[10-Q] Princeton Bancorp, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

Key results — Q2 2025 vs. Q2 2024: Net income was $688k for the three months ended June 30, 2025 versus $5,126k a year earlier; diluted EPS fell to $0.10 from $0.80. Provision for credit losses was $6,956k in Q2 2025 and $7,224k for the six months, compared with a $118k reversal and $68k provision in the prior-year periods. Charge-offs for the six months were $10,033k, including $9,950k in commercial real estate.

Balance sheet and liquidity: Total assets were $2,241,668k and deposits were $1,932,372k at June 30, 2025 (down $100,253k in the six months). Cash and cash equivalents fell to $21,094k from $117,348k at year-end. Securities available-for-sale fair value was $224,763k with $10,590k of unrealized losses. Allowance for credit losses on loans was $21,014k at June 30, 2025. The Company had $10,000k overnight borrowings as of June 30, 2025.

Positive

• Net interest income increase: Q2 NII was $18,810k versus $15,968k in Q2 2024, indicating higher interest margin or loan yields.
• Completed strategic acquisition: The Company completed the Cornerstone Financial Corporation acquisition on August 23, 2024 (disclosed as completed).
• Large securities portfolio: Securities available-for-sale at fair value totaled $224,763k, providing liquid investment holdings.
• Loan originations/acquisitions: The Company purchased approximately $43.0M in residential loans and $2.8M in consumer loans during the six months ended June 30, 2025.

Negative

• Sharp decline in quarterly earnings: Q2 net income fell to $688k from $5,126k year-over-year; diluted EPS fell to $0.10 from $0.80.
• Material credit losses and provisioning: Q2 provision $6,956k and six-month charge-offs $10,033k (including $9,950k CRE charge-offs) reduced the allowance from prior-year levels.
• Deposit outflow and liquidity pressure: Deposits decreased by $100,253k in six months and cash and cash equivalents declined by $96,254k, requiring $10,000k overnight borrowings at period-end.
• Unrealized securities losses: Available-for-sale securities had $10,590k of unrealized losses at June 30, 2025.
• Allowance level reduced: Allowance for credit losses on loans was $21,014k at June 30, 2025, lower than $23,657k at December 31, 2024, after charge-offs.

Insights

Financial Analyst

TL;DR: Earnings plunged due to large loan loss provisioning and charge-offs, while net interest income improved but liquidity and deposits contracted materially.

The quarter shows a meaningful deterioration in reported earnings: Q2 net income of $688k and EPS $0.10 versus $5,126k and $0.81 a year ago, driven primarily by a $6.956M provision for credit losses and $9.95M commercial real estate charge-offs in the six-months. Net interest income increased to $18,810k for Q2 (from $15,968k), indicating benefit from higher yields or loan growth. However, deposits declined $100.253M and cash balances fell ~$96.254M in the six months, prompting $10.0M overnight borrowings at period-end. Investors should note the reduction in the allowance to $21.014M after significant charge-offs and the $10.59M unrealized AFS securities loss. Overall impact: materially negative to near-term earnings and liquidity.

Credit/Risk Analyst

TL;DR: Credit metrics weakened with sizable charge-offs and elevated provisioning, though nonperforming loan counts and collateral support are documented.

Credit activity is the dominant driver this period. The Company recorded $10.033M of charge-offs in the six months, largely $9.95M in commercial real estate, and increased loan loss provisions of $7.224M for six months. The allowance for loan losses totaled $21.014M and seven loans totaling $16.5M were individually evaluated for credit loss as of June 30, 2025; $16.0M of these are real-estate-secured. Nonaccrual loans aggregated $16.53M at June 30, 2025. Management indicates unrealized securities losses are interest-rate related, not credit-driven. These credit developments are material and suggest elevated portfolio stresses despite collateral coverage.

falseQ20001913971--12-31The provision for credit losses on the Consolidated Statement of Income is $7.2 million comprising of an increase of $7.1 million increase to the allowance for loan loss and a $50 thousand increase to the reserve for unfunded liabilities.The reversal of credit losses on the Consolidated Statement of Income is $118 thousand comprising of a $169 thousand decrease to the allowance for credit losses on loans and a $51 thousand increase to the reserve for unfunded liabilities.The provision for credit losses on the Consolidated Statement of Income is $68 thousand comprising of a $133 thousand increase to the allowance for credit losses on loans and a $65 thousand reduction to the reserve for unfunded liabilities.The provision for credit losses on the Consolidated Statement of Income is $7.0 million comprising of an increase of $6.9 million to the allowance for loan loss and a $57 thousand increase to the reserve for unfunded liabilities. 0001913971 2025-01-01 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bprn:Securities bprn:Loan bprn:Integer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20429

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from       to      

Commission File Number: 001-41589

PRINCETON BANCORP, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania		88-4268702
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

183 Bayard Lane, Princeton, New Jersey 08540

(Address of principal executive offices) (Zip Code)

(609) 921-1700

(Registrant’s telephone number, including area code)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, no par value		BPRN		The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☒
Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 6, 2025, there were 6,747,923 outstanding shares of the issuer’s common stock, no par value.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1		Financial Statements
		Unaudited Consolidated Statements of Financial Condition - June 30, 2025 and December 31, 2024			3
		Unaudited Consolidated Statements of Income - Three and Six Months Ended June 30, 2025 and 2024			4
		Unaudited Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2025 and 2024			5
		Unaudited Consolidated Statements of Changes in Stockholders’ Equity - Three and Six Months Ended June 30, 2025 and 2024			6
		Unaudited Consolidated Statements of Cash Flows - Six Months Ended June 30, 2025 and 2024			7
		Notes to Unaudited Consolidated Financial Statements			8
Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3		Quanitative and Qualitative Disclosure about Market Risk			40
Item 4		Controls and Procedures			40
PART II OTHER INFORMATION
Item 1		Legal Proceedings			41
Item 1A		Risk Factors			41
Item 2		Unregistered Sale of Equity Securities and Use of Proceeds			41
Item 3		Defaults Upon Senior Securities			41
Item 4		Mine Safety Disclosures			41
Item 5		Other Information			41
Item 6		Exhibits			42

2

PART I–FINANCIAL INFORMATION

Item 1. Financial Statements.

PRINCETON BANCORP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except share data)

		June 30,				December 31,
		2025				2024
ASSETS
Cash and due from banks		$	19,609			$	16,915
Interest-earning bank balances			1,485				16,729
Federal funds sold			—				83,704
Total cash and cash equivalents			21,094				117,348
Securities available-for-sale, at fair value			224,763				247,171
Securities held-to-maturity (fair value $158 and $162, at June 30, 2025 and December 31, 2024, respectively)			157				161
Loans receivable, net of deferred fees and costs			1,839,228				1,818,875
Less: allowance for credit losses			(21,014	)			(23,657	)
Loan receivable, net			1,818,214				1,795,218
Bank-owned life insurance			70,357				72,111
Premises and equipment, net			17,361				17,804
Accrued interest receivable			7,868				7,975
Restricted investment in bank stock			2,816				2,075
Deferred taxes, net			19,533				20,276
Goodwill			14,381				14,381
Core deposit intangible			3,185				3,632
Other real estate owned			—				295
Operating lease right-of-use asset			20,438				21,903
Other assets			21,501				19,883
TOTAL ASSETS		$	2,241,668			$	2,340,233
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest-bearing		$	299,902			$	300,972
Interest-bearing			1,632,470				1,731,653
Total deposits			1,932,372				2,032,625
Borrowings			10,000				—
Accrued interest payable			9,655				15,401
Operating lease liability			21,501				22,941
Other liabilities			6,194				7,226
TOTAL LIABILITIES			1,979,722				2,078,193
STOCKHOLDERS’ EQUITY:
Preferred stock, no par value; 2,000,000 shares authorized and none outstanding at June 30, 2025 and at December 31, 2024			—				—
Common stock, no par value; 15,000,000 shares authorized, 7,011,952 shares issued and 6,805,799 outstanding at June 30, 2025; 6,910,693 shares issued and 6,883,193 outstanding at December 31, 2024			—				—
Paid-in capital			121,706				119,908
Treasury stock, at cost; 206,153 shares at June 30, 2025 and 27,500 shares at December 31, 2024			(6,485	)			(842	)
Retained earnings			153,768				151,915
Accumulated other comprehensive loss			(7,043	)			(8,941	)
TOTAL STOCKHOLDERS’ EQUITY			261,946				262,040
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	2,241,668			$	2,340,233

See accompanying notes to unaudited consolidated financial statements.

3

Table of Contents

PRINCETON BANCORP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except share data)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2025				2024				2025				2024
INTEREST AND DIVIDEND INCOME
Loans receivable, including fees		$	29,620			$	26,034			$	59,244			$	50,974
Securities available-for-sale:
Taxable			2,298				1,001				4,914				1,565
Tax-exempt			279				286				563				572
Securities held-to-maturity			2				3				4				5
Other interest and dividend income			557				2,086				1,326				4,360
TOTAL INTEREST AND DIVIDEND INCOME			32,756				29,410				66,051				57,476
INTEREST EXPENSE
Deposits			13,933				13,442				28,471				26,060
Borrowings			13				—				13				—
TOTAL INTEREST EXPENSE			13,946				13,442				28,484				26,060
NET INTEREST INCOME			18,810				15,968				37,567				31,416
Provision for (reversal of) credit losses			6,956				(118	)			7,224				68
NET INTEREST INCOME AFTER PROVISION FOR (REVERSAL OF) CREDIT LOSSES			11,854				16,086				30,343				31,348
NON-INTEREST INCOME
Income from bank-owned life insurance			494				388				965				769
Fees and service charges			551				465				1,062				897
Loan fees, including preypayment penalties			703				937				1,378				1,661
Other			503				297				1,036				745
TOTAL NON-INTEREST INCOME			2,251				2,087				4,441				4,072
NON-INTEREST EXPENSE
Salaries and employee benefits			7,093				6,443				14,265				12,963
Occupancy and equipment			2,147				1,850				4,432				3,879
Professional fees			721				602				1,482				1,126
Data processing and communications			1,543				1,404				3,169				2,564
Federal deposit insurance			415				279				948				552
Advertising and promotion			152				156				323				298
Office expense			238				155				348				274
Other real estate expenses			—				—				27				—
Core deposit intangible			219				111				447				231
Other			981				1,009				1,860				1,958
TOTAL NON-INTEREST EXPENSE			13,509				12,009				27,301				23,845
INCOME BEFORE INCOME TAX EXPENSE			596				6,164				7,483				11,575
INCOME TAX (BENEFIT) EXPENSE			(92	)			1,038				1,417				2,104
NET INCOME		$	688			$	5,126			$	6,066			$	9,471
Earnings per common share-basic		$	0.10			$	0.81			$	0.88			$	1.50
Earnings per common share-diluted		$	0.10			$	0.80			$	0.88			$	1.48

See accompanying notes to unaudited consolidated financial statements.

4

Table of Contents

PRINCETON BANCORP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2025				2024				2025				2024
NET INCOME		$	688			$	5,126			$	6,066			$	9,471
Other comprehensive income (loss)
Unrealized gains(losses) arising during period on securities available-for-sale			821				(1,110	)			2,648				(2,001	)
Net unrealized gain (loss) income			821				(1,110	)			2,648				(2,001	)
Tax effect			(234	)			316				(750	)			916
Total other comprehensive income (loss)			587				(794	)			1,898				(1,085	)
COMPREHENSIVE INCOME		$	1,275			$	4,332			$	7,964			$	8,386

See accompanying notes to unaudited consolidated financial statements.

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PRINCETON BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands, except share data)

																		Accumulated
																		Other
		Common				Paid-in				Treasury				Retained				Comprehensive
		Stock				Capital				Stock				Earnings				Loss				Total
Three Months Ended June 30, 2025 and 2024
Balance, April 1, 2024		$	—			$	98,312			$	(579	)		$	151,860			$	(7,785	)			241,808
Net income			—				—				—				5,126				—				5,126
Other comprehensive loss			—				—				—				—				(794	)			(794	)
Treasury stock repurchases (8,500 shares)			—				—				(263	)			—				—				(263	)
Stock options exercised (40,050 shares)			—				556				—				—				—				556
Dividends declared $0.30 per share			—				—				—				(1,868	)			—				(1,868	)
Dividend reinvestment plan (1,141 shares)			—				35				—				(35	)			—				—
Stock-based compensation expense			—				276				—				—				—				276
Balance, June 30, 2024		$	—			$	99,179			$	(842	)		$	155,083			$	(8,579	)		$	244,841
Balance, April 1, 2025		$	—			$	120,452			$	(1,005	)		$	155,170			$	(7,630	)		$	266,987
Net income			—				—				—				688				—				688
Other comprehensive income			—				—				—				—				587				587
Treasury stock repurchases (173,403 shares)			—				—				(5,480	)			—				—				(5,480	)
Stock options exercised (50,000 shares)			—				899				—				—				—				899
Share redemption for tax withholding on restricted stock vesting			—				—				—				—				—				—
Dividends declared $0.30 per share			—				—				—				(2,057	)			—				(2,057	)
Dividend reinvestment plan (1,072 shares)			—				33				—				(33	)			—				—
Stock-based compensation expense			—				322				—				—				—				322
Balance, June 30, 2025		$	—			$	121,706			$	(6,485	)		$	153,768			$	(7,043	)		$	261,946
																		Accumulated
																		Other
		Common				Paid-in				Treasury				Retained				Comprehensive
		stock				Capital				Stock				Earnings				Loss				Total
Six Months Ended June 30, 2025 and 2024
Balance, January 1, 2024		$	—			$	98,291			$	—			$	149,414			$	(7,494	)		$	240,211
Net income			—				—				—				9,471				—				9,471
Other comprehensive loss			—				—				—				—				(1,085	)			(1,085	)
Treasury stock repurchases (27,500 shares)			—				—				(842	)			—				—				(842	)
Stock options exercised (42,500 shares)			—				590				—				—				—				590
Share redemption for tax withholding on restricted stock vesting			—				(249	)			—				—				—				(249	)
Dividends declared $0.60 per share			—				—				—				(3,734	)			—				(3,734	)
Dividend reinvestment plan (2,159 shares)			—				68				—				(68	)			—				—
Stock-based compensation expense			—				479				—				—				—				479
Balance, June 30, 2024		$	—			$	99,179			$	(842	)		$	155,083			$	(8,579	)		$	244,841
Balance, January 1, 2025		$	—			$	119,908			$	(842	)		$	151,915			$	(8,941	)		$	262,040
Net income			—				—				—				6,066				—				6,066
Other comprehensive income			—				—				—				—				1,898				1,898
Treasury stock repurchases (178,653 shares)			—				—				(5,643	)							—				(5,643	)
Stock options exercised (71,300 shares)			—				1,342				—				—				—				1,342
Share redemption for tax withholding on restricted stock vesting			—				(227	)			—				—				—				(227	)
Dividends declared $0.60 per share			—				—				—				(4,149	)			—				(4,149	)
Dividend reinvestment plan (2,066 shares)			—				64				—				(64	)			—				—
Stock-based compensation expense			—				619				—				—				—				619
Balance, June 30, 2025		$	—			$	121,706			$	(6,485	)		$	153,768			$	(7,043	)		$	261,946

See accompanying notes to unaudited consolidated financial statements.

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PRINCETON BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

		Six Months Ended June 30,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	6,066			$	9,471
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses			7,224				68
Depreciation and amortization			894				817
Stock-based compensation expense			619				479
Amortization of premiums and accretion of discounts on securities, net			142				99
Accretion of net deferred loan fees and costs			(2,600	)			(721	)
Increase in cash surrender value of bank-owned life insurance			(965	)			(769	)
Deferred income (benefit) tax			743				1,252
Amortization of core deposit intangible			447				231
Decrease (increase) in accrued interest receivable and other assets			90				(1,275	)
(Decrease) in accrued interest payable and other liabilities			(8,267	)			(518	)
NET CASH PROVIDED BY OPERATING ACTIVITIES			4,393				9,134
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale securities			(11,590	)			(49,331	)
Maturities, calls and principal repayments of securities available-for-sale			36,504				6,894
Maturities, calls and principal repayments of securities held-to-maturity			4				28
Net (increase) in loans			(27,571	)			(24,296	)
Purchases of premises and equipment			(451	)			(446	)
Exchange (purchase) of bank-owned life insurance			2,798				—
(Purchases) of equity method investments			(670	)			—
(Purchases) redemption of restricted bank stock			(741	)			(331	)
NET CASH USED IN INVESTMENT ACTIVITIES			(1,717	)			(67,482	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits			(100,253	)			63,331
Proceeds from overnight borrowings			10,000				—
Cash dividends			4,149				(3,734	)
Share redemption for tax witholding on restricted stock vesting			(227	)			(249	)
Purchase of treasury stock			(5,643	)			(842	)
Proceeds from exercise of stock options			1,342				590
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES			(98,930	)			59,096
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS			(96,254	)			748
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			117,348				150,557
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	21,094			$	151,305
SUPPLEMENTARY CASH FLOWS INFORMATION:
Interest paid		$	34,230			$	24,174
Income taxes paid		$	2,694			$	1,279

See accompanying notes to unaudited consolidated financial statements.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 1 – Summary of Significant Accounting Policies

Organization and Nature of Operations

The Bank of Princeton (the “Bank”) was incorporated on March 5, 2007, under the laws of the State of New Jersey and is a New Jersey state-chartered banking institution. The Bank was granted its bank charter on April 17, 2007, commenced operations on April 23, 2007, and is a full-service bank providing personal and business lending and deposit services. As a state-chartered bank, the Bank is subject to regulation by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation (“FDIC”). The area served by the Bank, through its 35 branches, is generally an area within an approximate 50-mile radius of Princeton, NJ, including parts of Burlington, Camden, Gloucester, Hunterdon, Mercer, Middlesex, Ocean, and Somerset Counties in New Jersey, and additional areas in portions of Philadelphia, Montgomery, and Bucks Counties in Pennsylvania. The Bank also has two retail branches and conducts loan origination activities in select areas of New York.

The Bank offers traditional retail banking services, one-to-four-family residential mortgage loans, multi-family and commercial mortgage loans, construction loans, commercial business loans and consumer loans, including home equity loans and lines of credit.

On January 10, 2023, Princeton Bancorp, Inc., a Pennsylvania corporation formed by the Bank (the “Company”), acquired all the outstanding stock of the Bank in a corporate reorganization. As a result, the Bank became the sole direct subsidiary of the Company, the Company became the holding company for the Bank and the stockholders of the Bank became stockholders of the Company. As of June 30, 2025, the Company and its subsidiaries had 251 total employees and 247 full-time equivalent employees.

On August 23, 2024, the Company completed the acquisition of Cornerstone Financial Corporation (“CFC”), the holding company for Cornerstone Bank, a New Jersey chartered state bank headquartered in Mt. Laurel, New Jersey that primarily served the South Jersey market. On that date, the Company acquired 100% of the outstanding common stock of CFC in exchange for the Company’s stock, CFC was merged into the Company, and Cornerstone Bank was merged with and into the Bank.

Basis of Financial Statement Presentation

The unaudited consolidated financial statements include the accounts of the Company, its wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiaries: Bayard Lane, LLC, Bayard Properties, LLC, 112 Fifth Avenue, LLC, TBOP Delaware Investment Company and TBOP REIT, Inc. All significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission and the FDIC. Accordingly, they do not include all the information and disclosures required by GAAP for annual financial statements. In management’s opinion, the unaudited consolidated financial statements contain all adjustments, which include normal and recurring adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods presented. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 1 – Summary of Significant Accounting Policies (continued)

Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the valuation of acquired assets and liabilities, and evaluation of the potential impairment of goodwill.

Management believes that the allowance for credit losses is adequate as of June 30, 2025. While management uses current information to recognize losses on loans, future additions to the allowance for credit losses may be necessary based on changes in economic conditions in the market area or other factors.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to effect certain changes that result in additions to the allowance based on their judgments about information available to them at the time of their examinations.

Segment Reporting

The Company adopted Accounting Standards Update (ASU) 2023-07 “Segment Reporting (Topic 280) - Improvement to Reportable Segment Disclosures” on January 1, 2024. The Company has determined that all of its banking divisions and subsidiaries meet the aggregation criteria of Accounting Standards Codification (ASC) 280, Segment Reporting, as its current operating model is structured whereby banking divisions and subsidiaries serve a similar customer base utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the Company’s Chief Executive Officer, who has been identified as the chief operating decision maker (“CODM”).

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company’s consolidated statements of income. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of income.

Reclassifications

Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year’s presentation.

Recent Accounting Pronouncements Adopted

Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (FASB) issued (ASU) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which enhances the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, as well as additional information about income taxes paid. The ASU also removes certain disclosures that are no longer considered cost beneficial or relevant.

The Company adopted ASU 2023-09 on January 1, 2025, on a prospective basis, as permitted by the guidance. The adoption did not impact on the Company’s consolidated financial condition, results of operations, or cash flows, but it will result in enhanced income tax disclosures beginning with the Company’s annual report for the fiscal year ended December 31, 2025.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 1 – Summary of Significant Accounting Policies (concluded)

Recent Accounting Pronouncements Not Yet Adopted

ASU 2023-06, “Disclosure Improvements” amends disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The effective dates will depend, in part, on whether an entity is already subject to the SEC’s current disclosure requirements. This ASU is not expected to have a material impact on the Company’s consolidated financial statements.

Note 2 – Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares outstanding for the period adjusted to include the effect of outstanding stock options, if dilutive, using the treasury stock method. Shares issued during any period are weighted for the portion of the period they were outstanding.

The following schedule presents earnings per share data for the three and six month periods ended June 30, 2025 and 2024 (in thousands, except per share data):

		Three months ended June 30,								Six months ended June 30,
		2025				2024				2025				2024
Net income applicable to common stock		$	688			$	5,126			$	6,066			$	9,471
Weighted average number of common shares outstanding			6,867				6,332				6,886				6,330
Basic earnings per share		$	0.10			$	0.81			$	0.88			$	1.50
Net income applicable to common stock		$	688			$	5,126			$	6,066			$	9,471
Weighted average number of common shares outstanding			6,867				6,332				6,886				6,330
Dilutive effect on common shares outstanding			29				85				43				79
Weighted average number of diluted common shares outstanding			6,896				6,417				6,929				6,409
Diluted earnings per share		$	0.10			$	0.80			$	0.88			$	1.48

The following schedule presents stock options granted but not exercised and the amount of shares that were anti-dilutive because the weighted average exercise price equaled or exceeded the estimated fair value of our common stock for the three- and six-months period ended June 30, 2025, and 2024:

		Three months ended June 30,
		2025								2024
						Weighted Ave								Weighted Ave
		Options				Exercise Price				Options				Exercise Price
Options to purchase			178,396			$	25.10				310,582			$	32.61
Anti-dilutive			—			$	—				—			$	—

		Six months ended June 30,
		2025								2024
						Weighted Ave								Weighted Ave
		Options				Exercise Price				Options				Exercise Price
Options to purchase			178,001			$	25.07				321,403			$	24.61
Anti-dilutive			—				—				—			$	—

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 3 – Investment Securities

The following summarizes the amortized cost and fair value of securities available-for-sale at June 30, 2025 and December 31, 2024 with gross unrealized gains and losses therein:

		June 30, 2025
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
		(In thousands)
Available-for-sale
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)		$	175,736			$	743			$	(6,033	)		$	170,445
U.S. government agency securities			11,260				1				(919	)			10,341
Obligations of state and political subdivisions			43,220				1				(3,635	)			39,587
Small business association (SBA) securities			1,481				8				(1	)			1,487
U.S. treasury securities			2,905				—				(2	)			2,903
Total		$	234,602			$	753			$	(10,590	)		$	224,763

		December 31, 2024
						Gross				Gross
		Amortized				Unrealized				Unrealized
		Cost				Gains				Losses				Fair Value
						(In thousands)
Available -for-sale
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)		$	197,792			$	422			$	(7,669	)		$	190,545
U.S. government agency securities			11,260				17				(1,077	)			10,200
Obligations of state and political subdivisions			43,895				1				(4,166	)			39,730
Small business association (SBA) securities			1,856				5				(4	)			1,857
U.S. treasury securities			4,855				1				(17	)			4,839
Total		$	259,658			$	446			$	(12,933	)		$	247,171

The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities available-for-sale at June 30, 2025 and December 31, 2024 are as follows:

		Less than 12 Months								More than 12 Months								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
		(In thousands)
June 30, 2025
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)		$	41,075			$	(278	)		$	28,055			$	(5,755	)		$	69,130			$	(6,033	)
U.S. government agency securities			4,879				(60	)			5,400				(859	)			10,279				(919	)
Obligations of state and political subdivisions			2,205				(4	)			34,816				(3,631	)			37,021				(3,635	)
Small business association (SBA) securities			165				—				85				(1	)			250				(1	)
U.S. Treasuries			2,903				(2	)			—				—				2,903				(2	)
Total		$	51,227			$	(344	)		$	68,356			$	(10,246	)		$	119,583			$	(10,590	)

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 3 – Investment Securities (concluded)

		Less than 12 Months								More than 12 Months								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
		(In thousands)
December 31, 2024
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)		$	122,763			$	(1,157	)		$	29,229			$	(6,512	)		$	151,992			$	(7,669	)
U.S. government agency securities			129				—				5,183				(1,077	)			5,312				(1,077	)
Obligations of state and political subdivisions			3,664				(39	)			34,320				(4,127	)			37,984				(4,166	)
Small business association (SBA) securities			447				(1	)			449				(3	)			896				(4	)
U.S. Treasuries			2,846				(17	)			—				—				2,846				(17	)
		$	129,849			$	(1,214	)		$	69,181			$	(11,719	)		$	199,030			$	(12,933	)

The amortized cost and fair value of securities available-for-sale at June 30, 2025 by contractual maturity are shown below. Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:

		Amortized
		Cost				Fair Value
		(In thousands)
Due in one year or less		$	2,122			$	2,122
Due after one year through five years			9,427				9,334
Due after five years through ten years			41,975				38,369
Due after ten years			5,342				4,493
Mortgage-backed securities (GSEs)			175,736				170,445
		$	234,602			$	224,763

Proceeds from calls and maturities of securities available-for-sale were not significant for the six-month period ended June 30, 2025 or 2024.

The Company uses a defined methodology for allowance for credit losses on its investment securities available-for-sale. The Company did not have an allowance for credit losses on its investment securities available-for-sale as of June 30, 2025 or 2024.

The Company’s securities primarily consist of the following types of instruments; U.S. guaranteed mortgage-backed securities, U.S. guaranteed agency bonds, state and political subdivision issued bonds, mortgage related securities guaranteed by the SBA and U.S. treasury notes. We believe it is reasonable to expect that the securities with a credit guarantee of the U.S. government will have a zero-credit loss. Therefore, no reserve was recorded for U.S. guaranteed securities or bonds at June 30, 2025. The state and political subdivision securities carry a minimum investment rating of A by either Moody’s or Standard and Poor’s. Some of the smaller municipalities also have insurance to cover the Company in the event of default. Therefore, the Company did not project a credit loss and no reserve was recorded as of June 30, 2025.

At June 30, 2025, the Company’s available-for-sale securities portfolio consisted of approximately 270 securities, of which 161 available-for-sale securities were in an unrealized loss position for more than twelve months and 31 available-for-sale securities were in an unrealized loss position for less than twelve months. The available-for-sale securities in an unrealized loss position for more than twelve months consisted of 106 municipal securities aggregating $34.8 million with a loss of $3.6 million, 50 mortgage-backed securities-GSE aggregating $28.0 million with a loss of $5.8 million, 1 agency security aggregating $5.4 million with a loss of $859 thousand and 4 SBA securities aggregating $85 thousand with a loss of $1 thousand. The Company does not intend to sell these securities, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. Unrealized losses primarily relate to interest rate fluctuations and not credit concerns.

There are no securities pledged as of June 30, 2025, and December 31, 2024.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 4 – Loans Receivable

Loans receivable, net at June 30, 2025 and December 31, 2024 were comprised of the following:

		June 30,				December 31,
		2025				2024
		(In thousands)
Commercial real estate		$	1,378,327			$	1,385,085
Commercial and industrial			78,409				92,857
Construction			255,335				257,169
Residential first-lien mortgage			108,558				68,030
Home equity/consumer			21,416				18,133
Total loans			1,842,045				1,821,274
Deferred fees and costs			(2,817	)			(2,399	)
Loans, net		$	1,839,228			$	1,818,875

The Company purchased approximately $43.0 million in residential loans and $2.8 million in consumer loans during the six-months ended June 30, 2025. Besides the loans acquired in the acquisition of Cornerstone Bank in the third quarter of 2024, the Company did not purchase any loans during the year ended December 31, 2024.

The Company uses the discounted cash flow methodology in determining the appropriate quantitative adjustments, which projects future losses, based on historical and peer loss data, as part of the allowance for credit losses (“ACL”) reserve. Qualitative adjustments include and consider changes in national, regional, and local economic and business conditions, an assessment of the lending environment, including underwriting standards, and other factors affecting credit quality. There were no significant changes to the Company’s ACL methodology for the quarter ended June 30, 2025.

The following table presents the components of the allowance for credit losses:

		June 30, 2025				December 31, 2024
		(In thousands)
Allowance for credit losses - loans		$	(21,014	)		$	(23,657	)
Allowance for credit losses - off balance sheet			(411	)			(361	)
		$	(21,425	)		$	(24,018	)

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 4 – Loans Receivable (continued)

The following table presents nonaccrual loans by segment of the loan portfolio as of June 30, 2025 and December 31, 2024:

		June 30, 2025								December 31, 2024
		With a				Without a				With a				Without a
		Related				Related				Related				Related
		Allowance				Allowance				Allowance				Allowance
		(In thousands)
Commercial real estate		$	—			$	15,312			$	18,502			$	6,939
Commercial and industrial			—			$	1,071				109				1,178
Construction			—				—				—				—
Residential first-lien mortgage			—				147				—				94
Home equity/consumer			—				—				—				19
Total nonaccrual loans		$	—			$	16,530			$	18,611			$	8,230

The calculation of the allowance for credit losses does not include any accrued interest receivable. The Company’s policy is to write off any interest not collected after 90 days or when the ability to collect principal and interest according to the contractual terms is in doubt. During the six-month period ended June 30, 2025, the Company wrote off $675 thousand in accrued interest receivable for loans, compared to $666 thousand for the six-month period ended June 30, 2024. Accrued interest receivable related to loans, at June 30, 2025, and December 31, 2024, was $6.5 million, respectively. The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loan receivables by the length of time a recorded payment is past due. The following table presents the segments of the loan portfolio, summarized by the past due status as of June 30, 2025:

																										Loans
		30-59				60-89				>90																Receivable
		Days				Days				Days				Total								Total				>90 Days
		Past				Past				Past				Past								Loans				and
		Due				Due				Due				Due				Current				Receivable				Accruing
		(In thousands)
Commercial real estate		$	379			$	—			$	15,312			$	15,691			$	1,362,636			$	1,378,327			$	—
Commercial and industrial			1,423				—				1,071				2,494				75,915				78,409				65
Construction			—				—				—				—				255,335				255,335				—
Residential first-lien mortgage			612				—				147				759				107,799				108,558				—
Home equity/consumer			—				—				—				—				21,416				21,416				—
Total		$	2,414			$	—			$	16,530			$	18,944			$	1,823,101			$	1,842,045			$	65

The following table presents the segments of the loan portfolio summarized by the past due status as of December 31, 2024:

																										Loans
		30-59				60-89				>90																Receivable
		Days				Days				Days				Total								Total				>90 Days
		Past				Past				Past				Past								Loans				and
		Due				Due				Due				Due				Current				Receivable				Accruing
		(In thousands)
Commercial real estate		$	—			$	—			$	25,441			$	25,441			$	1,359,644			$	1,385,085			$	—
Commercial and industrial			36				—				421				457				92,400				92,857				32
Construction			—				—				—				—				257,169				257,169				—
Residential first-lien mortgage			700				94				—				794				67,236				68,030				—
Home equity/consumer			—				—				—				—				18,133				18,133				—
Total		$	736			$	94			$	25,862			$	26,692			$	1,794,582			$	1,821,274			$	32

14

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 4 – Loans Receivable (continued)

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis and assigns one of the following ratings: pass, special mention, substandard and doubtful. The Company engages a third party to review its assessment on a semiannual basis. The Company classifies residential and consumer loans as either performing or nonperforming based on payment status.

The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of June 30, 2025. Gross charge-offs are included for the six-months ended June 30, 2025.

		2025				2024				2023				2022				2021				Prior				Revolving Loans				Total
		(Dollars in thousands)
Commercial real estate
Pass		$	48,349			$	129,926			$	163,654			$	302,928			$	131,269			$	572,356			$	6,030			$	1,354,512
Special mention			—				—				—				—				—				8,502				—				8,502
Substandard			—				—				—				—				—				15,313				—				15,313
Total commercial real estate			48,349				129,926				163,654				302,928				131,269				596,171				6,030				1,378,327
Current period gross charge-offs																							9,950								9,950
Commercial and industrial
Pass			2,641				3,046				4,952				10,625				11,517				14,513				29,404				76,698
Special mention			—				—				—				—				—				641				—				641
Substandard			—				—				—				—				—				1,070				—				1,070
Total commercial and industrial			2,641				3,046				4,952				10,625				11,517				16,224				29,404				78,409
Current period gross charge-offs																							83								83
Construction
Pass			18,602				4,000				7,234				9,380				31,349				6,416				178,354				255,335
Special mention			—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—
Total construction			18,602				4,000				7,234				9,380				31,349				6,416				178,354				255,335
Current period gross charge-offs																							—								—
Residential first-lien mortgage
Performing			5,204				34,213				11,357				7,957				7,083				42,597				—				108,411
Nonperforming			—				—				—				—				—				147				—				147
Total residential first-lien mortgage			5,204				34,213				11,357				7,957				7,083				42,744				—				108,558
Home equity/consumer
Performing			4,147				1,596				374				1,930				986				995				11,388				21,416
Nonperforming			—				—				—				—				—				—				—				—
Total home equity/consumer			4,147				1,596				374				1,930				986				995				11,388				21,416
Total
Pass			78,943				172,781				187,571				332,820				182,204				636,877				225,176				1,816,372
Special mention			—				—				—				—				—				9,143				—				9,143
Substandard			—				—				—				—				—				16,530				—				16,530
Total loans		$	78,943			$	172,781			$	187,571			$	332,820			$	182,204			$	662,550			$	225,176			$	1,842,045

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 4 – Loans Receivable (continued)

The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of December 31, 2024. Gross charge-offs are included for the year-ended December 31, 2024.

		2024				2023				2022				2021				2020				Prior				Revolving Loans				Total
		(Dollars in thousands)
Commercial real estate
Pass		$	143,453			$	168,828			$	309,379			$	136,509			$	58,755			$	537,532			$	2,600			$	1,357,056
Special mention			—				—				—				—				—				2,588				—				2,588
Substandard			—				—				—				—				6,938				18,503				—				25,441
Total commercial real estate			143,453				168,828				309,379				136,509				65,693				558,623				2,600				1,385,085
Current period gross charge-offs																							236								236
Commercial and industrial
Pass			—				3,022				10,876				11,183				—				16,440				48,143				89,664
Special mention			—				—				—				—				—				1,906				—				1,906
Substandard			—				—				—				—				—				1,287				—				1,287
Total commercial and industrial			—				3,022				10,876				11,183				—				19,633				48,143				92,857
Current period gross charge-offs																							516								516
Construction
Pass			17,765				22,109				46,558				92,841				16,431				242				61,223				257,169
Special mention			—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—
Total construction			17,765				22,109				46,558				92,841				16,431				242				61,223				257,169
Current period gross charge-offs																							—								—
Residential first-lien mortgage
Performing			596				1,895				6,789				6,134				2,860				49,662				—				67,936
Nonperforming			—				—				—				—				—				94				—				94
Total residential first-lien mortgage			596				1,895				6,789				6,134				2,860				49,756				—				68,030
Home equity/consumer
Performing			1,234				967				556				—				—				—				15,357				18,114
Nonperforming			—				—				19				—				—				—				—				19
Total home equity/consumer			1,234				967				575				—				—				—				15,357				18,133
Total
Pass			163,048				196,821				374,158				246,667				78,046				603,876				127,323				1,789,939
Special mention			—				—				—				—				—				4,494				—				4,494
Substandard			—				—				19				—				6,938				19,884				—				26,841
Total loans		$	163,048			$	196,821			$	374,177			$	246,667			$	84,984			$	628,254			$	127,323			$	1,821,274

The following table presents the allowance for credit losses on loans receivable at and for the three months ended June 30, 2025:

						Commercial								Residential
		Commercial				and								first-lien				Home equity/
		real estate				industrial				Construction				mortgage				consumer				Total
		(In thousands)
Allowance for credit losses:
Beginning balance		$	20,981			$	1,104			$	400			$	1,288			$	169				23,942
Provision (reversal)1			7,013				(155	)			29				70				(8	)			6,949
Charge-offs			(9,950	)			1				—				—				—				(9,949	)
Recoveries			6				66				—				—				—				72
Total		$	18,050			$	1,016			$	429			$	1,358			$	161			$	21,014

1  The provision for credit losses on the Consolidated Statement of Income is $7.0 million comprising of an increase of $6.9 million to the allowance for loan loss and a $7 thousand increase to the reserve for unfunded liabilities.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 4 – Loans Receivable (continued)

The following table presents the allowance for credit losses on loans receivable at and for the six months ended June 30, 2025:

						Commercial								Residential
		Commercial				and								first-lien				Home equity/
		real estate				industrial				Construction				mortgage				consumer				Total
		(In thousands)
Allowance for credit losses:
Beginning balance		$	20,821			$	1,173			$	609			$	893			$	161				23,657
Provision (reversal)1			7,162				(273	)			(180	)			465				—				7,174
Charge-offs			(9,950	)			(83	)			—				—				—				(10,033	)
Recoveries			17				199				—				—				—				216
Total		$	18,050			$	1,016			$	429			$	1,358			$	161			$	21,014

1 The provision for credit losses on the Consolidated Statement of Income is $7.2 million comprising of an increase of $7.1 million increase to the allowance for loan loss and a $50 thousand increase to the reserve for unfunded liabilities.

The following table presents the allowance for credit losses on loans receivable at and for the three months ended June 30, 2024:

						Commercial								Residential
		Commercial				and								first-lien				Home equity/
		real estate				industrial				Construction				mortgage				consumer				Total
		(In thousands)
Allowance for credit losses:
Beginning balance		$	16,446			$	513			$	1,021			$	572			$	66			$	18,618
Provision (reversal)1			106				(80	)			(277	)			88				(6	)			(169	)
Charge-offs			—				(84	)			—				—				—				(84	)
Recoveries			71				28				—				—				—				99
Total		$	16,623			$	377			$	744			$	660			$	60			$	18,464

1 The reversal of credit losses on the Consolidated Statement of Income is $118 thousand comprising of a $169 thousand decrease to the allowance for credit losses on loans and a $51 thousand increase to the reserve for unfunded liabilities.

The following table presents the allowance for credit losses on loans receivable at and for the six months ended June 30, 2024:

						Commercial								Residential
		Commercial				and								first-lien				Home equity/
		real estate				industrial				Construction				mortgage				consumer				Total
		(In thousands)
Allowance for credit losses:
Beginning balance		$	16,047			$	488			$	1,145			$	725			$	87			$	18,492
Provision (reversal)1			737				(111	)			(401	)			(65	)			(27	)			133
Charge-offs			(237	)			(130	)			—				—				—				(367	)
Recoveries			76				130				—				—				—				206
Total		$	16,623			$	377			$	744			$	660			$	60			$	18,464

1 The provision for credit losses on the Consolidated Statement of Income is $68 thousand comprising of a $133 thousand increase to the allowance for credit losses on loans and a $65 thousand reduction to the reserve for unfunded liabilities.

As of June 30, 2025, the Company had seven loans totaling $16.5 million that were individually analyzed for potential credit loss. Loans totaling $16.0 million have real estate as credit support, and $458 thousand are evaluated through the discounted cash flow method. As of December 31, 2024, the Company had nine loans totaling $26.8 million that were individually analyzed for potential credit loss and all the loans have real estate credit support.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 4 – Loans Receivable (concluded)

Occasionally, the Company will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. Typically, such concessions may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, extension of additional credit base on receipt of adequate collateral, or a deferment or reduction of payments (principal or interest) which materially alters the Company’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination. When principal forgiveness is provided, the amount forgiven is charged off against the allowance for credit losses on loans. There were no modifications to borrowers with financial difficulties and no previously modified loans that defaulted during the six-month period ended June 30, 2025, and the twelve-months ended December 31, 2024.

Note 5 – Deposits

The components of deposits were as follows:

		June 30, 2025								December 31, 2024
		(Dollars in thousands)
Demand, non-interest-bearing checking		$	299,902				15.52	%		$	300,972				14.81	%
Demand, interest-bearing checking			282,656				14.63	%			300,559				14.79	%
Savings			169,663				8.78	%			170,880				8.41	%
Money market			463,206				23.97	%			490,543				24.13	%
Time deposits, $250,000 and over			220,474				11.41	%			284,272				13.99	%
Time deposits, other			496,471				25.69	%			485,399				23.88	%
		$	1,932,372				100.00	%		$	2,032,625				100.00	%

Note 6 – Borrowings

At June 30, 2025 the Company has outstanding overnight borrowings of $10 million. There were no borrowings outstanding at December 31, 2024.

Note 7 – Fair Value Measurements and Disclosures

The Company follows the guidance on fair value measurements now codified as FASB ASC Topic 820, “Fair Value Measurement” (“Topic 820”). Fair value measurements are not adjusted for transaction costs. Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

Management uses its best judgment in estimating the fair value of the Company’s financial instruments, however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in sales transactions on the dates indicated. The estimated fair value amounts have been measured as of their respective period-end and have not been re-evaluated or updated for the purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each period-end.

The fair value measurement hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 7 – Fair Value Measurements and Disclosures (continued)

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2025 were as follows:

		(Level 1)
		Quoted Price				(Level 2)
		in Active				Significant				(Level 3)				Total Fair
		Markets for				Other				Significant				Value
		Identical				Observable				Unobservable				June 30,
Description		Assets				Inputs				Inputs				2025
		(In thousands)
Mortgage-backed securities -U.S. government sponsored enterprise (GSEs)		$	—			$	170,445			$	—			$	170,445
U.S. government agency securities			—				10,341				—				10,341
Obligations of state and political subdivisions			—				39,587				—				39,587
Small Business Association (SBA) securities			—				1,487				—				1,487
U.S. treasury securities			2,903				—				—				2,903
Mortgage servicings rights			—				835				—				835

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy, used at December 31, 2024 were as follows:

		(Level 1)
		Quoted Price				(Level 2)
		in Active				Significant				(Level 3)				Total Fair
		Markets for				Other				Significant				Value
		Identical				Observable				Unobservable				December 31,
Description		Assets				Inputs				Inputs				2024
		(In thousands)
Mortgage-backed securities -U.S. government sponsored enterprise (GSEs)		$	—			$	190,545			$	—			$	190,545
U.S. government agency securities			—				10,200				—				10,200
Obligations of state and political subdivisions			—				39,730				—				39,730
Small Business Association (SBA) securities			—				1,857				—				1,857
U.S. treasury securities			4,839				—				—				4,839
Mortgage servicings rights			—				1,060				—				1,060

There were no liabilities measured at fair value on a recurring basis, at June 30, 2025 or December 31, 2024.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 7 – Fair Value Measurements and Disclosures (continued)

There were no assets measured at fair value on a nonrecurring basis, at June 30, 2025.

For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2024, were as follows:

		(Level 1)
		Quoted Price				(Level 2)
		in Active				Significant				(Level 3)				Total Fair
		Markets for				Other				Significant				Value
		Identical				Observable				Unobservable				December 31,
Description		Assets				Inputs				Inputs				2024
		(In thousands)
Collateral dependent loan		$	—			$	—			$	16,223			$	16,223
Other real estate owned1											295				295
		$	—			$	—			$	16,518			$	16,518

1  The Bank charged off approximately $197,000 during the year ended December 31, 2024, prior to the property being transferred to other real estate owned.

The following table presents quantitative information using Level 3 fair value measurements at December 31, 2024.

Range

December 31,

Valuation

Unobservable

(Weighted

Description

2024

Technique

Input

Average)

(Dollars in thousands)

Collateral dependent loan

$

16,223

Collateral

1

Discount adjustment

12.0% 12.0%

Other real estate owned2

$

295

Collateral

1

Discount adjustment

0.0% 0.0%

1  Fair value is generally determined through independent appraisal of the underlying collateral, primarily using comparable sales.

2  The other real estate owned was written down to the estimated net realizable value.

There were no transfers between fair value hierarchy levels during the six months ended June 30, 2025 or 2024. The Company’s policy is to recognize transfers between levels as of the end of the reporting period.

The following methods and assumptions were used by the Company in estimating fair value disclosures:

Investment Securities

The fair value of securities available-for-sale (carried at fair value) and held-to-maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. Level 2 debt securities are valued by a third-party pricing service commonly used in the banking industry, and not adjusted by management. Level 2 fair value measurements consider observable data that may include dealer quotes, market spreads, cash

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 7 – Fair Value Measurements and Disclosures (continued)

flows, the U.S. treasury yield curve, live trading levels, trade execution date, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things.

Individual evaluated loans

Individual loans carried at fair value are those loans in which the Company has measured for a reserve and are generally based on the fair value of the related loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds, discounted for estimated selling costs or other factors the Company determines will impact collection of proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

The carrying amounts and estimated fair value of financial instruments at June 30, 2025 are as follows:

		June 30, 2025
		Carrying				Estimated
		Amount				Fair Value				Level 1				Level 2				Level 3
		(In thousands)
Financial Assets:
Cash and cash equivalents		$	21,094			$	21,094			$	21,094			$	—			$	—
Securities available-for-sale at fair value			224,763				224,763				2,903				221,860				—
Securities held-to-maturity			157				158				—				158				—
Loans receivable, net			1,818,214				1,838,173				—				—				1,838,173
Restricted investments in bank stock			2,816				2,816				—				2,816				—
Accrued interest receivable			7,868				7,868				—				7,868				—
Equity method investments			12,103				12,103				—				7,520				4,583
Mortgage servicing rights			835				835				—				835				—
Financial Liabilities:
Deposits		$	1,932,372				1,831,226			$	—			$	1,831,226			$	—
Borrowings			10,000				10,002				—				10,002				—
Accrued interest payable			9,655				9,655				—				9,655				—

The carrying amounts and estimated fair value of financial instruments at December 31, 2024 are as follows:

		December 31, 2024
		Carrying				Estimated
		Amount				Fair Value				Level 1				Level 2				Level 3
		(In thousands)
Financial Assets:
Cash and cash equivalents		$	117,348			$	117,348			$	117,348			$	—			$	—
Securities available-for-sale at fair value			247,171				247,171				4,389				242,782				—
Securities held-to-maturity			161				162				—				162				—
Loans receivable, net			1,795,218				1,798,302				—				—				1,798,302
Restricted investments in bank stock			2,075				2,075				—				2,075				—
Accrued interest receivable			7,975				7,975				—				7,975				—
Equity method investments			11,160				11,160				—				6,850				4,310
Mortgage servicing rights			1,060				1,060				—				1,060				—
Financial Liabilities:
Deposits		$	2,032,625				1,934,884			$	—			$	1,934,884			$	—
Accrued interest payable			15,401				15,401				—				15,401				—

The fair value of cash and cash equivalents, restricted bank stock, accrued interest receivable, equity method investments, and accrued interest payable are measured at the Company’s carrying amount.

The fair value of loans, deposits and borrowings are measured on a discounted cash flow basis using current rates and terms.

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 7 – Fair Value Measurements and Disclosures (concluded)

The Mortgage servicing rights are carried at estimated fair value. The estimated fair value is obtained through independent third-party valuations.

Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Limitations

The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors.

These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, the foregoing estimates may not reflect the actual amount that could be realized if all or substantially all the financial instruments were offered for sale. This is due to the fact that no market exists for a sizable portion of the loan, deposit and off-balance sheet instruments.

In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be practical due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.

Note 8 – Leases

Leases ASC (Topic 842) establishes a right of use model that requires a lessee to record a right of use asset (“ROU”) and a lease liability for all leases with terms longer than 12 months. The Company is obligated under 30 operating lease agreements for 28 branches and its corporate offices with terms extending through 2042. The Company’s lease agreements include options to renew at the Company’s discretion. The extensions are reasonably certain to be exercised, therefore they were considered in the calculations of the ROU asset and lease liability.

The following table represents the classification of the Company’s right of use and lease liability.

		Statement of Financial				Six Months Ended				Year Ended
		Condition Location				June 30, 2025				December 31, 2024
						(In thousands)
Operating Lease Right of Use Asset:
Gross carrying amount beginning of year						$	21,903			$	23,398
Increased asset from new leases							—				3,066
Accumulated amortization							(1,465	)			(4,561	)
Net book value			Operating lease right-of-use asset			$	20,438			$	21,903
Operating Lease Liability:
Lease liability			Operating lease liability			$	21,501			$	22,941

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 8 – Leases (concluded)

As of June 30, 2025, the weighted-average remaining lease terms for operating leases was 10.5 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.56%. The Company used Federal Home Loan Bank (“FHLB”) fixed rate advances or at the time the lease was placed in service for the term most closely aligning with remaining lease term.

Future minimum payments under operating leases with terms longer than 12 months are as follows at June 30, 2025 (in thousands):

		Amount
		(In thousands)
Twelve months ended March 31,
2026		$	3,712
2027			3,466
2028			3,227
2028			2,888
2030			2,543
Thereafter			13,309
Total future operating lease payment			29,145
Amounts representing interest			(7,644	)
Present value of net future lease payments		$	21,501

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
		(In thousands)								(In thousands)
Lease cost:
Operating lease		$	1,015			$	976			$	2,040			$	1,962
Short-term lease cost			10				17				77				65
Total lease cost		$	1,025			$	993			$	2,117			$	2,027
Other information:
Cash paid for amounts included in the measurement of lease liabilities		$	947			$	871			$	1,887			$	1,751

Note 9 – Goodwill and Core Deposit Intangible

In accordance with ASC 805, the Company recorded $5.5 million of goodwill along with a core deposit intangible asset of $2.8 million for the Cornerstone Bank acquisition in 2024, and recorded $8.9 million of goodwill along with a core deposit intangible asset of $4.2 million for the five branches acquired in 2019. The Noah Bank acquisition that occurred in 2023 did not generate any goodwill, but the Bank recorded $98 thousand in a core deposit intangible asset. The core deposit intangible assets are being amortized over 10 years, using the sum of the year’s digits. Except as set forth below, GAAP requires that goodwill be tested for impairment annually based on closing date or more frequently if impairment indicators arise. The Company uses May 31st as its annual evaluation date. The reporting unit was determined to be our community banking operations, which is our only operating segment.

ASC Topic 350-20 guidance requires an annual review of the fair value of a Reporting Unit that has goodwill in order to determine if it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a Reporting Unit is less than its carrying amount, including goodwill. A qualitative factor test can be performed to determine whether it is necessary to perform a quantitative goodwill impairment test. If this qualitative test determines it is not more likely than not (less than 50% probability) that the fair value of the Reporting Unit is less than the Carrying Value, then the Company does not have to perform a quantitative test and goodwill can be considered not impaired. After performing the qualitative factor test, the result was the Company determined that a quantitative test would be performed at May 31, 2025, primarily due to the Company’s common

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 9 – Goodwill and Core Deposit Intangible (concluded)

stock trading at 80.0% of book value. This was a possible indication that a goodwill impairment may exist. The result of this quantitative test indicates that fair value is greater than book value and that no Reporting Unit goodwill impairment exists.

The changes in the carrying amount of goodwill and core deposit intangible assets are summarized as follows:

						Core Deposit
		Goodwill				Intangible
		(In thousands)
Balance at December 31, 2024		$	14,381			$	3,632
Amortization expense			—				(447	)
Balance at June 30, 2025		$	14,381			$	3,185

As of June 30, 2025, the remaining current fiscal year and future fiscal periods amortization for the core deposit intangible is (in thousands):

		Amount
		(In thousands)
2025			400
2026			717
2027			587
2028			457
2029			327
Thereafter			697
Total		$	3,185

Note 10 – Subsequent Events

On July 23, 2025, the Board of Directors declared a cash dividend of $0.30 per share of common stock to shareholders of record on August 6, 2025, payable on August 29, 2025.

Note 11 – Risk and Uncertainties 

The occurrence of events which adversely affect the global, national, and regional economies may have a negative impact on our business. Like other financial institutions, our business relies upon the ability and willingness of our customers to transact business with us, including banking, borrowing and other financial transactions. A strong and stable economy at each of the local, federal, and global levels is often a critical component of consumer confidence and typically correlates positively with our customers’ ability and willingness to transact certain types of business with us. Local and global events outside of our control which disrupt the New Jersey, Pennsylvania, New York, United States and/or global economy may therefore negatively impact our business and financial condition.

Government economic programs intended to backstop and bolster the economy through the pandemic have ended, and the nation’s economy has entered an inflationary phase. The Consumer Price Index has risen to levels not experienced since the 1980s while the labor market remains very tight, contributing additional inflationary pressure. To address the inflation problem,

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PRINCETON BANCORP, INC.

Notes to Consolidated Financial Statements (unaudited)

Note 11 – Risk and Uncertainties (concluded)

the Federal Reserve has reversed course on its previously accommodative monetary policies and modestly decreased short-term interest rates. These actions are intended to slow overall economic activity and risk entering the economy into a recession.

Regional conflicts around the world, including between Russia and Ukraine, have exacerbated pandemic-related supply chain issues, upset numerous global markets including energy and certain raw materials, and generally added to economic uncertainty and geopolitical instability. Any or all could have negative downstream effects on the Company’s operating results, the extent of which is indeterminable at this time.

25

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with the unaudited consolidated interim financial statements contained in Part I, Item 1 of this report, and with our audited consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in our Form 10-K as of and for the year ended December 31, 2024.

Cautionary Statement Regarding 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 tariffs imposed by the Trump administration, higher inflation levels, and general economic and recessionary concerns, all of which could impact economic growth and could cause an increase in loan delinquencies, a reduction in financial transactions and business activities including decreased deposits and reduced loan originations, difficulties in managing liquidity in a rapidly changing and unpredictable market, and supply chain disruptions. 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 Bank acquired in 2024; 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; other 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, 2024, 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.

Throughout this document, references to “we,” “us,” or “our” refer to the Company and the Bank.

26

Executive Overview

The Company is the holding company for The Bank of Princeton (the “Bank”), a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 28 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury. 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”).

The Company’s common stock trades on the “Nasdaq Global Select Market” under ticker symbol, “BPRN.”

Critical Accounting Policies and Estimates

The Company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are summarized in Note 1 to the consolidated financial statements included in the 2024 Annual Report on Form 10-K. There have been no changes to the Critical Accounting Estimates since the Company filed its Annual Report on Form 10-K for the year ended December 31, 2024.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements included in the 2024 Annual Report on Form 10-K and Note 1- Summary of Significant Accounting Policies in this document.

Economy

The second quarter of 2025 was defined by an extreme level of uncertainty regarding U.S. trade policy and large swings in the financial markets. The quarter began with the Liberation Day announcement of larger trade tariffs than expected. This triggered a violent market reaction and dominated investor psyche in the early part of the quarter. The anxiety was partially assuaged as the quarter progressed, and tariff rates were dialed back. Investors were encouraged by the early economic reports that showed no discernible damage from higher tariffs and policy uncertainty. In fact, inflation posted some of its better readings in three years, and the labor data remained generally stable. However, economists and investors remained concerned as the quarter concluded that the effects could still be working their way through the system. Moreover, tariff rates remained unsettled at quarter-end with numerous pauses in the higher rates set to expire imminently.

Comparison of Financial Condition at June 30, 2025 and December 31, 2024

General

Total assets were $2.24 billion at June 30, 2025, a decrease of $98.6 million, or 4.21% when compared to $2.34 billion at the end of 2024. The primary reasons for the decrease in total assets were related to decreases in cash and cash equivalents of $96.3 million and investment securities of $22.4 million, partially offset by an increase in net loans of $20.4 million.

Cash and cash equivalents

Cash and cash equivalents decreased $96.3 million, or 82.0%, to $21.1 million at June 30, 2025 compared to December 31, 2024.

Investment securities

Total available-for-sale investment securities decreased $22.4 million, or 9.1%, to $224.8 million at June 30, 2025 compared to December 31, 2024. This decrease was related to the payoffs of mortgage-backed securities of U.S. government sponsored enterprises and U.S government agency securities during the six-months ended June 30, 2025.

27

Loans

Loans, net of deferred loan fees and costs, increased $20.4 million, or 1.12%, to $1.84 billion at June 30, 2025 compared to December 31, 2024. The increase in the Company’s net loans consisted of increases of $40.5 million in residential mortgages, and $3.3 million in home equity and consumer loans, partially offset by decreases of $14.4 million in commercial and industrial loans, $6.8 million in commercial real estate loans and $1.8 million in construction loans.

The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied and nonowner-occupied CRE loans, was $1.38 billion or 74.8% of total loans of $1.84 billion at June 30, 2025. The Company’s CRE loan portfolio included $517.1 million or 37.5% of the total in multi-family loans, $429.6 million or 31.2% of the total in non-owner-occupied loans, $404.0 million or 29.3% of the total in owner-occupied loans and $27.7 million or 2.0% of the total in land loans. The Company’s non-owner-occupied portfolio by property type included $113.6 million in retail, $94.0 million in office buildings, $82.6 million in industrial warehousing, $45.0 million in mixed-use, $21.3 million in restaurants, $10.0 million in healthcare and $63.0 million in other property types. There were 756 loans in the Company’s CRE portfolio with an average and median loan size of $1.8 million and $0.6 million, respectively. Loan to Value (“LTV”) estimates are less than 70% for $1.24 billion or 90.0% of the CRE portfolio and less than 80% for $1.36 billion or 98.6% of the CRE portfolio.

The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value for the periods presented (dollars in thousands):

		June 30, 2025								December 31, 2024
		Balance				% of portfolio				Balance				% of portfolio				Weighted Average LTV
Commercial Real Estate
Multi Family			517,056				37.5	%			533,287				38.6	%			53.6	%
Owner Occupied			403,968				29.3	%			407,798				29.4	%			36.3	%
Land			27,736				2.0	%			25,241				1.8	%			73.9	%
Non Owner Occupied
Retail			113,640				8.3	%			100,771				7.3	%			42.5	%
Office Building			94,019				6.8	%			104,388				7.5	%			43.5	%
Industrial/Warehousing			82,568				6.0	%			73,417				5.3	%			44.9	%
Mixed Use			44,972				3.3	%			48,076				3.5	%			43.7	%
Restaurants			21,277				1.5	%			22,650				1.6	%			39.3	%
Healthcare			10,051				0.7	%			10,268				0.7	%			53.3	%
Other			63,040				4.6	%			59,189				4.3	%			45.6	%
Total non owner occupied			429,567				31.2	%			418,759				30.2	%
Total Commercial Real Estate			1,378,327				100.1	%			1,385,085				100.0	%

The following table presents the geographic markets of the commercial real estate portfolio for the periods presented (dollars in thousands):

		June 30, 2025								December 31, 2024
		Balance				% of portfolio				Balance				% of portfolio
Geographical Market
New York			637,706				46.3	%			639,994				46.1	%
New Jersey			532,341				38.6	%			540,896				39.1	%
Pennslyvania			189,321				13.7	%			184,084				13.3	%
Other			18,959				1.4	%			20,111				1.5	%
			1,378,327				100.00	%			1,385,085				100.00	%

For the three-month and six-month periods ended June 30, 2025, charge-offs were $9.9 million and $10.0 million, and recoveries were $72 thousand and $216 thousand, respectively. For the three-month and six-month periods ended June 30, 2024, charge-offs were $84 thousand and $367 thousand, and recoveries were $99 thousand and $206 thousand, respectively. The coverage ratio of the allowance for credit losses to period end loans was 1.14% at June 30, 2025 and 1.30% at December 31, 2024.

At June 30, 2025, non-performing assets totaled $16.5 million, a decrease of $10.6 million when compared to the amount at December 31, 2024. Non-performing assets as a percentage of total loans, net of deferred fees and costs, was 0.90% at June 30, 2025 and 1.47% at December 31, 2024.

28

Deposits

Total deposits on June 30, 2025, decreased $100.3 million, or 4.93%, when compared to December 31, 2024. The decrease in the Company’s deposits consisted of decreases in certificates of deposit of $52.7 million, money market deposits of $27.3 million, and interest-bearing demand deposits of $17.9 million. The decrease in the certificates was strategically planned, including a reduction in brokered deposits of $26 million which was not replenished, as part of a pricing structure designed to reduce the Bank’s cost of funds. On balance sheet liquidity remains strong at June 30, 2025.

At June 30, 2025, the Company had approximately $599.8 million in uninsured deposits, consisting of $94.0 million in non-interest-bearing demand deposits, $183.9 million in interest-bearing demand deposits, $152.1 million in money market accounts, $24.4 million in savings deposits and $145.4 million in certificates of deposits.

Borrowings

The Company had outstanding borrowings of $10 million at June 30, 2025 and no outstanding borrowings at December 31, 2024.    

Stockholders’ equity

Total stockholders’ equity at June 30, 2025, decreased $94 thousand or 0.04% when compared to December 31, 2024. The decrease was primarily due to a $5.6 million increase in purchases of treasury stock, partially offset by an increase in retained earnings of $1.8 million (which consisted of $6.1 million in net income, partially offset by $4.3 million of cash dividends recorded during the period), an increase in paid-in capital of $1.8 million, and a decrease in our accumulated other comprehensive loss of $1.9 million. The ratio of equity to total assets at June 30, 2025, and at December 31, 2024, was 11.7% and 11.2%, respectively.

Liquidity

Our liquidity, represented by cash and cash equivalents, is a product of our operating, investing and financing activities. Our primary sources of funds are deposits, principal repayments of securities and outstanding loans, and funds provided from operations. In addition, we invest excess funds in short-term interest-earnings assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.

As a member of the FHLB we are eligible to borrow funds in an aggregate amount of up to 50% of the Company’s total assets, subject to its collateral requirements. The Company maintained a $100.0 million letter of credit with the FHLB supporting municipal deposits as of June 30, 2025. Based on available eligible securities and qualified real estate loan collateral, the Company had the ability to borrow an additional $530.7 million as of June 30, 2025.

As of June 30, 2025, the Bank was eligible to use the Federal Reserve discount window for borrowings, based on assets pledged as collateral as of the applicable date. As of June 30, 2025, the Company had no outstanding advances from the discount window.

The Company is also a shareholder of Atlantic Community Bancshares, Inc., the parent company of Atlantic Community Bankers Bank (“ACBB”). As of June 30, 2025, the Company had available borrowing capacity with ACBB of $10.0 million to provide short-term liquidity generally for a period of not more than fourteen days. No amounts were outstanding under our line of credit with ACBB at June 30, 2025.

We believe that our current sources of funds provide adequate liquidity for our current cash flow needs.

29

Capital Resources

Regulatory Capital Requirements. Because the Company qualifies as a “small bank holding company” under the Federal Reserve’s Small Bank Holding Company Policy Statement, it is exempt from the Federal Reserve’s risk-based capital and leverage rules. With respect to the Bank, Federally insured, state-chartered non-member banks such as the Bank are required to maintain minimum levels of regulatory capital. Current FDIC capital standards require these institutions to satisfy a common equity Tier 1 capital requirement and a Tier 1 capital requirement, a leverage capital requirement and a risk-based capital requirement.

In addition, in order to make capital distributions and pay discretionary bonuses to executive officers without restriction, an institution must also maintain additional common equity in excess of the minimum requirements. This excess is referred to as a capital conservation buffer. At June 30, 2025, the required capital conservation buffer is 2.50%.

Under the risk-based capital requirements, “total” capital (a combination of core and “supplementary” capital) must equal at least 8.0% of “risk-weighted” assets. The FDIC also is authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis. Management believes, as of June 30, 2025, that the Bank meets all capital adequacy requirements to which it is subject and is “well capitalized” under applicable regulations.

The Bank’s actual capital amounts and ratios and the regulatory requirements at June 30, 2025 and December 31, 2024 are presented below:

		Actual								For capital conservation buffer requirement								To be well capitalized under prompt corrective action provision
		Amount				Ratio				Amount				Ratio				Amount				Ratio
		(Dollars in thousands)
June 30, 2025:
Total capital (to risk-weighted assets)		$	262,664				13.048	%		$	211,375				10.500	%		$	201,310				10.000	%
Tier 1 capital (to risk-weighted assets)		$	241,650				12.004	%		$	171,113				8.500	%		$	161,048				8.000	%
Common equity tier 1 capital (to risk-weighted assets)		$	241,650				12.004	%		$	140,917				7.000	%		$	130,851				6.500	%
Tier 1 leverage capital (to average assets)		$	241,650				10.623	%		$	147,860				6.500	%		$	113,739				5.000	%
December 31, 2024:
Total capital (to risk-weighted assets)		$	270,633				13.490	%		$	210,648				10.500	%		$	200,617				10.000	%
Tier 1 capital (to risk-weighted assets)		$	246,976				12.311	%		$	170,524				8.500	%		$	160,493				8.000	%
Common equity tier 1 capital (to risk- weighted assets)		$	246,976				12.311	%		$	140,432				7.000	%		$	130,401				6.500	%
Tier 1 leverage capital (to average assets)		$	246,976				10.577	%		$	151,776				6.500	%		$	116,750				5.000	%

30

Comparison of Operating Results for the Three Months Ended June 30, 2025 and 2024

General

The Company reported net income of $688 thousand, or $0.10 per diluted common share, for the second quarter of 2025, compared to net income of $5.1 million, or $0.80 per diluted common share, for the second quarter of 2024. The decrease in net income for the second quarter of 2025 when compared to the second quarter of 2024 was primarily due to increases in the provision for credit losses of $7.1 million and in non-interest expense of $1.5 million, partially offset by increases of $2.8 million in net-interest income and $164 thousand in non-interest income, and a decrease of $1.1 million in income tax expense.

Interest income

Interest income increased $3.3 million for the three months ended June 30, 2025, compared to the same period in 2024. Interest income on loans increased $3.6 million due to an increase in the average balance of loans of $260.0 million, partially offset by a decrease of 16 basis points on the yield on loans. Other interest and dividend income decreased $1.5 million due to a decrease in average balances of $103.7 million and a decrease in the yield of 90 basis points. Interest on taxable available-for-sale securities increased $1.3 million due to a 24 basis point increase in yield and a $105.6 million increase in the average balance of taxable available-for-sale securities.

Interest expense

Interest expense increased $500 thousand to $13.9 million for the three-month period ended June 30, 2025, due to an increase in the average balance of interest-bearing deposits of $213.9 million, partially offset by a decrease of 35 basis points in the rate paid on interest-bearing deposits over the same prior year period.

Provision for credit losses

The Company recorded a provision for credit losses of $7.0 million during the second quarter of 2025, primarily associated with the loan charge-off of $9.9 million previously disclosed on the Company’s Form 8-K filed with the Securities and Exchange Commission on May 28, 2025. The charge-off included a $2.4 million specific reserve that had previously been reserved in the allowance for loan losses and as well as changes in the composition in the allowance for loan losses consistent with typical business activity. Charge-offs were $9.9 million, and recoveries were $72 thousand, for the quarter ended June 30, 2025.

Non-interest income

Total non-interest income was $2.3 million for the three-months ended June 30, 2025, an increase of $164 thousand or 7.9% when compared to the same prior year period. The increase over the prior year’s second quarter was primarily due to an increase in other non-interest income of $206 thousand, and an increase in income from bank owned life insurance of $106 thousand, partially offset by a decrease in loan fees of $234 thousand.

Non-interest expense

Total non-interest expense was $13.5 million for the three-months ended June 30, 2025, an increase of $1.5 million or 12.5% when compared to the same prior year period. This increase was primarily related to increases in salaries and employee benefits expense of $650 thousand, occupancy and equipment expense of $297 thousand, data processing and communications expense of $139 thousand, federal deposit insurance expense of $136 thousand, professional fees of $119 thousand, and core deposit intangible expense of $108 thousand, all primarily associated with the Cornerstone Bank acquisition in the third quarter of 2024.

31

Provision for income taxes

For the three months ended June 30, 2025, the Company recorded an income tax benefit of $92 thousand, resulting in an effective tax rate of (15.4)%, compared to an income tax expense of $1.0 million resulting in an effective tax rate of 16.8% for the quarter ended June 30, 2024.

Average Balances, Net Interest Income, and Yields Earned and Rates Paid

The following table shows for the three-month period indicated the total dollar amount of interest earned from average interest earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities and the resulting costs, expressed both in dollars and rates. Average loan receivables balances include non-accrual loans. Average yields have been annualized. Tax-exempt incomes and yields have not been adjusted to a tax-equivalent basis.

		Three Months Ended June 30,
		2025												2024												Change 2025 vs 2024
		Average Balances				Income/ Expense				Yield Rates				Average Balances				Income/ Expense				Yield Rates				Average Balances				Yield Rates
		(Dollars in thousands)
Interest-earning assets:
Loans receivable		$	1,845,920			$	29,620				6.44	%		$	1,585,876			$	26,034				6.60	%		$	260,044				-0.17	%
Securities
Taxable available-for-sale			195,152				2,298				4.71	%			89,547				1,001				4.47	%			105,605				0.24	%
Tax exempt available-for-sale			39,025				279				2.86	%			39,756				286				2.88	%			(731	)			-0.02	%
Held-to-maturity			158				2				5.06	%			166				3				7.23	%			(8	)			-2.17	%
Federal funds sold			34,201				377				4.42	%			133,336				1,808				5.45	%			(99,135	)			-1.03	%
Other interest earning-assets			14,790				180				4.88	%			19,338				278				5.78	%			(4,548	)			-0.90	%
Total interest-earning assets			2,129,246			$	32,756				6.17	%			1,868,019			$	29,410				6.33	%			261,227				-0.16	%
Other non-earnings assets			165,803												141,377												24,426
Total assets		$	2,295,049											$	2,009,396											$	285,653
Interest-bearing liabilities
Demand		$	314,336			$	1,567				2.00	%		$	231,895			$	1,119				1.94	%		$	82,441				0.06	%
Savings			170,644				975				2.29	%			148,377				974				2.64	%			22,267				-0.35	%
Money markets			464,917				3,636				3.14	%			390,019				3,873				3.99	%			74,898				-0.86	%
Certificates of deposit			747,773				7,755				4.16	%			713,433				7,477				4.22	%			34,340				-0.06	%
Total deposit			1,697,670				13,933				3.29	%			1,483,724				13,443				3.64	%			213,946				-0.35	%
Borrowings			1,259				13				4.14	%			—				—				N/A				1,259				N/A
Total interest-bearing liabilities			1,698,929			$	13,946				3.29	%			1,483,724			$	13,443				3.64	%			215,205				-0.35	%
Non-interest-bearing deposits			288,608												243,248												45,360
Other liabilities			42,634												40,874												1,760
Total liabilities			2,030,171												1,767,846												262,325
Stockholders’ equity			264,878												241,550												23,328
Total liabilities and stockholder’s equity		$	2,295,049											$	2,009,396											$	285,653
Net interest-earnings assets		$	430,317											$	384,295											$	46,022
Net interest income; interest rate spread											2.88	%											2.69	%							0.19	%
Net interest margin						$	18,810				3.54	%						$	15,967				3.44	%		$	2,843				0.11	%

32

Rate/Volume Analysis

The following table reflects the changes in our interest income and interest expense segregated into amounts attributable to changes in volume and in yields on interest-earning assets and interest-bearing liabilities during the periods indicated.

		Three Months Ended June 30, 2025 vs . 2024 Increase (Decrease) Due to
		Rate				Volume				Net
		(In thousands)
Interest and dividend income:
Loans receivable, including fees		$	(34	)		$	3,620			$	3,586
Securities available-for-sale
Taxable			101				1,196				1,297
Tax-exempt			(4	)			(3	)			(7	)
Securities held-to-maturity			—				(1	)			(1	)
Federal funds sold			(666	)			(766	)			(1,432	)
Other interest and dividend income			(83	)			(14	)			(97	)
Total interest and dividend income		$	(686	)		$	4,032			$	3,346
Interest expense
Demand		$	32			$	416			$	448
Savings			(135	)			136				1
Money markets			(904	)			667				(237	)
Certificates of deposit			(105	)			384				279
Borrowings			—				13				13
Total interest expense		$	(1,112	)		$	1,616			$	504
Change in net interest income		$	426			$	2,416			$	2,842

33

Comparison of Operating Results for the Six Months Ended June 30, 2025, and 2024

General

The Company reported net income of $6.1 million, or $0.88 per diluted common share, for the six-month period ended June 30, 2025, compared to net income of $9.5 million, or $1.48 per diluted common share, for the same period in 2024. The decrease in net income for the six-month period ended June 30, 2025, compared to the same period in 2025, was primarily due to an increase of $7.2 million in our provision for credit losses associated with the charge-off of $9.9 million previously disclosed on the Company’s Form 8-K filed with the Securities and Exchange Commission on May 28, 2025, and a $3.5 million increase in non-interest expense, partially offset by an increase in net interest income of $6.2 million, a decrease of $687 thousand in income tax expense and an increase of $369 thousand in non-interest income.

Interest income

Interest income increased $8.6 million for the six-months ended June 30, 2025, compared to the same period in 2024. Interest income on loans increased $8.3 million due to an increase in the average balance of loans of $280.1 million, partially offset by a decrease in the yield of 8 basis points. Other interest and dividend income decreased $3.0 million due to a decrease in average balances of $100.7 million and a decrease in the yield of 95 basis points. Interest on taxable available-for-sale securities increased $3.3 million due to a 71 basis point increase in yield and a $125.4 million increase in the average balance of taxable available-for-sale securities.

Interest expense

Interest expense on deposits increased $2.4 million to $28.5 million for the six-month period ended June 30, 2025, due to an increase in the average balance of interest-bearing deposits of $260.3 million, partially offset by a decrease on the rate paid on interest-bearing deposits of 25 basis points over the same prior year period.

Provision for credit losses

The Company recorded a $7.2 million provision for credit losses for the six-month period ended June 30, 2025 and recorded $68 thousand provision for credit losses for the six-month period ended June 30, 2024. The increase for the six-month period ended June 30, 2025, compared with the same prior year period, is primarily associated with the previously disclosed charge-off of $9.9 million, which included a $2.4 million specific reserve that had previously been reserved in the allowance for loan losses. For the six-month periods ended June 30, 2025, charge-offs were $10.0 million and recoveries were $216 thousand.

Non-interest income

For the six-month period ended June 30, 2025, non-interest income increased $369 thousand or 9.1%, from the same six-month period in 2024.

Non-interest expense

For the six-month period ended June 30, 2025, non-interest expense was $27.3 million, compared to $23.8 million for the same period in 2024. This increase was primarily due to increases in salaries and employee benefits of $1.3 million, data processing and communications of $605 thousand, occupancy and equipment expense of $553 thousand and federal deposit insurance of $396 thousand, all primarily due to the Cornerstone Bank acquisition in the third quarter of 2024.

Provision for income taxes

For the six-month period ended June 30, 2025, the Bank recorded an income tax expense of $1.4 million, resulting in an effective tax rate of 18.9%, compared to an income tax expense of $2.1 million resulting in an effective tax rate of 18.2% for the six-month period ended June 30, 2024.

34

Average Balances, Net Interest Income, and Yields Earned and Rates Paid

The following table shows for the six-month period indicated the total dollar amount of interest earned from average interest earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities and the resulting costs, expressed both in dollars and rates. Average loan receivables balances include non-accrual loans. Average yields have been annualized. Tax-exempt incomes and yields have not been adjusted to a tax-equivalent basis.

		Six Months Ended June 30,
		2025												2024												Change 2025 vs 2024
		Average Balances				Income/ Expense				Yield Rates				Average Balances				Income/ Expense				Yield Rates				Average Balances				Yield Rates
														(Dollars in thousands)
Interest-earning assets:
Loans receivable		$	1,848,664			$	59,244				6.46	%		$	1,568,541			$	50,974				6.54	%		$	280,123				-0.07	%
Securities
Taxable available-for-sale			199,548				4,914				4.93	%			74,144				1,565				4.21	%			125,404				0.71	%
Tax exempt available-for-sale			39,499				563				2.85	%			40,257				572				2.84	%			(758	)			0.01	%
Held-to-maturity			159				4				5.03	%			174				5				5.21	%			(15	)			-0.18	%
Federal funds sold			43,705				959				4.42	%			140,703				3,816				5.45	%			(96,998	)			-1.03	%
Other interest earning-assets			15,406				367				4.80	%			19,146				544				5.71	%			(3,740	)			-0.91	%
Total interest-earning assets			2,146,981			$	66,051				6.20	%			1,842,965			$	57,476				6.27	%			304,016				-0.07	%
Other non-earnings assets			168,359												141,019												27,340
Total assets		$	2,315,340											$	1,983,984											$	331,356
Interest-bearing liabilities
Demand		$	319,777			$	3,124				1.97	%		$	236,963			$	2,312				1.96	%		$	82,814				0.01	%
Savings			171,022				1,923				2.27	%			148,024				1,895				2.57	%			22,998				-0.31	%
Money markets			470,596				7,274				3.12	%			377,084				7,430				3.96	%			93,512				-0.85	%
Certificates of deposit			756,808				16,150				4.30	%			695,870				14,423				4.17	%			60,938				0.14	%
Total deposit			1,718,203				28,471				3.34	%			1,457,941				26,060				3.59	%			260,262				-0.25	%
Borrowings			639				13				4.10	%			—				—				0.00	%			639				4.10	%
Total interest-bearing liabilities			1,718,842			$	28,484				3.34	%			1,457,941			$	26,060				3.08	%			260,901				0.26	%
Non-interest-bearing deposits			288,060												243,669												44,391
Other liabilities			43,979												41,484												2,495
Total liabilities			2,050,881												1,743,094												307,787
Stockholders’ equity			264,459												240,890												23,569
Total liabilities and stockholder’s equity		$	2,315,340											$	1,983,984											$	331,356
Net interest-earnings assets		$	428,138											$	385,024											$	43,114
Net interest income; interest rate spread											2.86	%											2.68	%							0.19	%
Net interest margin						$	37,567				3.53	%						$	31,416				3.43	%		$	6,151				0.10	%

35

Rate/Volume Analysis

The following table reflects the changes in our interest income and interest expense segregated into amounts attributable to changes in volume and in yields on interest-earning assets and interest-bearing liabilities during the periods indicated.

		Six Months Ended June 30, 2025 vs . 2024 Increase (Decrease) Due to
		Rate				Volume				Net
		(In thousands)
Interest and dividend income:
Loans receivable, including fees		$	(129	)		$	8,399			$	8,270
Securities available-for-sale											—
Taxable			82				3,266				3,348
Tax-exempt			—				(9	)			(9	)
Securities held-to-maturity			—				(1	)			(1	)
Federal funds sold			(180	)			(2,677	)			(2,857	)
Other interest and dividend income			(29	)			(147	)			(176	)
Total interest and dividend income		$	(256	)		$	8,831			$	8,575
Interest expense:
Demand		$	2			$	810			$	812
Savings			(7	)			35				28
Money market			42				(198	)			(156	)
Certificates of deposit			144				1,583				1,727
Borrowings			—				13				13
Total interest expense		$	181			$	2,243			$	2,424
Change in net interest income		$	(437	)		$	6,588			$	6,151

36

How We Manage Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk which is inherent in our lending, investment and deposit gathering activities. To that end, management actively monitors and manages interest rate risk exposure. In addition to market risk, our primary risk is credit risk on our loan portfolio. We attempt to manage credit risk through our loan underwriting and oversight policies.

The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements and performance objectives, and manage the risk consistent with approved guidelines. We seek to manage our exposure to risks from changes in interest rates while at the same time trying to improve our net interest spread. We monitor interest rate risk as such risk relates to our operating strategies. We have established an Asset/Liability Committee which is comprised of both Management and members of the Board of Directors. The Asset/Liability Committee meets on a regular basis and is responsible for reviewing our asset/liability policies and interest rate risk position. Both the extent and direction of shifts in interest rates are uncertainties that could have a negative impact on future earnings.

Gap Analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring the Company’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate-sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to affect adversely net interest income while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to affect adversely net interest income.

The table on the next page sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at June 30, 2025, which we expect, based upon certain assumptions, to reprice or mature in each of the future time periods shown (the “GAP Table”). Except as stated below, the amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at June 30, 2025, based on contractual maturities, anticipated prepayments, and scheduled rate adjustments within a three-month period and subsequent selected time intervals. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and anticipated prepayments of adjustable-rate loans and fixed-rate loans, and as a result of contractual rate adjustments on adjustable-rate loans.

37

		3 Months or Less				More than 3 Months to 1 Year				More than 1 Year to 3 Years				More than 3 Years to 5 Years				More than 5 Years				Non-Rate Sensitive				Total Amount
(Dollars in thousands)
Interest-earning assets: (1)
Investment securities		$	17,331			$	35,809			$	56,792			$	31,983			$	93,772			$	(10,767	)		$	224,920
Loans receivable			411,852				208,439				598,921				498,514				121,344				(20,856	)			1,818,214
Other interest-earnings assets (2)			4,301				—				—				—				—				—				4,301
Total interest-earning assets		$	433,484			$	244,248			$	655,713			$	530,497			$	215,116			$	(31,623	)		$	2,047,435
Interest-bearing liabilities:
Checking and savings accounts		$	452,319							$	—			$	—			$	—			$	—			$	452,319
Money market accounts			463,206				—				—				—				—				—				463,206
Certificate accounts			371,249				310,665				31,995				3,036				—				—				716,945
Borrowings			—				—				—				—				—				—				—
Total interest-bearing liabilities		$	1,286,774			$	310,665			$	31,995			$	3,036			$	—			$	—			$	1,632,470
Interest-earning assets less interest-bearing liabilities		$	(853,290	)		$	(66,417	)		$	623,718			$	527,461			$	215,116			$	(31,623	)		$	414,965
Cumulative interest-rate sensitivity gap (3)		$	(853,290	)		$	(919,707	)		$	(295,989	)		$	231,472			$	446,588
Cumulative interest-rate gap as a percentage of total assets at
June 30, 2025			-38.06	%			-41.03	%			-13.20	%			10.33	%			19.92	%
Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities at June 30, 2025			33.69	%			42.43	%			81.83	%			114.18	%			127.36	%

(1) Interest-earnings assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities.

(2) Includes interest-bearing bank balances, FHLB Stock and Federal Funds Sold

(3) Interest-rate sensitivity gap represents the difference between total interest-earning assets and total interest-bearing liabilities.

Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate loans, have features which restrict changes in interest rates both on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase.

38

Net Portfolio Value Analysis. Our interest rate sensitivity is also monitored by management through the use of a model which generates estimates of the changes in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The following table sets forth our NPV as of June 30, 2025, and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated.

Change in Interest Rates		Net Portfolio Value												NPV as % of Portfolio Value of Assets
In Basis Points (Rate Shock)		Amounts				$ Change				% Change				EVE/EVA1				Change
						(Dollars in thousands)
300		$	295,886			$	(39,629	)			-11.81	%			14.01	%			(0.92	)
200		$	310,972			$	(24,543	)			-7.32	%			14.42	%			(0.51	)
100		$	322,754			$	(12,761	)			-3.80	%			14.67	%			(0.26	)
Static		$	335,515			$	—								14.93	%
(100)		$	345,041			$	9,526				2.84	%			15.08	%			0.15
(200)		$	347,169			$	11,654				3.47	%			14.96	%			0.03
(300)		$	341,801			$	6,286				1.87	%			14.54	%			(0.39	)

¹  Economic Value of Equity (EVE) divded by Economic Value of Assets (EVA)

As is the case with the GAP Table, certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV require the making of certain assumptions which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the models presented assume that the composition of our interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV model provides an indication of interest rate risk exposure at a particular point in time, such model is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

39

Item 3. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company, such as the Company, is not required to provide the information by this Item. Certain market risk disclosure is set forth in Item 2 above under “How We Manage Market Risk.”

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Management, with the participation of the Company’s Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule l3a-l5 (e) promulgated under the Exchange Act) as of June 30, 2025. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of June 30, 2025 to ensure that the information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in FDIC rules and forms.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting identified during the quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

40

PART II–OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth under the Part I, Item 1.A. Risk Factors as set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s repurchase of shares of common stock for the three months ended June 30, 2025 were as follows:

		Total Number of Shares Purchased				Average Price Paid Per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Program 1				Maximum Number of Shares that May Yet be Purchased Under Plans or Programs 1
Period
															281,250
April 1 - 30, 2025			6,253			$	29.06				6,253				274,997
May 1 - 31, 2025			149,150			$	31.31				149,150				125,847
June 1 - 30, 2025			18,000			$	30.43				18,000				107,847
			173,403			$	31.14				173,403

1  On August 10, 2023, the Company announced a stock repurchase program to repurchase up to 314,000 shares of common stock, approximately 5% of the Company’s outstanding shares of common stock, over a period of time necessary to complete such repurchases.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the fiscal quarter ended June 30, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement”.

41

Item 6. Exhibits

Exhibit Number		Description
31.1		Rule 13a-14(a) Certification on the Principal Executive Officer
31.2		Rule 13a-14(a) Certification on the Principal Financial Officer
32		Section 1350 Certifications
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Label Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document

42

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						Princeton Bancorp, Inc.
Date: August 8, 2025				By:		/s/ Edward Dietzler
						Edward Dietzler
						Chief Executive Officer and President
						(Principal Executive Officer)
				By:		/s/ George Rapp
						George Rapp
						Executive Vice President and Chief Financial Officer
						(Principal Financial Officer)

43

FAQ

What was Princeton Bancorp (BPRN) net income in Q2 2025 and how did EPS change?

Net income for Q2 2025 was $688k; diluted EPS was $0.10, down from $5,126k and $0.80 in Q2 2024.

How large were loan loss provisions and charge-offs for the period?

Provision for credit losses was $6,956k in Q2 2025 and $7,224k for the six months; charge-offs for the six months were $10,033k.

How did deposits and cash change during the six months ended June 30, 2025?

Deposits declined by $100,253k and cash and cash equivalents decreased by $96,254k over the six months.

What is the size of Princeton Bancorp's securities portfolio and unrealized losses?

Securities available-for-sale had a fair value of $224,763k with aggregate unrealized losses of $10,590k at June 30, 2025.

What is the allowance for credit losses on loans at June 30, 2025?

The allowance for credit losses on loans was $21,014k at June 30, 2025; total allowance including off-balance-sheet was $21,425k.