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Press Release Details

First Bank Reports Second Quarter 2021 Net Income of $8.9 Million

Company Release - 7/26/2021 4:30 PM ET
Net Income of $18.6 Million for First Six Months of 2021

For the Second Quarter and First Half of 2021: Continued Revenue and Asset Growth,  Effective Management of Non-Interest Expense, and Solid Asset Quality Metrics

HAMILTON, N.J., July 26, 2021 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) today announced results for the three and six months ended June 30, 2021. Net income for the second quarter of 2021 was $8.9 million, or $0.45 per diluted share, compared to $4.1 million, or $0.21 per diluted share, for the second quarter of 2020. Return on average assets and return on average equity for the second quarter of 2021 were 1.48% and 14.26%, respectively, compared to 0.74% and 7.33%, respectively, for the second quarter of 2020. Net income for the first six months of 2021 was $18.6 million, or $0.93 per diluted share, compared to $7.4 million, or $0.36 per diluted share, for the same period in 2020.

Second Quarter and Year-to-Date 2021 Performance Highlights:

  • Total net revenue (net interest income plus non-interest income) of $21.8 million for the quarter increased $3.6 million, or 19.5%, compared to $18.2 million for the prior year quarter.
  • Total loans of $2.05 billion at June 30, 2021 increased $31.8 million, or 1.6%, from the end of the linked first quarter of 2021 and were up $6.4 million from December 31, 2020.
  • Continued participation in the Paycheck Protection Program (PPP) with $5.7 million in new PPP loans originated during the quarter for a total of $107.9 million during the first six months of 2021. There were $59.6 million in PPP loans forgiven during the second quarter of 2021 and $105.1 million for the six months ended June 30, 2021. PPP loans outstanding at June 30, 2021 were $139.9 million.
  • Total deposits of $2.04 billion at June 30, 2021 increased $132.6 million, or 7.0%, from December 31, 2020 and $65.7 million, or 3.3%, compared to March 31, 2021.
  • Asset quality metrics remained solid during the quarter, with net charge-offs of $116,000, or an annualized 0.02% of average loans, for second quarter 2021, compared to net charge-offs of $1.0 million, or an annualized 0.21% of average loans, for second quarter 2020. Nonperforming loans were $9.6 million at June 30, 2021, $14.1 million on June 30, 2020, and $10.7 million on March 31, 2021. The ratio of nonperforming loans to total loans was 0.47% at June 30, 2021, down from 0.72% at June 30, 2020, and 0.53% at March 31, 2021.
  • Continued effective non-interest expense management was reflected in the second quarter 2021 efficiency ratioi of 46.66%, improved from 53.64% for second quarter 2020, and 47.66% for the linked first quarter of 2021.

“Our team delivered another quarter of very strong financial performance. During the second quarter we continued to focus on generating revenues, managing expenses, maintaining solid asset quality metrics and expanding relationships with new and existing customers,” said Patrick L. Ryan, President and Chief Executive Officer. “Our strong earnings performance is reflected in the recent improvement in our stock price. Through the first six months of the year, the price of our common stock grew by more than 44%, outpacing the broad-market Russell 3000® Index’s 14% by a wide margin. We were pleased that our growing market capitalization position earned us inclusion in this index for the third year in a row.”

“Net interest income and non-interest income combined to generate strong total net revenue of $21.8 million, up nearly 20% year-over-year. While total revenue was down slightly from the record level achieved in the first quarter of 2021, we were able to drive further improvement in our efficiency ratio as a result of our ability to effectively manage expenses. As a reminder, during the first quarter we consolidated two Mercer County branches into nearby locations and reduced our leased corporate office space, which benefitted our non-interest expenses in the second quarter and will continue to favorably impact expenses going forward.”

“Total deposits surpassed the $2 billion threshold, a record level for us, as we further improved our deposit mix during the quarter. Non-interest bearing deposits have grown over $110 million in the first six months of 2021 and now represent over 26% of total deposits. We have also been able to reduce higher cost time deposits and significantly lower our rates on all deposit types. These efforts are allowing us to successfully reduce our overall deposit costs, which is helping to drive core profitability higher.”

“We’re utilizing our strong liquidity position to fund loan growth with high-quality borrowers throughout our service footprint. Non-PPP loans rebounded nicely with $85.7 million in net loan growth during the second quarter. We maintained our solid asset quality position, reporting just two basis points of annualized net charge-offs to average loans, and we reduced both non-performing loans and non-performing assets during both the quarter and year ended June 30, 2021.”  

“Overall, we are very pleased with our performance through the first half of the year. Our team’s incredible efforts to help small businesses access critical funding during the past year have helped us attract new customers and deepen relationships with existing ones. With all our branch locations open and fully accessible to customers, and our reputation for personalized, relationship-based banking as strong as ever, we believe we are well-positioned for a strong and profitable second half of 2021.”

Income Statement

First Bank’s net interest income for the second quarter of 2021 was $20.4 million, an increase of $4.1 million, or 25.1%, compared to $16.3 million in the second quarter of 2020. This increase was driven by a $3.3 million decrease in total interest expense, along with an $839,000 increase in interest and dividend income.

Interest income increased primarily due to a $139.6 million increase in average loans compared with the second quarter of 2020. Interest income was also impacted by $1.3 million in PPP loan fee income during the second quarter of 2021 compared to $739,000 in the second quarter of 2020. Also contributing to the increase was prepayment penalty income of $730,000 for the quarter ended June 30, 2021 compared to $184,000 for the quarter ended June 30, 2020. The reduction in interest expense was primarily a result of an 85-basis point reduction for the average rates paid on interest-bearing deposits. Six-month 2021 net interest income totaled $40.5 million, an increase of $8.3 million, or 25.7%, compared to $32.2 million for the same period in 2020. The increase in the 2021 year to date net interest income was also driven by solid growth in average loans, which increased by $217.1 million, or 11.9%, from the prior year period, along with a 95-basis-point decrease in the interest rate for interest-bearing deposits.

The second quarter 2021 tax equivalent net interest margin was 3.57%, an increase of 50 basis points compared to the prior year quarter and a decrease of three basis points compared to the linked first quarter of 2021. The increase compared to second quarter 2020 was primarily the result of an 85-basis-point reduction in the average interest rate paid on interest-bearing deposits. The lower average cost of interest-bearing deposits is reflective of the continued repricing of time deposits, as well as lower interest rates for money markets, interest-bearing demand deposits and savings.   The decline in the margin compared to the first quarter of 2021 was primarily a result of an 11-basis-point decrease in interest earning asset yields, primarily loans. The year-to-date tax equivalent net interest margin was 3.58%, an increase of 40 basis points compared to the prior year period. The increase in the six-month net interest margin was principally a result of the lower cost of interest-bearing deposits, partially offset by lower earning asset yields.

First Bank reported a credit to the provision for loan losses of $162,000 for the second quarter of 2021, compared to a provision for loan losses of $3.0 million in the second quarter of 2020. The provision credit for the quarter ended June 30, 2021 was notably affected by an improving economic outlook combined with continued stable asset quality metrics, including annualized net charge-offs of 0.02% of average loans and nonperforming loans of 0.47% of total loans. For the year-to-date comparison, the Company reported a credit to the provision for loan losses of $1.2 million, compared to provision expense of $5.9 million for the same period in 2020. The variance in the six-month provision for loan losses was primarily due to the same factors as discussed for the three-month period.

Second quarter 2021 non-interest income decreased by $538,000 to $1.3 million, compared to $1.9 million in second quarter 2020, primarily the result of a $515,000 decrease in loan fees, comprised mostly of loan swap fees, and a $249,000 decrease in income from bank owned life insurance (BOLI) compared to the second quarter of 2020. Non-interest income totaled $3.6 million for the six months ended June 30, 2021, compared to $3.1 million for the same period in 2020. This increase in non-interest income for the first six months of 2021 was primarily a result of an increase of $732,000 in gains on the sale of loans, comprised mostly of SBA loans.

Non-interest expense for second quarter 2021 totaled $10.2 million, an increase of $388,000 compared to $9.8 million for the prior year quarter. The higher non-interest expense compared to second quarter 2020 was primarily a result of increased salaries and employee benefits expense partially offset by lower occupancy and equipment costs.

On a linked quarter basis, non-interest expense decreased $495,000 to $10.2 million for second quarter 2021 compared to $10.7 million for the first quarter of 2021. The lower non-interest expense compared to the linked first quarter of 2021 was primarily a result of reduced occupancy and equipment expenses.  

Non-interest expense for the first six months of 2021 totaled $20.8 million, an increase of $1.1 million, or 5.7%, compared to $19.7 million for the same period in 2020. The increase was primarily a result of increased salaries and employee benefits, as well as higher occupancy and equipment, marketing and data processing costs. These increases were partially offset by lower other expense.

Income tax expense for the three months ended June 30, 2021 was $2.9 million with an effective tax rate of 24.4%, compared to $1.3 million with an effective tax rate of 24.7% for the second quarter of 2020 and $3.1 million with an effective tax rate of 24.2% for the first quarter of 2021. Income tax expense for the six months ended June 30, 2021 was $6.0 million with an effective tax rate of 24.3%, compared to $2.4 million for the first six months of 2020 with an effective tax rate of 24.2%.

Balance Sheet

Total assets at June 30, 2021 were $2.44 billion, an increase of $142.5 million, or 6.2%, compared to $2.30 billion at June 30, 2020, and an increase of $96.8 million, or 4.1%, from December 31, 2020. Total loans were $2.05 billion at June 30, 2021, an increase of $98.9 million, or 5.1%, compared to $1.96 billion at June 30, 2020, and an increase of $6.4 million, or 0.3%, from the 2020 year-end. Total loans as of June 30, 2021 increased $31.8 million, or 1.6%, from $2.02 billion at March 31, 2021, reflecting organic, net non-PPP loan growth of $85.7 million, partially offset by a net decline in PPP loans of $53.9 million.

Total deposits were $2.04 billion at June 30, 2021, an increase of $65.7 million, or 3.3%, compared to $1.97 billion at March 31, 2021, and an increase of $132.6 million, or 7.0%, from December 31, 2020. Non-interest-bearing deposits totaled $534.5 million at June 30, 2021, an increase of $34.5 million, or 6.9%, from March 31, 2021, reflective of continued growth in commercial deposits primarily related to expanded business banking relationships.

Stockholders’ equity was $254.6 million at June 30, 2021, compared to $238.1 million on December 31, 2020. The growth in stockholder’s equity at June 30, 2021 was primarily a result of year-to-date net income of $18.6 million, partially offset by treasury stock repurchases of $1.3 million and cash dividends paid of $1.2 million during the six months ended June 30, 2021.

As of June 30, 2021, the Bank continued to exceed all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 9.84%, a Tier 1 Risk-Based capital ratio of 10.88%, a Common Equity Tier 1 Capital ratio of 10.88%, and a Total Risk-Based capital ratio of 13.30%.

Asset Quality

First Bank’s asset quality metrics have steadily improved during the past 12 months. Net charge-offs were $116,000 for the second quarter of 2021, compared to net charge-offs of $1.0 million for the second quarter of 2020 and net recoveries of $5,000 for the first quarter of 2021. Net charge-offs as an annualized percentage of average loans were 0.02% in second quarter 2021, compared to 0.21% in second quarter 2020. Nonperforming loans as a percentage of total loans at June 30, 2021 were 0.47%, compared with 0.72% on June 30, 2020 and 0.53% at March 31, 2021. Nonperforming loans were $9.6 million at June 30, 2021, down from $14.1 million on June 30, 2020, and down from $10.7 million on March 31, 2021. The allowance for loan losses to nonperforming loans was 236.95% at June 30, 2021, compared with 152.26% at the end of second quarter 2020, and 214.74% at March 31, 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 the first half of 2021. The PPP is a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the U.S. Small Business Administration (SBA). The PPP provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover compensation-related business operating costs. The PPP came to an end during the quarter ended June 30, 2021. As of June 30, 2021, First Bank had 1,024 PPP loans with outstanding balances of $139.9 million. During the first half of 2021, First Bank originated 783 new PPP loans totaling $107.9 million. During the first six months of 2021, PPP loans totaling $105.1 million were forgiven. During the six months ended June 30, 2021, the Bank realized $2.9 million in fee income on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of June 30, 2021, the Bank had $4.5 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) based on asset class and borrower type. As of June 30, 2021, the Bank’s population of COVID-19 deferrals was $11.7 million, or 0.57% of total loans, down from $22.1 million, or 1.1% of total loans, at March 31, 2021.
                                
Cash Dividend Declared

On July 20, 2021, First Bank’s Board of Directors declared a quarterly cash dividend of $0.03 per share to common stockholders of record at the close of business on August 6, 2021, payable on August 20, 2021.

Conference Call

First Bank will host its earnings call on Tuesday, July 27, 2021 at 9:00 AM eastern time. The direct dial toll free number for the call is 1-844-825-9784. For those unable to participate in the call, a replay will be available by dialing 1-877-344-7529 (access code 10158104) from one hour after the end of the conference call until October 27, 2021. 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 16 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Lawrence, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.4 billion in assets as of June 30, 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; continue to sustain its internal growth rate; 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; 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 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.

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



FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data)
 
             
        June 30, 2021    
        (unaudited)   December 31, 2020
Assets        
Cash and due from banks $ 31,621     $ 24,203  
Interest bearing deposits with banks   136,088       71,270  
    Cash and cash equivalents   167,709       95,473  
Interest bearing time deposits with banks   2,290       4,371  
Investment securities available for sale, at fair value   80,310       61,731  
Investment securities held to maturity (fair value of $40,174      
   at June 30, 2021 and $38,319 at December 31, 2020)   39,695       37,593  
Restricted investment in bank stocks   7,020       8,545  
Other investments   6,529       6,498  
Loans, net of deferred fees and costs   2,053,938       2,047,572  
  Less: Allowance for loan losses   22,648       23,974  
    Net loans   2,031,290       2,023,598  
Premises and equipment, net   9,881       10,736  
Other real estate owned, net   480       575  
Accrued interest receivable   6,064       6,806  
Bank-owned life insurance   50,869       50,197  
Goodwill   16,253       16,253  
Other intangible assets, net   1,712       1,745  
Deferred income taxes   11,477       11,394  
Other assets   11,468       10,755  
    Total assets $ 2,443,047     $ 2,346,270  
             
Liabilities and Stockholders' Equity      
Liabilities:      
Non-interest bearing deposits $ 534,475     $ 424,119  
Interest bearing deposits   1,501,753       1,479,498  
    Total deposits   2,036,228       1,903,617  
Borrowings   106,617       161,135  
Subordinated debentures   29,564       29,508  
Accrued interest payable   465       561  
Other liabilities   15,602       13,341  
    Total liabilities   2,188,476       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; 20,839,587    
  shares issued and 19,678,528 shares outstanding at June 30, 2021 and      
  20,742,158 shares issued and 19,707,474 outstanding at December 31, 2020   103,569       103,135  
Additional paid-in capital   79,080       78,887  
Retained earnings   80,806       63,431  
Accumulated other comprehensive income   592       839  
Treasury stock, 1,161,059 at June 30, 2021 and 1,034,684 shares at      
  December 31, 2020   (9,476 )     (8,184 )
    Total stockholders' equity   254,571       238,108  
    Total liabilities and stockholders' equity $ 2,443,047     $ 2,346,270  
             

 

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)
 
                     
        Three Months Ended   Six Months Ended
        June 30,   June 30,
        2021   2020   2021   2020
Interest and Dividend Income              
Investment securities—taxable $ 550     $ 612   $ 1,025     $ 1,162
Investment securities—tax-exempt   45       76     93       154
Interest bearing deposits with banks,              
  Federal funds sold and other   185       203     356       626
Loans, including fees   22,038       21,088     44,195       42,251
  Total interest and dividend income   22,818       21,979     45,669       44,193
                     
Interest Expense              
Deposits     1,463       4,565     3,313       9,951
Borrowings   493       550     1,007       1,109
Subordinated debentures   441       536     881       934
  Total interest expense   2,397       5,651     5,201       11,994
Net interest income   20,421       16,328     40,468       32,199
Provision for loan losses   (162 )     2,977     (1,215 )     5,909
  Net interest income after provision for loan losses   20,583       13,351     41,683       26,290
                     
Non-Interest Income              
Service fees on deposit accounts   165       116     341       287
Loan fees     134       649     815       934
Income from bank-owned life insurance   343       592     672       936
Gains on sale of loans   315       38     849       117
Gains on recovery of acquired loans   141       293     511       474
Other non-interest income   244       192     454       346
  Total non-interest income   1,342       1,880     3,642       3,094
                     
Non-Interest Expense              
Salaries and employee benefits   5,930       5,308     11,698       10,692
Occupancy and equipment   1,299       1,548     3,237       2,964
Legal fees   253       235     500       455
Other professional fees   528       569     1,059       1,025
Regulatory fees   228       277     496       510
Directors' fees   219       215     435       430
Data processing   608       430     1,143       994
Marketing and advertising   187       81     375       225
Travel and entertainment   24       13     39       114
Insurance     138       122     292       318
Other real estate owned expense, net   30       94     81       211
Other expense   711       875     1,450       1,744
  Total non-interest expense   10,155       9,767     20,805       19,682
Income Before Income Taxes   11,770       5,464     24,520       9,702
Income tax expense   2,877       1,347     5,966       2,352
Net Income $ 8,893     $ 4,117   $ 18,554     $ 7,350
                     
Basic earnings per common share $ 0.45     $ 0.21   $ 0.94     $ 0.37
Diluted earnings per common share $ 0.45     $ 0.21   $ 0.93     $ 0.36
Cash dividends per common share $ 0.03     $ 0.03   $ 0.06     $ 0.06
                     
Basic weighted average common shares outstanding   19,677,002       19,651,679     19,674,523       19,984,353
Diluted weighted average common shares outstanding   19,883,076       19,744,575     19,859,091       20,165,726
                     

 

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
                       
  Three Months Ended June 30,
    2021       2020  
  Average       Average
  Average       Average
  Balance   Interest   Rate (5)   Balance   Interest   Rate (5)
Interest earning assets                      
Investment securities (1) (2) $ 120,238     $ 605     2.02 %   $ 105,248     $ 704     2.69 %
Loans (3)   2,044,789       22,038     4.32 %     1,905,227       21,088     4.45 %
Interest bearing deposits with banks,                      
   Federal funds sold and other   117,787       71     0.24 %     120,343       73     0.24 %
Restricted investment in bank stocks   8,089       98     4.86 %     6,584       92     5.62 %
Other investments   6,525       16     0.98 %     6,457       38     2.37 %
Total interest earning assets (2)   2,297,428       22,828     3.99 %     2,143,859       21,995     4.13 %
Allowance for loan losses   (23,512 )             (20,000 )        
Non-interest earning assets   136,437               127,537          
     Total assets $ 2,410,353             $ 2,251,396          
                       
Interest bearing liabilities                      
Interest bearing demand deposits $ 210,494     $ 49     0.09 %   $ 164,325     $ 131     0.32 %
Money market deposits   602,221       424     0.28 %     531,535       1,138     0.86 %
Savings deposits   183,289       192     0.42 %     135,805       268     0.79 %
Time deposits   482,657       798     0.66 %     634,281       3,028     1.92 %
       Total interest bearing deposits   1,478,661       1,463     0.40 %     1,465,946       4,565     1.25 %
Borrowings   130,441       493     1.52 %     104,109       550     2.12 %
Subordinated debentures   29,547       441     5.97 %     32,515       536     6.59 %
      Total interest bearing liabilities   1,638,649       2,397     0.59 %     1,602,570       5,651     1.42 %
Non-interest bearing deposits   505,912               406,498          
Other liabilities   15,649               16,423          
Stockholders' equity   250,143               225,905          
     Total liabilities and stockholders' equity $ 2,410,353             $ 2,251,396          
Net interest income/interest rate spread (2)       20,431     3.40 %         16,344     2.71 %
Net interest margin (2) (4)         3.57 %           3.07 %
Tax equivalent adjustment (2)       (10 )             (16 )    
Net interest income     $ 20,421             $ 16,328      
                       
(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)
                       
  Six Months Ended June 30,
    2021       2020  
  Average       Average
  Average       Average
  Balance   Interest   Rate (5)   Balance   Interest   Rate (5)
Interest earning assets                      
Investment securities (1) (2) $ 109,058     $ 1,138     2.10 %   $ 98,553     $ 1,348     2.75 %
Loans (3)   2,041,074       44,195     4.37 %     1,824,020       42,251     4.66 %
Interest bearing deposits with banks,                      
   Federal funds sold and other   113,315       140     0.25 %     105,815       343     0.65 %
Restricted investment in bank stocks   8,267       185     4.51 %     6,549       202     6.20 %
Other investments   6,518       31     0.96 %     6,438       81     2.53 %
Total interest earning assets (2)   2,278,232       45,689     4.04 %     2,041,375       44,225     4.36 %
Allowance for loan losses   (24,053 )             (18,761 )        
Non-interest earning assets   134,326               127,698          
     Total assets $ 2,388,505             $ 2,150,312          
                       
Interest bearing liabilities                      
Interest bearing demand deposits $ 205,896     $ 114     0.11 %   $ 162,643     $ 293     0.36 %
Money market deposits   597,015       944     0.32 %     487,550       2,628     1.08 %
Savings deposits   176,180       396     0.45 %     131,215       590     0.90 %
Time deposits   495,234       1,859     0.76 %     647,024       6,440     2.00 %
       Total interest bearing deposits   1,474,325       3,313     0.45 %     1,428,432       9,951     1.40 %
Borrowings   137,995       1,007     1.47 %     103,269       1,109     2.16 %
Subordinated debentures   29,533       881     5.97 %     27,244       934     6.86 %
      Total interest bearing liabilities   1,641,853       5,201     0.64 %     1,558,945       11,994     1.55 %
Non-interest bearing deposits   485,149               347,539          
Other liabilities   15,571               16,641          
Stockholders' equity   245,932               227,187          
     Total liabilities and stockholders' equity $ 2,388,505             $ 2,150,312          
Net interest income/interest rate spread (2)       40,488     3.40 %         32,231     2.81 %
Net interest margin (2) (4)         3.58 %           3.18 %
Tax equivalent adjustment (2)       (20 )             (32 )    
Net interest income     $ 40,468             $ 32,199      
                       
(1) Average balances of investment securities available for sale are 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
    6/30/2021   3/31/2021   12/31/2020   9/30/2020   6/30/2020
EARNINGS                    
   Net interest income   $ 20,421     $ 20,047     $ 19,724     $ 17,630     $ 16,328  
   Provision for loan losses     (162 )     (1,053 )     1,633       1,997       2,977  
   Non-interest income     1,342       2,300       1,312       1,946       1,880  
   Non-interest expense     10,155       10,650       11,052       9,653       9,767  
   Income tax expense     2,877       3,089       2,156       2,023       1,347  
   Net income     8,893       9,661       6,195       5,903       4,117  
                     
PERFORMANCE RATIOS                    
   Return on average assets (1)     1.48 %     1.66 %     1.06 %     1.03 %     0.74 %
   Return on average equity (1)     14.26 %     16.21 %     10.44 %     10.20 %     7.33 %
   Return on average tangible equity (1) (2)     15.37 %     17.52 %     11.30 %     11.08 %     7.97 %
   Net interest margin (1) (3)     3.57 %     3.60 %     3.56 %     3.23 %     3.07 %
   Total cost of deposits (1)     0.30 %     0.39 %     0.50 %     0.70 %     0.98 %
   Efficiency ratio (2)     46.66 %     47.66 %     52.54 %     49.31 %     53.64 %
                     
SHARE DATA                    
   Common shares outstanding     19,678,528       19,663,065       19,707,474       19,694,892       19,629,892  
   Basic earnings per share   $ 0.45     $ 0.49     $ 0.31     $ 0.30     $ 0.21  
   Diluted earnings per share     0.45       0.49       0.31       0.30       0.21  
   Tangible book value per share (2)     12.02       11.59       11.17       10.88       10.61  
   Book value per share     12.94       12.51       12.08       11.79       11.54  
                     
MARKET DATA                    
   Market value per share   $ 13.54     $ 12.17     $ 9.38     $ 6.20     $ 6.52  
   Market value / Tangible book value     112.61 %     104.97 %     83.98 %     57.01 %     61.46 %
   Market capitalization   $ 266,447     $ 239,300     $ 184,856     $ 122,108     $ 127,987  
                     
CAPITAL & LIQUIDITY                    
   Tangible stockholders' equity / tangible assets (2)     9.76 %     9.55 %     9.45 %     9.35 %     9.12 %
   Stockholders' equity / assets     10.42 %     10.23 %     10.15 %     10.06 %     9.84 %
   Loans / deposits     100.87 %     102.62 %     107.56 %     109.22 %     101.65 %
                     
ASSET QUALITY                    
   Net charge-offs (recoveries)   $ 116     $ (5 )   $ 465     $ 633     $ 1,013  
   Nonperforming loans     9,558       10,676       10,234       12,694       14,082  
   Nonperforming assets     10,038       11,251       10,809       13,397       15,224  
   Net charge offs / average loans (1)     0.02 %     0.00 %     0.09 %     0.13 %     0.21 %
   Nonperforming loans / total loans     0.47 %     0.53 %     0.50 %     0.63 %     0.72 %
   Nonperforming assets / total assets     0.41 %     0.47 %     0.46 %     0.58 %     0.66 %
   Allowance for loan losses / total loans     1.10 %     1.13 %     1.17 %     1.14 %     1.10 %
   Allowance for loan losses / total loans (excluding PPP loans)   1.18 %     1.24 %     1.25 %     1.25 %     1.20 %
   Allowance for loan losses / nonperforming loans     236.95 %     214.74 %     234.26 %     179.66 %     152.26 %
                     
OTHER DATA                    
   Total assets   $ 2,443,047     $ 2,405,576     $ 2,346,270     $ 2,309,897     $ 2,300,594  
   Total loans     2,053,938       2,022,187       2,047,572       2,004,650       1,955,007  
   Total deposits     2,036,228       1,970,491       1,903,617       1,835,427       1,923,266  
   Total stockholders' equity     254,571       245,997       238,108       232,300       226,450  
   Number of full-time equivalent employees (4)     215       211       204       204       209  
                     
(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 and 2020.                
                     

 

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
                       
      As of the Quarter Ended
      6/30/2021   3/31/2021   12/31/2020   9/30/2020   6/30/2020
LOAN COMPOSITION                    
Commercial and industrial   $ 379,916     $ 432,869     $ 388,886     $ 430,722     $ 428,494  
Commercial real estate:                    
  Owner-occupied     427,094       399,042       407,089       402,147       392,096  
  Investor     814,762       771,599       778,958       721,029       689,891  
  Construction and development     127,329       123,930       149,284       146,057       131,791  
  Multi-family     142,015       125,493       144,527       133,778       132,942  
      Total commercial real estate     1,511,200       1,420,064       1,479,858       1,403,011       1,346,720  
Residential real estate:                    
  Residential mortgage and first lien home equity loans     108,842       117,756       120,018       117,530       117,796  
  Home equity–second lien loans and revolving lines of credit     29,422       29,306       33,575       27,600       29,371  
      Total residential real estate     138,264       147,062       153,593       145,130       147,167  
Consumer and other     31,584       29,213       30,368       32,531       40,230  
      Total loans prior to deferred loan fees and costs     2,060,964       2,029,208       2,052,705       2,011,394       1,962,611  
Net deferred loan fees and costs     (7,026 )     (7,021 )     (5,133 )     (6,744 )     (7,604 )
      Total loans   $ 2,053,938     $ 2,022,187     $ 2,047,572     $ 2,004,650     $ 1,955,007  
                       
LOAN MIX                    
Commercial and industrial     18.5 %     21.4 %     19.0 %     21.5 %     21.9 %
Commercial real estate:                    
  Owner-occupied     20.8 %     19.7 %     19.9 %     20.1 %     20.1 %
  Investor     39.7 %     38.2 %     38.0 %     36.0 %     35.3 %
  Construction and development     6.2 %     6.1 %     7.3 %     7.3 %     6.7 %
  Multi-family     6.9 %     6.2 %     7.0 %     6.6 %     6.8 %
      Total commercial real estate     73.5 %     70.2 %     72.2 %     70.0 %     68.9 %
Residential real estate:                    
  Residential mortgage and first lien home equity loans     5.3 %     5.8 %     5.9 %     5.8 %     6.0 %
  Home equity–second lien loans and revolving lines of credit     1.4 %     1.4 %     1.6 %     1.4 %     1.5 %
      Total residential real estate     6.7 %     7.2 %     7.5 %     7.2 %     7.5 %
Consumer and other     1.6 %     1.5 %     1.6 %     1.6 %     2.1 %
Net deferred loan fees and costs     (0.3 %)     (0.3 %)     (0.3 %)     (0.3 %)     (0.4 %)
      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
      6/30/2021   3/31/2021   12/31/2020   9/30/2020   6/30/2020
DEPOSIT COMPOSITION                    
Non-interest bearing demand deposits   $ 534,475     $ 500,008     $ 424,119     $ 445,514     $ 459,123  
Interest bearing demand deposits     211,074       208,443       201,881       156,059       165,081  
Money market and savings deposits     817,424       767,603       753,640       695,224       703,365  
Time deposits     473,255       494,437       523,977       538,630       595,697  
  Total Deposits   $ 2,036,228     $ 1,970,491     $ 1,903,617     $ 1,835,427     $ 1,923,266  
                       
DEPOSIT MIX                    
Non-interest bearing demand deposits     26.3 %     25.4 %     22.3 %     24.3 %     23.9 %
Interest bearing demand deposits     10.4 %     10.6 %     10.6 %     8.5 %     8.6 %
Money market and savings deposits     40.1 %     38.9 %     39.6 %     37.9 %     36.5 %
Time deposits     23.2 %     25.1 %     27.5 %     29.3 %     31.0 %
  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
  6/30/2021   3/31/2021   12/31/2020   9/30/2020   6/30/2020
Return on Average Tangible Equity                  
Net income (numerator) $ 8,893     $ 9,661     $ 6,195     $ 5,903     $ 4,117  
                   
Average stockholders' equity $ 250,143     $ 241,674     $ 236,099     $ 230,122     $ 225,905  
Less: Average Goodwill and other intangible assets, net   18,001       18,023       18,062       18,156       18,236  
Average Tangible stockholders' equity (denominator) $ 232,142     $ 223,651     $ 218,037     $ 211,966     $ 207,669  
                   
Return on Average Tangible equity   15.37 %     17.52 %     11.30 %     11.08 %     7.97 %
                   
Tangible Book Value Per Share                  
Stockholders' equity $ 254,571     $ 245,997     $ 238,108     $ 232,300     $ 226,450  
Less: Goodwill and other intangible assets, net   17,965       18,024       17,998       18,108       18,192  
Tangible stockholders' equity (numerator) $ 236,606     $ 227,973     $ 220,110     $ 214,192     $ 208,258  
                   
Common shares outstanding (denominator)   19,678,528       19,663,065       19,707,474       19,694,892       19,629,892  
                   
Tangible book value per share $ 12.02     $ 11.59     $ 11.17     $ 10.88     $ 10.61  
                   
                   
Tangible Equity / Assets                  
Stockholders' equity $ 254,571     $ 245,997     $ 238,108     $ 232,300     $ 226,450  
Less: Goodwill and other intangible assets, net   17,965       18,024       17,998       18,108       18,192  
Tangible stockholders' equity (numerator) $ 236,606     $ 227,973     $ 220,110     $ 214,192     $ 208,258  
                   
Total assets $ 2,443,047     $ 2,405,576     $ 2,346,270     $ 2,309,897     $ 2,300,594  
Less: Goodwill and other intangible assets, net   17,965       18,024       17,998       18,108       18,192  
Tangible total assets (denominator) $ 2,425,082     $ 2,387,552     $ 2,328,272     $ 2,291,789     $ 2,282,402  
                   
Tangible stockholders' equity / tangible assets   9.76 %     9.55 %     9.45 %     9.35 %     9.12 %
                   
                   
Efficiency Ratio                  
Non-interest expense $ 10,155     $ 10,650     $ 11,052     $ 9,653     $ 9,767  
                   
Net interest income $ 20,421     $ 20,047     $ 19,724     $ 17,630     $ 16,328  
Non-interest income   1,342       2,300       1,312       1,946       1,880  
Total revenue $ 21,763     $ 22,347     $ 21,036     $ 19,576     $ 18,208  
                   
Efficiency ratio   46.66 %     47.66 %     52.54 %     49.31 %     53.64 %
                   

 

 


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Source: First Bank