First Bank Announces Second Quarter 2025 Net Income of $10.2 Million

Results highlighted by robust loan growth, strong net interest margin, and continued operating efficiency

HAMILTON, N.J. , July 22, 2025 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) ("the Bank") today announced results for the second quarter of 2025. Net income for the second quarter of 2025 was $10.2 million, or $0.41 per diluted share, compared to $11.1 million, or $0.44 per diluted share, for the second quarter of 2024. Return on average assets, return on average equity and return on average tangible equityⁱ for the second quarter of 2025 were 1.04%, 9.77% and 11.16%, respectively, compared to 1.23%, 11.52% and 13.40%, respectively, for the second quarter of 2024.

Second Quarter 2025 Performance Highlights:

• Total loans of $3.33 billion at June 30, 2025 grew $91.2 million, or 11.3%, annualized, from the linked quarter ended March 31, 2025.

• Total deposits were $3.17 billion at June 30, 2025, increasing $48.4 million, or 6.2% annualized, from the linked quarter ended March 31, 2025.

• Net interest margin measured 3.65% for the second quarter of 2025, remaining stable compared to the first quarter of 2025.

• Tangible book value per shareⁱⁱ grew to $14.87 at June 30, 2025, increasing 11.1%, annualized, from $14.47 at March 31, 2025.

• Strong asset quality continued, with nonperforming assets decreasing to 0.40% of total assets at June 30, 2025, compared to 0.42% at March 31, 2025 and 0.56% at June 30, 2024.

“We are pleased to report growth in high-quality loans and deposits that continues to enhance our core earnings profile,” said Patrick L. Ryan, President and CEO of First Bank. “Our team’s robust performance in expanding commercial and industrial (“C&I”) loans and non-interest bearing deposits during the first half of 2025 demonstrates effective execution of our strategy to grow deep middle market commercial relationships. We have achieved substantial organic growth in our primary areas of focus while maintaining a stable net interest margin, solid asset quality, and an efficiency ratio that remained below 60% for the 24th consecutive quarter. These successes positioned First Bank to deliver an 11.1% annualized increase in tangible book value per share during the second quarter.”

Mr. Ryan added, “We anticipate our pace of loan growth will likely moderate in the second half of 2025 as we continue to prioritize relationship-building and profitability over volume amid continued competition in the deposit market. With a focus on continuing to maximize our risk-adjusted returns on shareholders’ equity, we expect to realize additional benefits from the prudent management of our capital, such as the reduced debt costs afforded by our recent subordinated debt issuance, and by delivering enhanced returns to our shareholders through share buybacks. Furthermore, we remain committed to proactive investments designed to scale our business and achieve top quartile profitability relative to our peers.”

Income Statement

In the second quarter of 2025, the Bank’s net interest income increased to $34.0 million, growing $3.5 million, or 11.4%, compared to the same period in 2024. The increase was primarily driven by an increase of $3.6 million in interest income, reflecting higher average loan balances, which outpaced the $140,000 increase in interest expense. Net interest income increased $1.9 million, or 6.0%, over the linked quarter of 2025. This increase was primarily driven by a $3.4 million increase in interest income, primarily due to higher average loan balances and yields, partially offset by an increase of $1.5 million in interest expense, primarily resulting from higher average borrowings during the second quarter of 2025.

The Bank’s tax equivalent net interest margin measured 3.65% for the second quarter of 2025, increasing by three basis points from 3.62% for the prior year quarter, and remaining stable as compared to the linked quarter ended March 31, 2025. The modest improvement from the prior year quarter was driven by an improved interest rate spread, reflecting declines in average rates on deposits and borrowings which outpaced the reduction in average rates on earning assets. The Bank’s net interest margin remained stable as compared to the linked quarter primarily due to a slight increase in average rates on loans and a slight decrease in average rate on deposits, offset by the increased cost on subordinated debt. The Bank’s tax equivalent net interest margin includes the impact of amortization and accretion of premiums and discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions. The net impact of amortization of premiums and accretion of discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions was a $2.7 million increase in net interest income during the second quarter of 2025, compared to $2.8 million for the quarter ended March 31, 2025.

The Bank recorded a credit loss expense totaling $2.6 million during the second quarter of 2025, compared to credit loss expense totaling $1.5 million for the first quarter of 2025 and $63,000 for the second quarter of 2024. The increased credit loss expense for the second quarter of 2025 is primarily due to the Bank's loan growth during the quarter, and to a lesser extent, slight increases in net charge-offs and specific reserves. The Bank’s credit loss expense for the second quarter of 2024 reflected the Bank’s strong and stable asset quality and modest loan growth during the quarter.

In the second quarter of 2025, the Bank recorded non-interest income totaling $2.7 million, compared to $689,000 during the same period in 2024 and $2.0 million during the first quarter of 2025. Non-interest income increased from both periods primarily due to higher loan fee income and a $397,000 gain on the sale of a corporate facility acquired through Malvern acquisition. Additionally, during the second quarter of 2024, the Bank recorded approximately $900,000 in net realized losses on the sale of certain loans as part of its balance sheet repositioning initiatives taken following its acquisition of Malvern Bank in 2023.

Non-interest expense for the second quarter of 2025 was $20.9 million, an increase of $2.9 million, or 16.2%, compared to $18.0 million for the prior year quarter. Higher non-interest expense was largely due to an increase of $1.1 million in salaries and employee benefits related to a larger employee base and $863,000 in one-time executive severance payments, a $429,000 increase in other expense primarily due to a settlement loss of $220,000 relating to a letter of credit commitment acquired through the Malvern Bank acquisition and other miscellaneous increases related to the Bank’s significant growth over the last twelve months, and $268,000 in higher occupancy and equipment costs due to ongoing branch network optimization initiatives and new branch locations added over the past year.

On a linked quarter basis, non-interest expense increased $483,000 from $20.4 million for the first quarter of 2025. The linked quarter growth primarily reflects increases of $841,000 in salaries and employee benefits costs primarily related to the aforementioned executive severance payments and settlement loss during the second quarter. This was partially offset by a decrease in other real estate owned (“OREO”) expense due to an $815,000 impairment of an OREO asset recorded during the linked quarter and the subsequent $34,000 gain on the sale of that property during second quarter 2025.

Income tax expense for the three months ended June 30, 2025 was $3.0 million with an effective tax rate of 22.9%, compared to $2.1 million with an effective tax rate of 16.2% for the second quarter of 2024. The effective tax rate for the second quarter of 2024 was lower due to the recognition of a $1.1 million tax benefit associated with the enactment of the New Jersey Corporate Transit Fee during that period and the related revaluation of the Bank’s deferred tax assets. Income tax expense for the six months ended June 30, 2025 was $5.8 million with an effective tax rate of 22.8%. We anticipate our future effective tax rate will be relatively stable and should not be significantly impacted by any recent legislative tax changes.

On July 4, 2025, subsequent to the end of the Company’s second fiscal quarter, the one big beautiful bill (“OBBB”) was enacted into law. The legislation includes a number of significant tax-related provisions, including changes affecting corporate tax incentives, international tax provisions, and various business credits and deductions. Pursuant to ASC 740, Income Taxes, the Company will recognize the effects of the OBBB in the third fiscal quarter of 2025, the period in which the legislation was enacted. The Company is currently evaluating the potential impact of the OBBB on its financial statements and, based on its preliminary assessment, does not expect the legislation to have a material impact.

Balance Sheet

The Bank reported total assets of $4.02 billion as of June 30, 2025, an increase of $403.6 million, or 11.2%, from $3.62 billion at June 30, 2024. Total loans increased $329.3 million, or 11.0%, to $3.33 billion at June 30, 2025 compared to $3.00 billion at June 30, 2024. The increase reflects strong organic loan growth, particularly in the C&I and owner-occupied commercial real estate portfolios.

Total assets increased $239.0 million, or 6.3%, from December 31, 2024 to June 30, 2025. Total loans as of June 30, 2025 increased $183.0 million, or 5.8%, from $3.14 billion at December 31, 2024, reflecting strong organic loan growth, particularly in the C&I and owner-occupied commercial real estate portfolios. The Bank’s cash and cash equivalents increased by $73.0 million, or 26.8%, compared to December 31, 2024, as management continued to maintain adequate on-balance sheet liquidity.

The Bank reported total deposits of $3.17 billion as of June 30, 2025, an increase of $200.6 million, or 6.8%, from $2.97 billion at June 30, 2024. Deposit growth was primarily due to our team’s success in attracting new deposit relationships while also maintaining existing balances amid heightened industry-wide pricing competition. Total deposits as of June 30, 2025 increased by $112.3 million, or 3.7%, from $3.06 billion at December 31, 2024, due to a combination of in-market commercial and consumer balances, offset somewhat by a decline in government related deposit balances. Compared to December 31, 2024, non-interest bearing demand deposits increased by $70.9 million to comprise 18.6% of total deposits, up from 17.0%. Over the same period, interest-bearing demand deposits decreased by $75.2 million to comprise 17.5% of total deposits at June 30, 2025, down from 20.6% at December 31, 2024. Time deposits expanded by $73.4 million, or 10.3%, during the first half of 2025.

During the six months ended June 30, 2025, stockholders’ equity increased by $13.2 million, or 3.2%, primarily due to net income, partially offset by dividends and share repurchases.

As of June 30, 2025, the Bank continued to exceed all regulatory capital requirements to be considered well-capitalized. The tangible stockholders' equity to tangible assets ratioⁱⁱⁱ measured 9.34% as of June 30, 2025 compared to 9.56% at December 31, 2024. The decline from December 31, 2024, was primarily due to the asset growth during the period.

Asset Quality

First Bank's asset quality metrics remained favorable during the second quarter of 2025. Total nonperforming assets declined from $17.3 million at December 31, 2024 to $16.0 million at June 30, 2025, primarily due to the sale of the Bank’s OREO asset during the second quarter of 2025, partially offset by the addition of nonperforming loans. Total nonperforming loans increased from $11.7 million at December 31, 2024 to $16.0 million at June 30, 2025.

The Bank recorded net charge-offs of $796,000 during the second quarter of 2025, compared to net recoveries of $15,000 in the first quarter of 2025 and net charge-offs of $175,000 in the second quarter of 2024. The allowance for credit losses on loans as a percentage of total loans measured 1.23% at June 30, 2025, compared to 1.21% at both March 31, 2025 and June 30, 2024.

Liquidity and Borrowings

Management believes the Bank’s current liquidity position, coupled with our various contingent funding sources, provides the Bank with a strong liquidity base and a diverse source of funding options. The Bank’s cash and cash equivalents increased by $56.8 million, or 19.7%, compared to March 31, 2025, ensuring adequate on-balance sheet liquidity. Borrowings increased by $44.9 million compared to March 31, 2025, as the Bank utilized Federal Home Loan Bank (“FHLB”) advances to support loan growth, while continuing to maintain adequate available borrowing capacity at the FHLB.

Subordinated Debt Issuance

On June 18, 2025, the Bank announced the closing of a $35.0 million private placement of fixed-to-floating rate subordinated notes with a maturity date of June 30, 2035 and a fixed rate of interest of 7.125% per annum for the first five years. Thereafter, the notes will pay interest at a floating rate, reset quarterly, equal to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 343 basis points. The notes may be redeemed at the option of the Bank, without penalty, on or after June 30, 2030. The Bank intends to use the proceeds of this issuance to redeem the Bank’s $30.0 million fixed-to-floating rate subordinated notes due June 1, 2030 (the “2020 notes”) on September 1, 2025, as well as for general corporate purposes. Previously, the 2020 notes carried a fixed rate of 5.50% per annum. On June 1, 2025, the 2020 notes began repricing quarterly at a rate equal to the current three-month term SOFR rate plus 538 basis points. The 2020 notes repriced to a rate of 9.704% per annum on June 1, 2025. The notes have been structured to qualify as Tier 2 capital for regulatory purposes.

Cash Dividend Declared

On July 15, 2025, the 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 August 8, 2025, payable on August 22, 2025.

Share Repurchase Program

During the second quarter of 2025 the Bank repurchased 193,185 shares of common stock at an average price of $14.71 per share, under the share repurchase program authorized in October 2024. Through June 30, 2025, 543,185 shares have been repurchased from the current share repurchase plan with a total cost of $8.0 million or $14.81 per share on average. The share repurchase program provides for the repurchase of up to 1.0 million shares of First Bank common stock with an aggregate repurchase amount of up to $16.0 million. The share repurchase program will expire on September 30, 2025.

Conference Call and Earnings Release Supplement

Additional details on the quarterly results and the Bank are included in the attached earnings release supplement. http://ml.globenewswire.com/Resource/Download/5917a538-bdcd-4a25-b364-99fd7d36addb

First Bank will host its earnings call on Wednesday, July 23, 2025 at 9:00 AM Eastern Time. The direct dial toll free number for the live call is 1-800-715-9871 and the access code is 3909613. For those unable to participate in the call, a replay will be available by dialing 1-800-770-2030 (access code 3909613) from one hour after the end of the conference call until October 21, 2025. Replay information will also 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 27 full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Morristown, Pennington, Randolph, Somerset, Summit, Trenton and Williamstown, New Jersey; Coventry, Devon, Doylestown, Lionville, Malvern, Media, Paoli, Trevose, Warminster and West Chester, Pennsylvania; and Palm Beach, Florida. With $4.02 billion in assets as of June 30, 2025, 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, integrate acquired entities and realize anticipated efficiencies, sustain its internal growth rate, and 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 market values; the impact of public health emergencies, 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; and 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 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.                                                                                                                                               

This press release contains “non-GAAP” financial measures, which management uses in its analysis of First Bank’s performance. Management believes these non-GAAP financial measures allow for better comparability of period to period operating performance. Additionally, First Bank believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of the non-GAAP measures used in this presentation to the most directly comparable GAAP measures is provided in the accompanying financial tables.

ⁱ Return on average tangible equity is a non-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-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release.

ⁱⁱ Tangible book value per share is a non-GAAP financial measure and is calculated by dividing common shares outstanding by tangible equity (equity minus goodwill and other intangible assets).  For a reconciliation of this non-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release.

ⁱⁱⁱ Tangible stockholders' equity to tangible assets ratio is a non-GAAP financial measure and is calculated by dividing tangible equity (equity minus goodwill and other intangible assets) by tangible assets (total assets minus goodwill and other intangible assets). For a reconciliation of this non-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release.

(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.

(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%.

(1) Annualized.