GlobeNewswire Inc | Apr 26, 2021 04:30PM EDT

April 26, 2021

Record Quarterly Net Income and EPS

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

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

First Quarter 2021 Performance Highlights:

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

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

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

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

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

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

Income Statement

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

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

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

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

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

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

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

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

Balance Sheet

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

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

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

Asset Quality and Capital Ratios

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

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

COVID-19 Response

First Bank participated in the PPP, established by the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act), during 2020 and the first quarter of 2021. The PPP is a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the SBA. The PPP provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover compensation-related business operating costs. As of March 31, 2021, First Bank had 1,200 PPP loans with a balance of $193.9 million. During the first quarter of 2021, First Bank originated 645 new PPP loans totaling $101.3 million and PPP loans totaling $44.6 million were forgiven. During the first quarter of 2021, the Bank realized $1.6 million in fee income on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of March 31, 2021, the Bank had $4.8 million in remaining unamortized fees associated with these loans.

First Bank continues to monitor and analyze its COVID-19 related financial hardship payment deferrals (COVID-19 deferrals) based on asset class and borrower type. As of March 31, 2021, the Banks population of COVID-19 deferrals was $22.1 million, or 1.1% of total loans, down from $35.9 million at December 31, 2020, or 1.8% of total loans.

Cash Dividend Declared

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

Conference Call

First Bank will host an earnings conference call on Tuesday, April 27, 2021, at 9:00 a.m. Eastern Time. The direct dial toll free number for the call is 844-825-9784. For those unable to participate in the call, a replay will be available by dialing 877-344-7529 (access code 10154313) from one hour after the end of the conference call until July 28, 2021. Replay information will also be available on our website at www.firstbanknj.com under the About Us tab. Click on Investor Relations to access the replay information for the conference call.

About First Bank

First Bank is a New Jersey state-chartered bank with 16 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Lawrence, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.4 billion in assets as of March 31, 2021, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol FRBA.

Forward Looking Statements

This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First Banks 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 Banks control. Statements preceded by, followed by or that otherwise include the words believes, expects, anticipates, intends, projects, estimates, plans and similar expressions or future or conditional verbs such as will, should, would, may and could are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions; continue to sustain its internal growth rate; provide competitive products and services that appeal to its customers and target markets; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the impact of disease pandemics, including COVID-19, on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank's investment securities portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank's ability to comply with applicable capital and liquidity requirements, including First Banks 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 Banks Annual Report on Form 10-K and any updates to those risk factors set forth in First Banks 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 Banks 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 Banks behalf may issue.

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i Return on average tangible equity is a non-U.S. GAAP financial measure and is calculated by dividing net income by average tangible equity (average equity minus average goodwill and other intangible assets). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

ii The efficiency ratio is a non-U.S. GAAP financial measure and is calculated by dividing non-interest expense by total net revenue (net interest income plus non-interest income). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

CONTACT: Patrick L. Ryan, President and CEO(609) 643-0168, patrick.ryan@firstbanknj.com



FIRST BANK AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(in thousands, except for share data)

March 31, 2021 (unaudited) December 31, 2020Assets Cash and due from banks $ 23,719 $ 24,203 Interest bearing deposits with banks 144,547 71,270 Cash and cash equivalents 168,266 95,473 Interest bearing time deposits with banks 2,657 4,371 Investment securities available for sale, at 71,050 61,731 fair valueInvestment securities held to maturity (fair value of $40,429at March 31, 2021 and $38,319 at December 40,132 37,593 31, 2020)Restricted investment in bank stocks 8,403 8,545 Other investments 6,513 6,498 Loans, net of deferred fees and costs 2,022,187 2,047,572 Less: Allowance for loan losses 22,926 23,974 Net loans 1,999,261 2,023,598 Premises and equipment, net 10,139 10,736 Other real estate owned, net 575 575 Accrued interest receivable 6,461 6,806 Bank-owned life insurance 50,526 50,197 Goodwill 16,253 16,253 Other intangible assets, net 1,771 1,745 Deferred income taxes 11,539 11,394 Other assets 12,030 10,755 Total assets $ 2,405,576 $ 2,346,270 Liabilities and Stockholders' Equity Liabilities: Non-interest bearing deposits $ 500,008 $ 424,119 Interest bearing deposits 1,470,483 1,479,498 Total deposits 1,970,491 1,903,617 Borrowings 141,617 161,135 Subordinated debentures 29,536 29,508 Accrued interest payable 952 561 Other liabilities 16,983 13,341 Total liabilities 2,159,579 2,108,162 Stockholders' Equity: Preferred stock, par value $2 per share; 10,000,000 shares authorized;no shares issued and outstanding - - Common stock, par value $5 per share; 40,000,000 shares authorized; 20,804,733shares issued and 19,663,065 shares outstanding at March 31, 2021 and20,742,158 shares issued and 19,707,474 103,330 103,135 outstanding at December 31, 2020Additional paid-in capital 78,974 78,887 Retained earnings 72,504 63,431 Accumulated other comprehensive income 410 839 Treasury stock, 1,141,668 at March 31, 2021 and 1,034,684 shares atDecember 31, 2020 (9,221 ) (8,184 )Total stockholders' equity 245,997 238,108 Total liabilities and stockholders' equity $ 2,405,576 $ 2,346,270

FIRST BANK AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(in thousands, except for share data, unaudited)

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

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

FIRST BANK AND SUBSIDIARIESQUARTERLY FINANCIAL HIGHLIGHTS(in thousands, except for share and employee data, unaudited) As of or For the Quarter Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020EARNINGS Net interest $ 20,047 $ 19,724 $ 17,630 $ 16,328 $ 15,871 incomeProvision for loan (1,053 ) 1,633 1,997 2,977 2,932 lossesNon-interest 2,300 1,312 1,946 1,880 1,214 incomeNon-interest 10,650 11,052 9,653 9,767 9,915 expenseIncome tax expense 3,089 2,156 2,023 1,347 1,005 Net income 9,661 6,195 5,903 4,117 3,233 PERFORMANCE RATIOS Return on average 1.66 % 1.06 % 1.03 % 0.74 % 0.63 %assets (1)Return on average 16.21 % 10.44 % 10.20 % 7.33 % 5.69 %equity (1)Return on averagetangible equity 17.52 % 11.30 % 11.08 % 7.97 % 6.19 %(1) (2)Net interest 3.60 % 3.56 % 3.23 % 3.07 % 3.30 %margin (1) (3)Total cost of 0.39 % 0.50 % 0.70 % 0.98 % 1.29 %deposits (1)Efficiency ratio 47.66 % 52.54 % 49.31 % 53.64 % 58.03 %(2) SHARE DATA Common shares 19,663,065 19,707,474 19,694,892 19,629,892 20,141,204 outstandingBasic earnings per $ 0.49 $ 0.31 $ 0.30 $ 0.21 $ 0.16 shareDiluted earnings 0.49 0.31 0.30 0.21 0.16 per shareTangible bookvalue per share 11.59 11.17 10.88 10.61 10.33 (2)Book value per 12.51 12.08 11.79 11.54 11.23 share MARKET DATA Market value per $ 12.17 $ 9.38 $ 6.20 $ 6.52 $ 6.94 shareMarket value /Tangible book 104.97 % 83.98 % 57.01 % 61.46 % 67.20 %valueMarket $ 239,300 $ 184,856 $ 122,108 $ 127,987 $ 139,780 capitalization CAPITAL & LIQUIDITYTangiblestockholders' 9.55 % 9.45 % 9.35 % 9.12 % 10.03 %equity / tangibleassets (2)Stockholders' 10.23 % 10.15 % 10.06 % 9.84 % 10.81 %equity / assetsLoans / deposits 102.62 % 107.56 % 109.22 % 101.65 % 101.90 % ASSET QUALITY Net (recoveries) $ (5 ) $ 465 $ 633 $ 1,013 $ 699 charge-offsNonperforming 10,676 10,234 12,694 14,082 13,815 loansNonperforming 11,251 10,809 13,397 15,224 14,976 assetsNet charge offs / 0.00 % 0.09 % 0.13 % 0.21 % 0.16 %average loans (1)Nonperformingloans / total 0.53 % 0.50 % 0.63 % 0.72 % 0.79 %loansNonperformingassets / total 0.47 % 0.46 % 0.58 % 0.66 % 0.72 %assetsAllowance for loanlosses / total 1.13 % 1.17 % 1.14 % 1.10 % 1.11 %loansAllowance for loanlosses / total 1.24 % 1.25 % 1.25 % 1.20 % 1.11 %loans (excludingPPP loans)Allowance for loanlosses / 214.74 % 234.26 % 179.66 % 152.26 % 140.99 %nonperformingloans OTHER DATA Total assets $ 2,405,576 $ 2,346,270 $ 2,309,897 $ 2,300,594 $ 2,092,444 Total loans 2,022,187 2,047,572 2,004,650 1,955,007 1,758,364 Total deposits 1,970,491 1,903,617 1,835,427 1,923,266 1,725,547 Totalstockholders' 245,997 238,108 232,300 226,450 226,259 equityNumber offull-time 211 204 204 209 208 equivalentemployees (4) (1) Annualized.(2) Non-U.S. GAAP financial measure that we believe provides management andinvestors with information that is useful in understanding ourfinancialperformance and condition. See accompanying table, "Non-U.S. GAAP FinancialMeasures", for calculation and reconciliation.(3) Tax equivalent using a federal income tax rate of 21%.(4) Includes 4 full-time equivalent seasonal interns as of June 30,2020.

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

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

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