First Bank Announces Fourth Quarter 2024 Net Income of $10.5 Million and Full Year Net Income of $42.2 Million

Results highlighted by strong loan growth, continued operating efficiency, and solid asset quality

HAMILTON, N.J., Jan. 23, 2025 (GLOBE NEWSWIRE) — First Bank (Nasdaq Global Market: FRBA) (“the Bank”) today announced results for the fourth quarter and full year 2024. Net income for the fourth quarter of 2024 was $10.5 million, or $0.41 per diluted share, compared to $8.4 million, or $0.33 per diluted share, for the fourth quarter of 2023. Return on average assets, return on average equity and return on average tangible equityⁱ for the fourth quarter of 2024 were 1.10%, 10.27% and 11.82%, respectively, compared to 0.93%, 9.06% and 10.67%, respectively, for the fourth quarter of 2023. 

Full year 2024 net income was $42.2 million, or $1.67 per diluted share, compared to $20.9 million, or $0.95 per diluted share for 2023. Return on average assets, return on average equity and return on average tangible equityⁱ for the full year 2024 were 1.15%, 10.77% and 12.50%, respectively, compared to 0.66%, 6.38% and 7.17%, respectively, for the full year 2023. Financial results for the fourth quarter and full year of 2023 included the impact of merger-related expenses and other one-time items that were primarily related to the Malvern Bancorp acquisition, completed in July 2023. See the analysis of the Bank’s adjusted net income in the attached financial tables, which include a reconciliation of non-GAAP financial measure. 

Fourth Quarter 2024 Performance Highlights:

• Total loans of $3.14 billion at December 31, 2024 grew $56.8 million, or 7.3%, annualized, from the linked quarter ended September 30, 2024.
• Total deposits were $3.06 billion at December 31, 2024, increasing $5.8 million from the linked quarter ended September 30, 2024.
• Tangible book value per shareⁱⁱ grew to $14.19 at December 31, 2024, increasing 10.0%, annualized, from $13.84 at September 30, 2024.
• Total net revenue (net interest income plus non-interest income) of $33.8 million for the fourth quarter of 2024 increased $5.8 million, or 20.6%, compared to the prior year quarter, while full year total net revenue was $129.9 million, an increase of $26.1 million, or 25.1%, compared to 2023. 
• Strong asset quality continued, with nonperforming assets decreasing to 0.46% of total assets at December 31, 2024, compared to 0.47% at September 30, 2024 and 0.69% at December 31, 2023. 

Patrick L. Ryan, President and CEO of First Bank, reflected on the Bank’s performance, stating, “We had a great finish to a very strong year. Our community banking and specialty banking teams produced strong loan growth during the quarter, with solid pipelines going into 2025. We are especially pleased to have achieved this with continued strength in asset quality and with sustained efficiency. Our efficiency ratio remained below 60% for the 22^nd consecutive quarter, even as we invested in technology and new C&I and deposit-focused business units. We have a clear vision for our future success – continued evolution from a traditional community bank into a full-service, middle market commercial bank. We are building from the core with our great commercially-focused, community bankers and our proven CRE lending teams. From that strong core we have layered in several exciting new initiatives that are all gaining momentum and moving closer to scale. With our Banking as a Service (“BaaS”) initiative launching this year, and our Asset Based Lending (“ABL”), Private Equity (“PE”) and Small Business teams all growing nicely, we’re excited for 2025 and beyond.”

Ryan continued, “First Bank is a unique and exciting investment opportunity where shareholders can own both an established franchise generating strong financial performance today with real opportunities for even stronger performance moving forward as the new business units grow and bear fruit. Furthermore, prudent interest rate management and incremental balance sheet repositioning during 2024 leave us well positioned to thrive in 2025 as we can generate strong profitability in various interest rate environments.” 

Mr. Ryan added, “In 2025, to help drive continued core deposit growth, we are expanding our community banking network, with recent branch openings in Trenton, NJ and Media, PA, making First Bank even more accessible for our customers. Ongoing upgrades to our online banking platform will further enhance the digital customer’s experience. We’re also rolling out new technology and tools to enhance our sales culture. These investments will support our strong team of bankers in their efforts to add quality deposit relationships, expand our newer specialty banking teams, and maintain excellent asset quality. We believe we are well-positioned to achieve our profitability and growth goals in 2025. We are proud of our track record of delivering top-quartile performance while still making significant and important investments in the future.”

Mr. Ryan concluded, “In December, the Kroll Bond Rating Agency (“KBRA”) again affirmed our investment grade credit ratings. Their press release cited our successful execution of strategy in recent years, including a demonstrated ability to effectively integrate acquisitions and to effectively navigate the interest rate hiking cycle. KBRA remarked the Bank’s focus on building a stronger core deposit base has been notable, and profitability has compared favorably to peers. We believe KBRA’s report is another validation of our approach to building franchise value for our shareholders.”

Income Statement

In the fourth quarter of 2024, the Bank’s net interest income increased to $31.6 million, growing $595,000, or 1.9%, compared to the same period in 2023. The increase was primarily driven by an increase of $3.7 million in interest income which outpaced the $3.1 million increase in interest expense in the fourth quarter of 2024 compared to the same quarter in 2023. Net interest income increased $1.5 million, or 5.0%, over the linked third quarter of 2024. Growth was primarily driven by a $627,000 increase in interest income on loans, due to higher average loan volume, and by decreases of $641,000 and $185,000 in interest expense on deposits and borrowings, respectively, which resulted from lower average rates in the fourth quarter.

Full year 2024 net interest income totaled $122.5 million, an increase of $18.0 million, or 17.3%, compared to $104.5 million for 2023. The increase was primarily a result of higher interest income from loans due to substantial loan growth related to the Malvern acquisition in the third quarter of 2023, organic loan growth in 2024, and higher loan yields. This was partially offset by increased interest expense due to an expanded deposit base related to the Malvern acquisition and organic growth, as well as the higher cost of deposits in 2024. Interest and dividend income increased by $48.1 million, reflecting growth in average loans, which increased by $325.5 million, or 12.1%, from the prior year, and a 74 basis point increase in the average yield on loans. The average cost of total interest bearing deposits increased 72 basis points compared to the prior year, reflective of the higher interest rate environment and ongoing competition for deposits throughout 2024. The average cost of time, money market, savings, and interest bearing demand deposits increased 127, 53, 51, and 43 basis points, respectively.

The Bank’s tax equivalent net interest margin measured 3.54% for the fourth quarter of 2024, decreasing by 14 basis points from 3.68% for the prior year quarter, and increasing by six basis points from 3.48% for the third quarter of 2024. The decrease from the prior year quarter was primarily driven by higher average rates on deposits. The Bank’s net interest margin increased compared to the linked third quarter primarily due to declines in average rates on deposits and borrowings which outpaced the reduction in average rates on earning assets. The Bank’s tax equivalent net interest margin includes the impact of amortization and accretion of premiums and discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions. The net impact of amortization of premiums and accretion of discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions was $3.1 million during the fourth quarter of 2024, compared to $3.9 million for the quarter ended December 31, 2023 and $3.4 million for the third quarter of 2024.

The full year 2024 tax equivalent net interest margin was 3.57%, an increase of 10 basis points compared to 3.47% for the full year 2023. The increase was principally a result of a 70 basis point increase in the yield on interest earning assets, partially offset by a 66 basis point increase in interest bearing liabilities cost.

The Bank recorded a credit loss expense totaling $234,000 during the fourth quarter of 2024, compared to a credit loss benefit totaling $294,000 for the same period of the previous year and a $1.6 million credit loss expense for the third quarter of 2024. The credit loss expense for the fourth quarter of 2024 reflects the Bank’s organic loan growth. Credit loss expense was muted by the net recoveries during the quarter and the Banks’s strong and stable asset quality, while the credit loss benefit during the prior year quarter was primarily due to flat loan growth during the quarter. The Bank’s credit loss expense for the third quarter of 2024 was commensurate with robust organic loan growth during the quarter.

For the full year 2024, the Bank reported a credit loss expense of $1.2 million, compared to $7.9 million for 2023. Full year 2023 credit loss expense included a $5.5 million credit loss recorded to establish a reserve for acquired Malvern loans in 2023. The decrease in credit loss expense reflects a lower level of net charge-offs and strong credit quality metrics when compared to 2023. Net charge-offs for 2024 totaled $205,000, excluding $5.5 million in a PCD loan charge-off in the first quarter of 2024, which was reserved for through purchase accounting marks at the time of the Malvern acquisition, compared to net charge-offs of $1.5 million in 2023.

In the fourth quarter of 2024, the Bank recorded non-interest income totaling $2.2 million, compared to non-interest income measuring $(3.0) million during the same period in 2023 and $2.5 million in non-interest income during the third quarter of 2024. Results for the fourth quarter of 2023 included $4.7 million in combined losses on the sale of investments and loans. The losses were primarily related to the Bank’s balance sheet repositioning, which primarily included the sale of lower-yielding residential loans and investment securities acquired from Malvern Bank during the third quarter of 2023.

For the full year ended December 31, 2024, the Bank recorded non-interest income totaling $7.3 million compared to $(715,000) in non-interest income earned for the full year ended December 31, 2023. The increase was primarily due to the net losses realized on the sale of loans and investments related to balance sheet repositioning initiatives in 2023, in addition to the increased bank-owned life insurance income (“BOIL”) restructuring benefit and higher levels of customer activity in 2024 following the July 2023 Malvern acquisition.

Non-interest expense for the fourth quarter of 2024 was $19.1 million, an increase of $1.2 million, or 6.6%, compared to $17.9 million for the prior year quarter. Higher non-interest expense was largely due to increases of $1.5 million in salaries and employee benefits primarily due to a larger employee base, $265,000 in occupancy and equipment primarily due to new branch openings, and $159,000 in other professional fees and consulting services. This was partially offset by merger-related expenses that declined by $338,000 due to no merger activity in 2024.

On a linked quarter basis, non-interest expense increased $480,000 from $18.6 million for the third quarter of 2024. The linked quarter increase primarily reflects salaries and employee benefits costs increasing $337,000 due to a larger employee base and higher incentive compensation accrual, occupancy and equipment costs rising $182,000 due to branch relocation and opening activity, and other professional fees rising $208,000 primarily related to investments in technology and consulting services. This was partially offset by a decrease of $523,000 in other real estate owned (“OREO”) expense due to a $362,000 impairment of an OREO asset recorded during the linked quarter, along with other related legal and real estate tax expenses.

Non-interest expense for the full year 2024 totaled $73.5 million, an increase of $4.8 million, or 7.0%, compared to $68.7 million for 2023. The increase was primarily a result of salaries and employee benefits costs increasing $6.4 million due to a larger employee base, occupancy and equipment costs rising $1.3 million due to an expanded network of facilities, and other generalized increases related to both the addition of Malvern in the second half of 2023 and ongoing investments in technology, products, and business operations. This was partially offset by an $8.0 million decrease in merger-related costs.

Income tax expense for the three months ended December 31, 2024 was $3.9 million with an effective tax rate of 27.2%, compared to $2.0 million with an effective tax rate of 19.1% for the fourth quarter of 2023. Income tax expense for the three months ended September 30, 2024 was $4.2 million with an effective tax rate of 33.9%. Both the third and fourth quarter of 2024 tax expense included additional tax related to the Bank’s BOLI restructuring. Income tax expense for the full year ended December 31, 2024 was $12.9 million with an effective tax rate of 23.4%, compared to $6.3 million for the full year 2023 with an effective tax rate of 23.1%. The full year tax rate in 2024 also included the negative impact of the BOLI restructuring but was offset by certain other tax adjustments from the first half of 2024 that reduced tax expense, primarily related to the revaluation of the Bank’s deferred tax assets due to the impact of the New Jersey Corporate Transit Fee. The New Jersey Corporate Transit Fee will result in an increased tax rate in future periods. We anticipate our future effective tax rate will be closer to 25-26%.

Balance Sheet

The Bank reported total assets of $3.78 billion as of December 31, 2024, an increase of $171.0 million, or 4.7%, from $3.61 billion at December 31, 2023. Total loans increased $122.8 million, or 4.1%, to $3.14 billion at December 31, 2024 compared to $3.02 billion at December 31, 2023. The increase primarily reflects strong organic loan growth recorded in the second half of 2024, partially offset by sales of loans and investment securities totaling approximately $35.3 million during 2024. The Bank’s cash and cash equivalents increased by $44.0 million, or 19.3%, compared to December 31, 2023, to ensure adequate on-balance sheet liquidity.

Total assets increased $22.7 million, or 0.6%, from September 30, 2024 to December 31, 2024. Total loans as of December 31, 2024 increased $56.8 million, or 1.8%, from $3.09 billion at September 30, 2024. Cash and cash equivalents decreased by $40.4 million, or 12.9%, compared to September 30, 2024.

As of December 31, 2024, the Bank’s total deposits were $3.06 billion, an increase of $88.3 million, or 3.0%, from $2.97 billion at December 31, 2023. Modest organic deposit growth during 2024 was primarily due to our team’s success in attracting new deposit relationships while also maintaining existing balances amid heightened industry-wide pricing competition. Growth was tempered by the Bank’s strategic decision to allow certain higher-cost and non-core funding to leave the Bank.

During the twelve months ended December 31, 2024, stockholders’ equity increased by $38.3 million, or 10.3%, primarily due to net income, partially offset by dividends.

As of December 31, 2024, the Bank continued to exceed all regulatory capital requirements to be considered well-capitalized, with a Tier 1 Leverage ratio of 9.50%, a Tier 1 Risk-Based capital ratio of 9.70%, a Common Equity Tier 1 Capital ratio of 9.70%, and a Total Risk-Based capital ratio of 11.56%. The tangible stockholders’ equity to tangible assets ratioⁱⁱⁱ increased to 9.56% as of December 31, 2024 compared to 8.89% at December 31, 2023.

Asset Quality

First Bank’s asset quality metrics for the fourth quarter of 2024 remained favorable. Total nonperforming loans declined from $25.0 million at December 31, 2023 to $11.7 million at December 31, 2024, while total nonperforming assets declined from $25.0 million to $17.3 million during the same period. 

The Bank recorded net recoveries of $155,000 during the fourth quarter of 2024 compared to net charge-offs of $386,000 in the third quarter of 2024 and net charge-offs of $209,000 in the fourth quarter of 2023. The allowance for credit losses on loans as a percentage of total loans measured 1.20% at December 31, 2024, compared to 1.21% at September 30, 2024 and 1.40% at December 31, 2023. The decline from December 31, 2023 to December 31, 2024 reflected the $5.5 million charge-off and elimination of the Bank’s reserves on a Malvern purchase credit deteriorated loan transferred to OREO during the first quarter of 2024.

Liquidity and Borrowings

Management believes the Bank’s current liquidity position, coupled with our various contingent funding sources, provides us with a strong liquidity base and a diverse source of funding options. The Bank utilized its excess liquidity position to support strong loan growth in the fourth quarter of 2024 which led to total cash and cash equivalents decreasing by $40.4 million to $271.9 million at December 31, 2024, compared to September 30, 2024. Borrowings increased by $9.9 million compared to September 30, 2024, as the Bank utilized some Federal Home Loan Bank (“FHLB”) advances to support loan growth, while continuing to maintain adequate available borrowing capacity at the FHLB.

Cash Dividend Declared

On January 21, 2025, the Bank’s Board of Directors declared a quarterly cash dividend of $0.06 per share to common stockholders of record at the close of business on February 7, 2025, payable on February 21, 2025.

Share Repurchase Program

During the fourth quarter of 2024 the Bank repurchased 93,546 shares of common stock at an average price of $14.31, under the share repurchase program authorized in October 2024. The share repurchase program provides for the repurchase of up to 1.0 million shares of First Bank common stock for an aggregate repurchase amount of up to $16.0 million. The share repurchase program will expire on September 30, 2025.

Conference Call and Earnings Release Supplement

Additional details on the quarterly results and the Bank are included in the attached earnings release supplement.

A PDF accompanying this announcement is available at http://ml.globenewswire.com/Resource/Download/506d5a7a-b1f8-4689-b91a-151b3952b08f

First Bank will host its earnings call on Friday, January 24, 2025 at 9:00 AM Eastern Time. The direct dial toll free number for the live call is 1-800-715-9871 and the access code is 5565911. For those unable to participate in the call, a replay will be available by dialing 1-800-770-2030 (access code 5565911) from one hour after the end of the conference call until April 24, 2025. Replay information will also be available on First Bank’s website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay of the conference call.

About First Bank

First Bank is a New Jersey state-chartered bank with 26 full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Morristown, Pennington, Randolph, Somerset, Trenton and Williamstown, New Jersey; and Coventry, Devon, Doylestown, Lionville, Malvern, Media, Paoli, Trevose, Warminster and West Chester, Pennsylvania; and Palm Beach, Florida. With $3.78 billion in assets as of December 31, 2024, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank’s common stock is listed on the Nasdaq Global Market under the symbol “FRBA.”

Forward Looking Statements

This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First Bank’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about First Bank, any of which may change over time and some of which may be beyond First Bank’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions, integrate acquired entities and realize anticipated efficiencies, sustain its internal growth rate, and provide competitive products and services that appeal to its customers and target markets; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the impact of public health emergencies, on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank’s level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank’s investment securities portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank’s operations, including changes in regulations affecting financial institutions and expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank’s ability to comply with applicable capital and liquidity requirements, including First Bank’s ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; and possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Forward-Looking Statements” and “Risk Factors” in First Bank’s Annual Report on Form 10-K and any updates to those risk factors set forth in First Bank’s proxy statement, subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank’s behalf may issue.

This press release contains “non-GAAP” financial measures, which management uses in its analysis of First Bank’s performance. Management believes these non-GAAP financial measures allow for better comparability of period to period operating performance. Additionally, First Bank believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of the non-GAAP measures used in this presentation to the most directly comparable GAAP measures is provided in the accompanying financial tables.

ⁱ Return on average tangible equity is a non-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-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release

ⁱⁱ Tangible book value per share is a non-GAAP financial measure and is calculated by dividing common shares outstanding by tangible equity (equity minus goodwill and other intangible assets). For a reconciliation of this non-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release.

ⁱⁱⁱ Tangible stockholders’ equity to tangible assets ratio is a non-GAAP financial measure and is calculated by dividing tangible equity (equity minus goodwill and other intangible assets) by tangible assets (total assets minus goodwill and other intangible assets). For a reconciliation of this non-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release.

(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.

(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.

(1) Annualized.
(2) Non-GAAP financial measure that we believe provides management and investors with information that is useful in understanding our financial performance and condition. See the accompanying table, “Non-GAAP Financial Measures,” for calculation and reconciliation.
(3) Tax equivalent using a federal income tax rate of 21%.
(4) Excludes $5.5 million in a PCD loan charge-off in first quarter of 2024, which was reserved for through purchase accounting marks at the time of the Malvern acquisition.

(1) Annualized.

(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Includes the net impact of the new Bank Owned Life Insurance enhancement and the increased tax expense on the terminated policies.
(3) Annualized.

(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Includes the net impact of the new Bank Owned Life Insurance enhancement and the increased tax expense on the terminated policies.

CONTACT: Andrew Hibshman, Chief Financial Officer
(609) 643-0058, [email protected]