Princeton Bancorp Announces Fourth Quarter 2023 Results

Rhea-AI Summary

Princeton Bancorp, Inc. reported strong financial performance, with total assets growing to $1.92 billion in 2023, net loans increasing by $178 million, and total deposits increasing by $288 million. Despite a decrease in net income for the fourth quarter of 2023 compared to the same period in 2022, the company's President/CEO remains optimistic about the Bank's performance, highlighting the addition of Cornerstone Bank as an in-market acquisition.

Positive

• Total assets grew by 19.7% in 2023
• Net loans increased by $178 million
• Total deposits increased by $288 million
• Stockholders' equity increased by 9.4% year over year
• The addition of Cornerstone Bank is an in-market acquisition that adds to the Bank's central and south Jersey footprint

Negative

• Net income for the fourth quarter of 2023 decreased compared to the same period in 2022
• Non-performing assets totaled $6.7 million, an increase of $6.4 million when compared to the amount at December 31, 2022
• Total non-interest expense for the year ended December 31, 2023, increased by $10.2 million

Insights

Financial Analyst

The reported financials of Princeton Bancorp, Inc. indicate a significant growth in total assets by 19.7%, primarily driven by the acquisition of Noah Bank. This strategic move has expanded the company's asset base and is likely to enhance future revenue potential. However, the net income decrease in Q4 2023 compared to both the previous quarter and the same period in the previous year raises concerns about the bank's cost management and revenue generation in a challenging interest rate environment.

Moreover, the increase in non-interest expenses by $10.2 million and the provision for credit losses of $2.7 million suggest that the bank is navigating through operational and credit challenges. Investors should monitor the bank's efficiency ratio and cost-income ratio in subsequent quarters to assess the impact of these expenses on profitability.

It is also noteworthy that the bank's stockholders' equity grew by 9.4%, reflecting a solid capital position which could support future growth initiatives or withstand potential economic downturns. However, the decline in the equity to total assets ratio post-acquisition implies a leveraged balance sheet, which could be a point of analysis for risk-averse investors.

Market Research Analyst

Princeton Bancorp's in-market acquisition of Cornerstone Bank, which is expected to expand its footprint in central and south Jersey, demonstrates a clear growth strategy aimed at increasing market share. This move, coupled with the increased loan and deposit balances, suggests that the bank is actively working to capitalize on regional economic opportunities and could potentially outperform regional competitors.

The strategic increase in certificates of deposit and money market deposits indicates a focus on stable funding sources, which may be a competitive advantage in a rising interest rate environment. However, the decrease in savings and interest-bearing demand deposits could reflect changing consumer behavior towards higher-yielding investment options, which may require the bank to adapt its deposit strategy accordingly.

Economist

The reported financial results of Princeton Bancorp, Inc. reflect the broader economic conditions, particularly the impact of rising interest rates on net interest income. The bank's net interest margin has contracted, which is a trend seen across the banking industry as funding costs rise. This contraction could be a headwind for profitability if interest rates continue to climb.

The decrease in net income for the fourth quarter, despite an increase in non-interest income, highlights the sensitivity of bank earnings to interest rate fluctuations and loan quality. The provision for credit losses suggests that the bank is anticipating potential credit deterioration, which could be indicative of broader economic challenges such as a potential slowdown in economic growth or a rise in unemployment.

Overall, the bank's performance must be contextualized within the macroeconomic landscape, including monetary policy and its implications for consumer and business lending activities.

PRINCETON, N.J., Jan. 25, 2024 /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 and 12 months ended December 31, 2023. 

President/CEO Edward Dietzler commented on the results, "I am extremely proud of the Bank's continued strong financial performance given the industry's strong headwinds.  Despite the significant impact from the interest rate environment and other industry pressures, the Bank increased loan and deposit balances while maintaining strong liquidity and good credit quality."

"In 2024, the addition of Cornerstone Bank is an in-market acquisition that adds to the Bank's central and south Jersey footprint. The Bank will continue to build on our existing valuable franchise reaching from New York to Philadelphia."

HIGHLIGHTS

• Total assets grew to $1.92 billion in 2023, an increase of 19.7%
• Net loans increased by $178 million for the year
• Total deposits for the year increased $288 million, or 21.4% over the prior year-end
• Stockholders' equity increased $20.6 million or 9.4% year over year
• Net income for the quarter was $5.3 million and $25.8 million for the year

The Company reported net income of $5.3 million, or $0.82 per diluted common share, for the fourth quarter of 2023, compared to net income of $7.6 million, or $1.19 per diluted common share, for the third quarter of 2023, and net income of $7.2 million, or $1.13 per diluted common share, for the fourth quarter of 2022. The decrease in net income for the fourth quarter of 2023 when compared to the third quarter of 2023 was due to decreases of $674 thousand and $624 thousand in net interest income and non-interest income, respectively, and increases of $744 thousand and $790 thousand in provision for credit losses and non-interest expense, respectively, partially offset by a reduction in income tax expense of $516 thousand. The decrease in net income for the fourth quarter of 2023 compared to the same period in 2022 was primarily due to a decrease in net interest income of $2.2 million and an increase in non-interest expenses of $1.3 million, partially offset by a decrease in income tax expense of $1.2 million and an increase in non-interest income of $782 thousand.

For the year ended December 31, 2023, the Company recorded net income of $25.8 million, or $4.03 per diluted common share, compared to $26.5 million, or $4.11 per diluted common share, for the same period in 2022. The decrease was due to an increase of $10.2 million in non-interest expenses, a decrease in net interest income of $3.1 million, and an increase in provision for credit losses of $2.7 million, partially offset by an increase of $12.3 million in non-interest income and a decrease in income tax expense of $3.0 million attributable in part to the $9.7 million bargain purchase gain from its Noah Bank acquisition in May of 2023 that is not taxable. The results for 2023 were significantly impacted by purchase accounting adjustments resulting from the Noah Bank acquisition.

Balance Sheet Review

Total assets were $1.92 billion at December 31, 2023, an increase of $314.7 million, or 19.7% 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 $178.0 million, an increase in cash and cash equivalents of approximately $97.2 million, an increase in bank-owned life insurance of $6.2 million, an increase in its right of use asset of $7.4 million and an increase in deferred tax assets of $3.4 million.  The increase in the Company's net loans consisted of a $269.3 million increase in commercial real estate loans and a $22.1 million increase in commercial and industrial loans, partially offset by a decrease of $107.4 million in construction loans.

Total deposits at December 31, 2023 increased $288.0 million, or 21.4%, 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 $96.3 million increase from existing operations. When comparing deposit products between the two periods, certificates of deposit increased $299.5 million and money market deposits increased $70.4 million. Partially offsetting these increases were decreases in savings deposits of $44.2 million, interest-bearing demand deposits of $21.8 million and non-interest-bearing deposits of $15.8 million for the year ended December 31, 2023.

Total stockholders' equity at December 31, 2023 increased $20.6 million or 9.4% when compared to the end of 2022. The increase was primarily due to the $17.9 million increase in retained earnings, consisting of $25.8 million in net income partially offset by $7.6 million of cash dividends recorded during the period. The ratio of equity to total assets at December 31, 2023 and at December 31, 2022, was 12.5% and 13.7%, respectively. The current period ratio decrease was primarily due to the Noah Bank acquisition.

Asset Quality

At December 31, 2023, non-performing assets totaled $6.7 million, an increase of $6.4 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 $2.1 million of non-performing loans acquired from Noah Bank. With respect to the $4.5 million commercial real estate loan, the Company has an agreement of sale with a material non-refundable security deposit and the sale is expected to close in the first quarter of 2024.

With the adoption of the Current Expected Credit Losses ("CECL") method of calculating the allowance for credit losses effective January 1, 2023, 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 at December 31, 2022 and throughout 2023.

Review of Quarterly and Year-to-Date Financial Results

Net interest income was $16.0 million for the fourth quarter of 2023, compared to $16.7 million for the third quarter of 2023 and $18.2 million for the fourth quarter of 2022. The decrease from the previous quarter was the result of an increase in interest expense of $1.2 million, or 11.9%, partially offset by an increase in interest income of $554 thousand, or 2.1%. The net interest margin for the fourth quarter 2023 was 3.55%, decreasing 21 basis points when compared to the third quarter of 2023. This decrease was primarily associated with an increase of 25 basis points in the cost of funds associated with rising interest rates. The increase in funding costs was partially offset by a $28.1 million growth in average interest-earning assets driven by a $58.1 million increase in average loans. When comparing the three-month periods ended December 31, 2023 and 2022, net interest income decreased $2.2 million, which was primarily due to an increase of 214 basis points in the cost of funds, partially offset by an increase of 71 basis points in the yield earned on interest-earning assets. For the year ended December 31, 2023, net interest income of $65.0 million was down 4.5% compared to net interest income of $68.1 million during 2022.  The decrease from the previous year was the result of an increase in interest expense of $27.2 million, or 452.7%, partially offset by an increase in interest income of $24.1 million, or 32.5%, both as a result of the 525 basis-point increase in federal funds interest rates since March 2022 and management's strategic initiative to maintain high levels of primary liquidity in this uncertain rate environment.

The Bank recorded a provision for credit losses of $562 thousand during the fourth quarter of 2023 and a credit provision for credit losses of $182 thousand during the third quarter of 2023.  The Bank recorded a $200 thousand provision for loan losses for the three months ended December 31, 2022. The provision recorded during the fourth quarter of 2023 was the result of an increase in the required reserve for credit losses on loans in the amount of $489 thousand and an increase in the reserve for unfunded liabilities of $72 thousand.  The credit recorded in the third quarter of 2023 was the result of a reduction in the reserve for unfunded liabilities in the amount of $182 thousand and no provision for credit losses on loans. For the three-month and twelve-month periods ended December 31, 2023, the Bank recorded net recoveries of $10 thousand and net charge-offs of $1.8 million, respectively. Included in the Company's provision for the twelve-month period of 2023 was $1.7 million related to non-purchased credit deteriorated loans resulting from the Noah Bank acquisition. 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 December 31, 2023 and 1.20% at December 31, 2022.

Total non-interest income of $1.8 million for the fourth quarter of 2023 decreased $624 thousand or 26.0% when compared to the third quarter of 2023 and increased $782 thousand or 78.4% when compared to the quarter ended December 31, 2022. The decrease from the third quarter of 2023 was primarily due to the $528 thousand decrease in loan fees during the fourth quarter and a gain on sale of other real estate owned during the third quarter. The increase over the prior year quarter was primarily due to an increase in loan fees of $420 thousand. For the year ended December 31, 2023, non-interest income increased $12.3 million, or by 252.1%, primarily due to the $9.7 million bargain purchase gain and an increase in loan fees of $1.7 million over the same period in 2022.

Total non-interest expense of $10.9 million for the fourth quarter of 2023 increased $790 thousand, or 7.8%, when compared to the third quarter of 2023, due primarily to the reversal of merger-related expenses in the third quarter of $1.4 million, representing a portion of the merger costs associated with the Noah acquisition expensed during the second 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 that was no longer needed. Total non-interest expense for the fourth quarter of 2023 increased $1.3 million or 13.2 % from the fourth quarter of 2022.  The increase was due primarily to increases in salaries and employee benefits and occupancy and equipment expenses of $830 thousand and $436 thousand, respectively, over the prior-year period which were associated with the Noah acquisition in 2023. For the year ended December 31, 2023, non-interest expense was $48.7 million, compared to $38.5 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 $2.9 million, occupancy and equipment of $1.2 million and data processing and communications of $538 thousand over the same period in 2022.

For the three-month period ended December 31, 2023, the Company recorded an income tax expense of $1.0 million, resulting in an effective tax rate of 15.9%, compared to an income tax expense of $1.5 million resulting in an effective tax rate of 16.6% for the three-month period ended September 30, 2023 and compared to an income tax expense of $2.2 million resulting in an effective tax rate of 23.5% for the three-month period ended December 31, 2022. For the year ending December 31, 2023, income tax expense was $4.6 million resulting in an effective tax rate of 15.1% compared to income tax expense of $7.6 million and an effective tax rate of 22.2% for the year ended December 30, 2022. This decrease was due to the $9.7 million non-taxable bargain purchase gain from the Noah Bank acquisition, partially offset by $325 thousand of merger-related expenses that were not tax-deductible.

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"). On January 18, 2024, the Company announced that it has entered into a definitive agreement and plan of merger with Cornerstone Financial Corporation ("Cornerstone"), the parent company of Cornerstone Bank, headquartered in Mount Laurel, New Jersey, pursuant to which the Company will acquire Cornerstone in a transaction that is expected to close in the second or third quarter of 2024 (the "Transaction").

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 integration of the businesses of the Company and Cornerstone following the completion of the Transaction may be more difficult, time-consuming or costly than expected; the ability to obtain required regulatory and shareholder approvals, and the ability to complete the Transaction on the expected timeframe may be more difficult, time-consuming or costly than expected; 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; 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)
		December 31,		December 31,			2023 vs 2022
		2023		2022			$ Change		% Change
ASSETS
Cash and cash equivalents		$       150,557		$         53,351			$    97,206		182.20	%
Securities available-for-sale taxable		50,544		42,061			8,483		20.17
Securities available-for-sale tax-exempt		40,808		41,341			(533)		(1.29)
Securities held-to-maturity		193		201			(8)		(3.98)
Loans receivable, net of deferred loan fees		1,548,335		1,370,368			177,967		12.99
Allowance for credit losses		(18,492)		(16,461)			(2,031)		12.34
Goodwill		8,853		8,853			-		-
Core deposit intangible		1,422		1,825			(403)		(22.08)
Equity method investments		8,296		-			8,296		N/A
Other assets		125,981		100,240			25,741		25.68
TOTAL ASSETS		$    1,916,497		$    1,601,779			$  314,718		19.65	%
LIABILITIES
Non-interest checking		$       249,282		$       265,078			$  (15,796)		(5.96)	%
Interest checking		247,939		269,737			(21,798)		(8.08)
Savings		146,484		190,686			(44,202)		(23.18)
Money market		354,005		283,652			70,353		24.80
Time deposits over $250,000		150,113		83,410			66,703		79.97
Other time deposits		487,918		255,167			232,751		91.22
Total deposits		1,635,741		1,347,730			288,011		21.37
Borrowings		-		10,000			(10,000)		(100.00)
Other liabilities		40,545		24,448			16,097		65.84
TOTAL LIABILITIES		1,676,286		1,382,178			294,108		21.28
STOCKHOLDERS' EQUITY
Common stock 1,2		-		34,547			(34,547)		(100.00)
Paid-in capital 2		98,291		81,291			17,000		20.91
Treasury stock 2		-		(19,452)			19,452		(100.00)
Retained earnings		149,414		131,488			17,926		13.63
Accumulated other comprehensive loss		(7,494)		(8,273)			779		(9.42)
TOTAL STOCKHOLDERS' EQUITY		240,211		219,601			20,610		9.39
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY		$    1,916,497		$    1,601,779			$  314,718		19.65	%
Book value per common share		$           38.04		$           35.16			$       2.88		8.19	%
Tangible book value per common share 3		$           36.41		$           33.45			$       2.96		8.85	%
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 December 31, 2023 and 2022 were as follows:
			December 31,		December 31,
			2023		2022
			(In thousands)
	Commercial real estate		$     1,142,864		$        873,573
	Commercial and industrial		50,961		28,859
	Construction		310,187		417,538
	Residential first-lien mortgages		38,040		43,125
	Home equity / consumer		8,081		9,729
	Total loans		1,550,133		1,372,824
	Deferred fees and costs		(1,798)		(2,456)
	Allowance for credit losses		(18,492)		(16,461)
	Loans, net		$     1,529,843		$     1,353,907
	The components of deposits at December 31, 2023 and 2022 were as follows:
			December 31,		December 31,
			2023		2022
			(In thousands)
	Demand, non-interest-bearing		$        249,282		$        265,078
	Demand, interest-bearing		247,939		269,737
	Savings		146,484		190,686
	Money market		354,005		283,652
	Time deposits		638,031		338,577
	Total deposits		$     1,635,741		$     1,347,730

 

Princeton Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
(Amounts in thousands except per share data)
			Three Months Ended December 31,
			2023		2022		$ Change		% Change
Interest and dividend income
	Loans and fees		$              24,364		$              19,400		$    4,964		25.6 %
	Available-for-sale debt securities:
		Taxable	412		288		124		43.1 %
		Tax-exempt	285		285		0		0.0 %
	Held-to-maturity debt securities		2		3		(1)		-33.3 %
	Other interest and dividend income		2,491		482		2,009		416.8 %
		Total interest and dividends	27,554		20,458		7,096		34.7 %
Interest expense
		Deposits	11,544		2,210		9,334		422.4 %
		Borrowings	-		2		(2)		-100.0 %
		Total interest expense	11,544		2,212		9,332		421.9 %
Net interest income			16,010		18,246		(2,236)		-12.3 %
Provision for credit losses			562		200		362		181.0 %
Net interest income after provision for credit losses			15,448		18,046		(2,598)		-14.4 %
Non-interest income
	Gain on call/sale of securities available-for-sale, net		45		-		45		N/A
	Income from bank-owned life insurance		377		286		91		31.8 %
	Fees and service charges		462		411		51		12.4 %
	Loan fees, including prepayment penalties		656		236		420		178.0 %
	Other		239		64		175		273.4 %
		Total non-interest income	1,779		997		782		78.4 %
Non-interest expense
	Salaries and employee benefits		6,034		5,204		830		15.9 %
	Occupancy and equipment		1,849		1,413		436		30.9 %
	Professional fees		425		541		(116)		-21.4 %
	Data processing and communications		1,166		1,354		(188)		-13.9 %
	Federal deposit insurance		190		222		(32)		-14.4 %
	Advertising and promotion		129		105		24		22.9 %
	Office expense		116		71		45		63.4 %
	Other real estate owned		-		(6)		6		-100.0 %
	Core deposit intangible		124		135		(11)		-8.1 %
	Other		916		632		284		44.9 %
		Total non-interest expense	10,949		9,671		1,278		13.2 %
Income before income tax expense			6,278		9,372		(3,094)		-33.0 %
Income tax expense			996		2,201		(1,205)		-54.7 %
Net income			$                5,282		$                7,171		(1,889)		-26.3 %
Net income per common share - basic			$                 0.84		$                 1.14		$    (0.30)		-26.3 %
Net income per common share - diluted			$                 0.82		$                 1.13		$    (0.31)		-27.4 %
Weighted average shares outstanding - basic			6,300		6,246		54		0.9 %
Weighted average shares outstanding - diluted			6,414		6,371		43		0.7 %

 

Princeton Bancorp, Inc.
Consolidated Statements of Income (Current Quarter vs Prior Quarter)
(Unaudited)
(Amounts in thousands, except per share data)
			Three Months Ended
			December 31,		September 30,
			2023		2023		$ Change		% Change
Interest and dividend income
	Loans and fees		$       24,364		$       23,503		$        861		3.7 %
	Available-for-sale debt securities:
		Taxable	412		357		55		15.4 %
		Tax-exempt	285		285		0		0.0 %
	Held-to-maturity debt securities		2		3		(1)		-33.3 %
	Other interest and dividend income		2,491		2,852		(361)		-12.7 %
		Total interest and dividends	27,554		27,000		554		2.1 %
Interest expense
		Deposits	11,544		10,316		1,228		11.9 %
		Borrowings	-		-		0		N/A
		Total interest expense	11,544		10,316		1,228		11.9 %
Net interest income			16,010		16,684		(674)		-4.0 %
Provision (credit) for credit losses			562		(182)		744		-408.8 %
Net interest income after provision for credit losses			15,448		16,866		(1,418)		-8.4 %
Non-interest income
	Gain (loss) on call/sale of securities available-for-sale, net		45		(6)		51		-850.0 %
	Income from bank-owned life insurance		377		331		46		13.9 %
	Fees and service charges		462		479		(17)		-3.5 %
	Loan fees, including prepayment penalties		656		1,184		(528)		-44.6 %
	Gain on sale of other real estate owned		-		203		(203)		-100.0 %
	Other		239		212		27		12.7 %
		Total non-interest income	1,779		2,403		(624)		-26.0 %
Non-interest expense
	Salaries and employee benefits		6,034		6,177		(143)		-2.3 %
	Occupancy and equipment		1,849		2,142		(293)		-13.7 %
	Professional fees		425		614		(189)		-30.8 %
	Data processing and communications		1,166		1,242		(76)		-6.1 %
	Federal deposit insurance		190		258		(68)		-26.4 %
	Advertising and promotion		129		139		(10)		-7.2 %
	Office expense		116		117		(1)		-0.9 %
	Core deposit intangible		124		116		8		6.9 %
	Merger-related expenses		-		(1,391)		1,391		-100.0 %
	Other		916		745		171		23.0 %
		Total non-interest expense	10,949		10,159		790		7.8 %
Income before income tax expense			6,278		9,110		(2,832)		-31.1 %
Income tax expense			996		1,512		(516)		-34.1 %
Net income			$         5,282		$         7,598		$    (2,316)		-30.5 %
Net income per common share - basic			$           0.84		$           1.21		$      (0.37)		-30.6 %
Net income per common share - diluted			$           0.82		$           1.19		$      (0.37)		-31.1 %
Weighted average shares outstanding - basic			6,300		6,295		5		0.1 %
Weighted average shares outstanding - diluted			6,414		6,390		24		0.4 %

 

Princeton Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
(Amounts in thousands, except per share data)
			Year Ended
			December 31,
			2023		2022		$ Change		% Change
Interest and dividend income
	Loans and fees		$89,278		$ 70,996		$     18,282		25.8 %
	Available-for-sale debt securities:
		Taxable	1,339		986		353		35.8 %
		Tax-exempt	1,138		1,167		(29)		-2.5 %
	Held-to-maturity debt securities		10		11		(1)		-9.1 %
	Other interest and dividend income		6,415		923		5,492		595.0 %
		Total interest and dividends	98,180		74,083		24,097		32.5 %
Interest expense
		Deposits	33,046		5,995		27,051		451.2 %
		Borrowings	118		5		113		2260.0 %
		Total interest expense	33,164		6,000		27,164		452.7 %
Net interest income			65,016		68,083		(3,067)		-4.5 %
Provision for credit losses			3,108		400		2,708		677.0 %
Net interest income after provision for credit losses			61,908		67,683		(5,775)		-8.5 %
Non-interest income
	Gain on call/sale of securities available-for-sale, net		39		2		37		1850.0 %
	Income from bank-owned life insurance		1,293		1,138		155		13.6 %
	Fees and service charges		1,853		1,852		1		0.1 %
	Loan fees, including prepayment penalties		3,221		1,484		1,737		117.0 %
	Bargain purchase gain		9,696		-		9,696		N/A
	Gain on sale of other real estate owned		203		-		203		N/A
	Other		816		386		430		111.4 %
		Total non-interest income	17,121		4,862		12,259		252.1 %
Non-interest expense
	Salaries and employee benefits		23,386		20,455		2,931		14.3 %
	Occupancy and equipment		7,037		5,859		1,178		20.1 %
	Professional fees		2,060		2,470		(410)		-16.6 %
	Data processing and communications		5,026		4,488		538		12.0 %
	Federal deposit insurance		891		1,010		(119)		-11.8 %
	Advertising and promotion		504		484		20		4.1 %
	Office expense		508		239		269		112.6 %
	Other real estate owned expense		1		106		(105)		-99.1 %
	Core deposit intangible		502		569		(67)		-11.8 %
	Merger-related expenses		5,635		-		5,635		N/A
	Other		3,144		2,812		332		11.8 %
		Total non-interest expense	48,694		38,492		10,202		26.5 %
Income before income tax expense			30,335		34,053		(3,718)		-10.9 %
Income tax expense			4,570		7,559		(2,989)		-39.5 %
Net income			$25,765		$ 26,494		$        (729)		-2.8 %
Net income per common share - basic			$    4.10		$     4.19		$       (0.09)		-2.1 %
Net income per common share - diluted			$    4.03		$     4.11		$       (0.08)		-1.9 %
Weighted average shares outstanding - basic			6,281		6,320		(39)		-0.6 %
Weighted average shares outstanding - diluted			6,388		6,449		(61)		-0.9 %

 

Princeton Bancorp, Inc.
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended December 31,
	2023				2022				Change in		Change in
	Average		Yield/		Average		Yield/		Average		Yield/
	Balance		Rate		Balance		Rate		Balance		Rate
Earning assets
Loans	$     1,522,906		6.35 %		$   1,375,191		5.60 %		$      147,715		0.75 %
Securities
Taxable available-for-sale	47,566		3.46 %		42,458		2.69 %		5,108		0.77 %
Tax-exempt available-for-sale	38,157		2.99 %		39,743		2.85 %		(1,586)		0.14 %
Held-to-maturity	194		5.28 %		202		5.24 %		(8)		0.04 %
Securities	85,917		3.26 %		82,403		2.77 %		3,514		0.49 %
Other interest earning assets
Federal funds sold	161,903		5.44 %		44,410		4.09 %		117,493		1.35 %
Other interest-earning assets	18,898		5.71 %		1,303		7.40 %		17,595		-1.69 %
Other interest-earning assets	180,801		5.47 %		45,713		4.19 %		135,088		1.28 %
Total interest-earning assets	1,789,624		6.11 %		1,503,307		5.40 %		286,317		0.71 %
Total non-earning assets	138,225				109,554
Total assets	$     1,927,849				$   1,612,861
Interest-bearing liabilities
Checking	$        250,941		1.96 %		$      275,797		0.45 %		$       (24,856)		1.51 %
Savings	146,294		2.32 %		201,498		0.53 %		(55,204)		1.79 %
Money market	353,372		3.72 %		294,246		0.91 %		59,126		2.81 %
Certificates of deposit	639,547		3.81 %		316,689		1.19 %		322,858		2.62 %
Total interest-bearing deposits	1,390,154		3.29 %		1,088,230		0.81 %		301,924		2.48 %
Non-interest bearing deposits	258,663				280,626				(21,963)
Total  deposits	1,648,817		2.78 %		1,368,856		0.64 %		279,961		2.14 %
Borrowings	-		N/A		217		4.67 %		(217)		N/A
Total interest-bearing liabilities
(excluding non interest deposits)	1,390,154		3.29 %		1,088,447		0.81 %		301,707		2.48 %
Non-interest-bearing deposits	258,663				280,626
Total cost of funds	1,648,817		2.78 %		1,369,073		0.64 %		279,744		2.14 %
Accrued expenses and other liabilities	44,404				28,215
Stockholders' equity	234,628				215,573
Total liabilities and stockholders' equity	$     1,927,849				$   1,612,861
Net interest spread			2.81 %				4.59 %
Net interest margin			3.55 %				4.82 %
Net interest margin (FTE)1			3.60 %				4.89 %
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
	December 31, 2023				September 30, 2023				Change in		Change in
	Average		Yield/		Average		Yield/		Average		Yield/
	Balance		Rate		Balance		Rate		Balance		Rate
Earning assets
Loans	$   1,522,906		6.35 %		$       1,464,798		6.37 %		$       58,108		-0.02 %
Securities
Taxable available-for-sale	47,566		3.46 %		46,599		3.06 %		967		0.40 %
Tax-exempt available-for-sale	38,157		2.99 %		40,118		2.84 %		(1,961)		0.15 %
Held-to-maturity	194		5.28 %		196		5.28 %		(2)		0.00 %
Securities	85,917		3.26 %		86,913		2.96 %		(996)		0.29 %
Other interest earning assets
Federal funds sold	161,903		5.44 %		199,350		5.38 %		(37,447)		0.06 %
Other interest-earning assets	18,898		5.71 %		10,506		5.67 %		8,392		0.04 %
Other interest-earning assets	180,801		5.47 %		209,856		5.39 %		(29,055)		0.07 %
Total interest-earning assets	1,789,624		6.11 %		1,761,567		6.08 %		28,057		0.03 %
Total non-earning assets	138,225				127,682
Total assets	$   1,927,849				$       1,889,249
Interest-bearing liabilities
Checking	$      250,941		1.96 %		$         243,359		1.68 %		$         7,582		0.27 %
Savings	146,294		2.32 %		149,215		2.10 %		(2,921)		0.22 %
Money market	353,372		3.72 %		337,491		3.50 %		15,881		0.22 %
Certificates of deposit	639,547		3.81 %		629,082		3.48 %		10,465		0.33 %
Total interest-bearing deposits	1,390,154		3.29 %		1,359,147		3.01 %		31,007		0.28 %
Non-interest bearing deposits	258,663				255,775				2,888
Total  deposits	1,648,817		2.78 %		1,614,922		2.53 %		33,895		0.25 %
Borrowings	-		N/A		-		N/A		0		N/A
Total interest-bearing liabilities
(excluding non interest deposits)	1,390,154		3.29 %		1,359,147		3.01 %		31,007		0.28 %
Non-interest-bearing deposits	258,663				255,775
Total cost of funds	1,648,817		2.78 %		1,614,922		2.53 %		33,895		0.25 %
Accrued expenses and other liabilities	44,404				45,923
Stockholders' equity	234,628				228,404
Total liabilities and stockholders' equity	$   1,927,849				$       1,889,249
Net interest spread			2.81 %				3.07 %
Net interest margin			3.55 %				3.76 %
Net interest margin (FTE)1			3.60 %				3.81 %
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 Year Ended December 31,
	2023				2022				Change in		Change in
	Average		Yield/		Average		Yield/		Average		Yield/
	Balance		Rate		Balance		Rate		Balance		Rate
Earning assets
Loans	$   1,449,504		6.16 %		$   1,375,501		5.16 %		$         74,003		1.00 %
Securities
Taxable available-for-sale	43,476		3.08 %		47,358		2.08 %		(3,882)		1.00 %
Tax-exempt available-for-sale	40,264		2.83 %		43,549		2.68 %		(3,285)		0.15 %
Held-to-maturity	197		5.28 %		204		5.39 %		(7)		-0.11 %
Securities	83,937		2.96 %		91,111		2.38 %		(7,174)		0.59 %
Other interest earning assets
Federal funds sold	109,441		5.35 %		66,292		1.20 %		43,149		4.15 %
Other interest-earning assets	10,064		5.53 %		10,612		1.19 %		(548)		4.34 %
Other interest-earning assets	119,504		5.37 %		76,904		1.20 %		42,600		4.17 %
Total interest-earning assets	1,652,946		5.94 %		1,543,516		4.80 %		109,430		1.14 %
Total non-earning assets	122,321				101,940
Total assets	$   1,775,267				$   1,645,456
Interest-bearing liabilities
Checking	$      250,312		1.46 %		$      261,951		0.31 %		$        (11,639)		1.15 %
Savings	159,175		1.72 %		220,222		0.32 %		(61,047)		1.40 %
Money market	311,478		3.07 %		353,224		0.44 %		(41,746)		2.63 %
Certificates of deposit	538,343		3.17 %		293,627		0.99 %		244,716		2.18 %
Total interest-bearing deposits	1,259,308		2.62 %		1,129,024		0.42 %		130,284		2.20 %
Non-interest bearing deposits	248,233				280,729
Total  deposits	1,507,541		2.19 %		1,409,753		0.43 %		97,788		1.77 %
Borrowings	2,343		5.01 %		153		3.37 %		2,190		1.64 %
Total interest-bearing liabilities
(excluding non interest deposits)	1,261,651		2.63 %		1,129,177		0.53 %		132,474		2.10 %
Non-interest-bearing deposits	248,233				280,729
Total cost of funds	1,509,884		2.19 %		1,409,906		0.43 %		99,978		1.77 %
Accrued expenses and other liabilities	36,856				20,755
Stockholders' equity	228,527				214,795
Total liabilities and stockholders' equity	$   1,775,267				$   1,645,456
Net interest spread			3.31 %				4.27 %
Net interest margin			3.93 %				4.41 %
Net interest margin (FTE)1			3.99 %				4.47 %
1Includes federal and state tax effect of tax-exempt securities and loans.

 

Princeton Bancorp, Inc.
Quarterly Financial Highlights
(Unaudited)
	2023		2023		2023		2023		2022
	December		September		June		March		December
Return on average assets	1.09 %		1.60 %		1.60 %		1.56 %		1.76 %
Return on average equity	8.93 %		13.20 %		11.98 %		11.05 %		13.20 %
Return on average tangible equity1	9.34 %		13.83 %		12.57 %		11.60 %		13.89 %
Net interest margin	3.55 %		3.76 %		3.95 %		4.59 %		4.82 %
Net interest margin (FTE)2	3.60 %		3.81 %		3.99 %		4.66 %		4.89 %
Efficiency ratio - non-GAAP3	61.01 %		59.89 %		60.82 %		53.43 %		49.56 %
COMMON STOCK DATA
Market value at period end	$     35.90		$     28.99		$     27.32		$     31.72		$     31.72
Market range:
High	$     37.60		$     31.69		$     33.00		$     37.18		$     32.80
Low	$     28.21		$     27.37		$     24.09		$     31.18		$     28.57
Book value per common share at period end	$     38.04		$     36.86		$     36.45		$     35.98		$     35.16
Tangible book value per common share at period end4	$     36.41		$     35.21		$     34.78		$     34.29		$     33.45
Shares of common stock outstanding (in thousands)	6,314		6,299		6,279		6,262		6,245
CAPITAL RATIOS
Total capital (to risk-weighted assets)	14.68 %		14.96 %		14.57 %		15.43 %		15.12 %
Tier 1 capital (to risk-weighted assets)	13.61 %		13.89 %		13.50 %		14.36 %		14.06 %
Tier 1 capital (to average assets)	12.29 %		12.38 %		13.43 %		14.00 %		13.47 %
Period-end equity to assets	12.53 %		12.14 %		12.42 %		14.21 %		13.71 %
Period-end tangible equity to tangible assets	12.06 %		11.66 %		11.92 %		13.64 %		13.13 %
CREDIT QUALITY DATA (Dollars in thousands)
Net charge-offs (recoveries)	$        (10)		$        (23)		$     1,842		$          (3)		$        406
Annualized net charge-offs (recoveries) to average loans	-0.003 %		-0.006 %		0.514 %		-0.001 %		0.118 %
Nonperforming loans	$     6,708		$     6,755		$     9,753		$     6,456		$        266
Other real estate owned	-		-		33		-		-
Total nonperforming assets	$     6,708		$     6,755		$     9,786		$     6,456		$        266
Allowance for credit losses as a percent of:
Period-end loans, net of deferred fees and costs	1.19 %		1.20 %		1.20 %		1.19 %		1.20 %
Nonaccrual loans	275.67 %		266.35 %		184.25 %		255.68 %		6188.35 %
Nonperforming assets	275.67 %		266.35 %		183.63 %		255.68 %		6188.35 %
Nonaccrual loans as a percent of total loans, net of deferred fees and costs	0.43 %		0.45 %		0.65 %		0.46 %		0.02 %
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 and gain on call/sale of securities available-for-sale).
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

FAQ

What is the ticker symbol for Princeton Bancorp, Inc.?

The ticker symbol for Princeton Bancorp, Inc. is BPRN.

What were the total assets at the end of 2023?

Total assets were $1.92 billion at the end of 2023, an increase of 19.7% compared to the end of 2022.

What was the net income for the fourth quarter of 2023?

The net income for the fourth quarter of 2023 was $5.3 million.

What was the increase in deposits for the year ended December 31, 2023?

Total deposits increased $288.0 million, or 21.4%, when compared to December 31, 2022.

What was the primary reason for the increase in total assets at the end of 2023?

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.

What was the effective tax rate for the year ending December 31, 2023?

The effective tax rate for the year ending December 31, 2023, was 15.1%.