First Bank Reports Fourth Quarter 2021 Net Income of $7.8 Million and Full Year Net Income of $35.4 Million

Source: Nasdaq GlobeNewswire / 26 Jan 2022 15:35:01 America/Chicago

HAMILTON, N.J., Jan. 26, 2022 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) today announced results for the fourth quarter and full year 2021. Net income for the fourth quarter of 2021 was $7.8 million, or $0.40 per diluted share, compared to $6.2 million, or $0.31 per diluted share, for the fourth quarter of 2020. Return on average assets, return on average equity and return on average tangible equityⁱ for the fourth quarter of 2021 were 1.27%, 11.77% and 12.63%, respectively, compared to 1.06%, 10.44%, and 11.30%, respectively, for the fourth quarter of 2020. Excluding merger-related expenses, fourth quarter 2021 adjusted diluted earnings per shareⁱⁱ were $0.42, adjusted return on average assetsⁱⁱ was 1.33% and adjusted return on average tangible equityⁱⁱ was 13.26%.

Full year 2021 net income was $35.4 million, an increase of $16.0 million, or 82.2%, compared to $19.4 million for 2020. Diluted earnings per share for 2021 were $1.79, an increase of $0.82, or 84.5%, compared to $0.97 per diluted share in 2020. Return on average assets and return on average equity for the full year 2021 were 1.46% and 13.96%, respectively, compared to 0.87% and 8.45%, respectively, for the full year 2020. Excluding merger-related expenses, full year 2021 adjusted diluted earnings per shareⁱⁱ were $1.81, adjusted return on average assetsⁱⁱ was 1.48% and adjusted return on average equity was 14.16%.

Fourth Quarter and Full Year 2021 Performance Highlights:

Completion of the acquisition of two branches during the fourth quarter of 2021, adding $100.9 million of deposits and $11.3 million of performing residential and consumer loans.
Total net revenue (net interest income plus non-interest income) of $22.9 million for the quarter increased $1.8 million, or 8.6%, compared to the prior year quarter, while full year total net revenue was $89.6 million, an increase of $13.7 million, or 18.1%, compared to 2020.
Total loans of $2.11 billion at December 31, 2021 reflected growth of $107.7 million, or 5.4%, from the end of the linked third quarter of 2021 and $64.4 million, or 3.1%, from December 31, 2020. Loan growth, excluding Paycheck Protection Program (PPP) loan activity, totaled $134.4 million in the fourth quarter of 2021 and $150.5 million for the full year 2021.
Total deposits of $2.11 billion at December 31, 2021 were up $211.0 million, or 11.1%, from December 31, 2020 and $68.6 million, or 3.4%, from September 30, 2021. Non-interest bearing demand deposits increased to 26.4% of total deposits at December 31, 2021, compared to 22.3% at December 31, 2020, while time deposits decreased to 18.5% at December 31, 2021 from 27.5% of total deposits at December 31, 2020.
Asset quality metrics remained solid during the quarter, with low net charge-offs of $6,000 during the fourth quarter of 2021, or 0.00% of average loans on an annualized basis, and nonperforming loans of $13.0 million, or 0.62% of total loans, at December 31, 2021 compared to $10.2 million, or 0.50% of total loans, at December 31, 2020.
Fourth consecutive quarter of an efficiency ratioⁱⁱⁱ below 50%, at 49.57% for the fourth quarter of 2021.

“First Bank’s fourth quarter performance provided a strong finish to 2021 highlighted by organic loan growth, revenue expansion and solid asset quality metrics, positioning us well heading into 2022,” said Patrick L. Ryan, President and Chief Executive Officer. “We put our liquidity to work in the fourth quarter and achieved significant loan growth, with non-PPP loans up $134.4 million during the quarter, while maintaining our nonperforming assets ratio under 60 basis points. The growth was driven primarily by organic growth in commercial and industrial, multi-family and owner-occupied commercial real estate lending. We also continued to enhance our deposit mix, expanding lower cost core deposits and reducing the proportion of higher cost time deposits on our balance sheet. These reduced funding costs supported a relatively stable net interest margin compared to the linked third quarter.”

Mr. Ryan continued, “We maintained an efficiency ratio below 50% for the fourth consecutive quarter, even as core operating expenses were elevated due to higher incentive compensation based on our strong 2021 performance. Our total non-interest expenses were also impacted by costs associated with our acquisition of two branches during the fourth quarter. Importantly, all remaining acquisition-related expenses related to this strategic in-market transaction were recorded during December and we have been very pleased with the performance of our two new branches since the transaction closed.”

“As we look ahead to 2022, we are excited by the opportunities. Our reputation as a committed and valuable financial partner was significantly enhanced by our response to the challenges faced in 2020 and 2021. We introduced our relationship-based banking approach to a large number of new customers and we deepened our relationships with existing ones. Our lending pipelines at year-end continued to be very strong and, with an expanded team and customer base as a result of our recent branch acquisition, we are well positioned to drive continued organic loan and deposit growth. During the fourth quarter we were also approved as a Preferred Lender by the U.S. Small Business Administration, which should drive continued growth in our SBA lending business. Our SBA team had a great year in 2021 and we’re excited about continued growth in this area.”

“Our ability to deliver strong profitability and earnings enables us to consistently reward our shareholders. We are pleased to announce another $0.06 dividend, which reflects an annualized yield of 1.62% based on our January 25, 2022 closing price, as part of our ongoing focus on creating shareholder value.”

Income Statement

First Bank’s net interest income for the fourth quarter of 2021 was $20.6 million, an increase of $917,000, or 4.6%, compared to $19.7 million in the fourth quarter of 2020, driven by a $1.5 million decrease in total interest expense. The reduction in interest expense was primarily a result of a 61 basis point reduction in the average rates paid on time deposits, along with a decrease of $131.7 million in the average balance of time deposits. As a result of our concerted effort to drive down costs, interest expense on all other interest bearing deposits also declined for the comparative period. Interest income decreased primarily due to a 17 basis point decline in average loan yields, partially offset by a $17.6 million increase in average loans compared with the fourth quarter of 2020. Interest income from loans in the fourth quarter of 2021 included $1.1 million in PPP loan fee income compared to $1.8 million in the fourth quarter of 2020 and $1.8 million in the linked third quarter of 2021. Also impacting loan interest income was prepayment income of $312,000 for the quarter ended December 31, 2021 compared to $138,000 for the quarter ended December 31, 2020 and $166,000 for the linked third quarter of 2021.

Full year 2021 net interest income totaled $81.9 million, an increase of $12.3 million, or 17.7%, compared to $69.6 million for 2020. The increase in 2021 net interest income was also primarily a result of lower interest paid on interest bearing deposits, primarily time deposits. The average rate for time deposits declined by 104 basis points, and the average balance declined by $141.5 million compared to the same period in 2020. Total interest and dividend income of $91.1 million for the full year 2021, increased $1.9 million, driven by higher PPP fee income, solid growth in average loans, which increased by $122.6 million, or 6.4%, from the prior year, partially offset by a 15 basis point decrease in the average yield on loans. The decrease in average yield on loans was primarily due to the low interest rate environment that persisted throughout 2021. Also impacting our average loan yields were the level of PPP loan fees and prepayment income. For the year ended December 31, 2021 PPP fee income was $5.8 million compared to $3.3 million for year ended December 31, 2020. Loan prepayment income was $1.9 million in 2021 compared to $709,000 in 2020.

The fourth quarter 2021 tax equivalent net interest margin was 3.52%, a decrease of four basis points compared to the prior year quarter and a decrease of two basis points compared to the linked third quarter of 2021. The modest decline in the margin compared to the third quarter of 2021 was primarily a result of a 7 basis point decrease in interest earning asset yields, partially offset by a 6 basis point decrease in the average cost of interest-bearing liabilities, primarily interest-bearing deposits. The full year 2021 tax equivalent net interest margin was 3.56%, an increase of 27 basis points compared to the prior year period. The increase in the full year net interest margin was principally a result of a 71 basis point reduction in the cost of interest-bearing deposits, partially offset by a 26 basis point decline in earning asset yields.

First Bank (the Bank) reported a provision for loan losses of $825,000 for the fourth quarter of 2021, compared to a provision for loan losses of $1.6 million in the fourth quarter of 2020. The provision for the quarter ended December 31, 2021 was due to strong loan growth offset somewhat by the low level of net charge-offs and continued stable asset quality metrics. For full year 2021, the Bank reported a credit to the provision for loan losses of $232,000, compared to provision expense of $9.5 million for the same period in 2020. The provision for loan losses in 2020 reflected a higher degree of economic uncertainty associated with the COVID-19 pandemic as well as an elevated level of charge-offs compared to 2021.

Fourth quarter 2021 non-interest income of $2.2 million increased $899,000, or 68.5%, from $1.3 million during the fourth quarter 2020. The increase between the periods was primarily the result of a $321,000 increase in gains on sale of loans, reflecting an increase in U.S. Small Business Administration (SBA) loan sales and a $305,000 increase in loan fees reflecting increased swap fees in the fourth quarter 2021. Non-interest income totaled $7.8 million for the full year ended December 31, 2021, compared to $6.4 million for the same period in 2020, an increase of $1.4 million, or 22.1%. The increase in non-interest income for the full year of 2021 was primarily a result of an increase of $1.6 million in gains on the sale of loans and an increase in other non-interest income of $331,000. For the full year ended December 31, 2021 gain on sale of loans included increased income from the Bank’s growing SBA business as well as gains on the sale of problem loan assets totaling $364,000. Other non-interest income during the year ended December, 31 2021 included a $159,000 gain on the sale of a former branch facility.

Non-interest expense for fourth quarter 2021 of $11.8 million increased $773,000, or 7.0%, compared to $11.1 million for the prior year quarter. The higher non-interest expense compared to fourth quarter 2020 was primarily a result of higher performance related compensation which was reflected in the $628,000 increase in salaries and employee benefits, along with merger-related expenses of $498,000 related to the acquisition of two former OceanFirst Bank branches. These increases were partially offset by reduced occupancy and equipment, regulatory fees, and marketing and advertising costs. Excluding merger-related expenses, non-interest expense would have increased 2.5% for the comparable periods.

On a linked quarter basis, fourth quarter 2021 non-interest expense increased $1.3 million compared to $10.5 million for the third quarter of 2021. The higher non-interest expense compared to the third quarter of 2021 was also due principally to an increase in performance related compensation and merger-related expenses.

Non-interest expense for the full year 2021 totaled $43.2 million, an increase of $2.8 million, or 6.8%, compared to $40.4 million for the same period in 2020. The increase was primarily a result of increased performance related compensation, merger-related expenses and data processing costs, partially offset by lower occupancy and equipment costs and other expense. Lower occupancy and equipment and other expense was primarily due to cost savings from the closure of two branches and administrative office space during 2021. Excluding merger-related expenses, non-interest expense would have increased 5.3% for the comparable periods.

Income tax expense for the three months ended December 31, 2021 was $2.4 million with an effective tax rate of 23.2%, compared to $2.2 million with an effective tax rate of 25.8% for the fourth quarter of 2020 and $3.0 million with an effective tax rate of 24.7% for the third quarter of 2021. Income tax expense for the full year ended December 31, 2021 was $11.3 million with an effective tax rate of 24.2%, compared to $6.5 million for the full year 2020 with an effective tax rate of 25.1%. The increase in the income tax expense is primarily due to higher pre-tax income for the current periods.

Balance Sheet

Total assets at December 31, 2021 were $2.51 billion, an increase of $164.0 million, or 7.0%, compared to $2.35 billion at December 31, 2020. Total loans increased $64.4 million, or 3.1%, to $2.11 billion at December 31, 2021 compared to $2.05 billion at December 31, 2020. The increase in loans for the full year 2021 reflects organic growth of $139.2 million and $11.3 million in acquired loans, offset by a net decline in PPP loans of $86.1 million. Total loans as of December 31, 2021 increased $107.7 million, or 5.4%, from $2.00 billion at September 30, 2021, reflecting organic, net non-PPP loan growth of $123.1 million and $11.3 million in acquired loans, offset by a net decline in PPP loans of $26.7 million. PPP loans outstanding at December 31, 2021 were $51.0 million.

Total deposits were $2.11 billion at December 31, 2021, an increase of $211.0 million, or 11.1%, from $1.90 billion at December 31, 2020, and an increase of $68.6 million, or 3.4%, compared to $2.05 billion at September 30, 2021. Non-interest-bearing deposits totaled $558.8 million at December 31, 2021, an increase of $134.7 million, or 31.7%, from December 31, 2020, and an increase of $21.9 million, or 4.1%, from September 30, 2021, reflective of continued growth in commercial deposits. The Bank continues to focus on enhancing its deposit mix and, as of December 31, 2021, had grown non-interest bearing deposits to 26.4% and lowered time deposits to 18.5% of total deposits.

Stockholders’ equity was $266.7 million at December 31, 2021, compared to $238.1 million on December 31, 2020. The growth of $28.6 million, or 12.0%, in stockholders’ equity was primarily a result of full year 2021 net income of $35.4 million, partially offset by repurchases of 344,458 shares of common stock totaling $4.1 million and cash dividends paid of $2.9 million during the full year ended December 31, 2021.

As of December 31, 2021, 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 10.65%, a Common Equity Tier 1 Capital ratio of 10.65%, and a Total Risk-Based capital ratio of 12.97%.

Asset Quality

First Bank’s asset quality metrics have remained stable and favorable during the twelve months ended December 31, 2021. Net charge-offs were $6,000 for the fourth quarter of 2021, compared to net charge-offs of $465,000 for the fourth quarter of 2020 and net recoveries of $121,000 for the third quarter of 2021. Net charge-offs as an annualized percentage of average loans were 0.00% in fourth quarter 2021, compared to 0.09% in fourth quarter 2020. Nonperforming loans were $13.0 million at December 31, 2021, up from $10.2 million on December 31, 2020, and up from $11.5 million on September 30, 2021. Nonperforming loans as a percentage of total loans at December 31, 2021 were 0.62%, compared with 0.50%, at December 31, 2020 and 0.57% at September 30, 2021. The allowance for loan losses to nonperforming loans was 182.65% at December 31, 2021, compared with 234.24% at the end of fourth quarter 2020, and 199.57% at September 30, 2021.

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 December 31, 2021, First Bank had 341 PPP loans with outstanding balances of $51.0 million. During 2021, prior to the end of the PPP on May 31, 2021, First Bank originated 783 new PPP loans totaling $107.9 million. During the year ended December 31, 2021, PPP loans totaling $194.0 million were forgiven. During 2021, the Bank realized $5.8 million in fee income on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of December 31, 2021, the Bank had $1.7 million 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 December 31, 2021, the Bank’s population of COVID-19 deferrals consisted of three loans totaling $1.6 million, or 0.08% of total loans, down from $10.3 million, or 0.52% of total loans, at September 30, 2021.

Branch Acquisition Completed

At the close of business on December 3, 2021, First Bank completed the acquisition of two New Jersey branch locations from OceanFirst Bank. As part of the acquisition, First Bank also acquired $100.9 million of associated deposits and $11.3 million of select performing loans. Located in Flemington and Monroe, the two branches enhance First Bank’s existing Central New Jersey footprint and further strengthen its presence along the New York City to Philadelphia corridor. Through December 31, 2021 there have been no material fluctuations in the acquired loan or deposit balances since the acquisition.

Cash Dividend Declared

On January 18, 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 February 11, 2022, payable on February 25, 2022.

Conference Call

First Bank will host its earnings call on Thursday, January 27, 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 448993. For those unable to participate in the call, a replay will be available by dialing 1-866-813-9403 (access code 410946) from one hour after the end of the conference call until April 27, 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 $2.5 billion in assets as of December 31, 2021, 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.

CONTACT: Patrick L. Ryan, President and CEO
(609) 643-0168, patrick.ryan@firstbanknj.com

_______________
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 Adjusted diluted earnings per share, adjusted return on average assets and adjusted return on average tangible equity are non-U.S. GAAP financial measures and are calculated by dividing net income adjusted for certain merger-related expenses and other one-time gains or expenses by diluted weighted average shares, average assets and average tangible equity, respectively. For a reconciliation of these non-U.S. GAAP financial measures, 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 The efficiency ratio is a non-U.S. GAAP financial measure and is calculated by dividing non-interest expense less merger-related expenses by 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.

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data, unaudited)


	December 31, 2021			December 31, 2020
Assets
Cash and due from banks	$	25,076		$	24,203
Interest bearing deposits with banks		129,431			71,270
Cash and cash equivalents		154,507			95,473
Interest bearing time deposits with banks		2,170			4,371
Investment securities available for sale, at fair value		94,584			61,731
Investment securities held to maturity (fair value of $39,718 at December 31, 2021 and $38,319 at December 31, 2020)		39,547			37,593
Restricted investment in bank stocks		5,856			8,545
Other investments		8,062			6,498
Loans, net of deferred fees and costs		2,111,991			2,047,572
Less: Allowance for loan losses		23,746			23,974
Net loans		2,088,245			2,023,598
Premises and equipment, net		9,883			10,736
Other real estate owned, net		772			575
Accrued interest receivable		5,681			6,806
Bank-owned life insurance		56,633			50,197
Goodwill		17,826			16,253
Other intangible assets, net		2,145			1,745
Deferred income taxes		11,081			11,394
Other assets		13,306			10,755
Total assets	$	2,510,298		$	2,346,270

Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits	$	558,775		$	424,119
Interest bearing deposits		1,555,827			1,479,498
Total deposits		2,114,602			1,903,617
Borrowings		81,835			161,135
Subordinated debentures		29,620			29,508
Accrued interest payable		399			561
Other liabilities		17,176			13,341
Total liabilities		2,243,632			2,108,162
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; 20,851,506 shares issued and 19,472,364 shares outstanding at December 31, 2021 and 20,742,158 shares issued and 19,707,474 outstanding at December 31, 2020		103,704			103,135
Additional paid-in capital		79,563			78,887
Retained earnings		95,924			63,431
Accumulated other comprehensive (loss) income		(206	)		839
Treasury stock, 1,379,142 shares at December 31, 2021 and 1,034,684 shares at December 31, 2020		(12,319	)		(8,184	)
Total stockholders' equity		266,666			238,108
Total liabilities and stockholders' equity	$	2,510,298		$	2,346,270

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)


	Three Months Ended				Year Ended
	December 31,				December 31,
		2021		2020		2021			2020
Interest and Dividend Income
Investment securities—taxable	$	553	$	500	$	2,149		$	2,229
Investment securities—tax-exempt		36		57		169			277
Interest bearing deposits with banks,
Federal funds sold and other		136		139		660			911
Loans, including fees		21,791		22,391		88,136			85,784
Total interest and dividend income		22,516		23,087		91,114			89,201

Interest Expense
Deposits		1,105		2,357		5,684			15,573
Borrowings		330		565		1,779			2,260
Subordinated debentures		440		441		1,761			1,815
Total interest expense		1,875		3,363		9,224			19,648
Net interest income		20,641		19,724		81,890			69,553
Provision for loan losses		825		1,633		(232	)		9,539
Net interest income after provision for loan losses		19,816		18,091		82,122			60,014

Non-Interest Income
Service fees on deposit accounts		246		189		760			629
Loan fees		384		79		1,338			1,659
Income from bank-owned life insurance		386		352		1,436			1,624
Gains on sale of loans		392		71		1,892			289
Gains on recovery of acquired loans		554		415		1,235			1,389
Other non-interest income		249		206		1,093			762
Total non-interest income		2,211		1,312		7,754			6,352

Non-Interest Expense
Salaries and employee benefits		7,229		6,601		25,404			22,809
Occupancy and equipment		1,265		1,533		5,762			6,130
Legal fees		130		191		769			864
Other professional fees		623		631		2,133			2,116
Regulatory fees		170		273		855			1,076
Directors' fees		221		220		876			869
Data processing		584		515		2,264			1,933
Marketing and advertising		1		89		526			427
Travel and entertainment		65		15		148			147
Insurance		172		168		655			673
Other real estate owned expense, net		68		73		165			57
Merger-related expenses		498		-		643			-
Other expense		799		743		2,952			3,286
Total non-interest expense		11,825		11,052		43,152			40,387
Income Before Income Taxes		10,202		8,351		46,724			25,979
Income tax expense		2,363		2,156		11,295			6,531
Net Income	$	7,839	$	6,195	$	35,429		$	19,448

Basic earnings per common share	$	0.40	$	0.31	$	1.81		$	0.98
Diluted earnings per common share	$	0.40	$	0.31	$	1.79		$	0.97
Cash dividends per common share	$	0.06	$	0.03	$	0.15		$	0.12

Basic weighted average common shares outstanding		19,469,404		19,721,653		19,611,381			19,885,699
Diluted weighted average common shares outstanding		19,725,294		19,827,708		19,815,747			20,005,432

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)


	Three Months Ended December 31,
		2021								2020
	Average						Average		Average						Average
	Balance			Interest			Rate (5)		Balance			Interest			Rate (5)
Interest earning assets
Investment securities (1) (2)	$	133,768		$	596		1.77	%	$	103,736		$	569		2.18	%
Loans (3)		2,035,059			21,791		4.25	%		2,017,496			22,391		4.42	%
Interest bearing deposits with banks,
Federal funds sold and other		145,742			46		0.13	%		69,015			40		0.23	%
Restricted investment in bank stocks		5,912			73		4.90	%		7,199			84		4.64	%
Other investments		7,323			17		0.92	%		6,493			15		0.92	%
Total interest earning assets (2)		2,327,804			22,523		3.84	%		2,203,939			23,099		4.17	%
Allowance for loan losses		(23,529	)							(23,323	)
Non-interest earning assets		143,124								135,433
Total assets	$	2,447,399							$	2,316,049

Interest bearing liabilities
Interest bearing demand deposits	$	265,789		$	59		0.09	%	$	178,190		$	78		0.17	%
Money market deposits		656,772			404		0.24	%		576,608			624		0.43	%
Savings deposits		181,253			165		0.36	%		149,946			207		0.55	%
Time deposits		399,768			477		0.47	%		531,495			1,448		1.08	%
Total interest bearing deposits		1,503,582			1,105		0.29	%		1,436,239			2,357		0.65	%
Borrowings		83,066			330		1.58	%		168,396			565		1.33	%
Subordinated debentures		29,603			440		5.95	%		29,491			441		5.98	%
Total interest bearing liabilities		1,616,251			1,875		0.46	%		1,634,126			3,363		0.82	%
Non-interest bearing deposits		550,718								429,604
Other liabilities		16,214								16,220
Stockholders' equity		264,216								236,099
Total liabilities and stockholders' equity	$	2,447,399							$	2,316,049
Net interest income/interest rate spread (2)					20,648		3.38	%					19,736		3.35	%
Net interest margin (2) (4)							3.52	%							3.56	%
Tax equivalent adjustment (2)					(7	)							(12	)
Net interest income				$	20,641							$	19,724

(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
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)


	Year Ended December 31,
		2021								2020
	Average						Average		Average						Average
	Balance			Interest			Rate		Balance			Interest			Rate
Interest earning assets
Investment securities (1) (2)	$	118,673		$	2,353		1.98	%	$	103,859		$	2,564		2.47	%
Loans (3)		2,036,855			88,136		4.33	%		1,914,266			85,784		4.48	%
Interest bearing deposits with banks,
Federal funds sold and other		134,109			248		0.18	%		83,840			425		0.51	%
Restricted investment in bank stocks		7,312			348		4.76	%		6,785			375		5.53	%
Other investments		6,727			64		0.95	%		6,462			111		1.72	%
Total interest earning assets (2)		2,303,676			91,149		3.96	%		2,115,212			89,259		4.22	%
Allowance for loan losses		(23,753	)							(20,768	)
Non-interest earning assets		140,594								132,466
Total assets	$	2,420,517							$	2,226,910

Interest bearing liabilities
Interest bearing demand deposits	$	225,945		$	224		0.10	%	$	165,346		$	455		0.28	%
Money market deposits		627,211			1,772		0.28	%		524,520			3,982		0.76	%
Savings deposits		179,705			739		0.41	%		139,091			1,047		0.75	%
Time deposits		458,980			2,949		0.64	%		600,447			10,089		1.68	%
Total interest bearing deposits		1,491,841			5,684		0.38	%		1,429,404			15,573		1.09	%
Borrowings		115,343			1,779		1.54	%		131,031			2,260		1.72	%
Subordinated debentures		29,561			1,761		5.96	%		28,367			1,815		6.40	%
Total interest bearing liabilities		1,636,745			9,224		0.56	%		1,588,802			19,648		1.24	%
Non-interest bearing deposits		514,137								391,686
Other liabilities		15,903								16,257
Stockholders' equity		253,732								230,165
Total liabilities and stockholders' equity	$	2,420,517							$	2,226,910
Net interest income/interest rate spread (2)					81,925		3.40	%					69,611		2.98	%
Net interest margin (2) (4)							3.56	%							3.29	%
Tax equivalent adjustment (2)					(35	)							(58	)
Net interest income				$	81,890							$	69,553

(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.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except for share and employee data, unaudited)

	As of or For the Quarter Ended
	12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020
EARNINGS
Net interest income	$	20,641		$	20,781		$	20,421		$	20,047		$	19,724
Provision for loan losses		825			158			(162	)		(1,053	)		1,633
Non-interest income		2,211			1,901			1,342			2,300			1,312
Non-interest expense		11,825			10,522			10,155			10,650			11,052
Income tax expense		2,363			2,966			2,877			3,089			2,156
Net income		7,839			9,036			8,893			9,661			6,195

PERFORMANCE RATIOS
Return on average assets (1)		1.27	%		1.46	%		1.48	%		1.66	%		1.06	%
Adjusted return on average assets (1) (2)		1.33	%		1.48	%		1.48	%		1.66	%		1.06	%
Return on average equity (1)		11.77	%		13.86	%		14.26	%		16.21	%		10.44	%
Adjusted return on average equity (1) (2)		12.36	%		14.04	%		14.26	%		16.21	%		10.44	%
Return on average tangible equity (1) (2)		12.63	%		14.90	%		15.37	%		17.52	%		11.30	%
Adjusted return on average tangible equity (1) (2)		13.26	%		15.09	%		15.37	%		17.52	%		11.30	%
Net interest margin (1) (3)		3.52	%		3.54	%		3.57	%		3.60	%		3.56	%
Total cost of deposits (1)		0.21	%		0.25	%		0.30	%		0.39	%		0.50	%
Efficiency ratio (2)		49.57	%		45.75	%		46.66	%		47.66	%		52.54	%

SHARE DATA
Common shares outstanding		19,472,364			19,464,388			19,678,528			19,663,065			19,707,474
Basic earnings per share	$	0.40		$	0.46		$	0.45		$	0.49		$	0.31
Diluted earnings per share		0.40			0.46			0.45			0.49			0.31
Adjusted diluted earnings per share (2)		0.42			0.46			0.45			0.49			0.31
Tangible book value per share (2)		12.67			12.45			12.02			11.59			11.17
Book value per share		13.69			13.37			12.94			12.51			12.08

MARKET DATA
Market value per share	$	14.51		$	14.09		$	13.54		$	12.17		$	9.38
Market value / Tangible book value		114.53	%		113.21	%		112.61	%		104.97	%		83.98	%
Market capitalization	$	282,544		$	274,253		$	266,447		$	239,300		$	184,856

CAPITAL & LIQUIDITY
Tangible stockholders' equity / tangible assets (2)		9.91	%		10.01	%		9.76	%		9.55	%		9.45	%
Stockholders' equity / assets		10.62	%		10.67	%		10.42	%		10.23	%		10.15	%
Loans / deposits		99.88	%		97.96	%		100.87	%		102.62	%		107.56	%

ASSET QUALITY
Net charge-offs (recoveries)	$	6		$	(121	)	$	116		$	(5	)	$	465
Nonperforming loans		13,001			11,488			9,558			10,676			10,234
Nonperforming assets		13,773			11,967			10,038			11,251			10,809
Net charge offs (recoveries) / average loans (1)		0.00	%		(0.02	%)		0.02	%		0.00	%		0.09	%
Nonperforming loans / total loans		0.62	%		0.57	%		0.47	%		0.53	%		0.50	%
Nonperforming assets / total assets		0.55	%		0.49	%		0.41	%		0.47	%		0.46	%
Allowance for loan losses / total loans		1.12	%		1.14	%		1.10	%		1.13	%		1.17	%
Allowance for loan losses / total loans (excluding PPP loans)		1.15	%		1.19	%		1.18	%		1.24	%		1.25	%
Allowance for loan losses / nonperforming loans		182.65	%		199.57	%		236.95	%		214.74	%		234.24	%

OTHER DATA
Total assets	$	2,510,298		$	2,438,020		$	2,443,047		$	2,405,576		$	2,346,270
Total loans		2,111,991			2,004,289			2,053,938			2,022,187			2,047,572
Total deposits		2,114,602			2,045,966			2,036,228			1,970,491			1,903,617
Total stockholders' equity		266,666			260,179			254,571			245,997			238,108
Number of full-time equivalent employees (4)		217			209			215			211			204

(1) Annualized.
(2) Non-U.S. GAAP financial measure that we believe provides management and investors with information that is useful in understanding our financial performance and condition. See accompanying table, "Non-U.S. GAAP Financial Measures", for calculation and reconciliation.
(3) Tax equivalent using a federal income tax rate of 21%.
(4) Includes 4 full-time equivalent seasonal interns as of June 30, 2021.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)

	As of the Quarter Ended
	12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020
LOAN COMPOSITION
Commercial and industrial	$	350,103		$	308,991		$	379,916		$	432,869		$	388,886
Commercial real estate:
Owner-occupied		470,022			444,635			427,094			399,042			407,089
Investor		848,021			832,727			814,762			771,599			778,958
Construction and development		109,292			112,112			127,329			123,930			149,284
Multi-family		173,728			145,245			142,015			125,493			144,527
Total commercial real estate		1,601,063			1,534,719			1,511,200			1,420,064			1,479,858
Residential real estate:
Residential mortgage and first lien home equity loans		106,204			103,890			108,842			117,756			120,018
Home equity–second lien loans and revolving lines of credit		31,375			29,998			29,422			29,306			33,575
Total residential real estate		137,579			133,888			138,264			147,062			153,593
Consumer and other		27,762			31,946			31,584			29,213			30,368
Total loans prior to deferred loan fees and costs		2,116,507			2,009,544			2,060,964			2,029,208			2,052,705
Net deferred loan fees and costs		(4,516	)		(5,255	)		(7,026	)		(7,021	)		(5,133	)
Total loans	$	2,111,991		$	2,004,289		$	2,053,938		$	2,022,187		$	2,047,572

LOAN MIX
Commercial and industrial		16.6	%		15.4	%		18.5	%		21.4	%		19.0	%
Commercial real estate:
Owner-occupied		22.3	%		22.2	%		20.8	%		19.7	%		19.9	%
Investor		40.1	%		41.5	%		39.7	%		38.2	%		38.0	%
Construction and development		5.2	%		5.6	%		6.2	%		6.1	%		7.3	%
Multi-family		8.2	%		7.2	%		6.9	%		6.2	%		7.0	%
Total commercial real estate		75.8	%		76.5	%		73.5	%		70.2	%		72.2	%
Residential real estate:
Residential mortgage and first lien home equity loans		5.0	%		5.2	%		5.3	%		5.8	%		5.9	%
Home equity–second lien loans and revolving lines of credit		1.5	%		1.5	%		1.4	%		1.4	%		1.6	%
Total residential real estate		6.5	%		6.7	%		6.7	%		7.2	%		7.5	%
Consumer and other		1.4	%		1.7	%		1.6	%		1.5	%		1.6	%
Net deferred loan fees and costs		(0.3	%)		(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
	12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020
DEPOSIT COMPOSITION
Non-interest bearing demand deposits	$	558,775		$	536,905		$	534,475		$	500,008		$	424,119
Interest bearing demand deposits		293,647			241,869			211,074			208,443			201,881
Money market and savings deposits		871,074			845,607			817,424			767,603			753,640
Time deposits		391,106			421,585			473,255			494,437			523,977
Total Deposits	$	2,114,602		$	2,045,966		$	2,036,228		$	1,970,491		$	1,903,617

DEPOSIT MIX
Non-interest bearing demand deposits		26.4	%		26.3	%		26.3	%		25.4	%		22.3	%
Interest bearing demand deposits		13.9	%		11.8	%		10.4	%		10.6	%		10.6	%
Money market and savings deposits		41.2	%		41.3	%		40.1	%		38.9	%		39.6	%
Time deposits		18.5	%		20.6	%		23.2	%		25.1	%		27.5	%
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
	12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020
Return on Average Tangible Equity
Net income (numerator)	$	7,839		$	9,036		$	8,893		$	9,661		$	6,195

Average stockholders' equity	$	264,216		$	258,596		$	250,143		$	241,674		$	236,099
Less: Average Goodwill and other intangible assets, net		17,910			17,937			18,001			18,023			18,062
Average Tangible stockholders' equity (denominator)	$	246,306		$	240,659		$	232,142		$	223,651		$	218,037

Return on Average Tangible equity		12.63	%		14.90	%		15.37	%		17.52	%		11.30	%

Tangible Book Value Per Share
Stockholders' equity	$	266,666		$	260,179		$	254,571		$	245,997		$	238,108
Less: Goodwill and other intangible assets, net		19,971			17,920			17,965			18,024			17,998
Tangible stockholders' equity (numerator)	$	246,695		$	242,259		$	236,606		$	227,973		$	220,110

Common shares outstanding (denominator)		19,472,364			19,464,388			19,678,528			19,663,065			19,707,474

Tangible book value per share	$	12.67		$	12.45		$	12.02		$	11.59		$	11.17


Tangible Equity / Assets
Stockholders' equity	$	266,666		$	260,179		$	254,571		$	245,997		$	238,108
Less: Goodwill and other intangible assets, net		19,971			17,920			17,965			18,024			17,998
Tangible stockholders' equity (numerator)	$	246,695		$	242,259		$	236,606		$	227,973		$	220,110

Total assets	$	2,510,298		$	2,438,020		$	2,443,047		$	2,405,576		$	2,346,270
Less: Goodwill and other intangible assets, net		19,971			17,920			17,965			18,024			17,998
Tangible total assets (denominator)	$	2,490,327		$	2,420,100		$	2,425,082		$	2,387,552		$	2,328,272

Tangible stockholders' equity / tangible assets		9.91	%		10.01	%		9.76	%		9.55	%		9.45	%


Efficiency Ratio
Non-interest expense	$	11,825		$	10,522		$	10,155		$	10,650		$	11,052
Less: Merger-related expenses		498			145			-			-			-
Adjusted non-interest expense (numerator)	$	11,327		$	10,377		$	10,155		$	10,650		$	11,052

Net interest income	$	20,641		$	20,781		$	20,421		$	20,047		$	19,724
Non-interest income		2,211			1,901			1,342			2,300			1,312
Total revenue	$	22,852		$	22,682		$	21,763		$	22,347		$	21,036

Efficiency ratio		49.57	%		45.75	%		46.66	%		47.66	%		52.54	%

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)


	For the Quarter Ended
	12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020

Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity

Net income	$	7,839		$	9,036		$	8,893		$	9,661		$	6,195
Add: Merger-related expenses ⁽¹⁾		393			115			-			-			-
Adjusted net income	$	8,232		$	9,151		$	8,893		$	9,661		$	6,195

Diluted weighted average common shares outstanding		19,725,294			19,842,817			19,883,076			19,834,319			19,827,708
Average assets	$	2,447,399		$	2,456,617		$	2,410,353		$	2,366,417		$	2,316,049
Average equity	$	264,216		$	258,596		$	250,143		$	241,674		$	236,099
Average Tangible Equity	$	246,306		$	240,659		$	232,142		$	223,651		$	218,037

Adjusted diluted earnings per share	$	0.42		$	0.46		$	0.45		$	0.49		$	0.31
Adjusted return on average assets ⁽²⁾		1.33	%		1.48	%		1.48	%		1.66	%		1.06	%
Adjusted return on average equity ⁽²⁾		12.36	%		14.04	%		14.26	%		16.21	%		10.44	%
Adjusted return on average tangible equity ⁽²⁾		13.26	%		15.09	%		15.37	%		17.52	%		11.30	%

(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Annualized.

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)


	Year Ended December 31,
		2021			2020

Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity

Net income	$	35,429		$	19,448
Add: Merger-related expenses ⁽¹⁾		508			-
Adjusted net income	$	35,937		$	19,448

Diluted weighted average common shares outstanding		19,815,747			20,005,432
Average assets	$	2,420,517		$	2,226,910
Average equity	$	253,732		$	230,165
Average Tangible Equity	$	235,764		$	211,975

Adjusted diluted earnings per share	$	1.81		$	0.97
Adjusted return on average assets		1.48	%		0.87	%
Adjusted return on average equity		14.16	%		8.45	%
Adjusted return on average tangible equity		15.24	%		9.17	%

(1) Tax-effected using a federal income tax rate of 21%

First Bank Reports Fourth Quarter 2021 Net Income of $7.8 Million and Full Year Net Income of $35.4 Million

Set Language