The Bank of Princeton Announces Second Quarter 2018 Results

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Jul 26, 2018, 16:00 ET

PRINCETON, N.J., July 26, 2018 /PRNewswire/ -- The Bank of Princeton (the "Bank") (NASDAQ – BPRN) today reported unaudited results of operations and financial condition for the quarter ended June 30, 2018. The Bank reported net income of $3.6 million, or $0.53 per diluted common share, for the second quarter of 2018, compared to net income of $3.6 million, or $0.52 per diluted common share, for the first quarter of 2018, and net income of $3.0 million, or $0.69 per diluted common share, for the second quarter of 2017. The increase in net income, when comparing the three months ended March 31, 2018, was primarily due in an increase of $372 thousand in net interest income and a reduction in income tax expense of $211thousand and partially offset by an increase to the Bank's provision for loan losses of $155 thousand, a decline in non-interest income of $159 thousand and an increase of $215 thousand in non-interest expenses. The increase of $596 thousand in total net income, when comparing the three months ended June 30, 2017 was primarily due to a $790 thousand increase of net-interest income, a $108 thousand increase in non-interest income, a $339 thousand reduction in income tax expense, partially offset with a $410 thousand in provision for loan losses and a $231 thousand increase in non-interest expenses. For the six month period ended June 30, 2018, the Bank recorded net income of $7.2 million, or $1.05 per diluted common share, compared to $6.1 million, or $1.21 per diluted common share for the same period in 2017.

Highlights for the quarter-ended June 30, 2018 are as follows:

Net-interest income for the three month period ended June 30, 2018 increased $790 thousand, or 8.3%, over the same period in 2017.
Non-interest income for the three month period ended June 30, 2018 increased $108 thousand, or 20.8%, over the same period in 2017.
Total net-income for the second quarter of 2018 increased $596 thousand, or 19.6%, when compared to the same period in 2017.
Total net-income for the six month period ended June 30, 2018 increased $1.1 million, or 17.7%, when compared to the same period in 2017.
Net loans increased $95.8 million, from $958.4 million at December 31, 2017. This reflects an annualized increase of 20.0%

"We are pleased to report another quarter of sound financial performance, continuing the momentum that began with our stock offering in August 2017," stated Edward Dietzler, President/CEO.

Chairman Richard Gillespie noted that, "The Bank's financial results in the second quarter, demonstrate the positive impact of our growth strategy, by focusing on prudent loan growth."

Balance Sheet Review

Total assets were $1.24 billion at June 30, 2018, an increase of $40.2 million, or 3.3% when compared to $1.20 billion at the end of 2017. The primary reason for the increase in total assets was due to an increase in net loans of approximately $95.8 million, primarily consisting of commercial and residential real estate loans, partially offset by a reduction of $57.0 million in cash and cash equivalents, which were related to a decline in deposit accounts connected with a cyclical reduction of municipal deposits.

Total deposits at June 30, 2018 decreased by $14.0 million, or 1.4% when compared to December 31, 2017. Since December 31, 2017, we experienced deposit increases of $54.9 million in time deposit, $35.2 million n money markets, which were more than offset by a $100.4 million decrease in demand accounts (approximately $50.0 million was related to the municipal deposits noted above). At June 30, 2018, the Bank had borrowings of $46.0 million in short-term advances to fund the loan growth.

Total stockholders' equity increased $7.7 million, or 4.6% when compared to the end of 2017. This increase was primarily due to earnings recorded during the first six months of 2018. The ratio of equity to total assets was 14.2%, 0.2% higher than year-end 2017.

Asset Quality

At June 30, 2018, non-performing assets were $9.3 million, a decrease of $736 thousand, or 7.4%, when compared to $10.0 million at December 31, 2017. This decrease was primarily the result of one large credit removed from non-accrual during the quarter. Total troubled debt restructuring ("TDRs") balance totaled $2.8 million at June 30, 2018, a decline of $3.5 million from year-end 2017. All TDRs are performing to their agreed upon terms.

Review of Quarterly Financial Results

Net interest income was $10.2 million for the second quarter of 2018, compared to $9.9 million for the first quarter of 2018 and $9.5 million for the second quarter of 2017. The increase from the previous quarter was a result of an increase in interest income of $865 thousand, or 6.9%, offset by an increase in interest expense of $493 thousand. The net interest margin for the second quarter 2018 was 3.57%, increasing 5 basis points, when compared to the first quarter of 2018. This increase was primarily associated with an increase of 20 basis points of yield on earning assets, partially offset by an increase of 18 basis points paid on cost of funds. When comparing the same three month period ended June 30, 2018 and 2017, net interest income increased $790 thousand, which was primarily due to a higher volume of average earnings assets of approximately $147.9 million. For the six month period ended June 30, 2018, net interest income was $20.2 million, an increase of $1.3 million, or 7.0%, over the same period in 2017, which was primarily due to a higher volume of average earning assets of approximately $147.9 million. Total rate on interest-bearing liabilities, which includes non-interest-bearing deposits for the three month period ended June 30, 2018 and 2017 was 1.24% and 0.93%, respectively.

The provision for credit losses was $410 thousand and $665 thousand for the three and six months ended June 30, 2018, respectively, compared to $0 for the same periods in 2017. When compared to the prior quarter, the increase was $255 thousand for the three months ended March 31, 2018. The primary reason for the provision in the second quarter of 2018 was due to an increase in the outstanding loans balance. The ratio of allowance for credit losses to period end loans was 1.13% at June 30, 2018, compared to 1.20% at December 31, 2017 and 1.20% at June 30, 2017, which reflects management's assessment of the credit quality in the loan portfolio.

Total non-interest income for the second quarter of 2018 increased $108 thousand, to $627 thousand, or 20.8%, when compared to the same period in 2017. This increase was primarily due to an increase in income from bank-owned life insurance. Total non-interest income, comparing the three month periods ended June 30, 2018 and March 31, 2018, reflected a decrease of $159 thousand, primarily due to a lower level of fees generated on loans recorded between the two periods. For the six month period ended June 30, 2018, non-interest income increased $530 thousand, or 60.0%, primarily due to increases in bank-owned life insurance and fees earned on loans.

Total non-interest expense for the second quarter of 2018 increased $231 thousand, or 3.8%, when compared to the same period in 2017. This increase was primarily due to increases in salaries and employee benefit expense and advertising expense, partially offset by a reduction in professional fees and FDIC deposit insurance. When comparing June 30, 2018 to the prior linked quarter, non-interest expense increased $215 thousand, or 3.6%, primarily due to an increase in professional fees and other operating expense. For the six month period ended June 30, 2018, non-operating expense was $12.3 million, compared to $12.0 million for the same period in 2017. The increase was attributed to an increase of salaries and benefits expense, partially offset by a reduction in professional fees and FDIC deposit insurance expense.

For the three month period ended June 30, 2018, the Bank recorded income tax expense of $579 thousand, resulting in an effective tax rate of 13.7%, compared to $790 thousand, resulting in an effective tax rate of 18.1%, for the three month period ended March 31, 2018, and compared to $918 thousand, resulting in an effective tax rate of 23.2%, for the three month period ended June 30, 2017. The current effective tax yield for the three and six months ended June 30, 2018, were reduced, in part, as a result of the new corporate tax rate of 21.0% from the prior rate of 34.0%. In addition, both three and six months ended June 30, 2018 and three months ended March 31, 2018 were positively impacted by recording a tax benefit related to the exercise of warrants and stock options.

About The Bank of Princeton

The Bank of Princeton is a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with ten branches in New Jersey, including three in Princeton and others in Hamilton, Pennington, Montgomery, Monroe, Lambertville, Lawrenceville, and New Brunswick. There are also three branches in the Philadelphia, Pennsylvania area, operating as MoreBank, a division of The Bank of Princeton. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation ("FDIC").

Forward-Looking Statements

The Bank of Princeton may from time to time make written or oral "forward-looking statements," including statements contained in the Bank's filings with the FDIC, in its reports to stockholders and in other communications by the Bank (including this press release), which are made in good faith by the Bank pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements involve risks and uncertainties, such as statements of the Bank's plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Bank's control). The following factors, among others, could cause the Bank's financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Bank conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; market volatility; the value of the Bank's products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors' products and services; the willingness of customers to substitute competitors' products and services for the Bank's products and services; credit risk associated with the Bank's lending activities; risks relating to the real estate market and the Bank's real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Bank; technological changes; acquisitions; changes in consumer spending and saving habits; and the success of the Bank at managing the risks involved in the foregoing.

The Bank cautions that the foregoing list of important factors is not exclusive. The Bank does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Bank, except as required by applicable law or regulation.

The Bank of Princeton
Summary Statements of Financial Condition Data
(unaudited)
(dollars in thousands, except per share data)

				Jun 30, 2018 vs Dec 31, 2017	Jun 30, 2018 vs Dec 31, 2017		Jun 30, 2018 vs Jun 30, 2017	Jun 30, 2018 vs Jun 30, 2017
	June 30, 2018	Dec 31, 2017	June 30, 2017	$ Change	% Change		$ Change	% Change

ASSETS
Cash and cash equivalents	$ 25,702	$ 82,822	$ 26,791	$ (57,120)	(68.97)	%	$ (1,089)	(4.06)	%
Securities available for sale taxable	52,038	53,770	59,229	(1,732)	(3.22)		(7,191)	(12.14)
Securities available for sale tax exempt	47,548	47,974	43,399	(426)	(0.89)		4,149	9.56
Securities held to maturity	262	264	294	(2)	(0.76)		(32)	(10.88)
Loans receivable, net of deferred	1,066,238	970,178	889,629	96,060	9.90		176,609	19.85
Allowance for loan losses	(12,046)	(11,822)	(10,645)	(224)	1.89		(1,401)	13.16
Other assets	61,012	57,405	45,852	3,607	6.28		15,160	33.06
TOTAL ASSETS	$ 1,240,754	$ 1,200,591	$ 1,054,549	$ 40,163	3.35	%	$ 186,205	17.66	%


LIABILITIES
Non interest checking	$ 102,035	$ 100,633	$ 111,535	$ 1,402	1.39	%	$ (9,500)	(8.52)	%
Interest checking	181,714	282,076	162,080	(100,362)	(35.58)		19,634	12.11
Savings	100,336	105,475	108,377	(5,139)	(4.87)		(8,041)	(7.42)
Money market	282,105	246,898	257,102	35,207	14.26		25,003	9.72
Time deposits over $250,000	158,885	102,586	65,257	56,299	54.88		93,628	143.48
Other time deposits	189,607	191,000	175,007	(1,393)	(0.73)		14,600	8.34
Total Deposits	1,014,682	1,028,668	879,358	(13,986)	(1.36)		135,324	15.39
Borrowings	46,000	-	60,000	46,000	-		(14,000)	(23.33)
Other liabilities	4,087	3,628	3,598	459	12.65		489	13.59
TOTAL LIABILITIES	1,064,769	1,032,296	942,956	32,473	3.15	%	121,813	12.92	%

STOCKHOLDERS' EQUITY
Common stock	33,206	32,756	24,105	450	1.37		9,101	37.76
Paid-in capital	77,450	76,350	32,957	1,100	1.44		44,493	135.00
Retained earnings	66,338	59,122	54,237	7,216	12.21		12,101	22.31
Accumulated other comprehensive (loss) income	(1,009)	67	294	(1,076)	(1,606)		(1,303)	(443)
TOTAL STOCKHOLDERS' EQUITY	175,985	168,295	111,593	7,690	4.57	%	64,392	57.70	%

TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY	$ 1,240,754	$ 1,200,591	$ 1,054,549	$ 40,163	17.02	%	$ 186,205	17.66	%

Book value per common share	$ 26.50	$ 25.69	$ 23.15	$ 0.81	3.15	%	$ 3.35	14.48	%
Tangible book value per common share1	$ 26.50	$ 25.69	$ 23.14	$ 0.81	3.15	%	$ 3.36	14.51	%

1Reconciliation of non-GAAP tangible
book value per common share:
Total stockholders' equity	$ 175,985	$ 168,295	$ 111,593
Intangible assets	-	-	(28)
Tangible stockholders' equity	$ 175,985	$ 168,295	$ 111,565

Common shares outstanding	6,641,179	6,551,229	4,821,045

Tangible book value per common share	$ 26.50	$ 25.69	$ 23.14

The Bank of Princeton
Loan/Deposit Tables
June 30, 2018

Loan receivable, net at June 30, 2018 were comprised of the following:


	June 30,	December 31,
	2018	2017
	(Dollars in thousands)
Commercial real estate	$ 709,214	$ 634,768
Commercial and industrial	54,516	59,636
Construction	266,371	283,051
Residential first-lien mortgages	96,555	73,505
Home equity	18,444	20,551
Consumer	456	447
Total loans	1,145,556	1,071,958
Undisbursed portion of loans-in-process	(77,021)	(99,676)
Deferred fees and costs	(2,297)	(2,335)
Allowance for loan losses	(12,046)	(11,591)
Loans, net	$ 1,054,192	$ 958,356


The components of deposits at June 30, 2018 were as follows:

	June 30,	December 31,
	2018	2017
	(Dollars in thousands)
Demand, non-interest-bearing checking	$ 102,035	$ 100,633
Demand, interest-bearing	181,714	282,076
Savings	100,336	105,475
Money Markets	282,105	246,898
Time deposits	348,492	293,586
Total Deposits	$ 1,014,682	$ 1,028,668

The Bank of Princeton
Consolidated Statements of Operations (Current Quarter vs Prior Quarter)
(unaudited)
			Quarter Ending
			Jun 30,	Mar 31,
			2018	2018	$ Change	% Change
			(Dollars in thousands)
Interest and Dividend Income

	Loans and fees		$ 12,684	$ 11,650	1,034	8.9%
	Available-for-Sale debt securities:
		Taxable	300	294	6	2.0%
		Tax-exempt	334	335	-1	-0.3%
	Held-to-Maturity debt securities		3	4	-1	-25.0%
	Other interest and dividend income		136	309	-173	-56.0%

		Total Interest and Dividends	13,457	12,592	865	6.9%

	Interest expense

		Deposits	3,074	2,683	391	14.6%
		Borrowings	116	14	102	728.6%

		Total Interest Expense	3,190	2,697	493	18.3%

		Net Interest Income	10,267	9,895	372	3.8%

Provision for Loan Losses			410	255	155	60.8%

Net Interest Income after Provision for Loan Losses			9,857	9,640	217	2.3%

Non-Interest income

	Gain on sale of securities available for sale,net		1	-	1	-
	Income from bank-owned life insurance		306	302	4	1.3%
	Fees and service charges		158	160	-2	-1.3%
	Loan fees, including prepayment penalities		149	308	-159	-51.6%
	Other		13	16	-3	-18.8%

		Total Non-Interest Income	627	786	-159	-20.2%

Non-Interest Expense

	Salaries and employee benefits		3,682	3,687	-5	-0.1%
	Occupancy and equipment		832	858	-26	-3.0%
	Professional fees		508	419	89	21.2%
	Data processing and communications		524	524	-	-
	Federal deposit insurance		88	88	-	-
	Advertising and promotion		98	61	37	60.7%
	Office expense		68	66	2	3.0%
	OREO Expense		1	-	1	-
	Other		469	352	117	33.2%
		Total Non-Interest Expense
			6,270	6,055	215	3.6%

Income before income tax expense/(benefit)			4,214	4,371	-157	-3.6%

Income tax expense/(benefit)			579	790	-211	-26.7%

Net Income			$ 3,635	$ 3,581	54	1.5%

Net income per common share - basic			0.55	0.55	-	-
Net income per common share - diluted			0.53	0.52	0.01	1.9%

Weighted average shares outstanding - basic			6,640	6,576	64	1.0%
Weighted average shares outstanding - diluted			6,905	6,855	50	0.7%

The Bank of Princeton
Consolidated Statements of Operations
(unaudited)
			Quarter Ending
			June 30,
			2018	2017	$ Change	% Change
			(Dollars in thousands)
Interest and Dividend Income

	Loans and fees		$ 12,684	$ 10,931	1,753	16.0%
	Available-for-Sale debt securities:
		Taxable	300	283	17	6.0%
		Tax-exempt	334	305	29	9.5%
	Held-to-Maturity debt securities		3	4	-1	-25.0%
	Other interest and dividend income		136	108	28	25.9%

		Total Interest and Dividends	13,457	11,631	1,826	15.7%

	Interest expense

		Deposits	3,074	1,859	1,215	65.4%
		Borrowings	116	295	-179	-60.7%

		Total Interest Expense	3,190	2,154	1,036	48.1%

		Net Interest Income	10,267	9,477	790	8.3%

Provision for Loan Losses			410	-	410	-

Net Interest Income after Provision for Loan Losses			9,857	9,477	380	4.0%

Non-Interest income

	Gain on sale of securities available for sale,net		1	11	-10	-90.9%
	Income from bank-owned life insurance		306	179	127	70.9%
	Fees and service charges		158	159	-1	-0.6%
	Loan fees, including prepayment penalities		149	161	-12	-7.5%
	Other		13	9	4	44.4%

		Total Non-Interest Income	627	519	108	20.8%

Non-Interest Expense

	Salaries and employee benefits		3,682	3,331	351	10.5%
	Occupancy and equipment		832	873	-41	-4.7%
	Professional fees		508	545	-37	-6.8%
	Data processing and communications		524	498	26	5.2%
	Federal deposit insurance		88	178	-90	-50.6%
	Advertising and promotion		98	68	30	44.1%
	Office expense		68	73	-5	-6.8%
	OREO Expense		1	-	1	-
	Other		469	473	-4	-0.8%
		Total Non-Interest Expense
			6,270	6,039	231	3.8%
Income before income tax expense/(benefit)
			4,214	3,957	257	6.5%
Income tax expense/(benefit)
			579	918	-339	-36.9%
Net Income
			$ 3,635	$ 3,039	596	19.6%

Net income per common share - basic			0.55	0.63	-0.08	-13.3%
Net income per common share - diluted			0.53	0.60	-0.07	-11.7%

Weighted average shares outstanding - basic			6,640	4,811	1,829	38.0%
Weighted average shares outstanding - diluted			6,905	5,104	1,081	35.3%

The Bank of Princeton
Consolidated Statements of Operations
(unaudited)
			Six Months Ended
			June 30,
			2018	2017	$ Change	% Change
			(Dollars in thousands)
Interest and Dividend Income

	Loans and fees		$ 24,334	$ 21,520	2,814	13.1%
	Available-for-Sale debt securities:
		Taxable	594	575	19	3.3%
		Tax-exempt	669	654	15	2.3%
	Held-to-Maturity debt securities		7	8	-1	-12.5%
	Other interest and dividend income		445	196	249	-127.0%

		Total Interest and Dividends	26,049	22,953	3,096	13.5%

	Interest expense

		Deposits	5,757	3,655	2,102	57.5%
		Borrowings	130	457	-327	-71.6%

		Total Interest Expense	5,887	4,112	1,755	43.2%

		Net Interest Income	20,162	18,841	1,321	7.0%

Provision for Loan Losses			665	-	665	-

Net Interest Income after Provision for Loan Losses			19,497	18,841	656	3.5%

Non-Interest income

	Gain on sale of securities available for sale,net		1	15	-14	-93.3%
	Income from bank-owned life insurance		608	353	255	72.2%
	Fees and service charges		318	303	15	5.0%
	Loan fees, including prepayment penalities		457	193	264	136.8%
	Other		29	19	10	52.6%

		Total Non-Interest Income	1,413	883	530	60.0%

Non-Interest Expense

	Salaries and employee benefits		7,369	6,791	578	8.5%
	Occupancy and equipment		1,690	1,713	-23	-1.3%
	Professional fees		927	1,105	-178	-16.1%
	Data processing and communications		1,048	958	90	9.4%
	Federal deposit insurance		176	336	-160	-47.6%
	Advertising and promotion		159	115	44	38.3%
	Office expense		134	124	10	8.1%
	OREO Expense		1	4	-3	7.5%
	Other		821	853	-32	3.8%
		Total Non-Interest Expense
			12,325	11,999	326	2.7%

Income before income tax expense/(benefit)			8,585	7,725	860	11.1%

Income tax expense/(benefit)			1,369	1,596	-227	-14.2%

Net Income			$ 7,216	$ 6,129	1,087	17.7%

Net income per common share - basic			1.09	1.29	-0.20	-15.5%
Net income per common share - diluted			1.05	1.21	-0.16	-13.2%

Weighted average shares outstanding - basic			6,608	4,764	1,844	38.7%
Weighted average shares outstanding - diluted			6,870	5,070	1,800	35.5%

The Bank of Princeton
Consolidated Average Balance Sheets
(unaudited)

	For the Quarter Ended

	June 2018		March 2018
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
Earning assets
Loans	$ 1,024,940	4.96%	$ 962,378	4.91%	62,562	0.05%

Securities

Taxable AFS	53,867	2.23%	53,974	2.18%	-107	0.05%
Tax exempt AFS	48,443	2.75%	48,792	2.75%	-349	0.01%
Held-to-maturity	263	5.22%	264	5.22%	-1	0.07%

Securities	102,573	2.48%	103,030	2.46%	-457	0.03%

Other interest earning assets
Interest-bearing bank accounts	23,936	1.74%	74,013	1.66%	-50,077	0.08%
Equities	2,048	6.22%	1,133	7.27%	915	-1.04%

Other interest earning assets	25,984	2.10%	75,146	1.67%	-49,162	0.43%

Total interest-earning assets	1,153,497	4.68%	1,140,554	4.48%	12,943	0.20%

Total non earning assets	57,581		60,778

Total Assets	$ 1,211,078		$ 1,201,332


Interest-bearing liabilities
Checking	$ 203,771	0.83%	$ 281,166	0.81%	-77,395	0.02%
Savings	105,212	1.16%	106,993	1.02%	-1,781	0.13%
Money Market	273,888	1.37%	248,741	1.19%	25,147	0.18%
Certificate of Deposit	327,284	1.73%	291,990	1.55%	35,294	0.18%

Total interest-bearing deposits	910,155	1.35%	928,890	1.17%	-18,735	0.18%

Non interest bearing deposits	101,043		95,417

Total deposits	1,011,198	1.22%	1,024,307	1.06%	-13,109	0.16%

Borrowings	21,635	2.15%	3,438	1.64%	18,197	0.50%

Total interest-bearing liabilities	931,790	1.37%	932,328	1.17%	-538	0.20%
(excluding non interest deposits)

Noninterest-bearing deposits	101,043		95,417
Total Cost of Funds	1,032,833	1.24%	1,027,775	1.06%	5,058	0.18%

Accrued expenses and other liabilities	4,418		3,445
Stockholders' equity	173,827		170,142
Total liabilities and stockholders' equity	$ 1,211,078		$ 1,201,332


Net interest spread		3.31%		3.31%
Net interest margin		3.57%		3.52%

Net interest margin (FTE)*		3.70%		3.65%

*Includes federal and state tax effect on tax exempt
securities and loans

The Bank of Princeton
Consolidated Average Balance Sheets
(unaudited)

	For the Three Months Ended
	June 30,
	2018		2017
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
Earning assets
Loans	$ 1,024,940	4.96%	$ 882,273	4.97%	142,667	-0.01%

Securities

Taxable AFS	53,867	2.23%	57,880	1.95%	-4,013	0.28%
Tax exempt AFS	48,443	2.75%	45,287	2.70%	3,156	0.05%
Held-to-maturity	263	5.22%	314	4.94%	-51	0.28%

Securities	102,573	2.48%	103,481	2.29%	-908	0.19%

Other interest earning assets
Interest-bearing bank accounts	23,936	1.74%	13,845	0.96%	10,091	0.78%
Equities	2,048	6.22%	5,912	5.11%	-3,864	1.11%

Other interest earning assets	25,984	2.10%	19,757	2.20%	6,227	-0.10%

Total interest-earning assets	1,153,497	4.68%	1,005,511	4.64%	147,986	0.04%

Total non earning assets	57,581		40,291

Total Assets	$ 1,211,078		$ 1,045,802


Interest-bearing liabilities
Checking	$ 203,771	0.83%	$ 144,443	0.66%	59,328	0.17%
Savings	105,212	1.16%	105,469	0.86%	-257	0.30%
Money Market	273,888	1.37%	265,655	0.97%	8,233	0.40%
Certificate of Deposit	327,284	1.73%	209,018	1.44%	118,265	0.29%

Total interest-bearing deposits	910,155	1.35%	724,586	1.03%	185,569	0.32%

Non interest bearing deposits	101,043		101,200

Total deposits	1,011,198	1.22%	825,786	0.90%	185,412	0.32%

Borrowings	21,635	2.15%	105,795	1.12%	-84,160	1.03%
Total interest-bearing liabilities
(excluding non interest deposits)	931,790	1.37%	830,381	1.04%	101,409	0.33%

Noninterest-bearing deposits	101,043		101,200
Total Cost of Funds	1,032,833	1.24%	931,581	0.93%	101,252	0.31%

Accrued expenses and other liabilities	4,418		4,330
Stockholders' equity	173,827		109,891
Total liabilities and stockholders' equity	$ 1,211,078		$ 1,045,802

Net interest spread		3.31%		3.60%
Net interest margin		3.57%		3.78%

Net interest margin (FTE)*		3.70%		3.95%

*Includes federal and state effect of tax exempt
securities and loans

The Bank of Princeton
Consolidated Average Balance Sheets
(unaudited)

	For the Six Months Ended
	June 30,
	2018		2017
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
Earning assets
Loans	$ 993,832	4.94%	$ 873,034	4.97%	120,798	-0.03%

Securities

Taxable AFS	53,920	2.20%	58,026	1.98%	-4,106	0.22%
Tax exempt AFS	48,617	2.75%	47,928	2.73%	689	0.02%
Held-to-maturity	263	5.22%	327	5.05%	-64	0.17%

Securities	102,800	2.47%	106,281	2.33%	-3,481	0.14%

Other interest earning assets
Interest-bearing bank accounts	48,836	1.62%	14,571	0.92%	34,265	0.70%
Equities	1,593	6.59%	5,234	4.99%	-3,641	1.60%

Other interest earning assets	50,429	1.78%	19,805	1.99%	30,624	-0.22%

Total interest-earning assets	1,147,061	4.58%	999,120	4.63%	147,941	-0.05%

Total non earning assets	59,171		38,735

Total Assets	$ 1,206,232		$ 1,037,855


Interest-bearing liabilities
Checking	$ 242,254	0.82%	$ 152,822	0.66%	89,432	0.16%
Savings	106,098	1.09%	$ 105,214	0.82%	884	0.27%
Money Market	261,384	1.29%	272,659	0.92%	-11,275	0.36%
Certificate of Deposit	309,735	1.65%	207,271	1.44%	102,464	0.21%

Total interest-bearing deposits	919,471	1.26%	737,966	1.00%	181,505	0.26%

Non interest bearing deposits	98,245		97,341

Total deposits	1,017,716	1.14%	835,307	0.88%	182,409	0.26%

Borrowings	12,586	2.08%	91,045	1.01%	-78,459	1.07%
Total interest-bearing liabilities
(excluding non interest deposits)	932,057	1.27%	829,011	1.00%	103,046	0.27%

Noninterest-bearing deposits	98,245		97,341
Total Cost of Funds	1,030,303	1.04%	926,352	0.79%	103,951	0.25%

Accrued expenses and other liabilities	3,935		3,925
Stockholders' equity	171,995		107,578
Total liabilities and stockholders' equity	$ 1,206,232		$ 1,037,855

Net interest spread		3.31%		3.63%
Net interest margin		3.54%		3.80%

Net interest margin (FTE)*		3.70%		3.96%

*Includes federal and state effect of tax exempt
securities and loans

The Bank of Princeton
Quarterly Financial Highlights
(unaudited)

	2018	2018	2017	2017	2017
	Jun	Mar	Dec	Sep	Jun


Return on average assets	1.21%	1.21%	0.59%	1.17%	1.17%
Return on average equity	8.39%	8.54%	4.02%	8.60%	11.10%
Return on average tangible equity	8.39%	8.54%	4.02%	8.60%	11.10%
Net interest margin	3.57%	3.52%	3.79%	3.82%	3.78%
Net interest margin (FTE)*	3.75%	3.65%	3.92%	3.96%	3.95%
Efficiency ratio - Non-GAAP	57.55%	56.70%	49.40%	52.67%	60.43%

Common Stock Data
Market value at period end	33.25	34.50	34.34	31.99	-
Market range:
High	34.90	34.69	34.95	33.49	-
Low	32.21	31.50	31.10	29.43	-
Book value per common share at period end	26.50	26.00	25.69	25.47	23.15
Tangible book value per common share at period end	26.50	26.00	25.69	25.46	23.14

CAPITAL RATIOS
Total Capital (to risk-weighted assets)	16.67%	17.04%	17.12%	17.15%	12.34%
Tier 1 Capital (to risk-weighted assets)	15.61%	15.94%	16.01%	16.06%	11.25%
Tierr 1 Capital (to average assets)	14.55%	14.30%	14.64%	15.29%	10.55%
Period-end equity to assets	14.18%	14.50%	14.02%	14.90%	10.58%
Period-end tangible equity to tangible assets	14.18%	14.50%	14.02%	14.90%	10.58%

CREDIT QUALITY DATA AT PERIOD END
(Dollars in Thousands)
Net charge-offs and (recoveries)	$ 213	$ (3)	$ 2,584	$ 235	$ 5

Annualized net charge-offs to average loans	-0.083%	-0.001%	1.08%	0.10%	0.002%

Nonaccrual loans	8,463	10,832	9,199	11,240	7,258
Other real estate owned	802	802	802	179	179
Total nonperforming assets	9,265	11,634	10,001	11,419	7,437

Accruing troubled debt restructurings (TDRs)	1,309	4,721	4,796	4,846	4,775

Total nonperforming assets and accruing TDRs	$ 10,574	$ 16,355	$ 14,797	$ 16,265	$ 12,212

Allowance for credit losses as a percent of:
Period-end loans	1.13%	1.19%	1.20%	1.19%	1.20%
Nonaccrual loans	70.26%	91.42%	79.36%	99.82%	68.18%
Nonperforming assets	76.91%	98.19%	86.28%	101.41%	69.86%

As a percent of total loans:
Nonaccrual loans	0.79%	1.08%	0.95%	1.19%	0.82%
Accruing TDRs	0.12%	0.47%	0.49%	0.51%	0.54%
Nonaccrual loans and accruing TDRs	0.87%	1.64%	1.53%	1.72%	1.37%



*Includes the effect of tax exempt securities and loans