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

July 26, 2021

For the Second Quarter and First Half of 2021: Continued Revenue and Asset Growth,Effective Management of Non-Interest Expense, and Solid Asset Quality Metrics

HAMILTON, N.J., July 26, 2021 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) today announced results for the three and six months ended June 30, 2021. Net income for the second quarter of 2021 was $8.9 million, or $0.45 per diluted share, compared to $4.1 million, or $0.21 per diluted share, for the second quarter of 2020. Return on average assets and return on average equity for the second quarter of 2021 were 1.48% and 14.26%, respectively, compared to 0.74% and 7.33%, respectively, for the second quarter of 2020. Net income for the first six months of 2021 was $18.6 million, or $0.93 per diluted share, compared to $7.4 million, or $0.36 per diluted share, for the same period in 2020.

Second Quarter and Year-to-Date 2021 Performance Highlights:

-- Total net revenue (net interest income plus non-interest income) of $21.8 million for the quarter increased $3.6 million, or 19.5%, compared to $18.2 million for the prior year quarter. -- Total loans of $2.05 billion at June 30, 2021 increased $31.8 million, or 1.6%, from the end of the linked first quarter of 2021 and were up $6.4 million from December 31, 2020. -- Continued participation in the Paycheck Protection Program (PPP) with $5.7 million in new PPP loans originated during the quarter for a total of $107.9 million during the first six months of 2021. There were $59.6 million in PPP loans forgiven during the second quarter of 2021 and $105.1 million for the six months ended June 30, 2021. PPP loans outstanding at June 30, 2021 were $139.9 million. -- Total deposits of $2.04 billion at June 30, 2021 increased $132.6 million, or 7.0%, from December 31, 2020 and $65.7 million, or 3.3%, compared to March 31, 2021. -- Asset quality metrics remained solid during the quarter, with net charge-offs of $116,000, or an annualized 0.02% of average loans, for second quarter 2021, compared to net charge-offs of $1.0 million, or an annualized 0.21% of average loans, for second quarter 2020. Nonperforming loans were $9.6 million at June 30, 2021, $14.1 million on June 30, 2020, and $10.7 million on March 31, 2021. The ratio of nonperforming loans to total loans was 0.47% at June 30, 2021, down from 0.72% at June 30, 2020, and 0.53% at March 31, 2021. -- Continued effective non-interest expense management was reflected in the second quarter 2021 efficiency ratioi of 46.66%, improved from 53.64% for second quarter 2020, and 47.66% for the linked first quarter of 2021.

Our team delivered another quarter of very strong financial performance. During the second quarter we continued to focus on generating revenues, managing expenses, maintaining solid asset quality metrics and expanding relationships with new and existing customers, said Patrick L. Ryan, President and Chief Executive Officer. Our strong earnings performance is reflected in the recent improvement in our stock price. Through the first six months of the year, the price of our common stock grew by more than 44%, outpacing the broad-market Russell 3000 Indexs 14% by a wide margin. We were pleased that our growing market capitalization position earned us inclusion in this index for the third year in a row.

Net interest income and non-interest income combined to generate strong total net revenue of $21.8 million, up nearly 20% year-over-year. While total revenue was down slightly from the record level achieved in the first quarter of 2021, we were able to drive further improvement in our efficiency ratio as a result of our ability to effectively manage expenses. As a reminder, during the first quarter we consolidated two Mercer County branches into nearby locations and reduced our leased corporate office space, which benefitted our non-interest expenses in the second quarter and will continue to favorably impact expenses going forward.

Total deposits surpassed the $2 billion threshold, a record level for us, as we further improved our deposit mix during the quarter. Non-interest bearing deposits have grown over $110 million in the first six months of 2021 and now represent over 26% of total deposits. We have also been able to reduce higher cost time deposits and significantly lower our rates on all deposit types. These efforts are allowing us to successfully reduce our overall deposit costs, which is helping to drive core profitability higher.

Were utilizing our strong liquidity position to fund loan growth with high-quality borrowers throughout our service footprint. Non-PPP loans rebounded nicely with $85.7 million in net loan growth during the second quarter. We maintained our solid asset quality position, reporting just two basis points of annualized net charge-offs to average loans, and we reduced both non-performing loans and non-performing assets during both the quarter and year ended June 30, 2021.

Overall, we are very pleased with our performance through the first half of the year. Our teams incredible efforts to help small businesses access critical funding during the past year have helped us attract new customers and deepen relationships with existing ones. With all our branch locations open and fully accessible to customers, and our reputation for personalized, relationship-based banking as strong as ever, we believe we are well-positioned for a strong and profitable second half of 2021.

Income Statement

First Banks net interest income for the second quarter of 2021 was $20.4 million, an increase of $4.1 million, or 25.1%, compared to $16.3 million in the second quarter of 2020. This increase was driven by a $3.3 million decrease in total interest expense, along with an $839,000 increase in interest and dividend income.

Interest income increased primarily due to a $139.6 million increase in average loans compared with the second quarter of 2020. Interest income was also impacted by $1.3 million in PPP loan fee income during the second quarter of 2021 compared to $739,000 in the second quarter of 2020. Also contributing to the increase was prepayment penalty income of $730,000 for the quarter ended June 30, 2021 compared to $184,000 for the quarter ended June 30, 2020. The reduction in interest expense was primarily a result of an 85-basis point reduction for the average rates paid on interest-bearing deposits. Six-month 2021 net interest income totaled $40.5 million, an increase of $8.3 million, or 25.7%, compared to $32.2 million for the same period in 2020. The increase in the 2021 year to date net interest income was also driven by solid growth in average loans, which increased by $217.1 million, or 11.9%, from the prior year period, along with a 95-basis-point decrease in the interest rate for interest-bearing deposits.

The second quarter 2021 tax equivalent net interest margin was 3.57%, an increase of 50 basis points compared to the prior year quarter and a decrease of three basis points compared to the linked first quarter of 2021. The increase compared to second quarter 2020 was primarily the result of an 85-basis-point reduction in the average interest rate paid on interest-bearing deposits. The lower average cost of interest-bearing deposits is reflective of the continued repricing of time deposits, as well as lower interest rates for money markets, interest-bearing demand deposits and savings. The decline in the margin compared to the first quarter of 2021 was primarily a result of an 11-basis-point decrease in interest earning asset yields, primarily loans. The year-to-date tax equivalent net interest margin was 3.58%, an increase of 40 basis points compared to the prior year period. The increase in the six-month net interest margin was principally a result of the lower cost of interest-bearing deposits, partially offset by lower earning asset yields.

First Bank reported a credit to the provision for loan losses of $162,000 for the second quarter of 2021, compared to a provision for loan losses of $3.0 million in the second quarter of 2020. The provision credit for the quarter ended June 30, 2021 was notably affected by an improving economic outlook combined with continued stable asset quality metrics, including annualized net charge-offs of 0.02% of average loans and nonperforming loans of 0.47% of total loans. For the year-to-date comparison, the Company reported a credit to the provision for loan losses of $1.2 million, compared to provision expense of $5.9 million for the same period in 2020. The variance in the six-month provision for loan losses was primarily due to the same factors as discussed for the three-month period.

Second quarter 2021 non-interest income decreased by $538,000 to $1.3 million, compared to $1.9 million in second quarter 2020, primarily the result of a $515,000 decrease in loan fees, comprised mostly of loan swap fees, and a $249,000 decrease in income from bank owned life insurance (BOLI) compared to the second quarter of 2020. Non-interest income totaled $3.6 million for the six months ended June 30, 2021, compared to $3.1 million for the same period in 2020. This increase in non-interest income for the first six months of 2021 was primarily a result of an increase of $732,000 in gains on the sale of loans, comprised mostly of SBA loans.

Non-interest expense for second quarter 2021 totaled $10.2 million, an increase of $388,000 compared to $9.8 million for the prior year quarter. The higher non-interest expense compared to second quarter 2020 was primarily a result of increased salaries and employee benefits expense partially offset by lower occupancy and equipment costs.

On a linked quarter basis, non-interest expense decreased $495,000 to $10.2 million for second quarter 2021 compared to $10.7 million for the first quarter of 2021. The lower non-interest expense compared to the linked first quarter of 2021 was primarily a result of reduced occupancy and equipment expenses.

Non-interest expense for the first six months of 2021 totaled $20.8 million, an increase of $1.1 million, or 5.7%, compared to $19.7 million for the same period in 2020. The increase was primarily a result of increased salaries and employee benefits, as well as higher occupancy and equipment, marketing and data processing costs. These increases were partially offset by lower other expense.

Income tax expense for the three months ended June 30, 2021 was $2.9 million with an effective tax rate of 24.4%, compared to $1.3 million with an effective tax rate of 24.7% for the second quarter of 2020 and $3.1 million with an effective tax rate of 24.2% for the first quarter of 2021. Income tax expense for the six months ended June 30, 2021 was $6.0 million with an effective tax rate of 24.3%, compared to $2.4 million for the first six months of 2020 with an effective tax rate of 24.2%.

Balance Sheet

Total assets at June 30, 2021 were $2.44 billion, an increase of $142.5 million, or 6.2%, compared to $2.30 billion at June 30, 2020, and an increase of $96.8 million, or 4.1%, from December 31, 2020. Total loans were $2.05 billion at June 30, 2021, an increase of $98.9 million, or 5.1%, compared to $1.96 billion at June 30, 2020, and an increase of $6.4 million, or 0.3%, from the 2020 year-end. Total loans as of June 30, 2021 increased $31.8 million, or 1.6%, from $2.02 billion at March 31, 2021, reflecting organic, net non-PPP loan growth of $85.7 million, partially offset by a net decline in PPP loans of $53.9 million.

Total deposits were $2.04 billion at June 30, 2021, an increase of $65.7 million, or 3.3%, compared to $1.97 billion at March 31, 2021, and an increase of $132.6 million, or 7.0%, from December 31, 2020. Non-interest-bearing deposits totaled $534.5 million at June 30, 2021, an increase of $34.5 million, or 6.9%, from March 31, 2021, reflective of continued growth in commercial deposits primarily related to expanded business banking relationships.

Stockholders equity was $254.6 million at June 30, 2021, compared to $238.1 million on December 31, 2020. The growth in stockholders equity at June 30, 2021 was primarily a result of year-to-date net income of $18.6 million, partially offset by treasury stock repurchases of $1.3 million and cash dividends paid of $1.2 million during the six months ended June 30, 2021.

As of June 30, 2021, the Bank continued to exceed all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 9.84%, a Tier 1 Risk-Based capital ratio of 10.88%, a Common Equity Tier 1 Capital ratio of 10.88%, and a Total Risk-Based capital ratio of 13.30%.

Asset Quality

First Banks asset quality metrics have steadily improved during the past 12 months. Net charge-offs were $116,000 for the second quarter of 2021, compared to net charge-offs of $1.0 million for the second quarter of 2020 and net recoveries of $5,000 for the first quarter of 2021. Net charge-offs as an annualized percentage of average loans were 0.02% in second quarter 2021, compared to 0.21% in second quarter 2020. Nonperforming loans as a percentage of total loans at June 30, 2021 were 0.47%, compared with 0.72% on June 30, 2020 and 0.53% at March 31, 2021. Nonperforming loans were $9.6 million at June 30, 2021, down from $14.1 million on June 30, 2020, and down from $10.7 million on March 31, 2021. The allowance for loan losses to nonperforming loans was 236.95% at June 30, 2021, compared with 152.26% at the end of second quarter 2020, and 214.74% at March 31, 2021.

COVID-19 Response

First Bank participated in the PPP, established by the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act), during 2020 and the first half of 2021. The PPP is a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the U.S. Small Business Administration (SBA). The PPP provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover compensation-related business operating costs. The PPP came to an end during the quarter ended June 30, 2021. As of June 30, 2021, First Bank had 1,024 PPP loans with outstanding balances of $139.9 million. During the first half of 2021, First Bank originated 783 new PPP loans totaling $107.9 million. During the first six months of 2021, PPP loans totaling $105.1 million were forgiven. During the six months ended June 30, 2021, the Bank realized $2.9 million in fee income on these loans as any deferred fees remaining on the forgiven loans were accelerated. As of June 30, 2021, the Bank had $4.5 million in remaining unamortized fees associated with outstanding balances of PPP loans.

First Bank continues to monitor and analyze its COVID-19 related financial hardship payment deferrals (COVID-19 deferrals) based on asset class and borrower type. As of June 30, 2021, the Banks population of COVID-19 deferrals was $11.7 million, or 0.57% of total loans, down from $22.1 million, or 1.1% of total loans, at March 31, 2021. Cash Dividend Declared

On July 20, 2021, First Banks Board of Directors declared a quarterly cash dividend of $0.03 per share to common stockholders of record at the close of business on August 6, 2021, payable on August 20, 2021.

Conference Call

First Bank will host its earnings call on Tuesday, July 27, 2021 at 9:00 AM eastern time. The direct dial toll free number for the call is 1-844-825-9784. For those unable to participate in the call, a replay will be available by dialing 1-877-344-7529 (access code 10158104) from one hour after the end of the conference call until October 27, 2021. Replay information will also be available on First Banks website at www.firstbanknj.com under the About Us tab. Click on Investor Relations to access the replay of the conference call.

About First Bank

First Bank is a New Jersey state-chartered bank with 16 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Lawrence, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.4 billion in assets as of June 30, 2021, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol FRBA.

Forward Looking Statements

This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First 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, 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 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.

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

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

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

June 30, 2021 (unaudited) December 31, 2020Assets Cash and due from banks $ 31,621 $ 24,203 Interest bearing deposits with banks 136,088 71,270 Cash and cash equivalents 167,709 95,473 Interest bearing time deposits with banks 2,290 4,371 Investment securities available for sale, at 80,310 61,731 fair valueInvestment securities held to maturity (fair value of $40,174 at June 30, 2021 and $38,319 at 39,695 37,593 December 31, 2020)Restricted investment in bank stocks 7,020 8,545 Other investments 6,529 6,498 Loans, net of deferred fees and costs 2,053,938 2,047,572 Less: Allowance for loan losses 22,648 23,974 Net loans 2,031,290 2,023,598 Premises and equipment, net 9,881 10,736 Other real estate owned, net 480 575 Accrued interest receivable 6,064 6,806 Bank-owned life insurance 50,869 50,197 Goodwill 16,253 16,253 Other intangible assets, net 1,712 1,745 Deferred income taxes 11,477 11,394 Other assets 11,468 10,755 Total assets $ 2,443,047 $ 2,346,270 Liabilities and Stockholders' Equity Liabilities: Non-interest bearing deposits $ 534,475 $ 424,119 Interest bearing deposits 1,501,753 1,479,498 Total deposits 2,036,228 1,903,617 Borrowings 106,617 161,135 Subordinated debentures 29,564 29,508 Accrued interest payable 465 561 Other liabilities 15,602 13,341 Total liabilities 2,188,476 2,108,162 Stockholders' Equity: Preferred stock, par value $2 per share; 10,000,000 shares authorized; no shares issued and outstanding - - Common stock, par value $5 per share; 40,000,000 shares authorized; 20,839,587 shares issued and 19,678,528 shares outstanding at June 30, 2021 and 20,742,158 shares issued and 19,707,474 103,569 103,135 outstanding at December 31, 2020Additional paid-in capital 79,080 78,887 Retained earnings 80,806 63,431 Accumulated other comprehensive income 592 839 Treasury stock, 1,161,059 at June 30, 2021 and 1,034,684 shares at December 31, 2020 (9,476 ) (8,184 ) Total stockholders' equity 254,571 238,108 Total liabilities and stockholders' $ 2,443,047 $ 2,346,270 equity

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

Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020Interest and Dividend IncomeInvestment $ 550 $ 612 $ 1,025 $ 1,162securities?taxableInvestment 45 76 93 154securities?tax-exemptInterest bearing deposits with banks,Federal funds sold 185 203 356 626and otherLoans, including fees 22,038 21,088 44,195 42,251 Total interest and 22,818 21,979 45,669 44,193 dividend income Interest Expense Deposits 1,463 4,565 3,313 9,951Borrowings 493 550 1,007 1,109Subordinated 441 536 881 934debentures Total interest 2,397 5,651 5,201 11,994 expenseNet interest income 20,421 16,328 40,468 32,199Provision for loan (162 ) 2,977 (1,215 ) 5,909losses Net interest income after provision for 20,583 13,351 41,683 26,290 loan losses Non-Interest Income Service fees on 165 116 341 287deposit accountsLoan fees 134 649 815 934Income frombank-owned life 343 592 672 936insuranceGains on sale of 315 38 849 117loansGains on recovery of 141 293 511 474acquired loansOther non-interest 244 192 454 346income Total non-interest 1,342 1,880 3,642 3,094 income Non-Interest Expense Salaries and employee 5,930 5,308 11,698 10,692benefitsOccupancy and 1,299 1,548 3,237 2,964equipmentLegal fees 253 235 500 455Other professional 528 569 1,059 1,025feesRegulatory fees 228 277 496 510Directors' fees 219 215 435 430Data processing 608 430 1,143 994Marketing and 187 81 375 225advertisingTravel and 24 13 39 114entertainmentInsurance 138 122 292 318Other real estate 30 94 81 211owned expense, netOther expense 711 875 1,450 1,744 Total non-interest 10,155 9,767 20,805 19,682 expenseIncome Before Income 11,770 5,464 24,520 9,702TaxesIncome tax expense 2,877 1,347 5,966 2,352Net Income $ 8,893 $ 4,117 $ 18,554 $ 7,350 Basic earnings per $ 0.45 $ 0.21 $ 0.94 $ 0.37common shareDiluted earnings per $ 0.45 $ 0.21 $ 0.93 $ 0.36common shareCash dividends per $ 0.03 $ 0.03 $ 0.06 $ 0.06common share Basic weightedaverage common shares 19,677,002 19,651,679 19,674,523 19,984,353outstandingDiluted weightedaverage common shares 19,883,076 19,744,575 19,859,091 20,165,726outstanding

FIRST BANK AND SUBSIDIARIESAVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES(dollars in thousands, unaudited) Three Months Ended June 30, 2021 2020 Average Average Average Average Balance Interest Rate Balance Interest Rate (5) (5)Interest earning assetsInvestment securities $ 120,238 $ 605 2.02 % $ 105,248 $ 704 2.69 %(1) (2)Loans (3) 2,044,789 22,038 4.32 % 1,905,227 21,088 4.45 %Interest bearing deposits with banks,Federal funds 117,787 71 0.24 % 120,343 73 0.24 %sold and otherRestricted investment 8,089 98 4.86 % 6,584 92 5.62 %in bank stocksOther investments 6,525 16 0.98 % 6,457 38 2.37 %Total interest 2,297,428 22,828 3.99 % 2,143,859 21,995 4.13 %earning assets (2)Allowance for loan (23,512 ) (20,000 ) lossesNon-interest earning 136,437 127,537 assetsTotal $ 2,410,353 $ 2,251,396 assets Interest bearing liabilitiesInterest bearing $ 210,494 $ 49 0.09 % $ 164,325 $ 131 0.32 %demand depositsMoney market deposits 602,221 424 0.28 % 531,535 1,138 0.86 %Savings deposits 183,289 192 0.42 % 135,805 268 0.79 %Time deposits 482,657 798 0.66 % 634,281 3,028 1.92 %Totalinterest bearing 1,478,661 1,463 0.40 % 1,465,946 4,565 1.25 %depositsBorrowings 130,441 493 1.52 % 104,109 550 2.12 %Subordinated 29,547 441 5.97 % 32,515 536 6.59 %debenturesTotalinterest bearing 1,638,649 2,397 0.59 % 1,602,570 5,651 1.42 %liabilitiesNon-interest bearing 505,912 406,498 depositsOther liabilities 15,649 16,423 Stockholders' equity 250,143 225,905 Totalliabilities and $ 2,410,353 $ 2,251,396 stockholders' equityNet interest income/interest rate spread 20,431 3.40 % 16,344 2.71 %(2)Net interest margin 3.57 % 3.07 %(2) (4)Tax equivalent (10 ) (16 ) adjustment (2)Net interest income $ 20,421 $ 16,328 (1) Average balance of investment securities available for sale is based on amortized cost.(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.(3) Average balances of loans include loans on nonaccrual status.(4) Net interest income divided by average total interest earning assets.(5) Annualized.

FIRST BANK AND SUBSIDIARIESAVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES(dollars in thousands, unaudited) Six Months Ended June 30, 2021 2020 Average Average Average Average Balance Interest Rate Balance Interest Rate (5) (5)Interest earning assetsInvestment securities $ 109,058 $ 1,138 2.10 % $ 98,553 $ 1,348 2.75 %(1) (2)Loans (3) 2,041,074 44,195 4.37 % 1,824,020 42,251 4.66 %Interest bearing deposits with banks,Federal funds 113,315 140 0.25 % 105,815 343 0.65 %sold and otherRestricted investment 8,267 185 4.51 % 6,549 202 6.20 %in bank stocksOther investments 6,518 31 0.96 % 6,438 81 2.53 %Total interest 2,278,232 45,689 4.04 % 2,041,375 44,225 4.36 %earning assets (2)Allowance for loan (24,053 ) (18,761 ) lossesNon-interest earning 134,326 127,698 assetsTotal $ 2,388,505 $ 2,150,312 assets Interest bearing liabilitiesInterest bearing $ 205,896 $ 114 0.11 % $ 162,643 $ 293 0.36 %demand depositsMoney market deposits 597,015 944 0.32 % 487,550 2,628 1.08 %Savings deposits 176,180 396 0.45 % 131,215 590 0.90 %Time deposits 495,234 1,859 0.76 % 647,024 6,440 2.00 %Totalinterest bearing 1,474,325 3,313 0.45 % 1,428,432 9,951 1.40 %depositsBorrowings 137,995 1,007 1.47 % 103,269 1,109 2.16 %Subordinated 29,533 881 5.97 % 27,244 934 6.86 %debenturesTotalinterest bearing 1,641,853 5,201 0.64 % 1,558,945 11,994 1.55 %liabilitiesNon-interest bearing 485,149 347,539 depositsOther liabilities 15,571 16,641 Stockholders' equity 245,932 227,187 Totalliabilities and $ 2,388,505 $ 2,150,312 stockholders' equityNet interest income/interest rate spread 40,488 3.40 % 32,231 2.81 %(2)Net interest margin 3.58 % 3.18 %(2) (4)Tax equivalent (20 ) (32 ) adjustment (2)Net interest income $ 40,468 $ 32,199 (1) Average balances of investment securities available for sale are based on amortized cost.(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.(3) Average balances of loans include loans on nonaccrual status.(4) Net interest income divided by average total interest earning assets.(5) Annualized.

FIRST BANK AND SUBSIDIARIESQUARTERLY FINANCIAL HIGHLIGHTS(in thousands, except for share and employee data, unaudited) As of or For the Quarter Ended 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020EARNINGS Net interest $ 20,421 $ 20,047 $ 19,724 $ 17,630 $ 16,328 incomeProvision for (162 ) (1,053 ) 1,633 1,997 2,977 loan lossesNon-interest 1,342 2,300 1,312 1,946 1,880 incomeNon-interest 10,155 10,650 11,052 9,653 9,767 expenseIncome tax 2,877 3,089 2,156 2,023 1,347 expense Net income 8,893 9,661 6,195 5,903 4,117 PERFORMANCE RATIOS Return on average 1.48 % 1.66 % 1.06 % 1.03 % 0.74 %assets (1) Return on average 14.26 % 16.21 % 10.44 % 10.20 % 7.33 %equity (1) Return on averagetangible equity (1) 15.37 % 17.52 % 11.30 % 11.08 % 7.97 %(2) Net interest 3.57 % 3.60 % 3.56 % 3.23 % 3.07 %margin (1) (3) Total cost of 0.30 % 0.39 % 0.50 % 0.70 % 0.98 %deposits (1) Efficiency ratio 46.66 % 47.66 % 52.54 % 49.31 % 53.64 %(2) SHARE DATA Common shares 19,678,528 19,663,065 19,707,474 19,694,892 19,629,892 outstandingBasic earnings $ 0.45 $ 0.49 $ 0.31 $ 0.30 $ 0.21 per shareDiluted earnings 0.45 0.49 0.31 0.30 0.21 per share Tangible book 12.02 11.59 11.17 10.88 10.61 value per share (2)Book value per 12.94 12.51 12.08 11.79 11.54 share MARKET DATA Market value per $ 13.54 $ 12.17 $ 9.38 $ 6.20 $ 6.52 shareMarket value / 112.61 % 104.97 % 83.98 % 57.01 % 61.46 %Tangible book valueMarket $ 266,447 $ 239,300 $ 184,856 $ 122,108 $ 127,987 capitalization CAPITAL & LIQUIDITY Tangiblestockholders' equity / 9.76 % 9.55 % 9.45 % 9.35 % 9.12 %tangible assets (2)Stockholders' 10.42 % 10.23 % 10.15 % 10.06 % 9.84 %equity / assetsLoans / deposits 100.87 % 102.62 % 107.56 % 109.22 % 101.65 % ASSET QUALITY Net charge-offs $ 116 $ (5 ) $ 465 $ 633 $ 1,013 (recoveries)Nonperforming 9,558 10,676 10,234 12,694 14,082 loansNonperforming 10,038 11,251 10,809 13,397 15,224 assets Net charge offs / 0.02 % 0.00 % 0.09 % 0.13 % 0.21 %average loans (1)Nonperforming 0.47 % 0.53 % 0.50 % 0.63 % 0.72 %loans / total loansNonperforming 0.41 % 0.47 % 0.46 % 0.58 % 0.66 %assets / total assetsAllowance forloan losses / total 1.10 % 1.13 % 1.17 % 1.14 % 1.10 %loansAllowance for loanlosses / total loans 1.18 % 1.24 % 1.25 % 1.25 % 1.20 %(excluding PPP loans)Allowance forloan losses / 236.95 % 214.74 % 234.26 % 179.66 % 152.26 %nonperforming loans OTHER DATA Total assets $ 2,443,047 $ 2,405,576 $ 2,346,270 $ 2,309,897 $ 2,300,594 Total loans 2,053,938 2,022,187 2,047,572 2,004,650 1,955,007 Total deposits 2,036,228 1,970,491 1,903,617 1,835,427 1,923,266 Total 254,571 245,997 238,108 232,300 226,450 stockholders' equityNumber offull-time equivalent 215 211 204 204 209 employees (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 equivalentusing a federal income tax rate of 21%.(4) Includes 4 full-time equivalentseasonal interns as of June 30, 2021 and 2020.

FIRST BANK AND SUBSIDIARIESQUARTERLY FINANCIAL HIGHLIGHTS(dollars in thousands, unaudited) As of the Quarter Ended 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020LOAN COMPOSITION Commercial and $ 379,916 $ 432,869 $ 388,886 $ 430,722 $ 428,494 industrialCommercial real estate: Owner-occupied 427,094 399,042 407,089 402,147 392,096 Investor 814,762 771,599 778,958 721,029 689,891 Construction and 127,329 123,930 149,284 146,057 131,791 development Multi-family 142,015 125,493 144,527 133,778 132,942 Total commercial 1,511,200 1,420,064 1,479,858 1,403,011 1,346,720 real estateResidential real estate: Residential mortgage and first lien 108,842 117,756 120,018 117,530 117,796 home equity loans Home equity?second lien loans and 29,422 29,306 33,575 27,600 29,371 revolving lines of credit Total residential 138,264 147,062 153,593 145,130 147,167 real estateConsumer and 31,584 29,213 30,368 32,531 40,230 other Total loans prior to 2,060,964 2,029,208 2,052,705 2,011,394 1,962,611 deferred loan fees and costsNet deferredloan fees and (7,026 ) (7,021 ) (5,133 ) (6,744 ) (7,604 )costs Total $ 2,053,938 $ 2,022,187 $ 2,047,572 $ 2,004,650 $ 1,955,007 loans LOAN MIX Commercial and 18.5 % 21.4 % 19.0 % 21.5 % 21.9 %industrialCommercial real estate: Owner-occupied 20.8 % 19.7 % 19.9 % 20.1 % 20.1 % Investor 39.7 % 38.2 % 38.0 % 36.0 % 35.3 % Construction and 6.2 % 6.1 % 7.3 % 7.3 % 6.7 % development Multi-family 6.9 % 6.2 % 7.0 % 6.6 % 6.8 % Total commercial 73.5 % 70.2 % 72.2 % 70.0 % 68.9 % real estateResidential real estate: Residential mortgage and first lien 5.3 % 5.8 % 5.9 % 5.8 % 6.0 % home equity loans Home equity?second lien loans and 1.4 % 1.4 % 1.6 % 1.4 % 1.5 % revolving lines of credit Total residential 6.7 % 7.2 % 7.5 % 7.2 % 7.5 % real estateConsumer and 1.6 % 1.5 % 1.6 % 1.6 % 2.1 %otherNet deferredloan fees and (0.3 %) (0.3 %) (0.3 %) (0.3 %) (0.4 %)costs Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % loans

FIRST BANK AND SUBSIDIARIESQUARTERLY FINANCIAL HIGHLIGHTS(dollars in thousands, unaudited) As of the Quarter Ended 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020DEPOSIT COMPOSITIONNon-interestbearing $ 534,475 $ 500,008 $ 424,119 $ 445,514 $ 459,123 demanddepositsInterestbearing 211,074 208,443 201,881 156,059 165,081 demanddepositsMoney marketand savings 817,424 767,603 753,640 695,224 703,365 depositsTime deposits 473,255 494,437 523,977 538,630 595,697 Total $ 2,036,228 $ 1,970,491 $ 1,903,617 $ 1,835,427 $ 1,923,266 Deposits DEPOSIT MIX Non-interestbearing 26.3 % 25.4 % 22.3 % 24.3 % 23.9 %demanddepositsInterestbearing 10.4 % 10.6 % 10.6 % 8.5 % 8.6 %demanddepositsMoney marketand savings 40.1 % 38.9 % 39.6 % 37.9 % 36.5 %depositsTime deposits 23.2 % 25.1 % 27.5 % 29.3 % 31.0 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Deposits

FIRST BANK AND SUBSIDIARIESNON-U.S. GAAP FINANCIAL MEASURES(in thousands, except for share data, unaudited) As of or For the Quarter Ended 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020Return onAverage Tangible EquityNet income $ 8,893 $ 9,661 $ 6,195 $ 5,903 $ 4,117 (numerator) Averagestockholders' $ 250,143 $ 241,674 $ 236,099 $ 230,122 $ 225,905 equityLess: AverageGoodwill and 18,001 18,023 18,062 18,156 18,236 other intangibleassets, netAverage Tangiblestockholders' $ 232,142 $ 223,651 $ 218,037 $ 211,966 $ 207,669 equity(denominator) Return onAverage Tangible 15.37 % 17.52 % 11.30 % 11.08 % 7.97 %equity Tangible Book Value Per ShareStockholders' $ 254,571 $ 245,997 $ 238,108 $ 232,300 $ 226,450 equityLess: Goodwilland other 17,965 18,024 17,998 18,108 18,192 intangibleassets, netTangiblestockholders' $ 236,606 $ 227,973 $ 220,110 $ 214,192 $ 208,258 equity(numerator) Common sharesoutstanding 19,678,528 19,663,065 19,707,474 19,694,892 19,629,892 (denominator) Tangible book $ 12.02 $ 11.59 $ 11.17 $ 10.88 $ 10.61 value per share Tangible Equity / AssetsStockholders' $ 254,571 $ 245,997 $ 238,108 $ 232,300 $ 226,450 equityLess: Goodwilland other 17,965 18,024 17,998 18,108 18,192 intangibleassets, netTangiblestockholders' $ 236,606 $ 227,973 $ 220,110 $ 214,192 $ 208,258 equity(numerator) Total assets $ 2,443,047 $ 2,405,576 $ 2,346,270 $ 2,309,897 $ 2,300,594 Less: Goodwilland other 17,965 18,024 17,998 18,108 18,192 intangibleassets, netTangible totalassets $ 2,425,082 $ 2,387,552 $ 2,328,272 $ 2,291,789 $ 2,282,402 (denominator) Tangiblestockholders' 9.76 % 9.55 % 9.45 % 9.35 % 9.12 %equity /tangible assets Efficiency Ratio Non-interest $ 10,155 $ 10,650 $ 11,052 $ 9,653 $ 9,767 expense Net interest $ 20,421 $ 20,047 $ 19,724 $ 17,630 $ 16,328 incomeNon-interest 1,342 2,300 1,312 1,946 1,880 incomeTotal revenue $ 21,763 $ 22,347 $ 21,036 $ 19,576 $ 18,208 Efficiency ratio 46.66 % 47.66 % 52.54 % 49.31 % 53.64 %