HAMILTON, NJ -- (Marketwired) -- 07/29/15 -- First Bank(NASDAQ: FRBA)today announced second quarter 2015 results. Net income for the quarter was $748 thousand or $0.08 per diluted share, compared to net income of $923 thousand or $0.10 per diluted share for the second quarter of 2014 and $1.7 million or $0.18 per diluted share for the first quarter of 2015.

Second quarter net income for 2015 reflected the impact of $269 thousand in interest expense paid on subordinated debt, as the Bank completed a $22 million subordinated debt financing on April 30, 2015. First quarter 2015 results included $624 thousand in non-interest income from gains on recovery of acquired loans related to the acquisition of Heritage Community Bank ("HCB") as well as $297 thousand in interest income related to a payoff on a partially marked-down HCB loan. Book value per share was $7.12 at the end of the second quarter 2015, an increase of 3.5% compared to book value of $6.88 at year-end.

Net income for the six months ended June 30, 2015 was $2.5 million compared to $3.5 million for the same period in 2014, a decrease of $1.0 million or 29.3%. The decrease in net income was due primarily to the $2.6 million tax-free bargain purchase gain realized in the first quarter of 2014 on the purchase of HCB. Diluted earnings per share for the comparative periods were $0.26 and $0.38, respectively.

President and Chief Executive Officer Patrick L. Ryan discussed the results: "The second quarter included positive strategic developments that will help drive long-term shareholder value and put pressure on short term earnings. Specifically, the important strategic capital raise we completed in April significantly enhanced our total capital position -- creating the opportunity for meaningful additional growth (organic or M&A) without the need to issue additional shares of common stock. But, as with all new forms of capital, the full cost of the new capital is felt immediately, while the benefits are enjoyed over time as the capital gets deployed into profitable projects. Importantly, we did start reinvesting the new capital with the return of strong loan growth in the quarter and our organic expansion into the Bucks County, PA market.

"In the second quarter we worked through a significant excess liquidity position as strong deposit growth in the first quarter, together with the proceeds from the capital raise, created a very strong cash position throughout the quarter. Good loan growth and prudent investment purchases, together with a strategic slowing of new deposit dollars, helped us to deploy the excess cash throughout the quarter. We should benefit from that additional interest income as we move into the second half of the year. We were pleased to see continued improvement in our asset quality in the quarter: i) net charge-offs were minimal, ii) non-performing assets declined, and iii) the coverage of our allowance for loan losses to non-performing loans increased to 138%."

Ryan continued, "We remain very excited about the organic growth opportunities we are finding throughout our New York City to Philadelphia corridor. Our newer branches are performing well and we are seeing new and exciting opportunities for expansion within our footprint. Based on our current pipeline, we expect to see strong loan growth during the second half of the year. Importantly, we think that growth will come from all three of our lending teams: North Jersey, Central/South Jersey, and Bucks County, PA. While growth remains our primary strategic objective, we will not do it without an eye toward the bottom line. As we invest, we are also exploring opportunities for cost savings and efficiencies that can improve profitability without emasculating our growth initiatives."

Second Quarter 2015 Highlights

• Balance Sheet
• • Total assets at June 30, 2015 were $757.0 million, an increase of $26.1 million or 3.6% compared to March 31, 2015, and an increase of $146.4 million or 24.0% compared to June 30, 2014.
  • Total loans reached $580.8 million at June 30, 2015, an increase of $35.7 million or 6.5% compared to March 31, 2015 and an increase of $113.9 million or 24.4% compared to June 30, 2014.
  • Loan portfolio breakdown at June 30, 2015:
  • • Acquisition, Construction and Development (ACD) loans equaled 6.4% of total loans
    • Commercial Real Estate, Investor (CREI; including multi-family) loans equaled 42.9% of total loans
    • Commercial Real Estate, Owner-Occupied (CREO) loans equaled 22.1% of total loans
    • Commercial and Industrial (C&I) loans equaled 16.0% of total loans
    • Residential, Consumer and Other loans equaled 12.6% of total loans
  • Total deposits reached $652.7 million, an increase of $4.3 million or 0.7% compared to March 31, 2015 and an increase of $120.5 million or 22.6% compared to June 30, 2014. Non-interest bearing deposits totaled $97.3 million at June 30, 2015 or 14.9% of total deposits.
  • Stockholders' equity increased to $67.2 million at June 30, 2015.
  • Book value per share was $7.12 at June 30, 2015 compared to $7.07 per share at March 31, 2015 and $6.68 per share at June 30, 2014. Tangible book value per share was $7.09 at June 30, 2015, compared to $7.03 per share at March 31, 2015 and $6.64 per share at June 30, 2014.

• Quarterly Income Statement
• • Net interest income for the second quarter of 2015 totaled $5.76 million, a decrease of $376 thousand or 6.1% compared to $6.13 million for the first quarter of 2015 and an increase of $341 thousand or 6.3% compared to the second quarter of 2014. First quarter 2015 results included $297 thousand in interest income related to a payoff on a partially marked-down loan.
  • Non-interest income for the second quarter of 2015 totaled $265 thousand compared to $832 thousand for the first quarter of 2015. Gains on recovery of acquired loans totaled $30 thousand in the second quarter of 2015 compared to $624 thousand in the first quarter of 2015. When compared to the second quarter of 2014 non-interest income decreased $52 thousand.
  • Non-interest expense for the second quarter of 2015 totaled $4.30 million, a decrease of $139 thousand or 3.1% compared to $4.43 million for the first quarter of 2015 and an increase of $175 thousand or 4.2% compared to the second quarter of 2014.
  • Pre-tax income for the second quarter of 2015 totaled $1.1 million, a decrease of $1.4 million or 55.8% compared to $2.5 million for the first quarter of 2015 and a decrease of $182 thousand or 14.3% compared to the second quarter of 2014.
  • Net income for the second quarter of 2015 totaled $748 thousand, a decrease of $981 thousand or 56.7% compared to $1.7 million in the first quarter of 2015, and a decrease of $175 thousand or 19.0% compared to the second quarter of 2014.
  • Diluted earnings per share for the second quarter of 2015 totaled $0.08, a decrease of $0.10 per share compared to $0.18 per share in the first quarter of 2015, and a decrease of $0.02 per share compared to the second quarter of 2014.
  • The provision for loan losses in the second quarter of 2015 totaled $632 thousand, an increase of $576 thousand or 1,028.6% compared to $56 thousand for the first quarter of 2015 and an increase of $296 thousand or 88.1% compared to the second quarter of 2014.
  • Pre-provision net revenue(1) for the second quarter was $1.7 million, a decrease of $360 thousand or 17.5% compared to $2.1 million in the first quarter of 2015, and a decrease of $41 thousand or 2.4% compared to the second quarter of 2014. First quarter 2015 results include $297 thousand in interest income related to a payoff on a partially marked-down loan.
• Year to Date Income Statement
• • Net interest income for the six months ended June 30, 2015 totaled $11.9 million, an increase of $2.3 million or 23.4% compared to $9.6 million for the same period in 2014.
  • Non-interest income for the six months ended June 30, 2015 totaled $1.1 million, a decrease of $2.0 million or 64.1% compared to $3.1 million for the same period in 2014. The bargain purchase gain of $2.6 million is included for the six months ended June 30, 2014.
  • Non-interest expense for the six months ended June 30, 2015 totaled $8.7 million, an increase of $1.4 million or 18.9% compared to $7.3 million for the same period in 2014.
  • The provision for loan losses for the six months ended June 30, 2015 totaled $688 thousand, an increase of $174 thousand or 33.9% compared to $514 thousand for the same period in 2014.

• Other items
• • The tax equivalent net interest margin (NIM) for the second quarter of 2015 was 3.24% compared to 3.73% for the first quarter of 2015 and 3.81% for the second quarter of 2014.
  • Non-performing assets ("NPAs") were $6.9 million or 0.92% of total assets at June 30, 2015 compared to $7.5 million or 1.03% of total assets at March 31, 2015.
  • • Non-accrual loans totaled $4.9 million or 0.84% of total loans at June 30, 2015 compared to non-accrual loans of $4.9 million or 0.90% of total loans at March 31, 2015.
    • Loans 30-89 days past due totaled $4.4 million at June 30, 2015 compared to $6.7 million at March 31, 2015. We had no loans over 90 days past due or more and still accruing at June 30, 2015 compared to $513 thousand at March 31, 2015.
    • Other real estate owned (including other repossessed assets) totaled $2.1 million at June 30, 2015 and March 31, 2015.
  • Regulatory capital ratios at June 30, 2015:
  • • Tier 1 Leverage ratio of 8.95%
    • Common equity Tier 1 capital of 10.16%
    • Tier 1 Risk-Based capital ratio of 10.16%
    • Total Risk-Based capital ratio of 14.43%
  • The allowance for loan losses (ALLL) to total loans at June 30, 2015 was 1.16% compared to 1.13% at March 31, 2015.
  • 105 full-time equivalent employees (FTEs) at June 30, 2015 compared to 94 at March 31, 2015.

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About First Bank
First Bank (www.firstbanknj.com) is a New Jersey state-chartered bank with ten full-service branches in Cranbury, Denville, Ewing, Hamilton, Lawrence, Randolph (2), Somerset and Williamstown, New Jersey, and Trevose, Pennsylvania. With $757 million in assets as of June 30, 2015, First Bank offers a traditional range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia, PA 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-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, or other one-time, non-ordinary costs).

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share data, unaudited)
	June 30,			December 31,
	2015			2014
Assets
Cash and due from banks	$	9,779			$	4,352
Interest bearing deposits with banks		19,123				16,018
	Cash and cash equivalents		28,902				20,370
Interest bearing time deposits with banks		5,322				5,183
Investment securities available for sale		57,106				40,390
Investment securities held to maturity (fair value of $55,663 at June 30, 2015 and $34,734 at December 31, 2014)		55,466				34,273
Restricted investment in bank stocks		1,412				1,304
Other investments		5,000				5,000
Loans, net of deferred fees and costs		580,760				547,759
	Less: Allowance for loan losses		6,755				6,104
	Net loans		574,005				541,655
Premises and equipment, net		3,512				3,452
Other real estate owned, net		1,977				2,182
Accrued interest receivable		1,825				1,724
Bank-owned life insurance		14,360				14,147
Intangible assets, net		320				356
Deferred income taxes		6,972				6,864
Other assets		860				558
	Total assets	$	757,039			$	677,458
Liabilities and Stockholders' Equity
Deposits:
	Non-interest bearing	$	97,271			$	91,972
	Interest bearing		555,394				504,510
	Total deposits		652,665				596,482
Long-term borrowings		14,000				14,000
Subordinated debentures		21,491				-
Accrued interest payable		614				337
Other liabilities		1,071				1,880
	Total liabilities		689,841				612,699
Stockholders' Equity:
Preferred stock, par value $2 per share; 5,000,000 shares authorized; no shares outstanding		-				-
Common stock, par value $5 per share; 20,000,000 shares authorized; issued and outstanding 9,434,741 shares at June 30, 2015 and 9,408,491 shares at December 31, 2014		47,042				47,042
Additional paid-in capital		14,426				14,301
Retained earnings		6,023				3,546
Accumulated other comprehensive loss		(293	)			(130	)
	Total stockholders' equity		67,198				64,759
	Total liabilities and stockholders' equity	$	757,039			$	677,458

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data, unaudited)
	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2015		2014		2015		2014
Interest and Dividend Income
Investment securities-taxable	$	357		$	338		$	652		$	705
Investment securities-tax-exempt		106			66			198			130
Federal funds sold		-			1			-			2
Interest bearing deposits with banks and other		64			59			125			117
Loans, including fees		6,890			5,938			13,886			10,600
	Total interest and dividend income		7,417			6,402			14,861			11,554
Interest Expense
Deposits		1,338			933			2,596			1,809
Long-term borrowings		54			54			108			108
Subordinated debentures		269			-			269			-
	Total interest expense		1,661			987			2,973			1,917
Net interest income		5,756			5,415			11,888			9,637
Provision for loan losses		632			336			688			514
Net interest income after provision for loan losses		5,124			5,079			11,200			9,123
Non-Interest Income
Service fees on deposit accounts		37			53			65			80
Loan fees		13			8			23			10
Title insurance fees		7			5			7			5
Income from bank-owned life insurance		109			65			214			128
Gains on sale of investment securities, net		-			34			-			34
Gains on sale of loans held for sale		-			-			-			14
Gain on acquisition of Heritage Community Bank		-			-			-			2,606
Gains on recovery of acquired loans		30			97			654			97
Other non-interest income		69			55			134			82
	Total non-interest income		265			317			1,097			3,056
Non-Interest Expense
Salaries and employee benefits		2,278			2,048			4,509			3,565
Occupancy and equipment		609			494			1,155			906
Legal fees		91			98			183			169
Other professional fees		269			315			686			587
Regulatory fees		143			138			290			224
Directors' fees		118			75			228			134
Data processing		203			202			392			347
Marketing and advertising		119			97			237			189
Travel and entertainment		61			71			117			105
Insurance		49			41			103			73
Other real estate owned expense, net		96			74			330			194
Merger-related expenses		-			256			-			463
Other expense		259			211			499			385
	Total non-interest expense		4,295			4,120			8,729			7,341
Income Before Income Taxes		1,094			1,276			3,568			4,838
Income tax expense		346			353			1,091			1,332
Net Income	$	748		$	923		$	2,477		$	3,506
Basic earnings per share	$	0.08		$	0.10		$	0.26		$	0.39
Diluted earnings per share	$	0.08		$	0.10		$	0.26		$	0.38
Basic weighted average common shares outstanding		9,408,491			9,396,349			9,408,491			9,076,792
Diluted weighted average common shares outstanding		9,473,950			9,467,472			9,471,105			9,147,873

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(unaudited)
	Three Months Ended June 30,
	2015			2014
	Average Balance			Interest			Average Rate (5)			Average Balance			Interest			Average Rate (5)
	(dollars in thousands)
Interest earning assets
Investment securities (1) (2)	$	96,885			$	499			2.07	%		$	74,952			$	426			2.28	%
Loans (3)		564,227				6,890			4.90	%			456,896				5,938			5.21	%
Federal funds sold and interest bearing deposits with banks		48,741				37			0.30	%			34,708				26			0.30	%
Restricted investment in bank stocks		1,406				12			3.42	%			1,491				12			3.23	%
Other investments		5,000				15			1.20	%			5,000				22			1.76	%
	Total interest earning assets (2)		716,259				7,453			4.17	%			573,047				6,424			4.50	%
Allowance for loan losses		(6,605	)										(4,890	)
Non-interest earning assets		40,212											35,989
	Total assets	$	749,866										$	604,146
Interest bearing liabilities
Interest bearing demand deposits	$	45,877			$	82			0.72	%		$	18,184				16			0.35	%
Money market deposits		113,318				187			0.66	%			94,198				126			0.54	%
Savings deposits		94,199				121			0.52	%			126,608				195			0.62	%
Time deposits		304,832				948			1.25	%			207,790				596			1.15	%
	Total interest bearing deposits		558,226				1,338			0.96	%			446,780				933			0.84	%
Long-term borrowings		14,000				54			1.55	%			14,000				54			1.55	%
Subordinated debentures		14,696				269			7.32	%			-				-			-
	Total interest bearing liabilities		586,922				1,661			1.14	%			460,780				987			0.86	%
Non-interest bearing deposits		93,652											79,785
Other liabilities		1,756											1,386
Stockholders' equity		67,536											62,195
	Total liabilities and stockholders' equity	$	749,866										$	604,146
Net interest income/ interest rate spread (2)						5,792			3.03	%							5,437			3.64	%
Net interest margin (2) (4)									3.24	%										3.81	%
Tax-equivalent adjustment (2)						(36	)										(22	)
Net interest income					$	5,756										$	5,415

(1) Average balances of investment securities available for sale are based on amortized cost.
(2) Interest and average rates are tax equivalent using a Federal income tax rate of 34 percent.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Average rates are annualized.

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(unaudited)
	Six Months Ended June 30,
	2015			2014
	Average Balance			Interest			Average Rate (5)			Average Balance			Interest			Average Rate (5)
	(dollars in thousands)
Interest earning assets
Investment securities (1) (2)	$	85,685			$	917			2.16	%		$	77,275			$	879			2.29	%
Loans (3)		556,165				13,886			5.03	%			411,755				10,600			5.19	%
Federal funds sold and interest bearing deposits with banks		45,294				67			0.30	%			29,276				48			0.33	%
Restricted investment in bank stocks		1,356				27			4.02	%			1,338				27			4.07	%
Other investments		5,000				31			1.25	%			5,000				44			1.77	%
	Total interest earning assets (2)		693,500				14,928			4.34	%			524,644				11,598			4.46	%
Allowance for loan losses		(6,448	)										(4,800	)
Non-interest earning assets		38,099											31,009
	Total assets	$	725,151										$	550,853
Interest bearing liabilities
Interest bearing demand deposits	$	40,264			$	143			0.72	%		$	15,776			$	27			0.35	%
Money market deposits		108,674				352			0.65	%			86,553				246			0.57	%
Savings deposits		96,930				267			0.56	%			114,819				376			0.66	%
Time deposits		299,155				1,834			1.24	%			192,319				1,160			1.22	%
Total interest bearing deposits		545,023				2,596			0.96	%			409,467				1,809			0.89	%
Long-term borrowings		14,022				108			1.55	%			14,000				108			1.56	%
Subordinated debentures		7,388				269			7.28	%			-				-			-
	Total interest bearing liabilities		566,433				2,973			1.06	%			423,467				1,917			0.91	%
Non-interest bearing deposits		90,126											67,436
Other liabilities		1,830											1,344
Stockholders' equity		66,762											58,606
	Total liabilities and stockholders' equity	$	725,151										$	550,853
Net interest income/interest rate spread (2)						11,955			3.28	%							9,681			3.55	%
Net interest margin (4)									3.48	%										3.72	%
Tax-equivalent adjustment (2)						(67	)										(44	)
Net interest income					$	11,888										$	9,637

(1) Average balances of investment securities available for sale are based on amortized cost.
(2) Interest and average rates are tax equivalent using a federal income tax rate of 34 percent.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Average rates are annualized.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except share data, unaudited)
	2Q2015			1Q2015			4Q2014			3Q2014			2Q2014
EARNINGS
	Net interest income	$	5,756			$	6,132			$	6,075			$	5,501			$	5,415
	Provision for loan losses		632				56				947				977				336
	Non-interest income		265				832				966				1,078				316
	Non-interest expense		4,295				4,434				4,368				4,112				4,119
	Income tax expense		346				745				484				401				353
	Net income		748				1,729				1,242				1,089				923
PER SHARE DATA
	Basic earnings per share	$	0.08			$	0.18			$	0.13			$	0.12			$	0.10
	Diluted earnings per share		0.08				0.18				0.13				0.12				0.10
	Tangible book value		7.09				7.03				6.85				6.75				6.64
	Book value		7.12				7.07				6.88				6.79				6.68
PERFORMANCE RATIOS
	Return on average assets (1)		0.40	%			1.00	%			0.74	%			0.69	%			0.61	%
	Return on average equity (1)		4.44	%			10.63	%			7.55	%			6.77	%			5.95	%
	Net interest margin, tax equivalent basis (1)		3.24	%			3.73	%			3.84	%			3.72	%			3.81	%
	Efficiency ratio		71.69	%			69.94	%			68.91	%			70.12	%			68.98	%
MARKET DATA (period-end)
	Market value per share	$	6.00			$	6.03			$	6.24			$	6.15			$	6.00
	Market value / book value		84.24	%			85.34	%			90.65	%			90.55	%			89.82	%
	Common shares outstanding		9,435				9,437				9,408				9,408				9,408
	Market capitalization	$	56,610			$	56,905			$	58,706			$	57,859			$	56,448
CAPITAL & LIQUIDITY
	Tangible equity / assets		8.83	%			9.08	%			9.51	%			9.87	%			10.23	%
	Equity / assets		8.88	%			9.12	%			9.56	%			9.93	%			10.29	%
	Loans / deposits		88.98	%			84.08	%			91.83	%			89.63	%			87.73	%
ASSET QUALITY
	Net charge offs (recoveries)	$	58			$	(21	)		$	354			$	490			$	41
	Nonperforming loans		4,887				5,414				7,112				4,666				3,411
	Nonperforming assets		6,949				7,521				9,394				7,014				5,745
	Net charge offs (recoveries) / average loans (1)		0.04	%			(0.02	%)			0.27	%			0.41	%			0.04	%
	Nonperforming loans / total loans		0.84	%			0.99	%			1.30	%			0.92	%			0.73	%
	Nonperforming assets / total assets		0.92	%			1.03	%			1.39	%			1.09	%			0.94	%
	Allowance for loan losses / total loans		1.16	%			1.13	%			1.11	%			1.09	%			1.08	%
	Allowance for loan losses / nonperforming loans		138.22	%			114.17	%			85.83	%			118.11	%			147.29	%
PERIOD-END DATA
	Total assets	$	757,039			$	730,935			$	677,458			$	643,499			$	610,645
	Total loans		580,760				545,074				547,759				505,008				466,878
	Total deposits		652,665				648,316				596,482				563,433				532,147
	Total stockholders' equity		67,198				66,684				64,759				63,895				62,847
	Full-time equivalent employees		105				94				94				89				95

(1) Annualized.

CONTACT:
Patrick L. Ryan
President and CEO
(609) 643-0168
[email protected]

Source: First Bank

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