First Bank Reports Second Quarter 2016 Net Income of $1.4

HAMILTON, NJ --(Marketwired - July 25, 2016) -

• Improved Results Driven by Continued Strong Loan and Deposit Growth
• Non-Interest Expense Increase of Less than 4%, Compared to Second Quarter 2015
• Asset Quality Metrics Remain Favorable
• $13.7 million in Growth Capital Raised during the Quarter

First Bank ( NASDAQ : FRBA ) today announced second quarter and year to date 2016 results. Net income for the quarter was $1.4 million or $0.15 per diluted share, compared to $748 thousand or $0.08 per diluted share for the second quarter of 2015, an increase of 92.9% in net income. The increase in second quarter net income compared to the second quarter of 2015 was driven by higher net interest income from strong loan growth and controlled non-interest expense growth. Continued margin compression worked to offset some of the benefits of higher loan balances.

Net income for the first six months of 2016 was $2.8 million, an increase of $322 thousand or 13.0% compared to the first six months of 2015. Similarly, the increase in net income during the first six months was driven by higher net interest income due to strong loan growth coupled with controlled expense growth.

Book value per share was $7.51 at the end of the second quarter of 2016, an increase of 5.5% compared to book value of $7.12 at the end of the second quarter of 2015.

Nonperforming assets as a percentage of total assets equaled 0.75% at the end of the second quarter of 2016 compared to 0.92% at the end of the second quarter of 2015.

2016 Performance Highlights:

• Total net revenue (net interest income plus non-interest income) of $7.2 million for the second quarter 2016 increased by $1.2 million or 19.5%, compared to the prior year quarter
• Total loans of $801.4 million at June 30, 2016 were up $220.7 million, or 38.0%, from June 30, 2015
• Total deposits of $852.2 million at June 30, 2016 were up $199.6 million, or 30.6%, compared to the prior year period
• Continued strong asset quality metrics with annualized net loan charge-offs to average loans of just 0.03% for the quarter, and nonperforming loans to total loans of 0.70% at June 30, 2016, compared to 0.84% at June 30, 2015
• The efficiency ratio improved to 62.43% for the second quarter, from 71.69% for second quarter 2015

President and Chief Executive Officer Patrick L. Ryan commenting on the results said: "We accomplished a lot of great things in the second quarter: i) we successfully raised $13.7 million in new equity capital to fund future growth, and ii) we continued to grow loans, deposits and earnings. In addition, two of our Mercer County competitors announced they were being acquired. With fresh capital, solid asset quality, and growing brand awareness, we are extremely well positioned to take advantage of the upcoming dislocation in our Central New Jersey markets. We already had high hopes for 2016, but this new capital and improving competitive landscape only make us more optimistic.

"While new capital and reduced competition will help going forward, it's important to note that we're already seeing improved earnings from the growth and cost control measures currently in place. Loans and deposits continued their strong upward trajectory, resulting in continued, steady earnings growth. In fact, year to date net income is up 13% compared to the first half of last year. Non-interest expenses grew slightly in the quarter, but are up only 3.7% compared to the second quarter of 2015.

"Our loan portfolio grew nicely in the second quarter with an increase of $43 million in net new loans during the period. With a total loan portfolio in excess of $800 million, loans are up 38% compared to this time last year. Plus, we are on pace for our best year ever in loan growth. Meanwhile, asset quality metrics remained strong. Our ratio of nonperforming assets to total assets increased slightly since March 31, 2016 but remained at a healthy level and net charge offs declined significantly. We saw some positive trends on the deposit side as well. Once again, we experienced deposit growth in all of the markets we serve. And, importantly, non-interest balances grew by over $6 million since March 31, 2016, while CDs as a percent of total deposits declined slightly.

Ryan concluded, "Having achieved our capital raising objectives, we're excited for the second half of 2016 and beyond. We have the right team, with the right model, operating in great markets. A tremendous opportunity has presented itself; now we need to execute and seize the moment."

Conference Call

First Bank will host an earnings call on Tuesday, July 26, 2016 at 2:00 p.m. The direct dial toll free number for the call is 1-888-317-6016. For those unable to participate in the call, a replay will be available by dialing 1-877-344-7529 from one hour after the end of the conference call until August 26, 2016. The replay will also be available on our website at www.firstbanknj.com under the "About Us" tab. Click on "Investor Relations" to access the replay of the conference call.

Second Quarter 2016 Highlights

• Balance Sheet
  • Total assets at June 30, 2016 were $970.7 million, an increase of $53.2 million or 5.8% compared to March 31, 2016, and an increase of $213.7 million or 28.2% compared to June 30, 2015.
  • Total loans reached $801.4 million at June 30, 2016, an increase of $43.3 million or 5.7% compared to March 31, 2016 and an increase of $220.7 million or 38.0% compared to June 30, 2015.
  • Loan portfolio composition at June 30, 2016:
    • Acquisition, Construction and Development (ACD) loans equaled 9.3% of total loans;
    • Commercial Real Estate, Investor (CREI; including multi-family) loans equaled 45.0% of total loans;
    • Commercial Real Estate, Owner-Occupied (CREO) loans equaled 22.7% of total loans;
    • Commercial and Industrial (C&I) loans equaled 13.2% of total loans;
    • Residential Real Estate and Consumer and Other loans equaled 9.8% of total loans.
  • Total deposits reached $852.2 million at June 30, 2016, an increase of $53.2 million or 6.7% compared to March 31, 2016 and an increase of $199.6 million or 30.6% compared to June 30, 2015. Non-interest bearing deposits totaled $107.7 million at June 30, 2016, or 12.6% of total deposits.
  • Stockholders' equity increased to $85.5 million at June 30, 2016. On June 30, 2016 First Bank raised $13.4 million in new equity, after expenses, through the private placement of 1,890,000 shares of common stock at a price of $7.25 per share.
  • Book value per share was $7.51 at June 30, 2016 compared to $7.42 per share at March 31, 2016 and $7.12 per share at June 30, 2015. Tangible book value per share was $7.49 at June 30, 2016, compared to $7.39 per share at March 31, 2016 and $7.09 per share at June 30, 2015.
• Quarterly Income Statement
  • Net interest income for the second quarter of 2016 totaled $6.9 million, an increase of $111 thousand, or 1.6%, compared to $6.8 million for the first quarter of 2016 and an increase of $1.1million, or 19.5%, compared to the second quarter of 2015.
  • The provision for loan losses in the second quarter of 2016 totaled $639 thousand, a decrease of $174 thousand, or 21.4%, compared to $813 thousand for the first quarter of 2016 and an increase of $7 thousand, or 1.1% compared to the second quarter of 2015.
  • Non-interest income for the second quarter of 2016 totaled $316 thousand compared to $360 thousand for the first quarter of 2016. Gains on recovery of acquired loans totaled $63 thousand in the second quarter of 2016 compared to $111 thousand in the first quarter of 2016. When compared to the second quarter of 2015, non-interest income increased $51 thousand, as gains on recovery of acquired loans increased by $33 thousand.
  • Non-interest expense for the second quarter of 2016 totaled $4.5 million, an increase of $84 thousand, or 1.9%, compared to $4.4 million for the first quarter of 2016, as salaries and employee benefits increased 3.3% due to our growth. When compared to the second quarter of 2015, non-interest expense increased $158 thousand due to slight increases across all categories.
  • Pre-tax income for the second quarter of 2016 totaled $2.1 million, an increase of $157 thousand, or 8.1%, compared to $1.9 million for the first quarter of 2016 and an increase of $1.0 million or 92.3% compared to the second quarter of 2015.
  • Income tax expense for the second quarter of 2016 totaled $661 thousand, an increase of $70 thousand, or 11.8% compared to $591 thousand for the first quarter of 2016 and an increase of $315 thousand, or 91.0%, compared to the second quarter of 2015.
  • Net income for the second quarter of 2016 totaled $1.44 million, an increase of $87 thousand, or 6.4%, compared to $1.36 million in the first quarter of 2016, and an increase of $695 thousand, or 92.9%, compared to the second quarter of 2015.
  • Diluted earnings per share for the second quarter of 2016 totaled $0.15 an increase of $0.01 per diluted share compared to $0.14 per diluted share for the first quarter of 2016. Diluted earnings per share for the second quarter of 2015 totaled $0.08.
  • Pre-provision net revenue ¹ for the second quarter of 2016 was $2.7 million, an increase of $56 thousand, or 2.1%, compared to $2.6 million in the first quarter of 2016, and an increase of $984 thousand, or 58.0%, compared to the second quarter of 2015.
• Year-to-Date Income Statement
  • Net income for the six months ended June 30, 2016 totaled $2.8 million, an increase of $322 thousand or 13.0% compared to $2.5 million for the same period in 2015. Year-to-date 2015 results included $654 thousand in gains on recovery of acquired loans compared to $174 thousand for the same period in 2016. Additionally, 2016 year-to-date results included $796 thousand in interest expense on our outstanding subordinated debentures compared to $269 thousand for the same period in 2015.
  • Net interest income for the six months ended June 30, 2016 totaled $13.7 million, an increase of $1.8 million or 14.8% compared to $11.9 million for the same period in 2015.
  • The provision for loan losses for the six months ended June 30, 2016 totaled $1.5 million, an increase of $764 thousand or 111.0% compared to $688 thousand for the same period in 2015. The increased provision for the comparative period was driven primarily by the level of loan growth.
  • Non-interest income for the six months ended June 30, 2016 totaled $676 thousand, a decrease of $421 thousand or 38.4% compared to $1.1 million for the same period in 2015. This decrease was largely due to the decrease in gains on recovery of acquired loans discussed above.
  • Non-interest expense for the six months ended June 30, 2016 totaled $8.8 million, an increase of $93 thousand or 1.1% compared to $8.7 million for the same period in 2015.
• Other items
  • The tax equivalent net interest margin for the second quarter of 2016 was 3.04% compared to 3.14% for the first quarter of 2016 and 3.24% for the second quarter of 2015. The tax equivalent net interest margin for the first six months of 2016 was 3.09% compared to 3.48% for the same period in 2015.
  • Nonperforming assets were $7.3 million or 0.75% of total assets at June 30, 2016 compared to $5.8 million or 0.63% of total assets at March 31, 2016. This increase was mainly the result of one new nonperforming loan with a principal balance of $1.8 million. This loan is well secured and in the process of being worked out.
    • Nonaccrual loans totaled $5.6 million or 0.70% of total loans at June 30, 2016 compared to nonaccrual loans of $3.9 million or 0.52% of total loans at March 31, 2016.
    • Loans 30-89 days past due totaled $5.3 million at June 30, 2016 compared to $4.2 million at March 31, 2016. There were no loans over 90 days past due or more and still accruing at June 30, 2016. Loans over 90 days past due or more and still accruing at March 31, 2016 totaled $155 thousand.
    • Other real estate owned and other repossessed assets totaled $1.7 million at June 30, 2016 and March 31, 2016.
  • Regulatory capital ratios at June 30, 2016:
    • Tier 1 Leverage ratio of 8.99%
    • Tier 1 Risk-Based capital ratio of 9.49%
    • Common Equity Tier 1 capital ratio of 9.49%
    • Total Risk-Based capital ratio of 12.92%
  • The ratio of the allowance for loan losses to total loans at June 30, 2016 was 1.13% compared to 1.12% at March 31, 2016.
  • There were 107 full-time equivalent employees at June 30, 2016 compared to 102 full-time equivalent employees at March 31, 2016.

About First Bank First Bank ( www.firstbanknj.com ) is a New Jersey state-chartered bank with ten full-service branches in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Randolph, Somerset and Williamstown, New Jersey, and Trevose, Pennsylvania. With $971 million in assets as of June 30 2016, First Bank offers a traditional range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol "FRBA".

This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond First Bank's control and could impede its ability to achieve these goals. These factors include those listed in our Annual Report on Form 10K under the caption "Item 1A-Risk Factors", and general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.

¹ A non-U.S. GAAP metric defined by SNL Financial as net interest income before provision for loan losses plus non-interest income excluding non-ordinary items (e.g. gains on sale of investment securities, gains on recovery of acquired loans, and bargain purchase gains) minus non-interest expense excluding non-ordinary items (e.g. merger related expenses and other one-time, non-ordinary costs).