8-K
Princeton Bancorp, Inc. (BPRN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
October 29, 2024
Date of Report (Date of earliest event reported)
PRINCETON BANCORP, INC.
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-41589 | 88-4268702 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Ident. No.) |
| 183 Bayard Lane, Princeton, New Jersey | 08540 | |
| (Address of principal executive offices) | (Zip Code) |
(609) 921-1700
Registrant’s telephone number, including area code
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
| --- | --- |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common stock, no par value | BPRN | The Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
|---|
On October 29, 2024, the registrant, the bank holding company for The Bank of Princeton, issued a press release containing financial information regarding its financial condition and results of operations at and for the three and nine months ended September 30, 2024.
A copy of the press release is furnished as Exhibit 99.1 hereto.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits: |
| --- | --- |
| 99.1 | Press Release issued October 29, 2024. |
| --- | --- |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PRINCETON BANCORP, INC. | ||
|---|---|---|
| Dated: October 29, 2024 | ||
| By: | /s/ George S. Rapp | |
| George S. Rapp | ||
| Executive Vice President and <br>Chief Financial Officer |
3
EX-99.1
Exhibit 99.1
For Immediate Release
Contact George Rapp
609.454.0718
grapp@thebankofprinceton.com
Princeton Bancorp Announces
Third Quarter 2024 Results
Princeton, NJ, October 29, 2024 / PRNewswire / - Princeton Bancorp, Inc. (the “Company”) (NASDAQ - BPRN), the bank holding company for The Bank of Princeton (the “Bank”), today reported its unaudited financial condition and results of operations at and for the quarter and nine-months ended September 30, 2024.
The Bank’s third quarter was highlighted by the closing of the Cornerstone Bank acquisition. This acquisition will be immediately accretive to earnings with an expected 2.5 year earn back of tangible book value dilution. While the costs related to this acquisition naturally impacted our reported numbers, the core earnings of the Bank remain consistently strong. Please refer to the reconciliation table below that compares Non-GAAP net income to GAAP net income.
President/CEO Edward Dietzler commented, “We are thrilled with the Cornerstone acquisition. This acquisition, along with our recent one of Noah Bank, continues our long-term strategy of becoming the community bank of choice up and down the I95 corridor. Core loans and deposits are both up while asset quality and our capital position remain strong. The Bank is well positioned to continue our strong growth path with our experienced management team. Special thanks to our operations and technology teams who handled this acquisition.”
The Company reported a net loss of ($3.6) million, or ($0.55) per diluted common share, for the third quarter of 2024, compared to net income of $5.1 million, or $0.80 per diluted common share, for the second quarter of 2024, and net income of $7.6 million, or $1.19 per diluted common share, for the third quarter of 2023. The decrease in net income for the third quarter of 2024 when compared to the second quarter of 2024 was due to an increase of $7.0 million in non-interest expense, and an increase in the provision for credit losses of $4.7 million. These increases were primarily the result of the Cornerstone acquisition which resulted in $6.7 million in merger related expenses and a $3.2 million provision for credit loss associated with the acquired non-purchase credit deteriorated loans. These expenses were partially offset by an increase in net interest income of $1.1 million. The $11.2 million decrease in net income for the third quarter of 2024 compared to the same period in 2023 was primarily due to the same acquisition-related items.
1
Review of Statements of Financial Condition
Total assets were $2.35 billion at September 30, 2024, an increase of $438.2 million, or 22.87% when compared to $1.92 billion at the end of 2023. The primary reason for the increase in total assets was the acquisition of Cornerstone Bank on August 23, 2024, which had approximately $314.5 million in assets at closing. When looking at specific components of the balance sheet, including acquired assets, the Company recorded an increase in net loans of $283.1 million related to the Cornerstone acquisition, an increase in investments of $97.5 million, an increase in cash and cash equivalents of approximately $30.5 million, and an increase in other assets of $22.2 million. The increase in the Company’s net loans consisted of increases of $248.4 million in commercial real estate loans, $42.8 million in commercial and industrial loans, $32.3 million in residential mortgages, and $11.3 in home equity and consumer loans, all partially offset by a decrease of $51.9 million in construction loans.
Total deposits on September 30, 2024, increased $410.3 million, or 25.08%, when compared to December 31, 2023. The primary reasons for the increase in total deposits were the $282.8 million in deposits acquired from Cornerstone Bank and the $127.5 million increase from existing operations. The increase in the Company’s deposits consisted of increases in certificates of deposit of $149.0 million, money market deposits of $139.3 million, non-interest-bearing deposits of $53.6 million, interest-bearing demand deposits of $36.6 million and savings deposits of $31.8 million.
Total stockholders’ equity at September 30, 2024, increased $22.1 million or 9.22% when compared to December 31, 2023. The increase was primarily due to the $21.2 million increase in paid-in capital associated with the issuance of common stock of $20.0 million related to the acquisition of Cornerstone and a decrease in accumulated other comprehensive income (loss) of $1.6 million. The ratio of equity to total assets at September 30, 2024 and at December 31, 2023 was 11.1% and 12.5%, respectively. The current period ratio decrease was primarily due to the Cornerstone Bank acquisition.
Asset Quality
At September 30, 2024, non-performing assets totaled $2.3 million, a decrease of $4.4 million when compared to the amount at December 31, 2023.
Review of Quarterly andYear-to-Date Financial Results
Net interest income was $17.1 million for the third quarter of 2024, compared to $16.0 million for the second quarter of 2024 and $16.7 million for the third quarter of 2023. The increase from the previous quarter was the result of an increase in interest income of $2.4 million, or 8.2%, partially offset by an increase in interest expense of $1.3 million, or 9.4%. The net interest margin for the third quarter of 2024 was 3.41%, a decrease by 3 basis points when compared to the second quarter of 2024. The increase in interest expense and the decrease in net interest margin were primarily associated with an increase in total interest-bearing deposits of $98.9 million and a six basis point increase in the rate on such deposits. This resulted in an increase in the Company’s cost of funds of 3 basis points. The increase in interest income for the third quarter was due to an increase in average interest-earning assets of $130.2 million, while the yield on interest-earning assets remained consistent with the second quarter of 2024.
2
For the nine-month period ended September 30, 2024, the Company recorded net income of $5.9 million, or $0.90 per diluted common share, compared to $20.5 million, or $3.21 per diluted common share, for the same period in 2023. This year-to-date decrease was primarily the result of a $9.7 bargain purchase gain in 2023 which included a tax benefit of $2.0 million from the Company’s acquisition of Noah Bank in May of that year, and the purchase accounting recorded in 2024 related to the Cornerstone acquisition, which includes an increase of $2.2 million in the provision for credit losses when comparing both periods.
The Company recorded a provision for credit losses of $4.6 million during the third quarter of 2024, which consisted of $3.2 million related to the CECL impact for non-purchase credit deteriorated loans associated with loans acquired in the Cornerstone acquisition, and $1.5 million recorded to the allowance of credit losses resulting from changes in the Company’s loan portfolio assumptions. The current quarters’ provision recorded on the Company’s statements of income was $4.7 million higher when compared to the provision for credit losses for the quarter ended June 30, 2024, and was $4.8 million higher than the provision for the same period in 2023, most of which can primarily be attributed to the acquisition of Cornerstone Bank. For the quarter ended September 30, 2024, the Company recorded charge-offs of $279 thousand and recoveries of $171 thousand. The coverage ratio of the allowance for credit losses to period end loans was 1.27% at September 30, 2024 and 1.19% at December 31, 2023.
Total non-interest income of $2.1 million for the third quarter of 2024 decreased $31 thousand or 1.5% when compared to the second quarter of 2024 and decreased $347 thousand or 14.4% when compared to the quarter ended September 30, 2023.
Total non-interest expense of $19.0 million for the third quarter of 2024 increased $7.0 million, or 58.5%, when compared to the second quarter of 2024. Total non-interest expense for the third quarter of 2024 increased $8.9 million or 87.4% when compared to the third quarter of 2023. This increase over both the prior quarter and the third quarter of 2023 was primarily due to the $6.7 million in merger costs associated with the Cornerstone acquisition. The remaining increase compared to the second quarter of 2024 was primarily related to occupancy and equipment expense increasing $237 thousand, salaries and benefits expense increasing $113 thousand, data processing and communications expense increasing $52 thousand, and professional fees increasing $52 thousand all partially offset by a decrease in other expenses of $251 thousand. For the nine-month period ended September 30, 2024, non-interest expense was $42.9 million, compared to $37.7 million for the same period in 2023. The increase was primarily due to an increase in merger-related expenses of $1.1 million during 2024 as well as increases in salaries and employee benefits of $2.2 million over the same period in 2023 associated with merit increases as well as additional staff costs related to the Cornerstone and Noah acquisitions.
For the quarter ended September 30, 2024, the Company recorded an income tax benefit of ($865) thousand, resulting in an effective tax rate of (19.3%), compared to an income tax expense of $1.0 million resulting in an effective tax rate of 16.8% for the second quarter ended June 30, 2024, and compared to an income tax expense of $1.5 million resulting in an effective tax rate of 16.6% for the quarter ended September 30, 2023.
About Princeton Bancorp, Inc. and The Bank of Princeton
Princeton Bancorp, Inc. is the holding company for The Bank of Princeton, a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 28 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation. ****
3
Forward-Looking Statements
The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission, in its reports to stockholders and in other communications by the Company (including this press release), which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, higher interest rates and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, supply chain disruptions, labor shortages and additional interest rate increases by the Federal Reserve. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the integration of the businesses of the Company and Cornerstone Bank following the completion of the Transaction may be more difficult; the global impact of the military conflicts in the Ukraine and the Middle East; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; other acquisitions; changes in consumer spending and saving habits; those risks under the heading “Risk Factors” set forth in the Bank’s Annual Report on Form 10-K for the year ended December 31, 2023, and the success of the Company at managing the risks involved in the foregoing.
The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as required by applicable law or regulation.
4
Princeton Bancorp, Inc.
Consolidated Statements of Financial Condition
(Unaudited)
(Dollars inthousands, except per share data)
| September 30, 2024 vs | September 30, 2024 vs | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | September 30, | December 31, 2023 | September 30, 2023 | |||||||||||||||
| 2023 | 2023 | Change | % Change | Change | % Change | |||||||||||||
| ASSETS | **** | |||||||||||||||||
| Cash and cash equivalents | 181,058 | $ | 150,557 | $ | 206,931 | 20.26 | % | ) | (12.50 | )% | ||||||||
| Securities<br>available-for-sale taxable | 147,871 | 50,544 | 47,765 | 192.56 | 209.58 | |||||||||||||
| Securities<br>available-for-sale tax-exempt | 40,988 | 40,808 | 37,627 | 0.44 | 8.93 | |||||||||||||
| Securities<br>held-to-maturity | 163 | 193 | 195 | ) | (15.54 | ) | ) | (16.41 | ) | |||||||||
| Loans receivable, net of deferred loan fees | 1,831,407 | 1,548,335 | 1,498,500 | 18.28 | 22.22 | |||||||||||||
| Allowance for credit losses | (23,200 | ) | (18,492 | ) | (17,992 | ) | ) | 25.46 | ) | 28.95 | ||||||||
| Goodwill | 14,381 | 8,853 | 8,853 | 62.44 | 62.44 | |||||||||||||
| Core deposit intangible | 3,860 | 1,422 | 1,546 | 171.45 | 149.68 | |||||||||||||
| Equity method investments | 10,042 | 8,296 | 2,672 | 21.05 | 275.82 | |||||||||||||
| Other assets | 148,160 | 125,981 | 127,026 | 17.61 | 16.64 | |||||||||||||
| TOTAL ASSETS | 2,354,730 | $ | 1,916,497 | $ | 1,913,123 | 22.87 | % | 23.08 | % | |||||||||
| LIABILITIES | ||||||||||||||||||
| Non-interest checking | 302,846 | $ | 249,282 | $ | 264,197 | 21.49 | % | 14.63 | % | |||||||||
| Interest checking | 284,504 | 247,939 | 239,902 | 14.75 | 18.59 | |||||||||||||
| Savings | 178,299 | 146,484 | 147,113 | 21.72 | 21.20 | |||||||||||||
| Money market | 493,353 | 354,005 | 349,505 | 39.36 | 41.16 | |||||||||||||
| Time deposits over 250,000 | 213,310 | 150,113 | 144,158 | 42.10 | 47.97 | |||||||||||||
| Other time deposits | 573,689 | 487,918 | 493,091 | 17.58 | 16.35 | |||||||||||||
| Total deposits | 2,046,001 | 1,635,741 | 1,637,966 | 25.08 | 24.91 | |||||||||||||
| Borrowings | — | — | — | — | N/A | |||||||||||||
| Other liabilities | 46,378 | 40,545 | 42,949 | 14.39 | 7.98 | |||||||||||||
| TOTAL LIABILITIES | 2,092,379 | 1,676,286 | 1,680,915 | 24.82 | 24.48 | |||||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||||
| Paid-in capital | 119,514 | 98,291 | 97,779 | 21.59 | 22.23 | |||||||||||||
| Treasury stock 1 | (842 | ) | — | — | ) | 100.00 | ) | 100.00 | ||||||||||
| Retained earnings | 149,565 | 149,414 | 146,022 | 0.10 | 2.43 | |||||||||||||
| Accumulated other comprehensive income (loss) | (5,886 | ) | (7,494 | ) | (11,593 | ) | (21.46 | ) | (49.23 | ) | ||||||||
| TOTAL STOCKHOLDERS’ EQUITY | 262,351 | 240,211 | 232,208 | 9.22 | 12.98 | |||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,354,730 | $ | 1,916,497 | $ | 1,913,123 | 22.87 | % | 23.08 | % | |||||||||
| Book value per common share | 38.15 | $ | 38.04 | $ | 36.86 | 0.29 | % | 3.50 | % | |||||||||
| Tangible book value per common<br>share 2 | 35.50 | $ | 36.41 | $ | 35.21 | ) | (2.50 | )% | 0.82 | % |
All values are in US Dollars.
| ^1^ | Treasury stock repurchases commenced March 8, 2024, associated with the stock repurchase program announced<br>August 10, 2023. |
|---|---|
| ^2^ | Tangible book value per common share is a non-GAAP measure. For more<br>information, see “Supplemental Information - Non-GAAP Financial Measures (Unaudited)” below. |
| --- | --- |
5
Princeton Bancorp, Inc.
Loan and Deposit Tables
(Unaudited)
The components of loans receivable, net at September 30, 2024 and December 31, 2023 were as follows:
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| (In thousands) | ||||||
| Commercial real estate | $ | 1,391,245 | $ | 1,142,864 | ||
| Commercial and industrial | 93,782 | 50,961 | ||||
| Construction | 258,332 | 310,187 | ||||
| Residential first-lien mortgages | 70,389 | 38,040 | ||||
| Home equity / consumer | 19,406 | 8,081 | ||||
| Total loans | 1,833,154 | 1,550,133 | ||||
| Deferred fees and costs | (1,747 | ) | (1,798 | ) | ||
| Allowance for credit losses | (23,200 | ) | (18,492 | ) | ||
| Loans, net | $ | 1,808,207 | $ | 1,529,843 |
The components of deposits at September 30, 2024 and December 31, 2023 were as follows:
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| (In thousands) | ||||
| Demand, non-interest-bearing | $ | 302,846 | $ | 249,282 |
| Demand, interest-bearing | 284,504 | 247,939 | ||
| Savings | 178,299 | 146,484 | ||
| Money market | 493,353 | 354,005 | ||
| Time deposits | 786,999 | 638,031 | ||
| Total deposits | $ | 2,046,001 | $ | 1,635,741 |
6
Princeton Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
(Amounts inthousands except per share data)
| Three Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | Change | % Change | ||||||||
| Interest and dividend income | |||||||||||
| Loans and fees | $ | 28,135 | $ | 23,503 | 19.7 | % | |||||
| Available-for-sale<br>debt securities: | |||||||||||
| Taxable | 1,273 | 357 | 256.6 | % | |||||||
| Tax-exempt | 285 | 285 | 0.0 | % | |||||||
| Held-to-maturity<br>debt securities | 2 | 3 | ) | -33.3 | % | ||||||
| Other interest and dividend income | 2,115 | 2,852 | ) | -25.8 | % | ||||||
| Total interest and dividends | 31,810 | 27,000 | 17.8 | % | |||||||
| Interest expense | |||||||||||
| Deposits | 14,701 | 10,316 | 42.5 | % | |||||||
| Borrowings | — | — | N/A | ||||||||
| Total interest expense | 14,701 | 10,316 | 42.5 | % | |||||||
| Net interest income | 17,109 | 16,684 | 2.5 | % | |||||||
| Provision for (reversal of) credit losses | 4,601 | (182 | ) | -2628.0 | % | ||||||
| Net interest income after provision for (reversal of) credit losses | 12,508 | 16,866 | ) | -25.8 | % | ||||||
| Non-interest income | |||||||||||
| Loss on sale of securities<br>available-for-sale, net | (7 | ) | (6 | ) | ) | 16.7 | % | ||||
| Income from bank-owned life insurance | 423 | 331 | 27.8 | % | |||||||
| Fees and service charges | 521 | 479 | 8.8 | % | |||||||
| Loan fees, including prepayment penalties | 784 | 1,184 | ) | -33.8 | % | ||||||
| Gain on sale of other real estate owned | — | 203 | ) | -100.0 | % | ||||||
| Other | 335 | 212 | 58.0 | % | |||||||
| Total non-interest income | 2,056 | 2,403 | ) | -14.4 | % | ||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 6,556 | 6,177 | 6.1 | % | |||||||
| Occupancy and equipment | 2,087 | 2,142 | ) | -2.6 | % | ||||||
| Professional fees | 654 | 614 | 6.5 | % | |||||||
| Data processing and communications | 1,456 | 1,242 | 17.2 | % | |||||||
| Federal deposit insurance | 316 | 258 | 22.5 | % | |||||||
| Advertising and promotion | 181 | 139 | 30.2 | % | |||||||
| Office expense | 190 | 117 | 62.4 | % | |||||||
| Core deposit intangible | 143 | 116 | 23.3 | % | |||||||
| Merger-related expenses | 6,695 | (1,391 | ) | 581.3 | % | ||||||
| Other | 758 | 745 | 1.7 | % | |||||||
| Total non-interest expense | 19,036 | 10,159 | 87.4 | % | |||||||
| Income (loss) before income tax expense | (4,472 | ) | 9,110 | ) | -149.1 | % | |||||
| Income tax (benefit) expense | (865 | ) | 1,512 | ) | -157.2 | % | |||||
| Net (loss) income | $ | (3,607 | ) | $ | 7,598 | ) | -147.5 | % | |||
| Net (loss) income per common share - basic | $ | (0.55 | ) | $ | 1.21 | ) | -145.5 | % | |||
| Net (loss) income per common share - diluted | $ | (0.55 | ) | $ | 1.19 | ) | -146.2 | % | |||
| Weighted average shares outstanding - basic | 6,573 | 6,295 | 4.4 | % | |||||||
| Weighted average shares outstanding - diluted | 6,573 | 6,390 | 2.9 | % |
All values are in US Dollars.
7
Princeton Bancorp, Inc.
Consolidated Statements of Income (Current Quarter vs Prior Quarter)
(Unaudited)
(Amounts inthousands, except per share data)
| Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | June 30, | ||||||||||
| 2024 | 2024 | Change | % Change | ||||||||
| Interest and dividend income | |||||||||||
| Loans and fees | $ | 28,135 | $ | 26,034 | 8.1 | % | |||||
| Available-for-sale<br>debt securities: | |||||||||||
| Taxable | 1,273 | 1,001 | 27.2 | % | |||||||
| Tax-exempt | 285 | 286 | ) | -0.3 | % | ||||||
| Held-to-maturity<br>debt securities | 2 | 3 | ) | -33.3 | % | ||||||
| Other interest and dividend income | 2,115 | 2,086 | 1.4 | % | |||||||
| Total interest and dividends | 31,810 | 29,410 | 8.2 | % | |||||||
| Interest expense | |||||||||||
| Deposits | 14,701 | 13,442 | 9.4 | % | |||||||
| Borrowings | — | — | N/A | ||||||||
| Total interest expense | 14,701 | 13,442 | 9.4 | % | |||||||
| Net interest income | 17,109 | 15,968 | 7.1 | % | |||||||
| Provision for (reversal of) credit losses | 4,601 | (118 | ) | -3999.2 | % | ||||||
| Net interest income after provision for (reversal of) credit losses | 12,508 | 16,086 | ) | -22.2 | % | ||||||
| Non-interest income | |||||||||||
| Gain on call/sale of securities<br>available-for-sale | (7 | ) | — | ) | N/A | ||||||
| Income from bank-owned life insurance | 423 | 388 | 9.0 | % | |||||||
| Fees and service charges | 521 | 465 | 12.0 | % | |||||||
| Loan fees, including prepayment penalties | 784 | 937 | ) | -16.3 | % | ||||||
| Other | 335 | 297 | 12.8 | % | |||||||
| Total non-interest income | 2,056 | 2,087 | ) | -1.5 | % | ||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 6,556 | 6,443 | 1.8 | % | |||||||
| Occupancy and equipment | 2,087 | 1,850 | 12.8 | % | |||||||
| Professional fees | 654 | 602 | 8.6 | % | |||||||
| Data processing and communications | 1,456 | 1,404 | 3.7 | % | |||||||
| Federal deposit insurance | 316 | 279 | 13.3 | % | |||||||
| Advertising and promotion | 181 | 156 | 16.0 | % | |||||||
| Office expense | 190 | 155 | 22.6 | % | |||||||
| Core deposit intangible | 143 | 111 | 28.8 | % | |||||||
| Merger-related expenses | 6,695 | — | N/A | ||||||||
| Other | 758 | 1,009 | ) | -24.9 | % | ||||||
| Total non-interest expense | 19,036 | 12,009 | 58.5 | % | |||||||
| Income (loss) before income tax expense | (4,472 | ) | 6,164 | ) | -172.6 | % | |||||
| Income tax (benefit) expense | (865 | ) | 1,038 | ) | -183.3 | % | |||||
| Net (loss) income | $ | (3,607 | ) | $ | 5,126 | ) | -170.4 | % | |||
| Net (loss) income per common share - basic | $ | (0.55 | ) | $ | 0.81 | ) | -167.9 | % | |||
| Net (loss) income per common share - diluted | $ | (0.55 | ) | $ | 0.80 | ) | -168.8 | % | |||
| Weighted average shares outstanding - basic | 6,573 | 6,334 | 3.8 | % | |||||||
| Weighted average shares outstanding - diluted | 6,573 | 6,420 | 2.4 | % |
All values are in US Dollars.
8
Princeton Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
(Amounts inthousands, except per share data)
| Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | |||||||||||
| 2024 | 2023 | Change | % Change | ||||||||
| Interest and dividend income | |||||||||||
| Loans and fees | $ | 79,109 | $ | 64,914 | 21.9 | % | |||||
| Available-for-sale<br>debt securities: | |||||||||||
| Taxable | 2,838 | 927 | 206.1 | % | |||||||
| Tax-exempt | 857 | 853 | 0.5 | % | |||||||
| Held-to-maturity<br>debt securities | 7 | 8 | ) | -12.5 | % | ||||||
| Other interest and dividend income | 6,475 | 3,924 | 65.0 | % | |||||||
| Total interest and dividends | 89,286 | 70,626 | 26.4 | % | |||||||
| Interest expense | |||||||||||
| Deposits | 40,761 | 21,502 | 89.6 | % | |||||||
| Borrowings | — | 118 | ) | -100.0 | % | ||||||
| Total interest expense | 40,761 | 21,620 | 88.5 | % | |||||||
| Net interest income | 48,525 | 49,006 | ) | -1.0 | % | ||||||
| Provision for credit losses | 4,669 | 2,546 | 83.4 | % | |||||||
| Net interest income after provision for credit losses | 43,856 | 46,460 | ) | -5.6 | % | ||||||
| Non-Interest income | |||||||||||
| (Loss) on sale of securities<br>available-for-sale, net | (7 | ) | (6 | ) | ) | 16.7 | % | ||||
| Income from bank-owned life insurance | 1,192 | 916 | 30.1 | % | |||||||
| Fees and service charges | 1,418 | 1,391 | 1.9 | % | |||||||
| Loan fees, including prepayment penalties | 2,445 | 2,565 | ) | -4.7 | % | ||||||
| Bargain purchase gain | — | 9,696 | ) | -100.0 | % | ||||||
| Gain on sale of other real estate owned | — | 203 | ) | -100.0 | % | ||||||
| Other | 1,080 | 577 | 87.2 | % | |||||||
| Total non-interest income | 6,128 | 15,342 | ) | -60.1 | % | ||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 19,519 | 17,352 | 12.5 | % | |||||||
| Occupancy and equipment | 5,966 | 5,188 | 15.0 | % | |||||||
| Professional fees | 1,780 | 1,635 | 8.9 | % | |||||||
| Data processing and communications | 4,020 | 3,860 | 4.1 | % | |||||||
| Federal deposit insurance | 868 | 701 | 23.8 | % | |||||||
| Advertising and promotion | 479 | 375 | 27.7 | % | |||||||
| Office expense | 464 | 392 | 18.4 | % | |||||||
| Other real estate owned expense | — | 1 | ) | -100.0 | % | ||||||
| Core deposit intangible | 374 | 378 | ) | -1.1 | % | ||||||
| Merger-related expenses | 6,695 | 5,635 | 18.8 | % | |||||||
| Other | 2,716 | 2,228 | 21.9 | % | |||||||
| Total non-interest expense | 42,881 | 37,745 | 13.6 | % | |||||||
| Income before income tax expense | 7,103 | 24,057 | ) | -70.5 | % | ||||||
| Income tax expense | 1,239 | 3,574 | ) | -65.3 | % | ||||||
| Net income | $ | 5,864 | $ | 20,483 | ) | -71.4 | % | ||||
| Net income per common share - basic | $ | 0.91 | $ | 3.26 | ) | -72.0 | % | ||||
| Net income per common share - diluted | $ | 0.90 | $ | 3.21 | ) | -71.9 | % | ||||
| Weighted average shares outstanding - basic | 6,412 | 6,275 | 2.2 | % | |||||||
| Weighted average shares outstanding - diluted | 6,496 | 6,380 | 1.8 | % |
All values are in US Dollars.
9
Princeton Bancorp, Inc.
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars inthousands)
| For the Three Months Ended September 30, | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | Change in | Change in | |||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||
| Balance | Rate | Balance | Rate | Balance | Rate | |||||||||||
| Earning assets | ||||||||||||||||
| Loans | $ | 1,691,688 | 6.62 | % | $ | 1,464,798 | 6.37 | % | $ | 226,890 | 0.25 | % | ||||
| Securities | ||||||||||||||||
| Taxable<br>available-for-sale | 111,633 | 4.56 | % | 46,599 | 3.06 | % | 65,034 | 1.50 | % | |||||||
| Tax-exempt available-for-sale | 40,028 | 2.85 | % | 40,118 | 2.84 | % | (90 | ) | 0.01 | % | ||||||
| Held-to-maturity | 164 | 5.33 | % | 196 | 5.28 | % | (32 | ) | 0.05 | % | ||||||
| Securities | 151,825 | 4.11 | % | 86,913 | 2.96 | % | 64,912 | 1.15 | % | |||||||
| Other interest earning assets | ||||||||||||||||
| Federal funds sold | 135,164 | 5.38 | % | 199,350 | 5.38 | % | (64,186 | ) | 0.00 | % | ||||||
| Other interest-earning assets | 19,549 | 5.85 | % | 10,506 | 5.67 | % | 9,043 | 0.18 | % | |||||||
| Other interest-earning assets | 154,713 | 5.44 | % | 209,856 | 5.39 | % | (55,143 | ) | 0.05 | % | ||||||
| Total interest-earning assets | 1,998,226 | 6.33 | % | 1,761,567 | 6.08 | % | 236,659 | 0.25 | % | |||||||
| Total non-earning assets | 151,776 | 127,682 | ||||||||||||||
| Total assets | $ | 2,150,002 | $ | 1,889,249 | ||||||||||||
| Interest-bearing liabilities | ||||||||||||||||
| Checking | $ | 258,728 | 1.86 | % | $ | 243,359 | 1.68 | % | $ | 15,369 | 0.18 | % | ||||
| Savings | 159,521 | 2.57 | % | 149,215 | 2.10 | % | 10,306 | 0.47 | % | |||||||
| Money market | 443,109 | 3.85 | % | 337,491 | 3.50 | % | 105,618 | 0.35 | % | |||||||
| Certificates of deposit | 721,240 | 4.50 | % | 629,082 | 3.48 | % | 92,158 | 1.02 | % | |||||||
| Total interest-bearing deposits | 1,582,598 | 3.70 | % | 1,359,147 | 3.01 | % | 223,451 | 0.69 | % | |||||||
| Non-interest bearing deposits | 269,030 | 255,775 | 13,255 | |||||||||||||
| Total deposits | 1,851,628 | 3.16 | % | 1,614,922 | 2.53 | % | 236,706 | 0.63 | % | |||||||
| Borrowings | — | N/A | — | N/A | — | N/A | ||||||||||
| Total interest-bearing liabilities (excluding non interest deposits) | 1,582,598 | 3.70 | % | 1,359,147 | 3.01 | % | 223,451 | 0.69 | % | |||||||
| Non-interest-bearing deposits | 269,030 | 255,775 | ||||||||||||||
| Total cost of funds | 1,851,628 | 3.16 | % | 1,614,922 | 2.53 | % | 236,706 | 0.63 | % | |||||||
| Accrued expenses and other liabilities | 43,729 | 45,923 | ||||||||||||||
| Stockholders’ equity | 254,645 | 228,404 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,150,002 | $ | 1,889,249 | ||||||||||||
| Net interest spread | 2.64 | % | 3.07 | % | ||||||||||||
| Net interest margin | 3.41 | % | 3.76 | % | ||||||||||||
| Net interest margin (FTE) ^1,^ ^2^ | 3.45 | % | 3.81 | % | ||||||||||||
| ^1^ | Includes federal and state tax effect of tax-exempt securities and<br>loans. | |||||||||||||||
| --- | --- | |||||||||||||||
| ^2^ | This is a non-GAAP financial measure. For more information, see<br>“Supplemental Information - Non-GAAP Financial Measures (Unaudited)” below. | |||||||||||||||
| --- | --- |
10
Princeton Bancorp, Inc.
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars inthousands)
| For the Nine Months Ended September 30, | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | Change in | Change in | |||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||
| Balance | Rate | Balance | Rate | Balance | Rate | |||||||||||
| Earning assets | ||||||||||||||||
| Loans | $ | 1,609,890 | 6.56 | % | $ | 1,424,768 | 6.09 | % | $ | 185,122 | 0.47 | % | ||||
| Securities | ||||||||||||||||
| Taxable<br>available-for-sale | 86,732 | 4.36 | % | 44,517 | 2.78 | % | 42,215 | 1.58 | % | |||||||
| Tax-exempt available-for-sale | 40,180 | 2.84 | % | 40,974 | 2.78 | % | (794 | ) | 0.06 | % | ||||||
| Held-to-maturity | 171 | 5.25 | % | 198 | 5.28 | % | (27 | ) | -0.03 | % | ||||||
| Securities | 127,083 | 3.88 | % | 85,689 | 2.78 | % | 41,394 | 1.10 | % | |||||||
| Other interest earning assets | ||||||||||||||||
| Federal funds sold | 138,843 | 5.43 | % | 91,761 | 5.30 | % | 47,082 | 0.13 | % | |||||||
| Other interest-earning assets | 19,281 | 5.76 | % | 7,086 | 5.36 | % | 12,195 | 0.40 | % | |||||||
| Other interest-earning assets | 158,124 | 5.47 | % | 98,847 | 5.31 | % | 59,277 | 0.16 | % | |||||||
| Total interest-earning assets | 1,895,097 | 6.29 | % | 1,609,304 | 5.87 | % | 285,793 | 0.42 | % | |||||||
| Total non-earning assets | 144,630 | 114,543 | ||||||||||||||
| Total assets | $ | 2,039,727 | $ | 1,723,847 | ||||||||||||
| Interest-bearing liabilities | ||||||||||||||||
| Checking | $ | 244,271 | 1.93 | % | $ | 250,100 | 1.29 | % | $ | (5,829 | ) | 0.64 | % | |||
| Savings | 151,884 | 2.57 | % | 163,516 | 1.54 | % | (11,632 | ) | 1.03 | % | ||||||
| Money market | 399,253 | 3.92 | % | 297,360 | 2.81 | % | 101,893 | 1.11 | % | |||||||
| Certificates of deposit | 704,388 | 4.28 | % | 504,237 | 2.90 | % | 200,151 | 1.38 | % | |||||||
| Total interest-bearing deposits | 1,499,796 | 3.63 | % | 1,215,213 | 2.37 | % | 284,583 | 1.26 | % | |||||||
| Non-interest bearing deposits | 252,184 | 244,718 | ||||||||||||||
| Total deposits | 1,751,980 | 3.11 | % | 1,459,931 | 1.97 | % | 292,049 | 1.14 | % | |||||||
| Borrowings | — | 0.00 | % | 3,133 | 5.01 | % | (3,133 | ) | -5.01 | % | ||||||
| Total interest-bearing liabilities (excluding non interest deposits) | 1,499,796 | 3.63 | % | 1,218,346 | 2.37 | % | 281,450 | 1.26 | % | |||||||
| Non-interest-bearing deposits | 252,184 | 244,718 | ||||||||||||||
| Total cost of funds | 1,751,980 | 3.11 | % | 1,463,064 | 1.97 | % | 288,916 | 1.14 | % | |||||||
| Accrued expenses and other liabilities | 42,239 | 34,312 | ||||||||||||||
| Stockholders’ equity | 245,508 | 226,471 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,039,727 | $ | 1,723,847 | ||||||||||||
| Net interest spread | 2.66 | % | 3.50 | % | ||||||||||||
| Net interest margin | 3.42 | % | 4.07 | % | ||||||||||||
| Net interest margin (FTE) ^1,^ ^2^ | 3.46 | % | 4.13 | % | ||||||||||||
| ^1^ | Includes federal and state tax effect of tax-exempt securities and<br>loans. | |||||||||||||||
| --- | --- | |||||||||||||||
| ^2^ | This is a non-GAAP financial measure. For more information, see<br>“Supplemental Information - Non-GAAP Financial Measures (Unaudited)” below. | |||||||||||||||
| --- | --- |
11
Princeton Bancorp, Inc.
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars inthousands)
| For the Three Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2024 | June 30, 2024 | Change in | Change in | |||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||
| Balance | Rate | Balance | Rate | Balance | Rate | |||||||||||
| Earning assets | ||||||||||||||||
| Loans | $ | 1,691,688 | 6.62 | % | $ | 1,585,876 | 6.60 | % | $ | 105,812 | 0.01 | % | ||||
| Securities | ||||||||||||||||
| Taxable<br>available-for-sale | 111,633 | 4.56 | % | 89,547 | 4.47 | % | 22,086 | 0.09 | % | |||||||
| Tax-exempt available-for-sale | 40,028 | 2.85 | % | 39,756 | 2.88 | % | 272 | -0.03 | % | |||||||
| Held-to-maturity | 164 | 5.33 | % | 166 | 5.33 | % | (2 | ) | 0.00 | % | ||||||
| Securities | 151,825 | 4.11 | % | 129,469 | 3.98 | % | 22,356 | 0.13 | % | |||||||
| Other interest earning assets | ||||||||||||||||
| Federal funds sold | 135,164 | 5.38 | % | 133,336 | 5.45 | % | 1,828 | -0.07 | % | |||||||
| Other interest-earning assets | 19,549 | 5.85 | % | 19,338 | 5.78 | % | 211 | 0.07 | % | |||||||
| Other interest-earning assets | 154,713 | 5.44 | % | 152,674 | 5.49 | % | 2,039 | -0.05 | % | |||||||
| Total interest-earning assets | 1,998,226 | 6.33 | % | 1,868,019 | 6.33 | % | 130,207 | 0.00 | % | |||||||
| Total non-earning assets | 151,776 | 141,377 | ||||||||||||||
| Total assets | $ | 2,150,002 | $ | 2,009,396 | ||||||||||||
| Interest-bearing liabilities | ||||||||||||||||
| Checking | $ | 258,728 | 1.86 | % | $ | 231,895 | 1.94 | % | $ | 26,833 | -0.08 | % | ||||
| Savings | 159,521 | 2.57 | % | 148,377 | 2.64 | % | 11,144 | -0.07 | % | |||||||
| Money market | 443,109 | 3.85 | % | 390,019 | 3.99 | % | 53,090 | -0.14 | % | |||||||
| Certificates of deposit | 721,240 | 4.50 | % | 713,433 | 4.22 | % | 7,807 | 0.29 | % | |||||||
| Total interest-bearing deposits | 1,582,598 | 3.70 | % | 1,483,724 | 3.64 | % | 98,874 | 0.05 | % | |||||||
| Non-interest bearing deposits | 269,030 | 243,248 | 25,781 | |||||||||||||
| Total deposits | 1,851,628 | 3.16 | % | 1,726,972 | 3.13 | % | 124,655 | 0.03 | % | |||||||
| Borrowings | — | N/A | — | N/A | — | N/A | ||||||||||
| Total interest-bearing liabilities (excluding non interest deposits) | 1,582,598 | 3.70 | % | 1,483,724 | 3.64 | % | 98,874 | 0.05 | % | |||||||
| Non-interest-bearing deposits | 269,030 | 243,248 | ||||||||||||||
| Total cost of funds | 1,851,628 | 3.16 | % | 1,726,972 | 3.13 | % | 124,655 | 0.03 | % | |||||||
| Accrued expenses and other liabilities | 43,729 | 40,874 | ||||||||||||||
| Stockholders’ equity | 254,645 | 241,550 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,150,002 | $ | 2,009,396 | ||||||||||||
| Net interest spread | 2.64 | % | 2.69 | % | ||||||||||||
| Net interest margin | 3.41 | % | 3.44 | % | ||||||||||||
| Net interest margin (FTE) ^1,^ ^2^ | 3.45 | % | 3.48 | % | ||||||||||||
| ^1^ | Includes federal and state tax effect of tax-exempt securities and<br>loans. | |||||||||||||||
| --- | --- | |||||||||||||||
| ^2^ | This is a non-GAAP financial measure. For more information, see<br>“Supplemental Information - Non-GAAP Financial Measures (Unaudited)” below. | |||||||||||||||
| --- | --- |
12
Princeton Bancorp, Inc.
Quarterly Financial Highlights
(Unaudited)
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | June | March | December | September | |||||||||||
| Return on average assets | -0.67 | % | 1.03 | % | 0.89 | % | 1.09 | % | 1.60 | % | |||||
| Return on average equity | -5.64 | % | 8.54 | % | 7.27 | % | 8.93 | % | 13.20 | % | |||||
| Return on average tangible equity^1^ | -6.07 | % | 8.91 | % | 7.60 | % | 9.34 | % | 13.83 | % | |||||
| Net interest margin | 3.41 | % | 3.44 | % | 3.42 | % | 3.55 | % | 3.76 | % | |||||
| Net interest margin (FTE)^1^ | 3.45 | % | 3.48 | % | 3.58 | % | 3.51 | % | 3.81 | % | |||||
| Adjusted efficiency ratio^1^ | 63.65 | % | 65.90 | % | 67.21 | % | 60.85 | % | 59.89 | % | |||||
| COMMON STOCK DATA | |||||||||||||||
| Market value at period end | $ | 36.98 | $ | 33.10 | $ | 30.78 | $ | 35.90 | $ | 28.99 | |||||
| Market range: | |||||||||||||||
| High | $ | 39.12 | $ | 33.10 | $ | 36.25 | $ | 37.60 | $ | 31.69 | |||||
| Low | $ | 32.40 | $ | 29.15 | $ | 29.72 | $ | 28.21 | $ | 27.37 | |||||
| Book value per common share at period end | $ | 38.15 | $ | 38.54 | $ | 38.26 | $ | 38.04 | $ | 36.86 | |||||
| Tangible book value per common<br>share^1^ | $ | 35.50 | $ | 36.98 | $ | 36.65 | $ | 36.41 | $ | 35.21 | |||||
| Shares of common stock outstanding (in thousands) | 6,876 | 6,353 | 6,320 | 6,314 | 6,299 | ||||||||||
| CAPITAL RATIOS | |||||||||||||||
| Total capital (to risk-weighted assets) | 13.21 | % | 14.66 | % | 14.31 | % | 14.68 | % | 14.96 | % | |||||
| Tier 1 capital (to risk-weighted assets) | 12.06 | % | 13.62 | % | 13.26 | % | 13.61 | % | 13.89 | % | |||||
| Tier 1 capital (to average assets) | 11.48 | % | 12.21 | % | 11.99 | % | 12.29 | % | 12.38 | % | |||||
| Equity to assets | 11.14 | % | 12.34 | % | 12.16 | % | 12.53 | % | 12.14 | % | |||||
| Tangible equity to tangible assets^1^ | 10.45 | % | 11.90 | % | 11.71 | % | 12.06 | % | 11.66 | % | |||||
| CREDIT QUALITY DATA (Dollars in thousands) | |||||||||||||||
| Net charge-offs (recoveries) | $ | 108 | $ | (15 | ) | $ | 176 | $ | (10 | ) | $ | (23 | ) | ||
| Annualized net charge-offs (recoveries) to average loans | 0.026 | % | -0.004 | % | 0.045 | % | -0.003 | % | -0.006 | % | |||||
| Nonperforming loans | $ | 2,330 | $ | 3,198 | $ | 2,115 | $ | 6,708 | $ | 6,755 | |||||
| Other real estate owned | — | — | — | — | — | ||||||||||
| Total nonperforming assets | $ | 2,330 | $ | 3,198 | $ | 2,115 | $ | 6,708 | $ | 6,755 | |||||
| Allowance for credit losses as a percent of: | |||||||||||||||
| Period-end loans, net of deferred fees and costs | 1.27 | % | 1.17 | % | 1.18 | % | 1.19 | % | 1.20 | % | |||||
| Nonperforming loans | 995.85 | % | 577.36 | % | 880.28 | % | 275.67 | % | 266.35 | % | |||||
| Nonperforming assets | 995.85 | % | 577.36 | % | 880.28 | % | 275.67 | % | 266.35 | % | |||||
| Nonaccrual loans as a percent of total loans, net of deferred fees and costs | 0.13 | % | 0.20 | % | 0.13 | % | 0.43 | % | 0.45 | % | |||||
| ^1^ | This is a non-GAAP financial measure. For more information, see<br>“Supplemental Information - Non-GAAP Financial Measures (Unaudited)” below. | ||||||||||||||
| --- | --- |
13
Princeton Bancorp, Inc.
Supplemental Information – Non-GAAP Financial Measures
(Unaudited)
This press release contains certain supplemental financial information, described in the table below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles (“GAAP”) that management uses in its analysis of its performance. These non-GAAP financial measures are “tangible book value per common share,” “return on average tangible equity,” “efficiency ratio,” “tangible equity to tangible assets,” and “net interest margin on a fully taxable equivalent.” For the purpose of calculating return on average tangible equity, net income for such period is annualized and divided by average tangible equity during such period. Average tangible equity equals average shareholders’ equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating tangible equity to tangible assets, tangible equity is divided by tangible assets. Tangible equity equals total shareholders’ equity less goodwill and other intangible assets, in each case at period end. Tangible assets equal total assets less goodwill and other intangible assets, in each case at period end. For the purpose of calculating tangible book value per common share, tangible equity is divided by the number of common shares outstanding, in each case at period end. For the purpose of calculating efficiency ratio, total operating expense is divided by total revenue for the period. For the purpose of calculating net interest margin on a fully taxable equivalent, fully taxable equivalent adjustments are added to net interest income for the period, net interest income fully taxable equivalent for such period is annualized and divided by average interest earning assets during such period. Adjusted earnings per share and adjusted diluted earnings per share are calculated by dividing net income adjusted for the provision for credit loss on non-purchase credit deteriorated loans and merger-related expenses by weighted outstanding shares.
Management believes these non- GAAP financial measures provide information useful to investors in understanding its financial results. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and the Company strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.
In addition to the items noted above, defined footnotes are included in the Supplemental Information – Non-GAAP Financial Measures table below. Income annualized is calculated using income for the period divided by the number of days in the period, then multiplied by total days in the year. Average equity is calculated using the sum of daily equity balance for the period, divided by the number of days in the period. Fully taxable equivalent adjustment is calculated using tax exempt loan income plus tax exempt securities income for the period, multiplied by a tax rate of 28%.
14
Princeton Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
(Dollars inthousands)
| Three months ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||
| September | June | March | December | September | |||||||||||
| Net (loss) income (annualized)^1^ | $ | (14,350 | ) | $ | 20,617 | $ | 17,428 | $ | 20,956 | $ | 30,144 | ||||
| Average equity^2^ | 254,645 | 241,550 | 240,230 | 234,628 | 228,404 | ||||||||||
| Less: intangible assets | (18,241 | ) | (10,044 | ) | (10,154 | ) | (10,275 | ) | (10,399 | ) | |||||
| Average Tangible Equity | $ | 236,404 | $ | 231,506 | $ | 230,076 | $ | 224,353 | $ | 218,005 | |||||
| Return on average tangible equity | -6.07 | % | 8.91 | % | 7.60 | % | 9.34 | % | 13.83 | % | |||||
| Net interest income | $ | 17,109 | $ | 15,968 | $ | 15,448 | $ | 16,010 | $ | 16,684 | |||||
| Other income | 2,056 | 2,087 | 1,985 | 1,779 | 2,403 | ||||||||||
| Total revenue | 19,165 | 18,055 | 17,433 | 17,789 | 19,087 | ||||||||||
| Non-interest expenses | $ | 19,036 | $ | 12,009 | $ | 11,836 | $ | 10,949 | $ | 10,159 | |||||
| Less: core deposit intangible amortization | (143 | ) | (111 | ) | (120 | ) | (124 | ) | (119 | ) | |||||
| Less: merger-related expenses | (6,695 | ) | — | — | — | 1,391 | |||||||||
| Total operating expenses | $ | 12,198 | $ | 11,898 | $ | 11,716 | $ | 10,825 | $ | 11,431 | |||||
| Adjusted efficiency ratio | 63.65 | % | 65.90 | % | 67.21 | % | 60.85 | % | 59.89 | % | |||||
| Total Assets | $ | 2,354,730 | $ | 1,983,941 | $ | 1,988,001 | $ | 1,916,497 | $ | 1,913,123 | |||||
| Less: intangible assets | (18,241 | ) | (10,044 | ) | (10,154 | ) | (10,275 | ) | (10,399 | ) | |||||
| Tangible assets | $ | 2,336,489 | $ | 1,973,897 | $ | 1,977,847 | $ | 1,906,222 | $ | 1,902,724 | |||||
| Stockholders’ equity | $ | 262,351 | $ | 244,841 | $ | 241,808 | $ | 240,211 | $ | 232,208 | |||||
| Less: intangible assets | (18,241 | ) | (10,044 | ) | (10,154 | ) | (10,275 | ) | (10,399 | ) | |||||
| Tangible equity | $ | 244,110 | $ | 234,797 | $ | 231,654 | $ | 229,936 | $ | 221,809 | |||||
| Tangible equity to tangible assets | 10.45 | % | 11.90 | % | 11.71 | % | 12.06 | % | 11.66 | % | |||||
| Tangible equity | $ | 244,110 | $ | 234,797 | $ | 231,654 | $ | 229,936 | $ | 221,809 | |||||
| Shares outstanding (in thousands) | 6,876 | 6,350 | 6,320 | 6,315 | 6,299 | ||||||||||
| Tangible book value per share | $ | 35.50 | $ | 36.98 | $ | 36.65 | $ | 36.41 | $ | 35.21 | |||||
| ^1^ | Income annualized is calculated using income for the period divided by the number of days in the period, then<br>multiplied by total days in the year. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^2^ | Average equity is calculated using the sum of daily equity balance for the period, divided by the number of<br>days in the period. | ||||||||||||||
| --- | --- | ||||||||||||||
| Three months ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||
| September | June | March | December | September | |||||||||||
| Net interest income | $ | 17,109 | $ | 15,968 | $ | 15,968 | $ | 15,448 | $ | 16,684 | |||||
| FTE adjustment^3^ | 211 | 213 | 226 | 224 | 215 | ||||||||||
| Net interest income FTE | $ | 17,320 | $ | 16,181 | $ | 16,194 | $ | 15,672 | $ | 16,899 | |||||
| Net interest income FTE<br>(annualized)^1^ | $ | 68,902 | $ | 65,078 | $ | 65,132 | $ | 62,862 | $ | 67,045 | |||||
| Average interest earning assets | 1,998,226 | 1,868,019 | 1,817,912 | 1,789,624 | 1,761,567 | ||||||||||
| Net interest margin FTE | 3.45 | % | 3.48 | % | 3.58 | % | 3.51 | % | 3.81 | % | |||||
| Nine months ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| 2024 | 2023 | ||||||||||||||
| September | September | ||||||||||||||
| Net interest income | $ | 48,525 | $ | 49,006 | |||||||||||
| FTE adjustment^3^ | 612 | 580 | |||||||||||||
| Net interest income FTE | $ | 49,137 | $ | 49,586 | |||||||||||
| Net interest income FTE<br>(annualized)^1^ | $ | 65,635 | $ | 66,540 | |||||||||||
| Average interest earning assets | 1,895,097 | 1,609,304 | |||||||||||||
| Net interest margin FTE | 3.46 | % | 4.13 | % | |||||||||||
| ^1^ | Income annualized is calculated using income for the period divided by the number of days in the period, then<br>multiplied by total days in the year. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^3^ | Fully taxable equivalent adjustment is calculated using tax exempt loan income plus tax exempt securities<br>income for the period, multiplied by a tax rate of 28%. | ||||||||||||||
| --- | --- |
15
Princeton Bancorp, Inc.
Reconciliation of Non-GAAP Net Income to GAAP Net Income
| At or For the Three | At or For the Nine | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Months Ended September 30, 2024 | Months Ended September 30, 2024 | ||||||||||||||
| Actual | Cornerstone^1^ | Core | Actual | Cornerstone^1^ | Core | ||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||
| Net interest income | $ | 17,109 | $ | — | $ | 17,109 | $ | 48,525 | $ | — | $ | 48,525 | |||
| Provision for credit loss | 4,601 | 3,152 | 1,449 | 4,669 | 3,152 | 1,517 | |||||||||
| Net interest income after provision | 12,508 | (3,152 | ) | 15,660 | 43,856 | (3,152 | ) | 47,008 | |||||||
| Non-interest income | 2,056 | — | 2,056 | 6,128 | — | 6,128 | |||||||||
| Non-interest expense | 19,036 | 6,695 | 12,341 | 42,881 | 6,695 | 36,186 | |||||||||
| Income (loss) before income taxes | (4,472 | ) | (9,847 | ) | 5,375 | 7,103 | (9,847 | ) | 16,950 | ||||||
| Income tax (benefit) expense | (865 | ) | (2,068 | ) | 1,203 | 1,239 | (2,068 | ) | 3,307 | ||||||
| Net (loss) income | $ | (3,607 | ) | $ | (7,779 | ) | $ | 4,172 | $ | 5,864 | $ | (7,779 | ) | $ | 13,643 |
| Earnings per common share - basic | $ | (0.55 | ) | $ | 0.63 | $ | 0.91 | $ | 2.13 | ||||||
| Earnings per common share - diluted | $ | (0.55 | ) | $ | 0.63 | $ | 0.90 | $ | 2.10 | ||||||
| ^1^ | Reflects the CECL adjustment for non-purchase credit deteriorated loans<br>and merger related expense impact to net income and tax-effected using a federal income tax rate of 21%. | ||||||||||||||
| --- | --- |
16