First Bank Reports First Quarter 2020 Net Income of $3.2 Million

First Bank Describes Response to COVID-19 Pandemic

For the First Quarter 2020: Efficiency Ratio¹ of 58.65%, Pre-Provision Net Revenue² of $7.0 Million, Loan Growth of $34.8 million

HAMILTON, N.J., April 27, 2020 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) today announced results for the first quarter of 2020. Net income for first quarter 2020 was $3.2 million, or $0.16 per diluted share, compared to $4.3 million, or $0.23 per diluted share, for the first quarter of 2019. Return on average assets and return on average equity for the first quarter of 2020 were 0.63% and 5.69%, respectively, compared to first quarter 2019 return on average assets and return on average equity of 0.99% and 8.79%, respectively. First quarter 2020 adjusted diluted earnings per share³ were $0.15, adjusted return on average assets³ was 0.61% and adjusted return on average equity³ was 5.44% compared to first quarter 2019 adjusted diluted earnings per share of $0.22, adjusted return on average assets of 0.99% and adjusted return on average equity of 8.76%.

First Quarter 2020 Performance Highlights:

• Total net revenue (net interest income plus non-interest income) increased 16.2%, or $2.4 million, to $17.1 million, compared to $14.7 million for the first quarter 2019;
• Total loans of $1.76 billion at March 31, 2020, increased $34.8 million, or 2.0%, compared to $1.72 billion on December 31, 2019, and increased $261.3 million or 17.5% from March 31, 2019;
• Total deposits of $1.73 billion at March 31,2020 increased $84.7 million, or 5.2%, from $1.64 billion at December 31, 2019, and non-interest bearing deposits of $291.9 million increased $16.2 million, or 5.9%, from $275.8 million at December 31, 2019;
• First quarter 2019 non-interest expense of $9.9 million increased $915,000, or 10.2%, compared to $9.0 million for the first quarter of 2019; 
• Efficiency ratio of 58.65% in the first quarter 2020 compared to 60.95% in first quarter 2019, and 53.21% in the linked fourth quarter of 2019.
• Nonperforming loans at March 31, 2020 were $13.8 million a decrease of $8.9 million from December 31, 2019.  

“Despite the unprecedented challenges posed by the COVID-19 crisis and the related economic conditions, First Bank produced a solid first quarter 2020 with year-over-year net revenue (net interest income plus non interest income) growth of 16.2%, loan growth for the quarter in excess of $34 million, a solid deposit gathering effort that attracted $84.7 million and continued effective management of non-interest expense,” said Patrick L. Ryan, President and Chief Executive Officer. “Our net income of $3.2 million was down $1.0 million, or 24.3%, primarily due to loan loss provisions that were $2.6 million higher in the first quarter of 2020 compared to the first quarter of 2019, reflecting the economic uncertainty associated with the COVID-19 pandemic.”

“As expected, our local market economy and customers have been negatively impacted by governmental actions necessary to contain the health crisis. We are closely monitoring the situation and taking the appropriate steps to minimize the current and future impact of this unprecedented situation. Our capital position remains very strong, we are closely tracking our loan portfolio and responding to deferral requests, and as evidenced by our balance sheet we took steps to increase liquidity in the first quarter.”   

“We also moved aggressively to enact operating protocols that protect both our employees and customers, which include: limiting branch access to drive-thru and appointment only access; having back office staff work from home; providing additional paid time off; suspending unnecessary business travel; meeting via conference and video; and sanitizing our locations on a daily basis.”

“We are fully focused on supporting the First Bank customers who are dealing with the financial and operating challenges that are a result of the COVID-19 crisis, including loan deferrals and participation in the Small Business Administration’s Paycheck Protection Program.”

“We are closely monitoring the ongoing developments and uncertainties associated with this unprecedented health crisis. Currently, it’s not possible to fully determine how COVID-19 will impact demand for the Bank’s products and services, future revenue, earnings, asset quality, capital reserves, dividend practices or liquidity. However, we are confident in our long-term underlying strength and stability, strategic direction and our ability to navigate these challenging conditions. Unfortunately, it appears we’ll be dealing with these challenges for an extended period of time.”

Income Statement

Net interest income for first quarter 2020 was $15.9 million, an increase of $1.8 million, or 13.1%, compared to $14.0 million in the first quarter of 2019. This increase was driven by a $2.4 million, or 11.9%, increase in interest and dividend income to $22.2 million. This increase in interest and dividend income was primarily a result of a $265.8 million increase in average loan balances, with growth across all loan portfolios except consumer and other loans. The increase in interest income was partially offset by increased interest expense of $535,000 for the first quarter of 2020 compared to the first quarter of 2019. Increased interest expense was primarily a result of higher average balances for money market deposits, time deposits and savings deposits. Loan and deposit balances for the quarter reflect both acquired and organic growth activity.

The first quarter 2020 tax equivalent net interest margin was 3.30%, a decrease of 15 basis points compared to 3.45% for the prior-year quarter and a decrease of 4 basis points from the linked fourth quarter of 2019. The decrease in the first quarter net interest margin compared to first and fourth quarter of 2019 was primarily the result of a lower average rate on interest earning assets of 27 and 14 basis points, respectively. The decrease in the average rate was primarily due to lower average rates on loans. Average loan rates were impacted by the 75 basis point decrease in the targeted federal funds rate during the second half of 2019 and the 150 basis point reduction in March of 2020. The reduction in average rates on interest earning assets was offset somewhat by lower average rates on interest bearing liabilities. The average interest rate paid on interest bearing liabilities for first quarter 2020 was 1.68% a decrease of 11 basis points compared to first quarter 2019, and a decrease of 12 basis points compared to the linked fourth quarter of 2019. Approximately $385 million of the Bank’s time deposits will reprice over the next six months, which is expected to further reduce interest expense and provide margin stabilization.  

The provision for loan losses for first quarter 2020 totaled $2.9 million which included the impact of $699,000 in net charge-offs and $34.8 million in loan growth. This compares to a provision for loan losses for the 2019 first quarter of $365,000 and $340,000 in the linked fourth quarter 2019. The $2.6 million increase in the provision for loan losses compared to the first and fourth quarters of 2019 is primarily attributable to uncertainty in relation to potential credit losses due to the COVID-19 pandemic.

Nonperforming loans at March 31, 2020 of $13.8 million were down $8.9 million from December 31, 2019. Fourth quarter 2019 nonperforming loans included an $8.2 million commercial and industrial relationship that was added to nonperforming loans in the third quarter of 2019. The primary collateral for this relationship was sold and the loan was paid in full during the first quarter of 2020.           

First quarter 2020 non-interest income increased $541,000 to $1.2 million from $673,000 in the first quarter of 2019. The increase was primarily a result of loan swap referral fees, an increase in service fees on deposit accounts, an increase in gain on sale of loans and increased income from bank-owned life insurance.

Non-interest expense for first quarter 2019 totaled $9.9 million, an increase of $915,000, or 10.2%, compared to $9.0 million for the prior-year quarter, and an increase of $606,000 compared to the fourth quarter of 2019. The higher non-interest expense compared to first quarter 2019 was primarily a result of increased salaries and employee benefits as well as other expense categories, primarily as a result of the Grand Bank acquisition in third quarter 2019, partially offset by lower other marketing fees and merger-related expenses. The increase from the fourth quarter of 2019 was primarily the result of higher regulatory fees due to expiration of FDIC assessment credits received in 2019, higher insurance costs and higher other real estate expenses.

The Bank’s efficiency ratio for the first quarter of 2019 was 58.65%, an improvement of 230 basis points compared to 60.95% in the first quarter of 2019, and an increase of 544 basis points compared to 53.21% for the linked fourth quarter of 2019.

Pre-provision net revenue for first quarter 2020 was $7.0 million, an increase of $1.3 million compared to $5.7 million for the first quarter 2019.

Income tax expense for the first quarter of 2020 was $1.0 million, or an effective tax rate of 23.7%, compared to $1.1 million, or an effective tax rate of 20.1%, in the first quarter of 2019 and $2.8 million or an effective tax rate of 34.7% in the linked fourth quarter 2019. The Bank expects an effective tax rate in a range of 24% to 25% for the remainder of 2020.

Balance Sheet

Total assets at March 31, 2020, were $2.1 billion, an increase of $315.1 million, or 17.7%, compared to $1.8 billion at March 31, 2019, due primarily to loan growth, both organic and acquired. Total assets at March 31, 2020 increased $80.9 million in comparison to December 31, 2019 reflecting loan growth of $34.8 million and an increase in cash and cash equivalents in response to the uncertainties created by the COVID-19 crisis.   

Total loans were $1.76 billion at March 31, 2020, an increase of $261.3 million, or 17.5%, compared to $1.50 billion on March 31, 2019, and included both organic and acquired growth. Total loan growth of $34.8 million during first quarter 2020, primarily reflected increases in commercial lending portfolios, and was consistent with announced plans to moderate the pace of loan growth in 2020.

Total deposits were $1.73 billion at March 31, 2020, an increase of $84.7 million, or 5.2%, compared to $1.64 billion at December 31, 2019. Non-interest-bearing deposits totaled $291.9 million at March 31, 2020, an increase of $16.2 million, or 5.9%, from December 31, 2019. Total deposits increased $274.8 million from March 31, 2019 and included both organic and acquired growth.

Stockholders’ equity was $226.3 million at March 31, 2020, up $26.9 million, or 13.5%, compared to $199.3 million at March 31, 2019. The increase was primarily the result of the Bank’s issuance of additional common shares for the acquisition of Grand Bank, which added $18.4 million to stockholders’ equity. Total stockholders’ equity on December 31, 2019 was $226.4 million. Stockholder’s equity declined slightly as of March 31, 2020 compared to December 31, 2019 due to treasury stock purchases of $3.9 million and $613,000 in cash dividends offset somewhat by net income of $3.2 million, stock option exercises and an increase in accumulated other comprehensive income.    

Asset Quality

Nonperforming loans as a percentage of total loans at March 31, 2020, were 0.79% compared with 1.32% at December 31, 2019. Net charge-offs for first quarter 2020 were $699,000, compared to net recoveries of $16,000 for first quarter 2019, and net charge-offs of $325,000 for the linked fourth quarter of 2019. Net charge-offs as an annualized percentage of average loans were 0.16% in first quarter 2020, compared to 0.00% for first quarter 2019 and 0.07% for the linked fourth quarter 2019. The allowance for loan losses was $19.5 million at March 31, 2020, an increase of $2.2 million from $17.2 million at December 31, 2019. The allowance for loan losses to nonperforming loans was 141.00% at March 31, 2020, compared to 75.82% at December 31, 2019. The increase to First Bank’s loan loss reserves primarily reflects the loan growth during the quarter ended March 31, 2020 and the current economic uncertainty associated with the COVID-19 pandemic.

As of March 31, 2020, the Bank exceeded all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 10.18%, a Tier 1 Risk-Based capital ratio of 10.57%, a Common Equity Tier 1 Capital ratio of 10.57%, and a Total Risk-Based capital ratio of 12.70%.

Additional COVID-19 Discussion

First Bank is participating in the Paycheck Protection Program (PPP), established by the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act), a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the U.S. Small Business Administration (SBA). The PPP provides, borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover compensation-related business operating costs.  Through April 20, 2020, First Bank has submitted and received approval from the SBA for 577 loans totaling approximately $135 million and is in the process of submitting additional applications utilizing the latest round of funding from the SBA. We believe the Bank has sufficient liquidity to handle current and anticipated funding requests from its borrowers.

First Bank has conducted an analysis of its COVID-19 related credit exposures based on asset class and borrower type.  No specific COVID-19 related credit impairment was identified within the Bank’s lending activities as of March 31, 2020.

First Bank has been proactively working with customers to assist both consumer and business borrowers experiencing financial hardship due to COVID-19 related challenges.  Through April 20, 2020, the Bank granted payment deferral requests, primarily for 90 days, representing approximately $271 million of existing loan balances. Additional loan deferrals are being processed but activity has slowed somewhat. Consistent with industry regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals will continue to be reported as current loans throughout the agreed upon deferral period, will continue to accrue interest and will not be required to be accounted for as a troubled debt restructuring. 

Cash Dividend Declared

On April 21, 2020, the Board of Directors declared a quarterly cash dividend of $0.03 per share to common stockholders of record at the close of business on May 8, 2020, payable on May 22, 2020.

Share Repurchase Program

On October 23, 2019, First Bank announced that the board of directors authorized, and the Bank had received regulatory approval for, the repurchase of up to 1.0 million shares of First Bank common stock in the open market. The Bank repurchased 442,136 shares of common stock during the first quarter of 2020 for an aggregate purchase price of approximately $3.9 million.

Conference Call

First Bank will host a conference call to discuss first quarter 2020 results on Tuesday, April 28, 2020, at 9:00 a.m. Eastern Time.  The direct dial toll free number for the call is 844-825-9784.  For those unable to participate in the call, a replay will be available by dialing 877-344-7529 (access code 10142000) from one hour after the end of the conference call until July 28, 2020.  Replay information will also be available on our website at www.firstbanknj.com under the “About Us” tab.  Click on “Investor Relations” to access the replay information for the conference call.

This earnings release, including supporting financial tables and presentation slides, is available within the press releases section of First Bank’s investor relations website at www.firstbanknj.com

About First Bank

First Bank is a New Jersey state-chartered bank with 18 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Hamilton Square, Lawrence, Mercerville, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.1 billion in assets as of March 31, 2020, 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; continue to sustain its internal growth rate; 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 markets; the impact of disease pandemics, such as the novel strain of coronavirus disease (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, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential 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; 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 joint 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.

___________________________________

¹ The efficiency ratio is a non-U.S. GAAP financial measure and is calculated by dividing non-interest expense less merger-related expenses by adjusted total revenue (net interest income plus non-interest income adjusted for gains on recovery of acquired 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.

² Pre-provision net revenue is a non-U.S. GAAP financial measure and is calculated by adding net interest income and non-interest income and subtracting non-interest expense adjusted by certain non-recurring items.  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.

³ Adjusted diluted earnings per share, adjusted return on average assets and adjusted return on average equity are non-U.S. GAAP financial measures and are calculated by dividing net income adjusted for certain merger related expenses and income and other one-time expenses by diluted weighted average shares, average assets and average 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. 

CONTACT:  Patrick L. Ryan, President and CEO
[phone], [e-mail]

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data)
				March 31, 2020
				(unaudited)				December 31, 2019
Assets
Cash and due from banks				$	20,065			$	16,751
Federal funds sold					15,000				40,000
Interest bearing deposits with banks					92,521				25,041
		Cash and cash equivalents			127,586				81,792
Interest bearing time deposits with banks					7,533				6,087
Investment securities available for sale					52,400				47,462
Investment securities held to maturity (fair value of $44,450
	at March 31, 2020 and $47,100 at December 31, 2019)				43,655				46,612
Restricted investment in bank stocks					6,510				6,652
Other investments					6,431				6,388
Loans, net of deferred fees and costs					1,758,364				1,723,574
	Less: Allowance for loan losses				19,478				17,245
		Net loans			1,738,886				1,706,329
Premises and equipment, net					11,505				11,881
Other real estate owned, net					1,161				1,363
Accrued interest receivable					4,936				4,810
Bank-owned life insurance					49,925				49,580
Goodwill					16,253				16,253
Other intangible assets, net					1,992				2,083
Deferred income taxes					10,209				10,400
Other assets					13,462				13,895
		Total assets		$	2,092,444			$	2,011,587
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits				$	291,949			$	275,778
Interest bearing deposits					1,433,598				1,365,089
		Total deposits			1,725,547				1,640,867
Borrowings					102,336				105,476
Subordinated debentures					21,991				21,964
Accrued interest payable					1,436				1,076
Other liabilities					14,875				15,811
		Total liabilities			1,866,185				1,785,194
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; 20,583,340
	shares issued and 20,141,204 shares outstanding at March 31, 2020
	and 20,458,665 shares issued and outstanding at December 31, 2019				102,387				101,887
Additional paid-in capital					78,225				78,112
Retained earnings					48,987				46,367
Accumulated other comprehensive income					538				27
Treasury stock, 442,136 shares at March 31, 2020					(3,878	)			-
		Total stockholders' equity			226,259				226,393
		Total liabilities and stockholders' equity		$	2,092,444			$	2,011,587

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)
				Three Months Ended
				March 31,
				2020			2019
Interest and Dividend Income
Investment securities—taxable				$	550		$	551
Investment securities—tax-exempt					78			98
Interest bearing deposits with banks,
Federal funds sold and other					423			526
Loans, including fees					21,163			18,668
	Total interest and dividend income				22,214			19,843
Interest Expense
Deposits					5,386			4,946
Borrowings					559			464
Subordinated debentures					398			398
	Total interest expense				6,343			5,808
Net interest income					15,871			14,035
Provision for loan losses					2,932			365
	Net interest income after provision for loan losses				12,939			13,670
Non-Interest Income
Service fees on deposit accounts					171			92
Loan fees					285			30
Income from bank-owned life insurance					344			267
Gains on sale of loans					79			-
Gains on recovery of acquired loans					181			135
Other non-interest income					154			149
	Total non-interest income				1,214			673
Non-Interest Expense
Salaries and employee benefits					5,384			5,080
Occupancy and equipment					1,416			1,361
Legal fees					220			112
Other professional fees					456			427
Regulatory fees					233			117
Directors' fees					215			200
Data processing					564			431
Marketing and advertising					144			225
Travel and entertainment					101			111
Insurance					196			87
Other real estate owned expense, net					117			69
Merger-related expenses					-			118
Other expense					869			662
	Total non-interest expense				9,915			9,000
Income Before Income Taxes					4,238			5,343
Income tax expense					1,005			1,073
Net Income				$	3,233		$	4,270
Basic earnings per common share				$	0.16		$	0.23
Diluted earnings per common share				$	0.16		$	0.23
Cash dividends per common share				$	0.03		$	0.03
Basic weighted average common shares outstanding					20,317,585			18,636,873
Diluted weighted average common shares outstanding					20,565,867			18,955,624

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
	Three Months Ended March 31,
	2020											2019
	Average								Average			Average								Average
	Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)	$	91,858			$	644			2.82	%		$	99,215			$	670			2.74	%
Loans (3)		1,742,812				21,163			4.88	%			1,477,017				18,668			5.13	%
Interest bearing deposits with banks,
Federal funds sold and other		91,288				270			1.19	%			64,164				376			2.38	%
Restricted investment in bank stocks		6,515				110			6.79	%			5,751				107			7.55	%
Other investments		6,420				43			2.69	%			6,233				43			2.80	%
Total interest earning assets (2)		1,938,893				22,230			4.61	%			1,652,380				19,864			4.88	%
Allowance for loan losses		(17,522	)										(15,502	)
Non-interest earning assets		127,858											110,536
Total assets	$	2,049,229										$	1,747,414
Interest bearing liabilities
Interest bearing demand deposits	$	160,962			$	162			0.40	%			154,589			$	262			0.69	%
Money market deposits		443,565				1,490			1.35	%			328,262				1,289			1.59	%
Savings deposits		126,625				322			1.02	%			84,116				135			0.65	%
Time deposits		659,767				3,412			2.08	%			632,765				3,260			2.09	%
Total interest bearing deposits		1,390,919				5,386			1.56	%			1,199,732				4,946			1.67	%
Borrowings		102,428				559			2.19	%			92,184				464			2.04	%
Subordinated debentures		21,974				398			7.24	%			21,866				398			7.28	%
Total interest bearing liabilities		1,515,321				6,343			1.68	%			1,313,782				5,808			1.79	%
Non-interest bearing deposits		288,580											219,204
Other liabilities		16,857											17,367
Stockholders' equity		228,471											197,061
Total liabilities and stockholders' equity	$	2,049,229										$	1,747,414
Net interest income/interest rate spread (2)						15,887			2.93	%							14,056			3.09	%
Net interest margin (2) (4)									3.30	%										3.45	%
Tax equivalent adjustment (2)						(16	)										(21	)
Net interest income					$	15,871										$	14,035
(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are tax equivalent 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
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except for share and employee data, unaudited)
		As of or For the Quarter Ended
		3/31/2020				12/31/2019				9/30/2019 (1)				6/30/2019				3/31/2019
EARNINGS
Net interest income		$	15,871			$	16,191			$	13,976			$	14,164			$	14,035
Provision for loan losses			2,932				340				1,558				1,721				365
Non-interest income			1,214				1,493				905				924				673
Non-interest expense			9,915				9,309				11,928				9,127				9,000
Income tax expense			1,005				2,789				306				1,400				1,073
Net income			3,233				5,246				1,089				2,840				4,270
PERFORMANCE RATIOS
Return on average assets (2)			0.63	%			1.02	%			0.23	%			0.64	%			0.99	%
Adjusted return on average assets (2) (3)			0.61	%			1.13	%			0.76	%			0.63	%			0.99	%
Return on average equity (2)			5.69	%			9.24	%			2.11	%			5.64	%			8.79	%
Adjusted return on average equity (2) (3)			5.44	%			10.26	%			6.94	%			5.52	%			8.76	%
Return on average tangible equity (2) (3)			6.19	%			10.06	%			2.31	%			6.11	%			9.64	%
Adjusted return on average tangible equity (2) (3)			5.91	%			11.18	%			7.58	%			7.67	%			7.75	%
Net interest margin (2) (4)			3.30	%			3.34	%			3.15	%			3.37	%			3.45	%
Efficiency ratio (3)			58.65	%			53.21	%			58.22	%			60.51	%			60.95	%
Pre-provision net revenue (3)		$	6,989			$	8,185			$	6,107			$	5,884			$	5,691
SHARE DATA
Common shares outstanding			20,141,204				20,458,665				20,460,078				18,757,965				18,735,291
Basic earnings per share		$	0.16			$	0.26			$	0.06			$	0.15			$	0.23
Diluted earnings per share			0.16				0.25				0.06				0.15				0.23
Adjusted diluted earnings per share (3)			0.15				0.28				0.19				0.15				0.22
Tangible book value per share (3)			10.33				10.17				9.92				9.85				9.71
Book value per share			11.23				11.07				10.83				10.78				10.64
MARKET DATA
Market value per share		$	6.94			$	11.05			$	10.83			$	11.74			$	11.53
Market value / Tangible book value			67.20	%			108.66	%			109.59	%			119.14	%			118.78	%
Market capitalization		$	139,780			$	226,068			$	221,583			$	220,219			$	216,018
CAPITAL & LIQUIDITY
Tangible stockholders' equity / tangible assets (3)			10.03	%			10.44	%			10.02	%			10.19	%			10.33	%
Stockholders' equity / assets			10.81	%			11.25	%			10.83	%			11.05	%			11.22	%
Loans / deposits			101.90	%			105.04	%			105.52	%			107.28	%			103.19	%
ASSET QUALITY
Net charge-offs (recoveries)		$	699			$	325			$	1,084			$	481			$	(16	)
Nonperforming loans			13,814				22,746				15,841				14,554				7,501
Nonperforming assets			14,975				24,108				17,705				15,330				8,952
Net charge offs (recoveries) / average loans (2)			0.16	%			0.07	%			0.28	%			0.13	%			0.00	%
Nonperforming loans / total loans			0.79	%			1.32	%			0.91	%			0.94	%			0.50	%
Nonperforming assets / total assets			0.72	%			1.20	%			0.87	%			0.84	%			0.50	%
Allowance for loan losses / total loans			1.11	%			1.00	%			0.99	%			1.08	%			1.04	%
Allowance for loan losses / nonperforming loans			141.00	%			75.82	%			108.77	%			115.13	%			206.85	%
OTHER DATA
Total assets		$	2,092,444			$	2,011,587			$	2,044,938			$	1,830,695			$	1,777,301
Total loans			1,758,364				1,723,574				1,743,897				1,548,540				1,497,086
Total deposits			1,725,547				1,640,867				1,652,608				1,443,497				1,450,774
Total stockholders' equity			226,259				226,393				221,510				202,242				199,337
Number of full-time equivalent employees (5)			208				216				216				195				181
(1) Includes effects of Grand Bank merger effective September 30, 2019.
(2) Annualized.
(3) 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.
(4) Tax equivalent using a federal income tax rate of 21%.
(5) Includes 15 full-time equivalent seasonal interns as of 6/30/2019.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
			As of the Quarter Ended
			3/31/2020				12/31/2019				9/30/2019 (1)				6/30/2019				3/31/2019
LOAN COMPOSITION
Commercial and industrial			$	247,654			$	239,090			$	236,932			$	219,930			$	204,159
Commercial real estate:
	Owner-occupied			387,217				395,995				405,485				370,498				361,671
	Investor			678,568				673,300				685,006				619,174				583,849
	Construction and development			124,496				105,709				113,281				93,916				99,368
	Multi-family			131,566				119,005				103,858				88,801				87,598
	Total commercial real estate			1,321,847				1,294,009				1,307,630				1,172,389				1,132,486
Residential real estate:
	Residential mortgage and first lien home equity loans			118,020				123,917				127,337				92,760				94,143
	Home equity–second lien loans and revolving lines of credit			33,764				32,555				35,264				26,695				27,486
	Total residential real estate			151,784				156,472				162,601				119,455				121,629
Consumer and other				38,902				35,810				38,584				38,529				40,517
Net deferred loan fees and costs				(1,823	)			(1,807	)			(1,850	)			(1,763	)			(1,705	)
	Total loans		$	1,758,364			$	1,723,574			$	1,743,897			$	1,548,540			$	1,497,086
LOAN MIX
Commercial and industrial				14.1	%			13.9	%			13.6	%			14.2	%			13.6	%
Commercial real estate:
	Owner-occupied			22.0	%			23.0	%			23.3	%			23.9	%			24.2	%
	Investor			38.6	%			39.1	%			39.3	%			40.0	%			39.0	%
	Construction and development			7.1	%			6.1	%			6.5	%			6.1	%			6.6	%
	Multi-family			7.5	%			6.9	%			6.0	%			5.7	%			5.9	%
	Total commercial real estate			75.2	%			75.1	%			75.0	%			75.7	%			75.7	%
Residential real estate:
	Residential mortgage and first lien home equity loans			6.7	%			7.2	%			7.3	%			6.0	%			6.3	%
	Home equity–second lien loans and revolving lines of credit			1.9	%			1.9	%			2.0	%			1.7	%			1.8	%
	Total residential real estate			8.6	%			9.1	%			9.3	%			7.7	%			8.1	%
Consumer and other				2.2	%			2.0	%			2.2	%			2.5	%			2.7	%
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	%
(1) Includes effects of Grand Bank merger effective September 30, 2019.

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(in thousands, except for share data, unaudited)
	As of or For the Quarter Ended
	3/31/2020				12/31/2019				9/30/2019 (1)				6/30/2019				3/31/2019
Return on Average Tangible Equity
Net income (numerator)	$	3,233			$	5,246			$	1,089			$	2,840			$	4,270
Average stockholders' equity	$	228,471			$	225,200			$	204,759			$	201,796			$	197,061
Less: Average Goodwill and other intangible assets, net		18,309				18,377				17,412				17,450				17,450
Average Tangible stockholders' equity (denominator)	$	210,162			$	206,823			$	187,347			$	184,346			$	179,611
Return on Average Tangible equity		6.17	%			10.06	%			2.31	%			6.11	%			9.64	%
Tangible Book Value Per Share
Stockholders' equity	$	226,259			$	226,393			$	221,510			$	202,242			$	199,337
Less: Goodwill and other intangible assets, net		18,245				18,336				18,485				17,406				17,467
Tangible stockholders' equity (numerator)	$	208,014			$	208,057			$	203,025			$	184,836			$	181,870
Common shares outstanding (denominator)		20,141,204				20,458,665				20,460,078				18,757,965				18,735,291
Tangible book value per share	$	10.33			$	10.17			$	9.92			$	9.85			$	9.71
Tangible Equity / Assets
Stockholders' equity	$	226,259			$	226,393			$	221,510			$	202,242			$	199,337
Less: Goodwill and other intangible assets, net		18,245				18,336				18,485				17,406				17,467
Tangible equity (numerator)	$	208,014			$	208,057			$	203,025			$	184,836			$	181,870
Total assets	$	2,092,444			$	2,011,587			$	2,044,938			$	1,830,695			$	1,777,301
Less: Goodwill and other intangible assets, net		18,245				18,336				18,485				17,406				17,467
Adjusted total assets (denominator)	$	2,074,199			$	1,993,251			$	2,026,453			$	1,813,289			$	1,759,834
Tangible equity / assets		10.03	%			10.44	%			10.02	%			10.19	%			10.33	%
Efficiency Ratio
Non-interest expense	$	9,915			$	9,309			$	11,928			$	9,127			$	9,000
Less: Merger-related expenses		-				-				3,418				110				118
Adjusted non-interest expense (numerator)	$	9,915			$	9,309			$	8,510			$	9,017			$	8,882
Net interest income	$	15,871			$	16,191			$	13,976			$	14,164			$	14,035
Non-interest income		1,214				1,493				905				924				673
Total revenue		17,085				17,684				14,881				15,088				14,708
Less: Gains on recovery of acquired loans		181				190				264				187				135
Adjusted total revenue (denominator)	$	16,904			$	17,494			$	14,617			$	14,901			$	14,573
Efficiency ratio		58.65	%			53.21	%			58.22	%			60.51	%			60.95	%
Pre-Provision Net Revenue
Net interest income	$	15,871			$	16,191			$	13,976			$	14,164			$	14,035
Non-interest income		1,214				1,493				905				924				673
Less: Gains on recovery of acquired loans		181				190				264				187				135
Less: Non-interest expense		9,915				9,309				11,928				9,127				9,000
Add: Merger-related expenses		-				-				3,418				110				118
Pre-provision net revenue	$	6,989			$	8,185			$	6,107			$	5,884			$	5,691
(1) Includes effects of Grand Bank merger effective September 30, 2019.

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
	For the Quarter Ended
	3/31/2020				12/31/2019				9/30/2019 (1)				6/30/2019				3/31/2019
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income	$	3,233			$	5,246			$	1,089			$	2,840			$	4,270
Add: Merger-related expenses (2)		-				-				2,700				87				93
Add: Deferred Tax Asset revaluation		-				730				-				-				-
Less: Gains on recovery of acquired loans (2)		143				150				209				148				107
Adjusted net income	$	3,090			$	5,826			$	3,581			$	2,779			$	4,257
Diluted weighted average common shares outstanding		20,565,867				20,666,729				18,976,574				18,954,171				18,955,624
Average assets	$	2,049,229			$	2,037,127			$	1,859,818			$	1,782,832			$	1,747,414
Average equity	$	228,471			$	225,200			$	204,759			$	201,796			$	197,061
Average Tangible Equity	$	210,162			$	206,823			$	187,347			$	187,347			$	184,346
Adjusted diluted earnings per share	$	0.15			$	0.28			$	0.19			$	0.15			$	0.22
Adjusted return on average assets (3)		0.61	%			1.13	%			0.76	%			0.63	%			0.99	%
Adjusted return on average equity (3)		5.44	%			10.26	%			6.94	%			5.52	%			8.76	%
Adjusted return on average tangible equity (3)		5.91	%			11.18	%			7.58	%			7.67	%			7.75	%
(1) Includes effects of Grand Bank merger effective September 30, 2019.
(2) Items are tax-effected using a federal income tax rate of 21%.
(3) Annualized.

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