Princeton Bancorp Announces Third Quarter 2023 Results
PRINCETON, N.J., Oct. 26, 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 September 30, 2023. The Company reported net income of $7.6 million, or $1.19 per diluted common share, for the third quarter of 2023, compared to net income of $6.8 million, or $1.07 per diluted common share, for the second quarter of 2023, and net income of $7.0 million, or $1.09 per diluted common share, for the third quarter of 2022. The increase in net income for the third quarter of 2023 when compared to the second quarter of 2023 was primarily due to a decrease of $7.7 million in non-interest expense, a decrease of $2.6 million in its provision for credit losses and an increase of $1.0 million in net interest income, partially offset by a decrease of $9.2 million in non-interest income and an increase of $1.4 million in income tax expense. The increase in net income for the third quarter of 2023 compared to the same period in 2022 was primarily due to an increase of $700 thousand in non-interest income, a $600 thousand decrease in income tax expense and a $400 thousand reduction in its provision for credit losses, partially offset by a $1.0 million decrease in net interest income. For the nine-month period ended September 30, 2023, the Company recorded net income of $20.5 million, or $3.21 per diluted common share, compared to $19.3 million, or $2.98 per diluted common share, for the same period in 2022. The increase was primarily due to an increase of $11.5 million in non-interest income and a $1.8 million decrease in income tax expense, partially offset by an $8.9 million increase in non-interest expense, and a $2.3 million increase in its provision for credit losses.
"The Bank continues to be well-positioned to promote strong growth," President/CEO Edward Dietzler commented on the quarter. The Bank was able to continue deposit growth and build significant liquidity to fund future loan demand. Our recent acquisition of Noah Bank is performing well giving us a strong platform to expand. We will continue to look at other opportunities that fit our overall strategy."
As a result of the increase in deposits, balance sheet liquidity increased to $206.9 million in immediately available cash with zero borrowings. The Bank has a sizable loan pipeline in the communities we serve that it anticipates funding during the remainder of 2023, supported by the Bank's strong capital position.
Balance Sheet Review
Total assets were $1.91 billion at September 30, 2023, an increase of $311.3 million, or 19.4% when compared to $1.60 billion at the end of 2022. The primary reason for the increase in total assets was the acquisition of Noah Bank on May 19, 2023, which had approximately $239.4 million in assets at closing. When looking at specific components of the balance sheet, including acquired assets, the Company recorded an increase in net loans of $128.1 million, an increase in cash and cash equivalents of approximately $153.6 million, an increase in its right of use asset of $7.3 million, an increase of $4.9 million primarily due to Noah Bank's deferred tax assets and an increase in other assets of $2.5 million. The increase in the Company's net loans consisted of a $206.7 million increase in commercial real estate loans and a $23.3 million increase in commercial and industrial loans, partially offset by a decrease of $96.7 million in construction loans.
Total deposits at September 30, 2023 increased $290.2 million, or 21.5%, when compared to December 31, 2022. The primary reasons for the increase in total deposits were the $191.7 million in deposits acquired from Noah Bank and a $98.5 million increase from existing operations. When comparing deposit products between the two periods, certificates of deposit increased $298.7 million and money market deposits increased $65.9 million. Partially offsetting these increases were decreases in savings deposits of $43.6 million and interest-bearing demand deposits of $29.8 million for the nine months ended September 30, 2023.
Total stockholders' equity at September 30, 2023 increased $12.6 million or 5.7% when compared to the end of 2022. The increase was primarily due to the $14.5 million increase in retained earnings, consisting of $20.5 million in net income partially offset by $5.7 million of cash dividends recorded during the period. The ratio of equity to total assets at September 30, 2023 and at December 31, 2022, was 12.1% and 13.7%, respectively. The current period ratio decrease was primarily due to the Noah Bank acquisition.
Asset Quality
At September 30, 2023, non-performing assets totaled $6.8 million, an increase of $6.5 million, when compared to the amount at December 31, 2022. This increase was due to the delinquency of a $4.5 million commercial real estate loan and $2.5 million of non-performing loans acquired from Noah Bank.
With 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 and Year-to-Date Financial Results
Net interest income was $16.7 million for the third quarter of 2023, compared to $15.7 million for the second quarter of 2023 and $17.7 million for the third quarter of 2022. The increase from the previous quarter was the result of an increase in interest income of $4.0 million, or 17.3%, partially offset by an increase in interest expense of $3.0 million, or 40.3%. The net interest margin for the third quarter 2023 was 3.76%, decreasing nineteen basis points when compared to the second quarter of 2023. This decrease was primarily associated with an increase of 49 basis points in the cost of funds associated with rising interest rates, partially offset by a 35 basis-point increase in the yield on loans. When comparing the three-month periods ended September 30, 2023 and 2022, net interest income decreased $1.0 million, which was primarily due to an increase of 213 basis points in the cost of funds, partially offset by an increase of 107 basis points in the yield earned on interest-earning assets. For the nine-month period ended September 30, 2023, net interest income of $49.0 million was down slightly compared to net interest income of $49.8 million during the first nine months of 2022. The decrease from the previous nine-month period was the result of an increase in interest expense of $17.8 million, or 470.7%, partially offset by an increase in interest income of $17.0 million, or 31.7%, both as a result of the 525 basis-point increase in federal funds interest rates since March 2022.
The Bank recorded a credit provision for credit losses of $182 thousand during the three months ended September 30, 2023 and a $2.5 million provision for credit losses during the second quarter of 2023. The Bank recorded a $200 thousand provision for loan losses for the three months ended September 30, 2022. The credit recorded in the current quarter was the result of a reduction in the reserve for unfunded liabilities in the amount of $182 thousand. The provision for credit losses for loans was zero. The provision of $2.5 million recorded in the prior quarter consisted of $2.7 million provision associated with the Company's loan portfolio, offset by a credit to the provision of $250 thousand associated with unfunded commitments. Included in the Company's second quarter 2023 provision was $1.7 million related to non-purchased credit deteriorated loans resulting from the Noah Bank acquisition. Net recoveries for the three-months ended September 30, 2023 were $23 thousand and net charge-offs for the nine-month period ended September 30, 2023 were $1.8 million. For the three-month and nine-month periods ended September 30, 2022, the Bank recorded net charge-offs of $200 thousand and $154 thousand, respectively. With the 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. The coverage ratio of the allowance for credit losses to period end loans was 1.19% at September 30, 2023 and 1.20% at December 31, 2022.
Total non-interest income of $2.4 million for the third quarter of 2023 decreased $9.2 million or 79.2% when compared to the second quarter of 2023 and increased $696 thousand or 40.8% when compared to the quarter ended September 30, 2022. The decrease from the second quarter of 2023 was primarily due to the $9.7 million bargain purchase gain recorded in connection with the Noah acquisition completed during the second quarter of 2023. The increase over the prior year quarter was due to an increase in loan fees of $334 thousand and the gain on sale of other real estate owned of $203 thousand during the third quarter of 2023. For the nine-month period ended September 30, 2023, non-interest income increased $11.5 million, or by 296.9%, primarily due to the $9.7 million bargain purchase gain and an increase in loan fees of $1.3 million over the same period in 2022.
Total non-interest expense of $10.2 million for the third quarter of 2023 decreased $7.7 million, or 43.0% when compared to the second quarter of 2023, due primarily to the $7.0 million in merger costs associated with the Noah acquisition expensed during the second quarter, a portion of which, totaling $1.4 million, were reversed during the third quarter. The amounts reversed during the third quarter were primarily the result of a lease termination cost that was lower than the original estimate based on a negotiated settlement of the remaining lease on a Noah Bank branch office and a legal reserve of $150 thousand. Total non-interest expense for the third quarter of 2023 was almost the same as the third quarter of 2022. The merger-related expenses reversed in 2023 were offset by increases in salaries and employee benefits and occupancy and equipment expenses of $401 thousand and $437 thousand, respectively, over the prior-year period associated with a full quarter of Noah costs versus a portion in the second quarter due to the closing date of May 19, 2023. For the nine-month period ended September 30, 2023, non-interest expense was $37.7 million, compared to $28.8 million for the same period in 2022. The increase was primarily due to merger-related expenses of $5.6 million during 2023 as well as increases in salaries and employee benefits of $2.1 million, occupancy and equipment of $742 thousand and data processing and communications of $726 thousand over the same period in 2022.
For the three-month period ended September 30, 2023, the Company recorded an income tax expense of $1.5 million, resulting in an effective tax rate of 16.6%, compared to an income tax expense of $161 thousand resulting in an effective tax rate of 2.3% for the three-month period ended June 30, 2023 due to the non-taxable bargain purchase gain, partially offset by $325 thousand of merger-related expenses that were not tax-deductible, and compared to an income tax expense of $2.1 million resulting in an effective tax rate of 23.2% for the three-month period ended September 30, 2022. For the nine-month period ending September 30, 2023, income tax expense was $3.6 million resulting in an effective tax rate of 14.9% compared to income tax expense of $5.4 million and an effective tax rate of 21.7% for the nine months ended September 30, 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 22 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation ("FDIC").
Forward-Looking Statements
The Company may from time to time make written or oral "forward-looking statements," including statements contained in the Company's filings with the Securities and Exchange Commission, in its reports to stockholders and in other communications by the Company (including this press release), which are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company's control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, higher interest rates and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, supply chain disruptions, labor shortages and additional interest rate increases by the Federal Reserve. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the global impact of the military conflicts in the Ukraine and the Middle East; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank's products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors' products and services; the willingness of customers to substitute competitors' products and services for the Bank's products and services; credit risk associated with the Bank's lending activities; risks relating to the real estate market and the Bank's real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; acquisitions including the Company's acquisition of Noah; difficulties and delays in integrating the businesses of Noah and TBOP or fully realizing cost savings and other benefits; changes in consumer spending and saving habits; those risks under the heading "Risk Factors" set forth in the Bank's Annual Report on Form 10-K for the year ended December 31, 2022, and in Part II, Item 1A of our quarterly report on Form 10-Q for the quarter-ended March 31, 2023, and the success of the Company at managing the risks involved in the foregoing.
The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as required by applicable law or regulation.
Princeton Bancorp, Inc. | ||||||||||||||||
Consolidated Statements of Financial Condition | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
September 30, 2023 vs | September 30, 2023 vs | |||||||||||||||
September 30, | December 31, | September 30, | December 31, 2022 | September 30, 2022 | ||||||||||||
2023 | 2022 | 2022 | $ Change | % Change | $ Change | % Change | ||||||||||
ASSETS | ||||||||||||||||
Cash and cash equivalents | $ 206,931 | $ 53,351 | $ 47,965 | $ 153,580 | 287.87 | % | $ 158,966 | 331.42 | % | |||||||
Securities available-for-sale taxable | 50,437 | 42,061 | 43,041 | 8,376 | 19.91 | 7,396 | 17.18 | |||||||||
Securities available-for-sale tax-exempt | 37,627 | 41,341 | 39,112 | (3,714) | (8.98) | (1,485) | (3.80) | |||||||||
Securities held-to-maturity | 195 | 201 | 203 | (6) | (2.99) | (8) | (3.94) | |||||||||
Loans receivable, net of deferred loan fees | 1,498,500 | 1,370,368 | 1,378,426 | 128,132 | 9.35 | 120,074 | 8.71 | |||||||||
Allowance for credit losses | (17,992) | (16,461) | (16,666) | (1,531) | 9.30 | (1,326) | 7.96 | |||||||||
Goodwill | 8,853 | 8,853 | 8,853 | - | - | - | - | |||||||||
Core deposit intangible | 1,546 | 1,825 | 1,958 | (279) | (15.29) | (412) | (21.04) | |||||||||
Other assets | 127,026 | 100,240 | 100,158 | 26,786 | 26.72 | 26,868 | 26.83 | |||||||||
TOTAL ASSETS | $ 1,913,123 | $ 1,601,779 | $ 1,603,050 | $ 311,344 | 19.44 | % | $ 310,073 | 19.34 | % | |||||||
LIABILITIES | ||||||||||||||||
Non-interest checking | $ 264,197 | $ 265,078 | $ 299,389 | $ (881) | (0.33) | % | $ (35,192) | (11.75) | % | |||||||
Interest checking | 239,902 | 269,737 | 233,969 | (29,835) | (11.06) | 5,933 | 2.54 | |||||||||
Savings | 147,113 | 190,686 | 213,522 | (43,573) | (22.85) | (66,409) | (31.10) | |||||||||
Money market | 349,505 | 283,652 | 324,037 | 65,853 | 23.22 | 25,468 | 7.86 | |||||||||
Time deposits over $250,000 | 144,158 | 83,410 | 46,810 | 60,748 | 72.83 | 97,348 | 207.96 | |||||||||
Other time deposits | 493,091 | 255,167 | 249,287 | 237,924 | 93.24 | 243,804 | 97.80 | |||||||||
Total deposits | 1,637,966 | 1,347,730 | 1,367,014 | 290,236 | 21.54 | 270,952 | 19.82 | |||||||||
Borrowings | - | 10,000 | - | (10,000) | (100.00) | - | N/A | |||||||||
Other liabilities | 42,949 | 24,448 | 23,518 | 18,501 | 75.67 | 19,431 | 82.62 | |||||||||
TOTAL LIABILITIES | 1,680,915 | 1,382,178 | 1,390,532 | 298,737 | 21.61 | 290,383 | 20.88 | |||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||
Common stock 1,2 | - | 34,547 | 34,535 | (34,547) | (100.00) | (34,535) | (100.00) | |||||||||
Paid-in capital 2 | 97,779 | 81,291 | 81,241 | 16,488 | 20.28 | 16,538 | 20.36 | |||||||||
Treasury stock 2 | - | (19,452) | (19,190) | 19,452 | (100.00) | 19,190 | (100.00) | |||||||||
Retained earnings | 146,022 | 131,488 | 125,878 | 14,534 | 11.05 | 20,144 | 16.00 | |||||||||
Accumulated other comprehensive income (loss) | (11,593) | (8,273) | (9,946) | (3,320) | 40.13 | (1,647) | 16.56 | |||||||||
TOTAL STOCKHOLDERS' EQUITY | 232,208 | 219,601 | 212,518 | 12,607 | 5.74 | 19,690 | 9.27 | |||||||||
TOTAL LIABILITIES | ||||||||||||||||
AND STOCKHOLDERS' EQUITY | $ 1,913,123 | $ 1,601,779 | $ 1,603,050 | $ 311,344 | 19.44 | % | $ 310,073 | 19.34 | % | |||||||
Book value per common share | $ 36.86 | $ 35.16 | $ 34.00 | $ 1.70 | 4.84 | % | $ 2.86 | 8.41 | % | |||||||
Tangible book value per common share 3 | $ 35.21 | $ 33.45 | $ 32.27 | $ 1.76 | 5.26 | % | $ 2.94 | 9.11 | % | |||||||
1The common stock of Princeton Bancorp, Inc. has no par value. The par value of the common stock of the Bank was $5.00 per share. | ||||||||||||||||
2The balances of common stock and treasury stock were reclassified to paid-in capital effective January 10, 2023, upon formation of Princeton Bancorp, Inc. | ||||||||||||||||
3Tangible book value per common share is a non-GAAP measure that represents book value per common share which excludes goodwill and core deposit intangible. | ||||||||||||||||
Princeton Bancorp, Inc. | |||||
Loan and Deposit Tables | |||||
(Unaudited) | |||||
The components of loans receivable, net at September 30, 2023 and December 31, 2022 were as follows: | |||||
September 30, | December 31, | ||||
2023 | 2022 | ||||
(In thousands) | |||||
Commercial real estate | $ 1,080,288 | $ 873,573 | |||
Commercial and industrial | 52,157 | 28,859 | |||
Construction | 320,824 | 417,538 | |||
Residential first-lien mortgages | 39,682 | 43,125 | |||
Home equity / consumer | 7,860 | 9,729 | |||
Total loans | 1,500,811 | 1,372,824 | |||
Deferred fees and costs | (2,311) | (2,456) | |||
Allowance for credit losses | (17,992) | (16,461) | |||
Loans, net | $ 1,480,508 | $ 1,353,907 | |||
The components of deposits at September 30, 2023 and December 31, 2022 were as follows: | |||||
September 30, | December 31, | ||||
2023 | 2022 | ||||
(In thousands) | |||||
Demand, non-interest-bearing | $ 264,197 | $ 265,078 | |||
Demand, interest-bearing | 239,902 | 269,737 | |||
Savings | 147,113 | 190,686 | |||
Money market | 349,505 | 283,652 | |||
Time deposits | 637,249 | 338,577 | |||
Total deposits | $ 1,637,966 | $ 1,347,730 | |||
Princeton Bancorp, Inc. | |||||||||
Consolidated Statements of Income | |||||||||
(Unaudited) | |||||||||
(Amounts in thousands except per share data) | |||||||||
Three Months Ended September 30, | |||||||||
2023 | 2022 | $ Change | % Change | ||||||
Interest and dividend income | |||||||||
Loans and fees | $ 23,503 | $ 18,336 | $ 5,167 | 28.2 % | |||||
Available-for-sale debt securities: | |||||||||
Taxable | 357 | 241 | 116 | 48.1 % | |||||
Tax-exempt | 285 | 286 | (1) | -0.3 % | |||||
Held-to-maturity debt securities | 3 | 2 | 1 | 50.0 % | |||||
Other interest and dividend income | 2,852 | 226 | 2,626 | 1161.9 % | |||||
Total interest and dividends | 27,000 | 19,091 | 7,909 | 41.4 % | |||||
Interest expense | |||||||||
Deposits | 10,316 | 1,392 | 8,924 | 641.1 % | |||||
Borrowing | - | 3 | (3) | -100.0 % | |||||
Total interest expense | 10,316 | 1,395 | 8,921 | 639.5 % | |||||
Net interest income | 16,684 | 17,696 | (1,012) | -5.7 % | |||||
(Credit) provision for credit losses | (182) | 200 | (382) | -191.0 % | |||||
Net interest income after provision for credit losses | 16,866 | 17,496 | (630) | -3.6 % | |||||
Non-interest income | |||||||||
Loss on sale of securities available-for-sale, net | (6) | - | (6) | N/A | |||||
Income from bank-owned life insurance | 331 | 287 | 44 | 15.3 % | |||||
Fees and service charges | 479 | 469 | 10 | 2.1 % | |||||
Loan fees, including prepayment penalties | 1,184 | 850 | 334 | 39.3 % | |||||
Gain on sale of other real estate owned | 203 | - | 203 | N/A | |||||
Other | 212 | 101 | 111 | 109.9 % | |||||
Total non-interest income | 2,403 | 1,707 | 696 | 40.8 % | |||||
Non-interest expense | |||||||||
Salaries and employee benefits | 6,177 | 5,442 | 735 | 13.5 % | |||||
Occupancy and equipment | 2,142 | 1,539 | 603 | 39.2 % | |||||
Professional fees | 614 | 786 | (172) | -21.9 % | |||||
Data processing and communications | 1,242 | 1,043 | 199 | 19.1 % | |||||
Federal deposit insurance | 258 | 249 | 9 | 3.6 % | |||||
Advertising and promotion | 139 | 140 | (1) | -0.7 % | |||||
Office expense | 117 | 52 | 65 | 125.0 % | |||||
Core deposit intangible | 116 | 135 | (19) | -14.1 % | |||||
Merger-related expenses | (1,391) | - | (1,391) | N/A | |||||
Other | 745 | 739 | 6 | 0.8 % | |||||
Total non-interest expense | 10,159 | 10,125 | 34 | 0.3 % | |||||
Income before income tax expense | 9,110 | 9,078 | 32 | 0.4 % | |||||
Income tax expense | 1,512 | 2,103 | (591) | -28.1 % | |||||
Net income | $ 7,598 | $ 6,975 | 623 | 8.9 % | |||||
Net income per common share - basic | $ 1.21 | $ 1.12 | $ 0.09 | 8.0 % | |||||
Net income per common share - diluted | $ 1.19 | $ 1.09 | $ 0.10 | 9.2 % | |||||
Weighted average shares outstanding - basic | 6,295 | 6,269 | 26 | 0.4 % | |||||
Weighted average shares outstanding - diluted | 6,390 | 6,378 | 12 | 0.2 % | |||||
Princeton Bancorp, Inc. | |||||||||
Consolidated Statements of Income (Current Quarter vs Prior Quarter) | |||||||||
(Unaudited) | |||||||||
(Amounts in thousands, except per share data) | |||||||||
Three Months Ended | |||||||||
September 30, | June 30, | ||||||||
2023 | 2023 | $ Change | % Change | ||||||
Interest and dividend income | |||||||||
Loans and fees | $ 23,503 | $ 21,517 | $ 1,986 | 9.2 % | |||||
Available-for-sale debt securities: | |||||||||
Taxable | 357 | 292 | 65 | 22.3 % | |||||
Tax-exempt | 285 | 284 | 1 | 0.4 % | |||||
Held-to-maturity debt securities | 3 | 2 | 1 | 50.0 % | |||||
Other interest and dividend income | 2,852 | 919 | 1,933 | 210.3 % | |||||
Total interest and dividends | 27,000 | 23,014 | 3,986 | 17.3 % | |||||
Interest expense | |||||||||
Deposits | 10,316 | 7,321 | 2,995 | 40.9 % | |||||
Borrowing | - | 32 | (32) | -100.0 % | |||||
Total interest expense | 10,316 | 7,353 | 2,963 | 40.3 % | |||||
Net interest income | 16,684 | 15,661 | 1,023 | 6.5 % | |||||
(Credit) provision for credit losses | (182) | 2,463 | (2,645) | -107.4 % | |||||
Net interest income after provision for credit losses | 16,866 | 13,198 | 3,668 | 27.8 % | |||||
Non-interest income | |||||||||
Loss on sale of securities available-for-sale, net | (6) | - | (6) | N/A | |||||
Income from bank-owned life insurance | 331 | 295 | 36 | 12.2 % | |||||
Fees and service charges | 479 | 464 | 15 | 3.2 % | |||||
Loan fees, including prepayment penalties | 1,184 | 1,030 | 154 | 15.0 % | |||||
Bargain purchase gain | - | 9,696 | (9,696) | -100.0 % | |||||
Gain on sale of other real estate owned | 203 | - | 203 | N/A | |||||
Other | 212 | 80 | 132 | 165.0 % | |||||
Total non-interest income | 2,403 | 11,565 | (9,162) | -79.2 % | |||||
Non-interest expense | |||||||||
Salaries and employee benefits | 6,177 | 5,776 | 401 | 6.9 % | |||||
Occupancy and equipment | 2,142 | 1,705 | 437 | 25.6 % | |||||
Professional fees | 614 | 556 | 58 | 10.4 % | |||||
Data processing and communications | 1,242 | 1,318 | (76) | -5.8 % | |||||
Federal deposit insurance | 258 | 253 | 5 | 2.0 % | |||||
Advertising and promotion | 139 | 126 | 13 | 10.3 % | |||||
Office expense | 117 | 178 | (61) | -34.3 % | |||||
Other real estate owned expense | - | 1 | (1) | -100.0 % | |||||
Core deposit intangible | 116 | 127 | (11) | -8.7 % | |||||
Merger-related expenses | (1,391) | 7,026 | (8,417) | -119.8 % | |||||
Other | 745 | 748 | (3) | -0.4 % | |||||
Total non-interest expense | 10,159 | 17,814 | (7,655) | -43.0 % | |||||
Income before income tax expense | 9,110 | 6,949 | 2,161 | 31.1 % | |||||
Income tax expense | 1,512 | 161 | 1,351 | 839.1 % | |||||
Net income | $ 7,598 | $ 6,788 | $ 810 | 11.9 % | |||||
Net income per common share - basic | $ 1.21 | $ 1.08 | $ 0.13 | 12.0 % | |||||
Net income per common share - diluted | $ 1.19 | $ 1.07 | $ 0.12 | 11.2 % | |||||
Weighted average shares outstanding - basic | 6,295 | 6,270 | 25 | 0.4 % | |||||
Weighted average shares outstanding - diluted | 6,390 | 6,366 | 24 | 0.4 % | |||||
Princeton Bancorp, Inc. | |||||||||
Consolidated Statements of Income | |||||||||
(Unaudited) | |||||||||
(Amounts in thousands, except per share data) | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2023 | 2022 | $ Change | % Change | ||||||
Interest and dividend income | |||||||||
Loans and fees | $ 64,914 | $ 51,596 | $ 13,318 | 25.8 % | |||||
Available-for-sale debt securities: | |||||||||
Taxable | 927 | 698 | 229 | 32.8 % | |||||
Tax-exempt | 853 | 882 | (29) | -3.3 % | |||||
Held-to-maturity debt securities | 8 | 8 | 0 | 0.0 % | |||||
Other interest and dividend income | 3,924 | 441 | 3,483 | 789.8 % | |||||
Total interest and dividends | 70,626 | 53,625 | 17,001 | 31.7 % | |||||
Interest expense | |||||||||
Deposits | 21,502 | 3,785 | 17,717 | 468.1 % | |||||
Borrowings | 118 | 3 | 115 | 3833.3 % | |||||
Total interest expense | 21,620 | 3,788 | 17,832 | 470.7 % | |||||
Net interest income | 49,006 | 49,837 | (831) | -1.7 % | |||||
Provision for credit losses | 2,546 | 200 | 2,346 | 1173.0 % | |||||
Net interest income after provision for credit losses | 46,460 | 49,637 | (3,177) | -6.4 % | |||||
Non-interest income | |||||||||
(Loss) gain on sale of securities available-for-sale, net | (6) | 2 | (8) | -400.0 % | |||||
Income from bank-owned life insurance | 916 | 852 | 64 | 7.5 % | |||||
Fees and service charges | 1,391 | 1,441 | (50) | -3.5 % | |||||
Loan fees, including prepayment penalties | 2,565 | 1,248 | 1,317 | 105.5 % | |||||
Bargain purchase gain | 9,696 | - | 9,696 | N/A | |||||
Gain on sale of other real estate owned | 203 | - | 203 | N/A | |||||
Other | 577 | 322 | 255 | 79.2 % | |||||
Total non-interest income | 15,342 | 3,865 | 11,477 | 296.9 % | |||||
Non-interest expense | |||||||||
Salaries and employee benefits | 17,352 | 15,251 | 2,101 | 13.8 % | |||||
Occupancy and equipment | 5,188 | 4,446 | 742 | 16.7 % | |||||
Professional fees | 1,635 | 1,929 | (294) | -15.2 % | |||||
Data processing and communications | 3,860 | 3,134 | 726 | 23.2 % | |||||
Federal deposit insurance | 701 | 788 | (87) | -11.0 % | |||||
Advertising and promotion | 375 | 379 | (4) | -1.1 % | |||||
Office expense | 392 | 168 | 224 | 133.3 % | |||||
Other real estate owned expense | 1 | 112 | (111) | -99.1 % | |||||
Core deposit intangible | 378 | 434 | (56) | -12.9 % | |||||
Merger-related expenses | 5,635 | - | 5,635 | N/A | |||||
Other | 2,228 | 2,180 | 48 | 2.2 % | |||||
Total non-interest expense | 37,745 | 28,821 | 8,924 | 31.0 % | |||||
Income before income tax expense | 24,057 | 24,681 | (624) | -2.5 % | |||||
Income tax expense | 3,574 | 5,358 | (1,784) | -33.3 % | |||||
Net income | $ 20,483 | $ 19,323 | $ 1,160 | 6.0 % | |||||
Net income per common share - basic | $ 3.26 | $ 3.05 | $ 0.21 | 7.0 % | |||||
Net income per common share - diluted | $ 3.21 | $ 2.98 | $ 0.23 | 7.7 % | |||||
Weighted average shares outstanding - basic | 6,275 | 6,345 | (70) | -1.1 % | |||||
Weighted average shares outstanding - diluted | 6,380 | 6,475 | (95) | -1.5 % | |||||
Princeton Bancorp, Inc. | |||||||||||
Consolidated Average Statement of Financial Condition | |||||||||||
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
For the Three Months Ended September 30, | |||||||||||
2023 | 2022 | Change in | Change in | ||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||
Balance | Rate | Balance | Rate | Balance | Rate | ||||||
Earning assets | |||||||||||
Loans | $ 1,464,798 | 6.37 % | $ 1,386,589 | 5.25 % | $ 78,209 | 1.12 % | |||||
Securities | |||||||||||
Taxable available-for-sale | 46,599 | 3.06 % | 46,281 | 2.06 % | 318 | 1.00 % | |||||
Tax-exempt available-for-sale | 40,118 | 2.84 % | 42,220 | 2.68 % | (2,102) | 0.16 % | |||||
Held-to-maturity | 196 | 5.28 % | 204 | 5.24 % | (8) | 0.04 % | |||||
Securities | 86,913 | 2.96 % | 88,704 | 2.37 % | (1,791) | 0.59 % | |||||
Other interest earning assets | |||||||||||
Federal funds sold | 199,350 | 5.38 % | 35,081 | 2.28 % | 164,269 | 3.10 % | |||||
Other interest-earning assets | 10,506 | 5.67 % | 1,322 | 5.85 % | 9,184 | -0.18 % | |||||
Other interest-earning assets | 209,856 | 5.39 % | 36,403 | 2.41 % | 173,453 | 2.98 % | |||||
Total interest-earning assets | 1,761,567 | 6.08 % | 1,511,697 | 5.01 % | 249,870 | 1.07 % | |||||
Total non-earning assets | 127,682 | 115,158 | |||||||||
Total assets | $ 1,889,249 | $ 1,626,856 | |||||||||
Interest-bearing liabilities | |||||||||||
Checking | $ 243,359 | 1.68 % | $ 240,948 | 0.29 % | $ 2,411 | 1.39 % | |||||
Savings | 149,215 | 2.10 % | 217,133 | 0.32 % | (67,918) | 1.78 % | |||||
Money market | 337,491 | 3.50 % | 350,901 | 0.43 % | (13,410) | 3.07 % | |||||
Certificates of deposit | 629,082 | 3.48 % | 289,274 | 0.86 % | 339,808 | 2.62 % | |||||
Total interest-bearing deposits | 1,359,147 | 3.01 % | 1,098,256 | 0.51 % | 260,891 | 2.50 % | |||||
Non-interest bearing deposits | 255,775 | 285,665 | (29,890) | ||||||||
Total deposits | 1,614,922 | 2.53 % | 1,383,921 | 0.40 % | 231,001 | 2.13 % | |||||
Borrowings | - | N/A | 391 | 2.65 % | (391) | N/A | |||||
Total interest-bearing liabilities | |||||||||||
(excluding non interest deposits) | 1,359,147 | 3.01 % | 1,098,647 | 0.51 % | 260,500 | 2.50 % | |||||
Non-interest-bearing deposits | 255,775 | 285,665 | |||||||||
Total cost of funds | 1,614,922 | 2.53 % | 1,384,312 | 0.40 % | 230,610 | 2.13 % | |||||
Accrued expenses and other liabilities | 45,923 | 28,136 | |||||||||
Stockholders' equity | 228,404 | 214,408 | |||||||||
Total liabilities and stockholders' equity | $ 1,889,249 | $ 1,626,856 | |||||||||
Net interest spread | 3.07 % | 4.50 % | |||||||||
Net interest margin | 3.76 % | 4.64 % | |||||||||
Net interest margin (FTE)1 | 3.81 % | 4.71 % | |||||||||
1Includes federal and state tax effect of tax-exempt securities and loans. | |||||||||||
Princeton Bancorp, Inc. | |||||||||||
Consolidated Average Statement of Financial Condition | |||||||||||
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
For the Three Months Ended | |||||||||||
September 30, 2023 | June 30, 2023 | Change in | Change in | ||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||
Balance | Rate | Balance | Rate | Balance | Rate | ||||||
Earning assets | |||||||||||
Loans | $ 1,464,798 | 6.37 % | $ 1,432,680 | 6.02 % | $ 32,118 | 0.35 % | |||||
Securities | |||||||||||
Taxable available-for-sale | 46,599 | 3.06 % | 44,669 | 2.63 % | 1,930 | 0.43 % | |||||
Tax-exempt available-for-sale | 40,118 | 2.84 % | 41,187 | 2.76 % | (1,069) | 0.08 % | |||||
Held-to-maturity | 196 | 5.28 % | 198 | 5.28 % | (2) | 0.00 % | |||||
Securities | 86,913 | 2.96 % | 86,054 | 2.69 % | 859 | 0.27 % | |||||
Other interest earning assets | |||||||||||
Federal funds sold | 199,350 | 5.38 % | 65,383 | 5.16 % | 133,967 | 0.22 % | |||||
Other interest-earning assets | 10,506 | 5.67 % | 5,691 | 5.31 % | 4,815 | 0.36 % | |||||
Other interest-earning assets | 209,856 | 5.39 % | 71,074 | 5.17 % | 138,782 | 0.22 % | |||||
Total interest-earning assets | 1,761,567 | 6.08 % | 1,589,808 | 5.81 % | 171,759 | 0.27 % | |||||
Total non-earning assets | 127,682 | 110,384 | |||||||||
Total assets | $ 1,889,249 | $ 1,700,192 | |||||||||
Interest-bearing liabilities | |||||||||||
Checking | $ 243,359 | 1.68 % | $ 242,667 | 1.38 % | $ 692 | 0.30 % | |||||
Savings | 149,215 | 2.10 % | 158,937 | 1.73 % | (9,722) | 0.37 % | |||||
Money market | 337,491 | 3.50 % | 285,021 | 2.97 % | 52,470 | 0.53 % | |||||
Certificates of deposit | 629,082 | 3.48 % | 516,252 | 2.87 % | 112,830 | 0.61 % | |||||
Total interest-bearing deposits | 1,359,147 | 3.01 % | 1,202,877 | 2.44 % | 156,270 | 0.57 % | |||||
Non-interest bearing deposits | 255,775 | 235,423 | 20,352 | ||||||||
Total deposits | 1,614,922 | 2.53 % | 1,438,300 | 2.04 % | 176,622 | 0.49 % | |||||
Borrowings | - | N/A | 2,482 | 5.08 % | (2,482) | N/A | |||||
Total interest-bearing liabilities | |||||||||||
(excluding non interest deposits) | 1,359,147 | 3.01 % | 1,205,359 | 2.45 % | 153,788 | 0.56 % | |||||
Non-interest-bearing deposits | 255,775 | 235,423 | |||||||||
Total cost of funds | 1,614,922 | 2.53 % | 1,440,782 | 2.04 % | 174,140 | 0.49 % | |||||
Accrued expenses and other liabilities | 45,923 | 32,232 | |||||||||
Stockholders' equity | 228,404 | 227,178 | |||||||||
Total liabilities and stockholders' equity | $ 1,889,249 | $ 1,700,192 | |||||||||
Net interest spread | 3.07 % | 3.36 % | |||||||||
Net interest margin | 3.76 % | 3.95 % | |||||||||
Net interest margin (FTE)1 | 3.81 % | 3.99 % | |||||||||
1Includes federal and state tax effect of tax-exempt securities and loans. | |||||||||||
Princeton Bancorp, Inc. | |||||||||||
Consolidated Average Statement of Financial Condition | |||||||||||
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
For the Nine Months Ended September 30, | |||||||||||
2023 | 2022 | Change in | Change in | ||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||
Balance | Rate | Balance | Rate | Balance | Rate | ||||||
Earning assets | |||||||||||
Loans | $ 1,424,768 | 6.09 % | $ 1,375,233 | 5.02 % | $ 49,535 | 1.07 % | |||||
Securities | |||||||||||
Taxable available-for-sale | 44,517 | 2.78 % | 47,626 | 1.96 % | (3,109) | 0.82 % | |||||
Tax-exempt available-for-sale | 40,974 | 2.78 % | 44,832 | 2.63 % | (3,858) | 0.15 % | |||||
Held-to-maturity | 198 | 5.28 % | 205 | 2.59 % | (7) | 2.69 % | |||||
Securities | 85,689 | 2.78 % | 92,664 | 2.29 % | (6,975) | 0.49 % | |||||
Other interest earning assets | |||||||||||
Federal funds sold | 91,761 | 5.30 % | 76,559 | 0.68 % | 15,202 | 4.62 % | |||||
Other interest-earning assets | 7,086 | 5.36 % | 1,327 | 4.96 % | 5,759 | 0.40 % | |||||
Other interest-earning assets | 98,848 | 5.31 % | 77,887 | 0.44 % | 20,961 | 4.87 % | |||||
Total interest-earning assets | 1,609,304 | 5.87 % | 1,545,783 | 4.64 % | 63,521 | 1.23 % | |||||
Total non-earning assets | 114,543 | 112,573 | |||||||||
Total assets | $ 1,723,847 | $ 1,658,356 | |||||||||
Interest-bearing liabilities | |||||||||||
Checking | $ 250,100 | 1.29 % | $ 257,284 | 0.26 % | $ (7,184) | 1.03 % | |||||
Savings | 163,516 | 1.54 % | 226,532 | 0.26 % | (63,016) | 1.28 % | |||||
Money market | 297,360 | 2.81 % | 374,570 | 0.34 % | (77,210) | 2.47 % | |||||
Certificates of deposit | 504,237 | 2.90 % | 285,855 | 0.91 % | 218,382 | 1.99 % | |||||
Total interest-bearing deposits | 1,215,213 | 2.37 % | 1,144,242 | 0.42 % | 70,971 | 1.95 % | |||||
Non-interest bearing deposits | 244,718 | 280,761 | |||||||||
Total deposits | 1,459,931 | 1.97 % | 1,425,004 | 0.36 % | 34,927 | 1.61 % | |||||
Borrowings | 3,133 | 5.01 % | 132 | 2.65 % | 3,001 | 2.36 % | |||||
Total interest-bearing liabilities | |||||||||||
(excluding non interest deposits) | 1,218,346 | 2.37 % | 1,144,374 | 0.45 % | 73,972 | 1.92 % | |||||
Non-interest-bearing deposits | 244,718 | 280,761 | |||||||||
Total cost of funds | 1,463,064 | 1.97 % | 1,425,135 | 0.36 % | 37,929 | 1.61 % | |||||
Accrued expenses and other liabilities | 34,312 | 18,680 | |||||||||
Stockholders' equity | 226,471 | 214,541 | |||||||||
Total liabilities and stockholders' equity | $ 1,723,847 | $ 1,658,356 | |||||||||
Net interest spread | 3.50 % | 4.19 % | |||||||||
Net interest margin | 4.07 % | 4.31 % | |||||||||
Net interest margin (FTE)1 | 4.13 % | 4.37 % | |||||||||
1Includes federal and state tax effect of tax-exempt securities and loans. | |||||||||||
Princeton Bancorp, Inc. | ||||||||||
Quarterly Financial Highlights | ||||||||||
(Unaudited) | ||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | ||||||
September | June | March | December | September | ||||||
Return on average assets | 1.60 % | 1.60 % | 1.56 % | 1.76 % | 1.70 % | |||||
Return on average equity | 13.20 % | 11.98 % | 11.05 % | 13.20 % | 12.91 % | |||||
Return on average tangible equity1 | 13.83 % | 12.57 % | 11.60 % | 13.89 % | 13.59 % | |||||
Net interest margin | 3.76 % | 3.95 % | 4.59 % | 4.82 % | 4.64 % | |||||
Net interest margin (FTE)2 | 3.81 % | 3.99 % | 4.66 % | 4.89 % | 4.71 % | |||||
Efficiency ratio - non-GAAP3 | 59.89 % | 60.82 % | 53.43 % | 49.56 % | 51.49 % | |||||
COMMON STOCK DATA | ||||||||||
Market value at period end | $ 28.99 | $ 27.32 | $ 31.72 | $ 31.72 | $ 28.35 | |||||
Market range: | ||||||||||
High | $ 31.69 | $ 33.00 | $ 37.18 | $ 32.80 | $ 29.95 | |||||
Low | $ 27.37 | $ 24.09 | $ 31.18 | $ 28.57 | $ 27.16 | |||||
Book value per common share at period end | $ 36.86 | $ 36.45 | $ 35.98 | $ 35.16 | $ 34.00 | |||||
Tangible book value per common share at period end4 | $ 35.21 | $ 34.78 | $ 34.29 | $ 33.45 | $ 32.27 | |||||
Shares of common stock outstanding (in thousands) | 6,299 | 6,279 | 6,262 | 6,245 | 6,251 | |||||
CAPITAL RATIOS | ||||||||||
Total capital (to risk-weighted assets) | 14.96 % | 14.57 % | 15.43 % | 15.12 % | 14.71 % | |||||
Tier 1 capital (to risk-weighted assets) | 13.89 % | 13.50 % | 14.36 % | 14.06 % | 13.63 % | |||||
Tier 1 capital (to average assets) | 12.38 % | 13.43 % | 14.00 % | 13.47 % | 13.10 % | |||||
Period-end equity to assets | 12.14 % | 12.42 % | 14.21 % | 13.71 % | 13.26 % | |||||
Period-end tangible equity to tangible assets | 11.66 % | 11.92 % | 13.64 % | 13.13 % | 12.67 % | |||||
CREDIT QUALITY DATA (Dollars in thousands) | ||||||||||
Net charge-offs (recoveries) | $ (23) | $ 1,842 | $ (3) | $ 406 | $ 200 | |||||
Annualized net charge-offs (recoveries) to average loans | -0.006 % | 0.514 % | -0.001 % | 0.118 % | 0.058 % | |||||
Nonperforming loans | $ 6,755 | $ 9,753 | $ 6,456 | $ 266 | $ 370 | |||||
Other real estate owned | - | 33 | - | - | - | |||||
Total nonperforming assets | $ 6,755 | $ 9,786 | $ 6,456 | $ 266 | $ 370 | |||||
Allowance for credit losses as a percent of: | ||||||||||
Period-end loans, net of deferred fees and costs | 1.20 % | 1.20 % | 1.19 % | 1.20 % | 1.21 % | |||||
Nonaccrual loans | 266.35 % | 184.25 % | 255.68 % | 6188.35 % | 2286.15 % | |||||
Nonperforming assets | 266.35 % | 183.63 % | 255.68 % | 6188.35 % | 2286.15 % | |||||
Nonaccrual loans as a percent of total loans, net of deferred fees and costs | 0.45 % | 0.65 % | 0.46 % | 0.02 % | 0.03 % | |||||
1Return on average tangible equity is a non-GAAP measure that represents the rate of return on tangible common equity. | ||||||||||
2Includes the effect of tax-exempt securities and loans. | ||||||||||
3The efficiency ratio is a non-GAAP measure that represents the ratio of non-interest expense (excluding amortization of core deposit intangible and merger-) | ||||||||||
related expenses) divided by net interest income and non-interest income (excluding bargain purchase gain). | ||||||||||
4Tangible book value per common share is a non-GAAP measure that represents book value per common share which | ||||||||||
excludes goodwill and core deposit intangible. | ||||||||||
Contact George Rapp
609.454.0718
grapp@thebankofprinceton.com
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SOURCE The Bank of Princeton
