Princeton Bancorp Inc.

10/29/2024 | Press release | Distributed by Public on 10/29/2024 14:01

Princeton Bancorp Announces Third Quarter 2024 Results Form 8 K

Princeton Bancorp Announces

Third Quarter 2024 Results

Princeton, NJ, October 29, 2024 / PRNewswire / - Princeton Bancorp, Inc. (the "Company") (NASDAQ - BPRN), the bank holding company for The Bank of Princeton (the "Bank"), today reported its unaudited financial condition and results of operations at and for the quarter and nine-months ended September 30, 2024.

The Bank's third quarter was highlighted by the closing of the Cornerstone Bank acquisition. This acquisition will be immediately accretive to earnings with an expected 2.5 year earn back of tangible book value dilution. While the costs related to this acquisition naturally impacted our reported numbers, the core earnings of the Bank remain consistently strong. Please refer to the reconciliation table below that compares Non-GAAP net income to GAAP net income.

President/CEO Edward Dietzler commented, "We are thrilled with the Cornerstone acquisition. This acquisition, along with our recent one of Noah Bank, continues our long-term strategy of becoming the community bank of choice up and down the I95 corridor. Core loans and deposits are both up while asset quality and our capital position remain strong. The Bank is well positioned to continue our strong growth path with our experienced management team. Special thanks to our operations and technology teams who handled this acquisition."

The Company reported a net loss of ($3.6) million, or ($0.55) per diluted common share, for the third quarter of 2024, compared to net income of $5.1 million, or $0.80 per diluted common share, for the second quarter of 2024, and net income of $7.6 million, or $1.19 per diluted common share, for the third quarter of 2023. The decrease in net income for the third quarter of 2024 when compared to the second quarter of 2024 was due to an increase of $7.0 million in non-interest expense, and an increase in the provision for credit losses of $4.7 million. These increases were primarily the result of the Cornerstone acquisition which resulted in $6.7 million in merger related expenses and a $3.2 million provision for credit loss associated with the acquired non-purchase credit deteriorated loans. These expenses were partially offset by an increase in net interest income of $1.1 million. The $11.2 million decrease in net income for the third quarter of 2024 compared to the same period in 2023 was primarily due to the same acquisition-related items.

1

Review of Statements of Financial Condition

Total assets were $2.35 billion at September 30, 2024, an increase of $438.2 million, or 22.87% when compared to $1.92 billion at the end of 2023. The primary reason for the increase in total assets was the acquisition of Cornerstone Bank on August 23, 2024, which had approximately $314.5 million in assets at closing. When looking at specific components of the balance sheet, including acquired assets, the Company recorded an increase in net loans of $283.1 million related to the Cornerstone acquisition, an increase in investments of $97.5 million, an increase in cash and cash equivalents of approximately $30.5 million, and an increase in other assets of $22.2 million. The increase in the Company's net loans consisted of increases of $248.4 million in commercial real estate loans, $42.8 million in commercial and industrial loans, $32.3 million in residential mortgages, and $11.3 in home equity and consumer loans, all partially offset by a decrease of $51.9 million in construction loans.

Total deposits on September 30, 2024, increased $410.3 million, or 25.08%, when compared to December 31, 2023. The primary reasons for the increase in total deposits were the $282.8 million in deposits acquired from Cornerstone Bank and the $127.5 million increase from existing operations. The increase in the Company's deposits consisted of increases in certificates of deposit of $149.0 million, money market deposits of $139.3 million, non-interest-bearing deposits of $53.6 million, interest-bearing demand deposits of $36.6 million and savings deposits of $31.8 million.

Total stockholders' equity at September 30, 2024, increased $22.1 million or 9.22% when compared to December 31, 2023. The increase was primarily due to the $21.2 million increase in paid-in capital associated with the issuance of common stock of $20.0 million related to the acquisition of Cornerstone and a decrease in accumulated other comprehensive income (loss) of $1.6 million. The ratio of equity to total assets at September 30, 2024 and at December 31, 2023 was 11.1% and 12.5%, respectively. The current period ratio decrease was primarily due to the Cornerstone Bank acquisition.

Asset Quality

At September 30, 2024, non-performing assets totaled $2.3 million, a decrease of $4.4 million when compared to the amount at December 31, 2023.

Review of Quarterly and Year-to-Date Financial Results

Net interest income was $17.1 million for the third quarter of 2024, compared to $16.0 million for the second quarter of 2024 and $16.7 million for the third quarter of 2023. The increase from the previous quarter was the result of an increase in interest income of $2.4 million, or 8.2%, partially offset by an increase in interest expense of $1.3 million, or 9.4%. The net interest margin for the third quarter of 2024 was 3.41%, a decrease by 3 basis points when compared to the second quarter of 2024. The increase in interest expense and the decrease in net interest margin were primarily associated with an increase in total interest-bearing deposits of $98.9 million and a six basis point increase in the rate on such deposits. This resulted in an increase in the Company's cost of funds of 3 basis points. The increase in interest income for the third quarter was due to an increase in average interest-earning assets of $130.2 million, while the yield on interest-earning assets remained consistent with the second quarter of 2024.

2

For the nine-month period ended September 30, 2024, the Company recorded net income of $5.9 million, or $0.90 per diluted common share, compared to $20.5 million, or $3.21 per diluted common share, for the same period in 2023. This year-to-date decrease was primarily the result of a $9.7 bargain purchase gain in 2023 which included a tax benefit of $2.0 million from the Company's acquisition of Noah Bank in May of that year, and the purchase accounting recorded in 2024 related to the Cornerstone acquisition, which includes an increase of $2.2 million in the provision for credit losses when comparing both periods.

The Company recorded a provision for credit losses of $4.6 million during the third quarter of 2024, which consisted of $3.2 million related to the CECL impact for non-purchase credit deteriorated loans associated with loans acquired in the Cornerstone acquisition, and $1.5 million recorded to the allowance of credit losses resulting from changes in the Company's loan portfolio assumptions. The current quarters' provision recorded on the Company's statements of income was $4.7 million higher when compared to the provision for credit losses for the quarter ended June 30, 2024, and was $4.8 million higher than the provision for the same period in 2023, most of which can primarily be attributed to the acquisition of Cornerstone Bank. For the quarter ended September 30, 2024, the Company recorded charge-offs of $279 thousand and recoveries of $171 thousand. The coverage ratio of the allowance for credit losses to period end loans was 1.27% at September 30, 2024 and 1.19% at December 31, 2023.

Total non-interest income of $2.1 million for the third quarter of 2024 decreased $31 thousand or 1.5% when compared to the second quarter of 2024 and decreased $347 thousand or 14.4% when compared to the quarter ended September 30, 2023.

Total non-interest expense of $19.0 million for the third quarter of 2024 increased $7.0 million, or 58.5%, when compared to the second quarter of 2024. Total non-interest expense for the third quarter of 2024 increased $8.9 million or 87.4% when compared to the third quarter of 2023. This increase over both the prior quarter and the third quarter of 2023 was primarily due to the $6.7 million in merger costs associated with the Cornerstone acquisition. The remaining increase compared to the second quarter of 2024 was primarily related to occupancy and equipment expense increasing $237 thousand, salaries and benefits expense increasing $113 thousand, data processing and communications expense increasing $52 thousand, and professional fees increasing $52 thousand all partially offset by a decrease in other expenses of $251 thousand. For the nine-month period ended September 30, 2024, non-interest expense was $42.9 million, compared to $37.7 million for the same period in 2023. The increase was primarily due to an increase in merger-related expenses of $1.1 million during 2024 as well as increases in salaries and employee benefits of $2.2 million over the same period in 2023 associated with merit increases as well as additional staff costs related to the Cornerstone and Noah acquisitions.

For the quarter ended September 30, 2024, the Company recorded an income tax benefit of ($865) thousand, resulting in an effective tax rate of (19.3%), compared to an income tax expense of $1.0 million resulting in an effective tax rate of 16.8% for the second quarter ended June 30, 2024, and compared to an income tax expense of $1.5 million resulting in an effective tax rate of 16.6% for the quarter ended September 30, 2023.

About Princeton Bancorp, Inc. and The Bank of Princeton

Princeton Bancorp, Inc. is the holding company for The Bank of Princeton, a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 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.

3

Forward-Looking Statements

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

These forward-looking statements involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company's control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, higher interest rates and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, supply chain disruptions, labor shortages and additional interest rate increases by the Federal Reserve. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the integration of the businesses of the Company and Cornerstone Bank following the completion of the Transaction may be more difficult; 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, 2023, and the success of the Company at managing the risks involved in the foregoing.

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

4

Princeton Bancorp, Inc.

Consolidated Statements of Financial Condition

(Unaudited)

(Dollars in thousands, except per share data)

September 30, 2024 vs September 30, 2024 vs
September 30, December 31, September 30, December 31, 2023 September 30, 2023
2024 2023 2023 $ Change % Change $ Change % Change

ASSETS

Cash and cash equivalents

$ 181,058 $ 150,557 $ 206,931 $ 30,501 20.26 % $ (25,873 ) (12.50 )%

Securities available-for-sale taxable

147,871 50,544 47,765 97,327 192.56 100,106 209.58

Securities available-for-saletax-exempt

40,988 40,808 37,627 180 0.44 3,361 8.93

Securities held-to-maturity

163 193 195 (30 ) (15.54 ) (32 ) (16.41 )

Loans receivable, net of deferred loan fees

1,831,407 1,548,335 1,498,500 283,072 18.28 332,907 22.22

Allowance for credit losses

(23,200 ) (18,492 ) (17,992 ) (4,708 ) 25.46 (5,208 ) 28.95

Goodwill

14,381 8,853 8,853 5,528 62.44 5,528 62.44

Core deposit intangible

3,860 1,422 1,546 2,438 171.45 2,314 149.68

Equity method investments

10,042 8,296 2,672 1,746 21.05 7,370 275.82

Other assets

148,160 125,981 127,026 22,179 17.61 21,134 16.64

TOTAL ASSETS

$ 2,354,730 $ 1,916,497 $ 1,913,123 $ 438,233 22.87 % $ 441,607 23.08 %

LIABILITIES

Non-interest checking

$ 302,846 $ 249,282 $ 264,197 $ 53,564 21.49 % $ 38,649 14.63 %

Interest checking

284,504 247,939 239,902 36,565 14.75 44,602 18.59

Savings

178,299 146,484 147,113 31,815 21.72 31,186 21.20

Money market

493,353 354,005 349,505 139,348 39.36 143,848 41.16

Time deposits over $250,000

213,310 150,113 144,158 63,197 42.10 69,152 47.97

Other time deposits

573,689 487,918 493,091 85,771 17.58 80,598 16.35

Total deposits

2,046,001 1,635,741 1,637,966 410,260 25.08 408,035 24.91

Borrowings

-  -  -  -  -  -  N/A

Other liabilities

46,378 40,545 42,949 5,833 14.39 3,429 7.98

TOTAL LIABILITIES

2,092,379 1,676,286 1,680,915 416,093 24.82 411,464 24.48

STOCKHOLDERS' EQUITY

Paid-in capital

119,514 98,291 97,779 21,223 21.59 21,735 22.23

Treasury stock 1

(842 ) -  -  (842 ) 100.00 (842 ) 100.00

Retained earnings

149,565 149,414 146,022 151 0.10 3,543 2.43

Accumulated other comprehensive income (loss)

(5,886 ) (7,494 ) (11,593 ) 1,608 (21.46 ) 5,707 (49.23 )

TOTAL STOCKHOLDERS' EQUITY

262,351 240,211 232,208 22,140 9.22 30,143 12.98

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 2,354,730 $ 1,916,497 $ 1,913,123 $ 438,233 22.87 % $ 441,607 23.08 %

Book value per common share

$ 38.15 $ 38.04 $ 36.86 $ 0.11 0.29 % $ 1.29 3.50 %

Tangible book value per common share 2

$ 35.50 $ 36.41 $ 35.21 $ (0.91 ) (2.50 )% $ 0.29 0.82 %
1

Treasury stock repurchases commenced March 8, 2024, associated with the stock repurchase program announced August 10, 2023.

2

Tangible book value per common share is a non-GAAP measure. For more information, see "Supplemental Information - Non-GAAP Financial Measures (Unaudited)" below.

5

Princeton Bancorp, Inc.

Loan and Deposit Tables

(Unaudited)

The components of loans receivable, net at September 30, 2024 and December 31, 2023 were as follows:

September 30, December 31,
2024 2023
(In thousands)

Commercial real estate

$ 1,391,245 $ 1,142,864

Commercial and industrial

93,782 50,961

Construction

258,332 310,187

Residential first-lien mortgages

70,389 38,040

Home equity / consumer

19,406 8,081

Total loans

1,833,154 1,550,133

Deferred fees and costs

(1,747 ) (1,798 )

Allowance for credit losses

(23,200 ) (18,492 )

Loans, net

$ 1,808,207 $ 1,529,843

The components of deposits at September 30, 2024 and December 31, 2023 were as follows:

September 30, December 31,
2024 2023
(In thousands)

Demand, non-interest-bearing

$ 302,846 $ 249,282

Demand, interest-bearing

284,504 247,939

Savings

178,299 146,484

Money market

493,353 354,005

Time deposits

786,999 638,031

Total deposits

$ 2,046,001 $ 1,635,741

6

Princeton Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

(Amounts in thousands except per share data)

Three Months Ended September 30,
2024 2023 $ Change % Change

Interest and dividend income

Loans and fees

$ 28,135 $ 23,503 $ 4,632 19.7 %

Available-for-sale debt securities:

Taxable

1,273 357 916 256.6 %

Tax-exempt

285 285 0 0.0 %

Held-to-maturity debt securities

2 3 (1 ) -33.3 %

Other interest and dividend income

2,115 2,852 (737 ) -25.8 %

Total interest and dividends

31,810 27,000 4,810 17.8 %

Interest expense

Deposits

14,701 10,316 4,385 42.5 %

Borrowings

-  -  0 N/A

Total interest expense

14,701 10,316 4,385 42.5 %

Net interest income

17,109 16,684 425 2.5 %

Provision for (reversal of) credit losses

4,601 (182 ) 4,783 -2628.0 %

Net interest income after provision for (reversal of) credit losses

12,508 16,866 (4,358 ) -25.8 %

Non-interest income

Loss on sale of securities available-for-sale, net

(7 ) (6 ) (1 ) 16.7 %

Income from bank-owned life insurance

423 331 92 27.8 %

Fees and service charges

521 479 42 8.8 %

Loan fees, including prepayment penalties

784 1,184 (400 ) -33.8 %

Gain on sale of other real estate owned

-  203 (203 ) -100.0 %

Other

335 212 123 58.0 %

Total non-interest income

2,056 2,403 (347 ) -14.4 %

Non-interest expense

Salaries and employee benefits

6,556 6,177 379 6.1 %

Occupancy and equipment

2,087 2,142 (55 ) -2.6 %

Professional fees

654 614 40 6.5 %

Data processing and communications

1,456 1,242 214 17.2 %

Federal deposit insurance

316 258 58 22.5 %

Advertising and promotion

181 139 42 30.2 %

Office expense

190 117 73 62.4 %

Core deposit intangible

143 116 27 23.3 %

Merger-related expenses

6,695 (1,391 ) 8,086 581.3 %

Other

758 745 13 1.7 %

Total non-interest expense

19,036 10,159 8,877 87.4 %

Income (loss) before income tax expense

(4,472 ) 9,110 (13,582 ) -149.1 %

Income tax (benefit) expense

(865 ) 1,512 (2,377 ) -157.2 %

Net (loss) income

$ (3,607 ) $ 7,598 (11,205 ) -147.5 %

Net (loss) income per common share - basic

$ (0.55 ) $ 1.21 $ (1.76 ) -145.5 %

Net (loss) income per common share - diluted

$ (0.55 ) $ 1.19 $ (1.74 ) -146.2 %

Weighted average shares outstanding - basic

6,573 6,295 278 4.4 %

Weighted average shares outstanding - diluted

6,573 6,390 183 2.9 %

7

Princeton Bancorp, Inc.

Consolidated Statements of Income (Current Quarter vs Prior Quarter)

(Unaudited)

(Amounts in thousands, except per share data)

Three Months Ended
September 30, June 30,
2024 2024 $ Change % Change

Interest and dividend income

Loans and fees

$ 28,135 $ 26,034 $ 2,101 8.1 %

Available-for-sale debt securities:

Taxable

1,273 1,001 272 27.2 %

Tax-exempt

285 286 (1 ) -0.3 %

Held-to-maturity debt securities

2 3 (1 ) -33.3 %

Other interest and dividend income

2,115 2,086 29 1.4 %

Total interest and dividends

31,810 29,410 2,400 8.2 %

Interest expense

Deposits

14,701 13,442 1,259 9.4 %

Borrowings

-  -  -  N/A

Total interest expense

14,701 13,442 1,259 9.4 %

Net interest income

17,109 15,968 1,141 7.1 %

Provision for (reversal of) credit losses

4,601 (118 ) 4,719 -3999.2 %

Net interest income after provision for (reversal of) credit losses

12,508 16,086 (3,578 ) -22.2 %

Non-interest income

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

(7 ) -  (7 ) N/A

Income from bank-owned life insurance

423 388 35 9.0 %

Fees and service charges

521 465 56 12.0 %

Loan fees, including prepayment penalties

784 937 (153 ) -16.3 %

Other

335 297 38 12.8 %

Total non-interest income

2,056 2,087 (31 ) -1.5 %

Non-interest expense

Salaries and employee benefits

6,556 6,443 113 1.8 %

Occupancy and equipment

2,087 1,850 237 12.8 %

Professional fees

654 602 52 8.6 %

Data processing and communications

1,456 1,404 52 3.7 %

Federal deposit insurance

316 279 37 13.3 %

Advertising and promotion

181 156 25 16.0 %

Office expense

190 155 35 22.6 %

Core deposit intangible

143 111 32 28.8 %

Merger-related expenses

6,695 -  6,695 N/A

Other

758 1,009 (251 ) -24.9 %

Total non-interest expense

19,036 12,009 7,027 58.5 %

Income (loss) before income tax expense

(4,472 ) 6,164 (10,636 ) -172.6 %

Income tax (benefit) expense

(865 ) 1,038 (1,903 ) -183.3 %

Net (loss) income

$ (3,607 ) $ 5,126 $ (8,733 ) -170.4 %

Net (loss) income per common share - basic

$ (0.55 ) $ 0.81 $ (1.36 ) -167.9 %

Net (loss) income per common share - diluted

$ (0.55 ) $ 0.80 $ (1.35 ) -168.8 %

Weighted average shares outstanding - basic

6,573 6,334 239 3.8 %

Weighted average shares outstanding - diluted

6,573 6,420 153 2.4 %

8

Princeton Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

(Amounts in thousands, except per share data)

Nine Months Ended
September 30,
2024 2023 $ Change % Change

Interest and dividend income

Loans and fees

$ 79,109 $ 64,914 $ 14,195 21.9 %

Available-for-sale debt securities:

Taxable

2,838 927 1,911 206.1 %

Tax-exempt

857 853 4 0.5 %

Held-to-maturity debt securities

7 8 (1 ) -12.5 %

Other interest and dividend income

6,475 3,924 2,551 65.0 %

Total interest and dividends

89,286 70,626 18,660 26.4 %

Interest expense

Deposits

40,761 21,502 19,259 89.6 %

Borrowings

-  118 (118 ) -100.0 %

Total interest expense

40,761 21,620 19,141 88.5 %

Net interest income

48,525 49,006 (481 ) -1.0 %

Provision for credit losses

4,669 2,546 2,123 83.4 %

Net interest income after provision for credit losses

43,856 46,460 (2,604 ) -5.6 %

Non-Interest income

(Loss) on sale of securities available-for-sale, net

(7 ) (6 ) (1 ) 16.7 %

Income from bank-owned life insurance

1,192 916 276 30.1 %

Fees and service charges

1,418 1,391 27 1.9 %

Loan fees, including prepayment penalties

2,445 2,565 (120 ) -4.7 %

Bargain purchase gain

-  9,696 (9,696 ) -100.0 %

Gain on sale of other real estate owned

-  203 (203 ) -100.0 %

Other

1,080 577 503 87.2 %

Total non-interest income

6,128 15,342 (9,214 ) -60.1 %

Non-interest expense

Salaries and employee benefits

19,519 17,352 2,167 12.5 %

Occupancy and equipment

5,966 5,188 778 15.0 %

Professional fees

1,780 1,635 145 8.9 %

Data processing and communications

4,020 3,860 160 4.1 %

Federal deposit insurance

868 701 167 23.8 %

Advertising and promotion

479 375 104 27.7 %

Office expense

464 392 72 18.4 %

Other real estate owned expense

-  1 (1 ) -100.0 %

Core deposit intangible

374 378 (4 ) -1.1 %

Merger-related expenses

6,695 5,635 1,060 18.8 %

Other

2,716 2,228 488 21.9 %

Total non-interest expense

42,881 37,745 5,136 13.6 %

Income before income tax expense

7,103 24,057 (16,954 ) -70.5 %

Income tax expense

1,239 3,574 (2,335 ) -65.3 %

Net income

$ 5,864 $ 20,483 $ (14,619 ) -71.4 %

Net income per common share - basic

$ 0.91 $ 3.26 $ (2.35 ) -72.0 %

Net income per common share - diluted

$ 0.90 $ 3.21 $ (2.31 ) -71.9 %

Weighted average shares outstanding - basic

6,412 6,275 137 2.2 %

Weighted average shares outstanding - diluted

6,496 6,380 116 1.8 %

9

Princeton Bancorp, Inc.

Consolidated Average Statement of Financial Condition

(Unaudited)

(Dollars in thousands)

For the Three Months Ended September 30,
2024 2023 Change in Change in
Average Yield/ Average Yield/ Average Yield/
Balance Rate Balance Rate Balance Rate

Earning assets

Loans

$ 1,691,688 6.62 % $ 1,464,798 6.37 % $ 226,890 0.25 %

Securities

Taxable available-for-sale

111,633 4.56 % 46,599 3.06 % 65,034 1.50 %

Tax-exemptavailable-for-sale

40,028 2.85 % 40,118 2.84 % (90 ) 0.01 %

Held-to-maturity

164 5.33 % 196 5.28 % (32 ) 0.05 %

Securities

151,825 4.11 % 86,913 2.96 % 64,912 1.15 %

Other interest earning assets

Federal funds sold

135,164 5.38 % 199,350 5.38 % (64,186 ) 0.00 %

Other interest-earning assets

19,549 5.85 % 10,506 5.67 % 9,043 0.18 %

Other interest-earning assets

154,713 5.44 % 209,856 5.39 % (55,143 ) 0.05 %

Total interest-earning assets

1,998,226 6.33 % 1,761,567 6.08 % 236,659 0.25 %

Total non-earning assets

151,776 127,682

Total assets

$ 2,150,002 $ 1,889,249

Interest-bearing liabilities

Checking

$ 258,728 1.86 % $ 243,359 1.68 % $ 15,369 0.18 %

Savings

159,521 2.57 % 149,215 2.10 % 10,306 0.47 %

Money market

443,109 3.85 % 337,491 3.50 % 105,618 0.35 %

Certificates of deposit

721,240 4.50 % 629,082 3.48 % 92,158 1.02 %

Total interest-bearing deposits

1,582,598 3.70 % 1,359,147 3.01 % 223,451 0.69 %

Non-interest bearing deposits

269,030 255,775 13,255

Total deposits

1,851,628 3.16 % 1,614,922 2.53 % 236,706 0.63 %

Borrowings

-  N/A -  N/A -  N/A

Total interest-bearing liabilities (excluding non interest deposits)

1,582,598 3.70 % 1,359,147 3.01 % 223,451 0.69 %

Non-interest-bearing deposits

269,030 255,775

Total cost of funds

1,851,628 3.16 % 1,614,922 2.53 % 236,706 0.63 %

Accrued expenses and other liabilities

43,729 45,923

Stockholders' equity

254,645 228,404

Total liabilities and stockholders' equity

$ 2,150,002 $ 1,889,249

Net interest spread

2.64 % 3.07 %

Net interest margin

3.41 % 3.76 %

Net interest margin (FTE) 1,2

3.45 % 3.81 %
1

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

2

This is a non-GAAP financial measure. For more information, see "Supplemental Information - Non-GAAP Financial Measures (Unaudited)" below.

10

Princeton Bancorp, Inc.

Consolidated Average Statement of Financial Condition

(Unaudited)

(Dollars in thousands)

For the Nine Months Ended September 30,
2024 2023 Change in Change in
Average Yield/ Average Yield/ Average Yield/
Balance Rate Balance Rate Balance Rate

Earning assets

Loans

$ 1,609,890 6.56 % $ 1,424,768 6.09 % $ 185,122 0.47 %

Securities

Taxable available-for-sale

86,732 4.36 % 44,517 2.78 % 42,215 1.58 %

Tax-exemptavailable-for-sale

40,180 2.84 % 40,974 2.78 % (794 ) 0.06 %

Held-to-maturity

171 5.25 % 198 5.28 % (27 ) -0.03 %

Securities

127,083 3.88 % 85,689 2.78 % 41,394 1.10 %

Other interest earning assets

Federal funds sold

138,843 5.43 % 91,761 5.30 % 47,082 0.13 %

Other interest-earning assets

19,281 5.76 % 7,086 5.36 % 12,195 0.40 %

Other interest-earning assets

158,124 5.47 % 98,847 5.31 % 59,277 0.16 %

Total interest-earning assets

1,895,097 6.29 % 1,609,304 5.87 % 285,793 0.42 %

Total non-earning assets

144,630 114,543

Total assets

$ 2,039,727 $ 1,723,847

Interest-bearing liabilities

Checking

$ 244,271 1.93 % $ 250,100 1.29 % $ (5,829 ) 0.64 %

Savings

151,884 2.57 % 163,516 1.54 % (11,632 ) 1.03 %

Money market

399,253 3.92 % 297,360 2.81 % 101,893 1.11 %

Certificates of deposit

704,388 4.28 % 504,237 2.90 % 200,151 1.38 %

Total interest-bearing deposits

1,499,796 3.63 % 1,215,213 2.37 % 284,583 1.26 %

Non-interest bearing deposits

252,184 244,718

Total deposits

1,751,980 3.11 % 1,459,931 1.97 % 292,049 1.14 %

Borrowings

-  0.00 % 3,133 5.01 % (3,133 ) -5.01 %

Total interest-bearing liabilities (excluding non interest deposits)

1,499,796 3.63 % 1,218,346 2.37 % 281,450 1.26 %

Non-interest-bearing deposits

252,184 244,718

Total cost of funds

1,751,980 3.11 % 1,463,064 1.97 % 288,916 1.14 %

Accrued expenses and other liabilities

42,239 34,312

Stockholders' equity

245,508 226,471

Total liabilities and stockholders' equity

$ 2,039,727 $ 1,723,847

Net interest spread

2.66 % 3.50 %

Net interest margin

3.42 % 4.07 %

Net interest margin (FTE) 1,2

3.46 % 4.13 %
1

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

2

This is a non-GAAP financial measure. For more information, see "Supplemental Information - Non-GAAP Financial Measures (Unaudited)" below.

11

Princeton Bancorp, Inc.

Consolidated Average Statement of Financial Condition

(Unaudited)

(Dollars in thousands)

For the Three Months Ended
September 30, 2024 June 30, 2024 Change in Change in
Average Yield/ Average Yield/ Average Yield/
Balance Rate Balance Rate Balance Rate

Earning assets

Loans

$ 1,691,688 6.62 % $ 1,585,876 6.60 % $ 105,812 0.01 %

Securities

Taxable available-for-sale

111,633 4.56 % 89,547 4.47 % 22,086 0.09 %

Tax-exemptavailable-for-sale

40,028 2.85 % 39,756 2.88 % 272 -0.03 %

Held-to-maturity

164 5.33 % 166 5.33 % (2 ) 0.00 %

Securities

151,825 4.11 % 129,469 3.98 % 22,356 0.13 %

Other interest earning assets

Federal funds sold

135,164 5.38 % 133,336 5.45 % 1,828 -0.07 %

Other interest-earning assets

19,549 5.85 % 19,338 5.78 % 211 0.07 %

Other interest-earning assets

154,713 5.44 % 152,674 5.49 % 2,039 -0.05 %

Total interest-earning assets

1,998,226 6.33 % 1,868,019 6.33 % 130,207 0.00 %

Total non-earning assets

151,776 141,377

Total assets

$ 2,150,002 $ 2,009,396

Interest-bearing liabilities

Checking

$ 258,728 1.86 % $ 231,895 1.94 % $ 26,833 -0.08 %

Savings

159,521 2.57 % 148,377 2.64 % 11,144 -0.07 %

Money market

443,109 3.85 % 390,019 3.99 % 53,090 -0.14 %

Certificates of deposit

721,240 4.50 % 713,433 4.22 % 7,807 0.29 %

Total interest-bearing deposits

1,582,598 3.70 % 1,483,724 3.64 % 98,874 0.05 %

Non-interest bearing deposits

269,030 243,248 25,781

Total deposits

1,851,628 3.16 % 1,726,972 3.13 % 124,655 0.03 %

Borrowings

-  N/A -  N/A -  N/A

Total interest-bearing liabilities (excluding non interest deposits)

1,582,598 3.70 % 1,483,724 3.64 % 98,874 0.05 %

Non-interest-bearing deposits

269,030 243,248

Total cost of funds

1,851,628 3.16 % 1,726,972 3.13 % 124,655 0.03 %

Accrued expenses and other liabilities

43,729 40,874

Stockholders' equity

254,645 241,550

Total liabilities and stockholders' equity

$ 2,150,002 $ 2,009,396

Net interest spread

2.64 % 2.69 %

Net interest margin

3.41 % 3.44 %

Net interest margin (FTE) 1,2

3.45 % 3.48 %
1

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

2

This is a non-GAAP financial measure. For more information, see "Supplemental Information - Non-GAAP Financial Measures (Unaudited)" below.

12

Princeton Bancorp, Inc.

Quarterly Financial Highlights

(Unaudited)

2024 2024 2024 2023 2023
September June March December September

Return on average assets

-0.67 % 1.03 % 0.89 % 1.09 % 1.60 %

Return on average equity

-5.64 % 8.54 % 7.27 % 8.93 % 13.20 %

Return on average tangible equity1

-6.07 % 8.91 % 7.60 % 9.34 % 13.83 %

Net interest margin

3.41 % 3.44 % 3.42 % 3.55 % 3.76 %

Net interest margin (FTE)1

3.45 % 3.48 % 3.58 % 3.51 % 3.81 %

Adjusted efficiency ratio1

63.65 % 65.90 % 67.21 % 60.85 % 59.89 %

COMMON STOCK DATA

Market value at period end

$ 36.98 $ 33.10 $ 30.78 $ 35.90 $ 28.99

Market range:

High

$ 39.12 $ 33.10 $ 36.25 $ 37.60 $ 31.69

Low

$ 32.40 $ 29.15 $ 29.72 $ 28.21 $ 27.37

Book value per common share at period end

$ 38.15 $ 38.54 $ 38.26 $ 38.04 $ 36.86

Tangible book value per common share1

$ 35.50 $ 36.98 $ 36.65 $ 36.41 $ 35.21

Shares of common stock outstanding (in thousands)

6,876 6,353 6,320 6,314 6,299

CAPITAL RATIOS

Total capital (to risk-weighted assets)

13.21 % 14.66 % 14.31 % 14.68 % 14.96 %

Tier 1 capital (to risk-weighted assets)

12.06 % 13.62 % 13.26 % 13.61 % 13.89 %

Tier 1 capital (to average assets)

11.48 % 12.21 % 11.99 % 12.29 % 12.38 %

Equity to assets

11.14 % 12.34 % 12.16 % 12.53 % 12.14 %

Tangible equity to tangible assets1

10.45 % 11.90 % 11.71 % 12.06 % 11.66 %

CREDIT QUALITY DATA (Dollars in thousands)

Net charge-offs (recoveries)

$ 108 $ (15 ) $ 176 $ (10 ) $ (23 )

Annualized net charge-offs (recoveries) to average loans

0.026 % -0.004 % 0.045 % -0.003 % -0.006 %

Nonperforming loans

$ 2,330 $ 3,198 $ 2,115 $ 6,708 $ 6,755

Other real estate owned

-  -  -  -  - 

Total nonperforming assets

$ 2,330 $ 3,198 $ 2,115 $ 6,708 $ 6,755

Allowance for credit losses as a percent of:

Period-end loans, net of deferred fees and costs

1.27 % 1.17 % 1.18 % 1.19 % 1.20 %

Nonperforming loans

995.85 % 577.36 % 880.28 % 275.67 % 266.35 %

Nonperforming assets

995.85 % 577.36 % 880.28 % 275.67 % 266.35 %

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

0.13 % 0.20 % 0.13 % 0.43 % 0.45 %
1

This is a non-GAAP financial measure. For more information, see "Supplemental Information - Non-GAAP Financial Measures (Unaudited)" below.

13

Princeton Bancorp, Inc.

Supplemental Information - Non-GAAP Financial Measures

(Unaudited)

This press release contains certain supplemental financial information, described in the table below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of its performance. These non-GAAP financial measures are "tangible book value per common share," "return on average tangible equity," "efficiency ratio," "tangible equity to tangible assets," and "net interest margin on a fully taxable equivalent." For the purpose of calculating return on average tangible equity, net income for such period is annualized and divided by average tangible equity during such period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating tangible equity to tangible assets, tangible equity is divided by tangible assets. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at period end. Tangible assets equal total assets less goodwill and other intangible assets, in each case at period end. For the purpose of calculating tangible book value per common share, tangible equity is divided by the number of common shares outstanding, in each case at period end. For the purpose of calculating efficiency ratio, total operating expense is divided by total revenue for the period. For the purpose of calculating net interest margin on a fully taxable equivalent, fully taxable equivalent adjustments are added to net interest income for the period, net interest income fully taxable equivalent for such period is annualized and divided by average interest earning assets during such period. Adjusted earnings per share and adjusted diluted earnings per share are calculated by dividing net income adjusted for the provision for credit loss on non-purchase credit deteriorated loans and merger-related expenses by weighted outstanding shares.

Management believes these non- GAAP financial measures provide information useful to investors in understanding its financial results. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and the Company strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

In addition to the items noted above, defined footnotes are included in the Supplemental Information - Non-GAAP Financial Measures table below. Income annualized is calculated using income for the period divided by the number of days in the period, then multiplied by total days in the year. Average equity is calculated using the sum of daily equity balance for the period, divided by the number of days in the period. Fully taxable equivalent adjustment is calculated using tax exempt loan income plus tax exempt securities income for the period, multiplied by a tax rate of 28%.

14

Princeton Bancorp, Inc.

Supplemental Information - Non-GAAP Financial Measures

(Unaudited)

(Dollars in thousands)

Three months ended
2024 2024 2024 2023 2023
September June March December September

Net (loss) income (annualized)1

$ (14,350 ) $ 20,617 $ 17,428 $ 20,956 $ 30,144

Average equity2

254,645 241,550 240,230 234,628 228,404

Less: intangible assets

(18,241 ) (10,044 ) (10,154 ) (10,275 ) (10,399 )

Average Tangible Equity

$ 236,404 $ 231,506 $ 230,076 $ 224,353 $ 218,005

Return on average tangible equity

-6.07 % 8.91 % 7.60 % 9.34 % 13.83 %

Net interest income

$ 17,109 $ 15,968 $ 15,448 $ 16,010 $ 16,684

Other income

2,056 2,087 1,985 1,779 2,403

Total revenue

19,165 18,055 17,433 17,789 19,087

Non-interest expenses

$ 19,036 $ 12,009 $ 11,836 $ 10,949 $ 10,159

Less: core deposit intangible amortization

(143 ) (111 ) (120 ) (124 ) (119 )

Less: merger-related expenses

(6,695 ) -  -  -  1,391

Total operating expenses

$ 12,198 $ 11,898 $ 11,716 $ 10,825 $ 11,431

Adjusted efficiency ratio

63.65 % 65.90 % 67.21 % 60.85 % 59.89 %

Total Assets

$ 2,354,730 $ 1,983,941 $ 1,988,001 $ 1,916,497 $ 1,913,123

Less: intangible assets

(18,241 ) (10,044 ) (10,154 ) (10,275 ) (10,399 )

Tangible assets

$ 2,336,489 $ 1,973,897 $ 1,977,847 $ 1,906,222 $ 1,902,724

Stockholders' equity

$ 262,351 $ 244,841 $ 241,808 $ 240,211 $ 232,208

Less: intangible assets

(18,241 ) (10,044 ) (10,154 ) (10,275 ) (10,399 )

Tangible equity

$ 244,110 $ 234,797 $ 231,654 $ 229,936 $ 221,809

Tangible equity to tangible assets

10.45 % 11.90 % 11.71 % 12.06 % 11.66 %

Tangible equity

$ 244,110 $ 234,797 $ 231,654 $ 229,936 $ 221,809

Shares outstanding (in thousands)

6,876 6,350 6,320 6,315 6,299

Tangible book value per share

$ 35.50 $ 36.98 $ 36.65 $ 36.41 $ 35.21
1

Income annualized is calculated using income for the period divided by the number of days in the period, then multiplied by total days in the year.

2

Average equity is calculated using the sum of daily equity balance for the period, divided by the number of days in the period.

Three months ended
2024 2024 2024 2023 2023
September June March December September

Net interest income

$ 17,109 $ 15,968 $ 15,968 $ 15,448 $ 16,684

FTE adjustment3

211 213 226 224 215

Net interest income FTE

$ 17,320 $ 16,181 $ 16,194 $ 15,672 $ 16,899

Net interest income FTE (annualized)1

$ 68,902 $ 65,078 $ 65,132 $ 62,862 $ 67,045

Average interest earning assets

1,998,226 1,868,019 1,817,912 1,789,624 1,761,567

Net interest margin FTE

3.45 % 3.48 % 3.58 % 3.51 % 3.81 %
Nine months ended
2024 2023
September September

Net interest income

$ 48,525 $ 49,006

FTE adjustment3

612 580

Net interest income FTE

$ 49,137 $ 49,586

Net interest income FTE (annualized)1

$ 65,635 $ 66,540

Average interest earning assets

1,895,097 1,609,304

Net interest margin FTE

3.46 % 4.13 %
1

Income annualized is calculated using income for the period divided by the number of days in the period, then multiplied by total days in the year.

3

Fully taxable equivalent adjustment is calculated using tax exempt loan income plus tax exempt securities income for the period, multiplied by a tax rate of 28%.

15

Princeton Bancorp, Inc.

Reconciliation of Non-GAAP Net Income to GAAP Net Income

At or For the Three At or For the Nine
Months Ended September 30, 2024 Months Ended September 30, 2024
Actual Cornerstone1 Core Actual Cornerstone1 Core
(Dollars in thousands, except per share data)

Net interest income

$ 17,109 $ -  $ 17,109 $ 48,525 $ -  $ 48,525

Provision for credit loss

4,601 3,152 1,449 4,669 3,152 1,517

Net interest income after provision

12,508 (3,152 ) 15,660 43,856 (3,152 ) 47,008

Non-interest income

2,056 -  2,056 6,128 -  6,128

Non-interest expense

19,036 6,695 12,341 42,881 6,695 36,186

Income (loss) before income taxes

(4,472 ) (9,847 ) 5,375 7,103 (9,847 ) 16,950

Income tax (benefit) expense

(865 ) (2,068 ) 1,203 1,239 (2,068 ) 3,307

Net (loss) income

$ (3,607 ) $ (7,779 ) $ 4,172 $ 5,864 $ (7,779 ) $ 13,643

Earnings per common share - basic

$ (0.55 ) $ 0.63 $ 0.91 $ 2.13

Earnings per common share - diluted

$ (0.55 ) $ 0.63 $ 0.90 $ 2.10
1

Reflects the CECL adjustment for non-purchase credit deteriorated loans and merger related expense impact to net income and tax-effected using a federal income tax rate of 21%.

16