FRBA First Bank

First Bank (Nasdaq Global Market: FRBA) (the Bank) today announced results for the fourth quarter and full year 2023. Net income for the fourth quarter of 2023 was $8.4 million, or $0.33 per diluted share, compared to $9.1 million, or $0.46 per diluted share, for the fourth quarter of 2022. Return on average assets, return on average equity and return on average tangible equityi for the fourth quarter of 2023 were 0.93%, 9.06% and 10.67%, respectively, compared to 1.35%, 12.61% and 13.53%, respectively, for the fourth quarter of 2022. Excluding merger-related expenses and losses on the sale of loans and investments, First Bank’s fourth quarter 2023 adjusted diluted earnings per shareii were $0.49, adjusted return on average assetsii was 1.38% and adjusted return on average tangible equityii was 15.75%.

Full year 2023 net income was $20.9 million, or $0.95 per diluted share, compared to $36.3 million, or $1.84 per diluted share for 2022. Return on average assets, return on average equity and return on average tangible equityi for the full year 2023 were 0.66%, 6.38% and 7.17%, respectively. Excluding merger-related expenses, losses on the sale of loans and investments, and credit loss expenses on acquired loans, full year 2023 adjusted diluted earnings per share were $1.64, adjusted return on average assets was 1.14% and adjusted return on average tangible equity was 12.43%.

Fourth Quarter and Full Year 2023 Performance Highlights:

• Total net revenue (net interest income plus non-interest income) of $28.0 million for the fourth quarter of 2023 increased $2.8 million, or 11.1%, compared to the prior year quarter, while full year total net revenue was $103.8 million, an increase of $6.3 million, or 6.5%, compared to 2022. Excluding the net impact of loan and investment securities sales, total net revenue was $32.7 million for the fourth quarter of 2023, a 29.8% increase from the prior year quarter, and $109.6 million for 2023, a 12.8% increase from 2022.
• Total loans were $3.02 billion at December 31, 2023, in line with the linked quarter. Excluding the impact of loan sales totaling $35.6 million during the quarter, total loans grew an adjusted $36.3 million, or 4.8%, annualized, from September 30, 2023.
• Total deposits were $2.97 billion at December 31, 2023, in line with balances for the linked quarter ended September 30, 2023. Non-interest bearing deposits increased $8.1 million during the fourth quarter of 2023 while interest bearing deposits decreased $7.9 million.
• Strong asset quality continued, with nonperforming assets increasing slightly to 0.69% of total assets at December 31, 2023 compared to 0.68% at September 30, 2023, net charge-offs as a percentage of average loans measuring 0.03% for fourth quarter 2023, and a credit loss benefit measuring $294,000 recorded for the quarter.

Patrick L. Ryan, President and CEO of First Bank, reflected on the Bank’s performance, stating, “Results for the fourth quarter display the outstanding momentum First Bank has achieved from solid execution of our strategic priorities in 2023. The completed acquisition of Malvern Bancorp and Malvern Bank added meaningfully to our earnings profile, contributing to a 30% increase in adjusted revenue compared to the fourth quarter of 2022, despite the challenging interest rate environment. The ramp up of new business units and information technology investments remained on track and in line with expected costs. We also continued to reposition our balance sheet through the sale of $36 million in commercial loans. These outcomes drove improvement in our profitability metrics and overall risk diversification.”

Mr. Ryan added, “In 2024, we will continue to prioritize strong profit growth above overall balance sheet growth. We will continue to focus on core deposit generation which will drive our loan and asset growth in 2024. While the current rate environment continues to be a challenge, our strong team of bankers is focused on adding quality deposit relationships, diversifying our lending profile through growth in our new specialty banking businesses, and maintaining our excellent asset quality. With continued success, we expect to produce strong profitability metrics in 2024.”

Mr. Ryan concluded, “In December, the Kroll Bond Rating Agency (KBRA) again affirmed our investment grade credit ratings. Their report cited our successful execution of strategy in recent years, including a well-thought-out approach to M&A and a demonstrated ability to effectively integrate acquisitions. KRBA notes the Bank now reflects a vastly improved earnings profile that compares favorably to peers. We believe KBRA’s report is another validation of our approach to building franchise value for our shareholders.”

Income Statement

In the fourth quarter of 2023, the Bank’s net interest income increased to $31.0 million, growing $7.2 million, or 30.5%, compared to the same period in 2022. The increase was primarily driven by an increase of $20.0 million in interest income on loans which outpaced the $12.8 million increase in interest expense on deposits in the fourth quarter of 2023 compared to the same quarter in 2022. Net interest income increased $2.4 million, or 8.4%, over the linked third quarter of 2023. The increase was primarily driven by an increase of $3.2 million in interest income on loans and a decrease of $475,000 in interest expense on borrowings, which resulted from the Bank’s balance sheet repositioning efforts. This was partially offset by a $1.2 million increase in deposit interest expense.

Full year 2023 net interest income totaled $104.5 million, an increase of $12.1 million, or 13.1%, compared to $92.4 million for 2022. The increase was primarily a result of higher interest income from loans due to substantial loan growth related to the Malvern acquisition in the third quarter of 2023 and higher loan yields, which were partially offset by increased interest expense related to the higher cost of deposits and expanded deposit base. Interest and dividend income increased by $66.8 million, reflecting Malvern-driven growth in average loans, which increased by $493.0 million, or 22.4%, from the prior year, and a 133 basis point increase in the average yield on loans. Reflective of the increasing interest rate environment and heightened competition for deposits throughout 2023, the average cost of total interest bearing deposits increased 208 basis points compared to the prior year. The average cost of money market, time, and interest bearing demand deposits increased 249, 215, and 173 basis points, respectively.

The Bank’s tax equivalent net interest margin measured 3.68% for the fourth quarter of 2023, decreasing by one basis point compared to the prior year quarter and increasing by 32 basis points from 3.36% for the third quarter of 2023. The modest change from the prior year quarter was primarily driven by the increase in deposit costs, which was partially offset by an increase in average loan yields. The linked quarter increase in net interest margin was primarily due to the impact of the Malvern acquisition and the related balance sheet repositioning, including the aforementioned asset sales, coupled with accretion income from the Malvern fair value adjustments.

The full year 2023 tax equivalent net interest margin was 3.47%, a decrease of 28 basis points compared to 3.75% for the full year 2022. The decrease was principally a result of the 212 basis point increase in interest bearing liabilities cost, partially offset by the 142 basis point increase in the yield on interest earning assets.

The Bank recorded a credit loss benefit totaling $294,000 during the fourth quarter of 2023, compared to a credit loss expense totaling $716,000 for the same period of the previous year and a $6.7 million credit loss expense for the third quarter of 2023. The benefit during the current quarter was primarily due to the Bank’s strong and stable asset quality and flat loan growth during the quarter. The credit loss expense for the third quarter of 2023 included $5.5 million in credit losses recorded to establish the allowance for credit losses on the acquired Malvern loan portfolio.

For the full year 2023, the Bank reported a credit loss expense of $7.9 million, compared to $2.9 million for 2022. Excluding the $5.5 million credit loss recorded to establish a reserve for acquired Malvern balances, credit loss expenses were $2.4 million for the full year 2023, reflecting a low level of net charge-offs, strong credit quality metrics, and lower net loan growth when compared to 2022.

In the fourth quarter of 2023, the Bank recorded non-interest income totaling $(3.0) million, compared to non-interest income measuring $1.4 million during the same period in 2022 and $193,000 in non-interest income during the third quarter of 2023. Results for the third and fourth quarters of 2023 include $1.2 million and $4.7 million in combined losses on the sale of investments and loans, respectively, which are net against non-interest income on the consolidated statements of income. The losses were primarily related to the Bank’s aforementioned balance sheet repositioning, which included the sale of Malvern investments and, lower-yielding residential and commercial investor real estate loans.

For the full year ended December 31, 2023, the Bank recorded non-interest income totaling $(715,000), compared to $5.1 million in non-interest income earned for the full year ended December 31, 2022. The decrease was primarily the result of net losses realized on the sale of loans and investments related to balance sheet repositioning initiatives in 2023.

Non-interest expense for the fourth quarter of 2023 was $17.9 million, an increase of $5.5 million, or 43.9%, compared to $12.5 million for the prior year quarter. Higher non-interest expense was largely due to the increased operating expenses associated with the Malvern acquisition, including increases of $1.8 million in salaries and employee benefits, $670,000 in regulatory fees, $590,000 in occupancy and equipment, and $1.4 million in other expense. The increase in other expense was primarily due to an increase in core deposit intangible amortization and higher Pennsylvania shares tax.

On a linked quarter basis, non-interest expense declined $5.6 million from $23.5 million for the third quarter of 2023. The linked quarter decrease primarily reflects the decline of $6.7 million in merger-related expenses following the closing of the Malvern acquisition during the third quarter of 2023, partially offset by general increases related to a full quarter of Malvern operating expenses.

Non-interest expense for the full year 2023 totaled $68.7 million, an increase of $22.0 million, or 47.0%, compared to $46.7 million for 2022. The increase was primarily a result of merger-related costs rising $7.6 million, salaries and employee benefits costs increasing $7.0 million due to a larger employee base, occupancy and equipment costs rising $1.4 million due to an expanded network of facilities, and other generalized increases related to the addition of Malvern in the second half of 2023.

Income tax expense for the three months ended December 31, 2023 was $2.0 million with an effective tax rate of 19.1%, compared to $2.9 million with an effective tax rate of 24.3% for the fourth quarter of 2022. Income tax expense for the full year ended December 31, 2023 was $6.3 million with an effective tax rate of 23.1%, compared to $11.6 million for the full year 2022 with an effective tax rate of 24.2%. Income tax expense in 2023 was impacted by a number of factors including certain non-deductible merger-related costs and changes in the apportionment of our income to the various states in which we do business. The state tax apportionment adjustments impacted our current taxes as well as our deferred tax assets. The change in state tax apportionment resulted in an increase to our deferred tax rate in the fourth quarter of 2023. Consequently, our deferred tax assets increased during the quarter and tax expense decreased, driving the lower effective tax rate. We expect our effective tax rate to be in-line with historic levels between 23-25% in 2024 as we continue to explore tax planning opportunities.

Balance Sheet

The Bank reported total assets of $3.61 billion as of December 31, 2023, an increase of $876.4 million, or 32.1%, from $2.73 billion at December 31, 2022. Total loans increased $683.7 million, or 29.2%, to $3.02 billion at December 31, 2023 compared to $2.34 billion at December 31, 2022. Increases primarily reflect growth from the Malvern acquisition, partially offset by sales of loans and investment securities totaling approximately $238.2 million during 2023. The Bank also increased its cash and cash equivalents by $102.0 million, or 81.0%, compared to December 31, 2022, to ensure adequate on-balance sheet liquidity.

Total assets increased $50.9 million, or 1.4%, from September 30, 2023 to December 31, 2023. Total loans as of December 31, 2023 were effectively unchanged from $3.02 billion at September 30, 2023. Loan growth totaling $36.3 million was offset by sales of commercial investor real estate loans totaling $35.6 million during the fourth quarter of 2023. The Bank increased its cash and cash equivalents by $47.7 million, or 26.5%, compared to September 30, 2023, to ensure adequate on-balance sheet liquidity.

The Bank's increase in loans during the three and twelve month periods ended December 31, 2023 were $723,000 and $683.7 million, respectively. Excluding the $617.2 million in loans acquired from Malvern at December 31, 2023, which is net of loan sales and pay-downs since the acquisition, net organic loan growth was $66.5 million during the twelve months ended December 31, 2023. Excluding the impact of loan sales totaling $35.6 million during the fourth quarter of 2023, total loans grew an adjusted $36.3 million, or 4.8%, annualized, from September 30, 2023.

As of December 31, 2023, the Bank's total deposits were $2.97 billion, an increase of $673.6 million, or 29.4%, from $2.29 billion at December 31, 2022. Excluding $671.9 million in deposits acquired from Malvern, deposit balances increased $1.7 million for the twelve months of 2023. Modest organic deposit growth during 2023 was primarily due to the Bank allowing some higher cost and non-core funding to leave the Bank, while heightened industry-wide pricing competition also tempered deposit growth. This served to partially offset our team’s success in attracting new deposit relationships while also maintaining existing balances.   

As of December 31, 2023, the Bank's stockholders' equity totaled $370.9 million, an increase of $81.3 million, or 28.1%, compared to $289.6 million at December 31, 2022, primarily due to the equity issued in the Malvern acquisition. During the three months ended December 31, 2023, stockholders’ equity increased by $9.9 million, primarily due to net income and a reduction in unrealized losses on available for sale securities, partially offset by dividends.

As of December 31, 2023, the Bank continued to exceed all regulatory capital requirements to be considered well-capitalized, with a Tier 1 Leverage ratio of 9.12%, a Tier 1 Risk-Based capital ratio of 9.22%, a Common Equity Tier 1 Capital ratio of 9.22%, and a Total Risk-Based capital ratio of 11.59%. The tangible stockholders' equity to tangible assets ratioiii increased to 8.89% as of December 31, 2023 compared to 8.72% at September 30, 2023.

Asset Quality

First Bank's asset quality metrics for the fourth quarter of 2023 remained favorable and continue to reflect the inclusion of $17.0 million of purchase credit deteriorated (PCD) loans primarily related to the Malvern acquisition. Excluding PCD loans, nonperforming loans increased slightly from $7.0 million at September 30, 2023 to $8.0 million at December 31, 2023. Nonperforming loans, excluding PCD loans, as a percentage of total loans were 0.26% at December 31, 2023, compared to 0.23% at September 30, 2023. The Bank recorded net charge-offs of $209,000 during the fourth quarter of 2023 compared to net charge-offs of $1.1 million in the third quarter of 2023 and net recoveries of $213,000 in the fourth quarter of 2022. The allowance for credit losses on loans as a percentage of total loans measured 1.40% at December 31, 2023, compared to 1.42% at September 30, 2023 and 1.09% at December 31, 2022. The increase compared to the prior year end largely reflects the impact of the adoption of the Current Expected Credit Loss accounting standard in the first quarter of 2023 and the allowance for credit losses on the acquired Malvern loan portfolio. The allowance for credit losses at December 31, 2023 included $6.0 million in reserves on the Bank’s PCD loans.   

Liquidity and Borrowings

The Bank increased its liquidity position in the fourth quarter of 2023 as total cash and cash equivalents increased by $47.7 million to $228.0 million at December 31, 2023. The Bank continued to utilize asset sales, while also adding some Federal Home Loan Bank advances, to enhance its liquidity position heading into 2024. The Bank’s current liquidity position coupled with the balance sheet flexibility gained after the Malvern acquisition provides the Bank with a strong liquidity base and a diverse source of funding options.   

Pending Redemption of Subordinated Debt

The Bank has received the regulatory approvals required to retire $25 million of subordinated notes inherited from Malvern as part of its balance sheet repositioning initiative. The notes, which currently carry a 9.79% interest rate, will be redeemed on February 15, 2024.

Cash Dividend Declared

On January 16, 2024, the Bank’s Board of Directors declared a quarterly cash dividend of $0.06 per share to common stockholders of record at the close of business on February 9, 2024, payable on February 23, 2024.

Conference Call and Earnings Release Supplement

Additional details on the quarterly results and the Bank are included in the attached earnings release supplement. http://ml.globenewswire.com/Resource/Download/da24d66e-2436-456b-a1c5-13fffc470852

First Bank will host its earnings call on Thursday, January 25, 2024 at 9:00 AM Eastern Time. The direct dial toll free number for the live call is 1-888-330-3273 and the access code is 7660423. For those unable to participate in the call, a replay will be available by dialing 1-888-330-3273 (access code 7660423) from one hour after the end of the conference call until April 24, 2024. Replay information will also be available on First Bank’s website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay of the conference call.

About First Bank

First Bank is a New Jersey state-chartered bank with 26 full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington (2), Hamilton, Lawrence, Monroe, Morristown, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Coventry, Devon, Doylestown, Glenn Mills, Lionville, Malvern, Paoli, Trevose, Warminster and West Chester, Pennsylvania; and Palm Beach, Florida. With $3.61 billion in assets as of December 31, 2023, First Bank offers a full 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.”

Forward Looking Statements

This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First Bank’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about First Bank, any of which may change over time and some of which may be beyond First Bank’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions, integrate acquired entities and realize anticipated efficiencies, sustain its internal growth rate, and provide competitive products and services that appeal to its customers and target markets; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the effects of the recent turmoil in the banking industry (including the failures of two financial institutions in early 2023); the impact of public health emergencies, such as COVID-19, on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank's investment securities portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank's operations, including changes in regulations affecting financial institutions and expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank's ability to comply with applicable capital and liquidity requirements, including First Bank’s ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; and possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Forward-Looking Statements” and “Risk Factors” in First Bank’s Annual Report on Form 10-K and any updates to those risk factors set forth in First Bank’s proxy statement, subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank’s behalf may issue.

________________________i Return on average tangible equity is a non-U.S. GAAP financial measure and is calculated by dividing net income by average tangible equity (average equity minus average goodwill and other intangible assets). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release

ii Adjusted diluted earnings per share, adjusted return on average assets and adjusted return on average tangible equity are non-U.S. GAAP financial measures and are calculated by dividing net income adjusted for certain merger-related expenses and other one-time gains or expenses by diluted weighted average shares, average assets and average tangible equity, respectively. For a reconciliation of these non-U.S. GAAP financial measures, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

iii Tangible stockholders' equity to tangible assets ratio is a non-U.S. GAAP financial measure and is calculated by dividing tangible equity (equity minus goodwill and other intangible assets) by tangible assets (total assets minus goodwill and other intangible assets). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

CONTACT: Andrew Hibshman, Chief Financial Officer(609) 643-0058, andrew.hibshman@firstbanknj.com

FIRST BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data, unaudited)
		December 31, 2023				December 31, 2022
Assets
Cash and due from banks		$	25,652			$	17,577
Restricted cash			13,770				13,580
Interest bearing deposits with banks			188,529				94,759
Cash and cash equivalents			227,951				125,916
Interest bearing time deposits with banks			996				1,293
Investment securities available for sale, at fair value			94,142				98,956
Equity Securities, at fair value			1,888				-
Investment securities held to maturity, net of allowance for credit losses of $200 at December 31, 2023 (fair value of $38,486 at December 31, 2023 and $38,548 at December 31, 2022)			44,059				47,193
Restricted investment in bank stocks			10,469				6,214
Other investments			9,841				8,372
Loans, net of deferred fees and costs			3,021,501				2,337,814
Less: Allowance for credit losses			42,397				25,474
Net loans			2,979,104				2,312,340
Premises and equipment, net			21,627				10,550
Other real estate owned, net			-				-
Accrued interest receivable			14,763				8,164
Bank-owned life insurance			86,435				58,107
Goodwill			44,166				17,826
Other intangible assets, net			10,812				1,579
Deferred income taxes, net			24,869				13,155
Other assets			38,204				23,275
Total assets		$	3,609,326			$	2,732,940
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits		$	501,763			$	503,856
Interest bearing deposits			2,465,806				1,790,096
Total deposits			2,967,569				2,293,952
Borrowings			179,140				90,932
Subordinated debentures			55,261				29,731
Accrued interest payable			2,813				1,218
Other liabilities			33,644				27,545
Total liabilities			3,238,427				2,443,378
Stockholders' Equity:
Preferred stock, par value $2 per share; 10,000,000 shares authorized; no shares issued and outstanding			-				-
Common stock, par value $5 per share; 40,000,000 shares authorized; 27,149,186 shares issued and 24,968,122 shares outstanding at December 31, 2023 and 21,082,819 shares issued and 19,451,755 shares outstanding at December 31, 2022			134,552				104,512
Additional paid-in capital			122,881				80,695
Retained earnings			140,563				127,532
Accumulated other comprehensive loss			(5,719	)			(7,334	)
Treasury stock, 2,181,064 shares at December 31, 2023 and 1,631,064 shares at December 31, 2022			(21,378	)			(15,843	)
Total stockholders' equity			370,899				289,562
Total liabilities and stockholders' equity		$	3,609,326			$	2,732,940

FIRST BANK
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
			2023				2022				2023				2022
Interest and Dividend Income
Investment securities—taxable		$	989			$	945			$	4,117			$	2,998
Investment securities—tax-exempt			36				40				194				149
Interest bearing deposits with banks,
Federal funds sold and other			2,831				1,205				8,860				2,093
Loans, including fees			49,310				29,324				160,846				102,021
Total interest and dividend income			53,166				31,514				174,017				107,261
Interest Expense
Deposits			19,707				6,875				60,281				11,883
Borrowings			1,439				448				6,378				1,244
Subordinated debentures			1,021				440				2,842				1,761
Total interest expense			22,167				7,763				69,501				14,888
Net interest income			30,999				23,751				104,516				92,373
Credit loss (benefit) expense			(294	)			716				7,943				2,872
Net interest income after credit loss expense			31,293				23,035				96,573				89,501
Non-Interest Income
Service fees on deposit accounts			337				210				1,078				941
Loan fees			150				369				409				683
Income from bank-owned life insurance			591				362				1,882				1,474
Losses on sale of investment securities, net			(916	)			-				(1,650	)			-
(Losses) gains on sale of loans, net			(3,799	)			4				(4,192	)			296
Gains on recovery of acquired loans			127				216				222				672
Other non-interest income			510				285				1,536				1,054
Total non-interest income			(3,000	)			1,446				(715	)			5,120
Non-Interest Expense
Salaries and employee benefits			9,019				7,261				34,339				27,383
Occupancy and equipment			1,997				1,407				7,104				5,689
Legal fees			271				193				942				695
Other professional fees			992				651				2,872				2,649
Regulatory fees			843				173				2,188				851
Directors' fees			246				173				877				743
Data processing			887				617				3,093				2,476
Marketing and advertising			468				177				1,161				682
Travel and entertainment			224				189				743				479
Insurance			259				189				883				727
Other real estate owned expense, net			27				26				65				295
Merger-related expenses			338				452				8,048				452
Other expense			2,365				957				6,385				3,612
Total non-interest expense			17,936				12,465				68,700				46,733
Income Before Income Taxes			10,357				12,016				27,158				47,888
Income tax expense			1,977				2,916				6,261				11,601
Net Income		$	8,380			$	9,100			$	20,897			$	36,287
Basic earnings per common share		$	0.34			$	0.47			$	0.95			$	1.86
Diluted earnings per common share		$	0.33			$	0.46			$	0.95			$	1.84
Cash dividends per common share		$	0.06			$	0.06			$	0.24			$	0.24
Basic weighted average common shares outstanding			24,949,114				19,446,770				21,942,174				19,503,837
Diluted weighted average common shares outstanding			25,089,495				19,649,282				22,072,616				19,716,684

FIRST BANK
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
	Three Months Ended December 31,
		2023											2022
	Average								Average			Average								Average
	Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)	$	140,620			$	1,033			2.91	%		$	152,386			$	993			2.59	%
Loans (3)		3,013,393				49,310			6.49	%			2,277,238				29,324			5.11	%
Interest bearing deposits with banks,
Federal funds sold and other		170,021				2,353			5.49	%			112,829				1,067			3.75	%
Restricted investment in bank stocks		8,362				252			11.96	%			5,545				85			6.08	%
Other investments		10,554				226			8.50	%			8,381				53			2.51	%
Total interest earning assets (2)		3,342,950				53,174			6.31	%			2,556,379				31,522			4.89	%
Allowance for credit losses		(43,247	)										(24,981	)
Non-interest earning assets		261,558											149,409
Total assets	$	3,561,261										$	2,680,807
Interest bearing liabilities
Interest bearing demand deposits	$	654,623			$	4,251			2.58	%		$	328,191			$	800			0.97	%
Money market deposits		1,024,388				9,205			3.57	%			721,866				3,375			1.85	%
Savings deposits		176,001				541			1.22	%			183,746				417			0.90	%
Time deposits		614,486				5,710			3.69	%			489,478				2,283			1.85	%
Total interest bearing deposits		2,469,498				19,707			3.17	%			1,723,281				6,875			1.58	%
Borrowings		122,912				1,439			4.64	%			70,941				448			2.51	%
Subordinated debentures		55,261				1,021			7.39	%			29,713				440			5.92	%
Total interest bearing liabilities		2,647,671				22,167			3.32	%			1,823,935				7,763			1.69	%
Non-interest bearing deposits		500,024											538,304
Other liabilities		46,616											32,285
Stockholders' equity		366,950											286,283
Total liabilities and stockholders' equity	$	3,561,261										$	2,680,807
Net interest income/interest rate spread (2)						31,007			2.99	%							23,759			3.20	%
Net interest margin (2) (4)									3.68	%										3.69	%
Tax equivalent adjustment (2)						(8	)										(8	)
Net interest income					$	30,999										$	23,751
(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Annualized.

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
	Year Ended December 31,
		2023											2022
	Average								Average			Average								Average
	Balance				Interest				Rate			Balance				Interest				Rate
Interest earning assets
Investment securities (1) (2)	$	151,471			$	4,352			2.87	%		$	143,460			$	3,178			2.22	%
Loans (3)		2,697,024				160,846			5.96	%			2,204,028				102,021			4.63	%
Interest bearing deposits with banks,
Federal funds sold and other		150,500				7,756			5.15	%			104,057				1,694			1.63	%
Restricted investment in bank stocks		9,084				706			7.77	%			5,457				285			5.22	%
Other investments		9,319				398			4.27	%			8,193				114			1.39	%
Total interest earning assets (2)		3,017,398				174,058			5.77	%			2,465,195				107,292			4.35	%
Allowance for credit losses		(36,080	)										(24,702	)
Non-interest earning assets		196,253											146,851
Total assets	$	3,177,571										$	2,587,344
Interest bearing liabilities
Interest bearing demand deposits	$	498,075			$	10,743			2.16	%		$	323,824			$	1,395			0.43	%
Money market deposits		886,991				29,382			3.31	%			719,743				5,923			0.82	%
Savings deposits		160,570				1,743			1.09	%			184,510				989			0.54	%
Time deposits		593,798				18,413			3.10	%			378,292				3,576			0.95	%
Total interest bearing deposits		2,139,434				60,281			2.82	%			1,606,369				11,883			0.74	%
Borrowings		142,456				6,378			4.48	%			69,916				1,244			1.78	%
Subordinated debentures		41,565				2,842			6.84	%			29,672				1,761			5.93	%
Total interest bearing liabilities		2,323,455				69,501			2.99	%			1,705,957				14,888			0.87	%
Non-interest bearing deposits		492,683											579,691
Other liabilities		34,142											24,057
Stockholders' equity		327,291											277,639
Total liabilities and stockholders' equity	$	3,177,571										$	2,587,344
Net interest income/interest rate spread (2)						104,557			2.78	%							92,404			3.48	%
Net interest margin (2) (4)									3.47	%										3.75	%
Tax equivalent adjustment (2)						(41	)										(31	)
Net interest income					$	104,516										$	92,373
(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.

FIRST BANK
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except for share and employee data, unaudited)
		As of or For the Quarter Ended
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
EARNINGS
Net interest income		$	30,999			$	28,594			$	22,128			$	22,795			$	23,751
Credit loss expense / Provision for loan losses			(294	)			6,650				496				1,091				716
Non-interest income			(3,000	)			193				1,128				964				1,446
Non-interest expense			17,936				23,486				13,775				13,503				12,465
Income tax expense			1,977				(78	)			2,186				2,176				2,916
Net income			8,380				(1,271	)			6,799				6,989				9,100
PERFORMANCE RATIOS
Return on average assets (1)			0.93%				(0.14%	)			0.97%				1.03%				1.35%
Adjusted return on average assets (1) (2)			1.38%				1.07%				0.97%				1.09%				1.40%
Return on average equity (1)			9.06%				(1.43%	)			9.23%				9.70%				12.61%
Adjusted return on average equity (1) (2)			13.38%				10.75%				9.28%				10.28%				13.10%
Return on average tangible equity (1) (2)			10.67%				(1.66%	)			9.87%				10.39%				13.53%
Adjusted return on average tangible equity (1) (2)			15.75%				12.50%				9.93%				11.01%				14.06%
Net interest margin (1) (3)			3.68%				3.36%				3.28%				3.52%				3.69%
Total cost of deposits (1)			2.63%				2.47%				2.19%				1.69%				1.21%
Efficiency ratio (2)			53.79%				54.83%				58.71%				54.74%				47.68%
SHARE DATA
Common shares outstanding			24,968,122				24,926,919				19,041,343				19,569,334				19,451,755
Basic earnings per share		$	0.34			$	(0.05	)		$	0.35			$	0.36			$	0.47
Diluted earnings per share			0.33				(0.05	)			0.35				0.36				0.46
Adjusted diluted earnings per share (2)			0.49				0.40				0.35				0.38				0.48
Book value per share			14.85				14.48				15.45				15.03				14.89
Tangible book value per share (2)			12.65				12.26				14.44				14.05				13.89
MARKET DATA
Market value per share		$	14.70			$	10.78			$	10.38			$	10.10			$	13.76
Market value / Tangible book value			116.18%				87.96%				71.91%				71.90%				99.07%
Market capitalization		$	367,031			$	268,712			$	197,649			$	197,650			$	267,656
CAPITAL & LIQUIDITY
Stockholders' equity / assets			10.28%				10.15%				10.23%				10.44%				10.60%
Tangible stockholders' equity / tangible assets (2)			8.89%				8.72%				9.63%				9.83%				9.96%
Loans / deposits			101.82%				101.80%				101.53%				106.73%				101.91%
ASSET QUALITY
Net charge-offs (recoveries)		$	209			$	1,122			$	(109	)		$	315			$	(213	)
Nonperforming loans			24,864				24,158				8,023				7,820				6,250
Nonperforming assets			24,864				24,158				8,023				7,820				6,250
Net charge offs (recoveries) / average loans (1)			0.03%				0.15%				(0.02%	)			0.05%				(0.04%	)
Nonperforming loans / total loans			0.82%				0.80%				0.33%				0.33%				0.27%
Nonperforming assets / total assets			0.69%				0.68%				0.28%				0.28%				0.23%
Allowance for credit losses on loans / total loans			1.40%				1.42%				1.25%				1.25%				1.09%
Allowance for credit losses on loans / nonperforming loans			170.52%				177.50%				379.55%				382.26%				407.58%
OTHER DATA
Total assets		$	3,609,326			$	3,558,426			$	2,874,425			$	2,816,897			$	2,732,940
Total loans			3,021,501				3,020,778				2,436,708				2,392,583				2,337,814
Total deposits			2,967,569				2,967,455				2,399,900				2,241,804				2,293,952
Total stockholders' equity			370,899				361,037				294,161				294,221				289,562
Number of full-time equivalent employees			286				286				261				252				238
(1) Annualized.
(2) Non-U.S. GAAP financial measure that we believe provides management and investors with information that is useful in understanding our
financial performance and condition. See accompanying table, "Non-U.S. GAAP Financial Measures," for calculation and reconciliation.
(3) Tax equivalent using a federal income tax rate of 21%.

FIRST BANK
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
		As of the Quarter Ended
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
LOAN COMPOSITION
Commercial and industrial		$	506,849			$	478,120			$	419,836			$	394,734			$	354,203
Commercial real estate:
Owner-occupied			612,352				607,888				560,878				539,112				533,426
Investor			1,221,702				1,269,134				965,339				958,574				951,115
Construction and development			186,829				168,192				136,615				143,955				142,876
Multi-family			271,058				275,825				223,784				220,101				215,990
Total commercial real estate			2,291,941				2,321,039				1,886,616				1,861,742				1,843,407
Residential real estate:
Residential mortgage and first lien home equity loans			156,024				158,487				91,260				94,060				93,847
Home equity–second lien loans and revolving lines of credit			44,698				46,239				29,983				29,316				33,551
Total residential real estate			200,722				204,726				121,243				123,376				127,398
Consumer and other			25,343				20,208				12,514				16,413				16,318
Total loans prior to deferred loan fees and costs			3,024,855				3,024,093				2,440,209				2,396,265				2,341,326
Net deferred loan fees and costs			(3,354	)			(3,315	)			(3,501	)			(3,682	)			(3,512	)
Total loans		$	3,021,501			$	3,020,778			$	2,436,708			$	2,392,583			$	2,337,814
LOAN MIX
Commercial and industrial			16.8%				15.8%				17.2%				16.5%				15.2%
Commercial real estate:
Owner-occupied			20.3%				20.1%				23.0%				22.5%				22.8%
Investor			40.4%				42.0%				39.6%				40.1%				40.7%
Construction and development			6.2%				5.6%				5.6%				6.0%				6.1%
Multi-family			9.0%				9.1%				9.2%				9.2%				9.2%
Total commercial real estate			75.9%				76.8%				77.4%				77.8%				78.8%
Residential real estate:
Residential mortgage and first lien home equity loans			5.1%				5.3%				3.8%				3.9%				4.0%
Home equity–second lien loans and revolving lines of credit			1.5%				1.5%				1.2%				1.2%				1.4%
Total residential real estate			6.6%				6.8%				5.0%				5.1%				5.4%
Consumer and other			0.8%				0.7%				0.5%				0.7%				0.7%
Net deferred loan fees and costs			(0.1%	)			(0.1%	)			(0.1%	)			(0.1%	)			(0.1%	)
Total loans			100.0%				100.0%				100.0%				100.0%				100.0%

FIRST BANK
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
		As of the Quarter Ended
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
DEPOSIT COMPOSITION
Non-interest bearing demand deposits		$	501,763			$	493,703			$	476,733			$	463,926			$	503,856
Interest bearing demand deposits			629,110				623,338				376,948				310,140				322,944
Money market and savings deposits			1,171,440				1,228,832				979,524				914,063				935,311
Time deposits			665,256				621,582				566,695				553,675				531,841
Total Deposits		$	2,967,569			$	2,967,455			$	2,399,900			$	2,241,804			$	2,293,952
DEPOSIT MIX
Non-interest bearing demand deposits			16.9%				16.6%				19.9%				20.7%				22.0%
Interest bearing demand deposits			21.2%				21.0%				15.7%				13.8%				14.1%
Money market and savings deposits			39.5%				41.4%				40.8%				40.8%				40.8%
Time deposits			22.4%				21.0%				23.6%				24.7%				23.1%
Total Deposits			100.0%				100.0%				100.0%				100.0%				100.0%

FIRST BANK
NON-U.S. GAAP FINANCIAL MEASURES
(in thousands, except for share data, unaudited)
		As of or For the Quarter Ended
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Return on Average Tangible Equity
Net income (numerator)		$	8,380			$	(1,271	)		$	6,799			$	6,989			$	9,100
Average stockholders' equity		$	366,950			$	353,372			$	295,560			$	292,174			$	286,283
Less: Average Goodwill and other intangible assets, net			55,324				49,491				19,324				19,379				19,533
Average Tangible stockholders' equity (denominator)		$	311,626			$	303,881			$	276,236			$	272,795			$	266,750
Return on Average Tangible equity (1)			10.67%				-1.66%				9.87%				10.39%				13.53%
Tangible Book Value Per Share
Stockholders' equity		$	370,899			$	361,037			$	294,161			$	294,221			$	289,562
Less: Goodwill and other intangible assets, net			54,978				55,554				19,289				19,322				19,405
Tangible stockholders' equity (numerator)		$	315,921			$	305,483			$	274,872			$	274,899			$	270,157
Common shares outstanding (denominator)			24,968,122				24,926,919				19,041,343				19,569,334				19,451,755
Tangible book value per share		$	12.65			$	12.26			$	14.44			$	14.05			$	13.89
Tangible Equity / Assets
Stockholders' equity		$	370,899			$	361,037			$	294,161			$	294,221			$	289,562
Less: Goodwill and other intangible assets, net			54,978				55,554				19,289				19,322				19,405
Tangible stockholders' equity (numerator)		$	315,921			$	305,483			$	274,872			$	274,899			$	270,157
Total assets		$	3,609,326			$	3,558,426			$	2,874,425			$	2,816,897			$	2,732,940
Less: Goodwill and other intangible assets, net			54,978				55,554				19,289				19,322				19,405
Tangible total assets (denominator)		$	3,554,348			$	3,502,872			$	2,855,136			$	2,797,575			$	2,713,535
Tangible stockholders' equity / tangible assets			8.89%				8.72%				9.63%				9.83%				9.96%
Efficiency Ratio
Non-interest expense		$	17,936			$	23,486			$	13,775			$	13,503			$	12,465
Less: Merger-related expenses			338				7,028				221				461				452
Adjusted non-interest expense (numerator)		$	17,598			$	16,458			$	13,554			$	13,042			$	12,013
Net interest income		$	30,999			$	28,594			$	22,128			$	22,795			$	23,751
Non-interest income			(3,000	)			193				1,128				964				1,446
Total revenue			27,999				28,787				23,256				23,759				25,197
Add: Losses on sale of investment securities, net			916				527				-				207				-
Add (subtract): Losses (gains) on sale of loans, net			3,799				704				(170	)			(141	)			(4	)
Adjusted total revenue (denominator)		$	32,714			$	30,018			$	23,086			$	23,825			$	25,193
Efficiency ratio			53.79%				54.83%				58.71%				54.74%				47.68%
(1) Annualized.

FIRST BANK
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
		For the Quarter Ended
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income		$	8,380			$	(1,271	)		$	6,799			$	6,989			$	9,100
Add: Merger-related expenses(1)			267				5,552				175				364				357
Add: Credit loss expense on acquired loan portfolio(1)			-				4,323				-				-				-
Add (subtract): Losses (gains) on sale of loans, net(1)			3,001				556				(134	)			(111	)			(3	)
Add: Losses on sale of investment securities, net(1)			724				416				-				164				-
Adjusted net income		$	12,372			$	9,576			$	6,839			$	7,405			$	9,454
Diluted weighted average common shares outstanding			25,089,495				24,029,910				19,434,522				19,667,194				19,649,282
Average assets		$	3,561,261			$	3,565,350			$	2,825,213			$	2,745,235			$	2,680,807
Average equity		$	366,950			$	353,372			$	295,560			$	292,174			$	286,283
Average Tangible Equity		$	311,626			$	303,881			$	276,236			$	272,795			$	266,750
Adjusted diluted earnings per share		$	0.49			$	0.40			$	0.35			$	0.38			$	0.48
Adjusted return on average assets (2)			1.38%				1.07%				0.97%				1.09%				1.40%
Adjusted return on average equity (2)			13.38%				10.75%				9.28%				10.28%				13.10%
Adjusted return on average tangible equity (2)			15.75%				12.50%				9.93%				11.01%				14.06%
(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Annualized.

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
	Year Ended December 31,
		2023				2022
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income	$	20,897			$	36,287
Add: Merger-related expenses(1)		6,358				357
Add: Credit loss expense on acquired loan portfolio(1)		4,323				-
Add (subtract): Losses (gains) on sale of loans, net(1)		3,312				(234	)
Add: Losses on sale of investment securities, net(1)		1,303				-
Adjusted net income	$	36,193			$	36,410
Diluted weighted average common shares outstanding		22,072,616				19,716,684
Average assets	$	3,177,571			$	2,587,344
Average equity	$	327,291			$	277,639
Average Tangible Equity	$	291,276			$	257,905
Adjusted diluted earnings per share	$	1.64			$	1.85
Adjusted return on average assets		1.14%				1.41%
Adjusted return on average equity		11.06%				13.11%
Adjusted return on average tangible equity		12.43%				14.12%
(1) Tax-effected using a federal income tax rate of 21%