.52%
Tax equivalent adjustment (2)
(8)
(8)
Net interest income
$
30,318
$
22,795
(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
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
EARNINGS
Net interest income
$
30,318
$
30,999
$
28,594
$
22,128
$
22,795
Credit loss (benefit) expense
(698)
(294)
6,650
496
1,091
Non-interest income
1,964
(3,000)
193
1,128
964
Non-interest expense
17,810
17,936
23,486
13,775
13,503
Income tax expense
2,658
1,977
(78)
2,186
2,176
Net income (loss)
12,512
8,380
(1,271)
6,799
6,989
PERFORMANCE RATIOS
Return on average assets (1)
1.41%
0.93%
(0.14%)
0.97%
1.03%
Adjusted return on average assets (1) (2)
1.39%
1.38%
1.07%
0.97%
1.09%
Return on average equity (1)
13.36%
9.06%
(1.43%)
9.23%
9.70%
Adjusted return on average equity (1) (2)
13.17%
13.38%
10.75%
9.28%
10.28%
Return on average tangible equity (1) (2)
15.64%
10.67%
(1.66%)
9.87%
10.39%
Adjusted return on average tangible equity (1) (2)
Net (recoveries) charge-offs, excluding PCD loan charge-offs (1) (5)
(201)
209
1,122
(109)
315
Nonperforming loans
17,055
24,989
24,158
10,342
10,214
Nonperforming assets
23,054
24,989
24,158
10,342
10,214
Net charge offs (recoveries) / average loans (1)
0.71%
0.03%
0.15%
(0.02%)
0.05%
Net (recoveries) charge offs, excluding PCD loan charge-offs / average loans (1) (5)
(0.03%)
0.03%
0.15%
(0.02%)
0.05%
Nonperforming loans / total loans
0.57%
0.83%
0.80%
0.42%
0.33%
Nonperforming assets / total assets
0.64%
0.69%
0.68%
0.36%
0.36%
Allowance for credit losses on loans / total loans
1.22%
1.40%
1.42%
1.25%
1.25%
Allowance for credit losses on loans / nonperforming loans
213.40%
169.66%
177.50%
294.44%
292.67%
OTHER DATA
Total assets
$
3,591,398
$
3,609,327
$
3,558,426
$
2,874,425
$
2,816,897
Total loans
2,992,423
3,021,501
3,020,778
2,436,708
2,392,583
Total deposits
2,970,262
2,967,569
2,967,455
2,399,900
2,241,804
Total stockholders' equity
382,254
370,900
361,037
294,161
294,221
Number of full-time equivalent employees (4)
288
286
286
261
252
(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 which was reserved for through purchase accounting marks at the time of the Malvern acquisition.
FIRST BANK QUARTERLY FINANCIAL HIGHLIGHTS (dollars in thousands, unaudited)
As of the Quarter Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
LOAN COMPOSITION
Commercial and industrial
$
508,911
$
506,849
$
478,120
$
419,836
$
394,734
Commercial real estate:
Owner-occupied
625,643
612,352
607,888
560,878
539,112
Investor
1,172,311
1,221,702
1,269,134
965,339
958,574
Construction and development
184,816
186,829
168,192
136,615
143,955
Multi-family
279,668
271,058
275,825
223,784
220,101
Total commercial real estate
2,262,438
2,291,941
2,321,039
1,886,616
1,861,742
Residential real estate:
Residential mortgage and first lien home equity loans
154,704
156,024
158,487
91,260
94,060
Home equity–second lien loans and revolving lines of credit
45,869
44,698
46,239
29,983
29,316
Total residential real estate
200,573
200,722
204,726
121,243
123,376
Consumer and other
23,702
25,343
20,208
12,514
16,413
Total loans prior to deferred loan fees and costs
2,995,624
3,024,855
3,024,093
2,440,209
2,396,265
Net deferred loan fees and costs
(3,201)
(3,354)
(3,315)
(3,501)
(3,682)
Total loans
$
2,992,423
$
3,021,501
$
3,020,778
$
2,436,708
$
2,392,583
LOAN MIX
Commercial and industrial
17.0%
16.8%
15.8%
17.2%
16.5%
Commercial real estate:
Owner-occupied
20.9%
20.3%
20.1%
23.0%
22.5%
Investor
39.2%
40.4%
42.0%
39.6%
40.1%
Construction and development
6.2%
6.2%
5.6%
5.6%
6.0%
Multi-family
9.3%
9.0%
9.1%
9.2%
9.2%
Total commercial real estate
75.6%
75.9%
76.8%
77.4%
77.8%
Residential real estate:
Residential mortgage and first lien home equity loans
5.2%
5.1%
5.3%
3.8%
3.9%
Home equity–second lien loans and revolving lines of credit
1.5%
1.5%
1.5%
1.2%
1.2%
Total residential real estate
6.7%
6.6%
6.8%
5.0%
5.1%
Consumer and other
0.8%
0.8%
0.7%
0.5%
0.7%
Net deferred loan fees and costs
(0.1%)
(0.1%)
(0.1%)
(0.1%)
(0.1%)
Total loans
100.0%
100.0%
100.0%
100.0%
100.0%
FIRST BANK QUARTERLY FINANCIAL HIGHLIGHTS (dollars in thousands, unaudited)
As of the Quarter Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
DEPOSIT COMPOSITION
Non-interest bearing demand deposits
$
470,749
$
501,763
$
493,703
$
476,733
$
463,926
Interest bearing demand deposits
580,864
629,110
623,338
376,948
310,140
Money market and savings deposits
1,219,634
1,171,440
1,228,832
979,524
914,063
Time deposits
699,015
665,256
621,582
566,695
553,675
Total Deposits
$
2,970,262
$
2,967,569
$
2,967,455
$
2,399,900
$
2,241,804
DEPOSIT MIX
Non-interest bearing demand deposits
15.8%
16.9%
16.6%
19.9%
20.7%
Interest bearing demand deposits
19.6%
21.2%
21.0%
15.7%
13.8%
Money market and savings deposits
41.1%
39.5%
41.4%
40.8%
40.8%
Time deposits
23.5%
22.4%
21.0%
23.6%
24.7%
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
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Return on Average Tangible Equity
Net income (numerator)
$
12,512
$
8,380
$
(1,271)
$
6,799
$
6,989
Average stockholders' equity
$
376,542
$
366,950
$
353,372
$
295,560
$
292,174
Less: Average Goodwill and other intangible assets, net
54,790
55,324
49,491
19,324
19,379
Average Tangible stockholders' equity (denominator)
$
321,752
$
311,626
$
303,881
$
276,236
$
272,795
Return on Average Tangible equity (1)
15.64%
10.67%
-1.66%
9.87%
10.39%
Tangible Book Value Per Share
Stockholders' equity
$
382,254
$
370,900
$
361,037
$
294,161
$
294,221
Less: Goodwill and other intangible assets, net
54,483
54,978
55,554
19,289
19,322
Tangible stockholders' equity (numerator)
$
327,771
$
315,922
$
305,483
$
274,872
$
274,899
Common shares outstanding (denominator)
25,096,449
24,968,122
24,926,919
19,041,343
19,569,334
Tangible book value per share
$
13.06
$
12.65
$
12.26
$
14.44
$
14.05
Tangible Equity / Assets
Stockholders' equity
$
382,254
$
370,900
$
361,037
$
294,161
$
294,221
Less: Goodwill and other intangible assets, net
54,483
54,978
55,554
19,289
19,322
Tangible stockholders' equity (numerator)
$
327,771
$
315,922
$
305,483
$
274,872
$
274,899
Total assets
$
3,591,398
$
3,609,327
$
3,558,426
$
2,874,425
$
2,816,897
Less: Goodwill and other intangible assets, net
54,483
54,978
55,554
19,289
19,322
Tangible total assets (denominator)
$
3,536,915
$
3,554,349
$
3,502,872
$
2,855,136
$
2,797,575
Tangible stockholders' equity / tangible assets
9.27%
8.89%
8.72%
9.63%
9.83%
Efficiency Ratio
Non-interest expense
$
17,810
$
17,936
$
23,486
$
13,775
$
13,503
Less: Merger-related expenses
-
338
7,028
221
461
Adjusted non-interest expense (numerator)
$
17,810
$
17,598
$
16,458
$
13,554
$
13,042
Net interest income
$
30,318
$
30,999
$
28,594
$
22,128
$
22,795
Non-interest income
1,964
(3,000)
193
1,128
964
Total revenue
32,282
27,999
28,787
23,256
23,759
Add: Losses on sale of investment securities, net
-
916
527
-
207
(Subtract) Add: (Gains) losses on sale of loans, net
(229)
3,799
704
(170)
(141)
Adjusted total revenue (denominator)
$
32,053
$
32,714
$
30,018
$
23,086
$
23,825
Efficiency ratio
55.56%
53.79%
54.83%
58.71%
54.74%
(1) Annualized.
FIRST BANK NON-U.S. GAAP FINANCIAL MEASURES (dollars in thousands, except for share data, unaudited)
For the Quarter Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income
$
12,512
$
8,380
$
(1,271)
$
6,799
$
6,989
Add: Merger-related expenses(1)
-
267
5,552
175
364
Add: Credit loss expense on acquired loan portfolio(1)
-
-
4,323
-
-
Add (subtract): Losses (gains) on sale of loans, net(1)
(181)
3,001
556
(134)
(111)
Add: Losses on sale of investment securities, net(1)
-
724
416
-
164
Adjusted net income
$
12,331
$
12,372
$
9,576
$
6,839
$
7,405
Diluted weighted average common shares outstanding
25,199,381
25,089,495
24,029,910
19,434,522
19,667,194
Average assets
$
3,575,748
$
3,561,261
$
3,565,350
$
2,825,213
$
2,745,235
Average equity
$
376,542
$
366,950
$
353,372
$
295,560
$
292,174
Average Tangible Equity
$
321,752
$
311,626
$
303,881
$
276,236
$
272,795
Adjusted diluted earnings per share
$
0.49
$
0.49
$
0.40
$
0.35
$
0.38
Adjusted return on average assets (2)
1.39%
1.38%
1.07%
0.97%
1.09%
Adjusted return on average equity (2)
13.17%
13.38%
10.75%
9.28%
10.28%
Adjusted return on average tangible equity (2)
15.41%
15.75%
12.50%
9.93%
11.01%
(1) Items are tax-effected using a federal income tax rate of 21%.
First Bank is a chartered commercial bank. The Company offers a set of lending products, including commercial and industrial loans, commercial real estate loans (including owner-occupied, investor, construction and development, and multi-family loans), residential real estate loans and consumer and other loans. It offers commercial and industrial loans to small to mid-sized businesses for general business purposes. It invests in various types of liquid assets, including United States Treasury obligations, securities of various federal agencies, state and municipal governments, mortgage-backed securities and certificates of deposit of federally insured institutions. The Company operates 18 full-service branches located in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset and Williamstown, New Jersey, and Doylestown, Trevose, Warminster and West Chester, Pennsylvania.
FIRST BANK 
