First Bank Reports First Quarter 2021 Net Income of $9.7 Million

Rhea-AI Summary

First Bank (FRBA) reported a record net income of $9.7 million ($0.49/share) for Q1 2021, up from $3.2 million ($0.16/share) a year earlier. Total net revenue increased by 30.8% to $22.3 million, with total loans growing 15% year-over-year to $2.02 billion. The efficiency ratio improved to 47.66% from 58.03%, and non-interest-bearing deposits surged 71.3%. Asset quality remained stable, with nonperforming loans at 0.53%. A quarterly dividend of $0.03 was declared, payable on May 21, 2021.

Positive

• Net income increased to $9.7 million from $3.2 million, reflecting strong earnings growth.
• Total net revenue rose by 30.8% year-over-year to $22.3 million.
• Total loans grew 15% year-over-year, reaching $2.02 billion.
• Non-interest-bearing deposits increased significantly by 71.3%.
• Efficiency ratio improved to 47.66% compared to 58.03% in Q1 2020.

Negative

• Loan balances decreased by $25.4 million, or 1.2%, from the previous quarter.
• A reduction in interest expense was due to lower rates, which may indicate pressure on future earnings.

Record Quarterly Net Income and EPS

For the First Quarter 2021: Strong Revenue and Earnings Growth, Stable and Solid Asset Quality Metrics Continued Effective Expense Management with an Improved Efficiency Ratio

HAMILTON, N.J., April 26, 2021 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) today announced results for the first quarter of 2021. Net income for first quarter 2021 was $9.7 million, or $0.49 per diluted share, compared to $3.2 million, or $0.16 per diluted share, for the first quarter of 2020. Return on average assets, return on average equity and return on average tangible equityⁱ for the first quarter of 2021 were 1.66%, 16.21% and 17.52%, respectively, compared to first quarter 2020 return on average assets, return on average equity and return on average tangible equity of 0.63%, 5.69% and 6.19%, respectively.

First Quarter 2021 Performance Highlights:

• Total net revenue (net interest income plus non-interest income) of $22.3 million for the first quarter of 2021 grew $5.3 million, or 30.8%, compared to the prior year quarter.
• Total loans were $2.02 billion at March 31, 2021, an increase of $263.8 million, or 15.0%, compared with March 31, 2020, and a decrease of $25.4 million, or 1.2%, compared to December 31, 2020.
• Total deposits of $1.97 billion at March 31, 2021 increased $244.9 million, or 14.2%, from March 31, 2020, and increased $66.9 million, or 3.5%, from December 31, 2020. Non-interest-bearing deposits at March 31, 2021 of $500.0 million, increased $208.1 million, or 71.3%, from March 31, 2020, and increased $75.9 million, or 17.9%, from December 31, 2020.
• Continued effective non-interest expense management was reflected in the first quarter 2021 efficiency ratioⁱⁱ of 47.66%, compared to 58.03% for first quarter 2020 and 52.54% for the fourth quarter of 2020.
• Asset quality metrics remained solid and stable during the quarter, despite the ongoing economic uncertainty associated with the COVID-19 pandemic, with net recoveries of $5,000 for first quarter 2021 and nonperforming loans of $10.7 million at March 31, 2021, or 0.53% of total loans at quarter-end.
• First quarter 2021 tax equivalent net interest margin of 3.60% increased by 30 basis points compared to first quarter 2020 and 4 basis points compared to the fourth quarter of 2020.

“The effort and focus of our team produced strong results for first quarter 2021, with record quarterly earnings of nearly $9.7 million, along with best ever return on assets and return on tangible common equity,” said Patrick L. Ryan, President and Chief Executive Officer. “Total net revenue was up more than 30% compared to first quarter 2020, reflecting strong growth in net interest income and non-interest income. While we had modest growth in interest and dividend income as a result of downward pressure on interest rates for interest earning assets, we were able to successfully manage a significant reduction in interest expense compared to first quarter 2020, resulting in a 30-basis point improvement in our net interest margin year-over-year.”

“We continued to actively participate in the Paycheck Protection Program (PPP) to support local businesses. In addition to supporting existing customers, we found PPP to be an effective platform for attracting new customers and introducing them to the quality and strength of our relationship banking model. New PPP loans originated during first quarter 2021 totaled more than $100 million, and our ending balance was $193.9 million at March 31, 2021. While first quarter year-over-year loan growth was a very solid 15%, loan balances declined by $25.4 million, or 1.2%, compared to December 31, 2020, primarily a result of paydowns on loans in our commercial real estate investor portfolio. While core loan balances were down on a linked-quarter basis, we have a strong backlog in our pipeline and we expect to experience healthy loan growth over the next few quarters. As you may recall, Q4 2020 saw stronger than expected loan growth, and we see the modest decline in Q1 as largely a timing issue, not a sign of reduced demand in our markets.”

“Our focus on gathering lower cost deposits remains an operating strength, as illustrated by our ability to grow non-interest bearing deposits by $75.9 million during the first quarter and $208.1 million year-over-year. In addition, we have effectively managed the pricing of our interest bearing deposits. During the last 12 months, our average rate for these deposits dropped by 105 basis points to 0.51%, with most of the reduction coming in the form of lower rates for time and money market deposits. Better access to reasonably priced deposits has been another positive offshoot of our decision to actively participate in the PPP. With our continued success attracting new deposits, our balance sheet is highly liquid, enabling us to fund organic growth activities as appropriate.”

“During the first quarter we consolidated our Mercerville and Hamilton Square branches into other nearby locations and we also reduced leased corporate office space. While this action contributed to higher occupancy and equipment expense during the first quarter, it will benefit our non-interest expense line moving forward.”

“We’re pleased that despite the many challenges our customers have faced because of the COVID-19 pandemic, asset quality has remained solid. Although it’s premature to declare the effects of the pandemic over, we’re excited about the opportunities for a great 2021 and beyond. Obviously, we got off to a great start this quarter.”

Income Statement

Net interest income for first quarter 2021 was $20.0 million, an increase of $4.2 million, or 26.3%, compared to $15.9 million in the first quarter of 2020. This increase was primarily the result of a $3.5 million decrease in total interest expense compared to first quarter 2020, coupled with an increase of $637,000 in interest and dividend income. The decrease in total interest expense for first quarter 2021 was driven by a lower cost of interest bearing deposits across all interest bearing deposit types in a significantly lower interest rate environment. Primarily contributing to the decline in interest expense was a $151.8 million decrease in average time deposits combined with a 123-basis-point reduction in the interest rate paid on these deposits, along with a 99-basis point decline in the rate paid on money market deposits. First quarter 2021 interest income on loans increased by $994,000, compared to first quarter 2020, reflecting an increase in the average loan balance of $294.5 million, partially offset by a 47-basis point decline in the average yield. The yield on the loan portfolio during the first quarter of 2021 was negatively impacted by a lower interest rate environment and lower rates paid on Paycheck Protection Program (“PPP”) loans, partially offset by a comparatively higher amount of prepayment fees received on the early pay-off of loans and the amortization of deferred PPP loan fees.           

The first quarter 2021 tax equivalent net interest margin of 3.60% increased by 30 basis points compared to 3.30% for the prior-year quarter and increased by 4 basis points from the linked fourth quarter 2021.

The increase in the 2021 first quarter margin compared to the 2020 first quarter was primarily the result of lower average rates paid for interest-bearing liabilities, comprised primarily of time and money market deposits, in addition to a significant decline in the average balance of higher-cost time deposits. The increase in the net interest margin compared to fourth quarter 2020 was a result of a $19.8 million increase in average loan balances, along with a 13-basis point decline in the cost of interest-bearing liabilities.

First Bank reported a credit to the provision for loan losses of $1.1 million in the first quarter of 2021, compared to a loan loss provision of $2.9 million in the first quarter of 2020, and a loan loss provision of $1.6 million during the fourth quarter of 2020. The provision credit for the quarter ended March 31, 2021 was reflective of continued stable and solid asset quality metrics, along with elevated loan prepayment activity which occurred during the quarter. The elevated level of loan prepayment activity contributed to the decline in the Bank’s loan portfolio of $82.1 million, excluding PPP loan activity, during the first quarter of 2021. As loans declined in the quarter, so did the levels of reserves, but it should be noted that the overall level of reserves to total loans remained relatively stable.

First quarter 2021 non-interest income was $2.3 million, an increase of $1.1 million compared to $1.2 million in first quarter 2020. The increase was primarily the result of a $436,000 increase in gains on sale of loans, primarily U.S. Small Business Administration (“SBA”) loans, a $415,000 increase in loan fees (primarily loan swap fees), as well as a $189,000 increase in gains on recovery of acquired loans. The increase in SBA loan fees was directly related to a strategic initiative to increase SBA lending through the creation of a centralized SBA Lending Team.

Non-interest expense for first quarter 2021 totaled $10.7 million, an increase of $735,000 compared to $9.9 million for the prior-year quarter and a decrease of $402,000 compared to the fourth quarter of 2020. The increase in non-interest expense, compared to first quarter 2020, was primarily a result of increased occupancy and equipment fees, and salaries and employee benefits. Higher occupancy and equipment costs were impacted by a $312,000 write off of leasehold improvements remaining from the administrative office space which was closed during the first quarter of 2021. Salaries and employee benefits also contributed to the rise in non-interest expense, reflecting higher employee benefit costs and merit-based salary and bonus increases.

The Bank’s efficiency ratio for the first quarter of 2021 was 47.66%, significantly improved in comparison to 58.03% in the first quarter of 2020 and 52.54% for the fourth quarter of 2020. The improvement in the efficiency ratio is due to a combination of increases in net interest income and non-interest income and effectively managed increases in non-interest expense.

Income tax expense for the three months ended March 31, 2021 was $3.1 million with an effective tax rate of 24.2%, compared to $1.0 million and an effective tax rate of 23.7% for the first quarter of 2020 and $2.2 million with an effective tax rate of 25.8% for the fourth quarter of 2020.

Balance Sheet

Total assets at March 31, 2021 were $2.41 billion, an increase of $313.1 million, or 15.0%, compared to $2.09 billion at March 31, 2020, primarily due to the origination of PPP loans and commercial real estate loan growth. Total assets grew $59.3 million, or 2.5%, from year end 2020 due primarily to an increase in interest bearing deposits with banks. Total loans were $2.02 billion at March 31, 2021, an increase of $263.8 million, or 15.0%, compared to $1.76 billion at March 31, 2020, and a decrease of $25.4 million, or 1.2%, from $2.05 billion at end of the linked fourth quarter of 2020. First Bank originated $101.3 million in new PPP loans during the first quarter, while $44.6 million in PPP loans were forgiven. At March 31, 2021 PPP loans outstanding totaled $193.9 million. Early commercial real estate loan payoff activity, coupled with normal loan principal amortization, reduced non-PPP loan balances by approximately $82.1 million in the first quarter of 2021.

Total deposits were $1.97 billion at March 31, 2021, an increase of $66.9 million, or 3.5%, compared to $1.90 billion at December 31, 2020. Non-interest-bearing deposits totaled $500.0 million at March 31, 2021, an increase of $75.9 million, or 17.9%, from December 31, 2020, primarily a result of the Bank’s participation in the PPP and continued growth from commercial banking relationships. Borrowings at March 31, 2021 were $141.6 million, a decrease of $19.5 million, or 12.1%, compared to year end 2020. During the first quarter of 2021 we paid off PPP Liquidity Facility (“PPPLF”) borrowings of $15.3 million with the remaining reduction in borrowings due to the payoff of certain FHLB advances. At March 31, 2021 we had no borrowings from the PPPLF outstanding. Projected liquidity is expected to support commercial loan growth over the next several months. Compared to the first quarter of 2020, total deposits grew $244.9 million, or 14.2%.

Stockholders’ equity was $246.0 million at March 31, 2021, compared to $238.1 million at December 31, 2020. The increase in stockholders’ equity of $7.9 million was primarily due to net income of $9.7 million, partially offset by shares purchased under First Bank’s stock repurchase program of $1.0 million and cash dividends paid of $588,000 during the first quarter.

Asset Quality and Capital Ratios

During the first quarter 2021 First Bank realized $5,000 in net recoveries, compared to net charge-offs of $699,000 for first quarter 2020 and net charge-offs of $465,000 for the fourth quarter of 2020. Net recoveries as an annualized percentage of average loans were 0.00% in first quarter 2021 compared to net charge-offs as an annualized percentage of average loans of 0.16% for first quarter 2020 and 0.09% for the linked fourth quarter 2020. Nonperforming loans as a percentage of total loans at March 31, 2021 were 0.53%, compared with 0.79% at March 31, 2020 and 0.50% at December 31, 2020. The allowance for loan losses to nonperforming loans was 214.74% at March 31, 2021, compared with 140.99% at March 31, 2020 and 234.26% at December 31, 2020. The allowance for loan losses to total loans (excluding PPP loans) was 1.24% at 3/31/21. The number increases to 1.59% if you add back purchase accounting credit marks on acquired loans.

As of March 31, 2021, the Bank exceeded all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 9.67%, a Tier 1 Risk-Based capital ratio of 10.98%, a Common Equity Tier 1 Capital ratio of 10.98%, and a Total Risk-Based capital ratio of 13.58%.

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 quarter of 2021. The PPP is a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the 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. As of March 31, 2021, First Bank had 1,200 PPP loans with a balance of $193.9 million. During the first quarter of 2021, First Bank originated 645 new PPP loans totaling $101.3 million and PPP loans totaling $44.6 million were forgiven. During the first quarter of 2021, the Bank realized $1.6 million in fee income on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of March 31, 2021, the Bank had $4.8 million in remaining unamortized fees associated with these 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 March 31, 2021, the Bank’s population of COVID-19 deferrals was $22.1 million, or 1.1% of total loans, down from $35.9 million at December 31, 2020, or 1.8% of total loans.

Cash Dividend Declared

On April 20, 2021, the Board of Directors declared a quarterly cash dividend of $0.03 per share to common stockholders of record at the close of business on May 7, 2021, payable on May 21, 2021.

Conference Call

First Bank will host an earnings conference call on Tuesday, April 27, 2021, at 9:00 a.m. Eastern Time. The direct dial toll free number for the call is 844-825-9784. For those unable to participate in the call, a replay will be available by dialing 877-344-7529 (access code 10154313) from one hour after the end of the conference call until July 28, 2021. Replay information will also be available on our website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay information for 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 March 31, 2021, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol “FRBA.”

Forward Looking Statements

This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include information regarding First Bank’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material.  Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about First Bank, any of which may change over time and some of which may be beyond First Bank’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions; 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, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential 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 Return on average tangible equity is a non-U.S. GAAP financial measure and is calculated by dividing net income by average tangible equity (average equity minus average goodwill and other intangible assets). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

ⁱⁱ The efficiency ratio is a non-U.S. GAAP financial measure and is calculated by dividing non-interest expense by total net 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)
	March 31, 2021
	(unaudited)				December 31, 2020
Assets
Cash and due from banks	$	23,719			$	24,203
Interest bearing deposits with banks		144,547				71,270
Cash and cash equivalents		168,266				95,473
Interest bearing time deposits with banks		2,657				4,371
Investment securities available for sale, at fair value		71,050				61,731
Investment securities held to maturity (fair value of $40,429
at March 31, 2021 and $38,319 at December 31, 2020)		40,132				37,593
Restricted investment in bank stocks		8,403				8,545
Other investments		6,513				6,498
Loans, net of deferred fees and costs		2,022,187				2,047,572
Less: Allowance for loan losses		22,926				23,974
Net loans		1,999,261				2,023,598
Premises and equipment, net		10,139				10,736
Other real estate owned, net		575				575
Accrued interest receivable		6,461				6,806
Bank-owned life insurance		50,526				50,197
Goodwill		16,253				16,253
Other intangible assets, net		1,771				1,745
Deferred income taxes		11,539				11,394
Other assets		12,030				10,755
Total assets	$	2,405,576			$	2,346,270
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits	$	500,008			$	424,119
Interest bearing deposits		1,470,483				1,479,498
Total deposits		1,970,491				1,903,617
Borrowings		141,617				161,135
Subordinated debentures		29,536				29,508
Accrued interest payable		952				561
Other liabilities		16,983				13,341
Total liabilities		2,159,579				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; 20,804,733
shares issued and 19,663,065 shares outstanding at March 31, 2021 and
20,742,158 shares issued and 19,707,474 outstanding at December 31, 2020		103,330				103,135
Additional paid-in capital		78,974				78,887
Retained earnings		72,504				63,431
Accumulated other comprehensive income		410				839
Treasury stock, 1,141,668 at March 31, 2021 and 1,034,684 shares at
December 31, 2020		(9,221	)			(8,184	)
Total stockholders' equity		245,997				238,108
Total liabilities and stockholders' equity	$	2,405,576			$	2,346,270

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)
	Three Months Ended
	March 31,
	2021				2020
Interest and Dividend Income
Investment securities—taxable	$	475			$	550
Investment securities—tax-exempt		48				78
Interest bearing deposits with banks,
Federal funds sold and other		171				423
Loans, including fees		22,157				21,163
Total interest and dividend income		22,851				22,214
Interest Expense
Deposits		1,850				5,386
Borrowings		514				559
Subordinated debentures		440				398
Total interest expense		2,804				6,343
Net interest income		20,047				15,871
Provision for loan losses		(1,053	)			2,932
Net interest income after provision for loan losses		21,100				12,939
Non-Interest Income
Service fees on deposit accounts		176				171
Loan fees		681				266
Income from bank-owned life insurance		329				344
Gains on sale of loans		534				98
Gains on recovery of acquired loans		370				181
Other non-interest income		210				154
Total non-interest income		2,300				1,214
Non-Interest Expense
Salaries and employee benefits		5,768				5,384
Occupancy and equipment		1,938				1,416
Legal fees		247				220
Other professional fees		531				456
Regulatory fees		268				233
Directors' fees		216				215
Data processing		535				564
Marketing and advertising		188				144
Travel and entertainment		15				101
Insurance		154				196
Other real estate owned expense, net		51				117
Other expense		739				869
Total non-interest expense		10,650				9,915
Income Before Income Taxes		12,750				4,238
Income tax expense		3,089				1,005
Net Income	$	9,661			$	3,233
Basic earnings per common share	$	0.49			$	0.16
Diluted earnings per common share	$	0.49			$	0.16
Cash dividends per common share	$	0.03			$	0.03
Basic weighted average common shares outstanding		19,672,017				20,317,585
Diluted weighted average common shares outstanding		19,834,319				20,565,867

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
	Three Months Ended March 31,
	2021											2020
	Average								Average			Average								Average
	Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)	$	97,756			$	533			2.21	%		$	91,858			$	644			2.82	%
Loans (3)		2,037,318				22,157			4.41	%			1,742,812				21,163			4.88	%
Interest bearing deposits with banks,
Federal funds sold and other		108,793				69			0.26	%			91,288				270			1.19	%
Restricted investment in bank stocks		8,447				87			4.18	%			6,515				110			6.79	%
Other investments		6,510				15			0.93	%			6,420				43			2.69	%
Total interest earning assets (2)		2,258,824				22,861			4.10	%			1,938,893				22,230			4.61	%
Allowance for loan losses		(24,600	)										(17,522	)
Non-interest earning assets		132,193											127,858
Total assets	$	2,366,417										$	2,049,229
Interest bearing liabilities
Interest bearing demand deposits	$	201,247			$	65			0.13	%		$	160,962			$	162			0.40	%
Money market deposits		591,752				520			0.36	%			443,565				1,490			1.35	%
Savings deposits		168,993				204			0.49	%			126,625				322			1.02	%
Time deposits		507,949				1,061			0.85	%			659,767				3,412			2.08	%
Total interest bearing deposits		1,469,941				1,850			0.51	%			1,390,919				5,386			1.56	%
Borrowings		145,632				514			1.43	%			102,428				559			2.19	%
Subordinated debentures		29,519				440			5.96	%			21,974				398			7.24	%
Total interest bearing liabilities		1,645,092				2,804			0.69	%			1,515,321				6,343			1.68	%
Non-interest bearing deposits		464,157											288,580
Other liabilities		15,494											16,857
Stockholders' equity		241,674											228,471
Total liabilities and stockholders' equity	$	2,366,417										$	2,049,229
Net interest income/interest rate spread (2)						20,057			3.41	%							15,887			2.93	%
Net interest margin (2) (4)									3.60	%										3.30	%
Tax equivalent adjustment (2)						(10	)										(16	)
Net interest income					$	20,047										$	15,871
(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Annualized.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except for share and employee data, unaudited)
	As of or For the Quarter Ended
	3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
EARNINGS
Net interest income	$	20,047			$	19,724			$	17,630			$	16,328			$	15,871
Provision for loan losses		(1,053	)			1,633				1,997				2,977				2,932
Non-interest income		2,300				1,312				1,946				1,880				1,214
Non-interest expense		10,650				11,052				9,653				9,767				9,915
Income tax expense		3,089				2,156				2,023				1,347				1,005
Net income		9,661				6,195				5,903				4,117				3,233
PERFORMANCE RATIOS
Return on average assets (1)		1.66	%			1.06	%			1.03	%			0.74	%			0.63	%
Return on average equity (1)		16.21	%			10.44	%			10.20	%			7.33	%			5.69	%
Return on average tangible equity (1) (2)		17.52	%			11.30	%			11.08	%			7.97	%			6.19	%
Net interest margin (1) (3)		3.60	%			3.56	%			3.23	%			3.07	%			3.30	%
Total cost of deposits (1)		0.39	%			0.50	%			0.70	%			0.98	%			1.29	%
Efficiency ratio (2)		47.66	%			52.54	%			49.31	%			53.64	%			58.03	%
SHARE DATA
Common shares outstanding		19,663,065				19,707,474				19,694,892				19,629,892				20,141,204
Basic earnings per share	$	0.49			$	0.31			$	0.30			$	0.21			$	0.16
Diluted earnings per share		0.49				0.31				0.30				0.21				0.16
Tangible book value per share (2)		11.59				11.17				10.88				10.61				10.33
Book value per share		12.51				12.08				11.79				11.54				11.23
MARKET DATA
Market value per share	$	12.17			$	9.38			$	6.20			$	6.52			$	6.94
Market value / Tangible book value		104.97	%			83.98	%			57.01	%			61.46	%			67.20	%
Market capitalization	$	239,300			$	184,856			$	122,108			$	127,987			$	139,780
CAPITAL & LIQUIDITY
Tangible stockholders' equity / tangible assets (2)		9.55	%			9.45	%			9.35	%			9.12	%			10.03	%
Stockholders' equity / assets		10.23	%			10.15	%			10.06	%			9.84	%			10.81	%
Loans / deposits		102.62	%			107.56	%			109.22	%			101.65	%			101.90	%
ASSET QUALITY
Net (recoveries) charge-offs	$	(5	)		$	465			$	633			$	1,013			$	699
Nonperforming loans		10,676				10,234				12,694				14,082				13,815
Nonperforming assets		11,251				10,809				13,397				15,224				14,976
Net charge offs / average loans (1)		0.00	%			0.09	%			0.13	%			0.21	%			0.16	%
Nonperforming loans / total loans		0.53	%			0.50	%			0.63	%			0.72	%			0.79	%
Nonperforming assets / total assets		0.47	%			0.46	%			0.58	%			0.66	%			0.72	%
Allowance for loan losses / total loans		1.13	%			1.17	%			1.14	%			1.10	%			1.11	%
Allowance for loan losses / total loans (excluding PPP loans)		1.24	%			1.25	%			1.25	%			1.20	%			1.11	%
Allowance for loan losses / nonperforming loans		214.74	%			234.26	%			179.66	%			152.26	%			140.99	%
OTHER DATA
Total assets	$	2,405,576			$	2,346,270			$	2,309,897			$	2,300,594			$	2,092,444
Total loans		2,022,187				2,047,572				2,004,650				1,955,007				1,758,364
Total deposits		1,970,491				1,903,617				1,835,427				1,923,266				1,725,547
Total stockholders' equity		245,997				238,108				232,300				226,450				226,259
Number of full-time equivalent employees (4)		211				204				204				209				208
(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, 2020.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
	As of the Quarter Ended
	3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
LOAN COMPOSITION
Commercial and industrial	$	432,869			$	388,886			$	430,722			$	428,494			$	247,654
Commercial real estate:
Owner-occupied		399,042				407,089				402,147				392,096				387,217
Investor		771,599				778,958				721,029				689,891				678,568
Construction and development		123,930				149,284				146,057				131,791				124,496
Multi-family		125,493				144,527				133,778				132,942				131,566
Total commercial real estate		1,420,064				1,479,858				1,403,011				1,346,720				1,321,847
Residential real estate:
Residential mortgage and first lien home equity loans		117,756				120,018				117,530				117,796				118,020
Home equity–second lien loans and revolving lines of credit		29,306				33,575				27,600				29,371				33,764
Total residential real estate		147,062				153,593				145,130				147,167				151,784
Consumer and other		29,213				30,368				32,531				40,230				38,902
Total loans prior to deferred loan fees and costs		2,029,208				2,052,705				2,011,394				1,962,611				1,760,187
Net deferred loan fees and costs		(7,021	)			(5,133	)			(6,744	)			(7,604	)			(1,823	)
Total loans	$	2,022,187			$	2,047,572			$	2,004,650			$	1,955,007			$	1,758,364
LOAN MIX
Commercial and industrial		21.4	%			19.0	%			21.5	%			21.9	%			14.1	%
Commercial real estate:
Owner-occupied		19.7	%			19.9	%			20.1	%			20.1	%			22.0	%
Investor		38.2	%			38.0	%			36.0	%			35.3	%			38.6	%
Construction and development		6.1	%			7.3	%			7.3	%			6.7	%			7.1	%
Multi-family		6.2	%			7.0	%			6.6	%			6.8	%			7.5	%
Total commercial real estate		70.2	%			72.2	%			70.0	%			68.9	%			75.2	%
Residential real estate:
Residential mortgage and first lien home equity loans		5.8	%			5.9	%			5.8	%			6.0	%			6.7	%
Home equity–second lien loans and revolving lines of credit		1.4	%			1.6	%			1.4	%			1.5	%			1.9	%
Total residential real estate		7.2	%			7.5	%			7.2	%			7.5	%			8.6	%
Consumer and other		1.5	%			1.6	%			1.6	%			2.1	%			2.2	%
Net deferred loan fees and costs		(0.3	%)			(0.3	%)			(0.3	%)			(0.4	%)			(0.1	%)
Total loans		100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
	As of the Quarter Ended
	3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
DEPOSIT COMPOSITION
Non-interest bearing demand deposits	$	500,008			$	424,119			$	445,514			$	459,123			$	291,949
Interest bearing demand deposits		208,443				201,881				156,059				165,081				161,726
Money market and savings deposits		767,603				753,640				695,224				703,365				611,098
Time deposits		494,437				523,977				538,630				595,697				660,774
Total Deposits	$	1,970,491			$	1,903,617			$	1,835,427			$	1,923,266			$	1,725,547
DEPOSIT MIX
Non-interest bearing demand deposits		25.4	%			22.3	%			24.3	%			23.9	%			16.9	%
Interest bearing demand deposits		10.6	%			10.6	%			8.5	%			8.6	%			9.4	%
Money market and savings deposits		38.9	%			39.6	%			37.9	%			36.5	%			35.4	%
Time deposits		25.1	%			27.5	%			29.3	%			31.0	%			38.3	%
Total Deposits		100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(in thousands, except for share data, unaudited)
	As of or For the Quarter Ended
	3/31/2021				12/31/2020				9/30/2020				6/30/2020				3/31/2020
Return on Average Tangible Equity
Net income (numerator)	$	9,661			$	6,195			$	5,903			$	4,117			$	3,233
Average stockholders' equity	$	241,674			$	236,099			$	230,122			$	225,905			$	228,471
Less: Average Goodwill and other intangible assets, net		18,023				18,062				18,156				18,236				18,309
Average Tangible stockholders' equity (denominator)	$	223,651			$	218,037			$	211,966			$	207,669			$	210,162
Return on Average Tangible equity		17.52	%			11.30	%			11.08	%			7.97	%			6.19	%
Tangible Book Value Per Share
Stockholders' equity	$	245,997			$	238,108			$	232,300			$	226,450			$	226,259
Less: Goodwill and other intangible assets, net		18,024				17,998				18,108				18,192				18,245
Tangible stockholders' equity (numerator)	$	227,973			$	220,110			$	214,192			$	208,258			$	208,014
Common shares outstanding (denominator)		19,663,065				19,707,474				19,694,892				19,629,892				20,141,204
Tangible book value per share	$	11.59			$	11.17			$	10.88			$	10.61			$	10.33
Tangible Equity / Assets
Stockholders' equity	$	245,997			$	238,108			$	232,300			$	226,450			$	226,259
Less: Goodwill and other intangible assets, net		18,024				17,998				18,108				18,192				18,245
Tangible equity (numerator)	$	227,973			$	220,110			$	214,192			$	208,258			$	208,014
Total assets	$	2,405,576			$	2,346,270			$	2,309,897			$	2,300,594			$	2,092,444
Less: Goodwill and other intangible assets, net		18,024				17,998				18,108				18,192				18,245
Adjusted total assets (denominator)	$	2,387,552			$	2,328,272			$	2,291,789			$	2,282,402			$	2,074,199
Tangible equity / assets		9.55	%			9.45	%			9.35	%			9.12	%			10.03	%
Efficiency Ratio (1)
Non-interest expense	$	10,650			$	11,052			$	9,653			$	9,767			$	9,915
Net interest income	$	20,047			$	19,724			$	17,630			$	16,328			$	15,871
Non-interest income		2,300				1,312				1,946				1,880				1,214
Total revenue	$	22,347			$	21,036			$	19,576			$	18,208			$	17,085
Efficiency ratio		47.66	%			52.54	%			49.31	%			53.64	%			58.03	%
(1) During the quarter ended 6/30/2020 the efficiency ratio calculation was changed from the way these amounts were calculated in previous period reports. The prior quarter numbers above have been adjusted accordingly. Gains on recovery of acquired loans are no longer removed from the revenue numbers as management has determined that these amounts have become part of our core operations and should not be removed in our adjusted totals.

FAQ

What were First Bank's earnings for Q1 2021?

First Bank reported a net income of $9.7 million, or $0.49 per diluted share, for the first quarter of 2021.

How much did First Bank's total net revenue increase in Q1 2021?

Total net revenue for Q1 2021 increased by 30.8% to $22.3 million compared to the same quarter in 2020.

What is the current efficiency ratio for First Bank?

First Bank's efficiency ratio improved to 47.66% for Q1 2021, down from 58.03% in Q1 2020.

What was the nonperforming loan rate for First Bank as of March 31, 2021?

As of March 31, 2021, nonperforming loans accounted for 0.53% of total loans at First Bank.

When is the dividend payable for First Bank's Q1 2021 earnings?

The quarterly cash dividend of $0.03 per share is payable on May 21, 2021.