PRINCETON, N.J., Oct. 20, 2022 /PRNewswire/ -- The Bank of Princeton (the "Bank") (NASDAQ: BPRN) today reported its unaudited financial condition and results of operations at and for the quarter ended September 30, 2022. The Bank reported net income of $7.0 million, or $1.09 per diluted common share, for the third quarter of 2022, compared to net income of $6.3 million, or $0.98 per diluted common share, for the second quarter of 2022, and net income of $5.9 million, or $0.88 per diluted common share, for the third quarter of 2021. The increase in net income, when compared to the three months ended June 30, 2022, was primarily due to an increase of $1.4 million in net interest income and a $595 thousand increase in non-interest income, partially offset by a $697 thousand increase in non-interest expenses and a $459 thousand increase income tax expense. The increase in net income, when comparing it to the three months ended September 30, 2021, was primarily due to an increase in net interest income of $1.6 million, a $1.0 million decrease in the provision for loan losses and a $389 thousand increase in non-interest income, partially offset by a $1.6 million increase in non-interest expenses and a $350 thousand increase in income tax expense. For the nine-month period ended September 30, 2022, the Bank recorded net income of $19.3 million, or $2.98 per diluted common share, compared to $16.3 million, or $2.38 per diluted common share for the same period in 2021, primarily due to a $3.2 million increase in net interest income a $3.1 million decrease in the Bank's provision for loan losses, and a $666 thousand increase in non-interest income, partially offset by a $3.3 million increase in non-interest expenses and an increase in income taxes of $676 thousand.

Highlights for the three and nine month periods ended September 30, 2022 are as follows:

During the nine months ended September 30, 2022, the Bank purchased 315,058 shares of common stock nearly completing the authorized 324,017 shares of common stock from the 5% stock buyback program that commenced in 2022 at a weighted average price of $29.07.
Net income for the third quarter of 2022 increased $1.0 million or 17.7% over the same period in 2021.
The Bank maintained its low total cost of funds on deposits at 40 basis points for the third quarter of 2022, down 8 basis points from the same period in 2021.
The ratio of nonperforming loans to total loans continues to be low at 0.05% as of September 30, 2022, compared to 0.09% at December 31, 2021 and 0.11% at September 30, 2021.

President/CEO Edward Dietzler noted that, "The Bank's earnings performance continues to increase, propelled by a strong net interest margin of 4.64% for the quarter and strong credit quality."

Balance Sheet Review

Total assets were $1.60 billion at September 30, 2022, a decrease of $84.6 million, or 5.0% when compared to $1.69 billion at the end of 2021. The primary reason for the decrease in total assets was a decrease in cash and cash equivalents of approximately $110.8 million and a $19.0 million decrease in available-for-sale securities, partially offset by an increase of $43.2 million in net loans. The increase in net loans primarily consisted of a $117.6 million increase in commercial real estate loans, partially offset by a decrease of $71.7 million in Payroll Protection Program ("PPP") loans which are no longer being offered by the SBA.

Total deposits at September 30, 2022 decreased $79.1 million, or 5.5%, when compared to December 31, 2021. When comparing deposit products between the two periods, money market deposits decreased $49.0 million, interest-bearing demand deposits decreased $25.1 million, savings decreased $12.1 million, certificates of deposit decreased $6.1 million and non-interest-bearing demand deposits increased $13.1 million. In addition, the Bank had no outstanding borrowings at September 30, 2022 and December 31, 2021.

Total stockholders' equity at September 30, 2022 decreased $4.1 million or 1.9% when compared to the end of 2021. This decrease was primarily due to the $9.2 million of common stock repurchased pursuant to the 2022 buyback program, and a $10.8 million change in the accumulated other comprehensive income (loss) on the available-for-sale investment portfolio associated with an increase in unrealized losses due to the increase in interest rates. These decreases were partially offset by a $14.4 million increase in retained earnings consisting of $19.3 million of net income less $4.9 million of cash dividends recorded during the period. The ratio of equity to total assets at September 30, 2022 and at December 31, 2021, was $13.3% and 12.8%, respectively.

Asset Quality

At September 30, 2022, non-performing assets were $729 thousand, a decrease of $672 thousand, or 48.0%, when compared to the amount at December 31, 2021. This decrease was primarily due to the sale of an other real estate owned property in the amount of $226 thousand and a $400 thousand write-down of a non-performing loan. Troubled debt restructurings ("TDRs") totaled $6.3 million at September 30, 2022 and $6.9 million at December 31, 2021. Three TDR loans totaling $5.9 million are performing in accordance with the agreed-upon terms and there is one TDR loan in non-accrual status as of September 30, 2022.

Review of Quarterly and Year-to-Date Financial Results

Net interest income was $17.7 million for the third quarter of 2022, compared to $16.3 million for the second quarter of 2022 and $16.1 million for the third quarter of 2021. The increase from the previous quarter was the result of an increase in interest income of $1.6 million, or 9.4%, partially offset by an increase in interest expense of $226 thousand. The net interest margin for the third quarter 2022 was 4.64%, increasing 45 basis points when compared to the second quarter of 2022. This increase was primarily associated with an increase of 52 basis points in the yield on earning assets. When comparing the same three-month period ended September 30, 2022 and 2021, net interest income increased $1.6 million, which was primarily due to an increase of 54 basis points in the yield earned on interest-earning assets. For the nine-month period ended September 30, 2022, net interest income was $49.8 million compared to $46.6 million for the nine-month period ended September 30, 2021. The increase from the previous nine-month period was the result of an increase in interest income of $1.8 million, or 3.4% and a decrease in interest expense of $1.5 million, or 28.0%. The rate on total deposits, for the three-month periods ended September 30, 2022 and 2021 was 0.40% and 0.48%, respectively. For the nine-month periods ended September 30, 2022 and 2021, the rate on total deposits was 0.36% and 0.50%, respectively.

The Bank recorded a provision for loan losses of $200 thousand during the three-month period ended September 30, 2022 and since no provision had been recorded earlier in the year, the nine-month period reflects the same $200 thousand. The comparable amounts were $1.2 million and $3.3 million for the three months and nine months ended September 30, 2021, respectively. The primary reasons for the provisions for loan losses during the 2021 periods were charge-offs in the amounts of $821 thousand and $1.8 million, respectively. Net charge-offs for the three-month and nine-month periods ended September 30, 2022 were $200 thousand and $154 thousand, respectively. The Bank did not make any material changes to the qualitative factors used in determining the level of general reserve needed for management's assessment of the credit quality in the loan portfolio. The coverage ratio of allowance for loan losses to period end loans was 1.21% (excluding PPP loans it was 1.21%) at September 30, 2022, compared to 1.24% (excluding PPP loans it was 1.32%) at December 31, 2021.

Total non-interest income for the third quarter of 2022 increased $595 thousand and $389 thousand to $1.7 million, or by 53.5% and 29.5% when compared to the quarter ended June 30, 2022 and the quarter ended September 30,2021, respectively. The increase over the prior quarter was to primarily due to a $547 thousand increase in loan fees and a $74 thousand increase in other non-interest income. The increase over the 2021 period was primarily due to a $214 thousand increase in loan fees and a $148 thousand increase in other non-interest income. For the nine-month period ended September 30, 2022, non-interest income increased $666 thousand, or 20.8%, from the same nine-month period in 2021, primarily due to a $248 thousand increase in loan fees and a $247 thousand increase in other non-interest income.

Total non-interest expense for the third quarter of 2022 increased $1.6 million, or 18.4%, when compared to the same period in 2021. This increase was primarily due to a $1.1 million increase in salaries and benefits expenses, a $206 thousand increase in professional fees and a $139 thousand increase in data processing and communications expenses. When comparing the quarter ended September 30, 2022 to the immediately preceding quarter, non-interest expense increased $697 thousand, or 7.4%, primarily due to increases salaries and employee benefits costs, professional fees and occupancy and equipment expenses, partially offset by a decrease in other real estate owned expenses. For the nine-month period ended September 30, 2022, non-interest expense was $28.8 million, compared to $25.5 million for the same period in 2021. This increase was primarily due to increases in salaries and benefits expenses and data processing and communications costs.

For the three-month period ended September 30, 2022, the Bank recorded an income tax expense of $2.1 million, resulting in an effective tax rate of 23.2%, compared to an income tax expense of $1.6 million resulting in an effective tax rate of 20.6% for the three-month period ended June 30, 2022, and compared to an income tax expense of $1.8 million resulting in an effective tax rate of 22.8% for the three-month period ended September 30, 2021. For the nine-month periods ended September 30, 2022 and 2021, the income tax expenses were $5.4 million (effective tax rate of 21.7%) and $4.7 million (effective tax rate of 22.3%), respectively.

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 19 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Hamilton, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville. There are also four 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 extent of the adverse impact of the current global coronavirus outbreak on our customers, prospects and business, including related supply chain shortage of goods, as well as the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area, the strength of the United States economy in general and the strength of the local economies in which the 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; and the timing and nature of the regulatory response to any applications filed by 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, 2021 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
Consolidated Statements of Financial Condition
(Unaudited)
(Dollars in thousands, except per share data)


				September 30, 2022 vs			September 30, 2022 vs
	September 30,	December 31,	September 30,	December 31, 2021			September 30, 2021
	2022	2021	2021	$ Change	% Change		$ Change	% Change

ASSETS
Cash and cash equivalents	$ 47,965	$ 158,716	$ 144,184	$ (110,751)	(69.78)	%	$ (96,219)	(66.73)	%
Securities available-for-sale taxable	43,041	51,690	46,522	(8,649)	(16.73)		(3,481)	(7.48)
Securities available-for-sale tax-exempt	39,112	49,468	46,345	(10,356)	(20.93)		(7,233)	(15.61)
Securities held-to-maturity	203	208	210	(5)	(2.40)		(7)	(3.33)
Loans receivable, net of deferred	1,378,426	1,335,163	1,342,670	43,263	3.24		35,756	2.66
Allowance for loan losses	(16,666)	(16,620)	(16,421)	(46)	0.28		(245)	1.49
Goodwill	8,853	8,853	8,853	-	-		-	-
Core deposit intangible	1,958	2,393	2,547	(435)	(18.18)		(589)	(23.13)
Other assets	100,158	97,811	94,284	2,347	2.40		5,874	6.23
TOTAL ASSETS	$ 1,603,050	$ 1,687,682	$ 1,669,194	$ (84,632)	(5.01)	%	$ (66,144)	(3.96)	%


LIABILITIES
Non-interest checking	$ 299,389	$ 286,247	$ 274,766	$ 13,142	4.59	%	$ 24,623	8.96	%
Interest checking	233,969	259,022	249,563	(25,053)	(9.67)		(15,594)	(6.25)
Savings	213,522	225,579	223,188	(12,057)	(5.34)		(9,666)	(4.33)
Money market	324,037	373,075	361,052	(49,038)	(13.14)		(37,015)	(10.25)
Time deposits over $250,000	46,810	33,741	39,270	13,069	38.73		7,540	19.20
Other time deposits	249,287	268,479	283,055	(19,192)	(7.15)		(33,768)	(11.93)
Total deposits	1,367,014	1,446,143	1,430,894	(79,129)	(5.47)		(63,880)	(4.46)
Borrowings	-	-	-	-	N/A		-	N/A
Other liabilities	23,518	24,961	23,116	(1,443)	(5.78)		402	1.74
TOTAL LIABILITIES	1,390,532	1,471,104	1,454,010	(80,572)	(5.48)		(63,478)	(4.37)

STOCKHOLDERS' EQUITY
Common stock	34,535	34,100	34,082	435	1.28		453	1.33
Paid-in capital	81,241	80,220	80,112	1,021	1.27		1,129	1.41
Treasury stock	(19,190)	(10,032)	(6,618)	(9,158)	91.29		(12,572)	N/A
Retained earnings	125,878	111,451	106,455	14,427	12.94		19,423	18.25
Accumulated other comprehensive income (loss)	(9,946)	839	1,153	(10,785)	(1,285.46)		(11,099)	(962.62)
TOTAL STOCKHOLDERS' EQUITY	212,518	216,578	215,184	(4,060)	(1.87)		(2,666)	(1.24)

TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY	$ 1,603,050	$ 1,687,682	$ 1,669,194	$ (84,632)	(5.01)	%	$ (66,144)	(3.96)	%

Book value per common share	$ 34.00	$ 33.42	$ 32.66	$ 0.58	1.73	%	$ 1.34	4.10	%
Tangible book value per common share¹	$ 32.27	$ 31.69	$ 30.93	$ 0.58	1.85	%	$ 1.34	4.33	%

¹Tangible book value per common share is a non-GAAP measure that represents book value per common share which excludes goodwill and core deposit intangible.

The Bank of Princeton
Loan and Deposit Tables
(Unaudited)

The components of loans receivable, net at September 30, 2022 and December 31, 2021 were as follows:


	September 30,	December 31,
	2022	2021
	(In thousands)
Commercial real estate	$ 888,590	$ 771,028
Commercial and industrial	27,961	29,677
Construction	404,017	403,680
Residential first-lien mortgages	45,487	48,638
Home equity / consumer	7,392	7,685
PPP I (SBA loans)	4,167	6,641
PPP II (SBA loans)	3,830	73,099
Total loans	1,381,444	1,340,448
Deferred fees and costs	(3,018)	(5,285)
Allowance for loan losses	(16,666)	(16,620)
Loans, net	$ 1,361,760	$ 1,318,543


The components of deposits at September 30, 2022 and December 31, 2021 were as follows:

	September 30,	December 31,
	2022	2021
	(In thousands)
Demand, non-interest-bearing	$ 299,389	$ 286,247
Demand, interest-bearing	233,969	259,022
Savings	213,522	225,579
Money markets	324,037	373,075
Time deposits	296,097	302,220
Total deposits	$ 1,367,014	$ 1,446,143

The Bank of Princeton
Consolidated Statements of Income
(Unaudited)
(Amounts in thousands except per share data)

			Three Months Ended September 30,
			2022	2021	$ Change	% Change
Interest and dividend income
	Loans and fees		$ 18,336	$ 17,181	$ 1,155	6.7 %
	Available-for-sale debt securities:
		Taxable	241	133	108	81.2 %
		Tax-exempt	286	287	(1)	-0.3 %
	Held-to-maturity debt securities		2	2	0	0.0 %
	Other interest and dividend income		226	53	173	326.4 %
		Total interest and dividends	19,091	17,656	1,435	8.1 %

Interest expense
		Deposits	1,392	1,545	(153)	-9.9 %
		Borrowing	3	-	3	N/A
		Total interest expense	1,395	1,545	(150)	-9.7 %

Net interest income			17,696	16,111	1,585	9.8 %
Provision for loan losses			200	1,200	(1,000)	-83.3 %
Net interest income after provision for loan losses			17,496	14,911	2,585	17.3 %

Non-interest income
	Income from bank-owned life insurance		287	276	11	4.0 %
	Fees and service charges		469	453	16	3.5 %
	Loan fees, including prepayment penalties		850	636	214	33.6 %
	Other		101	(47)	148	-314.9 %
		Total non-interest income	1,707	1,318	389	29.5 %

Non-interest expense
	Salaries and employee benefits		5,442	4,342	1,100	25.3 %
	Occupancy and equipment		1,539	1,492	47	3.2 %
	Professional fees		786	580	206	35.5 %
	Data processing and communications		1,043	904	139	15.4 %
	Federal deposit insurance		249	220	29	13.2 %
	Advertising and promotion		140	59	81	137.3 %
	Office expense		52	56	(4)	-7.1 %
	Other real estate owned expense		-	80	(80)	-100.0 %
	Core deposit intangible		135	155	(20)	-12.9 %
	Other		739	661	78	11.8 %
		Total non-interest expense	10,125	8,549	1,576	18.4 %

Income before income tax expense			9,078	7,680	1,398	18.2 %
Income tax expense			2,103	1,753	350	20.0 %
Net income			$ 6,975	$ 5,927	1,048	17.7 %

Net income per common share - basic			$ 1.12	$ 0.89	$ 0.23	25.8 %
Net income per common share - diluted			$ 1.09	$ 0.88	$ 0.21	23.9 %

Weighted average shares outstanding - basic			6,269	6,836	(567)	-8.3 %
Weighted average shares outstanding - diluted			6,378	6,896	(518)	-7.5 %

The Bank of Princeton
Consolidated Statements of Income (Current Quarter vs Prior Quarter)
(Unaudited)
(Amounts in thousands, except per share data)

			Three Months Ended
			September 30,	June 30,
			2022	2022	$ Change	% Change
Interest and dividend income
	Loans and fees		$ 18,336	$ 16,768	$ 1,568	9.4 %
	Available-for-sale debt securities:
		Taxable	241	234	7	3.0 %
		Tax-exempt	286	293	(7)	-2.4 %
	Held-to-maturity debt securities		2	3	(1)	-33.3 %
	Other interest and dividend income		226	158	68	43.0 %
		Total interest and dividends	19,091	17,456	1,635	9.4 %

Interest expense
		Deposits	1,392	1,169	223	19.1 %
		Borrowing	3	-	3	N/A
		Total interest expense	1,395	1,169	226	19.3 %

Net interest income			17,696	16,287	1,409	8.7 %
Provision for loan losses			200	-	200	0.0 %
Net interest income after provision for loan losses			17,496	16,287	1,209	7.4 %

Non-interest income
	Gain on sale of securities available for sale, net		-	2	(2)	-100.0 %
	Income from bank-owned life insurance		287	283	4	1.4 %
	Fees and service charges		469	497	(28)	-5.6 %
	Loan fees, including prepayment penalties		850	303	547	180.5 %
	Other		101	27	74	274.1 %
		Total non-interest income	1,707	1,112	595	53.5 %

Non-interest expense
	Salaries and employee benefits		5,442	4,908	534	10.9 %
	Occupancy and equipment		1,539	1,429	110	7.7 %
	Professional fees		786	582	204	35.1 %
	Data processing and communications		1,043	1,056	(13)	-1.2 %
	Federal deposit insurance		249	276	(27)	-9.8 %
	Advertising and promotion		140	120	20	16.7 %
	Office expense		52	62	(10)	-16.1 %
	Other real estate owned expense		-	2	(2)	-100.0 %
	Loss on sale of other real estate owned		-	101	(101)	-100.0 %
	Core deposit intangible		135	145	(10)	-6.9 %
	Other		739	747	(8)	-1.1 %
		Total non-interest expense	10,125	9,428	697	7.4 %

Income before income tax expense			9,078	7,971	1,107	13.9 %
Income tax expense			2,103	1,644	459	27.9 %
Net income			$ 6,975	$ 6,327	$ 648	10.2 %

Net income per common share - basic			$ 1.12	$ 1.00	$ 0.12	12.0 %
Net income per common share - diluted			$ 1.09	$ 0.98	$ 0.11	11.2 %

Weighted average shares outstanding - basic			6,269	6,305	(36)	-0.6 %
Weighted average shares outstanding - diluted			6,378	6,437	(59)	-0.9 %

The Bank of Princeton
Consolidated Statements of Income
(Unaudited)
(Amounts in thousands, except per share data)

			Nine Months Ended
			September 30,
			2022	2021	$ Change	% Change
Interest and dividend income
	Loans and fees		$ 51,596	$ 50,487	$ 1,109	2.2 %
	Available-for-sale debt securities:
		Taxable	698	353	345	97.7 %
		Tax-exempt	882	877	5	0.6 %
	Held-to-maturity debt securities		8	8	-	0.0 %
	Other interest and dividend income		441	139	302	217.3 %
		Total interest and dividends	53,625	51,864	1,761	3.4 %

Interest expense
		Deposits	3,785	5,261	(1,476)	-28.1 %
		Borrowings	3	2	1	50.0 %
		Total interest expense	3,788	5,263	(1,475)	-28.0 %

Net interest income			49,837	46,601	3,236	6.9 %
Provision for loan losses			200	3,325	(3,125)	-94.0 %
Net interest income after provision for loan losses			49,637	43,276	6,361	14.7 %

Non-Interest income
	Gain on sale of securities available-for-sale, net		2	7	(5)	-71.4 %
	Income from bank-owned life insurance		852	826	26	3.1 %
	Fees and service charges		1,441	1,291	150	11.6 %
	Loan fees, including prepayment penalties		1,248	1,000	248	24.8 %
	Other		322	75	247	329.3 %
		Total non-interest income	3,865	3,199	666	20.8 %

Non-interest expense
	Salaries and employee benefits		15,251	12,816	2,435	19.0 %
	Occupancy and equipment		4,446	4,534	(88)	-1.9 %
	Professional fees		1,929	1,920	9	0.5 %
	Data processing and communications		3,134	2,664	470	17.6 %
	Federal deposit insurance		788	586	202	34.5 %
	Advertising and promotion		379	172	207	120.3 %
	Office expense		168	153	15	9.8 %
	Other real estate owned expense		112	-	112	N/A
	Loss on sale of other real estate owned		-	90	(90)	N/A
	Core deposit intangible		434	489	(55)	-11.2 %
	Other		2,180	2,066	114	5.5 %
		Total non-interest expense	28,821	25,490	3,331	13.1 %

Income before income tax expense			24,681	20,985	3,696	17.6 %
Income tax expense			5,358	4,682	676	14.4 %
Net income			$ 19,323	$ 16,303	$ 3,020	18.5 %

Net income per common share - basic			$ 3.05	$ 2.43	$ 0.62	25.5 %
Net income per common share - diluted			$ 2.98	$ 2.38	$ 0.60	25.2 %

Weighted average shares outstanding - basic			6,345	6,710	(365)	-5.4 %
Weighted average shares outstanding - diluted			6,475	6,854	(379)	-5.5 %

The Bank of Princeton
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars in thousands)

	For the Three Months Ended September 30,
	2022		2021
	Average	Yield/	Average	Yield/
	Balance	Rate	Balance	Rate	$ Change	% Change
Earning assets
Loans	$ 1,386,589	5.25 %	$ 1,367,980	4.98 %	$ 18,609	0.27 %
Securities
Taxable available-for-sale	46,281	2.06 %	33,953	1.51 %	12,328	0.55 %
Tax-exempt available-for-sale	42,220	2.68 %	46,510	2.47 %	(4,290)	0.21 %
Held-to-maturity	204	5.24 %	211	5.27 %	(7)	-0.03 %
Securities	88,704	2.37 %	80,674	2.07 %	8,030	0.30 %

Other interest earning assets
Interest-bearing bank accounts	35,081	2.28 %	116,910	0.13 %	(81,829)	2.15 %
Equities	1,322	5.85 %	1,338	3.93 %	(16)	1.92 %
Other interest-earning assets	36,403	2.41 %	118,248	0.18 %	(81,845)	2.23 %
Total interest-earning assets	1,511,697	5.01 %	1,566,902	4.47 %	(55,205)	0.54 %
Total non-earning assets	115,158		95,130
Total assets	$ 1,626,856		$ 1,662,032


Interest-bearing liabilities
Checking	$ 240,948	0.29 %	$ 260,813	0.26 %	$ (19,865)	0.03 %
Savings	217,133	0.32 %	214,406	0.24 %	2,727	0.08 %
Money market	350,901	0.43 %	346,330	0.47 %	4,571	-0.04 %
Certificates of deposit	289,274	0.86 %	329,117	1.21 %	(39,843)	-0.35 %
Total interest-bearing deposits	1,098,256	0.51 %	1,150,666	0.53 %	(52,410)	-0.02 %
Non-interest bearing deposits	285,665		272,097
Total deposits	1,383,921	0.40 %	1,422,763	0.48 %	(38,842)	-0.08 %
Borrowings	391	2.65 %	-	0.32 %	391	2.33 %
Total interest-bearing liabilities
(excluding non interest deposits)	1,098,647	0.51 %	1,150,666	0.53 %	(52,019)	-0.02 %
Non-interest-bearing deposits	285,665		272,097
Total cost of funds	1,384,312	0.40 %	1,422,763	0.43 %	(38,451)	-0.03 %
Accrued expenses and other liabilities	28,136		24,480
Stockholders' equity	214,408		214,789
Total liabilities and stockholders' equity	$ 1,626,856		$ 1,662,032

Net interest spread		4.50 %		3.94 %
Net interest margin		4.64 %		4.08 %
Net interest margin (FTE)¹		4.71 %		4.14 %

¹Includes federal and state tax effect of tax-exempt securities and loans.

The Bank of Princeton
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars in thousands)

	For the Three Months Ended
	September 30, 2022		June 30, 2022
	Average	Yield/	Average	Yield/
	Balance	Rate	Balance	Rate	$ Change	% Change
Earning assets
Loans	$ 1,386,589	5.25 %	$ 1,391,937	4.85 %	$ (5,348)	0.40 %
Securities
Taxable available-for-sale	46,281	2.06 %	48,590	1.93 %	(2,309)	0.14 %
Tax-exempt available-for-sale	42,220	2.68 %	43,742	2.68 %	(1,522)	0.01 %
Held-to-maturity	204	5.24 %	205	5.29 %	(1)	-0.05 %
Securities	88,704	2.37 %	92,537	2.29 %	(3,833)	0.08 %

Other interest earning assets
Interest-bearing bank accounts	35,081	2.28 %	72,786	0.78 %	(37,705)	1.50 %
Equities	1,322	5.85 %	1,307	5.14 %	15	0.71 %
Other interest-earning assets	36,403	2.41 %	74,093	0.86 %	(37,690)	1.56 %
Total interest-earning assets	1,511,697	5.01 %	1,558,567	4.49 %	(46,870)	0.52 %
Total non-earning assets	115,158		107,194
Total assets	$ 1,626,856		$ 1,665,761


Interest-bearing liabilities
Checking	$ 240,948	0.29 %	$ 273,114	0.26 %	$ (32,166)	0.03 %
Savings	217,133	0.32 %	230,493	0.24 %	(13,360)	0.08 %
Money market	350,901	0.43 %	368,704	0.29 %	(17,803)	0.14 %
Certificates of deposit	289,274	0.86 %	277,621	0.86 %	11,653	0.00 %
Total interest-bearing deposits	1,098,256	0.51 %	1,149,932	0.41 %	(51,676)	0.10 %
Non-interest bearing deposits	285,665		278,963
Total deposits	1,383,921	0.40 %	1,428,895	0.33 %	(44,974)	0.07 %
Borrowings	391	2.65 %	-	0.32 %	391	2.33 %
Total interest-bearing liabilities
(excluding non interest deposits)	1,098,647	0.51 %	1,149,932	0.41 %	(51,285)	0.10 %
Non-interest-bearing deposits	285,665		278,963
Total cost of funds	1,384,312	0.40 %	1,428,895	0.33 %	(44,583)	0.07 %
Accrued expenses and other liabilities	28,136		23,534
Stockholders' equity	214,408		213,332
Total liabilities and stockholders' equity	$ 1,626,856		$ 1,665,761

Net interest spread		4.50 %		4.08 %
Net interest margin		4.64 %		4.19 %
Net interest margin (FTE)¹		4.71 %		4.24 %

¹Includes federal and state tax effect of tax-exempt securities and loans.

The Bank of Princeton
Consolidated Average Statement of Financial Condition
(Unaudited)
(Dollars in thousands)

	For the Nine Months Ended September 30,
	2022		2021
	Average	Yield/	Average	Yield/
	Balance	Rate	Balance	Rate	$ Change	% Change
Earning assets
Loans	$ 1,375,233	5.02 %	$ 1,393,122	4.85 %	$ (17,889)	0.17 %
Securities
Taxable available-for-sale	47,626	1.96 %	28,306	1.66 %	19,320	0.30 %
Tax-exempt available-for-sale	44,832	2.63 %	47,204	2.48 %	(2,372)	0.15 %
Held-to-maturity	205	5.29 %	213	5.27 %	(8)	0.02 %
Securities	92,664	2.29 %	75,723	2.18 %	16,941	0.11 %

Other interest earning assets
Interest-bearing bank accounts	76,559	0.68 %	71,289	0.19 %	5,270	0.49 %
Equities	1,327	4.96 %	1,376	4.29 %	(49)	0.67 %
Other interest-earning assets	77,887	0.44 %	72,665	0.26 %	5,222	0.18 %
Total interest-earning assets	1,545,783	4.64 %	1,541,510	4.50 %	4,273	0.14 %
Total non-earning assets	112,573		100,970
Total assets	$ 1,658,356		$ 1,642,480


Interest-bearing liabilities
Checking	$ 257,284	0.26 %	$ 259,932	0.28 %	$ (2,648)	-0.02 %
Savings	226,532	0.26 %	199,789	0.26 %	26,743	0.00 %
Money market	374,570	0.34 %	330,605	0.31 %	43,965	0.03 %
Certificates of deposit	285,855	0.91 %	344,526	1.39 %	(58,671)	-0.48 %
Total interest-bearing deposits	1,144,242	0.42 %	1,134,852	0.62 %	9,390	-0.20 %
Non-interest bearing deposits	280,761		268,194
Total deposits	1,425,004	0.36 %	1,403,046	0.50 %	21,958	-0.14 %

Borrowings	132	2.65 %	361	0.32 %	(229)	2.33 %
Total interest-bearing liabilities
(excluding non interest deposits)	1,144,374	0.45 %	1,135,213	0.62 %	9,161	-0.17 %
Non-interest-bearing deposits	280,761		268,194
Total cost of funds	1,425,135	0.36 %	1,403,407	0.50 %	21,728	-0.14 %
Accrued expenses and other liabilities	18,680		25,947
Stockholders' equity	214,541		213,126
Total liabilities and stockholders' equity	$ 1,658,356		$ 1,642,480

Net interest spread		4.19 %		3.88 %
Net interest margin		4.31 %		4.04 %
Net interest margin (FTE)¹		4.37 %		4.10 %

¹Includes federal and state tax effect of tax-exempt securities and loans.

The Bank of Princeton
Quarterly Financial Highlights
(Unaudited)

	2022	2022	2022	2021	2021
	September	June	March	December	September

Return on average assets	1.70 %	1.52 %	1.45 %	1.44 %	1.41 %
Return on average equity	12.91 %	11.90 %	11.25 %	11.34 %	10.95 %
Return on average tangible equity¹	13.59 %	12.54 %	11.86 %	11.97 %	11.56 %
Net interest margin	4.64 %	4.19 %	4.09 %	3.96 %	4.08 %
Net interest margin (FTE)²	4.71 %	4.24 %	4.14 %	4.02 %	4.14 %
Efficiency ratio - non-GAAP³	51.49 %	53.36 %	53.93 %	50.43 %	48.16 %

COMMON STOCK DATA
Market value at period end	$ 28.35	$ 27.46	$ 28.85	$ 29.33	$ 29.87
Market range:
High	$ 29.95	$ 30.55	$ 32.05	$ 30.89	$ 20.45
Low	$ 27.16	$ 26.57	$ 28.67	$ 28.71	$ 17.40
Book value per common share at period end	$ 34.00	$ 33.74	$ 33.49	$ 33.42	$ 32.66
Tangible book value per common share at period end⁴	$ 32.27	$ 32.00	$ 31.75	$ 31.96	$ 30.93
Shares of common stock outstanding (in thousands)	6,251	6,263	6,366	6,480	6,588

CAPITAL RATIOS
Total capital (to risk-weighted assets)	14.71 %	14.13 %	14.16 %	15.10 %	15.60 %
Tier 1 capital (to risk-weighted assets)	13.63 %	13.08 %	13.10 %	13.97 %	14.43 %
Tier 1 capital (to average assets)	13.10 %	12.46 %	12.36 %	12.06 %	12.29 %
Period-end equity to assets	13.26 %	13.00 %	12.71 %	12.84 %	12.89 %
Period-end tangible equity to tangible assets	12.67 %	12.42 %	12.13 %	12.26 %	12.23 %

CREDIT QUALITY DATA (Dollars in thousands)
Net charge-offs (recoveries)	$ 200	$ (12)	$ (34)	$ 101	$ 821
Annualized net charge-offs (recoveries) to average loans	0.058 %	-0.003 %	-0.010 %	0.030 %	0.240 %

Nonperforming loans (excluding TDRs)	$ 370	$ 402	$ 406	$ 409	$ 1,043
Other real estate owned	-	-	226	226	376
Troubled debt restructurings (TDRs)
-Performing	5,943	6,001	6,066	6,122	6,187
-Non-performing	359	563	766	766	1,092
Total nonperforming assets and accruing TDRs	$ 6,672	$ 6,966	$ 7,464	$ 7,523	$ 8,698

Allowance for loan losses as a percent of:
Period-end loans	1.21 %	1.19 %	1.19 %	1.24 %	1.22 %
Nonaccrual loans	2286.15 %	1727.05 %	1420.99 %	1398.99 %	769.13 %
Nonperforming assets	2286.15 %	1727.05 %	1191.27 %	1175.39 %	653.96 %

As a percent of total loans:
Nonaccrual loans	0.05 %	0.07 %	0.08 %	0.09 %	0.11 %
Accruing TDRs	0.43 %	0.43 %	0.43 %	0.46 %	0.46 %
Nonaccrual loans and accruing TDRs	0.48 %	0.50 %	0.52 %	0.55 %	0.62 %

¹Return on average tangible equity is a non-GAAP measure that represents the rate of return on tangible common equity.
²Includes the effect of tax exempt securities and loans.
³The efficiency ratio is a non-GAAP measure that represents the ratio of non-interest expense (excluding amortization of core deposit intangible)
divided by net interest income and non-interest income.
⁴Tangible book value per common share is a non-GAAP measure that represents book value per common share which
excludes goodwill and core deposit intangible.

Contact George Rapp

609.454.0718

grapp@thebankofprinceton.com

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SOURCE The Bank of Princeton

The Bank of Princeton Announces Third Quarter 2022 Results