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Princeton Bancorp Announces Fourth Quarter 2023 Results

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Princeton Bancorp, Inc. reported strong financial performance, with total assets growing to $1.92 billion in 2023, net loans increasing by $178 million, and total deposits increasing by $288 million. Despite a decrease in net income for the fourth quarter of 2023 compared to the same period in 2022, the company's President/CEO remains optimistic about the Bank's performance, highlighting the addition of Cornerstone Bank as an in-market acquisition.
Positive
  • Total assets grew by 19.7% in 2023
  • Net loans increased by $178 million
  • Total deposits increased by $288 million
  • Stockholders' equity increased by 9.4% year over year
  • The addition of Cornerstone Bank is an in-market acquisition that adds to the Bank's central and south Jersey footprint
Negative
  • Net income for the fourth quarter of 2023 decreased compared to the same period in 2022
  • Non-performing assets totaled $6.7 million, an increase of $6.4 million when compared to the amount at December 31, 2022
  • Total non-interest expense for the year ended December 31, 2023, increased by $10.2 million

Insights

The reported financials of Princeton Bancorp, Inc. indicate a significant growth in total assets by 19.7%, primarily driven by the acquisition of Noah Bank. This strategic move has expanded the company's asset base and is likely to enhance future revenue potential. However, the net income decrease in Q4 2023 compared to both the previous quarter and the same period in the previous year raises concerns about the bank's cost management and revenue generation in a challenging interest rate environment.

Moreover, the increase in non-interest expenses by $10.2 million and the provision for credit losses of $2.7 million suggest that the bank is navigating through operational and credit challenges. Investors should monitor the bank's efficiency ratio and cost-income ratio in subsequent quarters to assess the impact of these expenses on profitability.

It is also noteworthy that the bank's stockholders' equity grew by 9.4%, reflecting a solid capital position which could support future growth initiatives or withstand potential economic downturns. However, the decline in the equity to total assets ratio post-acquisition implies a leveraged balance sheet, which could be a point of analysis for risk-averse investors.

Princeton Bancorp's in-market acquisition of Cornerstone Bank, which is expected to expand its footprint in central and south Jersey, demonstrates a clear growth strategy aimed at increasing market share. This move, coupled with the increased loan and deposit balances, suggests that the bank is actively working to capitalize on regional economic opportunities and could potentially outperform regional competitors.

The strategic increase in certificates of deposit and money market deposits indicates a focus on stable funding sources, which may be a competitive advantage in a rising interest rate environment. However, the decrease in savings and interest-bearing demand deposits could reflect changing consumer behavior towards higher-yielding investment options, which may require the bank to adapt its deposit strategy accordingly.

The reported financial results of Princeton Bancorp, Inc. reflect the broader economic conditions, particularly the impact of rising interest rates on net interest income. The bank's net interest margin has contracted, which is a trend seen across the banking industry as funding costs rise. This contraction could be a headwind for profitability if interest rates continue to climb.

The decrease in net income for the fourth quarter, despite an increase in non-interest income, highlights the sensitivity of bank earnings to interest rate fluctuations and loan quality. The provision for credit losses suggests that the bank is anticipating potential credit deterioration, which could be indicative of broader economic challenges such as a potential slowdown in economic growth or a rise in unemployment.

Overall, the bank's performance must be contextualized within the macroeconomic landscape, including monetary policy and its implications for consumer and business lending activities.

PRINCETON, N.J., Jan. 25, 2024 /PRNewswire/ -- Princeton Bancorp, Inc. (the "Company") (NASDAQ - BPRN), the bank holding company for The Bank of Princeton (the "Bank"), today reported its unaudited financial condition and results of operations at and for the quarter and 12 months ended December 31, 2023. 

President/CEO Edward Dietzler commented on the results, "I am extremely proud of the Bank's continued strong financial performance given the industry's strong headwinds.  Despite the significant impact from the interest rate environment and other industry pressures, the Bank increased loan and deposit balances while maintaining strong liquidity and good credit quality."

"In 2024, the addition of Cornerstone Bank is an in-market acquisition that adds to the Bank's central and south Jersey footprint. The Bank will continue to build on our existing valuable franchise reaching from New York to Philadelphia."

HIGHLIGHTS

  • Total assets grew to $1.92 billion in 2023, an increase of 19.7%
  • Net loans increased by $178 million for the year
  • Total deposits for the year increased $288 million, or 21.4% over the prior year-end
  • Stockholders' equity increased $20.6 million or 9.4% year over year
  • Net income for the quarter was $5.3 million and $25.8 million for the year

The Company reported net income of $5.3 million, or $0.82 per diluted common share, for the fourth quarter of 2023, compared to net income of $7.6 million, or $1.19 per diluted common share, for the third quarter of 2023, and net income of $7.2 million, or $1.13 per diluted common share, for the fourth quarter of 2022. The decrease in net income for the fourth quarter of 2023 when compared to the third quarter of 2023 was due to decreases of $674 thousand and $624 thousand in net interest income and non-interest income, respectively, and increases of $744 thousand and $790 thousand in provision for credit losses and non-interest expense, respectively, partially offset by a reduction in income tax expense of $516 thousand. The decrease in net income for the fourth quarter of 2023 compared to the same period in 2022 was primarily due to a decrease in net interest income of $2.2 million and an increase in non-interest expenses of $1.3 million, partially offset by a decrease in income tax expense of $1.2 million and an increase in non-interest income of $782 thousand.

For the year ended December 31, 2023, the Company recorded net income of $25.8 million, or $4.03 per diluted common share, compared to $26.5 million, or $4.11 per diluted common share, for the same period in 2022. The decrease was due to an increase of $10.2 million in non-interest expenses, a decrease in net interest income of $3.1 million, and an increase in provision for credit losses of $2.7 million, partially offset by an increase of $12.3 million in non-interest income and a decrease in income tax expense of $3.0 million attributable in part to the $9.7 million bargain purchase gain from its Noah Bank acquisition in May of 2023 that is not taxable. The results for 2023 were significantly impacted by purchase accounting adjustments resulting from the Noah Bank acquisition.

Balance Sheet Review

Total assets were $1.92 billion at December 31, 2023, an increase of $314.7 million, or 19.7% when compared to $1.60 billion at the end of 2022. The primary reason for the increase in total assets was the acquisition of Noah Bank on May 19, 2023, which had approximately $239.4 million in assets at closing. When looking at specific components of the balance sheet, including acquired assets, the Company recorded an increase in net loans of $178.0 million, an increase in cash and cash equivalents of approximately $97.2 million, an increase in bank-owned life insurance of $6.2 million, an increase in its right of use asset of $7.4 million and an increase in deferred tax assets of $3.4 million.  The increase in the Company's net loans consisted of a $269.3 million increase in commercial real estate loans and a $22.1 million increase in commercial and industrial loans, partially offset by a decrease of $107.4 million in construction loans.

Total deposits at December 31, 2023 increased $288.0 million, or 21.4%, when compared to December 31, 2022. The primary reasons for the increase in total deposits were the $191.7 million in deposits acquired from Noah Bank and a $96.3 million increase from existing operations. When comparing deposit products between the two periods, certificates of deposit increased $299.5 million and money market deposits increased $70.4 million. Partially offsetting these increases were decreases in savings deposits of $44.2 million, interest-bearing demand deposits of $21.8 million and non-interest-bearing deposits of $15.8 million for the year ended December 31, 2023.

Total stockholders' equity at December 31, 2023 increased $20.6 million or 9.4% when compared to the end of 2022. The increase was primarily due to the $17.9 million increase in retained earnings, consisting of $25.8 million in net income partially offset by $7.6 million of cash dividends recorded during the period. The ratio of equity to total assets at December 31, 2023 and at December 31, 2022, was 12.5% and 13.7%, respectively. The current period ratio decrease was primarily due to the Noah Bank acquisition.

Asset Quality

At December 31, 2023, non-performing assets totaled $6.7 million, an increase of $6.4 million when compared to the amount at December 31, 2022. This increase was due to the delinquency of a $4.5 million commercial real estate loan and $2.1 million of non-performing loans acquired from Noah Bank. With respect to the $4.5 million commercial real estate loan, the Company has an agreement of sale with a material non-refundable security deposit and the sale is expected to close in the first quarter of 2024.

With the adoption of the Current Expected Credit Losses ("CECL") method of calculating the allowance for credit losses effective January 1, 2023, troubled debt restructurings ("TDRs") are no longer reported for the current period.  At December 31, 2022 there were three loans classified as TDR loans totaling $5.9 million and each of these loans was performing in accordance with the agreed-upon terms at December 31, 2022 and throughout 2023.

Review of Quarterly and Year-to-Date Financial Results

Net interest income was $16.0 million for the fourth quarter of 2023, compared to $16.7 million for the third quarter of 2023 and $18.2 million for the fourth quarter of 2022. The decrease from the previous quarter was the result of an increase in interest expense of $1.2 million, or 11.9%, partially offset by an increase in interest income of $554 thousand, or 2.1%. The net interest margin for the fourth quarter 2023 was 3.55%, decreasing 21 basis points when compared to the third quarter of 2023. This decrease was primarily associated with an increase of 25 basis points in the cost of funds associated with rising interest rates. The increase in funding costs was partially offset by a $28.1 million growth in average interest-earning assets driven by a $58.1 million increase in average loans. When comparing the three-month periods ended December 31, 2023 and 2022, net interest income decreased $2.2 million, which was primarily due to an increase of 214 basis points in the cost of funds, partially offset by an increase of 71 basis points in the yield earned on interest-earning assets. For the year ended December 31, 2023, net interest income of $65.0 million was down 4.5% compared to net interest income of $68.1 million during 2022.  The decrease from the previous year was the result of an increase in interest expense of $27.2 million, or 452.7%, partially offset by an increase in interest income of $24.1 million, or 32.5%, both as a result of the 525 basis-point increase in federal funds interest rates since March 2022 and management's strategic initiative to maintain high levels of primary liquidity in this uncertain rate environment.

The Bank recorded a provision for credit losses of $562 thousand during the fourth quarter of 2023 and a credit provision for credit losses of $182 thousand during the third quarter of 2023.  The Bank recorded a $200 thousand provision for loan losses for the three months ended December 31, 2022. The provision recorded during the fourth quarter of 2023 was the result of an increase in the required reserve for credit losses on loans in the amount of $489 thousand and an increase in the reserve for unfunded liabilities of $72 thousand.  The credit recorded in the third quarter of 2023 was the result of a reduction in the reserve for unfunded liabilities in the amount of $182 thousand and no provision for credit losses on loans. For the three-month and twelve-month periods ended December 31, 2023, the Bank recorded net recoveries of $10 thousand and net charge-offs of $1.8 million, respectively. Included in the Company's provision for the twelve-month period of 2023 was $1.7 million related to non-purchased credit deteriorated loans resulting from the Noah Bank acquisition. With the adoption of the CECL method of calculating the allowance for credit losses on January 1, 2023, the Bank recorded a one-time decrease, net of tax, in retained earnings of $284 thousand, a reduction to the allowance for credit losses of $301 thousand and an increase in the reserve for unfunded liabilities of $695 thousand. The coverage ratio of the allowance for credit losses to period end loans was 1.19% at December 31, 2023 and 1.20% at December 31, 2022.

Total non-interest income of $1.8 million for the fourth quarter of 2023 decreased $624 thousand or 26.0% when compared to the third quarter of 2023 and increased $782 thousand or 78.4% when compared to the quarter ended December 31, 2022. The decrease from the third quarter of 2023 was primarily due to the $528 thousand decrease in loan fees during the fourth quarter and a gain on sale of other real estate owned during the third quarter. The increase over the prior year quarter was primarily due to an increase in loan fees of $420 thousand. For the year ended December 31, 2023, non-interest income increased $12.3 million, or by 252.1%, primarily due to the $9.7 million bargain purchase gain and an increase in loan fees of $1.7 million over the same period in 2022.

Total non-interest expense of $10.9 million for the fourth quarter of 2023 increased $790 thousand, or 7.8%, when compared to the third quarter of 2023, due primarily to the reversal of merger-related expenses in the third quarter of $1.4 million, representing a portion of the merger costs associated with the Noah acquisition expensed during the second quarter. The amounts reversed during the third quarter were primarily the result of a lease termination cost that was lower than the original estimate based on a negotiated settlement of the remaining lease on a Noah Bank branch office and a legal reserve of $150 thousand that was no longer needed. Total non-interest expense for the fourth quarter of 2023 increased $1.3 million or 13.2 % from the fourth quarter of 2022.  The increase was due primarily to increases in salaries and employee benefits and occupancy and equipment expenses of $830 thousand and $436 thousand, respectively, over the prior-year period which were associated with the Noah acquisition in 2023. For the year ended December 31, 2023, non-interest expense was $48.7 million, compared to $38.5 million for the same period in 2022. The increase was primarily due to merger-related expenses of $5.6 million during 2023 as well as increases in salaries and employee benefits of $2.9 million, occupancy and equipment of $1.2 million and data processing and communications of $538 thousand over the same period in 2022.

For the three-month period ended December 31, 2023, the Company recorded an income tax expense of $1.0 million, resulting in an effective tax rate of 15.9%, compared to an income tax expense of $1.5 million resulting in an effective tax rate of 16.6% for the three-month period ended September 30, 2023 and compared to an income tax expense of $2.2 million resulting in an effective tax rate of 23.5% for the three-month period ended December 31, 2022. For the year ending December 31, 2023, income tax expense was $4.6 million resulting in an effective tax rate of 15.1% compared to income tax expense of $7.6 million and an effective tax rate of 22.2% for the year ended December 30, 2022. This decrease was due to the $9.7 million non-taxable bargain purchase gain from the Noah Bank acquisition, partially offset by $325 thousand of merger-related expenses that were not tax-deductible.

About Princeton Bancorp, Inc. and The Bank of Princeton

Princeton Bancorp, Inc. is the holding company for The Bank of Princeton, a community bank founded in 2007.  The Bank is a New Jersey state-chartered commercial bank with 22 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville.  There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation ("FDIC"). On January 18, 2024, the Company announced that it has entered into a definitive agreement and plan of merger with Cornerstone Financial Corporation ("Cornerstone"), the parent company of Cornerstone Bank, headquartered in Mount Laurel, New Jersey, pursuant to which the Company will acquire Cornerstone in a transaction that is expected to close in the second or third quarter of 2024 (the "Transaction").

Forward-Looking Statements

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

These forward-looking statements involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company's control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, higher interest rates and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, supply chain disruptions, labor shortages and additional interest rate increases by the Federal Reserve. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the integration of the businesses of the Company and Cornerstone following the completion of the Transaction may be more difficult, time-consuming or costly than expected; the ability to obtain required regulatory and shareholder approvals, and the ability to complete the Transaction on the expected timeframe may be more difficult, time-consuming or costly than expected; the global impact of the military conflicts in the Ukraine and the Middle East; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank's products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors' products and services; the willingness of customers to substitute competitors' products and services for the Bank's products and services; credit risk associated with the Bank's lending activities; risks relating to the real estate market and the Bank's real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; acquisitions; changes in consumer spending and saving habits; those risks under the heading "Risk Factors" set forth in the Bank's Annual Report on Form 10-K for the year ended December 31, 2022, and in Part II, Item 1A of our quarterly report on Form 10-Q for the quarter-ended March 31, 2023, and the success of the Company at managing the risks involved in the foregoing.

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

Princeton Bancorp, Inc.

Consolidated Statements of Financial Condition

(Unaudited)

(Dollars in thousands, except per share data)



























December 31,


December 31,



2023 vs 2022





2023


2022



$ Change


% Change














ASSETS



Cash and cash equivalents


$       150,557


$         53,351



$    97,206


182.20

%


Securities available-for-sale taxable


50,544


42,061



8,483


20.17



Securities available-for-sale tax-exempt


40,808


41,341



(533)


(1.29)



Securities held-to-maturity


193


201



(8)


(3.98)



Loans receivable, net of deferred loan fees


1,548,335


1,370,368



177,967


12.99



Allowance for credit losses


(18,492)


(16,461)



(2,031)


12.34



Goodwill


8,853


8,853



-


-



Core deposit intangible


1,422


1,825



(403)


(22.08)



Equity method investments


8,296


-



8,296


       N/A 



Other assets


125,981


100,240



25,741


25.68



TOTAL ASSETS


$    1,916,497


$    1,601,779



$  314,718


19.65

%


























LIABILITIES












Non-interest checking


$       249,282


$       265,078



$  (15,796)


(5.96)

%


Interest checking


247,939


269,737



(21,798)


(8.08)



Savings


146,484


190,686



(44,202)


(23.18)



Money market


354,005


283,652



70,353


24.80



Time deposits over $250,000 


150,113


83,410



66,703


79.97



Other time deposits


487,918


255,167



232,751


91.22



Total deposits


1,635,741


1,347,730



288,011


21.37



Borrowings


-


10,000



(10,000)


(100.00)



Other liabilities


40,545


24,448



16,097


65.84



    TOTAL LIABILITIES


1,676,286


1,382,178



294,108


21.28















STOCKHOLDERS' EQUITY












Common stock 1,2


-


34,547



(34,547)


(100.00)



Paid-in capital 2


98,291


81,291



17,000


20.91



Treasury stock 2


-


(19,452)



19,452


(100.00)



Retained earnings


149,414


131,488



17,926


13.63



Accumulated other comprehensive loss


(7,494)


(8,273)



779


(9.42)



     TOTAL STOCKHOLDERS' EQUITY 


240,211


219,601



20,610


9.39















TOTAL LIABILITIES 












     AND STOCKHOLDERS' EQUITY


$    1,916,497


$    1,601,779



$  314,718


19.65

%














Book value per common share


$           38.04


$           35.16



$       2.88


8.19

%


Tangible book value per common share 3


$           36.41


$           33.45



$       2.96


8.85

%














1The common stock of Princeton Bancorp, Inc. has no par value.  The par value of the common stock of the Bank was $5.00 per share.





2The balances of common stock and treasury stock were reclassified to paid-in capital effective January 10, 2023, upon formation of Princeton Bancorp, Inc.



3Tangible book value per common share is a non-GAAP measure that represents book value per common share which excludes goodwill and core deposit intangible.


 


Princeton Bancorp, Inc.



Loan and Deposit Tables



(Unaudited)











The components of loans receivable, net at December 31, 2023 and 2022 were as follows:













December 31,


December 31,






2023


2022






(In thousands)




Commercial real estate


$     1,142,864


$        873,573




Commercial and industrial


50,961


28,859




Construction


310,187


417,538




Residential first-lien mortgages


38,040


43,125




Home equity / consumer


8,081


9,729




     Total loans


1,550,133


1,372,824




Deferred fees and costs 


(1,798)


(2,456)




Allowance for credit losses


(18,492)


(16,461)




     Loans, net


$     1,529,843


$     1,353,907




































The components of deposits at December 31, 2023 and 2022 were as follows:














December 31,


December 31,






2023


2022






(In thousands)




Demand, non-interest-bearing


$        249,282


$        265,078




Demand, interest-bearing 


247,939


269,737




Savings


146,484


190,686




Money market


354,005


283,652




Time deposits


638,031


338,577




     Total deposits


$     1,635,741


$     1,347,730











 

Princeton Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

(Amounts in thousands except per share data)














Three Months Ended December 31,








2023


2022


$ Change


% Change

Interest and dividend income









Loans and fees

$              24,364


$              19,400


$    4,964


25.6 %


Available-for-sale debt securities:










Taxable

412


288


124


43.1 %



Tax-exempt

285


285


0


0.0 %


Held-to-maturity debt securities

2


3


(1)


-33.3 %


Other interest and dividend income

2,491


482


2,009


416.8 %



Total interest and dividends

27,554


20,458


7,096


34.7 %











Interest expense










Deposits

11,544


2,210


9,334


422.4 %



Borrowings

-


2


(2)


-100.0 %



Total interest expense

11,544


2,212


9,332


421.9 %











Net interest income

16,010


18,246


(2,236)


-12.3 %

Provision for credit losses

562


200


362


181.0 %

Net interest income after provision for credit losses

15,448


18,046


(2,598)


-14.4 %











Non-interest income









Gain on call/sale of securities available-for-sale, net

45


-


45


       N/A


Income from bank-owned life insurance

377


286


91


31.8 %


Fees and service charges

462


411


51


12.4 %


Loan fees, including prepayment penalties

656


236


420


178.0 %


Other 

239


64


175


273.4 %



Total non-interest income

1,779


997


782


78.4 %











Non-interest expense









Salaries and employee benefits

6,034


5,204


830


15.9 %


Occupancy and equipment

1,849


1,413


436


30.9 %


Professional fees

425


541


(116)


-21.4 %


Data processing and communications

1,166


1,354


(188)


-13.9 %


Federal deposit insurance

190


222


(32)


-14.4 %


Advertising and promotion

129


105


24


22.9 %


Office expense

116


71


45


63.4 %


Other real estate owned

-


(6)


6


-100.0 %


Core deposit intangible

124


135


(11)


-8.1 %


Other 

916


632


284


44.9 %



Total non-interest expense

10,949


9,671


1,278


13.2 %











Income before income tax expense

6,278


9,372


(3,094)


-33.0 %

Income tax expense

996


2,201


(1,205)


-54.7 %

Net income

$                5,282


$                7,171


(1,889)


-26.3 %











Net income per common share - basic

$                 0.84


$                 1.14


$    (0.30)


-26.3 %

Net income per common share - diluted

$                 0.82


$                 1.13


$    (0.31)


-27.4 %











Weighted average shares outstanding - basic

6,300


6,246


54


0.9 %

Weighted average shares outstanding - diluted

6,414


6,371


43


0.7 %

 

Princeton Bancorp, Inc.

Consolidated Statements of Income (Current Quarter vs Prior Quarter)

(Unaudited)

(Amounts in thousands, except per share data)














Three Months Ended








December 31,


September 30,








2023


2023


$ Change


% Change

Interest and dividend income









Loans and fees

$       24,364


$       23,503


$        861


3.7 %


Available-for-sale debt securities:










Taxable

412


357


55


15.4 %



Tax-exempt

285


285


0


0.0 %


Held-to-maturity debt securities

2


3


(1)


-33.3 %


Other interest and dividend income

2,491


2,852


(361)


-12.7 %



Total interest and dividends

27,554


27,000


554


2.1 %











Interest expense










Deposits

11,544


10,316


1,228


11.9 %



Borrowings

-


-


0


       N/A



Total interest expense

11,544


10,316


1,228


11.9 %











Net interest income

16,010


16,684


(674)


-4.0 %

Provision (credit) for credit losses

562


(182)


744


-408.8 %

Net interest income after provision for credit losses

15,448


16,866


(1,418)


-8.4 %











Non-interest income









Gain (loss) on call/sale of securities available-for-sale, net

45


(6)


51


-850.0 %


Income from bank-owned life insurance

377


331


46


13.9 %


Fees and service charges

462


479


(17)


-3.5 %


Loan fees, including prepayment penalties

656


1,184


(528)


-44.6 %


Gain on sale of other real estate owned

-


203


(203)


-100.0 %


Other 

239


212


27


12.7 %



Total non-interest income

1,779


2,403


(624)


-26.0 %











Non-interest expense









Salaries and employee benefits

6,034


6,177


(143)


-2.3 %


Occupancy and equipment

1,849


2,142


(293)


-13.7 %


Professional fees

425


614


(189)


-30.8 %


Data processing and communications

1,166


1,242


(76)


-6.1 %


Federal deposit insurance

190


258


(68)


-26.4 %


Advertising and promotion

129


139


(10)


-7.2 %


Office expense

116


117


(1)


-0.9 %


Core deposit intangible

124


116


8


6.9 %


Merger-related expenses

-


(1,391)


1,391


-100.0 %


Other 

916


745


171


23.0 %



Total non-interest expense

10,949


10,159


790


7.8 %











Income before income tax expense

6,278


9,110


(2,832)


-31.1 %

Income tax expense

996


1,512


(516)


-34.1 %

Net income

$         5,282


$         7,598


$    (2,316)


-30.5 %











Net income per common share - basic

$           0.84


$           1.21


$      (0.37)


-30.6 %

Net income per common share - diluted

$           0.82


$           1.19


$      (0.37)


-31.1 %











Weighted average shares outstanding - basic

6,300


6,295


5


0.1 %

Weighted average shares outstanding - diluted

6,414


6,390


24


0.4 %

 

Princeton Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

(Amounts in thousands, except per share data)














Year Ended








December 31,








2023


2022


$ Change


% Change

Interest and dividend income









Loans and fees

$89,278


$ 70,996


$     18,282


25.8 %


Available-for-sale debt securities:










Taxable

1,339


986


353


35.8 %



Tax-exempt

1,138


1,167


(29)


-2.5 %


Held-to-maturity debt securities

10


11


(1)


-9.1 %


Other interest and dividend income

6,415


923


5,492


595.0 %



Total interest and dividends

98,180


74,083


24,097


32.5 %











Interest expense










Deposits

33,046


5,995


27,051


451.2 %



Borrowings

118


5


113


2260.0 %



Total interest expense

33,164


6,000


27,164


452.7 %











Net interest income

65,016


68,083


(3,067)


-4.5 %

Provision for credit losses

3,108


400


2,708


677.0 %

Net interest income after provision for credit losses

61,908


67,683


(5,775)


-8.5 %











Non-interest income









Gain on call/sale of securities available-for-sale, net

39


2


37


1850.0 %


Income from bank-owned life insurance

1,293


1,138


155


13.6 %


Fees and service charges

1,853


1,852


1


0.1 %


Loan fees, including prepayment penalties

3,221


1,484


1,737


117.0 %


Bargain purchase gain

9,696


-


9,696


      N/A


Gain on sale of other real estate owned

203


-


203


      N/A


Other 

816


386


430


111.4 %



Total non-interest income

17,121


4,862


12,259


252.1 %











Non-interest expense









Salaries and employee benefits

23,386


20,455


2,931


14.3 %


Occupancy and equipment

7,037


5,859


1,178


20.1 %


Professional fees

2,060


2,470


(410)


-16.6 %


Data processing and communications

5,026


4,488


538


12.0 %


Federal deposit insurance

891


1,010


(119)


-11.8 %


Advertising and promotion

504


484


20


4.1 %


Office expense

508


239


269


112.6 %


Other real estate owned expense

1


106


(105)


-99.1 %


Core deposit intangible

502


569


(67)


-11.8 %


Merger-related expenses

5,635


-


5,635


      N/A


Other 

3,144


2,812


332


11.8 %



Total non-interest expense

48,694


38,492


10,202


26.5 %











Income before income tax expense

30,335


34,053


(3,718)


-10.9 %

Income tax expense

4,570


7,559


(2,989)


-39.5 %

Net income

$25,765


$ 26,494


$        (729)


-2.8 %











Net income per common share - basic

$    4.10


$     4.19


$       (0.09)


-2.1 %

Net income per common share - diluted

$    4.03


$     4.11


$       (0.08)


-1.9 %











Weighted average shares outstanding - basic

6,281


6,320


(39)


-0.6 %

Weighted average shares outstanding - diluted

6,388


6,449


(61)


-0.9 %

 

Princeton Bancorp, Inc.

Consolidated Average Statement of Financial Condition

(Unaudited)

(Dollars in thousands)














For the Three Months Ended December 31,






2023


2022


Change in


Change in


Average 


Yield/


Average 


Yield/


Average 


Yield/


Balance


Rate 


Balance


Rate 


Balance


Rate 

Earning assets












Loans 

$     1,522,906


6.35 %


$   1,375,191


5.60 %


$      147,715


0.75 %

Securities












  Taxable available-for-sale

47,566


3.46 %


42,458


2.69 %


5,108


0.77 %

  Tax-exempt available-for-sale

38,157


2.99 %


39,743


2.85 %


(1,586)


0.14 %

  Held-to-maturity

194


5.28 %


202


5.24 %


(8)


0.04 %

Securities

85,917


3.26 %


82,403


2.77 %


3,514


0.49 %













Other interest earning assets












  Federal funds sold

161,903


5.44 %


44,410


4.09 %


117,493


1.35 %

  Other interest-earning assets

18,898


5.71 %


1,303


7.40 %


17,595


-1.69 %

Other interest-earning assets

180,801


5.47 %


45,713


4.19 %


135,088


1.28 %

Total interest-earning assets

1,789,624


6.11 %


1,503,307


5.40 %


286,317


0.71 %

Total non-earning assets

138,225




109,554







Total assets

$     1,927,849




$   1,612,861































Interest-bearing liabilities












Checking

$        250,941


1.96 %


$      275,797


0.45 %


$       (24,856)


1.51 %

Savings

146,294


2.32 %


201,498


0.53 %


(55,204)


1.79 %

Money market

353,372


3.72 %


294,246


0.91 %


59,126


2.81 %

Certificates of deposit

639,547


3.81 %


316,689


1.19 %


322,858


2.62 %

    Total interest-bearing deposits

1,390,154


3.29 %


1,088,230


0.81 %


301,924


2.48 %

Non-interest bearing deposits

258,663




280,626




(21,963)



    Total  deposits

1,648,817


2.78 %


1,368,856


0.64 %


279,961


2.14 %

Borrowings

-


      N/A


217


4.67 %


(217)


          N/A

    Total interest-bearing liabilities 












       (excluding non interest deposits)

1,390,154


3.29 %


1,088,447


0.81 %


301,707


2.48 %

Non-interest-bearing deposits

258,663




280,626







Total cost of funds

1,648,817


2.78 %


1,369,073


0.64 %


279,744


2.14 %

Accrued expenses and other liabilities

44,404




28,215







Stockholders' equity

234,628




215,573







Total liabilities and stockholders' equity

$     1,927,849




$   1,612,861



















Net interest spread



2.81 %




4.59 %





Net interest margin



3.55 %




4.82 %





Net interest margin (FTE)1



3.60 %




4.89 %

















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






 

Princeton Bancorp, Inc.

Consolidated Average Statement of Financial Condition

(Unaudited)

(Dollars in thousands)














For the Three Months Ended






December 31, 2023


September 30, 2023


Change in


Change in


Average 


Yield/


Average 


Yield/


Average 


Yield/


Balance


Rate 


Balance


Rate 


Balance


Rate 

Earning assets












Loans 

$   1,522,906


6.35 %


$       1,464,798


6.37 %


$       58,108


-0.02 %

Securities












  Taxable available-for-sale

47,566


3.46 %


46,599


3.06 %


967


0.40 %

  Tax-exempt available-for-sale

38,157


2.99 %


40,118


2.84 %


(1,961)


0.15 %

  Held-to-maturity

194


5.28 %


196


5.28 %


(2)


0.00 %

Securities

85,917


3.26 %


86,913


2.96 %


(996)


0.29 %













Other interest earning assets












  Federal funds sold

161,903


5.44 %


199,350


5.38 %


(37,447)


0.06 %

  Other interest-earning assets

18,898


5.71 %


10,506


5.67 %


8,392


0.04 %

Other interest-earning assets

180,801


5.47 %


209,856


5.39 %


(29,055)


0.07 %

Total interest-earning assets

1,789,624


6.11 %


1,761,567


6.08 %


28,057


0.03 %

Total non-earning assets

138,225




127,682







Total assets

$   1,927,849




$       1,889,249































Interest-bearing liabilities












Checking

$      250,941


1.96 %


$         243,359


1.68 %


$         7,582


0.27 %

Savings

146,294


2.32 %


149,215


2.10 %


(2,921)


0.22 %

Money market

353,372


3.72 %


337,491


3.50 %


15,881


0.22 %

Certificates of deposit

639,547


3.81 %


629,082


3.48 %


10,465


0.33 %

    Total interest-bearing deposits

1,390,154


3.29 %


1,359,147


3.01 %


31,007


0.28 %

Non-interest bearing deposits

258,663




255,775




2,888



    Total  deposits

1,648,817


2.78 %


1,614,922


2.53 %


33,895


0.25 %

Borrowings

-


      N/A


-


      N/A


0


            N/A

    Total interest-bearing liabilities 












       (excluding non interest deposits)

1,390,154


3.29 %


1,359,147


3.01 %


31,007


0.28 %

Non-interest-bearing deposits

258,663




255,775







Total cost of funds

1,648,817


2.78 %


1,614,922


2.53 %


33,895


0.25 %

Accrued expenses and other liabilities

44,404




45,923







Stockholders' equity

234,628




228,404







Total liabilities and stockholders' equity

$   1,927,849




$       1,889,249



















Net interest spread



2.81 %




3.07 %





Net interest margin



3.55 %




3.76 %





Net interest margin (FTE)1



3.60 %




3.81 %

















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






 

Princeton Bancorp, Inc.

Consolidated Average Statement of Financial Condition

(Unaudited)

(Dollars in thousands)














For the Year Ended December 31,






2023


2022


Change in


Change in


Average 


Yield/


Average 


Yield/


Average 


Yield/


Balance


Rate 


Balance


Rate 


Balance


Rate 

Earning assets












Loans 

$   1,449,504


6.16 %


$   1,375,501


5.16 %


$         74,003


1.00 %

Securities












  Taxable available-for-sale

43,476


3.08 %


47,358


2.08 %


(3,882)


1.00 %

  Tax-exempt available-for-sale

40,264


2.83 %


43,549


2.68 %


(3,285)


0.15 %

  Held-to-maturity

197


5.28 %


204


5.39 %


(7)


-0.11 %

Securities

83,937


2.96 %


91,111


2.38 %


(7,174)


0.59 %













Other interest earning assets












  Federal funds sold

109,441


5.35 %


66,292


1.20 %


43,149


4.15 %

  Other interest-earning assets

10,064


5.53 %


10,612


1.19 %


(548)


4.34 %

Other interest-earning assets

119,504


5.37 %


76,904


1.20 %


42,600


4.17 %

Total interest-earning assets

1,652,946


5.94 %


1,543,516


4.80 %


109,430


1.14 %

Total non-earning assets

122,321




101,940







Total assets

$   1,775,267




$   1,645,456































Interest-bearing liabilities












Checking

$      250,312


1.46 %


$      261,951


0.31 %


$        (11,639)


1.15 %

Savings

159,175


1.72 %


220,222


0.32 %


(61,047)


1.40 %

Money market

311,478


3.07 %


353,224


0.44 %


(41,746)


2.63 %

Certificates of deposit

538,343


3.17 %


293,627


0.99 %


244,716


2.18 %

    Total interest-bearing deposits

1,259,308


2.62 %


1,129,024


0.42 %


130,284


2.20 %

Non-interest bearing deposits

248,233




280,729







    Total  deposits

1,507,541


2.19 %


1,409,753


0.43 %


97,788


1.77 %













Borrowings

2,343


5.01 %


153


3.37 %


2,190


1.64 %

    Total interest-bearing liabilities 












       (excluding non interest deposits)

1,261,651


2.63 %


1,129,177


0.53 %


132,474


2.10 %

Non-interest-bearing deposits

248,233




280,729







Total cost of funds

1,509,884


2.19 %


1,409,906


0.43 %


99,978


1.77 %

Accrued expenses and other liabilities

36,856




20,755







Stockholders' equity

228,527




214,795







Total liabilities and stockholders' equity

$   1,775,267




$   1,645,456



















Net interest spread



3.31 %




4.27 %





Net interest margin



3.93 %




4.41 %





Net interest margin (FTE)1



3.99 %




4.47 %

















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






 

Princeton Bancorp, Inc.

Quarterly Financial Highlights

(Unaudited)













2023


2023


2023


2023


2022



December


September


June


March


December













     Return on average assets 

1.09 %


1.60 %


1.60 %


1.56 %


1.76 %


     Return on average equity 

8.93 %


13.20 %


11.98 %


11.05 %


13.20 %


     Return on average tangible equity1

9.34 %


13.83 %


12.57 %


11.60 %


13.89 %


     Net interest margin

3.55 %


3.76 %


3.95 %


4.59 %


4.82 %


     Net interest margin (FTE)2

3.60 %


3.81 %


3.99 %


4.66 %


4.89 %


     Efficiency ratio - non-GAAP3 

61.01 %


59.89 %


60.82 %


53.43 %


49.56 %













COMMON STOCK DATA











     Market value at period end

$     35.90


$     28.99


$     27.32


$     31.72


$     31.72


     Market range:











        High

$     37.60


$     31.69


$     33.00


$     37.18


$     32.80


        Low

$     28.21


$     27.37


$     24.09


$     31.18


$     28.57


     Book value per common share at period end

$     38.04


$     36.86


$     36.45


$     35.98


$     35.16


     Tangible book value per common share at period end4

$     36.41


$     35.21


$     34.78


$     34.29


$     33.45


     Shares of common stock outstanding (in thousands)

6,314


6,299


6,279


6,262


6,245













CAPITAL RATIOS











Total capital (to risk-weighted assets)

14.68 %


14.96 %


14.57 %


15.43 %


15.12 %


Tier 1 capital (to risk-weighted assets)

13.61 %


13.89 %


13.50 %


14.36 %


14.06 %


Tier 1 capital (to average assets)

12.29 %


12.38 %


13.43 %


14.00 %


13.47 %


     Period-end equity to assets

12.53 %


12.14 %


12.42 %


14.21 %


13.71 %


     Period-end tangible equity to tangible assets 

12.06 %


11.66 %


11.92 %


13.64 %


13.13 %













CREDIT QUALITY DATA (Dollars in thousands)











     Net charge-offs (recoveries)

$        (10)


$        (23)


$     1,842


$          (3)


$        406


     Annualized net charge-offs (recoveries) to average loans

-0.003 %


-0.006 %


0.514 %


-0.001 %


0.118 %













     Nonperforming loans

$     6,708


$     6,755


$     9,753


$     6,456


$        266


     Other real estate owned

-


-


33


-


-


     Total nonperforming assets

$     6,708


$     6,755


$     9,786


$     6,456


$        266













     Allowance for credit losses as a percent of:











     Period-end loans, net of deferred fees and costs      

1.19 %


1.20 %


1.20 %


1.19 %


1.20 %


     Nonaccrual loans 

275.67 %


266.35 %


184.25 %


255.68 %


6188.35 %


     Nonperforming assets 

275.67 %


266.35 %


183.63 %


255.68 %


6188.35 %













    Nonaccrual loans as a percent of total loans, net of deferred fees and costs

0.43 %


0.45 %


0.65 %


0.46 %


0.02 %
























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





2Includes the effect of tax-exempt securities and loans.











3The efficiency ratio is a non-GAAP measure that represents the ratio of non-interest expense (excluding amortization of core deposit intangible and merger-) 

       related expenses) divided by net interest income and non-interest income (excluding bargain purchase gain and gain on call/sale of securities available-for-sale). 

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




      excludes goodwill and core deposit intangible. 











 

Contact: 
George Rapp 
609.454.0718
grapp@thebankofprinceton.com

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/princeton-bancorp-announces-fourth-quarter-2023-results-302045114.html

SOURCE The Bank of Princeton

FAQ

What is the ticker symbol for Princeton Bancorp, Inc.?

The ticker symbol for Princeton Bancorp, Inc. is BPRN.

What were the total assets at the end of 2023?

Total assets were $1.92 billion at the end of 2023, an increase of 19.7% compared to the end of 2022.

What was the net income for the fourth quarter of 2023?

The net income for the fourth quarter of 2023 was $5.3 million.

What was the increase in deposits for the year ended December 31, 2023?

Total deposits increased $288.0 million, or 21.4%, when compared to December 31, 2022.

What was the primary reason for the increase in total assets at the end of 2023?

The primary reason for the increase in total assets was the acquisition of Noah Bank on May 19, 2023, which had approximately $239.4 million in assets at closing.

What was the effective tax rate for the year ending December 31, 2023?

The effective tax rate for the year ending December 31, 2023, was 15.1%.

Princeton Bancorp, Inc.

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