The Bank of Princeton Announces Third Quarter 2018 Results

Earnings Up 17% Over Last Year

News provided by

Oct 25, 2018, 16:15 ET

PRINCETON, N.J., Oct. 25, 2018 /PRNewswire/ -- The Bank of Princeton (the "Bank") (NASDAQ: BPRN) today reported unaudited results of operations and financial condition for the quarter ended September 30, 2018. The Bank reported net income of $3.7 million, or $0.54 per diluted common share, for the third quarter of 2018, compared to net income of $3.6 million, or $0.53 per diluted common share, for the second quarter of 2018, and net income of $3.2 million, or $0.51 per diluted common share, for the third quarter of 2017.

For the nine month period ended September 30, 2018, the Bank reported net income of $10.9 million, or $1.59 per diluted common share, compared to $9.3 million, or $1.71 per diluted common share for the same period in 2017. The diluted earnings per shares calculation in 2018 was impacted by the common stock offering that was completed August 2017.

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

Net-interest income for the three month period ended September 30, 2018 increased $593 thousand, or 6.0%, over the same period in 2017.
Total net income for the third quarter of 2018 increased $527 thousand, or 16.6%, when compared to the same period in 2017.
Total net income for the nine month period ended September 30, 2018 increased $1.6 million, or 17.3%, when compared to the same period in 2017.
Net loans increased $90.1 million, from $970.0 million at December 31, 2017. This reflects an annualized increase of 9.3%

"The Bank of Princeton third quarter results continued to build on the momentum for 2018. Year over year 2018 earnings increased 17% due to strong loan and deposit growth along with continued expense management. The Bank's balance sheet and capital positon remains a source of strength allowing the bank to evaluate future organic and inorganic growth opportunities," stated Edward Dietzler, President/CEO.

Chairman Richard Gillespie states that, "The Bank continues to look for expansion opportunities within our footprint and will be opening three new branch locations within the next several months. We are also pleased to have announced our first ever cash dividend to shareholders."

Balance Sheet Review

Total assets were $1.23 billion at September 30, 2018, an increase of $34.3 million, or 2.9%, 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 $90.1 million, primarily consisting of commercial and residential real estate loans, partially offset by a reduction of $50.9 million in cash and cash equivalents, used to fund loan growth.

Total deposits at September 30, 2018 decreased by $2.9 million, or 0.3%, when compared to December 31, 2017. Since December 31, 2017, we experienced deposit increases of $62.6 million in time deposit, $39.9 million in money markets deposits, which were more than offset by a $99.3 million decrease in demand accounts (approximately $50.0 million was related to municipal deposits). At September 30, 2018, the Bank had borrowings of $25.0 million in short-term advances to fund its loan growth.

Total stockholders' equity increased $11.2 million, or 6.7% when compared to the end of 2017. This increase was primarily due to earnings reported during the first nine months of 2018. The ratio of equity to total assets was 14.5%, 0.5% higher than year-end 2017.

Asset Quality

At September 30, 2018, non-performing assets were $4.9 million, a decrease of $5.1 million or 51.3% when compared to $10.0 million at December 31, 2017. This decrease was primarily the result of two large commercial real estate credits totaling $6.4 million that paid-off and partially offset with addition of one commercial real estate property totaling $1.7 million and one construction and development $487 thousand. Total troubled debt restructuring ("TDRs") balance totaled $2.8 million at September 30, 2018, a decline of $3.6 million from year-end 2017. All TDRs are performing to their agreed upon terms.

Review of Quarterly Financial Results

Net interest income was $10.5 million for the third quarter of 2018, compared to $10.3 million for the second quarter of 2018 and $9.9 million for the third quarter of 2017. The increase from the previous quarter was a result of an increase in interest income of $672 thousand, or 5.0%, offset by an increase in interest expense of $398 thousand. The net interest margin for the third quarter 2018 was 3.51%, decreasing six basis points, when compared to the second quarter of 2018. This decrease was primarily associated with an increase of 11 basis points paid on cost of funds, partially offset by an increase of three basis points earning on interest earning assets. When comparing the same three month period ended September 30, 2018 and 2017, net interest income increased $593 thousand, which was primarily due to a higher volume of average earnings assets of approximately $157.0 million. For the nine month period ended September 30, 2018, net interest income was $30.7 million, an increase of $1.9 million, or 6.6%, over the same period in 2017, which was primarily due to a higher volume of average earning assets of approximately $151.0 million. Total rate on interest-bearing liabilities, which includes non-interest-bearing deposits for the three month period ended September 30, 2018 and 2017 was 1.22% and 0.92%, respectively.

The Bank did not record a provision for credit losses this quarter and recorded $665 thousand for the nine months ended September 30, 2018, compared to $850 thousand for both the three and nine months periods in 2017. When compared to the prior quarter, the Bank recorded a $410 thousand provision for credit losses for the three months ended June 30, 2018. The primary reason for the provision in the second quarter of 2018 was due to an increase in the outstanding loans balance. The Bank realized net recoveries of $93 thousand in this quarter compared to net charges-offs of $213 thousand in the quarter ended June 30, 2018. The ratio of allowance for credit losses to period end loans was 1.15% at September 30, 2018, compared to 1.20% at December 31, 2017 and 1.19% at September 30, 2017, which reflects management's assessment of the credit quality in the loan portfolio.

Total non-interest income for the third quarter of 2018 decreased $498 thousand, to $649 thousand, when compared to the same period in 2017. This decrease was primarily due to a decrease in income from fees and service charges, primarily due to a lower level of fees generated on loans earned between the two periods. The increase in non-interest income from the previous quarter was $22 thousand primarily due to loan fees collected, partially offset by a reduction in service charges collected during the current quarter. For the nine month period ended September 30, 2018, non-interest income increased $32 thousand, or 1.6%, primarily due to increases in bank-owned life insurance, partially offset due to a lower level of fees generated on loans.

Total non-interest expense for the third quarter of 2018 increased $813 thousand, or 13.9%, when compared to the same period in 2017. This increase was primarily due a one-time charge the Bank recorded against an OREO property, along with increases in salaries and employee benefit expense and advertising expense, partially offset by a reduction in professional fees, FDIC deposit insurance and occupancy expense. When comparing September 30, 2018 to the prior linked quarter, non-interest expense increased $385 thousand, or 6.1%, primarily due a one-time charge the Bank recorded against an OREO property, partially offset by a decrease in salaries and benefits expense. For the nine month period ended September 30, 2018, non-operating expense was $19.0 million, compared to $17.8 million for the same period in 2017. The increase was attributed to an increase of salaries and benefits expense and a one-time charge against an OREO property, partially offset by a reduction in professional fees and FDIC deposit insurance expense.

For the three month period ended September 30, 2018, the Bank incurred income tax expense of $830 thousand, resulting in an effective tax rate of 18.3%, compared to $579 thousand, resulting in an effective tax rate of 13.7%, for the three month period ended June 30, 2018, and compared to $1.2 million, resulting in an effective tax rate of 27.8%, for the three month period ended September 30, 2017. The current effective tax yield for the three and nine months ended September 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 nine months ended September 30, 2018 and three months ended June 30, 2018 were positively impacted by recording a tax benefit related to the exercise of warrants and stock options. The Bank is continuing to evaluate the impact of recent New Jersey tax legislation, which increases Corporation Business Tax rate and the Bank does not anticipate having a material impact.

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)

				Sept 30, 2018 vs Dec 31, 2017	Sept 30, 2018 vs Dec 31, 2017		Sept 30, 2018 vs Sept 30, 2017	Sept 30, 2018 vs Sept 30, 2017
	Sept 30, 2018	Dec 31, 2017	Sept 30, 2017	$ Change	% Change		$ Change	% Change

ASSETS
Cash and cash equivalents	$ 31,918	$ 82,822	$ 27,182	$ (50,904)	(61.46)	%	$ 4,736	17.42	%
Securities available for sale taxable	48,558	53,770	57,472	(5,212)	(9.69)		(8,914)	(15.51)
Securities available for sale tax exempt	46,249	47,974	43,465	(1,725)	(3.60)		2,784	6.41
Securities held to maturity	230	264	265	(34)	(12.88)		(35)	(13.21)
Loans receivable, net of deferred	1,060,025	969,947	945,549	90,078	9.29		114,476	12.11
Allowance for loan losses	(12,139)	(11,591)	(11,260)	(548)	4.73		(879)	7.81
Other assets	60,071	57,405	56,278	2,666	4.64		3,793	6.74
TOTAL ASSETS	$ 1,234,912	$ 1,200,591	$ 1,118,951	$ 34,321	2.86	%	$ 115,961	10.36	%


LIABILITIES
Non interest checking	$ 98,538	$ 100,633	$ 111,885	$ (2,095)	(2.08)	%	$ (13,347)	(11.93)	%
Interest checking	184,915	282,076	195,070	(97,161)	(34.44)		(10,155)	(5.21)
Savings	99,391	105,475	110,932	(6,084)	(5.77)		(11,541)	(10.40)
Money market	286,751	246,898	259,078	39,853	16.14		27,673	10.68
Time deposits over $250,000	161,423	102,586	89,943	58,837	57.35		71,480	79.47
Other time deposits	194,752	191,000	181,168	3,752	1.96		13,584	7.50
Total Deposits	1,025,770	1,028,668	948,076	(2,898)	(0.28)		77,694	8.19
Borrowings	25,000	-	-	25,000	-		25,000	-
Other liabilities	4,633	3,628	4,111	1,005	27.70		522	12.70
TOTAL LIABILITIES	1,055,403	1,032,296	952,187	23,107	2.24	%	103,216	10.84	%

STOCKHOLDERS' EQUITY
Common stock	33,236	32,756	32,740	480	1.47		496	1.51
Paid-in capital	77,664	76,350	76,301	1,314	1.72		1,363	1.79
Retained earnings	70,042	59,122	57,415	10,920	18.47		12,627	21.99
Accumulated other comprehensive (loss) income	(1,433)	67	308	(1,500)	(2,238.81)		(1,741)	(565.26)
TOTAL STOCKHOLDERS' EQUITY	179,509	168,295	166,764	11,214	6.66	%	12,745	7.64	%

TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY	$ 1,234,912	$ 1,200,591	$ 1,118,951	$ 34,321	2.86	%	$ 115,961	10.36	%

Book value per common share	$ 27.01	$ 25.69	$ 25.47	$ 1.32	5.12	%	$ 1.54	6.04	%
Tangible book value per common share1	$ 27.01	$ 25.69	$ 25.46	$ 1.32	5.12	%	$ 1.54	6.05	%

1Reconciliation of non-GAAP tangible
book value per common share:
Total stockholders' equity	$ 179,509	$ 168,295	$ 166,764
Intangible assets	-	-	(23)
Tangible stockholders' equity	$ 179,509	$ 168,295	$ 166,741

Common shares outstanding	6,647,209	6,551,229	6,548,045

Tangible book value per common share	$ 27.01	$ 25.69	$ 25.46

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

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


	September 30,	December 31,
	2018	2017
	(Dollars in thousands)
Commercial real estate	$ 706,131	$ 634,768
Commercial and industrial	64,163	59,636
Construction	227,943	283,051
Residential first-lien mortgages	104,587	73,505
Home equity	17,737	20,551
Consumer	385	447
Total loans	1,120,946	1,071,958
Undisbursed portion of loans-in-process	(58,691)	(99,676)
Deferred fees and costs	(2,230)	(2,335)
Allowance for loan losses	(12,139)	(11,591)
Loans, net	$ 1,047,886	$ 958,356


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

	September 30,	December 31,
	2018	2017
	(Dollars in thousands)
Demand, non-interest-bearing checking	$ 98,538	$ 100,633
Demand, interest-bearing	184,915	282,076
Savings	99,391	105,475
Money Markets	286,751	246,898
Time deposits	356,175	293,586
Total Deposits	$ 1,025,770	$ 1,028,668

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

	Loans and fees		$ 13,314	$ 12,684	$ 630	5.0%
	Available-for-Sale debt securities:
		Taxable	297	300	(3)	-1.0%
		Tax-exempt	323	334	(11)	-3.3%
	Held-to-Maturity debt securities		3	3	-	0.0%
	Other interest and dividend income		192	136	56	41.2%

		Total Interest and Dividends	14,129	13,457	672	5.0%

	Interest expense

		Deposits	3,476	3,074	402	13.1%
		Borrowings	112	116	(4)	-3.4%

		Total Interest Expense	3,588	3,190	398	12.5%

		Net Interest Income	10,541	10,267	274	2.7%

Provision for Loan Losses			-	410	(410)	-100.0%

Net Interest Income after Provision for Loan Losses			10,541	9,857	684	6.9%

Non-Interest income

	Gain on sale of securities available for sale,net		-	1	(1)	-100.0%
	Income from bank-owned life insurance		304	306	(2)	-0.7%
	Fees and service charges		145	158	(13)	-8.2%
	Loan fees, including prepayment penalities		179	149	30	20.1%
	Other		20	13	7	53.8%

		Total Non-Interest Income	648	627	21	3.3%

Non-Interest Expense

	Salaries and employee benefits		3,507	3,682	(175)	-4.8%
	Occupancy and equipment		839	832	7	0.8%
	Professional fees		485	508	(23)	-4.5%
	Data processing and communications		534	524	10	1.9%
	Federal deposit insurance		84	88	(4)	-4.5%
	Advertising and promotion		128	98	30	30.6%
	Office expense		72	68	4	5.9%
	OREO Expense		1	1	-	0.0%
	Loss on sale of other real estate owned		540	-	540	0.0%
	Other		465	469	(4)	-0.9%
		Total Non-Interest Expense
			6,655	6,270	385	6.1%
Income before income tax expense/(benefit)
			4,534	4,214	320	7.6%
Income tax expense/(benefit)
			830	579	251	43.4%
Net Income
			$ 3,704	$ 3,635	$ 69	1.9%

Net income per common share - basic			0.56	0.55	0.01	1.8%
Net income per common share - diluted			0.54	0.53	0.01	1.9%

Weighted average shares outstanding - basic			6,644	6,640	4	0.1%
Weighted average shares outstanding - diluted			6,903	6,905	(2)	0.0%

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

	Loans and fees		$ 13,314	$ 11,517	$ 1,797	15.6%
	Available-for-Sale debt securities:
		Taxable	297	291	6	2.1%
		Tax-exempt	323	292	31	10.6%
	Held-to-Maturity debt securities		3	4	-1	-25.0%
	Other interest and dividend income		192	125	67	53.6%

		Total Interest and Dividends	14,129	12,229	1,900	15.5%

	Interest expense

		Deposits	3,476	2,210	1,266	57.3%
		Borrowings	112	71	41	57.7%

		Total Interest Expense	3,588	2,281	1,307	57.3%

		Net Interest Income	10,541	9,948	593	6.0%

Provision for Loan Losses			-	850	-850	-100.0%

Net Interest Income after Provision for Loan Losses			10,541	9,098	1,443	15.9%

Non-Interest income

	Gain on sale of securities available for sale,net		-	-	-	-
	Income from bank-owned life insurance		305	245	60	24.5%
	Fees and service charges		145	160	-15	-9.4%
	Loan fees, including prepayment penalities		179	735	-556	-75.6%
	Other		20	7	13	185.7%

		Total Non-Interest Income	649	1,147	-498	-43.4%

Non-Interest Expense

	Salaries and employee benefits		3,507	3,178	329	10.4%
	Occupancy and equipment		839	874	-35	-4.0%
	Professional fees		485	548	-63	-11.5%
	Data processing and communications		534	501	33	6.6%
	Federal deposit insurance		84	191	-107	-56.0%
	Advertising and promotion		128	87	41	47.1%
	Office expense		72	72	0	0.0%
	OREO Expense		1	2	-1	-50.0%
	Loss on sale of other real estate owned		540	-	540	0.0%
	Other		466	389	77	19.8%

		Total Non-Interest Expense	6,656	5,842	814	13.9%

Income before income tax expense/(benefit)			4,534	4,403	131	3.0%

Income tax expense/(benefit)			830	1,225	-395	-32.2%

Net Income			$ 3,704	$ 3,178	$ 526	16.6%

Net income per common share - basic			0.56	0.54	0.02	3.7%
Net income per common share - diluted			0.54	0.51	0.03	5.9%

Weighted average shares outstanding - basic			6,644	5,909	735	12.4%
Weighted average shares outstanding - diluted			6,903	6,204	699	11.3%

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

	Loans and fees		$ 37,648	$ 33,037	$ 4,611	14.0%
	Available-for-Sale debt securities:
		Taxable	891	866	25	2.9%
		Tax-exempt	992	946	46	4.9%
	Held-to-Maturity debt securities		10	12	(2)	-16.7%
	Other interest and dividend income		637	321	316	98.4%

		Total Interest and Dividends	40,178	35,182	4,996	14.2%

	Interest expense

		Deposits	9,233	5,865	3,368	57.4%
		Borrowings	242	528	(286)	-54.2%

		Total Interest Expense	9,475	6,393	3,082	48.2%

		Net Interest Income	30,703	28,789	1,914	6.6%

Provision for Loan Losses			665	850	(185)	-21.8%

Net Interest Income after Provision for Loan Losses			30,038	27,939	2,099	7.5%

Non-Interest income

	Gain on sale of securities available for sale,net		1	14	(13)	-92.9%
	Income from bank-owned life insurance		912	598	314	52.5%
	Fees and service charges		463	463	-	0.0%
	Loan fees, including prepayment penalities		636	928	(292)	-31.5%
	Gain on sale of premise and equipment		-	3	(3)	-100.0%
	Other		49	24	25	104.2%

		Total Non-Interest Income	2,061	2,030	31	1.5%

Non-Interest Expense

	Salaries and employee benefits		10,876	9,969	907	9.1%
	Occupancy and equipment		2,529	2,587	(58)	-2.2%
	Professional fees		1,412	1,653	(241)	-14.6%
	Data processing and communications		1,582	1,459	123	8.4%
	Federal deposit insurance		260	527	(267)	-50.7%
	Advertising and promotion		287	202	85	42.1%
	Office expense		206	196	10	5.1%
	Other real estate owned expense		2	6	(4)	-66.7%
	Loss on sale of other real estate owned		540	-	540	0.0%
	Other		1,286	1,242	44	3.5%

		Total Non-Interest Expense	18,980	17,841	1,139	6.4%

Income before income tax expense/(benefit)			13,119	12,128	991	8.2%

Income tax expense/(benefit)			2,199	2,821	(622)	-22.0%

Net Income			$ 10,920	$ 9,307	$ 1,613	17.3%

Net income per common share - basic			1.65	1.81	(0.16)	-8.8%
Net income per common share - diluted			1.59	1.71	(0.12)	-7.0%

Weighted average shares outstanding - basic			6,620	5,145	1,475	28.7%
Weighted average shares outstanding - diluted			6,878	5,431	1,447	26.6%

The Bank of Princeton
Consolidated Average Balance Sheets
(unaudited)

	For the Quarter Ended

	Sept 2018		June 2018
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
Earning assets
Loans	$ 1,059,316	4.99%	$ 1,024,940	4.96%	$ 34,376	0.03%

Securities

Taxable AFS	50,661	2.34%	53,867	2.23%	(3,206)	0.11%
Tax exempt AFS	46,788	2.76%	48,443	2.75%	(1,655)	0.01%
Held-to-maturity	250	5.03%	263	5.22%	(13)	-0.19%

Securities	97,699	2.55%	102,573	2.48%	(4,874)	0.07%

Other interest earning assets
Interest-bearing bank accounts	30,938	2.05%	23,936	1.74%	7,002	0.31%
Equities	1,986	6.41%	2,048	6.22%	(62)	0.19%

Other interest earning assets	32,924	2.31%	25,984	2.10%	6,940	0.21%

Total interest-earning assets	1,189,939	4.71%	1,153,497	4.68%	36,442	0.03%

Total non earning assets	54,916		57,581

Total Assets	$ 1,244,855		$ 1,211,078


Interest-bearing liabilities
Checking	$ 200,635	0.85%	$ 203,771	0.83%	(3,136)	0.02%
Savings	100,496	1.22%	105,212	1.16%	(4,716)	0.06%
Money Market	284,651	1.48%	273,888	1.37%	10,763	0.11%
Certificate of Deposit	354,563	1.87%	327,284	1.73%	27,279	0.14%

Total interest-bearing deposits	940,345	1.47%	910,155	1.35%	30,190	0.12%

Non interest bearing deposits	101,923		101,043

Total deposits	1,042,268	1.32%	1,011,198	1.22%	31,070	0.10%

Borrowings	20,128	2.22%	21,635	2.15%	(1,507)	0.07%

Total interest-bearing liabilities	960,473	1.48%	931,790	1.37%	28,683	0.11%
(excluding non interest deposits)

Noninterest-bearing deposits	101,923		101,043
Total Cost of Funds	1,062,396	1.34%	1,032,833	1.24%	29,563	0.10%

Accrued expenses and other liabilities	4,543		4,418
Stockholders' equity	177,916		173,827
Total liabilities and stockholders' equity	$ 1,244,855		$ 1,211,078


Net interest spread		3.23%		3.31%
Net interest margin		3.51%		3.57%

Net interest margin (FTE)*		3.67%		3.70%

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

The Bank of Princeton
Consolidated Average Balance Sheets
(unaudited)

	For the Three Months Ended
	Sept 30,
	2018		2017
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
Earning assets
Loans	$ 1,059,316	4.99%	$ 903,622	5.06%	$ 155,694	-0.07%

Securities

Taxable AFS	50,661	2.34%	57,871	2.02%	(7,210)	0.32%
Tax exempt AFS	46,788	2.76%	43,990	2.65%	2,798	0.11%
Held-to-maturity	250	5.03%	292	5.02%	(42)	0.01%

Securities	97,699	2.55%	102,153	2.30%	(4,454)	0.25%

Other interest earning assets
Interest-bearing bank accounts	30,938	2.05%	25,143	1.31%	5,795	0.74%
Equities	1,986	6.41%	1,991	8.32%	(5)	-1.91%

Other interest earning assets	32,924	2.31%	27,134	1.83%	5,790	0.48%

Total interest-earning assets	1,189,939	4.71%	1,032,909	4.70%	157,030	0.01%

Total non earning assets	54,916		50,032

Total Assets	$ 1,244,855		$ 1,082,941


Interest-bearing liabilities
Checking	$ 200,635	0.85%	$ 179,382	0.74%	21,253	0.11%
Savings	100,496	1.22%	111,489	0.89%	(10,993)	0.33%
Money Market	284,651	1.48%	261,240	1.04%	23,411	0.44%
Certificate of Deposit	354,563	1.87%	250,499	1.48%	104,064	0.39%

Total interest-bearing deposits	940,345	1.47%	802,610	1.09%	137,735	0.38%

Non interest bearing deposits	101,923		108,839

Total deposits	1,042,268	1.32%	911,449	0.96%	130,819	0.36%

Borrowings	20,128	2.22%	21,217	1.34%	(1,089)	0.88%
Total interest-bearing liabilities
(excluding non interest deposits)	960,473	1.48%	823,827	1.10%	136,646	0.38%

Noninterest-bearing deposits	101,923		108,839
Total Cost of Funds	1,062,396	1.34%	932,666	0.97%	129,730	0.37%

Accrued expenses and other liabilities	4,543		3,597
Stockholders' equity	177,916		146,678
Total liabilities and stockholders' equity	$ 1,244,855		$ 1,082,941


Net interest spread		3.23%		3.60%
Net interest margin		3.51%		3.82%

Net interest margin (FTE)*		3.67%		3.99%

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

The Bank of Princeton
Consolidated Average Balance Sheets
(unaudited)

	For the Nine Months Ended
	Sept 30,
	2018		2017
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
Earning assets
Loans	$ 1,015,900	4.95%	$ 883,342	5.00%	$ 132,558	-0.05%

Securities

Taxable AFS	52,822	2.25%	57,974	1.99%	(5,152)	0.26%
Tax exempt AFS	48,000	2.76%	46,601	2.71%	1,399	0.05%
Held-to-maturity	259	5.16%	315	5.05%	(56)	0.11%

Securities	101,081	2.50%	104,890	2.32%	(3,809)	0.18%

Other interest earning assets
Interest-bearing bank accounts	42,804	1.73%	18,134	1.10%	24,670	0.63%
Equities	1,726	6.52%	4,141	5.53%	(2,415)	0.99%

Other interest earning assets	44,530	1.91%	22,275	1.92%	22,255	-0.01%

Total interest-earning assets	1,161,511	4.62%	1,010,507	4.65%	151,004	-0.03%

Total non earning assets	57,737		42,542

Total Assets	$ 1,219,248		$ 1,053,049


Interest-bearing liabilities
Checking	$ 228,229	0.83%	$ 161,772	0.69%	66,457	0.14%
Savings	104,210	1.13%	107,329	0.85%	(3,119)	0.28%
Money Market	269,224	1.36%	268,811	0.96%	413	0.40%
Certificate of Deposit	324,842	1.73%	221,839	1.45%	103,003	0.28%

Total interest-bearing deposits	926,505	1.33%	759,751	1.03%	166,754	0.30%

Non interest bearing deposits	99,485		101,216

Total deposits	1,025,990	1.20%	860,967	0.91%	165,023	0.29%

Borrowings	15,128	2.14%	67,513	1.05%	(52,385)	1.09%
Total interest-bearing liabilities
(excluding non interest deposits)	941,633	1.35%	827,264	1.03%	114,369	0.32%

Noninterest-bearing deposits	99,485		101,216
Total Cost of Funds	1,041,118	1.22%	928,480	0.92%	112,638	0.30%

Accrued expenses and other liabilities	4,140		3,815
Stockholders' equity	173,990		120,754
Total liabilities and stockholders' equity	$ 1,219,248		$ 1,053,049

Net interest spread		3.28%		3.62%
Net interest margin		3.53%		3.81%

Net interest margin (FTE)*		3.69%		3.99%

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

The Bank of Princeton
Quarterly Financial Highlights
(unaudited)

	2018	2018	2018	2017	2017
	Sep	Jun	Mar	Dec	Sep


Return on average assets	1.18%	1.21%	1.21%	0.59%	1.17%
Return on average equity	8.26%	8.39%	8.54%	4.02%	8.60%
Return on average tangible equity (1)	8.26%	8.39%	8.54%	4.02%	8.60%
Net interest margin	3.57%	3.57%	3.52%	3.79%	3.82%
Net interest margin (FTE)*	3.67%	3.70%	3.65%	3.92%	3.96%
Efficiency ratio - Non-GAAP	59.47%	57.55%	56.70%	49.40%	52.67%

Common Stock Data
Market value at period end	30.54	33.25	34.50	34.34	31.99
Market range:
High	35.45	34.90	34.69	34.95	33.49
Low	30.54	32.21	31.50	31.10	29.43
Book value per common share at period end	27.01	26.50	26.00	25.69	25.47
Tangible book value per common share at period end (1)	27.01	26.50	26.00	25.69	25.46

CAPITAL RATIOS
Total Capital (to risk-weighted assets)	16.79%	16.67%	17.04%	17.12%	17.15%
Tier 1 Capital (to risk-weighted assets)	15.73%	15.61%	15.94%	16.01%	16.06%
Tierr 1 Capital (to average assets)	14.47%	14.55%	14.30%	14.64%	15.29%
Period-end equity to assets	14.54%	14.18%	14.50%	14.02%	14.90%
Period-end tangible equity to tangible assets (1)	14.54%	14.18%	14.50%	14.02%	14.90%

CREDIT QUALITY DATA AT PERIOD END
(Dollars in Thousands)
Net charge-offs and (recoveries)	$ 42	$ 213	$ (3)	$ 2,584	$ 235

Annualized net charge-offs to average loans	0.016%	-0.083%	-0.001%	1.08%	0.10%

Nonaccrual loans	4,832	8,463	10,832	9,199	11,240
Other real estate owned	44	802	802	802	179
Total nonperforming assets	4,876	9,265	11,634	10,001	11,419

Accruing troubled debt restructurings (TDRs)	1,300	1,309	4,721	4,796	4,846

Total nonperforming assets and accruing TDRs	$ 6,176	$ 10,574	$ 16,355	$ 14,797	$ 16,265

Allowance for credit losses as a percent of:
Period-end loans	1.15%	1.13%	1.19%	1.20%	1.19%
Nonaccrual loans	39.81%	70.26%	91.42%	79.36%	99.82%
Nonperforming assets	40.17%	76.91%	98.19%	86.28%	101.41%

As a percent of total loans:
Nonaccrual loans	0.46%	0.79%	1.08%	0.95%	1.19%
Accruing TDRs	0.12%	0.12%	0.47%	0.49%	0.51%
Nonaccrual loans and accruing TDRs	0.58%	0.87%	1.64%	1.53%	1.72%



*Includes the effect of tax exempt securities and loans