PRINCETON, N.J., Jan. 27, 2022 /PRNewswire/ -- The Bank of Princeton (the "Bank") (NASDAQ:BPRN) today reported its unaudited results of operations and financial condition for the quarter ended December 31, 2021. The Bank reported net income of $6.2 million, or $0.92 per diluted common share, for the fourth quarter of 2021, compared to net income of $5.9 million, or $0.88 per diluted common share, for the third quarter of 2021, and net income of $4.1 million, or $0.60 per diluted common share, for the fourth quarter of 2020. The increase in net income, when compared to the three months ended September 30, 2021, was primarily due to a reduction of $900 thousand in the provision for loan loss, and a $149 thousand increase in non-interest income, partially offset by $414 thousand increase in non-interest expense and by a $268 thousand increase in income tax expense. The increase in net income, when comparing it to the three months ended December 31, 2020, was primarily due to an increase in net interest income of $2.4 million, a $1.4 million decrease in the provision for loan losses and a $297 thousand increase in non-interest income, partially offset by a $1.1 million increase in non-interest expense and a $948 thousand increase in income tax expenses.

Highlights for the quarter-ended December 31, 2021 are as follows:

The Bank completed its 2021 stock buyback program during the fourth quarter by purchasing an additional 112,597 shares of common stock at a weighted average price of $30.23.
Net interest income for the fourth quarter of 2021 increased $2.4 million or 17.9% over the same period in 2020.
The Bank decreased its cost of funds on deposits by 34 basis points in the fourth quarter of 2021 from the same period in 2020.
The Bank's efficiency ratio decreased to 50.4% for the fourth quarter of 2021 compared to 52.6% for the fourth quarter of 2020.
The ratio of nonperforming loans to total loans continues to be low at 0.09% as of December 31, 2021 compared to 0.12% at December 31, 2020 and compared to 0.16% at September 30, 2021.

President/CEO Edward Dietzler stated that, "The Bank finished up 2021 with a very strong performance overall, including a 63% improvement over last year's net income, along with strong loan growth after backing out the reduction in the Payroll Protection Program loans, and deposit growth."

Balance Sheet Review

Total assets were $1.69 billion at December 31, 2021, an increase of $83.3 million, or 5.2% when compared to $1.60 billion at the end of 2020. The primary reason for the increase in total assets was an increase in cash and cash equivalents of approximately $81.3 million, and a $25.5 million increase in available-for-sale securities, partially offset by a decrease of $28.9 million in net loans. The decreases in net loans primarily consisted of a $96.1 million decrease in Payroll Protection Program ("PPP") loans due to loan payoffs and the federal government's termination of the program, a decrease of $41.0 million in commercial real estate loans and a $20.5 million decrease in residential loans and home equity/consumer loans, partially offset by an increase of $140.6 million in construction loans during the twelve month period covered.

Total deposits at December 31, 2021 increased by $78.9 million, or 5.8%, when compared to December 31, 2020, primarily due to loan proceeds maintained in non-interest demand accounts from customers who received PPP loans, and stimulus payments to individuals under the American Rescue Plan Act, as well as growth from new branches added during the third quarter of 2020. When comparing deposit products between the two periods, non-interest checking increased $70.9 million, savings increased $46.6 million and money markets increased $67.8 million. These increases were partially offset by a decrease in interest-bearing demand accounts of $29.7 million, primarily consisting of municipal deposits, and a decrease of $76.7 million in certificates of deposit. In addition, the Bank had no outstanding borrowings at December 31, 2021 and December 31, 2020.

Total stockholders' equity at December 31, 2021 increased $7.8 million or 3.7% when compared to the end of 2020. This increase was primarily due to the $22.5 million of earnings recorded during the twelve months of 2021, offset by the $10.0 million of common stock repurchased, the $4.4 million of cash dividends paid during the period, and the $952 thousand decrease in the accumulated other comprehensive income on the available-for-sale investment portfolio related to an increase in the treasury interest rate yield curve. The Bank completed its 2021 stock buyback program during the fourth quarter and in total repurchased 339,788 shares of common stock at a total cost of $10.0 million and a weighted average cost of $29.53 per share. The ratio of equity to total assets at December 31, 2021 and at December 31, 2020, was $12.8% and 13.0%, respectively.

Asset Quality

At December 31, 2021, non-performing assets were $1.4 million, a decrease of $262 thousand, or 15.6%, when compared to the amount at December 31, 2020. This decrease at December 31, 2021 from December 31, 2020 was primarily due to the removal of three loans totaling $1.2 million offset by one new loan totaling $766 thousand that was classified as non-performing, along with the addition of an other real estate owned property valued at $226 thousand. Troubled debt restructurings ("TDR") totaled $6.9 million at December 31, 2021 and $8.6 million at December 31, 2020. Three TDR loans totaling $6.1 million are performing to their agreed upon terms and the remaining one loan remained in non-accrual status as of December 31, 2021.

As part of the Bank's commitment to provide assistance during the COVID-19 pandemic, the Bank agreed to defer either the principal portion or both principal and interest payments for its customers who requested the deferral and were not delinquent prior to the government shut down. The Bank has seen a favorable trend as a vast majority of customers have returned to their regular payment schedule. As of December 31, 2021, the Bank had remaining 1 loan that was modified totaling $9.0 million, compared to 14 loans (consisting of nine borrowers) that were modified totaling $45.0 million at December 31, 2020, and 240 loans totaling $263.5 million originally approved for such deferment and reported as of June 30, 2020. Under current accounting guidance, these loans are not required to be classified as TDRs.

Review of Quarterly Financial Results

Net-interest income was $16.0 million for the fourth quarter of 2021, compared to $16.1 million for the third quarter of 2021 and to $13.6 million for the fourth quarter of 2020. The decrease from the previous quarter was a result of a decrease in interest income, partially offset by a $134 thousand, or 8.7%, decrease in interest paid on liabilities, partially resulting from a 5 basis points reduction in the rate on interest bearing deposits. Interest income for the fourth quarter of 2021 included an approximately $1.4 million in accelerated accretion attributable to deferred fees received from PPP loans, due to the U.S. government forgiving the debt and paying off the loans. The net interest margin for the fourth quarter of 2021 was 3.96%, decreasing 12 basis points when compared to the third quarter of 2021. This decrease was primarily due to a 16 basis points reduction in the yield on the earning assets, partially offset by a reduction of 5 basis points in total interest cost of funds. When comparing the three month periods ended December 31, 2021 and 2020, net interest income increased $2.4 million, which was primarily due to an increase in interest income of $1.6 million caused by a $118.9 million increase in interest earning assets aided by a reduction in interest expense of $876 thousand. The reduction in interest expense was attributable to a decline of 34 basis points in the rate paid on its interest-bearing liabilities. For the twelve month period ended December 31, 2021, net interest income was $62.6 million, an increase of $13.8 million, or 28.1%, over 2020. This increase was due a $7.6 million increase in interest earned on earning assets and a $6.2 million decline in interest expense. For the twelve month period ended December 31, 2021, the average outstanding balance of earning assets increased by $127.0 million and average outstanding interest-bearing liabilities increased $57.1 million. The total rate on average interest-bearing liabilities, which includes non-interest-bearing deposits, for the three month periods ended December 31, 2021 and 2020 was 0.38% and 0.68%, respectively. For the twelve month periods ended December 31, 2021 and 2020 the total rate on average interest-bearing liabilities was 0.47% and 0.98%, respectively.

The provision for credit losses was $300 thousand for the three month period ended December 31, 2021. The comparable amounts were $1.2 million and $1.7 million for the three months ended September 30, 2021 and December 31, 2020, respectively. The primary reasons for the provision for credit losses for the fourth and third quarters of 2021 were charge-offs in the amounts of $245 thousand and $821 thousand, respectively. The primary reason for the provision in the fourth quarter of 2020 was due to charge-offs recorded in the period. As of December 31, 2021, the Bank did not apply any qualitative factors to the loans originated from PPP, based on the U.S government's guarantee and the Coronavirus Aid, Relief and Economic Securities Act requirement to classify these loans at 0% in determining risk-based capital ratio. The coverage rate of allowance for credit losses to period end loans was 1.24% (excluding PPP loans, the coverage ratio was 1.32%) at December 31, 2021, compared to 1.18% (excluding PPP loans, the coverage ratio was 1.35%) at December 31, 2020, which reflects management's assessment of the credit quality in the loan portfolio.

At December 31, 2021, the Bank's concentration in the loan portfolio associated with the segments management believes could be affected by the pandemic: restaurants and hotels totaled $23.9 million and $45.9 million, respectively.

Total non-interest income for the fourth quarter of 2021 increased $297 thousand, or 25.4%, to $1.5 million when compared to the same period in 2020. This increase was primarily due to a $371 thousand increase in loan fees and a $45 thousand increase in deposit fees earned. Total non-interest income when comparing fourth quarter of 2021 to third quarter of 2021 increased $149 thousand, primarily due to $121 thousand increase in loans fees and a $20 thousand increase in deposit fees earned. For the twelve month period ended December 31, 2021, non-interest income decreased $140 thousand, or 2.9%, from the 2020 twelve month period, primarily due to a $564 thousand gain on the sale of investment securities available-for sale recorded in the 2020 period.

Total non-interest expense for the fourth quarter of 2021 increased $1.1 million, or 13.3%, when compared to the same period in 2020. This increase was primarily due to an increase in additional operating cost associated with the Bank's branch expansion strategy. When comparing the quarter ended December 31, 2021 to the immediately prior quarter, non-interest expense increased $414 thousand, or 4.8%, primarily due to increases in salaries and benefits expense, occupancy and equipment expenses, and OREO expenses. For the twelve month period ended December 31, 2021, non-interest expense was $34.5 million, compared to $31.1 million for the same period in 2020. This increase was primarily due to an increase in additional operating costs associated with the Bank's branch expansion strategy.

For the three month period ended December 31, 2021, the Bank recorded an income tax expense of $2.0 million, resulting in an effective tax rate of 24.6%, compared to an income tax expense of $1.8 million resulting in an effective tax rate of 22.8% for the three month period ended September 30, 2021, and compared to an income tax expense of $1.1 million resulting in an effective tax rate of 20.7% for the three month period ended December 31, 2020. During the third quarter of 2020, the New Jersey Governor signed a law extending and retroactively increasing New Jersey's corporation business tax surtax by 1.0% to 2.5%. The effective tax rate for the fourth and third quarters 2021 were impacted by the level of tax-free income against the level of taxable earnings. For the twelve month periods ended December 31, 2021 and 2020, the income tax expense was $6.7 million (effective tax rate of 23.0%) and $3.5 million (effective tax rate of 20.2%), respectively.

COVID-19

The full impact of the coronavirus continues to evolve as of the date of this press release. As such, it is uncertain as to the full magnitude that the pandemic will have on the Bank's financial condition, liquidity, and future results of operations.

The Bank continues to work closely with its loan customers to educate and guide them on their options for financial assistance, including possible payment relief through deferral and waived fees. The Bank continues to endeavor to provide a fast and flexible response to the quickly changing circumstances.

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 19 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Hamilton, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville. There are also four branches in the Philadelphia, Pennsylvania area. 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 extent of the adverse impact of the current global coronavirus outbreak on our customers, prospects and business, including related shortage of goods, as well as the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area, 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; and the timing and nature of the regulatory response to any applications filed by the Bank; technological changes; acquisitions; changes in consumer spending and saving habits; those risks set forth in the Bank's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Risk Factors," 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.

Contact George Rapp

609.454.0718

grapp@thebankofprinceton.com

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

			Dec 31, 2021 vs Dec 31, 2020	Dec 31, 2021 vs Dec 31, 2020
	Dec 31, 2021	Dec 31, 2020	$ Change	% Change

ASSETS
Cash and cash equivalents	$ 158,716	$ 77,429	$ 81,287	105.0%
Securities available for sale taxable	51,690	25,112	26,578	105.8%
Securities available for sale tax exempt	49,468	50,516	(1,048)	-2.1%
Securities held to maturity	208	215	(7)	-3.3%
Loans receivable, net of deferred fees	1,335,163	1,363,486	(28,323)	-2.1%
Allowance for loan losses	(16,620)	(16,027)	(593)	3.7%
Goodwill	8,853	8,853	-	0.0%
Core deposit intangible	2,393	3,036	(643)	-21.2%
Other assets	97,811	90,218	7,593	8.4%
TOTAL ASSETS	$ 1,687,682	$ 1,602,838	$ 84,844	5.3%
		-

LIABILITIES
Non interest checking	$ 286,247	$ 215,381	$ 70,866	32.9%
Interest checking	259,022	288,769	(29,747)	-10.3%
Savings	225,579	178,932	46,647	26.1%
Money market	373,075	305,290	67,785	22.2%
Time deposits over $250,000	33,741	67,924	(34,183)	-50.3%
Other time deposits	268,479	310,970	(42,491)	-13.7%
Total Deposits	1,446,143	1,367,266	78,877	5.8%
Borrowings	-	-	-	0.0%
Other liabilities	24,961	26,754	(1,793)	-6.7%
TOTAL LIABILITIES	1,471,104	1,394,020	77,084	5.5%

STOCKHOLDERS' EQUITY
Common stock	34,098	33,949	149	0.4%
Paid-in capital	80,205	79,708	497	0.6%
Treasury Stock	(10,032)	-	(10,032)	0.0%
Retained earnings	111,468	93,370	18,098	19.4%
Accumulated other comprehensive income	839	1,791	(952)	-53.2%
TOTAL STOCKHOLDERS' EQUITY	216,578	208,818	7,760	3.7%

TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY	$ 1,687,682	$ 1,602,838	$ 84,844	5.3%

Book value per common share	$ 33.42	$ 30.75	$ 2.67	8.7%
Tangible book value per common share¹	$ 31.69	$ 29.00	$ 2.69	9.3%

¹Refer to non-gaap disclosure for explanation (see definition on the last page of this document).

The Bank of Princeton
Loan/Deposit Tables
(unaudited)

Loan receivable, net at December 31, 2021 and December 31, 2020 were comprised of the following:


	December 31,	December 31,
	2021	2020
	(Dollars in thousands)
Commercial real estate	$ 771,028	$ 812,043
Commercial and industrial	29,677	40,597
Construction	403,680	263,032
Residential first-lien mortgages	48,638	66,857
Home equity / consumer	7,685	9,929
PPP (SBA loans) Phase I	6,641	175,878
PPP (SBA loans) Phase II	73,099	-
Total loans	1,340,448	1,368,336
Deferred fees and costs, net	(5,285)	(4,850)
Allowance for loan losses	(16,620)	(16,027)
Loans, net	$ 1,318,543	$ 1,347,459


The components of deposits at December 31, 2021 and December 31, 2020 were as follows:

	December 31,	December 31,
	2021	2020
	(Dollars in thousands)
Demand, non-interest-bearing checking	$ 286,247	$ 215,381
Demand, interest-bearing	259,022	288,769
Savings	225,579	178,932
Money Markets	373,075	305,290
Time deposits	302,220	378,894
Total Deposits	$ 1,446,143	$ 1,367,266

The Bank of Princeton
Consolidated Statements of Operations
(unaudited)
			Three Months Ended December 31,
			Three Months Ended December 31,
			2021	2020	$ Change	% Change
			(Dollars and shares in thousands, except per share data)
Interest and Dividend Income

	Loans and fees		$ 16,861	$ 15,379	$ 1,482	9.6%
	Available-for-Sale debt securities:
		Taxable	194	103	91	88.3%
		Tax-exempt	295	321	(26)	-8.1%
	Held-to-Maturity debt securities		3	2	1	50.0%
	Other interest and dividend income		58	48	10	20.8%

		Total Interest and Dividends	17,411	15,853	1,558	9.8%

	Interest expense

		Deposits	1,411	2,287	(876)	-38.3%
		Borrowings	-	-	-	N/A

		Total Interest Expense	1,411	2,287	(876)	-38.3%

		Net Interest Income	16,000	13,566	2,434	17.9%

Provision for Loan Losses			300	1,650	(1,350)	-81.8%

Net Interest Income after Provision for Loan Losses			15,700	11,916	3,784	31.8%

Non-Interest income

	Gain on sale of securities available for sale,net		-	17	(17)	-100.0%
	Income from bank-owned life insurance		290	281	9	3.2%
	Fees and service charges		473	428	45	10.5%
	Loan fees, including prepayment penalities		757	386	371	96.1%
	Other		(53)	58	(111)	-191.4%

		Total Non-Interest Income	1,467	1,170	297	25.4%

Non-Interest Expense

	Salaries and employee benefits		4,667	3,870	797	20.6%
	Occupancy and equipment		1,521	1,499	22	1.5%
	Professional fees		511	613	(102)	-16.6%
	Data processing and communications		898	788	110	14.0%
	Federal deposit insurance		206	181	25	13.8%
	Advertising and promotion		42	59	(17)	-28.8%
	Office expense		66	60	6	10.0%
	Other real estate owned expense		151	-	151	N/A
	Core deposit intangible		154	174	(20)	-11.5%
	Other		747	666	81	12.2%

		Total Non-Interest Expense	8,963	7,910	1,053	13.3%

Income before income tax expense			8,204	5,176	3,028	58.5%

Income tax expense			2,021	1,073	948	88.4%

Net Income			$ 6,183	$ 4,103	$ 2,080	50.7%

Net income per common share - basic			$ 0.94	$ 0.60	$ 0.34	56.7%
Net income per common share - diluted			$ 0.92	$ 0.60	$ 0.32	53.3%

Weighted average shares outstanding - basic			6,538	6,784	(246)	-3.6%
Weighted average shares outstanding - diluted			6,694	6,878	(184)	-2.7%

The Bank of Princeton
Consolidated Statements of Operations (Current Quarter vs Prior Quarter)
(unaudited)
			Three Months Ended
			Dec 31,	Sep 30,
			2021	2021	$ Change	% Change
			(Dollars and shares in thousands, except per share data)
Interest and Dividend Income

	Loans and fees		$ 16,861	$ 17,181	$ (320)	-1.9%
	Available-for-Sale debt securities:
		Taxable	194	133	61	45.9%
		Tax-exempt	295	287	8	2.8%
	Held-to-Maturity debt securities		3	2	1	50.0%
	Other interest and dividend income		58	53	5	9.4%

		Total Interest and Dividends	17,411	17,656	(245)	-1.4%

	Interest expense

		Deposits	1,411	1,545	(134)	-8.7%
		Borrowings	-	-	0	0.0%

		Total Interest Expense	1,411	1,545	(134)	-8.7%

		Net Interest Income	16,000	16,111	(111)	-0.7%

Provision for Loan Losses			300	1,200	(900)	-75.0%

Net Interest Income after Provision for Loan Losses			15,700	14,911	789	5.3%

Non-Interest income

	Gain on sale of securities available for sale,net		-	-	-	0.0%
	Income from bank-owned life insurance		290	276	14	5.1%
	Fees and service charges		473	453	20	4.4%
	Loan fees, including prepayment penalities		757	636	121	19.0%
	Other		(53)	(47)	(6)	12.8%

		Total Non-Interest Income	1,467	1,318	149	11.3%

Non-Interest Expense

	Salaries and employee benefits		4,667	4,342	325	7.5%
	Occupancy and equipment		1,521	1,492	29	1.9%
	Professional fees		511	580	(69)	-11.9%
	Data processing and communications		898	904	(6)	-0.7%
	Federal deposit insurance		206	220	(14)	-6.4%
	Advertising and promotion		42	59	(17)	-28.8%
	Office expense		66	56	10	17.9%
	Other real estate owned expense		151	80	71	88.8%
	Core deposit intangible		154	155	(1)	-0.6%
	Other		747	661	86	13.0%

		Total Non-Interest Expense	8,963	8,549	414	4.8%

Income before income tax expense			8,204	7,680	524	6.8%

Income tax expense			2,021	1,753	268	15.3%

Net Income			$ 6,183	$ 5,927	$ 256	4.3%

Net income per common share - basic			$ 0.94	$ 0.89	$ 0.05	5.6%
Net income per common share - diluted			$ 0.92	$ 0.88	$ 0.04	4.5%

Weighted average shares outstanding - basic			6,538	6,613	(75)	-1.1%
Weighted average shares outstanding - diluted			6,694	6,767	(73)	-1.1%

The Bank of Princeton
Consolidated Statements of Operations
(unaudited)

			Tweleve Months Ended Dec 31,
			2021	2020	$ Change	% Change
			(Dollars and shares in thousands, except for per share data)
Interest and Dividend Income

	Loans and fees		$ 67,348	$ 59,301	$ 8,047	13.6%
	Available-for-Sale debt securities:
		Taxable	547	719	(172)	-23.9%
		Tax-exempt	1,172	1,378	(206)	-14.9%
	Held-to-Maturity debt securities		11	11	0	0.0%
	Other interest and dividend income		197	267	(70)	-26.2%

		Total Interest and Dividends	69,275	61,676	7,599	12.3%

	Interest expense

		Deposits	6,673	12,817	(6,144)	-47.9%
		Borrowings	1	9	(8)	-88.9%

		Total Interest Expense	6,674	12,826	(6,152)	-48.0%

		Net Interest Income	62,601	48,850	13,751	28.1%

Provision for Loan Losses			3,625	5,225	(1,600)	-30.6%

Net Interest Income after Provision for Loan Losses			58,976	43,625	15,351	35.2%

Non-Interest income

	Gain on sale of securities available for sale,net		7	571	(564)	-98.8%
	Income from bank-owned life insurance		1,116	1,151	(35)	-3.0%
	Fees and service charges		1,764	1,493	271	18.2%
	Loan fees, including prepayment penalities		1,757	1,370	387	28.2%
	Other		22	221	(199)	-90.0%

		Total Non-Interest Income	4,666	4,806	(140)	-2.9%

Non-Interest Expense

	Salaries and employee benefits		17,483	16,451	1,032	6.3%
	Occupancy and equipment		6,055	5,412	643	11.9%
	Professional fees		2,431	2,103	328	15.6%
	Data processing and communications		3,562	3,085	477	15.5%
	Federal deposit insurance		792	497	295	59.4%
	Advertising and promotion		214	301	(87)	-28.9%
	Office expense		219	276	(57)	-20.7%
	Other real estate owned expense		241	-	241	N/A
	Core deposit intangible		643	727	(84)	-11.6%
	Other		2,813	2,289	524	22.9%

		Total Non-Interest Expense	34,453	31,141	3,312	10.6%

Income before income tax expense			29,189	17,290	11,899	68.8%

Income tax expense			6,703	3,484	3,219	92.4%

Net Income			$ 22,486	$ 13,806	$ 8,680	62.9%

Net income per common share - basic			$ 3.37	$ 2.04	$ 1.33	65.2%
Net income per common share - diluted			$ 3.30	$ 2.01	$ 1.29	64.2%

Weighted average shares outstanding - basic			6,667	6,774	(107)	-1.6%
Weighted average shares outstanding - diluted			6,814	6,873	(59)	-0.9%

The Bank of Princeton
Consolidated Average Statement of Financial Condition
(unaudited)

	For the Three Months Ended
	December 31,
	2021		2020
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
	(Dollars in thousands)
Earning assets
Loans	$ 1,347,511	4.96%	$ 1,351,400	4.53%	$ (3,889)	0.43%

Securities

Taxable AFS	50,124	1.56%	26,145	1.57%	23,979	-0.01%
Tax exempt AFS	47,562	2.47%	51,707	2.48%	(4,145)	-0.01%
Held-to-maturity	209	5.27%	216	5.26%	(7)	0.01%

Securities	97,895	2.01%	78,068	2.19%	19,827	-0.18%

Other interest earning assets
Interest-bearing bank accounts	157,550	0.11%	54,560	0.23%	102,990	-0.12%
Equities	1,338	3.99%	1,377	4.74%	(39)	-0.75%

Other interest earning assets	158,888	0.15%	55,937	0.34%	102,951	-0.19%

Total interest-earning assets	1,604,294	4.31%	1,485,405	4.25%	118,889	0.06%

Total non earning assets	102,987		92,007

Total Assets	$ 1,707,281		$ 1,577,412


Interest-bearing liabilities
Checking	$ 274,944	0.26%	$ 242,076	0.31%	$ 32,868	-0.05%
Savings	223,590	0.23%	177,822	0.29%	45,768	-0.06%
Money Market	367,493	0.27%	303,158	0.35%	64,335	-0.08%
Certificate of Deposit	312,634	1.09%	391,985	1.73%	(79,351)	-0.64%

Total interest-bearing deposits	1,178,661	0.48%	1,115,041	0.82%	63,620	-0.34%

Non interest bearing deposits	288,292		228,410

Total deposits	1,466,953	0.38%	1,343,451	0.68%	123,502	-0.30%

Borrowings	-	0.00%	261	0.38%	(261)	-0.38%
Total interest-bearing liabilities
(excluding non interest deposits)	1,178,661	0.48%	1,115,302	0.82%	63,359	-0.34%

Noninterest-bearing deposits	288,292		228,410
Total Cost of Funds	1,466,953	0.38%	1,343,712	0.68%	123,241	-0.30%

Accrued expenses and other liabilities	24,056		26,156
Stockholders' equity	216,272		207,544
Total liabilities and stockholders' equity	$ 1,707,281		$ 1,577,412


Net interest spread		3.83%		3.43%
Net interest margin		3.96%		3.63%

Net interest margin (FTE)¹		4.02%		3.69%

¹Includes federal and state tax effect of tax exempt securities and loans.

The Bank of Princeton
Consolidated Average Statement of Financial Condition
(unaudited)

	For the Quarter Ended
	Dec 2021		Sept 2021
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
	(Dollars in thousands)
Earning assets
Loans	$ 1,347,511	4.96%	$ 1,367,980	4.98%	$ (20,469)	-0.02%

Securities

Taxable AFS	50,124	1.56%	33,953	1.51%	16,171	0.05%
Tax exempt AFS	47,562	2.47%	46,510	2.47%	1,052	0.00%
Held-to-maturity	209	5.27%	211	5.27%	(2)	0.00%

Securities	97,895	2.01%	80,674	2.07%	17,221	-0.06%

Other interest earning assets
Interest-bearing bank accounts	157,550	0.11%	116,910	0.13%	40,640	-0.02%
Equities	1,338	3.99%	1,338	3.93%	0	0.06%

Other interest earning assets	158,888	0.15%	118,248	0.18%	40,640	-0.03%

Total interest-earning assets	1,604,294	4.31%	1,566,902	4.47%	37,392	-0.16%

Total non earning assets	102,987		95,130

Total Assets	$ 1,707,281		$ 1,662,032


Interest-bearing liabilities
Checking	$ 274,944	0.26%	$ 260,813	0.26%	$ 14,131	0.00%
Savings	223,590	0.23%	214,406	0.24%	9,184	-0.01%
Money Market	367,493	0.27%	346,330	0.28%	21,163	-0.01%
Certificate of Deposit	312,634	1.09%	329,117	1.21%	(16,483)	-0.12%

Total interest-bearing deposits	1,178,661	0.48%	1,150,666	0.53%	27,995	-0.05%

Non interest bearing deposits	288,292		272,097

Total deposits	1,466,953	0.38%	1,422,763	0.43%	44,190	-0.05%

Borrowings	-	0.00%	-	0.00%	0	0.00%

Total interest-bearing liabilities	1,178,661	0.48%	1,150,666	0.53%	27,995	-0.05%
(excluding non interest deposits)
Noninterest-bearing deposits	288,292		272,097
Total Cost of Funds	1,466,953	0.38%	1,422,763	0.43%	44,190	-0.05%

Accrued expenses and other liabilities	24,056		24,480
Stockholders' equity	216,272		214,789
Total liabilities and stockholders' equity	$ 1,707,281		$ 1,662,032


Net interest spread		3.83%		3.94%
Net interest margin		3.96%		4.08%

Net interest margin (FTE)¹		4.02%		4.14%

¹Includes federal and state tax effect of tax exempt securities and loans.

The Bank of Princeton
Consolidated Average Statement of Financial Condition
(unaudited)

	For the Tweleve Months Ended
	December 31,
	2021		2020
	(Dollars in thousands)
	Average	Yield/	Average	Yield/
	balance	rate	balance	rate	$ Change	% Change
Earning assets
Loans	$ 1,381,626	4.87%	$ 1,291,534	4.59%	$ 90,092	0.28%

Securities

Taxable AFS	33,805	1.62%	38,696	1.86%	(4,891)	-0.24%
Tax exempt AFS	47,294	2.48%	54,787	2.52%	(7,493)	-0.04%
Held-to-maturity	212	5.27%	219	5.26%	(7)	0.01%

Securities	81,311	2.13%	98,703	2.25%	(17,392)	-0.12%

Other interest earning assets
Interest-bearing bank accounts	93,031	0.15%	43,658	0.45%	49,373	-0.30%
Equities	1,366	4.21%	1,394	5.06%	(28)	-0.85%

Other interest earning assets	94,397	0.21%	45,052	0.59%	49,345	-0.38%

Total interest-earning assets	1,557,334	4.45%	1,430,288	4.31%	127,046	0.14%

Total non earning assets	101,479		100,552

Total Assets	$ 1,658,813		$ 1,530,840


Interest-bearing liabilities
Checking	$ 263,715	0.27%	$ 224,678	0.63%	$ 39,037	-0.36%
Savings	205,788	0.25%	171,119	0.58%	34,669	-0.33%
Money Market	339,903	0.30%	281,421	0.71%	58,482	-0.41%
Certificate of Deposit	336,488	1.32%	410,483	2.05%	(73,995)	-0.73%

Total interest-bearing deposits	1,145,894	0.58%	1,087,701	1.18%	58,193	-0.60%

Non interest bearing deposits	273,260		214,208

Total deposits	1,419,154	0.47%	1,301,909	0.98%	117,245	-0.51%

Borrowings	270	0.32%	1,345	0.67%	(1,075)	-0.35%
Total interest-bearing liabilities
(excluding non interest deposits)	1,146,164	0.58%	1,089,046	1.18%	57,118	-0.60%

Noninterest-bearing deposits	273,260		214,208
Total Cost of Funds	1,419,424	0.47%	1,303,254	0.98%	116,170	-0.51%

Accrued expenses and other liabilities	25,470		25,031
Stockholders' equity	213,919		202,555
Total liabilities and stockholders' equity	$ 1,658,813		$ 1,530,840

Net interest spread		3.87%		3.13%
Net interest margin		4.02%		3.42%

Net interest margin (FTE)¹		4.12%		3.49%

¹Includes federal and state tax effect of tax exempt securities and loans.

The Bank of Princeton
Quarterly Financial Highlights
(unaudited)

	2021	2021	2021	2021	2020
(Dollars in thousands, except common stock data)	Dec	Sep	Jun	Mar	Dec

Return on average assets	1.44%	1.41%	1.34%	1.21%	1.03%
Return on average equity	11.34%	10.95%	10.36%	9.31%	7.86%
Return on average tangible equity¹	11.97%	11.56%	10.95%	9.86%	8.35%
Net interest margin	3.96%	4.08%	4.06%	3.98%	3.63%
Net interest margin (FTE)²	4.02%	4.14%	4.12%	4.09%	3.69%
Efficiency ratio - Non-GAAP³	50.43%	48.16%	50.87%	51.79%	52.55%

Common Stock Data
Market value at period end	$ 29.33	$ 29.87	$ 28.67	$ 28.62	$ 23.41
Market range:
High	$ 30.89	$ 30.67	$ 31.31	$ 29.67	$ 26.44
Low	$ 28.71	$ 28.18	$ 25.58	$ 21.43	$ 18.12
Book value per common share at period end	$ 33.42	$ 32.66	$ 31.96	$ 31.24	$ 30.75
Tangible book value per common share at period end⁴	$ 31.69	$ 30.93	$ 30.22	$ 29.52	$ 29.00
Shares of common stock outstanding (in thousands)	6,480	6,588	6,659	6,804	6,761

CAPITAL RATIOS
Total Capital (to risk-weighted assets)	15.10%	15.60%	15.33%	15.73%	16.03%
Tier 1 Capital (to risk-weighted assets)	13.97%	14.43%	14.19%	14.56%	14.81%
Tier 1 Capital (to average assets)	12.06%	12.29%	12.22%	12.45%	12.48%
Period-end equity to assets	12.84%	12.89%	13.01%	12.62%	13.03%
Period-end tangible equity to tangible assets	12.26%	12.23%	12.40%	11.92%	12.38%

CREDIT QUALITY DATA AT PERIOD END
(Dollars in Thousands)
Net charge-offs and (recoveries)	$ 101	$ 821	$ 1,000	$ 1,100	$ 870
Annualized net charge-offs (recoveries) to average loans	0.030%	0.240%	0.279%	0.319%	0.256%

Total nonperforming Loans (TDRs not included)	$ 422	$ 1,043	$ 2,381	$ 2,498	$ 1,676
Other real estate owned	226	376	446	446	-
Troubled debt restructurings (TDRs)
-Performing	6,122	6,187	6,241	8,533	8,573
-Non-performing	766	1,092	1,332	-	-
Total nonperforming assets and accruing TDRs	$ 7,536	$ 8,698	$ 10,400	$ 11,477	$ 10,249

Allowance for credit losses as a percent of:
Period-end loans	1.24%	1.22%	1.14%	1.12%	1.18%
Nonaccrual loans	1398.99%	769.13%	491.03%	781.77%	956.26%
Nonperforming assets	1175.39%	653.96%	432.05%	642.19%	956.26%

As a percent of total loans:
Nonaccrual loans	0.09%	0.16%	0.23%	0.14%	0.12%
Accruing TDRs	0.46%	0.46%	0.45%	0.59%	0.63%
Nonaccrual loans and accruing TDRs	0.55%	0.62%	0.71%	0.77%	0.75%


¹Return on average tangible equity is a non-GAAP measure that represents the rate of return on tangible common equity.
²Includes the effect of tax exempt securities and loans
³The efficiency ratio in a non-GAAP measure that represents the ratio of non-interest expense (less CDI expense) divided by the net-interest income
and non-interest income.
⁴Tangible book value per common share is a non-GAAP measure that represents book value per common share which
excludes goodwill and core deposit intangible.

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SOURCE The Bank of Princeton

The Bank of Princeton Announces Fourth Quarter and Year-end 2021 Results