First Bank Reports First Quarter 2016 Earnings of $1.4 Million; Total Assets Reach $917 Million

HAMILTON, NJ--(Marketwired - April 25, 2016) - First Bank (NASDAQ: FRBA) today announced first quarter 2016 results. Net income for the quarter was $1.4 million or $0.14 per diluted share, compared to $686 thousand or $0.07 per diluted share for the fourth quarter of 2015 and $1.7 million or $0.18 per diluted share for the first quarter of 2015. 

The increase in first quarter net income compared to the fourth quarter of 2015 was driven by higher net interest income from strong loan growth and lower non-interest expenses. Fourth quarter 2015 results included $350 thousand in one-time severance and branch closing costs. 

Book value per share was $7.42 at the end of the first quarter of 2016, an increase of 5.0% compared to book value of $7.07 at the end of the first quarter of 2015. Nonperforming assets as a percentage of total assets equaled 0.63% at the end of the first quarter of 2016 compared to 1.03% at the end of the first quarter of 2015.

President and Chief Executive Officer Patrick L. Ryan commenting on the results said: "The first quarter of 2016 was a good, clean quarter. We had very little in the way of unusual or non-recurring income or expense. I believe it provides a good perspective on the improved earnings potential of the franchise based on our larger balance sheet and more streamlined cost structure. We hope that a strong first quarter puts us on the path for an excellent 2016. 

"Importantly, we had another very good quarter of loan growth, with an increase of $68 million in the quarter. It was nice to see continued, strong growth, especially on the heels of $81 million in loan growth in the fourth quarter of last year. Often a strong growth quarter can be followed by a slow down as we work to rebuild our pipeline and that did not happen in the first quarter. We do expect loan growth will slow from its current pace as we move through the remainder of 2016, but we are certainly enjoying our current momentum. We believe having lending teams in three different markets is helping to smooth out some of the peaks and troughs that are typical in the community bank lending business. In a manner fairly consistent with prior quarters and our stated goals, a little over half of the loan growth came from our central NJ region, a little over 25% came from the PA region, and about 20% came from the northern NJ region.

"We were pleased to see good deposit growth in the quarter, with net increases coming from nine of the ten branches in our network. Our newest location in Flemington is off to a great start. We are still looking to drive stronger growth in our non-interest bearing product categories and we have implemented some new initiatives which we hope will help drive stronger results in that area. We are also working on new product designs and features that should help drive continued adoption of our mobile and e-banking services. Over 20% of our online banking customers use mobile banking today, but we know the mobile penetration rate can and should move higher.

"Asset quality metrics remained strong. Nonperforming assets/total assets ticked down slightly and remained at very healthy levels. Delinquency rates also improved during the quarter. Thankfully, our markets (and our bank) do not have much in the way of energy exposure. Due to the cyclical nature of credit, we do not take our current environment for granted. We're watching key trends and metrics closely. Thankfully, the current signals indicate that borrowers remain in a healthy position.

"First quarter results showed that our expense control measures are working. Non-interest expenses were down not only compared to the fourth quarter of 2015, but also compared to the first quarter of 2015. I expect expenses will start to rise again as we continue to grow, but we will continue our efforts to operate in a prudent, but lean fashion."

Ryan concluded, "After two consecutive quarters of very strong growth, capital planning moves to the front of the agenda. The market opportunity in front of us is substantial, especially given our larger geographic reach, our larger legal lending limit, and the continued consolidation in the industry."

First Quarter 2016 Highlights

• Balance Sheet
• Total assets at March 31, 2016 were $917.4 million, an increase of $61.9 million or 7.2% compared to December 31, 2015, and an increase of $186.5 million or 25.5% compared to March 31, 2015. 
• Total loans reached $758.1 million at March 31, 2016, an increase of $68.2 million or 9.9% compared to December 31, 2015 and an increase of $213.1 million or 39.1% compared to March 31, 2015. 
• Loan portfolio composition at March 31, 2016:
• Acquisition, Construction and Development (ACD) loans equaled 7.5% of total loans;
• Commercial Real Estate, Investor (CREI; including multi-family) loans equaled 45.6% of total loans;
• Commercial Real Estate, Owner-Occupied (CREO) loans equaled 22.4% of total loans;
• Commercial and Industrial (C&I) loans equaled 14.9% of total loans;
• Residential Real Estate and Consumer and Other loans equaled 9.6% of total loans.
• Total deposits reached $799.0 million at March 31, 2016, an increase of $60.0 million or 8.1% compared to December 31, 2015 and an increase of $150.7 million or 23.2% compared to March 31 2015. Non-interest bearing deposits totaled $101.6 million at March 31, 2016, or 12.7% of total deposits.
• Stockholders' equity increased to $70.5 million at March 31, 2016.
• Book value per share was $7.42 at March 31, 2016 compared to $7.26 per share at December 31, 2015 and $7.07 per share at March 31, 2015. Tangible book value per share was $7.39 at March 31, 2016, compared to $7.23 per share at December 31, 2015 and $7.03 per share at March 31, 2015. 
  
• Quarterly and Year to Date Income Statement
• Net interest income for the first quarter of 2016 totaled $6.8 million, an increase of $673 thousand, or 11.0%, compared to $6.1 million for the fourth quarter of 2015 and an increase of $637 thousand, or 10.4%, compared to the first quarter of 2015. Net interest income in the first quarter of 2015 did not include any interest expense on subordinated debt.
  
• The provision for loan losses in the first quarter of 2016 totaled $813 thousand, a decrease of $137 thousand, or 14.4%, compared to $950 thousand for the fourth quarter of 2015 and an increase of $757 thousand compared to the first quarter of 2015.
  
• Non-interest income for the first quarter of 2016 totaled $360 thousand compared to $282 thousand for the fourth quarter of 2015. Gains on recovery of acquired loans totaled $111 thousand in the first quarter of 2016 compared to $56 thousand in the fourth quarter of 2015. When compared to the first quarter of 2015 non-interest income decreased $472 thousand. Non-interest income of $832 thousand for the first quarter of 2015 included gains on recovery of acquired loans of $624 thousand.
  
• Non-interest expense for the first quarter of 2016 totaled $4.4 million, a decrease of $296 thousand, or 6.3%, compared to $4.7 million for the fourth quarter of 2015. Current period non-interest expense was flat at $4.4 million compared to the first quarter of 2015.
  
• Pre-tax income for the first quarter of 2016 totaled $1.9 million, an increase of $1.2 million, or 155.2%, compared to $763 thousand for the fourth quarter of 2015 and a decrease of $527 thousand or 21.3% compared to the first quarter of 2015.
  
• Income tax expense for the first quarter of 2016 totaled $591 thousand, an increase of $514 thousand compared to $77 thousand for the fourth quarter of 2015 and a decrease of $154 thousand, or 20.7%, compared to the first quarter of 2015. 
  
• Net income for the first quarter of 2016 totaled $1.4 million, an increase of $670 thousand, or 97.7%, compared to $686 thousand in the fourth quarter of 2015, and a decrease of $373 thousand, or 21.6%, compared to the first quarter of 2015.
  
• Diluted earnings per share for the first quarter of 2016 totaled $0.14 an increase of $0.07 per diluted share compared to $0.07 per diluted share for the fourth quarter of 2015. Diluted earnings per share for the first quarter of 2015 totaled $0.18.
  
• Pre-provision net revenue¹ for the first quarter of 2016 was $2.6 million, an increase of $618 thousand, or 30.8%, compared to $2.0 million in the fourth quarter of 2015, and an increase of $568 thousand, or 27.6%, compared to the first quarter of 2015.
  
• Other items
• The tax equivalent net interest margin for the first quarter of 2016 was 3.14% compared to 3.05% for the fourth quarter of 2015 and 3.74% for the first quarter of 2015. 
• Nonperforming assets were $5.8 million or 0.63% of total assets at March 31, 2016 compared to $5.5 million or 0.64% of total assets at December 31, 2015. 
• Nonaccrual loans totaled $3.9 million or 0.52% of total loans at March 31, 2016 compared to nonaccrual loans of $3.8 million or 0.55% of total loans at December 31, 2015.
• Loans 30-89 days past due totaled $4.2 million at March 31, 2016 compared to $11.3 million at December 31, 2015. Loans over 90 days past due or more and still accruing at March 31, 2016 totaled $155 thousand compared to $108 thousand in loans over 90 days past due or more and still accruing at December 31, 2015.
• Other real estate owned and other repossessed assets totaled $1.7 million at March 31, 2016 and $1.6 million at December 31, 2015.
• Regulatory capital ratios at March 31, 2016:
• Tier 1 Leverage ratio of 7.73%
• Tier 1 Risk-Based capital ratio of 8.17%
• Common Equity Tier 1 capital ratio of 8.17%
• Total Risk-Based capital ratio of 11.69%
• The ratio of the allowance for loan losses to total loans at March 31, 2016 was 1.12% compared to 1.15% at December 31, 2015.
• 102 full-time equivalent employees at March 31, 2016 compared to 99 full-time equivalent employees at December 31, 2015.

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

Conference Call

First Bank will host an earnings call on Tuesday, April 26, 2016 at 3:00 p.m. The direct dial toll free number for the call is 1-888-317-6016. For those unable to participate in the call, a replay will be available by dialing 1-877-344-7529 from one hour after the end of the conference call until May 3, 2016. The replay will also be available on our website at www.firstbanknj.com under the "About Us" tab. Click on "Investor Relations" to access the replay of the conference call.

About First Bank

First Bank (www.firstbanknj.com) is a New Jersey state-chartered bank with ten full-service branches in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Randolph, Somerset and Williamstown, New Jersey, and Trevose, Pennsylvania. With $917 million in assets as of March 31 2016, First Bank offers a traditional range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol "FRBA". 

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