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

Rhea-AI Summary

First Bank (FRBA) reported strong financial results for Q2 and the first half of 2021, achieving a net income of $8.9 million for Q2 and $18.6 million year-to-date. This represents a significant increase from $4.1 million and $7.4 million in 2020. Total net revenue rose by 19.5% to $21.8 million. Asset quality remained robust, evidenced by net charge-offs of only 0.02% of average loans. Total deposits reached a record $2.04 billion, marking a 7% increase from year-end 2020. The bank continues to benefit from effective management of non-interest expenses, enhancing its efficiency ratio to 46.66%.

Positive

• Net income increased to $8.9 million in Q2 2021, up from $4.1 million in Q2 2020.
• Total net revenue for Q2 2021 was $21.8 million, a 19.5% increase year-over-year.
• Total deposits rose to a record $2.04 billion, a 7% increase since December 31, 2020.
• Efficiency ratio improved to 46.66%, reflecting effective expense management.
• Net charge-offs were only 0.02% of average loans, indicating strong asset quality.

Negative

• Non-interest income decreased by $538,000 to $1.3 million in Q2 2021 compared to Q2 2020.
• Non-interest expense increased by $388,000 to $10.2 million in Q2 2021 from the prior year.

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.

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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	%

 

 

FAQ

What is First Bank's net income for Q2 2021?

First Bank reported a net income of $8.9 million for Q2 2021.

How much did First Bank's total deposits increase by in 2021?

Total deposits increased by $132.6 million, or 7%, from December 31, 2020.

What was First Bank's efficiency ratio in Q2 2021?

The efficiency ratio for Q2 2021 was 46.66%.

How did First Bank perform in terms of net charge-offs in Q2 2021?

Net charge-offs were $116,000, or an annualized 0.02% of average loans.

What was First Bank's total net revenue in Q2 2021?

Total net revenue for Q2 2021 was $21.8 million, a 19.5% increase from the prior year.