FRBA First Bank

First Bank (Nasdaq Global Market: FRBA) today announced results for the fourth quarter and full year 2022. Net income for the fourth quarter of 2022 was $9.1 million, or $0.46 per diluted share, compared to $7.8 million, or $0.40 per diluted share, for the fourth quarter of 2021. Return on average assets, return on average equity and return on average tangible equityi for the fourth quarter of 2022 were 1.35%, 12.61% and 13.53%, respectively, compared to 1.27%, 11.77%, and 12.63%, respectively, for the fourth quarter of 2021. Excluding merger-related expenses, First Bank’s fourth quarter 2022 adjusted diluted earnings per shareii were $0.48, adjusted return on average assetsii was 1.40% and adjusted return on average tangible equityii was 14.07%. Excluding merger-related expenses, fourth quarter 2021 adjusted diluted earnings per share were $0.42, adjusted return on average assets was 1.33% and adjusted return on average tangible equity was 13.26%.

Full year 2022 net income was $36.3 million, an increase of $860,000, or 2.4%, compared to $35.4 million for 2021. Diluted earnings per share for 2022 were $1.84, an increase of $0.05, or 2.8%, compared to $1.79 per diluted share for 2021. Return on average assets and return on average equity for the full year 2022 were 1.40% and 13.07%, respectively. Excluding merger-related expenses, full year 2022 adjusted diluted earnings per share were $1.86, adjusted return on average assets was 1.42% and adjusted return on average equity was 13.20%. Excluding merger-related expenses, full year 2021 adjusted diluted earnings per share were $1.81, adjusted return on average assets was 1.48% and adjusted return on average equity was 14.16%.

Fourth Quarter and Full Year 2022 Performance Highlights:

• Announced agreement to acquire Malvern Bancorp, Inc. and Malvern Bank during the fourth quarter of 2022. The acquisition is expected to close in the second quarter of 2023 and will add approximately $785.3 million of deposits and $824.7 million of loans.
• Total net revenue (net interest income plus non-interest income) of $25.2 million for the fourth quarter of 2022 increased $2.3 million, or 10.3%, compared to the prior year quarter, while full year total net revenue was $97.5 million, an increase of $7.8 million, or 8.8%, compared to 2021.
• Total loans of $2.34 billion at December 31, 2022 reflected growth of $74.4 million, or 3.3%, from the end of the linked third quarter of 2022 and $212.4 million, or 10.0%, from December 31, 2021. Excluding Paycheck Protection Program (PPP) loan declines, loan growth was $74.8 million and $259.9 million for the quarter and year ended December 31, 2022, respectively. PPP loans outstanding at December 31, 2022 were $3.5 million.
• Total deposits of $2.29 billion at December 31, 2022 increased by $103.8 million, or 4.7%, from the end of the linked third quarter of 2022 and $179.4 million, or 8.5%, from December 31, 2021. Non-interest-bearing demand deposits decreased to 22.0% of total deposits at December 31, 2022, compared to 26.4% at December 31, 2021, while time deposits increased to 23.1% at December 31, 2022 from 18.5% of total deposits at December 31, 2021.

• Asset quality metrics remained strong during the fourth quarter of 2022, with annualized net recoveries to average loans of 0.04%, and nonperforming loans to total loans of 0.27% at December 31, 2022, compared to 0.61% at December 31, 2021.  
• Ongoing focus on cost containment resulted in the eighth consecutive quarter of an efficiency ratioiii below 50%, at 47.68% for the fourth quarter of 2022.

“We are proud of our solid performance in the fourth quarter and for the full year of 2022 which was highlighted by continued strong organic loan growth, revenue expansion and outstanding asset quality metrics. We are well positioned heading into 2023, despite the uncertain economic environment,” said Patrick L. Ryan, President and Chief Executive Officer. “In the fourth quarter, we continued to achieve strong organic loan growth, 13.3% annualized, while we continued to benefit from our strong underwriting standards with nonperforming assets to total assets of only 23 basis points at December 31, 2022. Strong commercial and industrial loan opportunities drove the need for accelerated deposit gathering during the quarter and while deposit pricing pressure has impacted our cost of deposits and net interest margin, we continue to operate at healthy profitability levels, achieving peer-leading returns on average assets.”

Mr. Ryan continued, “Our persistent focus on cost containment is essential in the current economic environment. We know how to operate lean, as evidenced by an efficiency ratio below 50% for the last eight consecutive quarters.”

“2023 will be an exciting year for us. Our strategic merger with Malvern Bancorp will provide critical mass and operating leverage in our highly attractive Southeastern Pennsylvania markets. New initiatives in small business and asset-based lending will help drive additional commercial and industrial loan growth. And, perhaps most importantly, new deposit sales teams will help drive additional commercial and municipal deposit growth. Our reputation as a committed and valuable financial partner continues to be strengthened by our earnings profile, our organic expansion, and our growth through acquisitions.”

“We are pleased to announce another $0.06 quarterly dividend, which reflects an annualized yield of 1.77% based on the January 17, 2023 closing price of our common stock, as part of our ongoing focus on creating shareholder value.”

Income Statement

First Bank’s net interest income for the fourth quarter of 2022 was $23.8 million, an increase of $3.1 million, or 15.1%, compared to $20.6 million in the fourth quarter of 2021, driven by a $9.0 million increase in total interest and dividend income, principally loan interest income, offset somewhat by a $5.9 million increase in total interest expense, primarily from the increase in cost of deposits. Net interest income decreased $812,000 from the linked third quarter of 2022 due to the increase in interest expense of $4.3 million partially offset by the increase in interest and dividend income of $3.5 million.

Full year 2022 net interest income totaled $92.4 million, an increase of $10.5 million, or 12.8%, compared to $81.9 million for 2021. The increase was primarily a result of higher interest income from loans due to substantial loan growth and higher loan yields, which was partially offset by increased interest expense related to the increased cost of deposits. Reflective of the rapidly increasing interest rate environment, the average cost of interest bearing deposits increased 36 basis points. The average cost of money market and time deposits increased 54 and 31 basis points, respectively. Interest and dividend income increased by $16.1 million, driven by solid growth in average loans, which increased by $167.2 million, or 8.2%, from the prior year, and a 30 basis point increase in the average yield on loans.

The fourth quarter 2022 tax equivalent net interest margin was 3.69%, an increase of 17 basis points compared to 3.52% for the prior year quarter and a decrease of 28 basis points compared to 3.97% in the linked third quarter of 2022. The decline in the margin compared to the linked third quarter of 2022 was primarily a result of a 90 basis point increase in the cost of interest bearing deposits. The full year 2022 tax equivalent net interest margin was 3.75%, an increase of 19 basis points compared to 3.56% for the full year 2021. The increase in the full year net interest margin was principally a result of the 39 basis point increase in earning asset yields partially offset by the increase in the cost of interest bearing deposits.

First Bank reported a provision for loan losses of $716,000 for the fourth quarter of 2022, compared to a provision for loan losses of $825,000 in the fourth quarter of 2021. The provision for the quarter ended December 31, 2022, was due to loan growth offset somewhat by net recoveries and continued stable asset quality metrics. For full year 2022, the Bank reported a provision for loan losses of $2.9 million, compared to a credit to the provision of $232,000 in 2021. Provision expense for the full year 2022 reflected the strong growth in loans, low level of net charge-offs and strong credit quality metrics.

Fourth quarter 2022 non-interest income of $1.4 million decreased from $2.2 million during the fourth quarter 2021. The decrease between the periods was primarily the result of a decline in gains on sale of Small Business Administration (SBA) loans and gains on recovery of acquired loans in the fourth quarter 2022. Non-interest income totaled $5.1 million for the full year ended December 31, 2022, compared to $7.8 million for 2021, primarily a result of a decrease in gains on the sale of loans, loan fees and gains on recovery of acquired loans.

Non-interest expense for fourth quarter 2022 of $12.5 million increased $640,000, or 5.4%, compared to $11.8 million for the prior year quarter. The higher non-interest expense compared to fourth quarter 2021 was primarily a result of higher marketing and advertising costs, other expense, occupancy and equipment expenses and travel and entertainment costs. The increases in marketing and advertising and travel and entertainment costs were primarily due to these expenses being unusually low in the fourth quarter of 2021. The increases in other expense and occupancy and equipment expenses were primarily due to a full quarter of expenses for the two new branches acquired by the Bank in December 2021.

On a linked quarter basis, fourth quarter 2022 non-interest expense increased $728,000 to $12.5 million compared to $11.7 million for the third quarter of 2022. The increase was primarily due to merger-related costs associated with the pending Malvern Bancorp acquisition and an increase in performance-based bonus accruals. Excluding the merger-related expenses in the fourth quarter of 2022, non-interest expense increased $276,000, or 2.4%, when compared to the linked prior quarter.

Non-interest expense for the full year 2022 totaled $46.7 million, an increase of $3.6 million, or 8.3%, compared to $43.2 million for 2021. The increase was primarily a result of increased salaries and employee benefits, and to a lesser extent increases in other expense, other professional fees, travel and entertainment and data processing. These increases were primarily due to two new branches acquired by the Bank in December 2021 and other increases associated with the continued growth of the Bank.

Income tax expense for the three months ended December 2022 was $2.9 million with an effective tax rate of 24.3%, compared to $2.4 million with an effective tax rate of 23.2% for the fourth quarter of 2021 and $3.3 million with an effective tax rate of 24.7% for the third quarter of 2022. Income tax expense for the full year ended December 31, 2022, was $11.6 million with an effective tax rate of 24.2%, compared to $11.3 million for the full year 2021 with an effective tax rate of 24.2%.

Balance Sheet

Total assets at December 31, 2022 were $2.73 billion, an increase of $209.2 million, or 8.3%, compared to $2.52 billion at December 31, 2021. Total loans increased $212.4 million, or 10.0%, to $2.34 billion at December 31, 2022 compared to $2.13 billion at December 31, 2021. Total loans as of December 31, 2022 increased $74.4 million, or 3.3%, from $2.26 billion at September 30, 2022. The increase in loans during the fourth quarter of 2022 was due to commercial and industrial and commercial real estate loan growth.

Total deposits were $2.29 billion at December 31, 2022, an increase of $103.8 million, or 4.7%, compared to $2.19 billion at September 30, 2022, and an increase of $179.4 million, or 8.5%, from December 31, 2021. Non-interest-bearing deposits totaled $503.9 million at December 31, 2022, a decrease of $80.2 million, or 13.7%, from September 30, 2022, primarily due to a shift in the mix of deposits to interest-bearing accounts, which increased $183.9 million, or 11.5% in the fourth quarter. The shift in deposits was due, in part, to certain higher non-interest bearing balances shifting to interest bearing accounts as a result of a notably higher interest rate environment.

Stockholders’ equity was $289.6 million at December 31, 2022, compared to $266.7 million on December 31, 2021. The growth of $22.9 million, or 8.6%, in stockholders’ equity was primarily a result of full year 2022 net income of $36.3 million, partially offset by a $7.1 million increase in accumulated other comprehensive loss, $3.5 million in treasury stock purchases and cash dividends paid of $4.7 million for the full year ending December 31, 2022. The increase in accumulated other comprehensive loss was due to an increase in unrealized losses on the Bank’s available for sale investment securities, primarily resulting from the current interest rate environment.

As of December 31, 2022, the Bank continued to exceed all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of 10.41%, a Tier 1 Risk-Based capital ratio of 10.40%, a Common Equity Tier 1 Capital ratio of 10.40%, and a Total Risk-Based capital ratio of 12.49%.

Asset Quality

First Bank’s asset quality metrics have remained solid during the year ended December 31, 2022. Net recoveries were $213,000 for the fourth quarter of 2022, compared to net charge-offs of $6,000 for the fourth quarter of 2021 and net charge-offs of $705,000 for the third quarter of 2022. Net recoveries as an annualized percentage of average loans were 0.04% in fourth quarter 2022, compared to annualized net charge-offs of 0.00% in fourth quarter 2021. Nonperforming loans were $6.3 million at December 31, 2022, down from $13.0 million on December 31, 2021, and up slightly from $5.1 million on September 30, 2022. Nonperforming loans as a percentage of total loans at December 31, 2022 were 0.27%, compared with 0.61% at December 31, 2021 and 0.23% at September 30, 2022. The allowance for loan losses to nonperforming loans was 407.58% at December 31, 2022, compared with 182.65% at December 31, 2021, and 480.61% at September 30, 2022.

Cash Dividend Declared

On January 17, 2023, First Bank’s Board of Directors declared a quarterly cash dividend of $0.06 per share to common stockholders of record at the close of business on February 10, 2023, payable on February 24, 2023.

Conference Call

First Bank will host its earnings call on Thursday, January 26, 2023 at 9:00 AM eastern time. The direct dial toll free number for the live call is 1-844-200-6205 and the access code is 106228. For those unable to participate in the call, a replay will be available on First Bank’s website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay of the conference call.

About First Bank

First Bank is a New Jersey state-chartered bank with 18 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington (2), Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $2.7 billion in assets as of December 31, 2022, 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, including the proposed acquisition of Malvern Bancorp, Inc. and Malvern Bank, First Bank’s 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 inflation and declines in housing market values; the impact of disease pandemics, including COVID-19, on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank's investment securities portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank's operations including changes in regulations affecting financial institutions, and expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank's ability to comply with applicable capital and liquidity requirements, including First Bank’s ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations. First Bank’s ability to obtain regulatory approvals and meet other closing conditions to its proposed acquisition of Malvern Bancorp and Malvern Bank; delays in closing the merger; difficulties and delays in integrating the acquired business or fully realizing cost savings and other benefits of the proposed merger; and business disruptions following the merger. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Forward-Looking Statements” and “Risk Factors” in First Bank’s Annual Report on Form 10-K and any updates to those risk factors set forth in First Bank’s proxy statement, subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank’s behalf may issue.

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

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

iii 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). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.

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

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data, unaudited)
				December 31, 2022				December 31, 2021
Assets
Cash and due from banks				$	17,577			$	25,076
Interest bearing deposits with banks					108,339				129,431
	Cash and cash equivalents				125,916				154,507
Interest bearing time deposits with banks					1,293				2,170
Investment securities available for sale, at fair value					98,956				94,584
Investment securities held to maturity (fair value of $42,465 at
	December 31, 2022 and $39,718 at December 31, 2021)				47,193				39,547
Restricted investment in bank stocks					6,214				5,856
Other investments					8,372				8,062
Loans, net of deferred fees and costs					2,337,814				2,125,437
	Less: Allowance for loan losses				25,474				23,746
	Net loans				2,312,340				2,101,691
Premises and equipment, net					10,550				9,883
Other real estate owned, net					-				772
Accrued interest receivable					8,164				5,681
Bank-owned life insurance					58,107				56,633
Goodwill					17,826				17,826
Other intangible assets, net					1,579				2,145
Deferred income taxes					13,155				11,081
Other assets					23,275				13,306
	Total assets			$	2,732,940			$	2,523,744
Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits				$	503,856			$	558,775
Interest bearing deposits					1,790,096				1,555,827
	Total deposits				2,293,952				2,114,602
Borrowings					90,932				95,281
Subordinated debentures					29,731				29,620
Accrued interest payable					1,218				399
Other liabilities					27,545				17,176
	Total liabilities				2,443,378				2,257,078
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; 21,082,819
	shares issued and 19,451,755 shares outstanding at December 31, 2022 and
	20,851,506 shares issued and 19,472,364 shares outstanding at December 31, 2021				104,512				103,704
Additional paid-in capital					80,695				79,563
Retained earnings					127,532				95,924
Accumulated other comprehensive loss					(7,334	)			(206	)
Treasury stock, 1,631,064 shares at December 31, 2022 and 1,379,142 shares
	at December 31, 2021				(15,843	)			(12,319	)
	Total stockholders' equity				289,562				266,666
	Total liabilities and stockholders' equity			$	2,732,940			$	2,523,744

FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share data, unaudited)
				Three Months Ended						Year Ended
				December 31,						December 31,
					2022			2021			2022			2021
Interest and Dividend Income
Investment securities—taxable				$	945		$	553		$	2,998		$	2,149
Investment securities—tax-exempt					40			36			149			169
Interest bearing deposits with banks,
Federal funds sold and other					1,205			136			2,093			660
Loans, including fees					29,324			21,791			102,021			88,136
	Total interest and dividend income				31,514			22,516			107,261			91,114
Interest Expense
Deposits					6,875			1,105			11,883			5,684
Borrowings					448			330			1,244			1,779
Subordinated debentures					440			440			1,761			1,761
	Total interest expense				7,763			1,875			14,888			9,224
Net interest income					23,751			20,641			92,373			81,890
Provision for loan losses					716			825			2,872			(232	)
	Net interest income after provision for loan losses				23,035			19,816			89,501			82,122
Non-Interest Income
Service fees on deposit accounts					210			246			941			760
Loan fees					369			384			683			1,338
Income from bank-owned life insurance					362			386			1,474			1,436
Gains on sale of loans					4			392			296			1,892
Gains on recovery of acquired loans					216			554			672			1,235
Other non-interest income					285			249			1,054			1,093
	Total non-interest income				1,446			2,211			5,120			7,754
Non-Interest Expense
Salaries and employee benefits					7,261			7,229			27,383			25,404
Occupancy and equipment					1,407			1,265			5,689			5,762
Legal fees					193			130			695			769
Other professional fees					651			623			2,649			2,133
Regulatory fees					173			170			851			855
Directors' fees					173			221			743			876
Data processing					617			584			2,476			2,264
Marketing and advertising					177			1			682			526
Travel and entertainment					189			65			479			148
Insurance					189			172			727			655
Other real estate owned expense, net					26			68			295			165
Merger-related expenses					452			498			452			643
Other expense					957			799			3,612			2,952
	Total non-interest expense				12,465			11,825			46,733			43,152
Income Before Income Taxes					12,016			10,202			47,888			46,724
Income tax expense					2,916			2,363			11,601			11,295
Net Income				$	9,100		$	7,839		$	36,287		$	35,429
Basic earnings per common share				$	0.47		$	0.40		$	1.86		$	1.81
Diluted earnings per common share				$	0.46		$	0.40		$	1.84		$	1.79
Cash dividends per common share				$	0.06		$	0.06		$	0.24		$	0.15
Basic weighted average common shares outstanding					19,446,770			19,469,404			19,503,837			19,611,381
Diluted weighted average common shares outstanding					19,649,282			19,725,294			19,716,661			19,815,747

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
	Three Months Ended December 31,
		2022											2021
	Average								Average			Average								Average
	Balance				Interest				Rate (5)			Balance				Interest				Rate (5)
Interest earning assets
Investment securities (1) (2)	$	152,386			$	993			2.59	%		$	133,768			$	596			1.77	%
Loans (3)		2,277,238				29,324			5.11	%			2,035,059				21,791			4.25	%
Interest bearing deposits with banks,
Federal funds sold and other		112,829				1,067			3.75	%			145,742				46			0.13	%
Restricted investment in bank stocks		5,545				85			6.08	%			5,912				73			4.90	%
Other investments		8,381				53			2.51	%			7,323				17			0.92	%
Total interest earning assets (2)		2,556,379				31,522			4.89	%			2,327,804				22,523			3.84	%
Allowance for loan losses		(24,981	)										(23,529	)
Non-interest earning assets		149,409											143,124
Total assets	$	2,680,807										$	2,447,399
Interest bearing liabilities
Interest bearing demand deposits	$	328,191			$	800			0.97	%		$	265,789			$	59			0.09	%
Money market deposits		721,866				3,375			1.85	%			656,772				404			0.24	%
Savings deposits		183,746				417			0.90	%			181,253				165			0.36	%
Time deposits		489,478				2,283			1.85	%			399,768				477			0.47	%
Total interest bearing deposits		1,723,281				6,875			1.58	%			1,503,582				1,105			0.29	%
Borrowings		70,941				448			2.51	%			83,066				330			1.58	%
Subordinated debentures		29,713				440			5.92	%			29,603				440			5.95	%
Total interest bearing liabilities		1,823,935				7,763			1.69	%			1,616,251				1,875			0.46	%
Non-interest bearing deposits		538,304											550,718
Other liabilities		32,285											16,214
Stockholders' equity		286,283											264,216
Total liabilities and stockholders' equity	$	2,680,807										$	2,447,399
Net interest income/interest rate spread (2)						23,759			3.20	%							20,648			3.38	%
Net interest margin (2) (4)									3.69	%										3.52	%
Tax equivalent adjustment (2)						(8	)										(7	)
Net interest income					$	23,751										$	20,641
(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Annualized.

FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(dollars in thousands, unaudited)
	Year Ended December 31,
		2022											2021
	Average								Average			Average								Average
	Balance				Interest				Rate			Balance				Interest				Rate
Interest earning assets
Investment securities (1) (2)	$	143,460			$	3,178			2.22	%		$	118,673			$	2,353			1.98	%
Loans (3)		2,204,028				102,021			4.63	%			2,036,855				88,136			4.33	%
Interest bearing deposits with banks,
Federal funds sold and other		104,057				1,694			1.63	%			134,109				248			0.18	%
Restricted investment in bank stocks		5,457				285			5.22	%			7,312				348			4.76	%
Other investments		8,193				114			1.39	%			6,727				64			0.95	%
Total interest earning assets (2)		2,465,195				107,292			4.35	%			2,303,676				91,149			3.96	%
Allowance for loan losses		(24,702	)										(23,753	)
Non-interest earning assets		146,851											140,594
Total assets	$	2,587,344										$	2,420,517
Interest bearing liabilities
Interest bearing demand deposits	$	323,824			$	1,395			0.43	%		$	225,945			$	224			0.10	%
Money market deposits		719,743				5,923			0.82	%			627,211				1,772			0.28	%
Savings deposits		184,510				989			0.54	%			179,705				739			0.41	%
Time deposits		378,292				3,576			0.95	%			458,980				2,949			0.64	%
Total interest bearing deposits		1,606,369				11,883			0.74	%			1,491,841				5,684			0.38	%
Borrowings		69,916				1,244			1.78	%			115,343				1,779			1.54	%
Subordinated debentures		29,672				1,761			5.93	%			29,561				1,761			5.96	%
Total interest bearing liabilities		1,705,957				14,888			0.87	%			1,636,745				9,224			0.56	%
Non-interest bearing deposits		579,691											514,137
Other liabilities		24,057											15,903
Stockholders' equity		277,639											253,732
Total liabilities and stockholders' equity	$	2,587,344										$	2,420,517
Net interest income/interest rate spread (2)						92,404			3.48	%							81,925			3.40	%
Net interest margin (2) (4)									3.75	%										3.56	%
Tax equivalent adjustment (2)						(31	)										(35	)
Net interest income					$	92,373										$	81,890
(1) Average balance of investment securities available for sale is based on amortized cost.
(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except for share and employee data, unaudited)
		As of or For the Quarter Ended
		12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
EARNINGS
Net interest income		$	23,751			$	24,563			$	22,910			$	21,149			$	20,641
Provision for loan losses			716				216				1,298				642				825
Non-interest income			1,446				944				1,463				1,267				2,211
Non-interest expense			12,465				11,737				11,409				11,122				11,825
Income tax expense			2,916				3,348				2,843				2,494				2,363
Net income			9,100				10,206				8,823				8,158				7,839
PERFORMANCE RATIOS
Return on average assets (1)			1.35	%			1.57	%			1.38	%			1.31	%			1.27	%
Adjusted return on average assets (1) (2)			1.40	%			1.57	%			1.38	%			1.31	%			1.33	%
Return on average equity (1)			12.61	%			14.46	%			12.92	%			12.25	%			11.77	%
Adjusted return on average equity (1) (2)			13.11	%			14.46	%			12.92	%			12.25	%			12.36	%
Return on average tangible equity (1) (2)			13.53	%			15.55	%			13.93	%			13.22	%			12.63	%
Adjusted return on average tangible equity (1) (2)			14.07	%			15.55	%			13.93	%			13.22	%			13.26	%
Net interest margin (1) (3)			3.69	%			3.97	%			3.76	%			3.57	%			3.52	%
Total cost of deposits (1)			1.21	%			0.50	%			0.23	%			0.19	%			0.21	%
Efficiency ratio (2)			47.68	%			46.01	%			46.81	%			49.62	%			49.57	%
SHARE DATA
Common shares outstanding			19,451,755				19,447,206				19,483,415				19,634,744				19,472,364
Basic earnings per share		$	0.47			$	0.52			$	0.45			$	0.42			$	0.40
Diluted earnings per share			0.46				0.52				0.45				0.41				0.40
Adjusted diluted earnings per share (2)			0.48				0.52				0.45				0.41				0.42
Tangible book value per share (2)			13.89				13.43				13.08				12.79				12.67
Book value per share			14.89				14.44				14.10				13.81				13.69
MARKET DATA
Market value per share		$	13.76			$	13.67			$	13.98			$	14.22			$	14.51
Market value / Tangible book value			99.07	%			101.80	%			106.84	%			111.14	%			114.53	%
Market capitalization		$	267,656			$	265,843			$	272,378			$	279,206			$	282,544
CAPITAL & LIQUIDITY
Tangible stockholders' equity / tangible assets (2)			9.96	%			9.97	%			9.95	%			9.79	%			9.85	%
Stockholders' equity / assets			10.60	%			10.64	%			10.64	%			10.48	%			10.57	%
Loans / deposits			101.91	%			103.34	%			103.15	%			99.41	%			100.51	%
ASSET QUALITY
Net (recoveries) charge-offs		$	(213	)		$	705			$	404			$	247			$	6
Nonperforming loans			6,250				5,107				11,888				12,591				13,001
Nonperforming assets			6,250				5,400				12,181				12,884				13,773
Net (recoveries) charge offs / average loans (1)			(0.04	%)			0.13	%			0.07	%			0.05	%			0.00	%
Nonperforming loans / total loans			0.27	%			0.23	%			0.53	%			0.58	%			0.61	%
Nonperforming assets / total assets			0.23	%			0.20	%			0.47	%			0.50	%			0.55	%
Allowance for loan losses / total loans			1.09	%			1.08	%			1.12	%			1.12	%			1.12	%
Allowance for loan losses / total loans (excluding PPP loans)			1.09	%			1.09	%			1.13	%			1.13	%			1.15	%
Allowance for loan losses / nonperforming loans			407.58	%			480.61	%			210.58	%			191.72	%			182.65	%
OTHER DATA
Total assets		$	2,732,940			$	2,638,060			$	2,581,192			$	2,587,038			$	2,523,744
Total loans			2,337,814				2,263,377				2,233,278				2,164,944				2,125,437
Total deposits			2,293,952				2,190,192				2,165,163				2,177,895				2,114,602
Total stockholders' equity			289,562				280,749				274,702				271,068				266,666
Number of full-time equivalent employees (4)			238				228				233				219				217
(1) Annualized.
(2) Non-U.S. GAAP financial measure that we believe provides management and investors with information that is useful in understanding our financial performance and condition. See accompanying table, "Non-U.S. GAAP Financial Measures," for calculation and reconciliation.
(3) Tax equivalent using a federal income tax rate of 21%.
(4) Includes 8 full-time equivalent seasonal interns as of June 30, 2022.

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
			As of the Quarter Ended
			12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
LOAN COMPOSITION
Commercial and industrial			$	354,203			$	323,984			$	321,205			$	321,979			$	350,103
Commercial real estate:
	Owner-occupied			533,426				517,448				523,108				499,379				475,576
	Investor			951,115				942,151				925,643				896,435				855,913
	Construction and development			142,876				126,206				117,011				96,585				109,292
	Multi-family			215,990				214,819				201,269				193,865				173,728
	Total commercial real estate			1,843,407				1,800,624				1,767,031				1,686,264				1,614,509
Residential real estate:
	Residential mortgage and first lien home equity loans			93,847				96,194				98,841				99,992				106,204
	Home equity–second lien loans and revolving lines of credit			33,551				31,670				30,491				30,485				31,375
	Total residential real estate			127,398				127,864				129,332				130,477				137,579
Consumer and other				16,318				14,654				19,694				30,096				27,762
	Total loans prior to deferred loan fees and costs			2,341,326				2,267,126				2,237,262				2,168,816				2,129,953
Net deferred loan fees and costs				(3,512	)			(3,749	)			(3,984	)			(3,872	)			(4,516	)
	Total loans		$	2,337,814			$	2,263,377			$	2,233,278			$	2,164,944			$	2,125,437
LOAN MIX
Commercial and industrial				15.2	%			14.3	%			14.4	%			14.8	%			16.5	%
Commercial real estate:
	Owner-occupied			22.8	%			22.9	%			23.4	%			23.1	%			22.4	%
	Investor			40.7	%			41.6	%			41.5	%			41.4	%			40.2	%
	Construction and development			6.1	%			5.6	%			5.2	%			4.5	%			5.1	%
	Multi-family			9.2	%			9.5	%			9.0	%			8.9	%			8.2	%
	Total commercial real estate			78.8	%			79.6	%			79.1	%			77.9	%			75.9	%
Residential real estate:
	Residential mortgage and first lien home equity loans			4.0	%			4.3	%			4.4	%			4.6	%			5.0	%
	Home equity–second lien loans and revolving lines of credit			1.4	%			1.4	%			1.4	%			1.4	%			1.5	%
	Total residential real estate			5.4	%			5.7	%			5.8	%			6.0	%			6.5	%
Consumer and other				0.7	%			0.6	%			0.9	%			1.4	%			1.3	%
Net deferred loan fees and costs				(0.1	%)			(0.2	%)			(0.2	%)			(0.1	%)			(0.2	%)
	Total loans			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(dollars in thousands, unaudited)
			As of the Quarter Ended
			12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
DEPOSIT COMPOSITION
Non-interest bearing demand deposits			$	503,856			$	584,025			$	600,402			$	597,333			$	558,775
Interest bearing demand deposits				322,944				343,042				318,687				314,564				293,647
Money market and savings deposits				935,311				860,577				929,075				936,848				871,074
Time deposits				531,841				402,549				316,999				329,150				391,106
	Total Deposits		$	2,293,952			$	2,190,193			$	2,165,163			$	2,177,895			$	2,114,602
DEPOSIT MIX
Non-interest bearing demand deposits				22.0	%			26.7	%			27.7	%			27.4	%			26.4	%
Interest bearing demand deposits				14.1	%			15.7	%			14.7	%			14.5	%			13.9	%
Money market and savings deposits				40.8	%			39.3	%			42.9	%			43.0	%			41.2	%
Time deposits				23.1	%			18.3	%			14.7	%			15.1	%			18.5	%
	Total Deposits			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(in thousands, except for share data, unaudited)
	As of or For the Quarter Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Return on Average Tangible Equity
Net income (numerator)	$	9,100			$	10,206			$	8,823			$	8,158			$	7,839
Average stockholders' equity	$	286,283			$	280,093			$	273,829			$	270,147			$	264,216
Less: Average Goodwill and other intangible assets, net		19,533				19,669				19,823				19,916				17,910
Average Tangible stockholders' equity (denominator)	$	266,750			$	260,424			$	254,006			$	250,231			$	246,306
Return on Average Tangible equity (1)		13.53	%			15.55	%			13.93	%			13.22	%			12.63	%
Tangible Book Value Per Share
Stockholders' equity	$	289,562			$	280,749			$	274,702			$	271,068			$	266,666
Less: Goodwill and other intangible assets, net		19,405				19,599				19,768				19,854				19,971
Tangible stockholders' equity (numerator)	$	270,157			$	261,150			$	254,934			$	251,214			$	246,695
Common shares outstanding (denominator)		19,451,755				19,447,206				19,483,415				19,634,744				19,472,364
Tangible book value per share	$	13.89			$	13.43			$	13.08			$	12.79			$	12.67
Tangible Equity / Assets
Stockholders' equity	$	289,562			$	280,749			$	274,702			$	271,068			$	266,666
Less: Goodwill and other intangible assets, net		19,405				19,599				19,768				19,854				19,971
Tangible stockholders' equity (numerator)	$	270,157			$	261,150			$	254,934			$	251,214			$	246,695
Total assets	$	2,732,940			$	2,638,060			$	2,581,192			$	2,587,038			$	2,523,744
Less: Goodwill and other intangible assets, net		19,405				19,599				19,768				19,854				19,971
Tangible total assets (denominator)	$	2,713,535			$	2,618,461			$	2,561,424			$	2,567,184			$	2,503,773
Tangible stockholders' equity / tangible assets		9.96	%			9.97	%			9.95	%			9.79	%			9.85	%
Efficiency Ratio
Non-interest expense	$	12,465			$	11,737			$	11,409			$	11,122			$	11,825
Less: Merger-related expenses		452				-				-				-				498
Adjusted non-interest expense (numerator)	$	12,013			$	11,737			$	11,409			$	11,122			$	11,327
Net interest income	$	23,751			$	24,563			$	22,910			$	21,149			$	20,641
Non-interest income		1,446				944				1,463				1,267				2,211
Total revenue	$	25,197			$	25,507			$	24,373			$	22,416			$	22,852
Less: Gains on sale of investment securities, net		-				-				-				-				-
Less: Gains on recovery of acquired loans
Adjusted total revenue (denominator)	$	25,197			$	25,507			$	24,373			$	22,416			$	22,852
Efficiency ratio		47.68	%			46.01	%			46.81	%			49.62	%			49.57	%
(1) Annualized.

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
	For the Quarter Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income	$	9,100			$	10,206			$	8,823			$	8,158			$	7,839
Add: Merger-related expenses (1)		357				-				-				-				393
Adjusted net income	$	9,457			$	10,206			$	8,823			$	8,158			$	8,232
Diluted weighted average common shares outstanding		19,649,282				19,668,133				19,794,657				19,768,452				19,725,294
Average assets	$	2,680,807			$	2,575,742			$	2,568,443			$	2,522,775			$	2,447,399
Average equity	$	286,283			$	280,093			$	273,829			$	270,147			$	264,216
Average Tangible Equity	$	266,750			$	260,424			$	254,006			$	250,231			$	246,306
Adjusted diluted earnings per share	$	0.48			$	0.52			$	0.45			$	0.41			$	0.42
Adjusted return on average assets (2)		1.40	%			1.57	%			1.38	%			1.31	%			1.33	%
Adjusted return on average equity (2)		13.11	%			14.46	%			12.92	%			12.25	%			12.36	%
Adjusted return on average tangible equity (2)		14.07	%			15.55	%			13.93	%			13.22	%			13.26	%
(1) Items are tax-effected using a federal income tax rate of 21%.
(2) Annualized.

FIRST BANK AND SUBSIDIARIES
NON-U.S. GAAP FINANCIAL MEASURES
(dollars in thousands, except for share data, unaudited)
	Year Ended December 31,
		2022				2021
Adjusted diluted earnings per share,
Adjusted return on average assets, and
Adjusted return on average equity
Net income	$	36,287			$	35,429
Add: Merger-related expenses (1)		357				508
Adjusted net income	$	36,644			$	35,937
Diluted weighted average common shares outstanding		19,716,661				19,815,747
Average assets	$	2,587,344			$	2,420,517
Average equity	$	277,639			$	253,732
Average Tangible Equity	$	257,905			$	235,764
Adjusted diluted earnings per share	$	1.86			$	1.81
Adjusted return on average assets		1.42	%			1.48	%
Adjusted return on average equity		13.20	%			14.16	%
Adjusted return on average tangible equity		14.21	%			15.24	%
(1) Tax-effected using a federal income tax rate of 21%