First Bank Reports Second Quarter 2022 Net Income of $8.8 Million

Rhea-AI Summary

First Bank (FRBA) reported its second quarter 2022 results, showcasing a net income of $8.8 million, equal to $0.45 per diluted share. Key performance metrics include a return on average assets of 1.38% and a net interest margin of 3.76%, up 19 basis points from the previous quarter. Total loans rose to $2.22 billion, a 5.1% increase year-over-year, while deposits decreased slightly by 0.6% from the prior quarter. The bank maintained solid asset quality with net charge-offs at 0.07% and nonperforming loans at 0.57%. A quarterly dividend of $0.06 was declared, reflecting an annualized yield of 1.69%.

Positive

• Net income of $8.8 million for Q2 2022, consistent year-over-year.
• Return on average equity at 12.92%, indicating strong profitability.
• Total loans increased by $108.2 million, or 5.1%, from December 31, 2021.
• Net interest margin improved to 3.76%, a 19 basis point increase from Q1 2022.
• Consistent asset quality with nonperforming loans at 0.57%.

Negative

• Total deposits decreased by $12.7 million, or 0.6%, from Q1 2022.
• Increased non-interest expense by 12.3% compared to the prior year.

Quarterly Results Reflect Strong Organic Loan Growth, Improving Net Interest Margin, and Solid Asset Quality Metrics

HAMILTON, N.J., July 26, 2022 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) today announced results for the second quarter of 2022, accentuated by net income of $8.8 million, or $0.45 per diluted share. Return on average assets, return on average equity, and return on average tangible equityⁱ for the second quarter of 2022 were 1.38%, 12.92% and 13.93%, respectively. In the second quarter of 2021, First Bank reported net income of $8.9 million, or $0.45 per diluted share, and return on average assets, return on average equity, and return on average tangible equityⁱ of 1.48%, 14.26% and 15.37%, respectively.

Second Quarter 2022 Highlights:

• Total loans of $2.22 billion on June 30, 2022, reflected growth of $68.5 million, or 3.2%, from the end of the first quarter of 2022 and were up $108.2 million, or 5.1%, from December 31, 2021. Loan growth, excluding the decline in Paycheck Protection Program (PPP) loans, totaled $84.0 million in the second quarter of 2022, representing a 15.8% annualized increase.
• Total deposits of $2.17 billion on June 30, 2022, were down $12.7 million, or 0.6%, from the end of the linked first quarter and up $50.6 million, or 2.4%, from December 31, 2021.
• Asset quality metrics remained solid during the quarter, with annualized net charge offs to average loans of 0.07% and nonperforming loans to total loans of 0.57% as of June 30, 2022, compared to 0.62% on December 31, 2021, and 0.59% on March 31, 2022.
• Continued focus on managing expenses resulted in the sixth consecutive quarter of an efficiency ratioⁱⁱ below 50%, at 46.81% for the second quarter of 2022.

President and Chief Executive Officer, Patrick L. Ryan, said, “We are pleased with our performance during the second quarter. Our continued focus on developing new and existing customer relationships facilitated another quarter of robust loan growth. Total deposits remained relatively stable as we continued to shift our deposit mix with non-interest bearing deposits representing 27.7% of total deposits at quarter-end. Loan growth, improving asset yields and managing deposit costs contributed to a 19 basis point improvement in our net interest margin which was 3.76% for the second quarter of 2022 compared to 3.57% for the first quarter of 2022. We remain focused on driving organic growth as we continue to manage expenses to achieve greater profitability.”

“Asset quality metrics also remain strong, reflected by our eighth consecutive quarter end with our nonperforming loans to total loans ratio under 65 basis points. Annualized net charge offs were only 0.07% of average loans for the quarter ended June 30, 2022, and primarily related to one small business loan.”

“In our continuous effort to drive long-term shareholder value, we are pleased to announce another $0.06 quarterly dividend, reflecting an annualized yield of 1.69% based on our July 22, 2022, closing price of $14.18. We also have an active share repurchase program and from January 1, 2022, through July 22, 2022, we have repurchased 241,284 shares of our common stock at an aggregate cost of $3.4 million, or an average price of $13.99 per share.”

“Overall, we are very pleased with our performance through the first half of the year and our financial performance provides us with the confidence that we are well positioned to continue to generate strong results during the second half of 2022.”

Income Statement

First Bank’s (the “Bank’s”) net interest income for the second quarter of 2022 was $22.9 million, an increase of $2.5 million, or 12.2%, compared to $20.4 million in the second quarter of 2021 and an increase of $1.8 million, or 8.3%, compared to $21.1 million in the first quarter of 2022. The increase from the comparable prior year quarter was due to an increase in interest and dividend income of $2.0 million coupled with a decline of $444,000 in total interest expense. The increase from the linked first quarter of 2022 was due to an increase in interest and dividend income of $2.0 million offset somewhat by an increase in total interest expense of $216,000.

The increase in interest income during the second quarter of 2022 compared to the second quarter of 2021 and the first quarter of 2022 was primarily due to an increase in average loans combined with a 7 basis point and 18 basis point increase, respectively, in the average rate on loans. Interest income increased compared to the year-ago quarter and the linked first quarter despite a decrease in PPP loan fees, as loan growth and the rising rate environment led to improved interest income. Interest income from loans included $493,000 in PPP loan fees in the second quarter of 2022 compared to $1.3 million in the second quarter of 2021 and $860,000 in the linked first quarter of 2022. Also impacting loan interest income in the second quarter of 2022 was loan prepayment income of $682,000, compared to $730,000 for the quarter ended June 30, 2021, and $459,000 for the quarter ended March 31, 2022. As a result of the Bank’s concerted effort to control deposit costs, the average rate on interest bearing deposits was lower during the quarter ended June 30, 2022, compared to the quarter ended June 30, 2021, and increased only 6 basis points compared to the first quarter of 2022, despite the rising rate environment during the second quarter of 2022.

Net interest income for the six months ended June 30, 2022, totaled $44.1 million, an increase of $3.6 million, or 8.9%, compared to $40.5 million for the same period in 2021. The increase in the 2022 year to date net interest income was also driven by solid growth in average loans, which increased by $115.2 million, or 5.6%, from the prior year period, along with a 16 basis point decrease in the average rate on interest-bearing deposits.

The second quarter 2022 tax equivalent net interest margin was 3.76%, an increase of 19 basis points compared to the comparable prior year quarter and from the first quarter of 2022. The Bank’s margin continues to benefit from the increase in average non-interest bearing deposits, improving asset yields and actively managing the cost of funds. The year-to-date tax equivalent net interest margin was 3.67%, an increase of 9 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.

The Bank’s provision for loan losses was $1.3 million for the second quarter of 2022, compared to a $162,000 credit to the provision for loan losses in the second quarter of 2021 and a provision for loan losses of $642,000 for the linked first quarter 2022. The Bank’s provision for loan losses was $1.9 million for the six months ended June 30, 2022, compared to a credit to the provision for loan losses of $1.2 million for the same period in 2021. The provision for loan losses for the three and six months ended June 30, 2022, reflects consistent organic loan growth and continued strong asset quality. The credit to the provision for loan losses for the three and six months ended June 30, 2021, reflected a reduction in qualitative factors that were increased significantly in 2020 due to the economic uncertainties created by the COVID-19 pandemic.

Second quarter 2022 non-interest income of $1.5 million compares to $1.3 million during the second quarter of 2021. The increase between the periods was primarily the result of higher income from service fees from deposit accounts and higher gains on recovery of acquired loans. Non-interest income totaled $2.7 million for the six months ended June 30, 2022, compared to $3.6 million for the same period in 2021. This decrease in non-interest income for the first six months of 2022 was a result of lower gains on sale of loans, lower loan fees and lower gains on recovery of acquired loans. The decrease was primarily the result of a reduction in Small Business Administration loan sales and a decline in loan swap activity, primarily due to the current market conditions.   

Non-interest expense for second quarter 2022 of $11.4 million, increased $1.3 million, or 12.3%, compared to $10.2 million for the prior year quarter. The higher non-interest expense compared to second quarter 2021 was primarily a result of a $768,000, or 13.0%, increase in salaries and employee benefits, along with lesser increases in other professional fees, travel and entertainment, and other expense. These increases were partially offset by lower legal fees, directors’ fees, and marginal declines in certain other non-interest expense categories. The increase in salaries and employee benefits was due primarily to salary increases and an increase in the number of employees, partially due to the employees added from our acquisition of two branches during the fourth quarter of 2021.

On a linked quarter basis, second quarter 2022 non-interest expense of $11.4 million, increased $287,000, or 2.6%, compared to $11.1 million for the first quarter of 2022. This increase was also primarily due to salary and employee benefits increases which was primarily due to annual salary increases that occurred at the end of the first quarter of 2022.

Non-interest expense for the first six months of 2022 totaled $22.5 million, an increase of $1.7 million, or 8.3%, compared to $20.8 million for the same period in 2021. The increase was primarily a result of higher salaries and employee benefits and higher other professional fees, offset somewhat by lower occupancy and equipment expenses.

Income tax expense for the three months ended June 30, 2022, was $2.8 million with an effective tax rate of 24.4%, compared to $2.9 million with an effective tax rate of 24.4% for the second quarter of 2021 and $2.5 million with an effective tax rate of 23.4% for the first quarter of 2022. Income tax expense for the six months ended June 30, 2022, was $5.3 million with an effective tax rate of 23.9%, compared to $6.0 million for the first six months of 2021 with an effective tax rate of 24.3%.

Balance Sheet

Total assets at June 30, 2022, were $2.57 billion, an increase of $57.8 million, or 2.3%, from December 31, 2021. Total loans increased $108.2 million, or 5.1%, to $2.22 billion at June 30, 2022, compared to $2.11 billion at December 31, 2021. The increase in loans during the six-month period ended June 30, 2022, reflects net non-PPP organic loan growth of $149.3 million, offset somewhat by a decline in PPP loans of $41.0 million, as such loans continue to be forgiven. Total loans as of June 30, 2022, increased $68.5 million, or 3.2%, from $2.15 billion on March 31, 2022, reflecting organic, net non-PPP loan growth of $84.0 million, offset somewhat by a decline in PPP loans of $15.5 million. PPP loans outstanding on June 30, 2022, were $10.0 million.

Total deposits were $2.17 billion on June 30, 2022, an increase of $50.6 million, or 2.4%, from $2.11 billion at December 31, 2021. Non-interest-bearing deposits totaled $600.4 million on June 30, 2022, an increase of $41.6 million, or 7.4%, from December 31, 2021. The Bank continues to focus on enhancing its deposit mix and, as of June 30, 2022, had grown non-interest bearing deposits to 27.7% and lowered time deposits to 14.7% of total deposits. Total deposits declined by $12.7 million, or 0.6%, from March 31, 2022, with interest bearing deposits declining $15.8 million, offset somewhat by a $3.1 million increase in non-interest bearing deposits.

Stockholders’ equity was $274.7 million on June 30, 2022, compared to $266.7 million on December 31, 2021. The growth of $8.0 million, or 3.0%, was primarily a result of year-to-date net income of $17.0 million, partially offset by a $5.1 million increase in accumulated other comprehensive loss, $2.7 million in treasury stock purchases and cash dividends paid of $2.3 million during the six months ended June 30, 2022. The increase in accumulated other comprehensive loss was due to an increase in unrealized losses on the Bank’s available for sale investment securities, primarily resulting from the current interest rate environment.

As of June 30, 2022, the Bank continued to exceed all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 10.19%, a Tier 1 Risk-Based capital ratio of 10.28%, a Common Equity Tier 1 Capital ratio of 10.28%, and a Total Risk-Based capital ratio of 12.46%.

Asset Quality

First Bank’s asset quality metrics remained stable and favorable during the three and six months ended June 30, 2022. Net charge offs of $404,000 for the second quarter of 2022 were 0.07% of average loans on an annualized basis. This compares to net charge offs of $116,000, or an annualized 0.02% of average loans, for the second quarter of 2021 and net charge offs of $247,000, or an annualized 0.05%, for the first quarter of 2022. Nonperforming loans were $12.7 million on June 30, 2022, down from $13.0 million on December 31, 2021. Nonperforming loans as a percentage of total loans on June 30, 2022, were 0.57%, compared with 0.62% at December 31, 2021, and 0.59% at March 31, 2022. The allowance for loan losses to nonperforming loans was 197.06% on June 30, 2022, compared with 182.65% at December 31, 2021, and 191.72% on March 31, 2022.

COVID-19 Response

First Bank participated in the PPP, established by the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act), during 2020 and 2021. The PPP was a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the Small Business Administration. The PPP provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover compensation and other business-related operating costs. The PPP ended on May 31, 2021, but the PPP loan forgiveness process is ongoing. As of June 30, 2022, First Bank had 99 PPP loans with outstanding balances of $10.0 million. During the quarter ended June 30, 2022, PPP loans totaling $15.5 million were forgiven and the Bank realized $493,000 in loan fees on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of June 30, 2022, the Bank had $336,000 in remaining unamortized fees associated with outstanding balances of PPP loans.

Cash Dividend Declared

On July 19, 2022, First Bank’s Board of Directors declared a quarterly cash dividend of $0.06 per share to common stockholders of record at the close of business on August 12, 2022, payable on August 26, 2022.

Conference Call

First Bank will host its earnings call on Wednesday, July 27, 2022, at 9:00 AM eastern time. The direct dial toll free number for the live call is 1-844-200-6205 and the access code is 212059. For those unable to participate in the call, a replay will be available by dialing 1-866-813-9403 (access code 861313) from one hour after the end of the conference call until October 24, 2022. 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 18 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington (2), Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.6 billion in assets as of June 30, 2022, 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, sustain its internal growth rate, and 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 inflation and declines in housing market values; the impact of disease pandemics, including COVID-19, on First Bank’s operations, 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; and 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.

CONTACT: Andrew Hibshman, Chief Financial Officer
(609) 643-0058, andrew.hibshman@firstbanknj.com

_______________
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 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.

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data, unaudited)
	June 30, 2022				December 31, 2021
Assets
Cash and due from banks	$	27,392			$	25,076
Interest bearing deposits with banks		61,186				129,431
Cash and cash equivalents		88,578				154,507
Interest bearing time deposits with banks		1,542				2,170
Investment securities available for sale, at fair value		97,152				94,584
Investment securities held to maturity (fair value of $41,003 at June 30, 2022 and $39,718 at December 31, 2021)		43,426				39,547
Restricted investment in bank stocks		5,705				5,856
Other investments		8,095				8,062
Loans, net of deferred fees and costs		2,220,223				2,111,991
Less: Allowance for loan losses		25,034				23,746
Net loans		2,195,189				2,088,245
Premises and equipment, net		10,067				9,883
Other real estate owned, net		293				772
Accrued interest receivable		6,028				5,681
Bank-owned life insurance		57,376				56,633
Goodwill		17,826				17,826
Other intangible assets, net		1,942				2,145
Deferred income taxes		12,680				11,081
Other assets		22,238				13,306
Total assets	$	2,568,137			$	2,510,298
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits	$	600,402			$	558,775
Interest bearing deposits		1,564,761				1,555,827
Total deposits		2,165,163				2,114,602
Borrowings		74,479				81,835
Subordinated debentures		29,675				29,620
Accrued interest payable		308				399
Other liabilities		23,810				17,176
Total liabilities		2,293,435				2,243,632
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; 21,050,594 shares issued and 19,483,415 shares outstanding at June 30, 2022 and 20,851,506 shares issued and 19,472,364 shares outstanding at December 31, 2021		104,390				103,704
Additional paid-in capital		80,039				79,563
Retained earnings		110,559				95,924
Accumulated other comprehensive loss		(5,280	)			(206	)
Treasury stock, 1,571,179 shares at June 30, 2022 and 1,379,142 shares at December 31, 2021		(15,006	)			(12,319	)
Total stockholders' equity		274,702				266,666
Total liabilities and stockholders' equity	$	2,568,137			$	2,510,298

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,
		2022				2021				2022				2021
Interest and Dividend Income
Investment securities—taxable	$	689			$	550			$	1,265			$	1,025
Investment securities—tax-exempt		33				45				70				93
Interest bearing deposits with banks,
Federal funds sold and other		260				185				390				356
Loans, including fees		23,881				22,038				46,024				44,195
Total interest and dividend income		24,863				22,818				47,749				45,669
Interest Expense
Deposits		1,262				1,463				2,271				3,313
Borrowings		250				493				538				1,007
Subordinated debentures		441				441				881				881
Total interest expense		1,953				2,397				3,690				5,201
Net interest income		22,910				20,421				44,059				40,468
Provision for loan losses		1,298				(162	)			1,940				(1,215	)
Net interest income after provision for loan losses		21,612				20,583				42,119				41,683
Non-Interest Income
Service fees on deposit accounts		243				165				495				341
Loan fees		102				134				347				815
Income from bank-owned life insurance		370				343				743				672
Gains on sale of loans		253				315				290				849
Gains on recovery of acquired loans		210				141				334				511
Other non-interest income		285				244				521				454
Total non-interest income		1,463				1,342				2,730				3,642
Non-Interest Expense
Salaries and employee benefits		6,698				5,930				13,242				11,698
Occupancy and equipment		1,381				1,299				2,805				3,237
Legal fees		172				253				314				500
Other professional fees		692				528				1,379				1,059
Regulatory fees		233				228				426				496
Directors' fees		180				219				398				435
Data processing		589				608				1,185				1,143
Marketing and advertising		177				187				341				375
Travel and entertainment		111				24				199				39
Insurance		186				138				351				292
Other real estate owned expense, net		114				30				197				81
Other expense		876				711				1,694				1,450
Total non-interest expense		11,409				10,155				22,531				20,805
Income Before Income Taxes		11,666				11,770				22,318				24,520
Income tax expense		2,843				2,877				5,337				5,966
Net Income	$	8,823			$	8,893			$	16,981			$	18,554
Basic earnings per common share	$	0.45			$	0.45			$	0.87			$	0.94
Diluted earnings per common share	$	0.45			$	0.45			$	0.86			$	0.93
Cash dividends per common share	$	0.06			$	0.03			$	0.12			$	0.06
Basic weighted average common shares outstanding		19,586,103				19,677,002				19,559,605				19,674,523
Diluted weighted average common shares outstanding		19,794,657				19,883,076				19,780,953				19,859,091

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
	Three Months Ended June 30,
		2022											2021
	Average								Average			Average								Average
	Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)	$	141,412			$	729			2.07	%		$	120,238			$	605			2.02	%
Loans (3)		2,181,197				23,881			4.39	%			2,044,789				22,038			4.32	%
Interest bearing deposits with banks,
Federal funds sold and other		107,903				171			0.64	%			117,787				71			0.24	%
Restricted investment in bank stocks		5,424				65			4.81	%			8,089				98			4.86	%
Other investments		8,090				24			1.19	%			6,525				16			0.98	%
Total interest earning assets (2)		2,444,026				24,870			4.08	%			2,297,428				22,828			3.99	%
Allowance for loan losses		(24,469	)										(23,512	)
Non-interest earning assets		148,886											136,437
Total assets	$	2,568,443										$	2,410,353
Interest bearing liabilities
Interest bearing demand deposits	$	329,702			$	137			0.17	%		$	210,494			$	49			0.09	%
Money market deposits		737,041				642			0.35	%			602,221				424			0.28	%
Savings deposits		181,390				180			0.40	%			183,289				192			0.42	%
Time deposits		321,378				303			0.38	%			482,657				798			0.66	%
Total interest bearing deposits		1,569,511				1,262			0.32	%			1,478,661				1,463			0.40	%
Borrowings		68,024				250			1.47	%			130,441				493			1.52	%
Subordinated debentures		29,658				441			5.95	%			29,547				441			5.97	%
Total interest bearing liabilities		1,667,193				1,953			0.47	%			1,638,649				2,397			0.59	%
Non-interest bearing deposits		606,874											505,912
Other liabilities		20,547											15,649
Stockholders' equity		273,829											250,143
Total liabilities and stockholders' equity	$	2,568,443										$	2,410,353
Net interest income/interest rate spread (2)						22,917			3.61	%							20,431			3.40	%
Net interest margin (2) (4)									3.76	%										3.57	%
Tax equivalent adjustment (2)						(7	)										(10	)
Net interest income					$	22,910										$	20,421
(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,
		2022											2021
	Average								Average			Average								Average
	Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)	$	137,742			$	1,350			1.98	%		$	109,058			$	1,138			2.10	%
Loans (3)		2,156,244				46,024			4.30	%			2,041,074				44,195			4.37	%
Interest bearing deposits with banks,
Federal funds sold and other		114,626				221			0.39	%			113,315				140			0.25	%
Restricted investment in bank stocks		5,519				128			4.68	%			8,267				185			4.51	%
Other investments		8,081				41			1.02	%			6,518				31			0.96	%
Total interest earning assets (2)		2,422,212				47,764			3.98	%			2,278,232				45,689			4.04	%
Allowance for loan losses		(24,265	)										(24,053	)
Non-interest earning assets		147,788											134,326
Total assets	$	2,545,735										$	2,388,505
Interest bearing liabilities
Interest bearing demand deposits	$	314,074			$	198			0.13	%		$	205,896			$	114			0.11	%
Money market deposits		721,790				1,090			0.30	%			597,015				944			0.32	%
Savings deposits		185,782				344			0.37	%			176,180				396			0.45	%
Time deposits		335,721				639			0.38	%			495,234				1,859			0.76	%
Total interest bearing deposits		1,557,367				2,271			0.29	%			1,474,325				3,313			0.45	%
Borrowings		72,234				538			1.50	%			137,995				1,007			1.47	%
Subordinated debentures		29,645				881			5.94	%			29,533				881			5.97	%
Total interest bearing liabilities		1,659,246				3,690			0.45	%			1,641,853				5,201			0.64	%
Non-interest bearing deposits		595,273											485,149
Other liabilities		19,218											15,571
Stockholders' equity		271,998											245,932
Total liabilities and stockholders' equity	$	2,545,735										$	2,388,505
Net interest income/interest rate spread (2)						44,074			3.53	%							40,488			3.40	%
Net interest margin (2) (4)									3.67	%										3.58	%
Tax equivalent adjustment (2)						(15	)										(20	)
Net interest income					$	44,059										$	40,468
(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
		6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
EARNINGS
Net interest income		$	22,910			$	21,149			$	20,641			$	20,781			$	20,421
Provision for loan losses			1,298				642				825				158				(162	)
Non-interest income			1,463				1,267				2,211				1,901				1,342
Non-interest expense			11,409				11,122				11,825				10,522				10,155
Income tax expense			2,843				2,494				2,363				2,966				2,877
Net income			8,823				8,158				7,839				9,036				8,893
PERFORMANCE RATIOS
Return on average assets (1)			1.38	%			1.31	%			1.27	%			1.46	%			1.48	%
Adjusted return on average assets (1) (2)			1.38	%			1.31	%			1.33	%			1.48	%			1.48	%
Return on average equity (1)			12.92	%			12.25	%			11.77	%			13.86	%			14.26	%
Adjusted return on average equity (1) (2)			12.92	%			12.25	%			12.36	%			14.04	%			14.26	%
Return on average tangible equity (1) (2)			13.93	%			13.22	%			12.63	%			14.90	%			15.37	%
Adjusted return on average tangible equity (1) (2)			13.93	%			13.22	%			13.26	%			15.09	%			15.37	%
Net interest margin (1) (3)			3.76	%			3.57	%			3.52	%			3.54	%			3.57	%
Total cost of deposits (1)			0.23	%			0.19	%			0.21	%			0.25	%			0.30	%
Efficiency ratio (2)			46.81	%			49.62	%			49.57	%			45.75	%			46.66	%
SHARE DATA
Common shares outstanding			19,483,415				19,634,744				19,472,364				19,464,388				19,678,528
Basic earnings per share		$	0.45			$	0.42			$	0.40			$	0.46			$	0.45
Diluted earnings per share			0.45				0.41				0.40				0.46				0.45
Adjusted diluted earnings per share (2)			0.45				0.41				0.42				0.46				0.45
Tangible book value per share (2)			13.08				12.79				12.67				12.45				12.02
Book value per share			14.10				13.81				13.69				13.37				12.94
MARKET DATA
Market value per share		$	13.98			$	14.22			$	14.51			$	14.09			$	13.54
Market value / Tangible book value			106.84	%			111.14	%			114.53	%			113.21	%			112.61	%
Market capitalization		$	272,378			$	279,206			$	282,544			$	274,253			$	266,447
CAPITAL & LIQUIDITY
Tangible stockholders' equity / tangible assets (2)			10.00	%			9.84	%			9.91	%			10.01	%			9.76	%
Stockholders' equity / assets			10.70	%			10.53	%			10.62	%			10.67	%			10.42	%
Loans / deposits			102.54	%			98.80	%			99.88	%			97.96	%			100.87	%
ASSET QUALITY
Net charge-offs (recoveries)		$	404			$	247			$	6			$	(121	)		$	116
Nonperforming loans			12,704				12,591				13,001				11,488				9,558
Nonperforming assets			12,997				12,884				13,773				11,967				10,038
Net charge offs (recoveries) / average loans (1)			0.07	%			0.05	%			0.00	%			(0.02	%)			0.02	%
Nonperforming loans / total loans			0.57	%			0.59	%			0.62	%			0.57	%			0.47	%
Nonperforming assets / total assets			0.51	%			0.50	%			0.55	%			0.49	%			0.41	%
Allowance for loan losses / total loans			1.13	%			1.12	%			1.12	%			1.14	%			1.10	%
Allowance for loan losses / total loans (excluding PPP loans)			1.13	%			1.13	%			1.15	%			1.19	%			1.18	%
Allowance for loan losses / nonperforming loans			197.06	%			191.72	%			182.65	%			199.57	%			236.95	%
OTHER DATA
Total assets		$	2,568,137			$	2,573,845			$	2,510,298			$	2,438,020			$	2,443,047
Total loans			2,220,223				2,151,751				2,111,991				2,004,289				2,053,938
Total deposits			2,165,163				2,177,895				2,114,602				2,045,966				2,036,228
Total stockholders' equity			274,702				271,068				266,666				260,179				254,571
Number of full-time equivalent employees (4)			233				219				217				209				215
(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 8 and 4 full-time equivalent seasonal interns as of June 30, 2022 and 2021, respectively.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
		As of the Quarter Ended
		6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
LOAN COMPOSITION
Commercial and industrial		$	321,205			$	321,979			$	350,103			$	308,991			$	379,916
Commercial real estate:
Owner-occupied			517,791				493,999				470,022				444,635				427,094
Investor			917,905				888,622				848,021				832,727				814,762
Construction and development			117,011				96,585				109,292				112,112				127,329
Multi-family			201,269				193,865				173,728				145,245				142,015
Total commercial real estate			1,753,976				1,673,071				1,601,063				1,534,719				1,511,200
Residential real estate:
Residential mortgage and first lien home equity loans			98,841				99,992				106,204				103,890				108,842
Home equity–second lien loans and revolving lines of credit			30,491				30,485				31,375				29,998				29,422
Total residential real estate			129,332				130,477				137,579				133,888				138,264
Consumer and other			19,694				30,096				27,762				31,946				31,584
Total loans prior to deferred loan fees and costs			2,224,207				2,155,623				2,116,507				2,009,544				2,060,964
Net deferred loan fees and costs			(3,984	)			(3,872	)			(4,516	)			(5,255	)			(7,026	)
Total loans		$	2,220,223			$	2,151,751			$	2,111,991			$	2,004,289			$	2,053,938
LOAN MIX
Commercial and industrial			14.5	%			15.0	%			16.6	%			15.4	%			18.5	%
Commercial real estate:
Owner-occupied			23.3	%			23.0	%			22.3	%			22.2	%			20.8	%
Investor			41.3	%			41.3	%			40.1	%			41.5	%			39.7	%
Construction and development			5.3	%			4.5	%			5.2	%			5.6	%			6.2	%
Multi-family			9.1	%			9.0	%			8.2	%			7.2	%			6.9	%
Total commercial real estate			79.0	%			77.8	%			75.8	%			76.5	%			73.5	%
Residential real estate:
Residential mortgage and first lien home equity loans			4.4	%			4.6	%			5.0	%			5.2	%			5.3	%
Home equity–second lien loans and revolving lines of credit			1.4	%			1.4	%			1.5	%			1.5	%			1.4	%
Total residential real estate			5.8	%			6.0	%			6.5	%			6.7	%			6.7	%
Consumer and other			0.9	%			1.4	%			1.4	%			1.7	%			1.6	%
Net deferred loan fees and costs			(0.2	%)			(0.2	%)			(0.3	%)			(0.3	%)			(0.3	%)
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
		6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
DEPOSIT COMPOSITION
Non-interest bearing demand deposits		$	600,402			$	597,333			$	558,775			$	536,905			$	534,475
Interest bearing demand deposits			318,687				314,564				293,647				241,869				211,074
Money market and savings deposits			929,075				936,848				871,074				845,607				817,424
Time deposits			316,999				329,150				391,106				421,585				473,255
Total Deposits		$	2,165,163			$	2,177,895			$	2,114,602			$	2,045,966			$	2,036,228
DEPOSIT MIX
Non-interest bearing demand deposits			27.7	%			27.4	%			26.4	%			26.3	%			26.3	%
Interest bearing demand deposits			14.7	%			14.5	%			13.9	%			11.8	%			10.4	%
Money market and savings deposits			42.9	%			43.0	%			41.2	%			41.3	%			40.1	%
Time deposits			14.7	%			15.1	%			18.5	%			20.6	%			23.2	%
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
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Return on Average Tangible Equity
Net income (numerator)	$	8,823			$	8,158			$	7,839			$	9,036			$	8,893
Average stockholders' equity	$	273,829			$	270,147			$	264,216			$	258,596			$	250,143
Less: Average Goodwill and other intangible assets, net		19,823				19,916				17,910				17,937				18,001
Average Tangible stockholders' equity (denominator)	$	254,006			$	250,231			$	246,306			$	240,659			$	232,142
Return on Average Tangible equity (1)		13.93	%			13.22	%			12.63	%			14.90	%			15.37	%
Tangible Book Value Per Share
Stockholders' equity	$	274,702			$	271,068			$	266,666			$	260,179			$	254,571
Less: Goodwill and other intangible assets, net		19,768				19,854				19,971				17,920				17,965
Tangible stockholders' equity (numerator)	$	254,934			$	251,214			$	246,695			$	242,259			$	236,606
Common shares outstanding (denominator)		19,483,415				19,634,744				19,472,364				19,464,388				19,678,528
Tangible book value per share	$	13.08			$	12.79			$	12.67			$	12.45			$	12.02
Tangible Equity / Assets
Stockholders' equity	$	274,702			$	271,068			$	266,666			$	260,179			$	254,571
Less: Goodwill and other intangible assets, net		19,768				19,854				19,971				17,920				17,965
Tangible stockholders' equity (numerator)	$	254,934			$	251,214			$	246,695			$	242,259			$	236,606
Total assets	$	2,568,137			$	2,573,845			$	2,510,298			$	2,438,020			$	2,443,047
Less: Goodwill and other intangible assets, net		19,768				19,854				19,971				17,920				17,965
Tangible total assets (denominator)	$	2,548,369			$	2,553,991			$	2,490,327			$	2,420,100			$	2,425,082
Tangible stockholders' equity / tangible assets		10.00	%			9.84	%			9.91	%			10.01	%			9.76	%
Efficiency Ratio
Non-interest expense	$	11,409			$	11,122			$	11,825			$	10,522			$	10,155
Less: Merger-related expenses		-				-				498				145				-
Adjusted non-interest expense (numerator)	$	11,409			$	11,122			$	11,327			$	10,377			$	10,155
Net interest income	$	22,910			$	21,149			$	20,641			$	20,781			$	20,421
Non-interest income		1,463				1,267				2,211				1,901				1,342
Total revenue	$	24,373			$	22,416			$	22,852			$	22,682			$	21,763
Efficiency ratio		46.81	%			49.62	%			49.57	%			45.75	%			46.66	%
(1) Annualized.

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
	For the Quarter Ended
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income	$	8,823			$	8,158			$	7,839			$	9,036			$	8,893
Add: Merger-related expenses (1)		-				-				393				115				-
Adjusted net income	$	8,823			$	8,158			$	8,232			$	9,151			$	8,893
Diluted weighted average common shares outstanding		19,794,657				19,768,452				19,725,294				19,842,817				19,883,076
Average assets	$	2,568,443			$	2,522,775			$	2,447,399			$	2,456,617			$	2,410,353
Average equity	$	273,829			$	270,147			$	264,216			$	258,596			$	250,143
Average Tangible Equity	$	254,006			$	250,231			$	246,306			$	240,659			$	232,142
Adjusted diluted earnings per share	$	0.45			$	0.41			$	0.42			$	0.46			$	0.45
Adjusted return on average assets (2)		1.38	%			1.31	%			1.33	%			1.48	%			1.48	%
Adjusted return on average equity (2)		12.92	%			12.25	%			12.36	%			14.04	%			14.26	%
Adjusted return on average tangible equity (2)		13.93	%			13.22	%			13.26	%			15.09	%			15.37	%
(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Annualized.

FAQ

What were First Bank's Q2 2022 net income and EPS?

First Bank reported a net income of $8.8 million, or $0.45 per diluted share for Q2 2022.

How did First Bank's net interest margin change in Q2 2022?

The net interest margin increased to 3.76% in Q2 2022, up 19 basis points from the previous quarter.

What is the current status of First Bank's loan portfolio?

As of June 30, 2022, total loans were $2.22 billion, reflecting a 5.1% increase year-over-year, with a significant portion being organic growth.

What dividend did First Bank declare in July 2022?

First Bank declared a quarterly cash dividend of $0.06 per common share, payable on August 26, 2022.

What are the asset quality metrics for First Bank as of Q2 2022?

First Bank reported net charge-offs of 0.07% and nonperforming loans at 0.57% as of June 30, 2022.