PR Newswire | Apr 22, 2021 04:01PM EDT

04/22 15:01 CDT

The Bank of Princeton Announces First Quarter 2021 Results PRINCETON, N.J., April 22, 2021

PRINCETON, N.J., April 22, 2021 /PRNewswire/ -- The Bank of Princeton (the "Bank") (NASDAQ: BPRN) today reported its unaudited results of operations and financial condition for the quarter ended March 31, 2021. The Bank reported net income of $4.9 million, or $0.70 per diluted common share, for the first quarter of 2021, compared to net income of $4.1 million, or $0.60 per diluted common share, for the fourth quarter of 2020, and net income of $3.0 million, or $0.44 per diluted common share, for the first quarter of 2020. The increase in net income, when compared to the three months ended December 31, 2020, was primarily due to a $1.2 million increase in net-interest income and a $525 thousand reduction in the provision for loan losses, partially offset by a $307 thousand decrease in non-interest income and a $349 thousand increase in non-interest expense. The increase in net income, when comparing it to the three months ended March 31, 2020, was primarily due to an increase in net-interest income of $4.3 million partially offset by a $475 thousand increase in the provision for loan losses, a $628 thousand decrease in non-interest income, and a $676 thousand increase in non-interest operating expenses.

Highlights for the quarter-ended March 31, 2021 are as follows:

* Total loans increased $94.2 million since December 31, 2020, to $1.5 billion or by 6.9%. * Net interest income for the first quarter of 2021 increased $4.3 million or 40.5% over the same period in 2020. * The Bank decreased its cost of funds by 88 basis points in the first quarter 2021 from the same period 2020. * The Bank efficiency ratio decreased to 51.8% for the first quarter 2021 compared to 64.3% from the first quarter 2020. * The ratio of nonperforming loans to total loans continues to be low at 0.14% as of March 31, 2021 compared to 0.12% at December 31, 2020 and compared to 0.22% at March 31, 2020.

President/CEO Edward Dietzler stated that, "The Bank started off the year very strong with a 17.5% increase in earnings per share with both asset and deposit growth as well as our net interest margin increasing 35 basis points from the fourth quarter of 2020."

Chairman Richard Gillespie added, "The Bank continues to outperform significantly even in the face of COVID-19 challenges. Our profitability continues to be well positioned for the balance of 2021."

Balance Sheet Review

Total assets were $1.68 billion at March 31, 2021, an increase of $81.7 million or 5.1% when compared to $1.60 billion at the end of 2020. The primary reason for the increase in total assets was due to an increase in net loans of approximately $91.7 million, primarily consisting of approximately $98.3 million in originations of phase two Payroll Protection Program ("PPP") loans guaranteed by the U.S. government, and a $53.4 million increase in construction loans, partially offset by a decrease of $42.8 million of PPP loans from the first phase as a result of the U.S. government forgiveness program.

Total deposits at March 31, 2021 increased by $31.4 million, or 2.3%, when compared to December 31, 2020, primarily due to loan proceeds maintained in non-interest demand accounts from customers who received PPP loans, stimulus payments to individuals under the recently enacted American Rescue Plan Act. as well as growth from new branches added during the third quarter of 2020. When comparing deposit products between the two periods, non-interest checking increased $73.5 million, savings increased $14.1 million and money markets increased $19.6 million. These increases were partially offset by a decrease in interest-bearing demand accounts of $47.7 million, primarily municipal deposits and a decrease of $28.0 million in certificates of deposit. In addition, the Bank had approximately $43.0 million in overnight borrowings at March 31, 2021 and no outstanding borrowings at December 31, 2020.

Total stockholders' equity at March 31, 2021 increased $3.7 million or 1.8% when compared to the end of 2020. This increase was primarily due to earnings recorded during the three months of 2021 minus the cash dividend paid during the period, and minus the $552 thousand decrease in the fair-value of the available-for-sale investment portfolio related to increase in the treasury curve. The ratio of equity to total assets at March 31, 2021 was 12.6% compared to 13.0% at December 31, 2020, as the current period ratio was impacted by the 5.1% growth in assets.

Asset Quality

At March 31, 2021, non-performing assets were $2.4 million, an increase of $822 thousand, or 49.1%, when compared to the amount at December 31, 2020. This increase at March 31, 2021 from December 31, 2020 was primarily due to the addition of three loans totaling $1.3 million being classified as non-performing, partially offset by $360 thousand in principal charge-offs. Troubled debt restructurings ("TDR") totaled $8.5 million at March 31, 2021 and $8.6 million at December 31, 2020. Two TDR loans totaling $2.3 million have deferred their payments under the COVID-19 loan deferral program and the remaining loans are performing to their agreed upon terms.

As part of the Bank's commitment to provide assistance during the COVID-19 pandemic, the Bank agreed to defer either the principal portion or both principal and interest payments for its customers who requested the deferral and were not delinquent prior to the government shut down. The Bank is seeing a favorable trend as a majority of customers have returned to their regular payment schedule. As of March 31, 2021, the Bank had remaining 8 loans that were modified totaling $16.3 million, and at December 31, 2020, the Bank had remaining 14 loans that were modified totaling $45.0 million, down from the 240 loans totaling $263.5 million originally approved for such deferment reported as of June 30, 2020. Under current accounting guidance, these loans are not required to be classified as TDR's.

Review of Quarterly Financial Results

Net-interest income was $14.8 million for the first quarter of 2021, compared to $13.6 million for the fourth quarter of 2020 and $10.5 million for the first quarter of 2020. The increase from the previous quarter was a result of an increase in interest income of $933 thousand and a $256 thousand, or 11.2%, decrease in interest paid on liabilities, partially resulting from a 9 basis points reduction in the rate on interest bearing deposits. Interest income for the first three months of 2021 included an increase of $836 thousand in accretion from deferred fees received from the first phase of PPP loans, due to the U.S. government forgiving the debt and paying off the loans. The net interest margin for the first quarter of 2021 was 3.98%, increasing 35 basis points when compared to the fourth quarter of 2020. This increase was primarily associated with a reduction of 8 basis points in total interest cost of funds, and an increase of 28 basis points in the yield on earning assets. When comparing the three month periods ended March 31, 2021 and 2020, net interest income increased $4.3 million, which was primarily due to a reduction in interest expense of $2.5 million aided by an increase in interest income of $1.7 million caused by a $152.4 million increase in interest earning assets. The reduction in interest expense was attributed to decline of 95 basis points in the rate paid on its interest-bearing liabilities resulting from the two Federal Open Market Committee ("FOMC") rate reductions in March of 2020 totaling 150 basis points . The total cost of funds rate was 0.60%, including non-interest deposits, for the first quarter 2021.

The provision for credit losses was $1.1 million for the three month period ended March 31, 2021. The comparable amounts were $1.7 million and $650 thousand for the three months ended December 31, 2020 and March 31, 2020, respectively. The primary reason for the elevated provision in the first quarter 2021, when compared to the same period of 2020, was due to the Bank's partially charging off four loans totaling $1.1 million. The general reserves were also impacted by an increase in the qualitative factors dollar contribution to the reserve due to growth within the Bank's loan portfolio mainly in the construction and development loans and partially offset by a reduction in the historical loss factor resulting from decline in level of prior period charge-offs. As of March 31, 2021, the Bank did not apply any qualitative factors to the loans originated from PPP, based on the U.S government's guarantee and the Coronavirus Aid, Relief and Economic Securities Act requirement to classify these loans at 0% in determining risk-based capital ratio. The rate of allowance for credit losses to period end loans was 1.10% (excluding PPP loans, the coverage ratio was 1.31%) at March 31, 2021, compared to 1.18% (excluding PPP loans, the coverage ratio was 1.35%) at December 31, 2020, which reflects management's assessment of the credit quality in the loan portfolio.

At March 31, 2021, the Bank's concentration in the loan portfolio associated with the segment's management believes could be affected by the pandemic: restaurants, hotels and retail, which totaled $16.1 million, $37.6 million and $40.7 million, respectively.

Total non-interest income for the first quarter of 2021 decreased $628 thousand to $863 thousand, or by 42.1%, when compared to the same period in 2020. This decrease was primarily due to a $498 thousand reduction from the realized gains on the sale of available-for-sale securities portfolio and a $178 thousand reduction in loan fees collected. Total non-interest income when comparing first quarter of 2021 to the fourth quarter of 2020 decreased $307 thousand, primarily due to a reduction in loans fees.

Total non-interest expense for the first quarter of 2021 increased $676 thousand, or 8.9%, when compared to the same period in 2020. This increase was primarily due to an increase in additional operating cost associated with the Bank's branch expansion strategy. When comparing March 31, 2021 to the immediately prior quarter, non-interest expense increased $349 thousand, or 4.4%, primarily due to increases in salaries and benefits expense, data processing expenses, and professional fees expense, partially offset by a reduction in Federal Deposit Insurance expense.

For the three month period ended March 31, 2021, the Bank recorded an income tax expense of $1.4 million, resulting in an effective tax rate of 22.2%, compared to an income tax expense of $1.1 million resulting in an effective tax rate of 20.7% for the three month period ended December 31, 2020, and compared to an income tax expense of $726 thousand resulting in an effective tax rate of 19.3% for the three month period ended March 31, 2020. During the third quarter of 2020, the New Jersey Governor signed a law extending and retroactively increasing New Jersey's corporation business tax surtax by 1.0% to 2.5%. The effective tax rate for the first quarter 2021 and the fourth quarter of 2020 were impacted by the level of tax-free income against the level of taxable earnings.

COVID-19

The full impact of the coronavirus continues to evolve as of the date of this press release. As such, it is uncertain as to the full magnitude that the pandemic will have on the Bank's financial condition, liquidity and future results of operations.

The Bank continues to work closely with its loan customers to educate and guide them on their options for financial assistance, including the PPP and payment relief through deferral and waived fees. The Bank continues to endeavor to provide a fast and flexible response to the quickly changing circumstances and is confident it will navigate successfully through these trying times.

About The Bank of Princeton

The Bank of Princeton is a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 20 branches in New Jersey, including four in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Hamilton, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville. There are also four branches in the Philadelphia, Pennsylvania area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation ("FDIC").

Forward-Looking Statements

The Bank of Princeton may from time to time make written or oral "forward-looking statements," including statements contained in the Bank's filings with the FDIC, in its reports to stockholders and in other communications by the Bank (including this press release), which are made in good faith by the Bank pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements involve risks and uncertainties, such as statements of the Bank's plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Bank's control). The following factors, among others, could cause the Bank's financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the extent of the adverse impact of the current global coronavirus outbreak on our customers, prospects and business, as well as the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area, the strength of the United States economy in general and the strength of the local economies in which the Bank conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; market volatility; the value of the Bank's products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors' products and services; the willingness of customers to substitute competitors' products and services for the Bank's products and services; credit risk associated with the Bank's lending activities; risks relating to the real estate market and the Bank's real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Bank; technological changes; acquisitions; changes in consumer spending and saving habits; those risks set forth in the Bank's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Risk Factors," and the success of the Bank at managing the risks involved in the foregoing.

The Bank cautions that the foregoing list of important factors is not exclusive. The Bank does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Bank, except as required by applicable law or regulation.

Contact George Rapp609.454.0718grapp@thebankofprinceton.com

The Bank of Princeton

Summary Statements of Financial Condition Data

(unaudited)

(dollars in thousands, except per share data)

Mar 31, 2021 Mar 31, 2021 Mar 31, 2021 Mar 31, 2021 vs vs vs vs Dec 31, 2020 Dec 31, 2020 Mar 31, 2020 Mar 31, 2020

Mar 31, 2021 Dec 31, 2020 Mar 31, 2020 $ % $ % Change Change Change Change

ASSETS

Cash and cash equivalents $ 67,517 $ 77,429 $ 51,437 $ (9,912) (12.80) % $ 16,080 31.26 %

Securities available for sale taxable 25,964 25,112 36,738 852 3.39 (10,774) (29.33)

Securities available for sale tax exempt 46,443 50,516 56,347 (4,073) (8.06) (9,904) (17.58)

Securities held to maturity 214 215 220 (1) (0.47) (6) (2.73)

Loans receivable, net of deferred 1,455,158 1,363,486 1,191,812 91,672 6.72 263,346 22.10

Allowance for loan losses (16,042) (16,027) (12,322) (15) 0.09 (3,720) 30.19

Other assets 105,284 102,107 100,344 3,177 3.11 4,940 4.92

TOTAL ASSETS $ 1,684,538 $ 1,602,838 $ 1,424,576 $ 81,700 5.10 % $ 259,962 18.25 %

LIABILITIES

Non interest checking $ 288,852 $ 215,381 $ 150,184 $ 73,471 34.11 % $ 138,668 92.33 %

Interest checking 241,061 288,769 200,405 (47,708) (16.52) 40,656 20.29

Savings 193,046 178,932 161,921 14,114 7.89 31,125 19.22

Money market 324,881 305,290 259,885 19,591 6.42 64,996 25.01

Time deposits over $250,000 55,117 67,924 120,062 (12,807) (18.85) (64,945) (54.09)

Other time deposits 295,754 310,970 307,898 (15,216) (4.89) (12,144) (3.94)

Total Deposits 1,398,711 1,367,266 1,200,355 31,445 2.30 198,356 16.52

Borrowings 43,000 - - 43,000 - 43,000 N/A

Other liabilities 30,280 26,754 25,207 3,526 13.18 5,073 20.13

TOTAL LIABILITIES 1,471,991 1,394,020 1,225,562 77,971 5.59 % 246,429 20.11 %

STOCKHOLDERS' EQUITY

Common stock 34,022 33,949 33,855 73 0.22 167 0.49

Paid-in capital 79,879 79,708 79,349 171 0.21 530 0.67

Retained earnings 97,407 93,370 84,630 4,037 4.32 12,777 15.10

Accumulated other comprehensive income (loss) 1,239 1,791 1,180 (552) (30.82) 59 5.00

TOTAL STOCKHOLDERS' EQUITY 212,547 208,818 199,014 3,729 1.79 % 13,533 6.80 %

TOTAL LIABILITIES

AND STOCKHOLDERS' EQUITY $ 1,684,538 $ 1,602,838 $ 1,424,576 $ 81,700 5.10 % $ 259,962 18.25 %

Book value per common share $ 31.24 $ 30.75 $ 29.39 $ 0.49 1.59 % $ 1.85 6.29 %

Tangible book value per common share^1 $ 29.52 $ 29.00 $ 27.56 $ 0.52 1.79 % $ 1.96 7.11 %

^1Tangible book value per common share in a non-GAAP measure that representsbook value per common share which excludes goodwill and core depositintangible.

The Bank of Princeton

Loan/Deposit Tables

(unaudited)

Loan receivable, net at March 31, 2021 and December 31, 2020 were comprised ofthe following:

March 31, December 31,

2020 2020

(Dollars in thousands)

Commercial real estate $ 807,752 $ 812,043

Commercial and industrial 37,009 40,597

Construction 316,447 263,032

Residential first-lien mortgages 61,102 66,857

Home equity / consumer 8,805 9,929

PPP (SBA loans) 231,375 175,878

Total loans 1,462,490 1,368,336

Deferred fees and costs (7,332) (4,850)

Allowance for loan losses (16,042) (16,027)

Loans, net $ 1,439,116 $ 1,347,459

The components of deposits at March 31, 2021 and December 31, 2020 were asfollows:

March 31, December 31,

2020 2020

(Dollars in thousands)

Demand, non-interest-bearing checking $ 288,852 $ 215,381

Demand, interest-bearing 241,061 288,769

Savings 193,046 178,932

Money Markets 324,881 305,290

Time deposits 350,871 378,894

Total Deposits $ 1,398,711 $ 1,367,266

The Bank of Princeton

Consolidated Statements of Operations

(unaudited)

Three Months Ended March 31,

2021 2020 $ Change % Change

(Dollars in thousands, except per share data)

Interest and Dividend Income

Loans and fees $ 16,328 $ 14,199 $ 2,129 15.0%

Available-for-Sale debt securities:

Taxable 108 310 (202) -65.2%

Tax-exempt 301 363 (62) -17.1%

Held-to-Maturity debt securities 4 3 1 33.3%

Other interest and dividend income 45 162 (117) -72.2%

Total Interest and Dividends 16,786 15,037 1,749 11.6%

Interest expense

Deposits 2,030 4,532 (2,502) -55.2%

Borrowings 1 3 (2) -66.7%

Total Interest Expense 2,031 4,535 (2,504) -55.2%

Net Interest Income 14,755 10,502 4,253 40.5%

Provision for Loan Losses 1,125 650 475 73.1%

Net Interest Income after Provision for Loan Losses 13,630 9,852 3,778 38.3%

Non-Interest income

Gain on sale of securities available for sale,net 7 505 (498) -98.6%

Income from bank-owned life insurance 273 296 (23) -7.8%

Fees and service charges 402 333 69 20.7%

Loan fees, including prepayment penalities 126 304 (178) -58.6%

Other 55 53 2 3.8%

Total Non-Interest Income 863 1,491 (628) -42.1%

Non-Interest Expense

Salaries and employee benefits 4,110 4,122 (12) -0.3%

Occupancy and equipment 1,520 1,202 318 26.5%

Professional fees 662 521 141 27.1%

Data processing and communications 871 803 68 8.5%

Federal deposit insurance 128 88 40 45.5%

Advertising and promotion 50 90 (40) -44.4%

Office expense 53 80 (27) -33.8%

Other real estate owned expense 9 - 9 N/A

Core deposit intangible 174 193 (19) -9.8%

Other 682 484 198 40.9%

Total Non-Interest Expense 8,259 7,583 676 8.9%

Income before income tax expense 6,234 3,760 2,474 65.8%

Income tax expense 1,382 726 656 90.4%

Net Income $ 4,852 $ 3,034 1,818 59.9%

Net income per common share - basic $ 0.71 $ 0.45 $ 0.26 57.8%

Net income per common share - diluted $ 0.70 $ 0.44 $ 0.26 59.1%

Weighted average shares outstanding - basic 6,804 6,766 38 0.6%

Weighted average shares outstanding - diluted 6,951 6,920 31 0.4%

The Bank of Princeton

Consolidated Statements of Operations (Current Quarter vs Prior Quarter)

(unaudited)

Quarter Ending

Mar 31, Dec 31,

2021 2020 $ Change % Change

(Dollars in thousands, except per share data)

Interest and Dividend Income

Loans and fees $ 16,328 $ 15,379 $ 949 6.2%

Available-for-Sale debt securities:

Taxable 108 103 5 4.9%

Tax-exempt 301 321 (20) -6.2%

Held-to-Maturity debt securities 4 2 2 100.0%

Other interest and dividend income 45 48 (3) -6.3%

Total Interest and Dividends 16,786 15,853 933 5.9%

Interest expense

Deposits 2,030 2,287 (257) -11.2%

Borrowings 1 - 1 0.0%

Total Interest Expense 2,031 2,287 (256) -11.2%

Net Interest Income 14,755 13,566 1,189 8.8%

Provision for Loan Losses 1,125 1,650 (525) -31.8%

Net Interest Income after Provision for Loan Losses 13,630 11,916 1,714 14.4%

Non-Interest income

Gain on sale of securities available for sale,net 7 17 (10) -58.8%

Income from bank-owned life insurance 273 281 (8) -2.8%

Fees and service charges 402 428 (26) -6.1%

Loan fees, including prepayment penalities 126 386 (260) -67.4%

Other 55 58 (3) -5.2%

Total Non-Interest Income 863 1,170 (307) -26.2%

Non-Interest Expense

Salaries and employee benefits 4,110 3,870 240 6.2%

Occupancy and equipment 1,520 1,499 21 1.4%

Professional fees 662 613 49 8.0%

Data processing and communications 871 788 83 10.5%

Federal deposit insurance 128 181 (53) -29.3%

Advertising and promotion 50 59 (9) -15.3%

Office expense 53 60 (7) -11.7%

Other real estate owned expense 9 - 9 N/A

Core deposit intangible 174 174 0 0.0%

Other 682 666 16 2.4%

Total Non-Interest Expense 8,259 7,910 349 4.4%

Income before income tax expense 6,234 5,176 1,058 20.4%

Income tax expense 1,382 1,073 309 28.8%

Net Income $ 4,852 $ 4,103 $ 749 18.3%

Net income per common share - basic $ 0.71 $ 0.60 $ 0.11 18.3%

Net income per common share - diluted $ 0.70 $ 0.60 $ 0.10 16.7%

Weighted average shares outstanding - basic 6,804 6,784 20 0.3%

Weighted average shares outstanding - diluted 6,951 6,878 73 1.1%

The Bank of Princeton

Consolidated Average Statement of Financial Condition

(unaudited)

For the Three Months Ended

March 31,

2021 2020

Average Yield/ Average Yield/

balance rate balance rate $ Change % Change

(Dollars in thousands)

Earning assets

Loans $ 1,377,302 4.81% $ 1,197,745 4.77% $ 179,557 0.04%

Securities

Taxable AFS 25,986 1.61% 56,641 2.18% (30,655) -0.57%

Tax exempt AFS 48,540 2.51% 56,875 2.55% (8,335) -0.04%

Held-to-maturity 215 5.27% 221 5.26% (6) 0.01%

Securities 74,741 2.21% 113,737 2.37% (38,996) -0.16%

Other interest earning assets

Interest-bearing bank accounts 49,986 0.24% 38,302 1.52% 11,684 -1.28%

Equities 1,388 4.56% 1,281 5.61% 107 -1.05%

Other interest earning assets 51,374 0.36% 39,583 1.65% 11,791 -1.29%

Total interest-earning assets 1,503,417 4.53% 1,351,065 4.48% 152,352 0.05%

Total non earning assets 113,352 95,402

Total Assets $ 1,616,769 $ 1,446,467

Interest-bearing liabilities

Checking $ 263,367 0.31% $ 220,018 1.00% $ 43,349 -0.69%

Savings 184,714 0.27% 157,263 1.16% 27,451 -0.89%

Money Market 312,648 0.33% 268,257 1.44% 44,391 -1.11%

Certificate of Deposit 368,692 1.59% 435,835 2.37% (67,143) -0.78%

Total interest-bearing deposits 1,129,421 0.73% 1,081,373 1.69% 48,048 -0.96%

Non interest bearing deposits 248,661 143,747

Total deposits 1,378,082 0.60% 1,225,120 1.48% 152,962 -0.88%

Borrowings 478 0.32% 803 1.64% (325) -1.32%

Total interest-bearing liabilities

(excluding non interest deposits) 1,129,899 0.73% 1,082,176 1.68% 47,723 -0.95%

Noninterest-bearing deposits 248,661 143,747

Total Cost of Funds 1,378,560 0.60% 1,225,923 1.48% 152,637 -0.88%

Accrued expenses and other liabilities 26,915 22,791

Stockholders' equity 211,294 197,753

Total liabilities and stockholders' equity $ 1,616,769 $ 1,446,467

Net interest spread 3.80% 2.79%

Net interest margin 3.98% 3.13%

Net interest margin (FTE)^1 4.09% 3.20%

^1Includes federal and state tax effect of tax exempt securities and loans.

The Bank of Princeton

Consolidated Average Statement of Financial Condition

(unaudited)

For the Quarter Ended

Mar 2021 Dec 2020

Average Yield/ Average Yield/

balance rate balance rate $ Change % Change

(Dollars in thousands)

Earning assets

Loans $ 1,377,302 4.81% $ 1,351,400 4.53% $ 25,902 0.28%

Securities

Taxable AFS 25,986 1.61% 26,145 1.57% (159) 0.04%

Tax exempt AFS 48,540 2.51% 51,707 2.48% (3,167) 0.03%

Held-to-maturity 215 5.27% 216 5.26% (1) 0.01%

Securities 74,741 2.21% 78,068 2.19% (3,327) 0.02%

Other interest earning assets

Interest-bearing bank accounts 49,986 0.24% 54,560 0.23% (4,574) 0.01%

Equities 1,388 4.56% 1,377 4.74% 11 -0.18%

Other interest earning assets 51,374 0.36% 55,937 0.34% (4,563) 0.02%

Total interest-earning assets 1,503,417 4.53% 1,485,405 4.25% 18,012 0.28%

Total non earning assets 113,352 92,007

Total Assets $ 1,616,769 $ 1,577,412

Interest-bearing liabilities

Checking $ 263,367 0.31% $ 242,076 0.31% $ 21,291 0.00%

Savings 184,714 0.27% 177,822 0.29% 6,892 -0.02%

Money Market 312,648 0.33% 303,158 0.35% 9,490 -0.02%

Certificate of Deposit 368,692 1.59% 391,985 1.73% (23,293) -0.14%

Total interest-bearing deposits 1,129,421 0.73% 1,115,041 0.82% 14,380 -0.09%

Non interest bearing deposits 248,661 228,410

Total deposits 1,378,082 0.60% 1,343,451 0.68% 34,631 -0.08%

Borrowings 478 0.32% 261 0.38% 217 -0.06%

Total interest-bearing liabilities 1,129,899 0.73% 1,115,302 0.82% 14,597 -0.09%

(excluding non interest deposits)

Noninterest-bearing deposits 248,661 228,410

Total Cost of Funds 1,378,560 0.60% 1,343,712 0.68% 34,848 -0.08%

Accrued expenses and other liabilities 26,915 26,156

Stockholders' equity 211,294 207,544

Total liabilities and stockholders' equity $ 1,616,769 $ 1,577,412

Net interest spread 3.80% 3.43%

Net interest margin 3.98% 3.63%

Net interest margin (FTE)^1 4.09% 3.69%

^1Includes federal and state tax effect of tax exempt securities and loans.

The Bank of Princeton

Quarterly Financial Highlights

(unaudited)

2021 2020 2020 2020 2020

Mar Dec Sep Jun Mar

Return on average assets 1.21% 1.03% 0.90% 0.82% 0.84%

Return on average equity 9.31% 7.86% 6.90% 6.27% 6.17%

Return on average tangible equity^1 9.86% 8.35% 7.50% 6.68% 6.59%

Net interest margin 3.98% 3.63% 3.45% 3.43% 3.13%

Net interest margin (FTE)^2 4.09% 3.69% 3.53% 3.49% 3.20%

Efficiency ratio - Non-GAAP^3 51.80% 52.55% 52.91% 61.10% 64.33%

Common Stock Data

Market value at period end 28.62 23.41 18.17 20.19 23.25

Market range:

High 29.67 26.44 20.45 23.91 32.25

Low 21.43 18.12 17.40 17.51 19.09

Book value per common share at period end 31.24 30.75 30.26 29.85 29.39

Tangible book value per common share at period end^4 29.52 29.00 28.48 28.04 27.56

CAPITAL RATIOS

Total Capital (to risk-weighted assets) 15.73% 16.03% 16.41% 16.01% 15.32%

Tier 1 Capital (to risk-weighted assets) 14.56% 14.81% 15.20% 14.95% 14.36%

Tier 1 Capital (to average assets) 12.45% 12.48% 12.27% 12.45% 12.91%

Period-end equity to assets 12.62% 13.03% 13.24% 12.69% 13.97%

Period-end tangible equity to tangible assets 11.92% 12.38% 12.56% 12.02% 13.21%

CREDIT QUALITY DATA AT PERIOD END

(Dollars in Thousands)

Net charge-offs and (recoveries) $1,100 $870 -$6 $6 $884

Annualized net charge-offs (recoveries) to average loans 0.319% 0.256% -0.001% 0.002% 0.297%

Total nonperforming assets 2,498 1,676 2,383 2,387 2,596

Accruing troubled debt restructurings (TDRs) 8,533 8,573 8,888 9,471 9,247

Total nonperforming assets and accruing TDRs $ 11,031 $ 10,249 $ 11,271 $ 11,858 $ 11,843

Allowance for credit losses as a percent of:

Period-end loans 1.12% 1.18% 1.14% 0.99% 1.03%

Nonaccrual loans 781.77% 956.26% 639.82% 557.90% 474.65%

Nonperforming assets 642.19% 956.26% 639.82% 557.90% 474.65%

As a percent of total loans:

Nonaccrual loans 0.14% 0.12% 0.18% 0.18% 0.22%

Accruing TDRs 0.59% 0.63% 0.66% 0.71% 0.78%

Nonaccrual loans and accruing TDRs 0.77% 0.75% 0.84% 0.88% 0.99%

^1Return on average tangible equity is a non-GAAP measure that represents therate of return on tangible common equity.

^2Includes the effect of tax exempt securities and loans

^3The efficiency ratio in a non-GAAP measure that represents the ratio ofnon-interest expense divided by the net-interest income

and non-interest income.

^4Tangible book value per common share is a non-GAAP measure that representsbook value per common share which

excludes goodwill and core deposit intangible.

View original content to download multimedia: http://www.prnewswire.com/news-releases/the-bank-of-princeton-announces-first-quarter-2021-results-301275384.html

SOURCE The Bank of Princeton