The Bank of Princeton Announces Fourth Quarter 2019 Results

PRINCETON, N.J., Jan. 29, 2020 /PRNewswire/ -- The Bank of Princeton (the "Bank") (NASDAQ – BPRN) today reported unaudited results of operations and financial condition for the quarter ended December 31, 2019.  The Bank reported net income of $3.4 million, or $0.49 per diluted common share, for the fourth quarter of 2019, compared to net income of $3.7 million, or $0.54 per diluted common share, for the third quarter of 2019, and net income of $3.8 million, or $0.55 per diluted common share, for the fourth quarter of 2018. The decrease in net income, when comparing the three months ended September 30, 2019, was primarily due to a decrease in net-interest income of approximately $353 thousand and a reduction of loan fees collected of approximately $295 thousand, partially offset by a $325 thousand reduction in non-interest expenses. The decrease in net income, when comparing the three months ended December 31, 2018, was attributed to an increase in non-interest operating expenses resulting from the acquisition of 5 branches from Beneficial Bank which closed in May 2019 and the recording of a $125 thousand provision for loan losses in the fourth quarter of 2019, partially offset by an increase in service charges collected on deposits of $173 thousand.

For the twelve month period ended December 31, 2019, the Bank recorded net income of $10.1 million, or $1.47 per diluted common share, compared to $14.7 million, or $2.14 per diluted common share for the same period in 2018. The decline in earnings was primarily due to an increase in the Bank's provision for loan losses of $4.1 million of which $3.9 million was recorded in the first quarter of 2019. 

Highlights for the quarter-ended December 31, 2019 are as follows:

  • Net loans increased $109.3 million (excluding $4.5 million in charge-offs) from the $1.07 billion at December 31, 2018. This reflects an annual increase of 10.2%.
  • Total deposits increased $230.6 million, or 22.9% from the $1.01 billion at December 31, 2018.
  • Non-performing assets decreased $3.3 million, or 57.2%, from $5.7 million at December 31, 2018.
  • Interest income for the three month period ended December 31, 2019 increased $1.0 million, or 7.1%, over the same period in 2018.
  • Non-interest income for the three month period ended December 31, 2019 increased $193 thousand, or 32.1%, over the same period in 2018.

"We are pleased with the strong earnings recorded this quarter, supporting our investment in branch expansion. We had strong growth in loans and deposits in the 4th quarter, finishing the year with a 10% growth rate," stated Edward Dietzler, President/CEO.

Chairman Richard Gillespie noted that, "The Bank continues to execute on its Branch Expansion Program to strategically build a franchise by increasing our footprint along the I95 corridor.  We have 3 more branches planned for the first half of 2020."

Balance Sheet Review

Total assets were $1.45 billion at December 31, 2019, an increase of $203.3 million or 16.2% when compared to $1.25 billion at the end of 2018. The primary reason for the increase in total assets was a result of the Bank's branch acquisition from Beneficial Bank and WSFS Bank in which the Bank received $159.9 million in cash and recorded $15.7 in intangible and other assets. The Bank also recorded a $14.5 million right-of-use asset resulting from the adoption of FASB Update No. 2016-02 ("Leases"). Net loans also increased $104.8 million from the $1.07 billion at December 31, 2018. Cash and cash equivalents increased $46.2 million or 175.2% to $72.6 million as December 31, 2019. Investment securities classified available-for-sale increased $20.6 million from the $91.7 million as of December 31, 2018.

Total deposits at December 31, 2019 increased by $230.6 million, or 22.9%, when compared to December 31, 2018, primarily due to acquiring $177.9 million in deposits in the Beneficial Bank branch acquisition, partially offset by not renewing $58.2 million of brokered deposits which carry a higher cost.  When comparing December 31, 2019 to balances at December 31, 2018, interest checking increased $61.5 million, savings accounts increased $60.0 million, time deposits increased $62.0 million and non-interest earning deposits increased $38.7 million. In addition, at the end of the quarter, the Bank did not have any outstanding balance in FHLB short-term advances, down from the $55.4 million level at December 31, 2018.    

Total stockholders' equity increased $11.6 million or 6.3% when compared to the end of 2018. This increase was primarily due to earnings recorded during the twelve months of 2019, exercises of stock options from the Bank's equity incentive plans and an increase of $1.1 million in the fair-value of the available-for-sale investment portfolio.   The ratio of equity to total assets was 13.5% compared to 14.7% at December 31, 2018.

Asset Quality

At December 31, 2019, non-performing assets were $2.4 million, a decrease of $3.3 million, or 57.1%, when compared to $5.7 million at December 31, 2018.  This decrease at December 31, 2019 from December 31, 2018 was primarily due to $2.6 million in charge-offs recorded in the first quarter consisting of a $1.9 million commercial and industrial loan and a $750 thousand partial charge-off of a commercial real estate loan.  Total troubled debt restructurings ("TDR") totaled $9.3 million at December 31, 2019, an increase of $8.0 million from year-end 2018, resulting from the restructure of three commercial real estate loans to two separate borrowers. All TDR's are performing to their agreed upon terms.

Review of Quarterly Financial Results

Net interest income was $10.4 million for the fourth quarter of 2019, compared to $10.8 million for the third quarter of 2019 and $10.3 million for the fourth quarter of 2018.  The decrease from the previous quarter was a result of an increase in interest paid on deposits of $294 thousand, or 6.6%, and a decrease in interest income of $58 thousand.  The net interest margin for the fourth quarter 2019 was 3.10%, decreasing 27 basis points when compared to the third quarter of 2019. This decrease was primarily associated with a decrease of 25 basis points of yield on earning assets resulting from the two 25 basis points rate reductions that occurred in September 2019 and October 2019, as well as the positive impact during the 3rd quarter related to large loan payoffs with deferred fees recorded to income. When comparing the three month periods ended December 31, 2019 and 2018, net interest income increased $106 thousand, which was primarily due to a higher volume of average earnings assets of approximately $152.6 million.  Interest and dividend income increased by $1.0 million, offset by an increase in interest expense of $900 thousand. The total rate on interest-bearing liabilities, which includes non-interest-bearing deposits, for the three month period ended December 31, 2019 and 2018 was 1.57% and 1.44%, respectively. For the twelve month period ended December 31, 2019, net interest income was $41.5 million, an increase of $442 thousand, or 1.1%, over the same period in 2018.  This slight increase was primarily due to a higher volume of average earning assets of approximately $100.5 million, partially offset by a 25 basis points reduction in net interest margin. 

The provision for credit losses was $125 thousand and $4.8 million for the three and twelve months ended December 31, 2019, respectively, compared to no provision recorded and $665 thousand for the same periods in 2018, respectively.  When compared to the three months ended September 30, 2019, the provision for credit losses was $125 thousand for both periods. The Bank was required to record a provision in both the fourth and third quarters of 2019 resulting from the overall growth in the loan portfolio. The ratio of allowance for credit losses to period end loans was 1.06% at December 31, 2019 and 1.10% at December 31, 2018, which reflects management's assessment of the credit quality in the loan portfolio.

Total non-interest income for the fourth quarter of 2019 increased $193 thousand to $794 thousand, or 32.1%, when compared to the same period in 2018. This increase was primarily due to an increase in service charges on deposits of $173 thousand and a $27 thousand gain recorded on available-for-sale securities.  Total non-interest income, comparing the three month periods ended December 31, 2019 and September 30, 2019, reflected a decrease of $283 thousand, or 26.3%, primarily due to a lower level of fees generated on loans recorded between the two periods.  For the twelve month period ended December 31, 2019, non-interest income increased $723 thousand, or 27.2%, primarily due to increases in service charges on deposits and loan fees collected.  

Total non-interest expense for the fourth quarter of 2019 increased $557 thousand, or 8.8%, when compared to the same period in 2018.  This increase was primarily due to an increase in occupancy and equipment expenses, data processing communications expenses, office expense and core deposit intangible expense, all related to the Beneficial Bank branch acquisition, partially offset by a reduction in professional fees and Federal Deposit Insurance Corporation premium expense resulting from the Deposit Insurance Fund exceeding the reserve ratio of 1.38%.  The FDIC issued a Small Bank Assessment Credit which allowed the Bank to reverse any expenses that were recorded during the period covered, which included the second, third and fourth quarter of 2019.  For the twelve month period ended December 31, 2019, non-interest expense was $27.7 million, compared to $25.3 million for the same period in 2018. The $2.4 million increase was attributed to expenses recorded relating to the Beneficial Bank branch acquisition and its impact on other operating expenses along with expenses associated with new branch expansion.

For the three month period ended December 31, 2019, the Bank recorded income tax expense of $817 thousand, resulting in an effective tax rate of 19.4%, compared to $801 thousand income tax expense, resulting in an effective tax rate of 17.7%, for the three month period ended September 30, 2019, and compared to an income tax expense of $801 thousand, resulting in an effective tax rate of 17.5%, for the three month period ended December 31, 2018. The current effective tax yields for the three and twelve months ended December 31, 2019, were increased, in part, by the recording of a $117,000 income tax expense as a result of the New Jersey Division of Taxation issuing TB-86(R) on December 16, 2019, which provided clarity for Business Entities in a Combined Group.  

About The Bank of Princeton

The Bank of Princeton is a community bank founded in 2007.  The Bank is a New Jersey state-chartered commercial bank with 18 branches in New Jersey, including four in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Hamilton, Lambertville, Lawrenceville, Monroe, New Brunswick, Pennington, Princeton Junction, Quakerbridge and Sicklerville.  There are also three branches in the Philadelphia, Pennsylvania area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation ("FDIC").

Forward-Looking Statements

The Bank of Princeton may from time to time make written or oral "forward-looking statements," including statements contained in the Bank's filings with the FDIC, in its reports to stockholders and in other communications by the Bank (including this press release), which are made in good faith by the Bank 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 Bank's plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Bank's control). The following factors, among others, could cause the Bank's financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Bank conducts 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; inflation, interest rate, 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 Bank; technological changes; acquisitions; changes in consumer spending and saving habits; those risks set forth in the Bank's Annual Report on Form 10-K for the year ended December 31, 2018 under the heading "Risk Factors," and the success of the Bank at managing the risks involved in the foregoing.

The Bank cautions that the foregoing list of important factors is not exclusive. The Bank 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 Bank, except as required by applicable law or regulation.

The Bank of Princeton

Summary Statements of Financial Condition Data

(unaudited)

(dollars in thousands, except per share data)









































Dec 31,

2019 

vs 

Dec 31,

2018



Dec 31,

2019

vs

Dec 31,

2018







Dec 31, 

2019



Dec 31, 

2018







$

Change



%

 Change



























ASSETS



Cash and cash equivalents



$     72,598



$     26,384







$      46,214



175.2%



Securities available for sale taxable



55,951



46,472







9,479



20.4%



Securities available for sale tax exempt



56,361



45,209







11,152



24.7%



Securities held to maturity



222



228







(6)



-2.6%



Loans receivable, net of deferred fees



1,186,570



1,081,179







105,391



9.7%



Allowance for loan losses



(12,557)



(11,944)







(613)



5.1%



Other assets



95,749



64,036







31,713



49.5%



TOTAL ASSETS



$ 1,454,894



$ 1,251,564







$     203,330



16.2%



















































LIABILITIES























Non interest checking



$   141,338



$   102,678







$      38,660



37.7%



Interest checking



212,552



151,042







61,510



40.7%



Savings



154,756



94,789







59,967



63.3%



Money market



294,940



286,457







8,483



3.0%



Time deposits over $250,000 



121,122



104,104







17,018



16.3%



Other time deposits



313,182



268,177







45,005



16.8%



Total Deposits



1,237,890



1,007,247







230,643



22.9%



Borrowings



-



55,400







(55,400)



-100.0%



Other liabilities



21,079



4,599







16,480



358.3%



    TOTAL LIABILITIES



1,258,969



1,067,246







191,723



18.0%



























STOCKHOLDERS' EQUITY























 Common stock 



33,807



33,278







529



1.6%



 Paid-in capital 



79,215



77,895







1,320



1.7%



 Retained earnings 



82,273



73,630







8,643



11.7%



 Accumulated other comprehensive income (loss) 



630



(485)







1,115



-229.9%



     TOTAL STOCKHOLDERS' EQUITY 



195,925



184,318







11,607



6.3%



























TOTAL LIABILITIES 























     AND STOCKHOLDERS' EQUITY



$ 1,454,894



$ 1,251,564







$     203,330



16.2%



























Book value per common share



$      28.98



$      27.69







$          1.29



4.6%



Tangible book value per common share1



$      27.11



$      27.69







$        (0.58)



-2.1%



























1Refer to non-gaap disclosure for explanation.  























 

The Bank of Princeton









Loan/Deposit Tables









(unaudited)



















Loans receivable, net at December 31, 2019 were comprised of the following:

























December 31,



December 31,





2019



2018





(Dollars in thousands)

Commercial real estate



$        853,876



$        729,336

Commercial and industrial



43,504



71,838

Construction



189,789



161,275

Residential first-lien mortgages



89,067



102,008

Home equity



12,959



17,048

Consumer



794



1,987

     Total loans



1,189,989



1,083,492

Deferred fees and costs



(3,419)



(2,313)

Allowance for loan losses



(12,557)



(11,944)

     Loans, net



$     1,174,013



$     1,069,235





















The components of deposits at December 31, 2019 were as follows:

















December 31,



December 31,





2019



2018





(Dollars in thousands)

Demand, non-interest-bearing checking



$        141,338



$        102,678

Demand, interest-bearing 



212,552



151,042

Savings



154,756



94,789

Money Markets



294,940



286,457

Time deposits



434,304



372,281

     Total Deposits



$     1,237,890



$     1,007,247

 

The Bank of Princeton















Consolidated Statements of Operations (Current Quarter vs Prior Quarter)









(unaudited)





















Quarter Ended















Dec 31,



Sep 30,















2019



2019



$ Change



% Change







(Dollars and shares in thousands)





Interest and Dividend Income





































Loans and fees

$    14,263



$ 14,412



$       (149)



-1.0%



Available-for-Sale debt securities:



















Taxable

315



276



39



14.1%





Tax-exempt

358



341



17



5.0%



Held-to-Maturity debt securities

3



3



-



0.0%



Other interest and dividend income

254



219



35



16.0%

























Total Interest and Dividends

15,193



15,251



(58)



-0.4%























Interest expense







































Deposits

4,762



4,468



294



6.6%





Borrowings

19



18



1



5.6%

























Total Interest Expense

4,781



4,486



295



6.6%

























Net Interest Income

10,412



10,765



(353)



-3.3%





















Provision for Loan Losses

125



125



-



0.0%





















Net Interest Income after Provision for Loan Losses

10,287



10,640



(353)



-3.3%





















Non-Interest income





































Gain on sale of securities available for sale,net

27



3



24



800.0%



Income from bank-owned life insurance

299



308



(9)



-2.9%



Fees and service charges

323



339



(16)



-4.7%



Loan fees, including prepayment penalities

122



417



(295)



-70.7%



Other 

23



10



13



130.0%

























Total Non-Interest Income

794



1,077



(283)



-26.3%





















Non-Interest Expense





































Salaries and employee benefits

3,643



4,060



(417)



-10.3%



Occupancy and equipment

1,219



1,189



30



2.5%



Professional fees

340



518



(178)



-34.4%



Data processing and communications

658



708



(50)



-7.1%



Federal deposit insurance

-



(87)



87



-100.0%



Advertising and promotion

98



123



(25)



-20.3%



Office expense

152



106



46



43.4%



OREO Expense  

4



5



(1)



-20.0%



Core deposit intangible



193



193



-



0.0%



Other 

568



385



183



47.5%

























Total Non-Interest Expense

6,875



7,200



(325)



-4.5%





















Income before income tax expense

4,206



4,517



(311)



-6.9%





















Income tax expense

817



801



16



2.0%





















Net Income

$     3,389



$  3,716



$       (327)



-8.8%





















Net income per common share - basic

$       0.50



$    0.55



$      (0.05)



-9.1%

Net income per common share - diluted

$       0.49



$    0.54



$      (0.05)



-9.3%





















Weighted average shares outstanding - basic

6,757



6,749



8



0.1%

Weighted average shares outstanding - diluted

6,922



6,903



19



0.3%

 

The Bank of Princeton















Consolidated Statements of Operations















(unaudited)





















Three Months Ended















December 31,















2019



2018



$ Change



% Change







(Dollars and shares in thousands)









Interest and Dividend Income





































Loans and fees

$ 14,263



$  13,437



$         826



6.1%



Available-for-Sale debt securities:



















Taxable

315



285



30



10.5%





Tax-exempt

358



314



44



14.0%



Held-to-Maturity debt securities

3



3



-



0.0%



Other interest and dividend income

254



148



106



71.6%

























Total Interest and Dividends

15,193



14,187



1,006



7.1%























Interest expense







































Deposits

4,762



3,729



1,033



27.7%





Borrowings

19



152



(133)



-87.5%

























Total Interest Expense

4,781



3,881



900



23.2%

























Net Interest Income

10,412



10,306



106



1.0%





















Provision for Loan Losses

125



-



125



N/A





















Net Interest Income after Provision for Loan Losses

10,287



10,306



(19)



-0.2%





















Non-Interest income





































Gain on sale of securities available for sale,net

27



-



27



N/A



Income from bank-owned life insurance

299



313



(14)



-4.5%



Fees and service charges

323



150



173



115.3%



Loan fees, including prepayment penalities

122



119



3



2.5%



Other 

23



19



4



21.1%

























Total Non-Interest Income

794



601



193



32.1%





















Non-Interest Expense





































Salaries and employee benefits

3,643



3,654



(11)



-0.3%



Occupancy and equipment

1,219



858



361



42.1%



Professional fees

340



527



(187)



-35.5%



Data processing and communications

658



519



139



26.8%



Federal deposit insurance

-



78



(78)



-100.0%



Advertising and promotion

98



134



(36)



-26.9%



Office expense

152



61



91



149.2%



OREO Expense  

4



-



4



N/A



Loss on sale of other real estate owned

193



-



193



N/A



Other 

568



487



81



16.6%

























Total Non-Interest Expense

6,875



6,318



557



8.8%





















Income before income tax expense

4,206



4,589



(383)



-8.3%





















Income tax expense

817



801



16



2.0%





















Net Income

$  3,389



$   3,788



$        (399)



-10.5%





















Net income per common share - basic

$    0.50



$     0.57



$       (0.07)



-12.3%

Net income per common share - diluted

$    0.49



$     0.55



$       (0.06)



-10.9%





















Weighted average shares outstanding - basic

6,757



6,650



107



1.6%

Weighted average shares outstanding - diluted

6,922



6,868



54



0.8%

 

The Bank of Princeton















Consolidated Statements of Operations















(unaudited)





















Twelve Months Ended















December 31,















2019



2018



$ Change



% Change







(Dollars and shares in thousands)









Interest and Dividend Income





































Loans and fees

$ 56,251



$  51,085



$       5,166



10.1%



Available-for-Sale debt securities:



















Taxable

1,126



1,176



(50)



-4.3%





Tax-exempt

1,337



1,306



31



2.4%



Held-to-Maturity debt securities

12



13



(1)



-7.7%



Other interest and dividend income

991



785



206



26.2%

























Total Interest and Dividends

59,717



54,365



5,352



9.8%























Interest expense







































Deposits

17,784



12,962



4,822



37.2%





Borrowings

482



394



88



22.3%

























Total Interest Expense

18,266



13,356



4,910



36.8%

























Net Interest Income

41,451



41,009



442



1.1%





















Provision for Loan Losses

4,800



665



4,135



621.8%





















Net Interest Income after Provision for Loan Losses

36,651



40,344



(3,693)



-9.2%





















Non-Interest income





































Gain on sale of securities available for sale,net

31



1



30



3000.0%



Income from bank-owned life insurance

1,229



1,225



4



0.3%



Fees and service charges

1,062



623



439



70.5%



Loan fees, including prepayment penalities

979



755



224



29.7%



Other 

84



58



26



44.8%

























Total Non-Interest Income

3,385



2,662



723



27.2%





















Non-Interest Expense





































Salaries and employee benefits

15,274



14,530



744



5.1%



Occupancy and equipment

4,260



3,387



873



25.8%



Professional fees

1,772



1,939



(167)



-8.6%



Data processing and communications

2,407



2,101



306



14.6%



Federal deposit insurance

81



338



(257)



-76.0%



Advertising and promotion

386



421



(35)



-8.3%



Office expense

433



267



166



62.2%



Other real estate owned expense  

10



2



8



400.0%



Loss on sale of other real estate owned

-



540



(540)



-100.0%



Acquisition Expense

627



-



627



N//A



Core deposit intangible

482



-



482



N//A



Other 

2,000



1,773



227



12.8%

























Total Non-Interest Expense

27,732



25,298



2,434



9.6%





















Income before income tax expense

12,304



17,708



(5,404)



-30.5%





















Income tax expense

2,162



3,000



(838)



-27.9%





















Net Income

$ 10,142



$  14,708



$     (4,566)



-31.0%





















Net income per common share - basic

$    1.51



$      2.22



$       (0.71)



-32.0%

Net income per common share - diluted

$    1.47



$      2.14



$       (0.67)



-31.3%





















Weighted average shares outstanding - basic

6,730



6,628



102



1.5%

Weighted average shares outstanding - diluted

6,896



6,872



24



0.3%

 

The Bank of Princeton

























Consolidated Average Balance Sheets

























(unaudited)





















































For the Quarter Ended



























Dec 2019



Sept 2019













Average 



Yield/



Average 



Yield/













balance



rate 



balance



rate 



$ Change



% Change

Earning assets

























  Loans 

$    1,159,919



4.88%



$    1,132,154



5.05%



$       27,765



-0.17%





























Securities



















































  Taxable AFS 

54,811



2.30%



46,329



2.38%



8,482



-0.08%



  Tax exempt AFS

55,388



2.59%



51,484



2.65%



3,904



-0.06%



  Held-to-maturity

223



5.26%



225



5.25%



(2)



0.01%





























Securities

110,422



2.45%



98,038



2.53%



12,384



-0.08%





























Other interest earning assets

























  Interest-bearing bank accounts

59,753



1.54%



34,744



2.27%



25,009



-0.73%



  Equities

1,416



5.90%



1,384



6.00%



32



-0.10%





























Other interest earning assets

61,169



1.64%



36,128



2.41%



25,041



-0.77%





























Total interest-earning assets

1,331,510



4.53%



1,266,320



4.78%



65,190



-0.25%





























Total non earning assets

95,094







92,446









































Total Assets

$    1,426,604







$    1,358,766



































































Interest-bearing liabilities

























Checking

$      216,489



1.03%



$      205,155



1.05%



11,334



-0.02%



Savings

154,934



1.28%



155,953



1.28%



(1,019)



0.00%



Money Market

265,015



1.67%



237,697



1.63%



27,318



0.04%



Certificate of Deposit

425,626



2.41%



404,982



2.40%



20,644



0.01%





























    Total interest-bearing deposits

1,062,064



1.78%



1,003,787



1.77%



58,277



0.01%





























Non interest bearing deposits

144,538







140,640









































    Total  deposits

1,206,602



1.57%



1,144,427



1.55%



62,175



0.02%





























Borrowings

3,795



2.01%



3,074



2.30%



721



-0.29%





























    Total interest-bearing liabilities 

1,065,859



1.78%



1,006,861



1.77%



58,998



0.01%



       (excluding non interest deposits)



















































Noninterest-bearing deposits

144,538







140,640















Total Cost of Funds

1,210,397



1.57%



1,147,501



1.55%



62,896



0.02%





























Accrued expenses and other liabilities

21,861







19,923















Stockholders' equity

194,346







191,342















Total liabilities and stockholders' equity

$    1,426,604







$    1,358,766



































































Net interest spread





2.75%







3.01%











Net interest margin





3.10%







3.37%





































Net interest margin (FTE)*





3.21%







3.49%





































  *Includes federal and state tax effect of tax exempt























    securities and loans

























 

The Bank of Princeton

























Consolidated Average Balance Sheets

























(unaudited)





















































For the Three Months Ended













December 31,













2019



2018













Average 



Yield/



Average 



Yield/













balance



rate 



balance



rate 



$ Change



% Change



Earning assets

























  Loans 

$    1,159,919



4.88%



$    1,062,719



5.02%



$        97,200



-0.14%





























Securities



















































  Taxable AFS 

54,811



2.30%



47,297



2.41%



7,514



-0.11%



  Tax exempt AFS

55,388



2.59%



45,212



2.78%



10,176



-0.19%



  Held-to-maturity

223



5.26%



229



5.26%



(6)



0.00%





























Securities

110,422



2.45%



92,738



2.60%



17,684



-0.15%





























Other interest earning assets

























  Interest-bearing bank accounts

59,753



1.54%



21,309



2.09%



38,444



-0.55%



  Equities

1,416



5.90%



2,131



6.75%



(715)



-0.85%





























Other interest earning assets

61,169



1.64%



23,440



2.51%



37,729



-0.87%





























Total interest-earning assets

1,331,510



4.53%



1,178,897



4.77%



152,613



-0.24%





























Total non earning assets

95,094







56,087









































Total Assets

$    1,426,604







$    1,234,984



































































Interest-bearing liabilities

























Checking

$      216,489



1.03%



$      177,247



0.98%



39,242



0.05%



Savings

154,934



1.28%



96,310



1.28%



58,624



0.00%



Money Market

265,015



1.67%



285,683



1.61%



(20,668)



0.06%



Certificate of Deposit

425,626



2.41%



364,272



1.98%



61,354



0.43%





























    Total interest-bearing deposits

1,062,064



1.78%



923,512



1.60%



138,552



0.18%





























Non interest bearing deposits

144,538







101,838









































    Total  deposits

1,206,602



1.57%



1,025,350



1.44%



181,252



0.13%





























Borrowings

3,795



2.01%



23,334



2.57%



(19,539)



-0.56%



    Total interest-bearing liabilities 

























       (excluding non interest deposits)

1,065,859



1.78%



946,846



1.63%



119,013



0.15%





























Noninterest-bearing deposits

144,538







101,838















Accrued expenses and other liabilities

21,861







5,166















Stockholders' equity

194,346







181,134















Total liabilities and stockholders' equity

$    1,426,604







$    1,234,984



































































Net interest spread





2.75%







3.15%











Net interest margin





3.10%







3.47%





































Net interest margin (FTE)*





3.21%







3.59%





































  *Includes federal and state tax effect of tax exempt























       securities and loans

























 

The Bank of Princeton























Consolidated Average Balance Sheets























(unaudited)

















































For the Twelve Months Ended











December 30,











2019



2018











Average 



Yield/



Average 



Yield/











balance



rate 



balance



rate 



$ Change



% Change

Earning assets























  Loans 

$    1,124,865



5.00%



$    1,027,701



4.97%



$     97,164



0.03%

























Securities















































  Taxable AFS 

47,435



2.37%



51,429



2.29%



(3,994)



0.08%

  Tax exempt AFS

50,218



2.66%



47,298



2.76%



2,920



-0.10%

  Held-to-maturity

225



5.20%



251



5.18%



(26)



0.02%

























Securities

97,878



2.53%



98,978



2.52%



(1,100)



0.01%

























Other interest earning assets























  Interest-bearing bank accounts

41,665



2.08%



37,386



1.78%



4,279



0.30%

  Equities

2,028



6.16%



1,828



6.59%



200



-0.43%

























Other interest earning assets

43,693



2.27%



39,214



2.00%



4,479



0.27%

























Total interest-earning assets

1,266,436



4.72%



1,165,893



4.66%



100,543



0.06%

























Total non earning assets

84,636







57,456





































Total Assets

$    1,351,072







$    1,223,349





























































Interest-bearing liabilities























Checking

$      205,828



1.15%



$      215,379



0.86%



(9,551)



0.29%

Savings

132,027



1.30%



102,219



1.17%



29,808



0.13%

Money Market

254,151



1.67%



273,373



1.42%



(19,222)



0.25%

Certificate of Deposit

406,908



2.32%



334,780



1.80%



72,128



0.52%

























    Total interest-bearing deposits

998,914



1.78%



925,751



1.40%



73,163



0.38%

























Non interest bearing deposits

123,821







100,078





































    Total  deposits

1,122,735



1.58%



1,025,829



1.26%



96,906



0.32%

























Borrowings

18,326



2.63%



17,196



2.29%



1,130



0.34%

    Total interest-bearing liabilities 























       (excluding non interest deposits)

1,017,240



1.80%



942,947



1.42%



74,293



0.38%

























Noninterest-bearing deposits

123,821







100,078













Accrued expenses and other liabilities

19,900







4,533













Stockholders' equity

190,111







175,791













Total liabilities and stockholders' equity

$    1,351,072







$    1,223,349





































Net interest spread





2.92%







3.25%









Net interest margin





3.27%







3.52%

































Net interest margin (FTE)*





3.39%







3.64%

































  *Includes federal and state tax effect of tax exempt





















       securities and loans























 

The Bank of Princeton



















Quarterly Financial Highlights



















(unaudited)









































2019



2019



2019



2019



2018



Dec



Sep



Jun



Mar



Dec





















     Return on average assets 

0.94%



1.09%



0.84%



0.07%



1.22%

     Return on average equity 

6.92%



7.70%



5.99%



0.50%



8.30%

     Return on average tangible equity *

7.40%



8.26%



6.40%



0.50%



8.30%

     Net interest margin

3.10%



3.37%



3.30%



3.34%



3.47%

     Net interest margin (FTE)**

3.21%



3.49%



3.39%



3.46%



3.59%

     Efficiency ratio - Non-GAAP *

61.35%



60.80%



65.96%



59.28%



57.94%





















Common Stock Data



















     Market value at period end

$     31.49



$     29.06



$     30.00



$     31.73



$     27.90

     Market range:



















        High

32.12



30.20



32.75



33.33



31.46

        Low

27.34



25.92



27.42



27.58



26.77

     Book value per common share at period end

28.98



28.61



28.08



27.64



27.69

     Tangible book value per common share at period end *

27.11



26.71



26.15



27.64



27.69





















CAPITAL RATIOS



















Total Capital (to risk-weighted assets)

15.11%



15.42%



15.43%



16.53%



17.37%

Tier 1 Capital (to risk-weighted assets)

14.13%



14.41%



14.41%



15.53%



16.31%

Tier 1 Capital (to average assets)

12.89%



13.31%



13.15%



14.60%



14.89%

     Period-end equity to assets

13.47%



14.00%



13.91%



14.35%



14.73%

     Period-end tangible equity to tangible assets 

12.71%



13.19%



13.08%



14.35%



14.73%





















CREDIT QUALITY DATA AT PERIOD END



















(Dollars in Thousands)



















     Net charge-offs and  (recoveries)

$       112



$           3



$      (110)



$     4,183



$       195

     Annualized net charge-offs (recoveries) to average loans

0.038%



0.001%



-0.040%



1.552%



0.073%





















     Nonaccrual loans 

$     2,442



$     2,434



$     2,700



$     9,472



$     5,699

     Other real estate owned

-



-



44



44



44

     Total nonperforming assets 

2,442



2,434



2,744



9,516



5,743

     Accruing troubled debt restructurings (TDRs)

9,293



9,828



7,606



1,278



1,286

     Total nonperforming assets and accruing TDRs 

$   11,735



$   12,262



$   10,350



$   10,794



$     7,029









































     Allowance for credit losses as a percent of:



















     Period-end loans      

1.06%



1.09%



1.10%



1.07%



1.10%

     Nonaccrual loans 

514.21%



515.32%



460.04%



126.28%



209.58%

     Nonperforming assets 

514.21%



515.32%



452.66%



125.69%



207.97%





















    As a percent of total loans:



















    Nonaccrual loans 

0.21%



0.21%



0.24%



0.85%



0.53%

    Accruing TDRs 

0.78%



0.86%



0.68%



0.11%



0.12%

    Nonaccrual loans and accruing TDRs 

0.99%



1.07%



0.92%



0.96%



0.65%









































* Refer to non-gaap disclosure for explantion



















**Includes the effect of tax exempt securities and loans



















 Non-GAAP Measures Disclosure

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").  The Bank's management believes that the supplemental non-GAAP information provided in the press release is utilized by market analysts and others to evaluate a company's financial condition and performance and, therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures presented by other companies.

The following table shows the reconciliation of net income and core net income (a non-GAAP measure which excludes the effects of one-time acquisition costs related to the 5-branch acquisition from Beneficial Bank and the one-time charge-offs related to two borrowers that occurred during the first quarter (management believes many investors desire to evaluate net income with regard to such expenses)





At or For the Three 



At or For the Twelve





Months Ended December 31,



Months Ended December 31,





2019



2018



2019



2018





(Dollars in thousands)

Income before income taxes



$      4,206



$     4,589



$   12,304



$     17,708

Income taxes expenses



817



801



2,162



3,000

Net Income



3,389



3,788



10,142



14,708

One-time charge-off (net of taxes)



-



-



-



-

One-time acquisition cost (net of taxes)



-



-



466



-

Core net income



3,389



3,788



10,608



14,708



















Earnings per common share - basic



$        0.50



$      0.57



$      1.58



$        2.22

Earnings per common share - diluted



$        0.49



$      0.55



$      1.54



$        2.14



















Average Shares Outstanding



6,757,365



6,650,022



6,730,438



6,627,731

Diluted Shares Outstanding



6,921,801



6,868,568



6,895,742



6,871,823

The following table shows the reconciliation of the Bank's book value and tangible book value (a non-GAAP measure which excludes goodwill and core deposit intangible resulting from the Beneficial Bank branch acquisition from total stockholders' equity as calculated in accordance with GAAP).





As of December 31, 2019



As of December 31, 2018





(Dollars in thousands, except per share data)

Total stockholders' equity



$195,925



$195,925



$184,318



$184,318

Less intangible assets:

















   Goodwill



8,853



-



-



-

   Core deposit intangible 



3,763



-



-



-

   Total intangibles



12,616



-



-



-

Adjusted stockholders' equity



$183,309



$195,925



$184,318



$184,318

Shares of common stock outstanding



6,761,443



6,761,443



6,655,509



6,655,509

Adjusted book value per share



$      27.11



$     28.98



$     27.69



$       27.69

Return on average tangible equity noted on page 13 of this press release is a non-GAAP measure that represents the rate of return on tangible common equity.   

The efficiency ratio noted on page 13 of this press release is a non-GAAP measure that represents the ratio of non-interest expenses divided by the sum of net-interest income and non-interest income.  

Contact George Rapp

609.454.0718

grapp@thebankofprinceton.com

Cision View original content:http://www.prnewswire.com/news-releases/the-bank-of-princeton-announces-fourth-quarter-2019-results-300995054.html

SOURCE The Bank of Princeton

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