Princeton Bancorp, Inc 10-Q for FY2024 Q1
Princeton Bancorp, Inc. (BPRN)
About this 10-Q
Princeton Bancorp, Inc filed this 10-Q on May 14, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).
Headline figures
Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $4.35M
- down 28.7% from net income of $6.1M a year earlier
- Diluted EPS
- $0.68
- down 28.4% from $0.95 a year earlier
Table of Contents
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
| Emerging growth company | ||||||
Table of Contents
TABLE OF CONTENTS
i
Table of Contents
March 31, 2024 |
December 31, 2023 |
|||||||
ASSETS |
||||||||
Cash and due from banks |
$ | $ | ||||||
Interest-earning bank balances |
||||||||
Federal funds sold |
||||||||
Total cash and cash equivalents |
||||||||
Securities available-for-sale, |
||||||||
Securities held-to-maturity |
||||||||
Loans receivable, net of deferred fees and costs |
||||||||
Less: allowance for credit losses |
( |
) | ( |
) | ||||
Loan receivable, net |
||||||||
Bank-owned life insurance |
||||||||
Premises and equipment, net |
||||||||
Accrued interest receivable |
||||||||
Restricted investment in bank stock |
||||||||
Deferred taxes, net |
||||||||
Goodwill |
||||||||
Core deposit intangible |
||||||||
Operating lease right-of-use |
||||||||
Equity method investments |
||||||||
Other assets |
||||||||
TOTAL ASSETS |
$ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
LIABILITIES |
||||||||
Deposits: |
||||||||
Non-interest-bearing |
$ | $ | ||||||
Interest-bearing |
||||||||
Total deposits |
||||||||
Accrued interest payable |
||||||||
Operating lease liability |
||||||||
Other liabilities |
||||||||
TOTAL LIABILITIES |
||||||||
STOCKHOLDERS’ EQUITY: |
||||||||
Common stock, |
||||||||
Paid-in capital |
||||||||
Treasury Stock, at cost of |
( |
) | ||||||
Retained earnings |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
TOTAL STOCKHOLDERS’ EQUITY |
||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | $ | ||||||
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
| INTEREST AND DIVIDEND INCOME |
||||||||
| Loans receivable, including fees |
$ | $ | ||||||
| Securities available-for-sale: |
||||||||
| Taxable |
||||||||
| Tax-exempt |
||||||||
| Securities held-to-maturity |
||||||||
| Other interest and dividend income |
||||||||
| |
|
|
|
|||||
| TOTAL INTEREST AND DIVIDEND INCOME |
||||||||
| |
|
|
|
|||||
| INTEREST EXPENSE |
||||||||
| Deposits |
||||||||
| Borrowings |
||||||||
| |
|
|
|
|||||
| TOTAL INTEREST EXPENSE |
||||||||
| |
|
|
|
|||||
| NET INTEREST INCOME |
||||||||
| Provision for credit losses |
||||||||
| |
|
|
|
|||||
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES |
||||||||
| |
|
|
|
|||||
| NON-INTEREST INCOME |
||||||||
| Income from bank-owned life insurance |
||||||||
| Fees and service charges |
||||||||
| Loan fees, including preypayment penalties |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| TOTAL NON-INTEREST INCOME |
||||||||
| |
|
|
|
|||||
| NON-INTEREST EXPENSE |
||||||||
| Salaries and employee benefits |
||||||||
| Occupancy and equipment |
||||||||
| Professional fees |
||||||||
| Data processing and communications |
||||||||
| Federal deposit insurance |
||||||||
| Advertising and promotion |
||||||||
| Office expense |
||||||||
| Core deposit intangible |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| TOTAL NON-INTEREST EXPENSE |
||||||||
| |
|
|
|
|||||
| INCOME BEFORE INCOME TAX EXPENSE |
||||||||
| INCOME TAX EXPENSE |
||||||||
| |
|
|
|
|||||
| NET INCOME |
$ | $ | ||||||
| |
|
|
|
|||||
| Earnings per common share-basic |
$ | $ | ||||||
| Earnings per common share-diluted |
$ | $ | ||||||
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
| NET INCOME |
$ | $ | ||||||
| Other comprehensive income (loss) |
||||||||
| Unrealized gains (losses) arising during period on securities available-for-sale |
( |
) | ||||||
| |
|
|
|
|||||
| Net unrealized gain (loss) |
( |
) | ||||||
| Tax effect |
( |
) | ||||||
| |
|
|
|
|||||
| Total other comprehensive income (loss) |
( |
) | ||||||
| |
|
|
|
|||||
| COMPREHENSIVE INCOME |
$ | $ | ||||||
| |
|
|
|
|||||
Common Stock |
Paid-in Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive (Loss) Income |
Total |
|||||||||||||||||||
Three Months Ended March 31, 2024 and 2023 |
||||||||||||||||||||||||
Balance, December 31, 2022 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | ||||||||||||||||||||
Change in accounting principle |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Formation of Princeton Bancorp, Inc. |
( |
) | — | — | — | |||||||||||||||||||
Stock options exercised ( |
— | — | — | |||||||||||||||||||||
Dividends declared $ |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Dividend reinvestment plan ( |
— | ( |
) | — | — | |||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Balance, March 31, 2023 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Balance, December 31, 2023 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Treasury stock repurchases ( |
— | — | ( |
) | — | — | ( |
) | ||||||||||||||||
Stock options exercised ( |
— | — | — | |||||||||||||||||||||
Share redemption for tax withholding on restricted stock vesting |
— | ( |
) | — | — | — | ( |
) | ||||||||||||||||
Dividends declared $ |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Dividend reinvestment plan ( |
— | ( |
) | — | — | |||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Balance, March 31, 2024 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Provision for credit losses |
||||||||
Depreciation and amortization |
||||||||
Stock-based compensation expense |
||||||||
Amortization of premiums and accretion of discount on securities |
||||||||
Accretion of net deferred loan fees and costs |
( |
) | ( |
) | ||||
Increase in cash surrender value of bank-owned life insurance |
( |
) | ( |
) | ||||
Deferred income tax |
( |
) | ||||||
Amortization of core deposit intangible |
||||||||
Increase (decrease) in accrued interest receivable and other assets |
( |
) | ||||||
Increase (decrease) in accrued interest payable and other liabilities |
( |
) | ||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES |
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Purchases of available-for-sale |
( |
) | ( |
) | ||||
Principal repayments and maturities on securities available-for-sale |
||||||||
Maturities, calls and principal repayments of securities held-to-maturity |
||||||||
Net increase in loans |
( |
) | ( |
) | ||||
Purchases of premises and equipment |
( |
) | ( |
) | ||||
Redemption (purchases) of restricted bank stock |
( |
) | ||||||
NET CASH USED IN INVESTMENT ACTIVITIES |
( |
) | ( |
) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Net increase (decrease) in deposits |
( |
) | ||||||
Proceeds from overnight borrowings |
||||||||
Cash dividends |
( |
) | ( |
) | ||||
Dividend reinvestment program |
||||||||
Share redemption for tax witholding on restricted stock vesting |
( |
) | ||||||
Purchase of treasury stock |
( |
) | ||||||
Proceeds from exercise of stock options |
||||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
( |
) | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
( |
) | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | $ | ||||||
SUPPLEMENTARY CASH FLOWS INFORMATION: |
||||||||
Interest paid |
$ | $ | ||||||
Income taxes paid |
$ | $ | ||||||
Increase in ROU leases |
$ | $ | ||||||
Reclass of paid-in capital related to holding company formation |
$ | $ | ||||||
Reclass of treasury stock related to holding company formation |
$ | $ | ||||||
Reclass of common stock related to holding company formation |
$ | $ | ( |
) | ||||
Three months ended March 31, |
||||||||
2024 |
2023 |
|||||||
Net income applicable to common stock |
$ | $ | ||||||
Weighted average number of common shares outstanding |
||||||||
Basic earnings per share |
$ | $ | ||||||
Net income applicable to common stock |
$ | $ | ||||||
Weighted average number of common shares outstanding |
||||||||
Dilutive effect on common shares outstanding |
||||||||
Weighted average number of diluted common shares outstanding |
||||||||
Diluted earnings per share |
$ | $ | ||||||
Three months ended March 31, |
||||||||||||||||
2024 |
2023 |
|||||||||||||||
| Options | Weighted Ave Exercise Price |
Options | Weighted Ave Exercise Price |
|||||||||||||
Options to purchase |
$ | $ | ||||||||||||||
Anti-dilutive |
$ | $ | ||||||||||||||
March 31, 2024 |
||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
| (In thousands) | ||||||||||||||||
Available-for-sale |
||||||||||||||||
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs) |
$ | $ | $ | ( |
) | $ | ||||||||||
U.S. government agency securities |
( |
) | ||||||||||||||
Obligations of state and political subdivisions |
( |
) | ||||||||||||||
Small business association (SBA) securities |
( |
) | ||||||||||||||
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
December 31, 2023 |
||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
| (In thousands) | ||||||||||||||||
Available-for-sale |
||||||||||||||||
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs) |
$ | $ | $ | ( |
) | $ | ||||||||||
U.S. government agency securities |
( |
) | ||||||||||||||
Obligations of state and political subdivisions |
( |
) | ||||||||||||||
Small business association (SBA) securities |
( |
) | ||||||||||||||
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
Less than 12 Months |
More than 12 Months |
Total |
||||||||||||||||||||||
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
|||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
March 31, 2024 |
||||||||||||||||||||||||
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs) |
$ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||
U.S. government agency securities |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Obligations of state and political subdivisions |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Small business association (SBA) securities |
( |
) | ( |
) | ||||||||||||||||||||
Total |
$ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||
Less than 12 Months |
More than 12 Months |
Total |
||||||||||||||||||||||
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
|||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
December 31, 2023 |
||||||||||||||||||||||||
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs) |
$ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||
U.S. government agency securities |
( |
) | ( |
) | ||||||||||||||||||||
Obligations of state and political subdivisions |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Small business association (SBA) securities |
( |
) | ( |
) | ||||||||||||||||||||
| $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | |||||||||||||
Amortized Cost |
Fair Value |
|||||||
| (In thousands) | ||||||||
Due in one year or less |
$ | $ | ||||||
Due after one year through five years |
||||||||
Due after five years through ten years |
||||||||
Due after ten years |
||||||||
Mortgage-backed securities (GSEs) |
||||||||
Small business association (SBA) securities |
||||||||
| $ | $ | |||||||
March 31, 2024 |
December 31, 2023 |
|||||||
| (In thousands) | ||||||||
Commercial real estate |
$ | $ | ||||||
Commercial and industrial |
||||||||
Construction |
||||||||
Residential first-lien mortgage |
||||||||
Home equity/consumer |
||||||||
Total loans |
||||||||
Deferred fees and costs |
( |
) | ( |
) | ||||
Loans, net |
$ | $ | ||||||
March 31, 2024 |
December 31, 2023 |
|||||||
| (In thousands) | ||||||||
| Allowance for credit losses - loans |
$ | ( |
) | $ | ( |
) | ||
| Allowance for credit losses - off balance sheet |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| $ | ( |
) | $ | ( |
) | |||
| |
|
|
|
|||||
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
With a Related Allowance |
Without a Related Allowance |
With a Related Allowance |
Without a Related Allowance |
|||||||||||||
| (In thousands) | ||||||||||||||||
| Commercial real estate |
$ | $ | $ | $ | ||||||||||||
| Commercial and industrial |
$ | |||||||||||||||
| Construction |
||||||||||||||||
| Residential first-lien mortgage |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total nonaccrual loans |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
30-59 Days Past Due |
60-89 Days Past Due |
>90 Days Past Due |
Total Past Due |
Current |
Total Loans Receivable |
Loans Receivable >90 Days and Accruing |
||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||
| Commercial real estate |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Commercial and industrial |
||||||||||||||||||||||||||||
| Construction |
||||||||||||||||||||||||||||
| Residential first-lien mortgage |
||||||||||||||||||||||||||||
| Home equity/consumer |
||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
30-59 Days Past Due |
60-89 Days Past Due |
>90 Days Past Due |
Total Past Due |
Current |
Total Loans Receivable |
Loans Receivable >90 Days and Accruing |
||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||
| Commercial real estate |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Commercial and industrial |
||||||||||||||||||||||||||||
| Construction |
||||||||||||||||||||||||||||
| Residential first-lien mortgage |
||||||||||||||||||||||||||||
| Home equity/consumer |
||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans |
Total | |||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Total commercial real estate |
||||||||||||||||||||||||||||||||
Current period gross charge-offs |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Commercial and industrial |
||||||||||||||||||||||||||||||||
Pass |
||||||||||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Total commercial and industrial |
||||||||||||||||||||||||||||||||
Current period gross charge-offs |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Construction |
||||||||||||||||||||||||||||||||
Pass |
||||||||||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Total construction |
||||||||||||||||||||||||||||||||
Residential first-lien mortgage |
||||||||||||||||||||||||||||||||
Performing |
||||||||||||||||||||||||||||||||
Nonperforming |
||||||||||||||||||||||||||||||||
Total residential first-lien mortgage |
||||||||||||||||||||||||||||||||
Home equity/consumer |
||||||||||||||||||||||||||||||||
Performing |
||||||||||||||||||||||||||||||||
Nonperforming |
||||||||||||||||||||||||||||||||
Total home equity/consumer |
||||||||||||||||||||||||||||||||
Total |
||||||||||||||||||||||||||||||||
Pass |
||||||||||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans |
Total | |||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||||||||||
Pass |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Total commercial real estate |
||||||||||||||||||||||||||||||||
Current period gross charge-offs |
||||||||||||||||||||||||||||||||
Commercial and industrial |
||||||||||||||||||||||||||||||||
Pass |
||||||||||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Total commercial and industrial |
||||||||||||||||||||||||||||||||
Current period gross charge-offs |
||||||||||||||||||||||||||||||||
Construction |
||||||||||||||||||||||||||||||||
Pass |
||||||||||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard |
||||||||||||||||||||||||||||||||
Total construction |
||||||||||||||||||||||||||||||||
Current period gross charge-offs |
||||||||||||||||||||||||||||||||
Residential first-lien mortgage |
||||||||||||||||||||||||||||||||
Performing |
||||||||||||||||||||||||||||||||
Non performing |
||||||||||||||||||||||||||||||||
Total residential first-lien mortgage |
||||||||||||||||||||||||||||||||
Current period gross charge-offs |
||||||||||||||||||||||||||||||||
Home equity/consumer |
||||||||||||||||||||||||||||||||
Performing |
||||||||||||||||||||||||||||||||
Nonperforming |
||||||||||||||||||||||||||||||||
Total home equity/consumer |
||||||||||||||||||||||||||||||||
Total |
||||||||||||||||||||||||||||||||
Pass/performing |
||||||||||||||||||||||||||||||||
Special mention |
||||||||||||||||||||||||||||||||
Substandard /non performing |
||||||||||||||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial real estate |
Commercial and industrial |
Construction |
Residential first-lien mortgage |
Home equity/ consumer |
Total |
|||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||||||
Beginning balance |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Provision 1 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Charge-offs |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Recoveries |
||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
1 |
The provision for credit losses on the Consolidated Statement of Income is $ |
Commercial real estate |
Commercial and industrial |
Construction |
Residential first-lien mortgage |
Home equity/ consumer |
PPP |
Unallocated |
Total |
|||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||
| Allowance for credit losses: |
||||||||||||||||||||||||||||||||
| Beginning balance |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| CECL adoption |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Provision 1 |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Charge-offs |
||||||||||||||||||||||||||||||||
| Recoveries |
||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1 |
The provision for credit losses on the Consolidated Statement of Income is $ |
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Demand, non-interest-bearing checking |
$ | % | $ | % | ||||||||||||
| Demand, interest-bearing checking |
% | % | ||||||||||||||
| Savings |
% | % | ||||||||||||||
| Money market |
% | % | ||||||||||||||
| Time deposits, $250,000 and over |
% | % | ||||||||||||||
| Time deposits, other |
% | % | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| $ | % | $ | % | |||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Description |
(Level 1) Quoted Price in Active Markets for Identical Assets |
(Level 2) Significant Other Observable Inputs |
(Level 3) Significant Unobservable Inputs |
Total Fair Value March 31, 2024 |
||||||||||||
| (In thousands) | ||||||||||||||||
| Mortgage-backed securities -U.S. government sponsored enterprise (GSEs) |
$ | $ | $ | $ | ||||||||||||
| U.S. government agency securities |
||||||||||||||||
| Obligations of state and political subdivisions |
||||||||||||||||
| Small Business Association (SBA) securities |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Securities available-for-sale |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Description |
(Level 1) Quoted Price in Active Markets for Identical Assets |
(Level 2) Significant Other Observable Inputs |
(Level 3) Significant Unobservable Inputs |
Total Fair Value December 31, 2023 |
||||||||||||
| (In thousands) | ||||||||||||||||
Mortgage-backed securities -U.S. government sponsored enterprise (GSEs) |
$ | $ | $ | $ | ||||||||||||
U.S. government agency securities |
||||||||||||||||
Obligations of state and political subdivisions |
||||||||||||||||
Small Business Association (SBA) securities |
||||||||||||||||
Securities available-for-sale |
$ | $ | $ | $ | ||||||||||||
Description |
(Level 1) Quoted Price in Active Markets for Identical Assets |
(Level 2) Significant Other Observable Inputs |
(Level 3) Significant Unobservable Inputs |
Total Fair Value March 31, 2024 |
||||||||||||
| (In thousands) | ||||||||||||||||
Collateral dependent loan |
$ | $ | $ | $ | ||||||||||||
| $ | $ | $ | $ | |||||||||||||
Description |
March 31, 2024 |
Valuation Technique |
Unobservable Input |
Range (Weighted Average) |
||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Discount | % | |||||||||||||||
Collateral dependent loan |
$ | Collateral | 1 |
adjustment | ( |
%) | ||||||||||
1 |
Value based on third party offer to purchase note from the Bank. |
Description |
(Level 1) Quoted Price in Active Markets for Identical Assets |
(Level 2) Significant Other Observable Inputs |
(Level 3) Significant Unobservable Inputs |
Total Fair Value December 31 2023 |
||||||||||||
| (In thousands) | ||||||||||||||||
Collateral dependent loan |
$ | $ | $ | $ | ||||||||||||
| $ | $ | $ | $ | |||||||||||||
Description |
December 31, 2023 |
Valuation Technique |
Unobservable Input |
Range (Weighted Average) |
||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Discount | % | |||||||||||||||
Collateral dependent loan |
$ | Collateral | 1 |
adjustment | ( |
%) | ||||||||||
1 |
Value based on third party offer to purchase note from the Bank. |
March 31, 2024 |
||||||||||||||||||||
Carrying Amount |
Estimated Fair Value |
Level 1 |
Level 2 |
Level 3 |
||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Financial Assets: |
||||||||||||||||||||
| Cash and cash equivalents |
$ | $ | $ | $ | — | $ | — | |||||||||||||
| Securities available-for-sale |
— | — | ||||||||||||||||||
| Securities held-to-maturity |
— | — | ||||||||||||||||||
| Loans receivable, net |
— | — | ||||||||||||||||||
| Restricted investments in bank stock |
— | — | ||||||||||||||||||
| Accrued interest receivable |
— | — | ||||||||||||||||||
| Equity method investments |
— | |||||||||||||||||||
| Mortgage servicing rights |
— | — | ||||||||||||||||||
| Financial Liabilities: |
||||||||||||||||||||
| Deposits |
$ | $ | — | $ | $ | — | ||||||||||||||
| Accrued interest payable |
— | — | ||||||||||||||||||
December 31, 2023 |
||||||||||||||||||||
Carrying Amount |
Estimated Fair Value |
Level 1 |
Level 2 |
Level 3 |
||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Financial Assets: |
||||||||||||||||||||
| Cash and cash equivalents |
$ | $ | $ | $ | — | $ | — | |||||||||||||
| Securities AFS |
— | — | ||||||||||||||||||
| Securities HTM |
— | — | ||||||||||||||||||
| Loans receivable, net |
— | — | ||||||||||||||||||
| Restricted bank stock |
— | — | ||||||||||||||||||
| Accrued interest receivable |
— | — | ||||||||||||||||||
| Equity method investments |
— | |||||||||||||||||||
| Financial Liabilities |
||||||||||||||||||||
| Deposits |
— | — | ||||||||||||||||||
| Accrued interest payable |
— | — | ||||||||||||||||||
Statement of Financial Condition Location |
Three Months Ended March 31, 2024 |
Year ended December 31, 2023 |
||||||||||
| (In thousands) | ||||||||||||
| Operating Lease Right of Use Asset: |
||||||||||||
| Gross carrying amount |
$ | $ | ||||||||||
| Increased asset from new leases |
||||||||||||
| Accumulated amortization |
( |
) | ( |
) | ||||||||
| |
|
|
|
|||||||||
| Net book value |
Operating lease right-of-use asset |
$ | $ | |||||||||
| |
|
|
|
|||||||||
| Operating Lease Liability: |
||||||||||||
| Lease liability |
Operating lease liability | $ | $ | |||||||||
| |
|
|
|
|||||||||
Twelve months ended March 31, |
||||
2024 |
$ | |||
2025 |
||||
2026 |
||||
2027 |
||||
2028 |
||||
Thereafter |
||||
Total future operating lease payment |
||||
Amounts representing interest |
( |
) | ||
Present value of net future lease payments |
$ | |||
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
| (In thousands) | ||||||||
Lease cost: |
||||||||
Operating lease |
$ | $ | ||||||
Short-term lease cost |
||||||||
Total lease cost |
$ | $ | ||||||
Other information: |
||||||||
Cash paid for amounts included in the measurement of lease liabilities |
$ | $ | ||||||
Goodwill |
Core Deposit Intangible |
|||||||
| (In thousands) | ||||||||
Balance at December 31, 2023 |
$ | $ | ||||||
Amortization expense |
— | ( |
) | |||||
Balance at March 31, 2024 |
$ | $ | ||||||
2024 |
||||
2025 |
||||
2026 |
||||
2027 |
||||
Thereafter |
||||
Total |
$ | |||
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis in conjunction with the unaudited consolidated interim financial statements contained in Part I, Item 1 of this report, and with our audited consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in our Form 10-K as of and for the year ended December 31, 2023.
Cautionary Statement Regarding 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 Financial Corporation “Cornerstone” following the completion of the business combination with Cornerstone Transaction, may be more difficult, time-consuming or costly than expected; the ability to obtain required regulatory and shareholder approvals, and the ability to complete the Transaction on the expected timeframe may be more difficult, time-consuming or costly than expected; the global impact of the regional conflicts around the world, including 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 Company’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 Company’s products and services; credit risk associated with the Company’s lending activities; risks relating to the real estate market and the Company’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 disclosed in the Company’s filings with the SEC, including under the heading “Risk Factors” set forth in the Company’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.
Throughout this document, references to “we,” “us,” or “our” refer to the Company and the Bank.
24
Table of Contents
Executive Overview
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 22 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville. 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 (“FDIC”).
On October 19, 2022, the Bank entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Cornerstone Financial Corporation, a New Jersey based holding company from Cornerstone bank (“Cornerstone”). Pursuant to the terms and conditions set forth in the Merger Agreement, Cornerstone will merge with and into Princeton Bancorp, with Cornerstone surviving (the “Merger”). The Bank plans to merge Cornerstone with and into the Company immediately after the Merger. The Company has received the requisite approvals of the Merger Agreement from the Federal Deposit Insurance Corporation, and New Jersey state bank regulators. The Company anticipates that the Merger will close in the third quarter of 2024.
The Company’s common stock trades on the “Nasdaq Global Select Market” under ticker symbol, “BPRN.”
Critical Accounting Policies and Estimates
Princeton Bancorp has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are summarized in Note 1 to the consolidated financial statements included in the 2023 Annual Report on Form 10-K. There have been no changes to the Critical Accounting Estimates since the Company filed its Annual Report on Form 10-K for the year ended December 31, 2023.
New Accounting Pronouncements
Refer to Note 1 to the consolidated financial statements included in the 2023 Annual Report on Form 10-K and Note 1- Summary of Significant Accounting Policies in this document.
Economy
The US economy is showing signs of stress with inflation hitting a 40-year high, an increase in energy prices, specifically home-heating costs, higher interest rates set by the Federal Open Market Committee (impacting the real estate market) and uncertainties resulting from regional conflicts in around the world, including in Ukraine and the Middle East. However, the unemployment rate in New Jersey is below the national average.
Comparison of Financial Condition at March 31, 2024 and December 31, 2023
General
Total assets were $1.99 billion on March 31, 2024, an increase of $71.5 million, or 3.73%, when compared to $1.92 billion at the end of 2023. The primary reason for the increase in total assets was attributable to increases in available for sale securities of $26.7 million, an increase in net loans of $22.9 million, and an increase in cash and cash equivalents of approximately $21.5 million.
Cash and cash equivalents
Cash and cash equivalents increased $21.5 million, or 14.29%, to $172.1 million at March 31, 2024 compared to December 31, 2023. This increase was primarily related to deposit growth of approximately $69.9 and partially offset by increases in available-for-sale securities of $26.7 million and in total loans of $22.9 million.
25
Table of Contents
Investment securities
Total available-for-sale investment securities increased million $26.7, or 29.28%, to $118.1 million at March 31, 2024 compared to December 31, 2023. This increase was related to the purchase of Government National Mortgage Association securities during the first quarter of 2024.
Loans
Loans, net of deferred loan fees and costs, increased $22.9 million, or 1.48%, to $1.57 billion at March 31, 2024 compared to December 31, 2023. The increase in the Company’s net loans consisted of a $19.9 million increase in commercial real estate loans and a $10.8 million increase in construction loans, partially offset by a decrease of $5.0 million in commercial and industrial loans, a decrease of $1.5 million in residential mortgages and a decrease of $770 thousand in HELOC/consumer loans.
Charge-offs for first quarter of 2024 were $283 thousand and recoveries were $107 thousand compared to the fourth quarter of 2023 which recorded charge offs of $55 thousand and recoveries of $65 thousand. The coverage ratio of the allowance for credit losses to period end loans was 1.18% at March 31, 2024 and 1.19% at December 31, 2023.
At March 31, 2024, non-performing assets totaled $2.1 million, a decrease of $4.6 million when compared to the amount at December 31, 2023. The decrease was primarily related to a $4.5 million commercial real estate loan which was sold during the first quarter of 2024. Non-performing assets as a percentage of total loans, net of deferred fees and costs, was 0.13% at March 31, 2024 and 0.43% at December 31, 2023.
Deposits
Total deposits at March 31, 2024 increased $69.9 million, or 4.27%, when compared to December 31, 2023. Certificates of deposit increased $77.1 million, money market deposits increased $24.7 million, and savings deposits increased $2.9 million. Partially offsetting these increases were decreases in interest-bearing demand deposits of $32.6 million and non-interest-bearing deposits of $2.2 million.
At March 31, 2024, the Company had approximately $426.7 million in uninsured deposits, consisting of $67.6 million in non-interest-bearing demand deposits, $128.7 million in interest-bearing demand deposits, $128.9 million in money market accounts, $21.3 million in savings deposits and $80.2 million in certificates of deposits.
Borrowings
The Company had no outstanding borrowings at March 31, 2024 and at December 31, 2023.
Stockholders’ equity
Total stockholders’ equity on March 31, 2024 increased $1.6 million or 0.66% when compared to December 31, 2023. The increase was primarily due to the $2.4 million increase in retained earnings, consisting of $4.3 million in net income partially offset by $1.9 million of cash dividends recorded during the period. Additionally, stockholders’ equity declined as a result of a stock buyback of 19,000 shares totaling $579 thousand. The ratio of equity to total assets at March 31, 2024 and at December 31, 2023 was 12.2% and 12.5%, respectively.
Liquidity
Our liquidity, represented by cash and cash equivalents, is a product of our operating, investing and financing activities. Our primary sources of funds are deposits, principal repayments of securities and outstanding loans, and funds provided from operations. In addition, we invest excess funds in short-term interest-earnings assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.
26
Table of Contents
Liquidity (continued)
As a member of the FHLB we are eligible to borrow funds in an aggregate amount of up to 50% of the Company’s total assets, subject to its collateral requirements. Based on available eligible securities and qualified real estate loan collateral, and a $70.0 million line of credit with the FHLB supporting municipal deposits, the Company had the ability to borrow an additional $148.9 million as of March 31, 2024.
As of March 31, 2024, the Bank was eligible to use the Federal Reserve discount window for borrowings. Based on assets pledged as collateral as of the applicable date, the Bank’s borrowing availability was approximately $10.0 million at March 31, 2024. As of March 31, 2024, the Company had no outstanding advances from the discount window.
The Company is also a shareholder of Atlantic Community Bancshares, Inc., the parent company of Atlantic Community Bankers Bank (“ACBB”). As of March 31, 2024, the Company had available borrowing capacity with ACBB of $10.0 million to provide short-term liquidity generally for a period of not more than fourteen days. No amounts were outstanding under our line of credit with ACBB at March 31, 2024.
We believe that our current sources of funds provide adequate liquidity for our current cash flow needs.
Capital Resources
Regulatory Capital Requirements. Federally insured, state-chartered non-member banks are required to maintain minimum levels of regulatory capital. Current FDIC capital standards require these institutions to satisfy a common equity Tier 1 capital requirement and a Tier 1 capital requirement, a leverage capital requirement and a risk-based capital requirement.
In addition, in order to make capital distributions and pay discretionary bonuses to executive officers without restriction, an institution must also maintain additional common equity in excess of the minimum requirements. This excess is referred to as a capital conservation buffer. At March 31, 2024, the required capital conservation buffer is 2.50%.
Under the risk-based capital requirements, “total” capital (a combination of core and “supplementary” capital) must equal at least 8.0% of “risk-weighted” assets. The FDIC also is authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis. Management believes, as of March 31, 2024, that the Bank meets all capital adequacy requirements to which it is subject and is “well capitalized” under applicable regulations.
The Bank’s actual capital amounts and ratios and the regulatory requirements at March 31, 2024 and December 31, 2023 are presented below:
27
Table of Contents
Capital Resources (continued)
| To be well capitalized | ||||||||||||||||||||||||
| For capital conservation | under prompt corrective | |||||||||||||||||||||||
| Actual | buffer requirement | action provision | ||||||||||||||||||||||
| Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| March 31, 2024: |
||||||||||||||||||||||||
| Total capital (to risk-weighted assets) |
$ | 255,304 | 14.305 | % | $ | 187,392 | 10.500 | % | $ | 178,468 | 10.000 | % | ||||||||||||
| Tier 1 capital (to risk-weighted assets) |
$ | 236,686 | 13.262 | % | $ | 151,698 | 8.500 | % | $ | 142,774 | 8.000 | % | ||||||||||||
| Common equity tier 1 capital (to-risk weighted assets |
$ | 236,686 | 13.262 | % | $ | 124,928 | 7.000 | % | $ | 116,004 | 6.500 | % | ||||||||||||
| Tier 1 leverage capital (to average assets) |
$ | 236,686 | 11.994 | % | $ | 128,273 | 6.500 | % | $ | 98,672 | 5.000 | % | ||||||||||||
| December 31, 2023: |
||||||||||||||||||||||||
| Total capital (to risk-weighted assets) |
$ | 254,030 | 14.677 | % | $ | 181,740 | 10.500 | % | $ | 173,086 | 10.000 | % | ||||||||||||
| Tier 1 capital (to risk-weighted assets) |
$ | 235,538 | 13.608 | % | $ | 147,123 | 8.500 | % | $ | 138,469 | 8.000 | % | ||||||||||||
| Common equity tier 1 capital (to-risk weighted assets |
$ | 235,538 | 13.608 | % | $ | 121,160 | 7.000 | % | $ | 112,506 | 6.500 | % | ||||||||||||
| Tier 1 leverage capital (to average assets) |
$ | 235,538 | 12.289 | % | $ | 124,583 | 6.500 | % | $ | 95,833 | 5.000 | % | ||||||||||||
Comparison of Operating Results for the Three Months Ended March 31, 2024 and 2023
General
The Company reported net income of $4.3 million, or $0.68 per diluted common share, for the first quarter of 2024, compared to net income of $6.1 million, or $0.95 per diluted common share, for the first quarter of 2023. The decrease in net income for the first quarter of 2024 compared to the same period in 2023 was primarily due to increases in interest expense of $8.7 million and $2.1 million in non-interest expense, partially offset by a $7.5 million increase interest income, $611 thousand increase in non-interest income and a reduction of $835 thousand in income tax expense recorded.
Interest income
Interest income increased $7.5 million for the three months ended March 31, 2024, compared to the same period in 2023. Interest income on loans increased $5.0 million due to increases in both the average balance of loans of $175.4 million and the yield of 60 basis points. Other interest and dividend income increased $2.1 million due to an increase in average balance of $153.6 million and an increase in the yield of 90 basis points. Interest on taxable available-for-sale securities increased $286 thousand due to an 120 basis point increase in yield and a $17 thousand increase in the average balance of taxable available-for-sale securities.
Interest expense
Interest expense on deposits increased $8.7 million to $12.6 million for the three-month period ended March 31, 2024, due to increases in both the rate paid on interest-bearing deposits of 209 basis points and in the average balance of interest-bearing deposits of $351.6 million over the same prior year period.
28
Table of Contents
Provision for credit losses
The Company reduced its provision for credit losses by $79 thousand during the three months ended March 31, 2024 while the allowance for credit losses was $10 thousand higher than at December 31, 2023. The decrease in the ACL in the current quarter consisted of $302 thousand increase recorded to the allowance of credit losses and a reduction to the allowance of $116 thousand in unfunded commitments, which is reported in other liabilities on the Company’s statement of condition. Charge-offs were $283 thousand and recoveries were $107 thousand for the quarter ending March 31, 2024.
Non-interest income
Total non-interest income of $2.0 million for the first quarter of 2024 increased $611 thousand, when compared to the quarter ended March 31, 2023. The increase over the first quarter of 2023 was due to increases in loan fees of $373 thousand, $163 thousand of other non-interest income, and $91 thousand in bank owned life insurance income.
Non-interest expense
Total non-interest expense for the first quarter of 2024 increased $2.1 million or 21.1% from the first quarter of 2023. The increase was due primarily to increases in salaries and employee benefits and occupancy and equipment expenses of $1.1 million and $688 thousand, respectively. This increase can be attributed in part to the acquisition of Noah Bank which occurred in the second quarter of 2023.
Provision for income taxes
For the three months ending March 31, 2024, the Company recorded an income tax expense of $1.1 million, resulting in an effective tax rate of 19.7%, compared to an income tax expense of $1.9 million resulting in an effective tax rate of 23.8% for the quarter ended March 31, 2023. The lower effective tax rate record in the first three months ended March 31, 2024, was attributed to a higher level of tax free investments benefit compared to a lower amount of net income.
Average Balances, Net Interest Income, and Yields Earned and Rates Paid
The following table shows for the three-month period indicated the total dollar amount of interest earned from average interest earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities and the resulting costs, expressed both in dollars and rates. Average yields have been annualized. Tax-exempt incomes and yields have not been adjusted to a tax-equivalent basis.
29
Table of Contents
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2024 | 2023 | Change 2024 vs 2023 | ||||||||||||||||||||||||||||||
| Average Balances |
Income/ Expense |
Yield Rates |
Average Balances |
Income/ Expense |
Yield Rates |
Average Balances |
Yield Rates |
|||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||||||||||
| Loans receivable |
$ | 1,551,206 | $ | 24,940 | 6.47 | % | $ | 1,375,849 | $ | 19,894 | 5.86 | % | $ | 175,357 | 0.60 | % | ||||||||||||||||
| Securities |
||||||||||||||||||||||||||||||||
| Taxable available-for-sale |
58,742 | 564 | 3.86 | % | 42,235 | 278 | 2.66 | % | 16,507 | 1.20 | % | |||||||||||||||||||||
| Tax exempt available-for-sale |
40,758 | 285 | 2.81 | % | 41,634 | 284 | 2.77 | % | (876 | ) | 0.05 | % | ||||||||||||||||||||
| Held-to-maturity |
182 | 2 | 4.42 | % | 200 | 3 | 5.36 | % | (18 | ) | -0.94 | % | ||||||||||||||||||||
| Federal funds sold |
148,069 | 2,009 | 5.46 | % | 8,454 | 95 | 4.56 | % | 139,615 | 0.90 | % | |||||||||||||||||||||
| Other interest earning-assets |
18,954 | 266 | 5.64 | % | 5,001 | 58 | 4.77 | % | 13,953 | 0.87 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total interest-earning assets |
1,817,911 | $ | 28,066 | 6.21 | % | 1,473,373 | $ | 20,612 | 5.67 | % | 344,538 | 0.54 | % | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Other non-earnings assets |
140,660 | 109,354 | 31,306 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total assets |
$ | 1,958,571 | $ | 1,582,727 | $ | 375,844 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Interest-bearing liabilities |
||||||||||||||||||||||||||||||||
| Demand |
$ | 242,030 | $ | 1,193 | 1.98 | % | $ | 264,507 | $ | 551 | 0.84 | % | $ | (22,477 | ) | 1.14 | % | |||||||||||||||
| Savings |
147,672 | 921 | 2.51 | % | 182,763 | 417 | 0.92 | % | (35,091 | ) | 1.58 | % | ||||||||||||||||||||
| Money markets |
364,150 | 3,557 | 3.93 | % | 268,814 | 1,158 | 1.75 | % | 95,336 | 2.18 | % | |||||||||||||||||||||
| Certificates of deposit |
678,306 | 6,947 | 4.12 | % | 364,470 | 1,739 | 1.94 | % | 313,836 | 2.18 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Total deposit |
1,432,158 | 12,618 | 3.54 | % | 1,080,554 | 3,865 | 1.45 | % | 351,604 | 2.09 | % | |||||||||||||||||||||
| Borrowings |
— | — | 0.00 | % | 6,993 | 86 | 4.99 | % | (6,993 | ) | -4.99 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Total interest-bearing liabilities |
1,432,158 | $ | 12,618 | 3.54 | % | 1,087,547 | $ | 3,951 | 1.47 | % | 344,611 | 2.07 | % | |||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Non-interest-bearing deposits |
244,089 | 242,814 | 1,275 | |||||||||||||||||||||||||||||
| Other liabilities |
42,094 | 28,587 | 13,507 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total liabilities |
1,718,341 | 1,358,948 | 359,393 | |||||||||||||||||||||||||||||
| Stockholders’ equity |
240,230 | 223,779 | 16,451 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total liabilities and stockholder’s equity |
$ | 1,958,571 | $ | 1,582,727 | $ | 375,844 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net interest-earnings assets |
$ | 385,753 | $ | 385,826 | $ | (73 | ) | |||||||||||||||||||||||||
| Net interest income; interest rate spread |
2.67 | % | 4.20 | % | -1.53 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net interest margin |
$ | 15,448 | 3.42 | % | $ | 16,661 | 4.59 | % | $ | (1,213 | ) | -1.17 | % | |||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net interest margin FTE1 |
3.48 | % | 4.66 | % | -1.18 | % | ||||||||||||||||||||||||||
| 1 | Includes federal and state tax effect of tax exempt securities and loans. |
30
Table of Contents
Rate/Volume Analysis
The following table reflects the changes in our interest income and interest expense segregated into amounts attributable to changes in volume and in yields on interest-earning assets and interest-bearing liabilities during the periods indicated.
| 2024 vs. 2023 Increase (Decrease) Due to |
||||||||||||
| Rate | Volume | Net | ||||||||||
| (In thousands) | ||||||||||||
| Interest and dividend income: |
||||||||||||
| Loans receivable, including fees |
$ | 240 | $ | 4,806 | $ | 5,046 | ||||||
| Securities available-for-sale |
||||||||||||
| Taxable |
245 | 41 | 286 | |||||||||
| Tax-exempt |
6 | (5 | ) | 1 | ||||||||
| Securities held-to-maturity |
1 | — | (1 | ) | ||||||||
| Federal funds sold |
37 | 1,877 | 1,914 | |||||||||
| Other interest and dividend income |
21 | 187 | 208 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total interest and dividend income |
$ | 549 | $ | 6,907 | $ | 7,454 | ||||||
|
|
|
|
|
|
|
|||||||
| Interest expense |
||||||||||||
| Demand |
$ | 1,074 | $ | (432 | ) | $ | 642 | |||||
| Savings |
1,809 | (1,305 | ) | 504 | ||||||||
| Money markets |
(4,300 | ) | 6,699 | 2,399 | ||||||||
| Certificates of deposit |
390 | 4,818 | 5,208 | |||||||||
| Borrowings |
— | (86 | ) | (86 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Total interest expense |
$ | (1,027 | ) | $ | 9,696 | $ | 8,667 | |||||
|
|
|
|
|
|
|
|||||||
| Change in net interest income |
$ | 1,576 | $ | (2,789 | ) | $ | (1,213 | ) | ||||
|
|
|
|
|
|
|
|||||||
How We Manage Market Risk
Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk which is inherent in our lending, investment and deposit gathering activities. To that end, management actively monitors and manages interest rate risk exposure. In addition to market risk, our primary risk is credit risk on our loan portfolio. We attempt to manage credit risk through our loan underwriting and oversight policies.
The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements and performance objectives, and manage the risk consistent with approved guidelines. We seek to manage our exposure to risks from changes in interest rates while at the same time trying to improve our net interest spread. We monitor interest rate risk as such risk relates to our operating strategies. We have established an Asset/Liability Committee which is comprised of both Management and members of the Board of Directors. The Asset/Liability Committee meets on a regular basis and is responsible for reviewing our asset/liability policies and interest rate risk position. Both the extent and direction of shifts in interest rates are uncertainties that could have a negative impact on future earnings.
31
Table of Contents
Gap Analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring the Company’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate-sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to affect adversely net interest income while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to affect adversely net interest income.
The table on the next page sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at March 31, 2024, which we expect, based upon certain assumptions, to reprice or mature in each of the future time periods shown (the “GAP Table”). Except as stated below, the amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at March 31, 2024, based on contractual maturities, anticipated prepayments, and scheduled rate adjustments within a three-month period and subsequent selected time intervals. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and anticipated prepayments of adjustable-rate loans and fixed-rate loans, and as a result of contractual rate adjustments on adjustable-rate loans.
| 3 Months or Less |
More than 3 Months to 1 Year |
More than 1 Year to 3 Years |
More than 3 Years to 5 Years |
More than 5 Years |
Non-Rate Sensitive |
Total Amount | ||||||||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||||||||||
| Interest-earning assets: (1) |
||||||||||||||||||||||||||||
| Investment securities |
$ | 13,567 | $ | 14,261 | $ | 22,117 | $ | 16,552 | $ | 64,219 | $ | (12,450 | ) | $ | 118,266 | |||||||||||||
| Loans receivable |
495,979 | 214,358 | 401,487 | 419,068 | 35,491 | (13,770 | ) | 1,552,613 | ||||||||||||||||||||
| Other interest-earnings assets (2) |
159,027 | — | — | — | — | 13,040 | 172,067 | |||||||||||||||||||||
| Other non-interest assets |
— | — | — | — | — | 145,055 | 145,055 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total interest-earning assets |
$ | 668,573 | $ | 228,619 | $ | 423,604 | $ | 435,620 | $ | 99,710 | $ | (13,180 | ) | $ | 1,988,001 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||||||
| Checking and savings accounts |
$ | 364,750 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 364,750 | ||||||||||||||
| Money market accounts |
378,652 | — | — | — | — | — | 378,652 | |||||||||||||||||||||
| Certificate accounts |
242,238 | 272,624 | 199,163 | 1,137 | — | — | 715,162 | |||||||||||||||||||||
| Borrowings |
— | — | — | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total interest-bearing liabilities |
$ | 985,640 | $ | 272,624 | $ | 199,163 | $ | 1,137 | $ | — | $ | — | $ | 1,458,564 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Interest-earning assets less interest-bearing liabilities |
$ | (317,067 | ) | $ | (44,005 | ) | $ | 224,441 | $ | 434,483 | $ | 99,710 | $ | (13,180 | ) | $ | 529,437 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Cumulative interest-rate sensitivity gap (3) |
$ | (317,067 | ) | $ | (361,072 | ) | $ | (136,631 | ) | $ | 297,852 | $ | 397,562 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Cumulative interest-rate gap as a percentage of total assets at March 31, 2024 |
-15.95 | % | -18.16 | % | -6.87 | % | 14.98 | % | 20.00 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities at March 31, 2024 |
67.83 | % | 71.30 | % | 90.63 | % | 120.42 | % | 127.26 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| (1) | Interest-earnings assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities. |
| (2) | Includes interest-bearing bank balances, FHLB Stock and Federal Funds Sold |
| (3) | Interest-rate sensitivity gap represents the difference between total interest-earning assets and total interest-bearing liabilities. |
32
Table of Contents
Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate loans, have features which restrict changes in interest rates both on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase.
Net Portfolio Value Analysis. Our interest rate sensitivity is also monitored by management through the use of a model which generates estimates of the changes in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The following table sets forth our NPV as of March 31, 2024, and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated.
| Change in | NPV as % of Portfolio | |||||||||||||||||||
| Interest Rates | Net Portfolio Value | Value of Assets | ||||||||||||||||||
| In Basis Points | ||||||||||||||||||||
| (Rate Shock) |
Amounts | $ Change | % Change | NPV Ratio | Change | |||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| 300 |
$ | 260,809 | $ | (4,296 | ) | -1.62 | % | -5.31 | % | -4.72 | % | |||||||||
| 200 |
$ | 264,795 | $ | (310 | ) | -0.12 | % | -3.79 | % | -3.20 | % | |||||||||
| 100 |
$ | 266,202 | $ | 1,097 | 0.41 | % | -2.22 | % | -1.63 | % | ||||||||||
| Static |
$ | 265,105 | $ | — | -0.59 | % | ||||||||||||||
| (100) |
$ | 270,264 | $ | 5,159 | 1.95 | % | 0.90 | % | 1.49 | % | ||||||||||
| (200) |
$ | 274,379 | $ | 9,274 | 3.50 | % | 2.09 | % | 2.68 | % | ||||||||||
| (300) |
$ | 265,028 | $ | (77 | ) | -0.03 | % | 3.30 | % | 3.89 | % | |||||||||
As is the case with the GAP Table, certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV require the making of certain assumptions which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the models presented assume that the composition of our interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV model provides an indication of interest rate risk exposure at a particular point in time, such model is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.
33
Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company, such as the Company, is not required to provide the information by this Item. Certain market risk disclosure is set forth in Item 2 above under “How We Manage Market Risk.”
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Management, with the participation of the Company’s Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule l3a-l5 (e) promulgated under the Exchange Act) as of March 31, 2024. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of March 31, 2024 to ensure that the information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in FDIC rules and forms.
Changes in Internal Control Over Financial Reporting
There was no change in the Company’s internal control over financial reporting identified during the quarter ended March 31, 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
34
Table of Contents
Total Number of Shares Purchased |
Average Price Paid Per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Program 1 |
Maximum Number of Shares that May Yet be Purchased Under Plans or Programs 1 |
|||||||||||||
| Period |
314,000 | |||||||||||||||
| January 1 - 31, 2024 |
— | $ | — | — | 314,000 | |||||||||||
| February 1 - 29, 2024 |
— | $ | — | — | 314,000 | |||||||||||
| March 1 - 31, 2024 |
19,000 | $ | 30.44 | 19,000 | 295,000 | |||||||||||
| |
|
|
|
|
|
|||||||||||
| 19,000 | $ | 30.44 | 19,000 | |||||||||||||
| |
|
|
|
|
|
|||||||||||
1 |
On August 10, 2023, the Company announced a stock repurchase program to repurchase up to 314,000 shares of common stock, approximately 5% of the Company’s outstanding shares of common stock, over a period of time necessary to complete such repurchases. |
Table of Contents
Item 6. Exhibits
| Exhibit |
Description | |
| 2.1 | Agreement and Plan of Merger, dated January 18, 2024, by and between Princeton Bancorp, Inc. and Cornerstone Financial Corporation (incorporated by reference to the registrant’s Current Report on Form 8-K filed with the SEC on January 18, 2024)* | |
| 31.1 | Rule 13a-14(a) Certification on the Principal Executive Officer | |
| 31.2 | Rule 13a-14(a) Certification on the Principal Financial Officer | |
| 32 | Section 1350 Certifications | |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | InlineXBRL Taxonomy Extension Schema Document | |
| 101.CAL | InlineXBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | InlineXBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | InlineXBRL Taxonomy Extension Label LinkbaseDocument | |
| 101.PRE | InlineXBRL Taxonomy Extension Label LinkbaseDocument | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document | |
| * | The schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a copy of such schedules, or any section thereof, to the SEC upon request. |
36
Table of Contents
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 thereunto duly authorized.
| Princeton Bancorp, Inc. | ||||||
| Date: May 14, 2024 | By: | /s/ Edward Dietzler | ||||
| Edward Dietzler | ||||||
| Chief Executive Officer and President (Principal Executive Officer) | ||||||
| By: | /s/ George Rapp | |||||
| George Rapp | ||||||
| Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | ||||||
37
Exhibit 31.1
RULE 13A-14(a) CERTIFICATION
OF THE PRINCIPAL EXECUTIVE OFFICER
I, Edward Dietzler, Chief Executive Officer and President of Princeton Bancorp, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Princeton Bancorp, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, considering the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 14, 2024 | /s/ Edward Dietzler | |||||
| Edward Dietzler | ||||||
| Chief Executive Officer and President | ||||||
| (Principal Executive Officer) |
Exhibit 31.2
RULE 13A-14(a) CERTIFICATION
OF THE PRINCIPAL FINANCIAL OFFICER
I, George Rapp, Executive Vice President and Chief Financial Officer of Princeton Bancorp, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Princeton Bancorp, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 14, 2024 | /s/ George Rapp | |||||
| George Rapp | ||||||
| Executive Vice President and Chief Financial Officer | ||||||
| (Principal Financial and Accounting Officer) |
Exhibit 32
SECTION 1350 CERTIFICATIONS
In connection with the Quarterly Report of Princeton Bancorp, Inc. on Form 10-Q for the period ended March 31, 2024 as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Princeton Bancorp, Inc.
| /s/ Edward Dietzler | ||||||
| Edward Dietzler | ||||||
| Chief Executive Officer and President | ||||||
| (Principal Executive Officer) | ||||||
| /s/ George Rapp | ||||||
| George Rapp | ||||||
| Executive Vice President and Chief Financial Officer | ||||||
| (Principal Financial and Accounting Officer) | ||||||
| Date: May 14, 2024 | ||||||