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First Bank Announces First Quarter 2024 Net Income of $12.5 Million
Источник: Nasdaq GlobeNewswire / 22 апр 2024 16:37:01 America/New_York
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-a537-7ed0c4fd1d53First 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.comFIRST 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) 15.41% 15.75% 12.50% 9.93% 11.01% Net interest margin (1) (3) 3.64% 3.68% 3.36% 3.28% 3.52% Yield on loans (1) 6.66% 6.49% 6.09% 5.65% 5.44% Total cost of deposits (1) 2.83% 2.63% 2.47% 2.19% 1.69% Efficiency ratio (2) 55.56% 53.79% 54.83% 58.71% 54.74% SHARE DATA Common shares outstanding 25,096,449 24,968,122 24,926,919 19,041,343 19,569,334 Basic earnings per share $ 0.50 $ 0.34 $ (0.05) $ 0.35 $ 0.36 Diluted earnings per share 0.50 0.33 (0.05) 0.35 0.36 Adjusted diluted earnings per share (2) 0.49 0.49 0.40 0.35 0.38 Book value per share 15.23 14.85 14.48 15.45 15.03 Tangible book value per share (2) 13.06 12.65 12.26 14.44 14.05 MARKET DATA Market value per share $ 13.74 $ 14.70 $ 10.78 $ 10.38 $ 10.10 Market value / Tangible book value 105.20% 116.18% 87.96% 71.91% 71.90% Market capitalization $ 344,825 $ 367,031 $ 268,712 $ 197,649 $ 197,650 CAPITAL & LIQUIDITY Stockholders' equity / assets 10.64% 10.28% 10.15% 10.23% 10.44% Tangible stockholders' equity / tangible assets (2) 9.27% 8.89% 8.72% 9.63% 9.83% Loans / deposits 100.75% 101.82% 101.80% 101.53% 106.73% ASSET QUALITY Net charge-offs (recoveries) (1) $ 5,293 $ 209 $ 1,122 $ (109) $ 315 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%. (2) Annualized. 
