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First Bank Reports First Quarter 2022 Net Income of $8.2 Million
Source: Nasdaq GlobeNewswire / 25 Apr 2022 15:30:01 America/Chicago
HAMILTON, N.J., April 25, 2022 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) (the Bank) today announced results for the first quarter of 2022, including net income of $8.2 million, or $0.41 per diluted share. Return on average assets, return on average equity and return on average tangible equityi for the first quarter of 2022 were 1.31%, 12.25% and 13.22%, respectively. In the first quarter of 2021, the Bank reported net income of $9.7 million, or $0.49 per diluted share, and return on average assets, return on average equity and return on average tangible equityi of 1.66%, 16.21% and 17.52%, respectively.
First Quarter 2022 Performance Highlights:
- Total loans of $2.15 billion at March 31, 2022 reflected growth of $39.8 million, or 1.9%, from December 31, 2021. Loan growth, excluding the decline in Paycheck Protection Program (PPP) loans, totaled $65.3 million in the first quarter of 2022, representing a 12.8% annualized increase.
- Total deposits of $2.18 billion at March 31, 2022 were up $63.3 million, or 3.0%, from December 31, 2021. Non-interest bearing demand deposits increased to 27.4% of total deposits at March 31, 2022, compared to 26.4% at December 31, 2021, while time deposits decreased to 15.1% at March 31, 2022 from 18.5% at December 31, 2021.
- Asset quality metrics remained solid during the quarter, with net charge offs making up 0.05% of average loans on an annualized basis and nonperforming loans declining to 0.59% of total loans at March 31, 2022 from 0.62% at December 31, 2021.
- Continued focus on managing expenses resulted in the fifth consecutive quarter of an efficiency ratioii below 50%, at 49.62% for the first quarter of 2022.
- Tangible book value per shareiii of $12.79, up $0.12 from the end of the linked fourth quarter of 2021 and up $1.20 from March 31, 2021.
“Our first quarter performance was highlighted by strong earnings, continued organic loan growth, further enhancement of our deposit mix and solid asset quality metrics,” said Patrick L. Ryan, President and Chief Executive Officer. “Our team’s focus on expanding relationships with new and existing customers supported solid balance sheet expansion, with non-PPP loans up an annualized 12.8% and deposits up an annualized 12.1% from the linked fourth quarter. Organic loan growth was led by investor and owner-occupied commercial real estate lending, while our deposit mix continued to shift toward lower cost, non-time deposits.”
Mr. Ryan continued, “As expected, PPP loans and associated fees declined in the first quarter of 2022 as customers’ loans through this federal program continue to be forgiven. Offsetting this decline was strong organic loan growth in the fourth quarter of 2021 and first quarter of 2022, creating a larger average earning asset base. This loan growth, combined with our continued low funding costs, led to net interest income expansion for the quarter. We also saw an improvement in our net interest margin which was 3.43%, excluding PPP fees, in the first quarter of 2022 compared to 3.34% in the fourth quarter of 2021 and we see opportunity to improve the margin through rising asset yields. While non-interest revenues were softer in the first three months of the year, we believe this was partially a timing issue and remain optimistic about opportunities to expand U.S. Small Business Administration loan sale activity and continue to generate loan swap fee income. As we seek to drive continued revenue growth, we remain focused on effectively managing expenses, even as we respond to inflationary and competitive pressures to retain and recruit top talent in our markets.”
“Loan growth continues to come from high-quality customers and, accordingly, our asset quality metrics remain strong. Our nonperforming loans to total loans ratio improved during the quarter to 0.59%. Net charge-offs remain relatively low as annualized charge offs were 0.05% of average loans during the quarter ended March 31, 2022 and primarily related to one loan.”
“We are very pleased with our performance so far in 2022 and the opportunities we see ahead for continued growth. Our two newest branches, acquired in late 2021, continue to perform well and have led to some expanded customer relationships and with our robust lending pipelines, we believe we can continue to drive organic commercial loan growth. Our confidence is due in large part to the exceptional talent we have and continue to attract. We have been able to capitalize on market disruption, adding a number of relationship managers over the last several quarters from larger institutions that have already hit the ground running.”
“Our entire team is focused on maintaining our earnings and profitability strength as we seek to drive long-term shareholder value. As such, we were pleased to again announce a $0.06 quarterly dividend, reflecting an annualized yield of 1.68% based on our April 19, 2022 closing price.”
Income Statement
First Bank’s net interest income for the first quarter of 2022 was $21.1 million, an increase of $1.1 million, or 5.5%, compared to $20.0 million in the first quarter of 2021, due primarily to a $1.1 million decrease in total interest expense. The reduction in interest expense was primarily a result of a 46 basis point reduction in the average rate paid on time deposits, along with a decrease of $157.7 million in the average balance of time deposits. As a result of the Bank’s concerted effort to drive down deposit costs in a comparatively much lower interest rate environment, interest expense on all other interest bearing deposits also declined. Interest income was consistent with the year-ago quarter even with a lower level of PPP loan fees, as average loan growth of $93.7 million between the comparative periods was partially offset by a 20 basis point decline in the average loan yields. Impacting interest income from loans in the first quarter of 2022 was $860,000 in PPP loan fees compared to $1.6 million in the first quarter of 2021 and $1.1 million in the linked fourth quarter of 2021. Also impacting loan interest income in the first quarter of 2022 was loan prepayment income of $459,000, compared to $673,000 for the quarter ended March 31, 2021 and $312,000 for the quarter ended December 31, 2021.
The first quarter 2022 tax equivalent net interest margin was 3.57%, a modest decrease of three basis points compared to the prior year quarter and an increase of five basis points from the fourth quarter of 2021. The Bank’s margin continues to benefit from higher average non-interest bearing deposits and an overall lower cost of funds.
The Bank reported a provision for loan losses of $642,000 for the first quarter of 2022, compared to $1.1 million credit to the provision for loan losses in the first quarter of 2021 and a provision of $825,000 for the linked fourth quarter 2021. The provision for the quarter ended March 31, 2022 reflects consistent organic loan growth and continued strong asset quality.
First quarter 2022 non-interest income of $1.3 million compares to $2.3 million during the first quarter 2021. The decrease between the periods was primarily the result of a $497,000 decrease in gains on sale of loans reflecting lower U.S. Small Business Administration (SBA) loan sales, a $436,000 decrease in loan fees primarily reflecting lower loan swap fees in the first quarter 2022, and a $246,000 decrease in gains on the recovery of acquired loans.
Non-interest expense for first quarter 2022 of $11.1 million increased $472,000, or 4.4%, compared to $10.7 million for the prior year quarter. The higher non-interest expense compared to first quarter 2021 was primarily a result of a $776,000, or 13.5%, increase in salaries and employee benefits which was partially offset by reduced occupancy and equipment and legal fees. The increase in salaries and employee benefits was due primarily to merit-based salary compensation, a slightly higher number of total employees and increases in employee benefit costs.
On a linked quarter basis, first quarter 2022 non-interest expense decreased $703,000, or 5.9%, compared to $11.8 million for the fourth quarter of 2021, when the Bank recorded higher performance related compensation and merger-related expenses associated with our acquisition of two branches. Excluding merger-related expenses incurred in the fourth quarter of 2021, adjusted non-interest expenseiv decreased 1.8% between the comparable periods.
Income tax expense for the three months ended March 31, 2022 was $2.5 million with an effective tax rate of 23.4%, compared to $3.1 million with an effective tax rate of 24.2% for the first quarter of 2021 and $2.4 million with an effective tax rate of 23.2% for the fourth quarter of 2021.
Balance Sheet
Total assets at March 31, 2022 were $2.57 billion, an increase of $168.3 million, or 7.0%, compared to $2.41 billion at March 31, 2021 and $63.5 million, or 2.5%, from December 31, 2021, respectively. Total loans increased $129.6 million, or 6.4%, to $2.15 billion at March 31, 2022 compared to $2.02 billion at March 31, 2021. The increase in loans during the twelve month period ended March 31, 2022 reflects net non-PPP organic growth of $286.7 million and approximately $11.3 million in acquired loans, offset by a net decline in PPP loans of $168.4 million, as such loans continue to be forgiven. Total loans as of March 31, 2022 increased $39.8 million, or 1.9%, from $2.11 billion at December 31, 2021, reflecting organic, net non-PPP loan growth of $65.3 million, offset by a net decline in PPP loans of $25.5 million. PPP loans outstanding at March 31, 2022 were $25.5 million.
Total deposits were $2.18 billion at March 31, 2022, an increase of $207.4 million, or 10.5%, from $1.97 billion at March 31, 2021, and an increase of $63.3 million, or 3.0%, compared to $2.11 billion at December 31, 2021, respectively. Non-interest-bearing deposits totaled $597.3 million at March 31, 2022, an increase of $97.3 million, or 19.5%, from March 31, 2021, and an increase of $38.6 million, or 6.9%, from December 31, 2021. The Bank continues to focus on enhancing its deposit mix and, as of March 31, 2022, has grown non-interest bearing deposits to 27.4% and lowered time deposits to 15.1% of total deposits.
Stockholders’ equity was $271.1 million at March 31, 2022, compared to $266.7 million at December 31, 2021. The growth of $4.4 million, or 1.7%, was primarily a result of first quarter 2022 net income of $8.2 million, partially offset by a $3.2 million increase in accumulated other comprehensive loss and cash dividends paid of $1.2 million during the three months ended March 31, 2022. The increase in accumulated other comprehensive loss was due to an increase in unrealized losses on the Bank’s available for sale investment securities.
As of March 31, 2022, the Bank continued to exceed all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 10.15%, a Tier 1 Risk-Based capital ratio of 10.60%, a Common Equity Tier 1 Capital ratio of 10.60%, and a Total Risk-Based capital ratio of 12.86%.
Asset Quality
First Bank’s asset quality metrics remained stable and favorable during the three months ended March 31, 2022. Net charge offs of $247,000 for the first quarter of 2022 were 0.05% of average loans on an annualized basis. This compares to net recoveries of $5,000, or an annualized 0.00% of average loans, for the first quarter of 2021 and net charge offs of $6,000, or an annualized 0.00%, for the fourth quarter of 2021. Nonperforming loans were $12.6 million at March 31, 2022, up from $10.7 million on March 31, 2021, and down from $13.0 million at December 31, 2021. Nonperforming loans as a percentage of total loans at March 31, 2022 were 0.59%, compared with 0.53% at March 31, 2021 and 0.62% at December 31, 2021, respectively. The allowance for loan losses to nonperforming loans was 191.72% at March 31, 2022, compared with 214.74% at the end of first quarter 2021, and 182.65% at December 31, 2021, respectively.
COVID-19 Response
First Bank participated in the PPP, established by the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act), during 2020 and 2021. The PPP was a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the SBA. The PPP provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover compensation and other business-related operating costs. The PPP ended on May 31, 2021 but the PPP loan forgiveness process is ongoing. As of March 31, 2022, First Bank had 205 PPP loans with outstanding balances of $25.5 million. During the quarter ended March 31, 2022, PPP loans totaling $25.5 million were forgiven and the Bank realized $860,000 in loan fees on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of March 31, 2022, the Bank had $829,000 in remaining unamortized fees associated with outstanding balances of PPP loans.
First Bank continues to monitor and analyze its COVID-19 related financial hardship payment deferrals (COVID-19 deferrals). As of March 31, 2022, the Bank’s population of COVID-19 deferrals consisted of one loan totaling $222,000, or 0.00% of total loans, down from $1.6 million, or 0.08% of total loans, at December 31, 2021.
Cash Dividend Declared
On April 19, 2022, First Bank’s Board of Directors declared a quarterly cash dividend of $0.06 per share to common stockholders of record at the close of business on May 13, 2022, payable on May 27, 2022.
Conference Call
First Bank will host its earnings call on Tuesday, April 26, 2022 at 9:00 AM eastern time. The direct dial toll free number for the live call is 1-844-200-6205 and the access code is 794535. For those unable to participate in the call, a replay will be available by dialing 1-866-813-9403 (access code 750010) from one hour after the end of the conference call until July 25, 2022. Replay information will also be available on First Bank’s website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay of the conference call.
About First Bank
First Bank is a New Jersey state-chartered bank with 18 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington (2), Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.6 billion in assets as of March 31, 2022, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol “FRBA.”
Forward Looking Statements
This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First Bank’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about First Bank, any of which may change over time and some of which may be beyond First Bank’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions, sustain its internal growth rate, and provide competitive products and services that appeal to its customers and target markets; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the impact of disease pandemics, including COVID-19, on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank's investment securities portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank's operations, including changes in regulations affecting financial institutions and expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank's ability to comply with applicable capital and liquidity requirements, including First Bank’s ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; and possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Forward-Looking Statements” and “Risk Factors” in First Bank’s Annual Report on Form 10-K and any updates to those risk factors set forth in First Bank’s proxy statement, subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank’s behalf may issue.
i Return on average tangible equity is a non-U.S. GAAP financial measure and is calculated by dividing net income by average tangible equity (average equity minus average goodwill and other intangible assets). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.
ii The efficiency ratio is a non-U.S. GAAP financial measure and is calculated by dividing non-interest expense less merger-related expenses by adjusted total revenue (net interest income plus non-interest income). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.
iii Tangible book value per share is a non-U.S. GAAP financial measure and is calculated by dividing common shares outstanding by tangible equity (equity minus goodwill and other intangible assets). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.
iv Adjusted non-interest expense is a non-U.S. GAAP financial measure and is calculated by subtracting merger-related expenses from total non-interest expense. For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.
FIRST BANK AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (in thousands, except for share data, unaudited) March 31, 2022 December 31, 2021 Assets Cash and due from banks $ 32,531 $ 25,076 Interest bearing deposits with banks 149,726 129,431 Cash and cash equivalents 182,257 154,507 Interest bearing time deposits with banks 1,740 2,170 Investment securities available for sale, at fair value 86,622 94,584 Investment securities held to maturity (fair value of $40,112 at March 31, 2022 and $39,718 at December 31, 2021) 41,468 39,547 Restricted investment in bank stocks 5,517 5,856 Other investments 8,078 8,062 Loans, net of deferred fees and costs 2,151,751 2,111,991 Less: Allowance for loan losses 24,140 23,746 Net loans 2,127,611 2,088,245 Premises and equipment, net 9,774 9,883 Other real estate owned, net 293 772 Accrued interest receivable 5,796 5,681 Bank-owned life insurance 57,006 56,633 Goodwill 17,826 17,826 Other intangible assets, net 2,028 2,145 Deferred income taxes 12,106 11,081 Other assets 15,723 13,306 Total assets $ 2,573,845 $ 2,510,298 Liabilities and Stockholders' Equity Liabilities: Non-interest bearing deposits $ 597,333 $ 558,775 Interest bearing deposits 1,580,562 1,555,827 Total deposits 2,177,895 2,114,602 Borrowings 74,306 81,835 Subordinated debentures 29,647 29,620 Accrued interest payable 799 399 Other liabilities 20,130 17,176 Total liabilities 2,302,777 2,243,632 Stockholders' Equity: Preferred stock, par value $2 per share; 10,000,000 shares authorized; no shares issued and outstanding - - Common stock, par value $5 per share; 40,000,000 shares authorized; 21,014,086 shares issued and 19,634,744 shares outstanding at March 31, 2022 and 20,851,506 shares issued and 19,472,364 shares outstanding at December 31, 2021 104,138 103,704 Additional paid-in capital 79,757 79,563 Retained earnings 102,914 95,924 Accumulated other comprehensive loss (3,420 ) (206 ) Treasury stock, 1,379,342 shares at March 31, 2022 and 1,379,142 shares at December 31, 2021 (12,321 ) (12,319 ) Total stockholders' equity 271,068 266,666 Total liabilities and stockholders' equity $ 2,573,845 $ 2,510,298 FIRST BANK AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except for share data, unaudited) Three Months Ended March 31, 2022 2021 Interest and Dividend Income Investment securities—taxable $ 576 $ 475 Investment securities—tax-exempt 37 48 Interest bearing deposits with banks, Federal funds sold and other 130 171 Loans, including fees 22,143 22,157 Total interest and dividend income 22,886 22,851 Interest Expense Deposits 1,009 1,850 Borrowings 288 514 Subordinated debentures 440 440 Total interest expense 1,737 2,804 Net interest income 21,149 20,047 Provision for loan losses 642 (1,053 ) Net interest income after provision for loan losses 20,507 21,100 Non-Interest Income Service fees on deposit accounts 252 176 Loan fees 245 681 Income from bank-owned life insurance 373 329 Gains on sale of loans 37 534 Gains on recovery of acquired loans 124 370 Other non-interest income 236 210 Total non-interest income 1,267 2,300 Non-Interest Expense Salaries and employee benefits 6,544 5,768 Occupancy and equipment 1,424 1,938 Legal fees 142 247 Other professional fees 687 531 Regulatory fees 193 268 Directors' fees 218 216 Data processing 596 535 Marketing and advertising 164 188 Travel and entertainment 88 15 Insurance 165 154 Other real estate owned expense, net 83 51 Other expense 818 739 Total non-interest expense 11,122 10,650 Income Before Income Taxes 10,652 12,750 Income tax expense 2,494 3,089 Net Income $ 8,158 $ 9,661 Basic earnings per common share $ 0.42 $ 0.49 Diluted earnings per common share $ 0.41 $ 0.49 Cash dividends per common share $ 0.06 $ 0.03 Basic weighted average common shares outstanding 19,532,811 19,672,017 Diluted weighted average common shares outstanding 19,768,452 19,834,319 FIRST BANK AND SUBSIDIARIES AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES (dollars in thousands, unaudited) Three Months Ended March 31, 2022 2021 Average Average Average Average Balance Interest Rate (5) Balance Interest Rate (5) Interest earning assets Investment securities (1) (2) $ 134,033 $ 621 1.88 % $ 97,756 $ 533 2.21 % Loans (3) 2,131,014 22,143 4.21 % 2,037,318 22,157 4.41 % Interest bearing deposits with banks, Federal funds sold and other 121,422 50 0.17 % 108,793 69 0.26 % Restricted investment in bank stocks 5,616 63 4.55 % 8,447 87 4.18 % Other investments 8,073 17 0.85 % 6,510 15 0.93 % Total interest earning assets(2) 2,400,158 22,894 3.87 % 2,258,824 22,861 4.10 % Allowance for loan losses (24,057 ) (24,600 ) Non-interest earning assets 146,674 132,193 Total assets $ 2,522,775 $ 2,366,417 Interest bearing liabilities Interest bearing demand deposits $ 298,274 $ 61 0.08 % $ 201,247 $ 65 0.13 % Money market deposits 706,368 448 0.26 % 591,752 520 0.36 % Savings deposits 190,222 164 0.35 % 168,993 204 0.49 % Time deposits 350,223 336 0.39 % 507,949 1,061 0.85 % Total interest bearing deposits 1,545,087 1,009 0.26 % 1,469,941 1,850 0.51 % Borrowings 76,492 288 1.53 % 145,632 514 1.43 % Subordinated debentures 29,632 440 5.94 % 29,519 440 5.96 % Total interest bearing liabilities 1,651,211 1,737 0.43 % 1,645,092 2,804 0.69 % Non-interest bearing deposits 583,543 464,157 Other liabilities 17,874 15,494 Stockholders' equity 270,147 241,674 Total liabilities and stockholders' equity $ 2,522,775 $ 2,366,417 Net interest income/interest rate spread (2) 21,157 3.44 % 20,057 3.41 % Net interest margin (2) (4) 3.57 % 3.60 % Tax equivalent adjustment (2) (8 ) (10 ) Net interest income $ 21,149 $ 20,047 (1) Average balance of investment securities available for sale is based on amortized cost. (2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%. (3) Average balances of loans include loans on nonaccrual status. (4) Net interest income divided by average total interest earning assets. (5) Annualized. FIRST BANK AND SUBSIDIARIES QUARTERLY FINANCIAL HIGHLIGHTS (in thousands, except for share and employee data, unaudited) As of or For the Quarter Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 EARNINGS Net interest income $ 21,149 $ 20,641 $ 20,781 $ 20,421 $ 20,047 Provision for loan losses 642 825 158 (162 ) (1,053 ) Non-interest income 1,267 2,211 1,901 1,342 2,300 Non-interest expense 11,122 11,825 10,522 10,155 10,650 Income tax expense 2,494 2,363 2,966 2,877 3,089 Net income 8,158 7,839 9,036 8,893 9,661 PERFORMANCE RATIOS Return on average assets (1) 1.31 % 1.27 % 1.46 % 1.48 % 1.66 % Adjusted return on average assets (1) (2) 1.31 % 1.33 % 1.48 % 1.48 % 1.66 % Return on average equity (1) 12.25 % 11.77 % 13.86 % 14.26 % 16.21 % Adjusted return on average equity (1) (2) 12.25 % 12.36 % 14.04 % 14.26 % 16.21 % Return on average tangible equity (1) (2) 13.22 % 12.63 % 14.90 % 15.37 % 17.52 % Adjusted return on average tangible equity (1) (2) 13.22 % 13.26 % 15.09 % 15.37 % 17.52 % Net interest margin (1) (3) 3.57 % 3.52 % 3.54 % 3.57 % 3.60 % Total cost of deposits (1) 0.19 % 0.21 % 0.25 % 0.30 % 0.39 % Efficiency ratio (2) 49.62 % 49.57 % 45.75 % 46.66 % 47.66 % SHARE DATA Common shares outstanding 19,634,744 19,472,364 19,464,388 19,678,528 19,663,065 Basic earnings per share $ 0.42 $ 0.40 $ 0.46 $ 0.45 $ 0.49 Diluted earnings per share 0.41 0.40 0.46 0.45 0.49 Adjusted diluted earnings per share (2) 0.41 0.42 0.46 0.45 0.49 Tangible book value per share (2) 12.79 12.67 12.45 12.02 11.59 Book value per share 13.81 13.69 13.37 12.94 12.51 MARKET DATA Market value per share $ 14.22 $ 14.51 $ 14.09 $ 13.54 $ 12.17 Market value / Tangible book value 111.14 % 114.53 % 113.21 % 112.61 % 104.97 % Market capitalization $ 279,206 $ 282,544 $ 274,253 $ 266,447 $ 239,300 CAPITAL & LIQUIDITY Tangible stockholders' equity / tangible assets (2) 9.84 % 9.91 % 10.01 % 9.76 % 9.55 % Stockholders' equity / assets 10.53 % 10.62 % 10.67 % 10.42 % 10.23 % Loans / deposits 98.80 % 99.88 % 97.96 % 100.87 % 102.62 % ASSET QUALITY Net charge-offs (recoveries) $ 247 $ 6 $ (121 ) $ 116 $ (5 ) Nonperforming loans 12,591 13,001 11,488 9,558 10,676 Nonperforming assets 12,884 13,773 11,967 10,038 11,251 Netcharge offs (recoveries) / average loans (1) 0.05 % 0.00 % (0.02 %) 0.02 % 0.00 % Nonperforming loans / total loans 0.59 % 0.62 % 0.57 % 0.47 % 0.53 % Nonperforming assets / total assets 0.50 % 0.55 % 0.49 % 0.41 % 0.47 % Allowance for loan losses / total loans 1.12 % 1.12 % 1.14 % 1.10 % 1.13 % Allowance for loan losses / total loans (excluding PPP loans) 1.13 % 1.15 % 1.19 % 1.18 % 1.24 % Allowance for loan losses / nonperforming loans 191.72 % 182.65 % 199.57 % 236.95 % 214.74 % OTHER DATA Total assets $ 2,573,845 $ 2,510,298 $ 2,438,020 $ 2,443,047 $ 2,405,576 Total loans 2,151,751 2,111,991 2,004,289 2,053,938 2,022,187 Total deposits 2,177,895 2,114,602 2,045,966 2,036,228 1,970,491 Total stockholders' equity 271,068 266,666 260,179 254,571 245,997 Number of full-time equivalent employees 219 217 209 215 211 (1) Annualized. (2) Non-U.S. GAAP financial measure that we believe provides management and investors with information that is useful in understanding our financial performance and condition. See accompanying table, "Non-U.S. GAAP Financial Measures," for calculation and reconciliation. (3) Tax equivalent using a federal income tax rate of 21%. FIRST BANK AND SUBSIDIARIES QUARTERLY FINANCIAL HIGHLIGHTS (dollars in thousands, unaudited) As of the Quarter Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 LOAN COMPOSITION Commercial and industrial $ 321,979 $ 350,103 $ 308,991 $ 379,916 $ 432,869 Commercial real estate: Owner-occupied 493,999 470,022 444,635 427,094 399,042 Investor 888,622 848,021 832,727 814,762 771,599 Construction and development 96,585 109,292 112,112 127,329 123,930 Multi-family 193,865 173,728 145,245 142,015 125,493 Total commercial real estate 1,673,071 1,601,063 1,534,719 1,511,200 1,420,064 Residential real estate: Residential mortgage and first lien home equity loans 99,992 106,204 103,890 108,842 117,756 Home equity–second lien loans and revolving lines of credit 30,485 31,375 29,998 29,422 29,306 Total residential real estate 130,477 137,579 133,888 138,264 147,062 Consumer and other 30,096 27,762 31,946 31,584 29,213 Total loans prior to deferred loan fees and costs 2,155,623 2,116,507 2,009,544 2,060,964 2,029,208 Net deferred loan fees and costs (3,872 ) (4,516 ) (5,255 ) (7,026 ) (7,021 ) Total loans $ 2,151,751 $ 2,111,991 $ 2,004,289 $ 2,053,938 $ 2,022,187 LOAN MIX Commercial and industrial 15.0 % 16.6 % 15.4 % 18.5 % 21.4 % Commercial real estate: Owner-occupied 23.0 % 22.3 % 22.2 % 20.8 % 19.7 % Investor 41.3 % 40.1 % 41.5 % 39.7 % 38.2 % Construction and development 4.5 % 5.2 % 5.6 % 6.2 % 6.1 % Multi-family 9.0 % 8.2 % 7.2 % 6.9 % 6.2 % Total commercial real estate 77.8 % 75.8 % 76.5 % 73.5 % 70.2 % Residential real estate: Residential mortgage and first lien home equity loans 4.6 % 5.0 % 5.2 % 5.3 % 5.8 % Home equity–second lien loans and revolving lines of credit 1.4 % 1.5 % 1.5 % 1.4 % 1.4 % Total residential real estate 6.1 % 6.5 % 6.7 % 6.7 % 7.2 % Consumer and other 1.4 % 1.4 % 1.7 % 1.6 % 1.5 % Net deferred loan fees and costs (0.2 %) (0.3 %) (0.3 %) (0.3 %) (0.3 %) Total loans 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % FIRST BANK AND SUBSIDIARIES QUARTERLY FINANCIAL HIGHLIGHTS (dollars in thousands, unaudited) As of the Quarter Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 DEPOSIT COMPOSITION Non-interest bearing demand deposits $ 597,333 $ 558,775 $ 536,905 $ 534,475 $ 500,008 Interest bearing demand deposits 314,564 293,647 241,869 211,074 208,443 Money market and savings deposits 936,848 871,074 845,607 817,424 767,603 Time deposits 329,150 391,106 421,585 473,255 494,437 Total Deposits $ 2,177,895 $ 2,114,602 $ 2,045,966 $ 2,036,228 $ 1,970,491 DEPOSIT MIX Non-interest bearing demand deposits 27.4 % 26.4 % 26.3 % 26.3 % 25.4 % Interest bearing demand deposits 14.5 % 13.9 % 11.8 % 10.4 % 10.6 % Money market and savings deposits 43.0 % 41.2 % 41.3 % 40.1 % 38.9 % Time deposits 15.1 % 18.5 % 20.6 % 23.2 % 25.1 % Total Deposits 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % FIRST BANK AND SUBSIDIARIES NON-U.S. GAAP FINANCIAL MEASURES (in thousands, except for share data, unaudited) As of or For the Quarter Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Return on Average Tangible Equity Net income (numerator) $ 8,158 $ 7,839 $ 9,036 $ 8,893 $ 9,661 Average stockholders' equity $ 270,147 $ 264,216 $ 258,596 $ 250,143 $ 241,674 Less: Average Goodwill and other intangible assets, net 19,916 17,910 17,937 18,001 18,023 Average Tangible stockholders' equity (denominator) $ 250,231 $ 246,306 $ 240,659 $ 232,142 $ 223,651 Return on Average Tangible equity (1) 13.22 % 12.63 % 14.90 % 15.37 % 17.52 % Tangible Book Value Per Share Stockholders' equity $ 271,068 $ 266,666 $ 260,179 $ 254,571 $ 245,997 Less: Goodwill and other intangible assets, net 19,854 19,971 17,920 17,965 18,024 Tangible stockholders' equity (numerator) $ 251,214 $ 246,695 $ 242,259 $ 236,606 $ 227,973 Common shares outstanding (denominator) 19,634,744 19,472,364 19,464,388 19,678,528 19,663,065 Tangible book value per share $ 12.79 $ 12.67 $ 12.45 $ 12.02 $ 11.59 Tangible Equity / Assets Stockholders' equity $ 271,068 $ 266,666 $ 260,179 $ 254,571 $ 245,997 Less: Goodwill and other intangible assets, net 19,854 19,971 17,920 17,965 18,024 Tangible stockholders' equity (numerator) $ 251,214 $ 246,695 $ 242,259 $ 236,606 $ 227,973 Total assets $ 2,573,845 $ 2,510,298 $ 2,438,020 $ 2,443,047 $ 2,405,576 Less: Goodwill and other intangible assets, net 19,854 19,971 17,920 17,965 18,024 Tangible total assets (denominator) $ 2,553,991 $ 2,490,327 $ 2,420,100 $ 2,425,082 $ 2,387,552 Tangible stockholders' equity / tangible assets 9.84 % 9.91 % 10.01 % 9.76 % 9.55 % Efficiency Ratio Non-interest expense $ 11,122 $ 11,825 $ 10,522 $ 10,155 $ 10,650 Less: Merger-related expenses - 498 145 - - Adjusted non-interest expense (numerator) $ 11,122 $ 11,327 $ 10,377 $ 10,155 $ 10,650 Net interest income $ 21,149 $ 20,641 $ 20,781 $ 20,421 $ 20,047 Non-interest income 1,267 2,211 1,901 1,342 2,300 Total revenue $ 22,416 $ 22,852 $ 22,682 $ 21,763 $ 22,347 Efficiency ratio 49.62 % 49.57 % 45.75 % 46.66 % 47.66 % (1) Annualized. FIRST BANK AND SUBSIDIARIES NON-U.S. GAAP FINANCIAL MEASURES (dollars in thousands, except for share data, unaudited) For the Quarter Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Adjusted diluted earnings per share, Adjusted return on average assets, and Adjusted return on average equity Net income $ 8,158 $ 7,839 $ 9,036 $ 8,893 $ 9,661 Add: Merger-related expenses(1) - 393 115 - - Adjusted net income $ 8,158 $ 8,232 $ 9,151 $ 8,893 $ 9,661 Diluted weighted average common shares outstanding 19,768,452 19,725,294 19,842,817 19,883,076 19,834,319 Average assets $ 2,522,775 $ 2,447,399 $ 2,456,617 $ 2,410,353 $ 2,366,417 Average equity $ 270,147 $ 264,216 $ 258,596 $ 250,143 $ 241,674 Average Tangible Equity $ 250,231 $ 246,306 $ 240,659 $ 232,142 $ 223,651 Adjusted diluted earnings per share $ 0.41 $ 0.42 $ 0.46 $ 0.45 $ 0.49 Adjusted return on average assets(2) 1.31 % 1.33 % 1.48 % 1.48 % 1.66 % Adjusted return on average equity(2) 12.25 % 12.36 % 14.04 % 14.26 % 16.21 % Adjusted return on average tangible equity(2) 13.22 % 13.26 % 15.09 % 15.37 % 17.52 % (1) Items are tax-effected using a federal income tax rate of 21%. (2) Annualized. CONTACT: Patrick L. Ryan, President and CEO
(609) 643-0168, patrick.ryan@firstbanknj.com
