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
April 20, 2023
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 April 20, 2023, 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 months ended March 31, 2023.
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 April 20, 2023. |
|---|---|
| 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: April 20, 2023 | ||
| By: | /s/ George S. Rapp | |
| George S. Rapp | ||
| Executive Vice President and<br> <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
First Quarter 2023 Results
Princeton, NJ, April 20, 2023 / 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 ended March 31, 2023. The Company reported net income of $6.1 million, or $0.95 per diluted common share, for the first quarter of 2023, compared to net income of $7.2 million, or $1.13 per diluted common share, for the fourth quarter of 2022, and net income of $6.0 million, or $0.91 per diluted common share, for the first quarter of 2022. The decrease in net income for the first quarter of 2023, when compared to the fourth quarter of 2022, was primarily due to a decrease of $1.6 million in net interest income and a $101 thousand increase in non-interest expenses, partially offset by a $377 thousand increase in non-interest income and a $300 thousand decrease in income tax expense. Although net income for the first quarter of 2023 was only slightly higher than the net income for same period in 2022, net interest income was $807 thousand above the first quarter of 2022 and non-interest income was also higher by $328 thousand. Increases of $504 thousand in non-interest expense and $265 thousand in the provision for credit losses almost entirely offset the increases in income from the first quarter of 2022 to the same period in 2023.
Highlights for the three-month period ended March 31, 2023 are as follows:
| • | The Bank formed a holding company, Princeton Bancorp, Inc., effective January 10, 2023.<br> |
|---|---|
| • | The Company realized a 5.2% annualized growth rate in its loan portfolio during the first quarter of 2023.<br> |
| --- | --- |
| • | Diluted earnings per share for the first quarter of 2023 was $0.95 or $0.04 higher compared to the same period in<br>2022. |
| --- | --- |
| • | The Bank improved its net interest margin by 50 basis points for the first quarter of 2023 compared to the first<br>quarter of 2022. |
| --- | --- |
President/CEO Edward Dietzler noted that, “Today we are announcing another strong earnings performance for Princeton Bancorp. For the quarter we realized $6.1 million with an annualized ROA of 1.56%. The Bank’s long-standing commitment to risk management and conservative balance sheet has the Bank well positioned for the future.”
4
Balance Sheet Review
Total assets were $1.59 billion at March 31, 2023, a decrease of $16.5 million, or 1.0% when compared to $1.60 billion at the end of 2022. The primary reason for the decrease in total assets was a decrease in cash and cash equivalents of approximately $35.3 million, partially offset by an increase of $18.2 million in net loans. The increase in net loans consisted of a $25.2 million increase in construction loans and a $2.1 million increase in commercial and industrial loans, partially offset by a decrease of $9.1 million in commercial real estate loans.
Total deposits at March 31, 2023 decreased $55.6 million, or 4.1%, when compared to December 31, 2022. When comparing deposit products between the two periods, non-interest-bearing demand deposits decreased $46.4 million, interest-bearing demand deposits decreased $24.8 million, money market deposits decreased $19.8 million and savings deposits decreased $17.2 million. Partially offsetting these decreases was an increase in certificates of deposit of $52.5 million. In addition, borrowings increased $34.5 million from $10.0 million at December 31, 2022 to $44.5 million at March 31, 2023.
Total stockholders’ equity at March 31, 2023 increased $5.7 million or 2.6% when compared to the end of 2022. The increase was primarily due to the $3.9 million increase in retained earnings, consisting of $6.1 million in income less $1.9 million of cash dividends recorded during the period, and a $1.2 million reduction in the accumulated other comprehensive loss on the available-for-sale investment portfolio. The ratio of equity to total assets at March 31, 2023 and at December 31, 2022, was 14.2% and 13.7%, respectively.
Asset Quality
At March 31, 2023, non-performing assets totaled $6.5 million, an increase of $6.2 million, when compared to the amount at December 31, 2022. This increase was due to the delinquency of a $6.2 million commercial real estate loan. The loan is sufficiently secured by a mixed-use property comprising two buildings each with retail units and residential apartments. The property is located in New York City.
Upon the adoption of the Current Expected Credit Losses (“CECL”) method of calculating the allowance for credit losses effective January 1, 2023, performing troubled debt restructurings (“TDRs”) are no longer reported for the current period. At December 31, 2022 there were three loans classified as TDR loans totaling $5.9 million and each of these loans was performing in accordance with the agreed-upon terms.
Review of Quarterly Financial Results
Net interest income was $16.7 million for the first quarter of 2023, compared to $18.2 million for the fourth quarter of 2022 and $15.9 million for the first quarter of 2022. The decrease from the previous quarter was the result of an increase in interest expense of $1.7 million, or 78.6%, partially offset by an increase in interest income of $154 thousand. The net interest margin for the first quarter 2023 was 4.59%, decreasing 23 basis points when compared to the fourth quarter of 2022. This decrease was primarily associated with an increase of 54 basis points in the cost of funds associated with rising interest rates. When comparing the three-month periods ended March 31, 2023 and 2022, net interest income increased $807 thousand, which was primarily due to an increase of 126 basis points in the yield earned on interest-earning assets, partially offset by an increase of 84 basis points in the cost of funds.
5
The Bank recorded a provision for credit losses of $265 thousand during the three months ended March 31, 2023 and $200 thousand during the fourth quarter of 2022. The Bank recorded no provision for the three months ended March 31, 2022. Net recoveries for the three-month periods ended March 31, 2023 and 2022 were $3 thousand and $34 thousand, respectively. Net charge-offs for the three months ended December 31, 2022 were $406 thousand. Upon adoption of the CECL method of calculating the allowance for credit losses on January 1, 2023, the Bank recorded a one-time decrease, net of tax, in retained earnings of $284 thousand, a reduction to the allowance for credit losses of $301 thousand and an increase in the reserve for unfunded liabilities of $695 thousand. During the first quarter of 2023, the Bank recorded a provision for credit losses of $265 thousand and increased the reserve for unfunded liabilities in the amount of $79 thousand. The coverage ratio of allowance for credit losses to period end loans was 1.19% at March 31, 2023, compared to 1.20% at December 31, 2022.
Total non-interest income of $1.4 million for the first quarter of 2023 increased $377 thousand and $328 thousand, or by 37.8% and 31.4%, when compared to the fourth quarter of 2022 and the quarter ended March 31, 2022, respectively. The increase over the prior quarter was primarily due to a $241 thousand increase in valuation of an SBIC investment and a $115 thousand increase in loan fees. The increase over the first quarter of 2022 period was primarily due to a $256 thousand increase in loan fees and a $91 thousand increase in other non-interest income.
Total non-interest expense for the first quarter of 2023 increased $504 thousand, or 5.4%, when compared to the same period in 2022. This increase was primarily due to a $498 thousand increase in salaries and benefits expenses and a $265 thousand increase in data processing and communications expenses, partially offset by decreases in occupancy and equipment expenses of $137 thousand, professional fees of $96 thousand and federal deposit insurance expense of $74 thousand. When comparing the quarter ended March 31, 2023 to the immediately preceding quarter, non-interest expense increased $101 thousand, or 1.0%, primarily due to increases in salaries and employee benefits costs and other non-interest expenses, partially offset by decreases in professional fees, occupancy and equipment expenses and data processing and communications expenses.
For the three-month period ended March 31, 2023, the Bank recorded an income tax expense of $1.9 million, resulting in an effective tax rate of 23.8%, compared to an income tax expense of $2.2 million resulting in an effective tax rate of 23.5% for the three-month period ended December 31, 2022, and compared to an income tax expense of $1.6 million resulting in an effective tax rate of 21.1% for the three-month period ended March 31, 2022.
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 19 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Hamilton, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville. There are also four branches in the Philadelphia, Pennsylvania 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 Noah Bank, a Pennsylvania-chartered bank (“Noah”). Pursuant to the terms and conditions set forth in the Merger Agreement, Noah will merge with and into the Bank. The Company has received the requisite approvals of the Merger Agreement from the Federal Deposit Insurance Corporation, and the Pennsylvania and New Jersey state bank regulators. The Company anticipates that the Merger will close in the second quarter of 2023.
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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 following factors, among others, could cause the Company’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the extent of the adverse impact of the current global coronavirus outbreak on our customers, prospects and business, including related supply chain shortage of goods, as well as 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 the 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; inflation, interest rate, 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; acquisitions including the Company’s pending acquisition of Noah; ability to meet other closing conditions to that acquisition; delay in closing the acquisition; difficulties and delays in integrating the businesses of Noah and the Bank or fully realizing cost savings and other benefits; changes in consumer spending and saving habits; those risks set forth in the Bank’s Annual Report on Form 10-K for the year ended December 31, 2022 under the heading “Risk Factors,” 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.
7
Princeton Bancorp, Inc.
Consolidated Statements of Financial Condition
(Unaudited)
(Dollars inthousands, except per share data)
| December 31, | March 31, | March 31, 2023 vsDecember 31, 2022 | March 31, 2023 vsMarch 31, 2022 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2022 | Change | % Change | Change | % Change | |||||||||||||
| ASSETS | ||||||||||||||||||
| Cash and cash equivalents | 18,024 | $ | 53,351 | $ | 94,030 | ) | (66.22 | )% | ) | (80.83 | )% | |||||||
| Securities<br>available-for-sale taxable | 42,228 | 42,061 | 50,409 | 0.40 | ) | (16.23 | ) | |||||||||||
| Securities<br>available-for-sale tax-exempt | 42,284 | 41,341 | 46,058 | 2.28 | ) | (8.19 | ) | |||||||||||
| Securities<br>held-to-maturity | 199 | 201 | 206 | ) | (1.00 | ) | ) | (3.40 | ) | |||||||||
| Loans receivable, net of deferred loan fees | 1,388,575 | 1,370,368 | 1,395,155 | 1.33 | ) | (0.47 | ) | |||||||||||
| Allowance for credit losses | (16,507 | ) | (16,461 | ) | (16,654 | ) | ) | 0.28 | (0.88 | ) | ||||||||
| Goodwill | 8,853 | 8,853 | 8,853 | — | — | |||||||||||||
| Core deposit intangible | 1,690 | 1,825 | 2,238 | ) | (7.40 | ) | ) | (24.49 | ) | |||||||||
| Other assets | 99,974 | 100,240 | 97,654 | ) | (0.27 | ) | 2.38 | |||||||||||
| TOTAL ASSETS | 1,585,320 | $ | 1,601,779 | $ | 1,677,949 | ) | (1.03 | )% | ) | (5.52 | )% | |||||||
| LIABILITIES | ||||||||||||||||||
| Non-interest checking | 218,709 | $ | 265,078 | $ | 273,679 | ) | (17.49 | )% | ) | (20.09 | )% | |||||||
| Interest checking | 244,889 | 269,737 | 269,072 | ) | (9.21 | ) | ) | (8.99 | ) | |||||||||
| Savings | 173,502 | 190,686 | 238,224 | ) | (9.01 | ) | ) | (27.17 | ) | |||||||||
| Money market | 263,874 | 283,652 | 382,477 | ) | (6.97 | ) | ) | (31.01 | ) | |||||||||
| Time deposits over 250,000 | 88,378 | 76,150 | 26,493 | 16.06 | 233.59 | |||||||||||||
| Other time deposits | 302,748 | 262,427 | 251,600 | 15.36 | 20.33 | |||||||||||||
| Total deposits | 1,292,100 | 1,347,730 | 1,441,545 | ) | (4.13 | ) | ) | (10.37 | ) | |||||||||
| Borrowings | 44,500 | 10,000 | — | 345.00 | N/A | |||||||||||||
| Other liabilities | 23,447 | 24,448 | 23,164 | ) | (4.09 | ) | 1.22 | |||||||||||
| TOTAL LIABILITIES | 1,360,047 | 1,382,178 | 1,464,709 | ) | (1.60 | ) | ) | (7.15 | ) | |||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||||
| Common stock 1,2 | — | 34,547 | 34,181 | ) | (100.00 | ) | ) | (100.00 | ) | |||||||||
| Paid-in capital 2 | 96,880 | 81,291 | 80,576 | 19.18 | 20.23 | |||||||||||||
| Treasury stock 2 | — | (19,452 | ) | (13,647 | ) | (100.00 | ) | (100.00 | ) | |||||||||
| Retained earnings | 135,425 | 131,488 | 115,813 | 2.99 | 16.93 | |||||||||||||
| Accumulated other comprehensive income (loss) | (7,032 | ) | (8,273 | ) | (3,683 | ) | (15.00 | ) | ) | 90.93 | ||||||||
| TOTAL STOCKHOLDERS’ EQUITY | 225,273 | 219,601 | 213,240 | 2.58 | 5.64 | |||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 1,585,320 | $ | 1,601,779 | $ | 1,677,949 | ) | (1.03 | )% | ) | (5.52 | )% | |||||||
| Book value per common share | 35.98 | $ | 35.16 | $ | 33.49 | 2.33 | % | 7.44 | % | |||||||||
| Tangible book value per common share 3 | 34.29 | $ | 33.45 | $ | 31.75 | 2.51 | % | 8.00 | % |
All values are in US Dollars.
| ^1^ | The common stock of Princeton Bancorp, Inc. has no par value. The par value of the common stock of the Bank was<br>$5.00 per share. |
|---|---|
| ^2^ | The balances of common stock and treasury stock were reclassified to<br>paid-in capital effective January 10, 2023, upon formation of Princeton Bancorp, Inc. |
| --- | --- |
| ^3^ | Tangible book value per common share is a non-GAAP measure that<br>represents book value per common share which excludes goodwill and core deposit intangible. |
| --- | --- |
8
Princeton Bancorp, Inc.
Loan and Deposit Tables
(Unaudited)
The components of loans receivable, net at March 31, 2023 and December 31, 2022 were as follows:
| March 31,2023 | December 31,2022 | |||||
|---|---|---|---|---|---|---|
| (In thousands) | ||||||
| Commercial real estate | $ | 864,497 | $ | 873,573 | ||
| Commercial and industrial | 30,916 | 28,859 | ||||
| Construction | 442,693 | 417,538 | ||||
| Residential first-lien mortgages | 42,566 | 43,125 | ||||
| Home equity / consumer | 7,535 | 7,260 | ||||
| PPP I (SBA loans) | 1,239 | 1,307 | ||||
| PPP II (SBA loans) | 1,077 | 1,162 | ||||
| Total loans | 1,390,523 | 1,372,824 | ||||
| Deferred fees and costs | (1,948 | ) | (2,456 | ) | ||
| Allowance for credit losses | (16,507 | ) | (16,461 | ) | ||
| Loans, net | $ | 1,372,068 | $ | 1,353,907 |
The components of deposits at March 31, 2023 and December 31, 2022 were as follows:
| March 31,2023 | December 31,2022 | |||
|---|---|---|---|---|
| (In thousands) | ||||
| Demand, non-interest-bearing | $ | 218,709 | $ | 265,078 |
| Demand, interest-bearing | 244,889 | 269,737 | ||
| Savings | 173,502 | 190,686 | ||
| Money market | 263,874 | 283,652 | ||
| Time deposits | 391,126 | 338,577 | ||
| Total deposits | $ | 1,292,100 | $ | 1,347,730 |
9
Princeton Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
(Amounts inthousands except per share data)
| Three Months Ended March 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change | % Change | ||||||
| Interest and dividend income | |||||||||
| Loans and fees | $ | 19,894 | $ | 16,492 | 20.6 | % | |||
| Available-for-sale<br>debt securities: | |||||||||
| Taxable | 278 | 223 | 24.7 | % | |||||
| Tax-exempt | 284 | 303 | ) | -6.3 | % | ||||
| Held-to-maturity<br>debt securities | 3 | 3 | 0.0 | % | |||||
| Other interest and dividend income | 153 | 57 | 168.4 | % | |||||
| Total interest and dividends | 20,612 | 17,078 | 20.7 | % | |||||
| Interest expense | |||||||||
| Deposits | 3,865 | 1,224 | 215.8 | % | |||||
| Borrowing | 86 | — | N/A | ||||||
| Total interest expense | 3,951 | 1,224 | 222.8 | % | |||||
| Net interest income | 16,661 | 15,854 | 5.1 | % | |||||
| Provision for credit losses | 265 | — | N/A | ||||||
| Net interest income after provision for credit losses | 16,396 | 15,854 | 3.4 | % | |||||
| Non-interest income | |||||||||
| Income from bank-owned life insurance | 290 | 282 | 2.8 | % | |||||
| Fees and service charges | 448 | 475 | ) | -5.7 | % | ||||
| Loan fees, including prepayment penalties | 351 | 95 | 269.5 | % | |||||
| Other | 285 | 194 | 46.9 | % | |||||
| Total non-interest income | 1,374 | 1,046 | 31.4 | % | |||||
| Non-interest expense | |||||||||
| Salaries and employee benefits | 5,399 | 4,901 | 10.2 | % | |||||
| Occupancy and equipment | 1,341 | 1,478 | ) | -9.3 | % | ||||
| Professional fees | 465 | 561 | ) | -17.1 | % | ||||
| Data processing and communications | 1,300 | 1,035 | 25.6 | % | |||||
| Federal deposit insurance | 190 | 264 | ) | -28.0 | % | ||||
| Advertising and promotion | 110 | 119 | ) | -7.6 | % | ||||
| Office expense | 97 | 54 | 79.6 | % | |||||
| Other real estate owned expense | — | 9 | ) | -100.0 | % | ||||
| Core deposit intangible | 135 | 154 | ) | -12.3 | % | ||||
| Other | 735 | 693 | 6.1 | % | |||||
| Total non-interest expense | 9,772 | 9,268 | 5.4 | % | |||||
| Income before income tax expense | 7,998 | 7,632 | 4.8 | % | |||||
| Income tax expense | 1,901 | 1,611 | 18.0 | % | |||||
| Net income | $ | 6,097 | $ | 6,021 | 1.3 | % | |||
| Net income per common share - basic | $ | 0.97 | $ | 0.93 | 4.8 | % | |||
| Net income per common share - diluted | $ | 0.95 | $ | 0.91 | 4.9 | % | |||
| Weighted average shares outstanding - basic | 6,257 | 6,465 | ) | -3.2 | % | ||||
| Weighted average shares outstanding - diluted | 6,386 | 6,614 | ) | -3.5 | % |
All values are in US Dollars.
10
Princeton Bancorp, Inc.
Consolidated Statements of Income (Current Quarter vs Prior Quarter)
(Unaudited)
(Amounts inthousands, except per share data)
| Three Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31,2023 | December 31,2022 | Change | % Change | |||||||
| Interest and dividend income | ||||||||||
| Loans and fees | $ | 19,894 | $ | 19,400 | 2.5 | % | ||||
| Available-for-sale<br>debt securities: | ||||||||||
| Taxable | 278 | 288 | ) | -3.5 | % | |||||
| Tax-exempt | 284 | 285 | ) | -0.4 | % | |||||
| Held-to-maturity<br>debt securities | 3 | 3 | 0.0 | % | ||||||
| Other interest and dividend income | 153 | 482 | ) | -68.3 | % | |||||
| Total interest and dividends | 20,612 | 20,458 | 0.8 | % | ||||||
| Interest expense | ||||||||||
| Deposits | 3,865 | 2,210 | 74.9 | % | ||||||
| Borrowing | 86 | 2 | 4200.0 | % | ||||||
| Total interest expense | 3,951 | 2,212 | 78.6 | % | ||||||
| Net interest income | 16,661 | 18,246 | ) | -8.7 | % | |||||
| Provision for credit losses | 265 | 200 | 32.5 | % | ||||||
| Net interest income after provision for credit losses | 16,396 | 18,046 | ) | -9.1 | % | |||||
| Non-interest income | ||||||||||
| Income from bank-owned life insurance | 290 | 286 | 1.4 | % | ||||||
| Fees and service charges | 448 | 411 | 9.0 | % | ||||||
| Loan fees, including prepayment penalties | 351 | 236 | 48.7 | % | ||||||
| Other | 285 | 64 | 345.3 | % | ||||||
| Total non-interest income | 1,374 | 997 | 37.8 | % | ||||||
| Non-interest expense | ||||||||||
| Salaries and employee benefits | 5,399 | 5,204 | 3.7 | % | ||||||
| Occupancy and equipment | 1,341 | 1,413 | ) | -5.1 | % | |||||
| Professional fees | 465 | 541 | ) | -14.0 | % | |||||
| Data processing and communications | 1,300 | 1,354 | ) | -4.0 | % | |||||
| Federal deposit insurance | 190 | 222 | ) | -14.4 | % | |||||
| Advertising and promotion | 110 | 105 | 4.8 | % | ||||||
| Office expense | 97 | 71 | 36.6 | % | ||||||
| Other real estate owned expense | — | (6 | ) | -100.0 | % | |||||
| Core deposit intangible | 135 | 135 | 0.0 | % | ||||||
| Other | 735 | 632 | 16.3 | % | ||||||
| Total non-interest expense | 9,772 | 9,671 | 1.0 | % | ||||||
| Income before income tax expense | 7,998 | 9,372 | ) | -14.7 | % | |||||
| Income tax expense | 1,901 | 2,201 | ) | -13.6 | % | |||||
| Net income | $ | 6,097 | $ | 7,171 | ) | -15.0 | % | |||
| Net income per common share - basic | $ | 0.97 | $ | 1.14 | ) | -14.5 | % | |||
| Net income per common share - diluted | $ | 0.95 | $ | 1.13 | ) | -15.5 | % | |||
| Weighted average shares outstanding - basic | 6,257 | 6,246 | 0.2 | % | ||||||
| Weighted average shares outstanding - diluted | 6,386 | 6,371 | 0.2 | % |
All values are in US Dollars.
11
Princeton Bancorp, Inc.
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars inthousands)
| For the Three Months Ended March 31, | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | ||||||||||||||
| AverageBalance | Yield/Rate | AverageBalance | Yield/Rate | Change | % Change | ||||||||||
| Earning assets | |||||||||||||||
| Loans | $ | 1,375,849 | 5.86 | % | $ | 1,346,733 | 4.97 | % | 0.89 | % | |||||
| Securities | |||||||||||||||
| Taxable<br>available-for-sale | 42,235 | 2.66 | % | 52,221 | 1.73 | % | ) | 0.93 | % | ||||||
| Tax-exempt available-for-sale | 41,634 | 2.77 | % | 48,605 | 2.53 | % | ) | 0.24 | % | ||||||
| Held-to-maturity | 200 | 5.36 | % | 207 | 5.35 | % | ) | 0.01 | % | ||||||
| Securities | 84,069 | 2.72 | % | 101,033 | 2.12 | % | ) | 0.60 | % | ||||||
| Other interest earning assets | |||||||||||||||
| Federal funds sold | 8,454 | 4.56 | % | 119,581 | 0.01 | % | ) | 4.55 | % | ||||||
| Other interest-earning assets | 5,001 | 4.77 | % | 4,546 | 1.23 | % | 3.54 | % | |||||||
| Other interest-earning assets | 13,455 | 4.64 | % | 124,127 | 0.19 | % | ) | 4.45 | % | ||||||
| Total interest-earning assets | 1,473,373 | 5.67 | % | 1,571,893 | 4.41 | % | ) | 1.26 | % | ||||||
| Total non-earning assets | 109,354 | 108,280 | |||||||||||||
| Total assets | $ | 1,582,727 | $ | 1,680,173 | |||||||||||
| Interest-bearing liabilities | |||||||||||||||
| Checking | $ | 264,507 | 0.84 | % | $ | 257,978 | 0.25 | % | 0.59 | % | |||||
| Savings | 182,763 | 0.92 | % | 232,136 | 0.24 | % | ) | 0.68 | % | ||||||
| Money market | 268,814 | 1.75 | % | 376,517 | 0.27 | % | ) | 1.48 | % | ||||||
| Certificates of deposit | 364,470 | 1.94 | % | 290,686 | 0.95 | % | 0.99 | % | |||||||
| Total interest-bearing deposits | 1,080,554 | 1.45 | % | 1,157,317 | 0.43 | % | ) | 1.02 | % | ||||||
| Non-interest bearing deposits | 242,814 | 285,298 | ) | ||||||||||||
| Total deposits | 1,323,368 | 1.18 | % | 1,442,615 | 0.34 | % | ) | 0.84 | % | ||||||
| Borrowings | 6,993 | 4.99 | % | — | 0.00 | % | 4.99 | % | |||||||
| Total interest-bearing liabilities (excluding non interest deposits) | 1,087,547 | 1.47 | % | 1,157,317 | 0.43 | % | ) | 1.04 | % | ||||||
| Non-interest-bearing deposits | 242,814 | 285,298 | |||||||||||||
| Total cost of funds | 1,330,361 | 1.18 | % | 1,442,615 | 0.34 | % | ) | 0.84 | % | ||||||
| Accrued expenses and other liabilities | 28,587 | 20,505 | |||||||||||||
| Stockholders’ equity | 223,779 | 217,053 | |||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,582,727 | $ | 1,680,173 | |||||||||||
| Net interest spread | 4.20 | % | 3.98 | % | |||||||||||
| Net interest margin | 4.59 | % | 4.09 | % | |||||||||||
| Net interest margin (FTE)^1^ | 4.66 | % | 4.14 | % |
All values are in US Dollars.
| ^1^ | Includes federal and state tax effect of tax-exempt securities and<br>loans. |
|---|
12
Princeton Bancorp, Inc.
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars inthousands)
| For the Three Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2023 | December 31, 2022 | ||||||||||||||
| AverageBalance | Yield/Rate | AverageBalance | Yield/Rate | Change | % Change | ||||||||||
| Earning assets | |||||||||||||||
| Loans | $ | 1,375,849 | 5.86 | % | $ | 1,375,191 | 5.60 | % | 0.27 | % | |||||
| Securities | |||||||||||||||
| Taxable<br>available-for-sale | 42,235 | 2.66 | % | 42,458 | 2.69 | % | ) | -0.03 | % | ||||||
| Tax-exempt available-for-sale | 41,634 | 2.77 | % | 39,743 | 2.85 | % | -0.07 | % | |||||||
| Held-to-maturity | 200 | 5.36 | % | 202 | 5.24 | % | ) | 0.12 | % | ||||||
| Securities | 84,069 | 2.72 | % | 82,403 | 2.77 | % | -0.05 | % | |||||||
| Other interest earning assets | |||||||||||||||
| Federal funds sold | 8,454 | 4.56 | % | 44,410 | 4.09 | % | ) | 0.46 | % | ||||||
| Other interest-earning assets | 5,001 | 4.77 | % | 1,303 | 7.40 | % | -2.63 | % | |||||||
| Other interest-earning assets | 13,455 | 4.64 | % | 45,713 | 4.19 | % | ) | 0.45 | % | ||||||
| Total interest-earning assets | 1,473,373 | 5.67 | % | 1,503,307 | 5.40 | % | ) | 0.27 | % | ||||||
| Total non-earning assets | 109,354 | 109,554 | |||||||||||||
| Total assets | $ | 1,582,727 | $ | 1,612,861 | |||||||||||
| Interest-bearing liabilities | |||||||||||||||
| Checking | $ | 264,507 | 0.84 | % | $ | 275,797 | 0.45 | % | ) | 0.39 | % | ||||
| Savings | 182,763 | 0.92 | % | 201,498 | 0.53 | % | ) | 0.40 | % | ||||||
| Money market | 268,814 | 1.75 | % | 294,246 | 0.91 | % | ) | 0.83 | % | ||||||
| Certificates of deposit | 364,470 | 1.94 | % | 316,689 | 1.19 | % | 0.75 | % | |||||||
| Total interest-bearing deposits | 1,080,554 | 1.45 | % | 1,088,230 | 0.81 | % | ) | 0.65 | % | ||||||
| Non-interest bearing deposits | 242,814 | 280,626 | ) | ||||||||||||
| Total deposits | 1,323,368 | 1.18 | % | 1,368,856 | 0.64 | % | ) | 0.54 | % | ||||||
| Borrowings | 6,993 | 4.99 | % | 217 | 4.67 | % | 0.32 | % | |||||||
| Total interest-bearing liabilities (excluding non interest deposits) | 1,087,547 | 1.47 | % | 1,088,447 | 0.81 | % | ) | 0.67 | % | ||||||
| Non-interest-bearing deposits | 242,814 | 280,626 | |||||||||||||
| Total cost of funds | 1,330,361 | 1.18 | % | 1,369,073 | 0.64 | % | ) | 0.54 | % | ||||||
| Accrued expenses and other liabilities | 28,587 | 28,215 | |||||||||||||
| Stockholders’ equity | 223,779 | 215,573 | |||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,582,727 | $ | 1,612,861 | |||||||||||
| Net interest spread | 4.20 | % | 4.59 | % | |||||||||||
| Net interest margin | 4.59 | % | 4.82 | % | |||||||||||
| Net interest margin (FTE)^1^ | 4.66 | % | 4.89 | % |
All values are in US Dollars.
| ^1^ | Includes federal and state tax effect of tax-exempt securities and<br>loans. |
|---|
13
Princeton Bancorp, Inc.
Quarterly Financial Highlights
(Unaudited)
| 2023March | 2022December | 2022September | 2022<br>June | 2022March | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on average assets | 1.56 | % | 1.76 | % | 1.70 | % | 1.52 | % | 1.45 | % | |||||
| Return on average equity | 11.05 | % | 13.20 | % | 12.91 | % | 11.90 | % | 11.25 | % | |||||
| Return on average tangible equity^1^ | 11.60 | % | 13.89 | % | 13.59 | % | 12.54 | % | 11.86 | % | |||||
| Net interest margin | 4.59 | % | 4.82 | % | 4.64 | % | 4.19 | % | 4.09 | % | |||||
| Net interest margin (FTE)^2^ | 4.66 | % | 4.89 | % | 4.71 | % | 4.24 | % | 4.14 | % | |||||
| Efficiency ratio - non-GAAP^3^ | 53.43 | % | 49.56 | % | 51.49 | % | 53.36 | % | 53.93 | % | |||||
| COMMON STOCK DATA | |||||||||||||||
| Market value at period end | $ | 31.72 | $ | 31.72 | $ | 28.35 | $ | 27.46 | $ | 28.85 | |||||
| Market range: | |||||||||||||||
| High | $ | 37.18 | $ | 32.80 | $ | 29.95 | $ | 30.55 | $ | 32.05 | |||||
| Low | $ | 31.18 | $ | 28.57 | $ | 27.16 | $ | 26.57 | $ | 28.67 | |||||
| Book value per common share at period end | $ | 35.98 | $ | 35.16 | $ | 34.00 | $ | 33.74 | $ | 33.49 | |||||
| Tangible book value per common share at period end^4^ | $ | 34.29 | $ | 33.45 | $ | 32.27 | $ | 32.00 | $ | 31.75 | |||||
| Shares of common stock outstanding (in thousands) | 6,262 | 6,245 | 6,251 | 6,263 | 6,366 | ||||||||||
| CAPITAL RATIOS | |||||||||||||||
| Total capital (to risk-weighted assets) | 15.43 | % | 15.12 | % | 14.71 | % | 14.13 | % | 14.16 | % | |||||
| Tier 1 capital (to risk-weighted assets) | 14.36 | % | 14.06 | % | 13.63 | % | 13.08 | % | 13.10 | % | |||||
| Tier 1 capital (to average assets) | 14.00 | % | 13.47 | % | 13.10 | % | 12.46 | % | 12.36 | % | |||||
| Period-end equity to assets | 14.21 | % | 13.71 | % | 13.26 | % | 13.00 | % | 12.71 | % | |||||
| Period-end tangible equity to tangible assets | 13.64 | % | 13.13 | % | 12.67 | % | 12.42 | % | 12.13 | % | |||||
| CREDIT QUALITY DATA (Dollars in thousands) | |||||||||||||||
| Net charge-offs (recoveries) | $ | (3 | ) | $ | 406 | $ | 200 | $ | (12 | ) | $ | (34 | ) | ||
| Annualized net charge-offs (recoveries) to average loans | -0.001 | % | 0.118 | % | 0.058 | % | -0.003 | % | -0.010 | % | |||||
| Nonperforming loans (excluding TDRs) | $ | 6,456 | $ | 266 | $ | 370 | $ | 402 | $ | 406 | |||||
| Other real estate owned | — | — | — | — | 226 | ||||||||||
| Troubled debt restructurings (TDRs) | |||||||||||||||
| -Performing ^5^ | — | 5,882 | 5,943 | 6,001 | 6,066 | ||||||||||
| -Non-performing | — | — | 359 | 563 | 766 | ||||||||||
| Total nonperforming assets and accruing TDRs | $ | 6,456 | $ | 6,148 | $ | 6,672 | $ | 6,966 | $ | 7,464 | |||||
| Allowance for credit losses as a percent of: | |||||||||||||||
| Period-end loans | 1.19 | % | 1.20 | % | 1.21 | % | 1.19 | % | 1.19 | % | |||||
| Nonaccrual loans | 255.68 | % | 6188.35 | % | 2286.15 | % | 1727.05 | % | 1420.99 | % | |||||
| Nonperforming assets | 255.68 | % | 6188.35 | % | 2286.15 | % | 1727.05 | % | 1191.27 | % | |||||
| As a percent of total loans: | |||||||||||||||
| Nonaccrual loans | 0.46 | % | 0.02 | % | 0.05 | % | 0.07 | % | 0.08 | % | |||||
| Accruing TDRs ^5^ | 0.00 | % | 0.43 | % | 0.43 | % | 0.43 | % | 0.43 | % | |||||
| Nonaccrual loans and accruing TDRs ^5^ | 0.46 | % | 0.45 | % | 0.48 | % | 0.50 | % | 0.52 | % | |||||
| ^1^ | Return on average tangible equity is a non-GAAP measure that represents<br>the rate of return on tangible common equity. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^2^ | Includes the effect of tax-exempt securities and loans.<br> | ||||||||||||||
| --- | --- | ||||||||||||||
| ^3^ | The efficiency ratio is a non-GAAP measure that represents the ratio of<br>non-interest expense (excluding amortization of core deposit intangible) divided by net interest income and non-interest income. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^4^ | Tangible book value per common share is a non-GAAP measure that<br>represents book value per common share which excludes goodwill and core deposit intangible. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^5^ | Performing TDRs are no longer reported upon adoption of the CECL method of calculating the allowance for credit<br>losses | ||||||||||||||
| --- | --- |
14