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Princeton Bancorp
BPRN
#8345
Rank
$0.23 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$34.81
Share price
0.67%
Change (1 day)
22.23%
Change (1 year)
๐Ÿฆ Banks๐Ÿ’ณ Financial services
Categories
  1. Princeton Bancorp
  2. Quarterly Reports (10-Q)
  3. Submitted on 2025-05-09

Princeton Bancorp - 10-Q quarterly report FY


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Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20429
 
 
FORM
10-Q
 
 
(Mark one)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2025
Or
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
     
to
     
Commission File Number:
001-41589
 
 
PRINCETON BANCORP, INC.
(Exact name of registrant as specified in its charter)
 
 
 
Pennsylvania
 
88-4268702
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
183 Bayard Lane, Princeton, New Jersey 08540
(Address of principal executive offices) (Zip Code)
(609)
921-1700
(Registrant’s telephone number, including area code)
 
 
Securities registered or to be registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Common stock, no par value
 
BPRN
 
The Nasdaq Global Market
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer ☐  Accelerated filer ☒
Non-accelerated
filer		 ☐  Smaller reporting company ☒
Emerging growth company ☐   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 5, 2025, there were 6,929,130 outstanding shares of the issuer’s common stock, no par value.
 
 
 

Table of Contents

TABLE OF CONTENTS

 

PART I FINANCIAL INFORMATION

  

Item 1

 Financial Statements  
 

Unaudited Consolidated Statements of Financial Condition - March 31, 2025 and December 31, 2024

   3 
 

Unaudited Consolidated Statements of Income - Three Months Ended March 31, 2025 and 2024

   4 
 

Unaudited Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2025 and 2024

   5 
 

Unaudited Consolidated Statements of Changes in Stockholders’ Equity - Three Months Ended March 31, 2025 and 2024

   6 
 

Unaudited Consolidated Statements of Cash Flows - Three Months Ended March 31, 2025 and 2024

   7 
 

Notes to Unaudited Consolidated Financial Statements

   8 

Item 2

 Management’s Discussion and Analysis of Financial Condition and Results of Operations   27 

Item 3

 Quantitative and Qualitative Disclosure about Market Risk   38 

Item 4

 Controls and Procedures   38 

PART II OTHER INFORMATION

  

Item 1

 Legal Proceedings   39 

Item 1A

 Risk Factors   39 

Item 2

 Unregistered Sale of Equity Securities and Use of Proceeds   39 

Item 3

 Defaults Upon Senior Securities   39 

Item 4

 Mine Safety Disclosures   39 

Item 5

 Other Information   39 

Item 6

 Exhibits   40 

 

2

Table of Contents
PART I–FINANCIAL INFORMATION
Item 1. Financial Statements.
PRINCETON BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
 
   
March 31,
  
December 31,
 
   
2025
  
2024
 
ASSETS
   
Cash and due from banks
  $20,193  $16,915 
Interest-earning bank balances
   2,587   16,729 
Federal funds sold
   44,894   83,704 
  
 
 
  
 
 
 
Total cash and cash equivalents
   67,674   117,348 
  
 
 
  
 
 
 
Securities
available-for-sale,
at fair value
   239,234   247,171 
Securities
held-to-maturity
(fair value $160 and $162, at March 31, 2025 and December 31, 2024, respectively)
   159   161 
Loans receivable, net of deferred fees and costs
   1,856,539   1,818,875 
Less: allowance for credit losses
   (23,942)   (23,657) 
  
 
 
  
 
 
 
Loan receivable, net
   1,832,597   1,795,218 
Bank-owned life insurance
   72,581   72,111 
Premises and equipment, net
   17,560   17,804 
Accrued interest receivable
   8,146   7,975 
Restricted investment in bank stock
   2,138   2,075 
Deferred taxes, net
   19,563   20,276 
Goodwill
   14,381   14,381 
Core deposit intangible
   3,403   3,632 
Other real estate owned
   —    295 
Operating lease
right-of-use
asset
   21,189   21,903 
Other assets
   19,472   19,883 
  
 
 
  
 
 
 
TOTAL ASSETS
  $2,318,097  $2,340,233 
  
 
 
  
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
   
LIABILITIES
   
Deposits:
   
Non-interest-bearing
  $290,496  $300,972 
Interest-bearing
   1,720,170   1,731,653 
  
 
 
  
 
 
 
Total deposits
   2,010,666   2,032,625 
Accrued interest payable
   12,510   15,401 
Operating lease liability
   22,241   22,941 
Other liabilities
   5,693   7,226 
  
 
 
  
 
 
 
TOTAL LIABILITIES
   2,051,110   2,078,193 
  
 
 
  
 
 
 
STOCKHOLDERS’ EQUITY:
   
Preferred stock, no par value;
2,000,000
shares authorized and none outstanding at March 31, 2025 and none authorized at December 31, 2024
   —    —  
Common stock, no par value; 15,000,000 shares authorized, 6,956,880 shares issued and 6,924,130 outstanding at March 31, 2025; 6,910,693 shares issued and 6,883,193 outstanding at December 31, 2024
   —    —  
Paid-in
capital
   120,452   119,908 
Treasury stock, at cost; 32,750 shares at March 31, 2025 and 27,500 shares at December 31, 2024
   (1,005)   (842) 
Retained earnings
   155,170   151,915 
Accumulated other comprehensive loss
   (7,630)   (8,941) 
  
 
 
  
 
 
 
TOTAL STOCKHOLDERS’ EQUITY
   266,987   262,040 
  
 
 
  
 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $2,318,097  $2,340,233 
  
 
 
  
 
 
 
See accompanying notes to unaudited consolidated financial statements.
 
3
Table of Contents
PRINCETON BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
 
   
Three Months
Ended
 
   
March 31,
 
   
2025
   
2024
 
INTEREST AND DIVIDEND INCOME
    
Loans receivable, including fees
  $29,624   $24,940 
Securities
available-for-sale:
    
Taxable
   2,616    564 
Tax-exempt
   284    286 
Securities
held-to-maturity
   2    2 
Other interest and dividend income
   769    2,274 
  
 
 
   
 
 
 
TOTAL INTEREST AND DIVIDEND INCOME
   33,295    28,066 
  
 
 
   
 
 
 
INTEREST EXPENSE
    
Deposits
   14,538    12,618 
Borrowings
   —     —  
  
 
 
   
 
 
 
TOTAL INTEREST EXPENSE
   14,538    12,618 
  
 
 
   
 
 
 
NET INTEREST INCOME
   18,757    15,448 
Provision for credit losses
   268    186 
  
 
 
   
 
 
 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
   18,489    15,262 
  
 
 
   
 
 
 
NON-INTEREST
INCOME
    
Income from bank-owned life insurance
   471    381 
Fees and service charges
   511    432 
Loan fees, including preypayment penalties
   675    724 
Other
   533    448 
  
 
 
   
 
 
 
TOTAL
NON-INTEREST
INCOME
   2,190    1,985 
  
 
 
   
 
 
 
NON-INTEREST
EXPENSE
    
Salaries and employee benefits
   7,172    6,520 
Occupancy and equipment
   2,285    2,029 
Professional fees
   761    524 
Data processing and communications
   1,626    1,160 
Federal deposit insurance
   533    273 
Advertising and promotion
   171    142 
Office expense
   110    119 
Other real estate expenses
   27    —  
Core deposit intangible
   229    120 
Other
   878    949 
  
 
 
   
 
 
 
TOTAL
NON-INTEREST
EXPENSE
   13,792    11,836 
  
 
 
   
 
 
 
INCOME BEFORE INCOME TAX EXPENSE
   6,887    5,411 
INCOME TAX EXPENSE
   1,509    1,066 
  
 
 
   
 
 
 
NET INCOME
  $5,378   $4,345 
  
 
 
   
 
 
 
Earnings per common share-basic
  $0.78   $0.69 
Earnings per common share-diluted
  $0.77   $0.68 
See accompanying notes to unaudited consolidated financial statements.
 
4
Table of Contents
PRINCETON BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
 
   
Three Months Ended
 
   
March 31,
 
   
 2025 
  
 2024 
 
NET INCOME
  $5,378  $4,345 
Other comprehensive income (loss)
   
Unrealized losses arising during period on securities
available-for-sale
   1,828   (434) 
  
 
 
  
 
 
 
Net unrealized (loss) income
   1,828   (434) 
Tax effect
   (517)   143 
  
 
 
  
 
 
 
Total other comprehensive (loss) income
   1,311   (291) 
  
 
 
  
 
 
 
COMPREHENSIVE INCOME
  $6,689  $4,054 
  
 
 
  
 
 
 
See accompanying notes to unaudited consolidated financial statements.
 
5
PRINCETON BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Dollars in thousands, except share data)
 
                
Accumulated
    
                
Other
    
   
Common
   
Paid-in
  
Treasury
  
Retained
  
Comprehensive
    
   
Stock
   
Capital
  
Stock
  
Earnings
  
Loss
  
Total
 
Three Months Ended March 31, 2025 and 2024
        
Balance, December 31, 2023
  $—    $98,291  $—   $149,414  $(7,494)  $240,211 
Net income
   —     —    —    4,345   —    4,345 
Other comprehensive loss
   —     —    —    —    (291)   (291) 
Treasury stock repurchases (19,000 shares)
   —     —    (579)   —    —    (579) 
Stock options exercised (2,450 shares)
   —     34   —    —    —    34 
Share redemption for tax withholding on restricted stock vesting
   —     (249)   —    —    —    (249) 
Dividends declared $0.30 per share
   —     —    —    (1,866)   —    (1,866) 
Dividend reinvestment plan (1,018 shares)
   —     33   —    (33)   —    —  
Stock-based compensation expense
   —     203   —    —    —    203 
  
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance, March 31, 2024
  $    —    $98,312  $(579)  $151,860  $(7,785)  $241,808 
  
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance, December 31, 2024
  $—    $119,908  $(842)  $151,915  $(8,941)  $262,040 
Net income (loss)
   —     —    —    5,378   —    5,378 
Other comprehensive income
   —     —    —    —    1,311   1,311 
Treasury stock repurchases (5,250 shares)
   —     —    (163)   —    —    (163) 
Stock options exercised (21,300 shares)
   —     443   —    —    —    443 
Share redemption for tax withholding on restricted stock vesting
   —     (231)   —    —    —    (231) 
Dividends declared $0.30 per share
   —     —    —    (2,092)   —    (2,092) 
Dividend reinvestment plan (994 shares)
   —     31   —    (31)   —    —  
Stock-based compensation expense
   —     301   —    —    —    301 
  
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance, March 31, 2025
  $—    $120,452  $(1,005)  $155,170  $(7,630)  $266,987 
  
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
See accompanying notes to unaudited consolidated financial statements.
 
6
Table of Contents
PRINCETON BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
   
Three Months Ended March 31,
 
   
2025
  
2024
 
CASH FLOWS FROM OPERATING ACTIVITIES
   
Net income
  $5,378  $4,345 
Adjustments to reconcile net income to net cash provided by operating activities:
   
Provision for credit losses
   268   186 
Depreciation and amortization
   444   409 
Stock-based compensation expense
   301   203 
Amortization of premiums and accretion of discounts on securities, net
   7   6 
Accretion of net deferred loan fees and costs
   (1,246)   (37) 
Increase in cash surrender value of bank-owned life insurance
   (470)   (380) 
Deferred income tax
   713   98 
Amortization of core deposit intangible
   229   121 
Increase (decrease) in accrued interest receivable and other assets
   751   (152) 
(Decrease) increase in accrued interest payable and other liabilities
   (5,124)   28 
  
 
 
  
 
 
 
NET CASH PROVIDED BY OPERATING ACTIVITIES
   1,251   4,827 
  
 
 
  
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
   
Purchases of
available-for-sale
securities
   (2,564)   (28,898) 
Maturities, calls and principal repayments of securities
available-for-sale
   12,320   1,254 
Maturities, calls and principal repayments of securities
held-to-maturity
   2   26 
Net (increase) in loans
   (36,418)   (22,859) 
Purchases of premises and equipment
   (200)   (71) 
(Purchases) redemption of restricted bank stock
   (63)   12 
  
 
 
  
 
 
 
NET CASH USED IN INVESTMENT ACTIVITIES
   (26,923)   (50,536) 
  
 
 
  
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
   
Net (decrease) increase in deposits
   (21,959)   69,879 
Cash dividends
   (2,092)   (1,866) 
Share redemption for tax witholding on restricted stock vesting
   (231)   (249) 
Purchase of treasury stock
   (163)   (579) 
Proceeds from exercise of stock options
   443   34 
  
 
 
  
 
 
 
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES
   (24,002)   67,219 
  
 
 
  
 
 
 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
   (49,674)   21,510 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
   117,348   150,557 
  
 
 
  
 
 
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
  $67,674  $172,067 
  
 
 
  
 
 
 
SUPPLEMENTARY CASH FLOWS INFORMATION:
   
Interest paid
  $17,429  $9,949 
Income taxes paid
  $1,094  $724 
Increase in ROU leases
  $—   $1,808 
See accompanying notes to unaudited consolidated financial statements.
 
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PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 1 – Summary of Significant Accounting Policies
Organization and Nature of Operations
The Bank of Princeton (the “Bank”) was incorporated on March 5, 2007, under the laws of the State of New Jersey and is a New Jersey state-chartered banking institution. The Bank was granted its bank charter on April 17, 2007, commenced operations on April 23, 2007, and is a full-service bank providing personal and business lending and deposit services. As a state-chartered bank, the Bank is subject to regulation by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation (“FDIC”). The area served by the Bank, through its 35 branches, is generally an area within an approximate
50-mile
radius of Princeton, NJ, including parts of Burlington, Camden, Gloucester, Hunterdon, Mercer, Middlesex, Ocean, and Somerset Counties in New Jersey, and additional areas in portions of Philadelphia, Montgomery, and Bucks Counties in Pennsylvania. The Bank also has two retail branches and conducts loan origination activities in select areas of New York.
The Bank offers traditional retail banking services,
one-to-four-family
residential mortgage loans, multi-family and commercial mortgage loans, construction loans, commercial business loans and consumer loans, including home equity loans and lines of credit.
On January 10, 2023, Princeton Bancorp, Inc., a Pennsylvania corporation formed by the Bank (the “Company”), acquired all the outstanding stock of the Bank in a corporate reorganization. As a result, the Bank became the sole direct subsidiary of the Company, the Company became the holding company for the Bank and the stockholders of the Bank became stockholders of the Company. As of March 31, 2025, the Company and its subsidiaries had 245 total employees and 242 full-time equivalent employees.
On August 23, 2024, the Company completed the acquisition of Cornerstone Financial Corporation (“CFC”), the holding company for Cornerstone Bank, a New Jersey chartered state bank headquartered in Mt. Laurel, New Jersey that primarily served the South Jersey market. On that date, the Company acquired 100% of the outstanding common stock of CFC in exchange for the Company’s stock, CFC was merged into the Company, and Cornerstone Bank was merged with and into the Bank.
Basis of Financial Statement Presentation
The unaudited consolidated financial statements include the accounts of the Company, its wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiaries: Bayard Lane, LLC, Bayard Properties, LLC, 112 Fifth Avenue, LLC, TBOP Delaware Investment Company and TBOP REIT, Inc. All significant inter-company accounts and transactions have been eliminated in consolidation.
The unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission and the FDIC. Accordingly, they do not include all the information and disclosures required by GAAP for annual financial statements. In management’s opinion, the unaudited consolidated financial statements contain all adjustments, which include normal and recurring adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods presented. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on
Form 10-K
for the year ended December 31, 2024.
 
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PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 1 – Summary of Significant Accounting Policies (continued)
 
 
Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the valuation of acquired assets and liabilities, and evaluation of the potential impairment of goodwill.
Management believes that the allowance for credit losses is adequate as of March 31, 2025. While management uses current information to recognize losses on loans, future additions to the allowance for credit losses may be necessary based on changes in economic conditions in the market area or other factors.
In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to effect certain changes that result in additions to the allowance based on their judgments about information available to them at the time of their examinations.
Reclassifications
Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year’s presentation.
Recent Accounting Pronouncements Adopted
Segment Reporting
The Company adopted Accounting Standards
Updat
e (ASU)
2023-07
“
Segment Reporting (Topic 280)—Improvement to Reportable Segment Disclosures
” on January 1, 2024. The Company has determined that all of its banking divisions and subsidiaries meet the aggregation criteria of Accounting Standards Codification (ASC) 280, Segment Reporting, as its current operating model is structured whereby banking divisions and subsidiaries serve a similar customer base utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the Company’s Chief Executive Officer, who has been identified as the chief operating decision maker (“CODM”).
The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company’s consolidated statements of income. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of income.
Improvements to Income Tax Disclosures
In December 2023, the Financial Accounting Standards Board (FASB) issued ASU
2023-09,
“Income Taxes (Topic 740): Improvements to Income Tax Disclosures”
, which enhances the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, as well as additional information about income taxes paid. The ASU also removes certain disclosures that are no longer considered cost beneficial or
relevant
.
The Company adopted ASU
2023-09
on January 1, 2025, on a prospective basis, as permitted by the guidance. The adoption did not impact on the Company’s consolidated financial condition, results of operations, or cash flows, but it will result in enhanced income tax disclosures beginning with the Company’s annual report for the fiscal year ended December 31, 2025.
 
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PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 1 – Summary of Significant Accounting Policies (concluded)
 
Recent Accounting Pronouncements Not Yet Adopted
ASU
2023-06,
“
Disclosure improvements
” amends disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The effective dates will depend, in part, on whether an entity is already subject to the SEC’s current disclosure requirements. This ASU is not expected to have a material impact on the Company’s consolidated financial statements.
Note 2 – Earnings Per Share
Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares outstanding for the period adjusted to include the effect of outstanding stock options, if dilutive, using the treasury stock method. Shares issued during any period are weighted for the portion of the period they were outstanding.
The following schedule presents earnings per share data for the three-month periods ended March 31, 2025, and 2024 (in thousands, except per share data):
 
   
Three months ended
 
   
March 30,
 
   
2025
   
2024
 
Net income applicable to common stock
  $5,378   $4,345 
Weighted average number of common shares outstanding
   6,905    6,328 
  
 
 
   
 
 
 
Basic earnings per share
  $0.78   $0.69 
  
 
 
   
 
 
 
Net income applicable to common stock
  $5,378   $4,345 
Weighted average number of common shares outstanding
   6,905    6,328 
Dilutive effect on common shares outstanding
   59    90 
  
 
 
   
 
 
 
Weighted average number of diluted common shares outstanding
   6,964    6,418 
  
 
 
   
 
 
 
Diluted earnings per share
  $0.77   $0.68 
  
 
 
   
 
 
 
 
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PRINCETON
BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 2 – Earnings Per Share (concluded)
 
The following schedule presents stock options granted but not exercised and the amount of share that were anti-dilutive because the weighted average exercise price equaled or exceeded the average estimated fair value of our common stock for the three-month periods ended March 31, 2025 and 2024.
 
   
Three months ended March 31,
 
   
2025
   
2024
 
       Weighted Ave       Weighted Ave 
   Options   Exercise Price   Options   Exercise Price 
Options to purchase
   260,698   $24.52    245,633   $21.38 
Anti-dilutive
   —    $—     86,431   $33.19 
Note 3 – Investment Securities
The following summarizes the amortized cost and fair
value
of securities
available-for-sale
at March 31, 2025 and December 31, 2024 with gross unrealized gains and losses therein:
 
   
March 31, 2025
 
       
Gross
   
Gross
     
   
Amortized
   
Unrealized
   
Unrealized
     
   
Cost
   
Gains
   
Losses
   
Fair Value
 
       (In thousands)     
Available-for-sale
      
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)
  $190,425   $818   $(6,277)   $184,966 
U.S. government agency securities
   11,260    21    (914)    10,367 
Obligations of state and political subdivisions
   43,607    1    (4,305)    39,303 
Small business association (SBA) securities
   1,717    7    (5)    1,719 
U.S. treasury securities
   2,884    —     (5)    2,879 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total
  $249,893   $847   $(11,506)   $239,234 
  
 
 
   
 
 
   
 
 
   
 
 
 
 
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PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 3 – Investment Securities (continued)
 
   
December 31, 2024
 
       
Gross
   
Gross
     
   
Amortized
   
Unrealized
   
Unrealized
     
   
Cost
   
Gains
   
Losses
   
Fair Value
 
       (In thousands)     
Available-for-sale
      
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)
  $197,792   $422   $(7,669)   $190,545 
U.S. government agency securities
   11,260    17    (1,077)    10,200 
Obligations of state and political subdivisions
   43,895    1    (4,166)    39,730 
Small business association (SBA) securities
   1,856    5    (4)    1,857 
U.S. treasury securities
   4,855    1    (17)    4,839 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total
  $259,658   $446   $(12,933)   $247,171 
  
 
 
   
 
 
   
 
 
   
 
 
 
The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities
available-for-sale
at March 31, 2025 and December 31, 2024 are as follows:
 
   
Less than 12 Months
  
More than 12 Months
  
Total
 
   
Fair
   
Unrealized
  
Fair
   
Unrealized
  
Fair
   
Unrealized
 
   
Value
   
Losses
  
Value
   
Losses
  
Value
   
Losses
 
   
(In thousands)
 
March 31, 2025
          
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)
  $50,826   $(411)  $28,767   $(5,866)  $79,593   $(6,277) 
U.S. government agency securities
   232    —    5,346    (914)   5,578    (914) 
Obligations of state and political subdivisions
   3,419    (32)   34,175    (4,273)   37,594    (4,305) 
Small business association (SBA) securities
   549    (3)   289    (2)   838    (5) 
U.S. Treasuries
   1,910    (5)   —     —    1,910    (5) 
  
 
 
   
 
 
  
 
 
   
 
 
  
 
 
   
 
 
 
Total
  $56,936   $(451)  $68,577   $(11,055)  $125,513   $(11,506) 
  
 
 
   
 
 
  
 
 
   
 
 
  
 
 
   
 
 
 
 
   
Less than 12 Months
  
More than 12 Months
  
Total
 
   
Fair
   
Unrealized
  
Fair
   
Unrealized
  
Fair
   
Unrealized
 
   
Value
   
Losses
  
Value
   
Losses
  
Value
   
Losses
 
   
(In thousands)
 
December 31, 2024
          
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)
  $122,763   $(1,157)  $29,229   $(6,512)  $151,992   $(7,669) 
U.S. government agency securities
   129    —    5,183    (1,077)   5,312    (1,077) 
Obligations of state and political subdivisions
   3,664    (39)   34,320    (4,127)   37,984    (4,166) 
Small business association (SBA) securities
   447    (1)   449    (3)   896    (4) 
U.S. Treasuries
   2,846    (17)   —     —    2,846    (17) 
  
 
 
   
 
 
  
 
 
   
 
 
  
 
 
   
 
 
 
  $129,849   $(1,214)  $69,181   $(11,719)  $199,030   $(12,933) 
  
 
 
   
 
 
  
 
 
   
 
 
  
 
 
   
 
 
 
The amortized cost and fair value of securities
available-for-sale
at March 31, 2025 by contractual maturity are shown below. Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:
 
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Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 3 – Investment Securities (concluded)
 
   
Amortized
     
   
Cost
   
Fair Value
 
   (In thousands) 
Due in one year or less
  $2,093   $2,094 
Due after one year through five years
   9,693    9,541 
Due after five years through ten years
   42,297    38,143 
Due after ten years
   5,385    4,490 
Mortgage-backed securities (GSEs)
   190,425    184,966 
  
 
 
   
 
 
 
  $249,893   $239,234 
  
 
 
   
 
 
 
Proceeds from calls and maturities of securities
available-for-sale
were not significant for the three-month period ended March 31, 2025 or 2024.
The Company uses a defined methodology for allowance for credit losses on its investment securities
available-for-sale.
The Company did not have an allowance for credit losses on its investment securities
available-for-sale
as of March 31, 2025 or 2024.
The Company’s securities primarily consist of the following types of instruments; U.S. guaranteed mortgage-backed securities, U.S. guaranteed agency bonds, state and political subdivision issued bonds, mortgage related securities guaranteed by the SBA and U.S. treasury notes. We believe it is reasonable to expect that the securities with a credit guarantee of the U.S. government will have a
zero-credit
loss. Therefore, no reserve was recorded for U.S. guaranteed securities or bonds at March 31, 2025. The state and political subdivision securities carry a minimum investment rating of A by either Moody’s or Standard and Poor’s. Some of the smaller municipalities also have insurance to cover the Company in the event of default. Therefore, the Company did not project a credit loss and no reserve was recorded as of March 31, 2025.
At March 31, 2025, the Company’s
available-for-sale
securities portfolio consisted of approximately 273 securities, of which 165
available-for-sale
securities were in an unrealized loss position for more than twelve months and 37
available-for-sale
securities were in an unrealized loss position for less than twelve months. The
available-for-sale
securities in an unrealized loss position for more than twelve months consisted of 106 municipal securities aggregating $34.2 million with a loss of $4.3 million, 52 mortgage-backed
securities-GSE
aggregating $28.8 million with a loss of $5.9 million, 3 agency securities aggregating $5.3 million with a loss of $914 thousand and 4 SBA securities aggregating $289 thousand with a loss of $2 thousand. The Company does not intend to sell these securities, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. Unrealized losses primarily relate to interest rate fluctuations and not credit concerns.
There are no securities pledged as of March 31, 2025, and December 31, 2024.
 
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Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 4 – Loans Receivable
Loans receivable, net at March 31, 2025 and December 31, 2024 were comprised of the following:
 
   
March 31,
   
December 31,
 
   
2025
   
2024
 
   (In thousands) 
Commercial real estate
  $1,404,108   $1,385,085 
Commercial and industrial
   89,941    92,857 
Construction
   249,187    257,169 
Residential first-lien mortgage
   97,255    68,030 
Home equity/consumer
   18,532    18,133 
  
 
 
   
 
 
 
Total loans
   1,859,023    1,821,274 
Deferred fees and costs
   (2,484)    (2,399) 
  
 
 
   
 
 
 
Loans, net
  $1,856,539   $1,818,875 
  
 
 
   
 
 
 
The Company purchased approximately $30.0 million in residential loans and $1.0 million in consumer loans during the three-months ended March 31, 2025. Besides the acquisition of Cornerstone Bank in the third quarter of 2024, the Company did not purchase any loans during the year ended December 31, 2024.
The Company uses the discounted cash flow methodology in determining the appropriate quantitative adjustments, which projects future losses, based on historical and peer loss data, as part of the allowance for credit losses (“ACL”) reserve. Qualitative adjustments include and consider changes in national, regional, and local economic and business conditions, an assessment of the lending environment, including underwriting standards, and other factors affecting credit quality. There were no significant changes to the Company’s ACL methodology for the quarter ended March 31, 2025.
The following table presents the components of the allowance for credit losses:
 
   
March 31,
2025
   
December 31,
2024
 
   (In thousands) 
Allowance for credit losses - loans
  $(23,942)   $(23,657) 
Allowance for credit losses - off balance sheet
   (404)    (361) 
  
 
 
   
 
 
 
  $(24,346)   $(24,018) 
  
 
 
   
 
 
 
 
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Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 4 – Loans Receivable (continued)
 
The following table presents nonaccrual loans by segment of the loan portfolio as of March 31, 2025 and December 31, 2024:
 
   
March 31, 2025
   
December 31, 2024
 
   
With a
   
Without a
   
With a
   
Without a
 
   
Related
   
Related
   
Related
   
Related
 
   
Allowance
   
Allowance
   
Allowance
   
Allowance
 
   (In thousands) 
Commercial real estate
  $18,323   $7,578   $18,502   $6,939 
Commercial and industrial
   22   $488    109    1,178 
Construction
   —     —     —     —  
Residential first-lien mortgage
   —     112    —     94 
Home equity/consumer
   —     —     —     19 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total nonaccrual loans
  $18,345   $8,178   $18,611   $8,230 
  
 
 
   
 
 
   
 
 
   
 
 
 
The calculation of the allowance for credit losses does not include any accrued interest receivable. The Company’s policy is to write off any interest not collected after 90 days or when the ability to collect principal and interest according to the contractual terms in doubt. During the three-month period ended March 31, 2025, the Company wrote off $422 thousand in accrued interest receivable for loans, compared to $310 thousand for the three-month period ended March 31, 2024. Accrued interest receivable related to loans, at March 31, 2025, and December 31, 2024, was $6.8 million and $6.5 million, respectively. The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loan receivables by the length of time a recorded payment is past due. The following table presents the segments of the loan portfolio, summarized by the past due status
a
s of March 31, 2025:
 
                           
Loans
 
   
30-59
   
60-89
   
>90
               
Receivable
 
   
Days
   
Days
   
Days
   
Total
       
Total
   
>90 Days
 
   
Past
   
Past
   
Past
   
Past
       
Loans
   
and
 
   
Due
   
Due
   
Due
   
Due
   
Current
   
Receivable
   
Accruing
 
   (In thousands) 
Commercial real estate
  $7,024   $ —    $25,901   $32,925   $1,371,183   $1,404,108   $—  
Commercial and industrial
   24    —     510    534    89,407    89,941    —  
Construction
   —     —     —     —     249,187    249,187    —  
Residential first-lien mortgage
   1,243    —     112    1,355    95,900    97,255    —  
Home equity/consumer
   —     —     —     —     18,532    18,532    —  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  $8,291   $—    $26,523   $34,814   $1,824,209   $1,859,023   $—  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
The following table presents the segments of the loan portfolio summarized by the past due status as of December 31, 2024:
 
                           
Loans
 
   
30-59
   
60-89
   
>90
               
Receivable
 
   
Days
   
Days
   
Days
   
Total
       
Total
   
>90 Days
 
   
Past
   
Past
   
Past
   
Past
       
Loans
   
and
 
   
Due
   
Due
   
Due
   
Due
   
Current
   
Receivable
   
Accruing
 
   (In thousands) 
Commercial real estate
  $—    $—    $25,441   $25,441   $1,359,644   $1,385,085   $ —  
Commercial and industrial
   36    —     421    457    92,400    92,857    32 
Construction
   —     —     —     —     257,169    257,169    —  
Residential first-lien mortgage
   700    94    —     794    67,236    68,030    —  
Home equity/consumer
   —     —     —     —     18,133    18,133    —  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  $736   $94   $25,862   $26,692   $1,794,582   $1,821,274   $32 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
15
Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 4 – Loans Receivable (continued)
 
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis and assigns one of the following ratings: pass, special mention, substandard and doubtful. The Company engages a third party to review its assessment on a semiannual basis. The Company classifies residential and consumer loans as either performing or nonperforming based on payment status.
The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of March 31, 2025. Gross charge-offs are included for the three-months ended March 31, 2025.
 
   2025   2024   2023   2022   2021   Prior   Revolving
Loans		   Total 
   (Dollars in thousands) 
Commercial real estate
                
Pass
  $27,959   $146,350   $168,360   $303,563   $130,669   $592,539   $6,218   $1,375,658 
Special mention
   —     —     —     —     —     2,549    —     2,549 
Substandard
   —     —     —     —     —     25,901    —     25,901 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total commercial real estate
   27,959    146,350    168,360    303,563    130,669    620,989    6,218    1,404,108 
Current period gross charge-offs
             —       —  
Commercial and industrial
                
Pass
   1,352    5,621    7,025    19,963    12,169    15,178    26,844    88,152 
Special mention
   —     —     —     —     —     1,279    —     1,279 
Substandard
   —     —     —     —     —     510    —     510 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total commercial and industrial
   1,352    5,621    7,025    19,963    12,169    16,967    26,844    89,941 
Current period gross charge-offs
             84      84 
Construction
                
Pass
   5,000    4,146    5,040    3,380    46,922    11,952    172,747    249,187 
Special mention
   —     —     —     —     —     —     —     —  
Substandard
   —     —     —     —     —     —     —     —  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total construction
   5,000    4,146    5,040    3,380    46,922    11,952    172,747    249,187 
Current period gross charge-offs
             —       —  
Residential first-lien mortgage
                
Performing
   1,495    27,968    3,842    6,706    6,074    51,058    —     97,143 
Nonperforming
   —     —     —     —     —     112    —     112 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total residential first-lien mortgage
   1,495    27,968    3,842    6,706    6,074    51,170    —     97,255 
Home equity/consumer
                
Performing
   1,112    1,089    930    1,307    1,067    910    12,099    18,514 
Nonperforming
   —     —     19    —     —     —     —     19 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total home equity/consumer
   1,112    1,089    949    1,307    1,067    910    12,099    18,533 
Total
                
Pass
   36,918    185,174    185,197    334,919    196,901    671,637    217,908    1,828,653 
Special mention
   —     —     —     —     —     3,828    —     3,828 
Substandard
   —     —     19    —     —     26,523    —     26,542 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total loans
  $36,918   $185,174   $185,216   $334,919   $196,901   $701,988   $217,908   $1,859,023 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
16
Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 4 – Loans Receivable (continued)
 
The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of December 31, 2024. Gross charge-offs are included for the year-ended December 31, 2024.
 
   2024   2023   2022   2021   2020   Prior   Revolving
Loans		   Total 
   (Dollars in thousands) 
Commercial real estate
                
Pass
  $143,453   $168,828   $309,379   $136,509   $58,755   $537,532   $2,600   $1,357,056 
Special mention
   —     —     —     —     —     2,588    —     2,588 
Substandard
   —     —     —     —     6,938    18,503    —     25,441 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total commercial real estate
   143,453    168,828    309,379    136,509    65,693    558,623    2,600    1,385,085 
Current period gross charge-offs
             236      236 
Commercial and industrial
                
Pass
   —     3,022    10,876    11,183    —     16,440    48,143    89,664 
Special mention
   —     —     —     —     —     1,906    —     1,906 
Substandard
   —     —     —     —     —     1,287    —     1,287 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total commercial and industrial
   —     3,022    10,876    11,183    —     19,633    48,143    92,857 
Current period gross charge-offs
             516      516 
Construction
                
Pass
   17,765    22,109    46,558    92,841    16,431    242    61,223    257,169 
Special mention
   —     —     —     —     —     —     —     —  
Substandard
   —     —     —     —     —     —     —     —  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total construction
   17,765    22,109    46,558    92,841    16,431    242    61,223    257,169 
Current period gross charge-offs
             —       —  
Residential first-lien mortgage
                
Performing
   596    1,895    6,789    6,134    2,860    49,662    —     67,936 
Nonperforming
   —     —     —     —     —     94    —     94 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total residential first-lien mortgage
   596    1,895    6,789    6,134    2,860    49,756    —     68,030 
Home equity/consumer
                
Performing
   1,234    967    556    —     —     —     15,357    18,114 
Nonperforming
   —     —     19    —     —     —     —     19 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total home equity/consumer
   1,234    967    575    —     —     —     15,357    18,133 
Total
                
Pass
   163,048    196,821    374,158    246,667    78,046    603,876    127,323    1,789,939 
Special mention
   —     —     —     —     —     4,494    —     4,494 
Substandard
   —     —     19    —     6,938    19,884    —     26,841 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total loans
  $163,048   $196,821   $374,177   $246,667   $84,984   $628,254   $127,323   $1,821,274 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
The following table presents the allowance for credit losses on loans receivable at and for the three months ended March 31, 2025:
 
       
Commercial
     
Residential
         
   
Commercial
   
and
     
first-lien
   
Home equity/
     
   
real estate
   
industrial
  
Construction
  
mortgage
   
consumer
   
Total
 
   (In thousands) 
Allowance for credit losses:
          
Beginning balance
  $20,821   $1,173  $609  $893   $161   $23,657 
Provision (reversal)
1
   149    (118)   (209)   395    8    225 
Charge-offs
   —     (84)   —    —     —     (84) 
Recoveries
   11    133   —    —     —     144 
  
 
 
   
 
 
  
 
 
  
 
 
   
 
 
   
 
 
 
Total
  $20,981   $1,104  $400  $1,288   $169   $23,942 
  
 
 
   
 
 
  
 
 
  
 
 
   
 
 
   
 
 
 
 
1
 
The provision for credit losses on the Consolidated Statement of Income is $268 thousand comprising of an increase of $225 thousand to the allowance for loan loss and a $43 thousand increase to the reserve for unfunded liabilities.
 
17
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 4 – Loans Receivable (concluded)
 
The following table presents the allowance for credit losses on loans receivable at and for the three months ended March 31, 2024:
 
      
Commercial
     
Residential
       
   
Commercial
  
and
     
first-lien
  
Home equity/
    
   
real estate
  
industrial
  
Construction
  
mortgage
  
consumer
  
Total
 
   (In thousands) 
Allowance for credit losses:
       
Beginning balance
  $16,047  $488  $1,145  $725  $87  $18,492 
Provision (reversal)
1
   631   (31)   (124)   (153)   (21)   302 
Charge-offs
   (237)   (46)   —    —    —    (283) 
Recoveries
   5   102   —    —    —    107 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
  $16,446  $513  $1,021  $572  $66  $18,618 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
1
 
The provision for credit losses on the Consolidated Statement of Income is $186 thousand comprising of an increase of $302 thousand to the allowance for loan loss and a decrease of $116 thousand to the reserve for unfunded liabilities.
As of March 31, 2025, the Company had nine loans totaling $26.5 million that were individually analyzed for potential credit loss and all the loans have real estate as credit support. As of December 31, 2024, the Company had nine loans totaling $26.8 million that were individually analyzed for potential credit loss and all the loans have real estate credit support.
Occasionally, the Company will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. Typically, such concessions may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, extension of additional credit base on receipt of adequate collateral, or a deferment or reduction of payments (principal or interest) which materially alters the Company’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination. When principal forgiveness is provided, the amount forgiven is charged off against the allowance for credit losses on loans. There were no modifications to borrowers with financial difficulties and no previously modified loans that defaulted for the three-month periods ended March 31, 2025, and December 31, 2024.
Note 5 – Deposits
The components of deposits were as follows:
 
   
March 31,

2025
  
December 31,

2024
 
   (Dollars in thousands) 
Demand,
non-interest-bearing
checking
  $290,496    14.45%  $300,972    14.81% 
Demand, interest-bearing checking
   331,032    16.46%   300,559    14.79% 
Savings
   172,546    8.58%   170,880    8.41% 
Money market
   464,012    23.08%   490,543    24.13% 
Time deposits, $250,000 and over
   220,968    10.99%   284,272    13.99% 
Time deposits, other
   531,612    26.44%   485,399    23.88% 
  
 
 
   
 
 
  
 
 
   
 
 
 
  $2,010,666    100.00%  $2,032,625    100.00% 
  
 
 
   
 
 
  
 
 
   
 
 
 
Note 6 – Borrowings
At March 31, 2025, and December 31, 2024, the Company had no borrowings outstanding.
 
18
Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 7 – Fair Value Measurements and Disclosures
The Company follows the guidance on fair value measurements now codified as FASB ASC Topic 820, “
Fair Value Measurement”
(“Topic 820”)
.
 Fair value measurements are not adjusted for transaction costs. Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
Management uses its best judgment in estimating the fair value of the Company’s financial instruments, however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in sales transactions on the dates indicated. The estimated fair value amounts have been measured as of their respective
period-end
and have not been
re-evaluated
or updated for the purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each
period-end.
The fair value measurement hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level
 1
: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level
 2
: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level
 3
: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at March 31,
2025
were as follows:
 
   
(Level 1)
             
   
Quoted Price
   
(Level 2)
         
   
in Active
   
Significant
   
(Level 3)
   
Total Fair
 
   
Markets for
   
Other
   
Significant
   
Value
 
   
Identical
   
Observable
   
Unobservable
   
March 31,
 
Description
  
Assets
   
Inputs
   
Inputs
   
2025
 
   (In thousands) 
Mortgage-backed securities
-U.S.
government sponsored enterprise (GSEs)
  $—    $184,966   $—    $184,966 
U.S. government agency securities
   —     10,367    —     10,367 
Obligations of state and political subdivisions
   —     39,303    —     39,303 
Small Business Association (SBA) securities
   —     1,719    —     1,719 
U.S. treasury securities
   2,879    —     —     2,879 
  
 
 
   
 
 
   
 
 
   
 
 
 
Mortgage servicings rights
   —     960    —     960 
  
 
 
   
 
 
   
 
 
   
 
 
 
 
19
Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 7 – Fair Value Measurements and Disclosures (continued)
 
For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy, used at December 31, 2024 were as follows:
 
   
(Level 1)
             
   
Quoted Price
   
(Level 2)
         
   
in Active
   
Significant
   
(Level 3)
   
Total Fair
 
   
Markets for
   
Other
   
Significant
   
Value
 
   
Identical
   
Observable
   
Unobservable
   
December 31,
 
Description
  
Assets
   
Inputs
   
Inputs
   
2024
 
   (In thousands) 
Mortgage-backed securities
-U.S.
government sponsored enterprise (GSEs)
  $—    $190,545   $—    $190,545 
U.S. government agency securities
   —     10,200    —     10,200 
Obligations of state and political subdivisions
   —     39,730    —     39,730 
Small Business Association (SBA) securities
   —     1,857    —     1,857 
U.S. treasury securities
   4,839    —     —     4,839 
Mortgage servicings rights
   —     1,060    —     1,060 
There were no liabilities measured at fair value on a recurring basis, at March 31, 2025 or December 31,
2024
.
For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2025, were as follows:
 
   
(Level 1)
             
   
Quoted Price
   
(Level 2)
         
   
in Active
   
Significant
   
(Level 3)
   
Total Fair
 
   
Markets for
   
Other
   
Significant
   
Value
 
   
Identical
   
Observable
   
Unobservable
   
March 31,
 
Description
  
Assets
   
Inputs
   
Inputs
   
2025
 
   (In thousands) 
Collateral dependent loan
  $—    $—    $15,962   $15,962 
  
 
 
   
 
 
   
 
 
   
 
 
 
  $—    $—    $15,962   $15,962 
  
 
 
   
 
 
   
 
 
   
 
 
 
 
20
Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 7 – Fair Value Measurements and Disclosures (continued)
 
For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2024, were as follows:
 
   
(Level 1)
             
   
Quoted Price
   
(Level 2)
         
   
in Active
   
Significant
   
(Level 3)
   
Total Fair
 
   
Markets for
   
Other
   
Significant
   
Value
 
   
Identical
   
Observable
   
Unobservable
   
December 31,
 
Description
  
Assets
   
Inputs
   
Inputs
   
2024
 
   (In thousands) 
Collateral dependent loan
  $—    $—    $16,223   $16,223 
Other real estate owned
1
       295    295 
  
 
 
   
 
 
   
 
 
   
 
 
 
  $—    $—    $16,518   $16,518 
  
 
 
   
 
 
   
 
 
   
 
 
 
 
1
 
The Bank charged off approximately $197,000 during the year ended December 31, 2024, prior to the property being transferred to other real estate owned.
The following table presents quantitative information using Level 3 fair value measurements at March 31, 2025.
 
               
Range
 
   
March 31,
   
Valuation
   
Unobservable
   
(Weighted
 
Description
  
2025
   
Technique
   
Input
   
Average)
 
   (Dollars in thousands) 
Collateral dependent loan
  $15,962    Collateral
1
 		   
Discount
adjustment
 
 
   
12.9
12.9
% 
% 
 
1
 
Fair value is generally determined through independent appraisal of the underlying collateral, primarily using comparable sales.
The following table presents quantitative information using Level 3 fair value measurements at December 31, 2024.
 
              
Range
 
   
December 31,
   
Valuation
   
Unobservable
  
(Weighted
 
Description
  
2024
   
Technique
   
Input
  
Average)
 
   (Dollars in thousands) 
Collateral dependent loan
  $16,223    Collateral
1
 		  Discount
adjustment
   
12.0
12.0
% 
% 
Other real estate owned
2
  $295    Collateral
1
 		  Discount
adjustment		   
0.0
0.0
% 
% 
 
1
 
Fair value is generally determined through independent appraisal of the underlying collateral, primarily using comparable sales.
2
 
The other real estate owned was written down to the estimated net realizable value.
There were no transfers between fair value hierarchy levels during the three months ended March 31, 2025 or 2024. The Company’s policy is to recognize transfers between levels as of the end of the reporting period.
 
21
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 7 – Fair Value Measurements and Disclosures (continued)
 
The following methods and assumptions were used by the Company in estimating fair value disclosures:
Investment Securities
The fair value of securities
available-for-sale
(carried at fair value) and
held-to-maturity
(carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. Level 2 debt securities are valued by a third-party pricing service commonly used in the banking industry, and not adjusted by management. Level 2 fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, live trading levels, trade execution date, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things.
Individual evaluated loans
Individual loans carried at fair value are those loans in which the Company has measured for a reserve and are generally based on the fair value of the related loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds, discounted for estimated selling costs or other factors the Company determines will impact collection of proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.
The carrying amounts and estimated fair value of financial instruments at March 31, 2025 are as follows:
 
   
March 31, 2025
 
   
Carrying
   
Estimated
             
   
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
   (In thousands) 
Financial Assets:
  
Cash and cash equivalents
  $67,674   $67,674   $67,674   $—    $—  
Securities
available-for-sale
at fair value
   239,234    239,234    2,879    236,355    —  
Securities
held-to-maturity
   159    160    —     160    —  
Loans receivable, net
   1,832,597    1,851,924    —     —     1,851,924 
Restricted investments in bank stock
   2,138    2,138    —     2,138    —  
Accrued interest receivable
   8,146    8,146    —     8,146    —  
Equity method investments
   11,310    11,310    —     6,850    4,460 
Mortgage servicing rights
   960    960    —     960    —  
Financial Liabilities:
          
Deposits
  $2,010,666    1,928,981   $—    $1,928,981   $—  
Accrued interest payable
   12,510    12,510    —     12,510    —  
 
22
Table of Contents
PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 7 – Fair Value Measurements and Disclosures (concluded)
 
The carrying amounts and estimated fair value of financial instruments at December 31, 2024 are as follows:
 
   
December 31, 2024
 
   
Carrying
   
Estimated
             
   
Amount
   
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
   (In thousands) 
Financial Assets:
  
Cash and cash equivalents
  $117,348   $117,348   $117,348   $—    $—  
Securities
available-for-sale
at fair value
   247,171    247,171    4,389    242,782    —  
Securities
held-to-maturity
   161    162    —     162    —  
Loans receivable, net
   1,795,218    1,798,302    —     —     1,798,302 
Restricted investments in bank stock
   2,075    2,075    —     2,075    —  
Accrued interest receivable
   7,975    7,975    —     7,975    —  
Equity method investments
   11,160    11,160    —     6,850    4,310 
Mortgage servicing rights
   1,060    1,060    —     1,060    —  
Financial Liabilities:
          
Deposits
  $2,032,625    1,934,884   $—    $1,934,884   $—  
Accrued interest payable
   15,401    15,401    —     15,401    —  
The fair value of cash and cash equivalents, restricted bank stock, accrued interest receivable, equity method investments, and accrued interest payable are measured at the Company’s carrying amount.
The fair value of loans, deposits and borrowings are measured on a discounted basis using similar rates and terms.
The Mortgage servicing rights are carried at estimated fair value. The estimated fair value is obtained through independent third-party valuations.
Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
Limitations
The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors.
These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, the foregoing estimates may not reflect the actual amount that could be realized if all or substantially all the financial instruments were offered for sale. This is due to the fact that no market exists for a sizable portion of the loan, deposit and
off-balance
sheet instruments.
In addition, the fair value estimates are based on existing on and
off-balance
sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.
Finally, reasonable comparability between financial institutions may not be practical due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.
 
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PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 8 – Leases
 
Leases ASC (Topic 842) establishes a right of use model that requires a lessee to record a right of use asset (“ROU”) and a lease liability for all leases with terms longer than 12 months. The Company is obligated under 30 operating lease agreements for 28 branches and its corporate offices with terms extending through 2042. The Company’s lease agreements include options to renew at the Company’s discretion. The extensions are reasonably certain to be exercised, therefore they were considered in the calculations of the ROU asset and lease liability.
The following table represents the classification of the Company’s right of use and lease liability.
 
   
Statement of Financial
   
Three Months Ended
   
Year Ended
 
   
Condition Location
   
March 31, 2025
   
December 31, 2024
 
       (In thousands) 
Operating Lease Right of Use Asset:
      
Gross carrying amount beginning of year
    $21,903   $23,398 
Increased asset from new leases
     —     3,066 
Accumulated amortization
     (714)    (4,561) 
    
 
 
   
 
 
 
Net book value
   
Operating lease right-of-use asset
   $21,189   $21,903 
    
 
 
   
 
 
 
Operating Lease Liability:
      
    
 
 
   
 
 
 
Lease liability
   Operating lease liability   $22,241   $22,941 
    
 
 
   
 
 
 
As of March 31, 2025, the weighted-average remaining lease terms for operating leases was 10.8 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.54%. The Company used Federal Home Loan Bank (“FHLB”) fixed rate advances or at the time the lease was placed in service for the term most closely aligning with remaining lease term.
Future minimum payments under operating leases with terms longer than 12 months are as follows at March 31, 2025 (in thousands):
 
   
Amount
 
   (In thousands) 
Twelve months ended March 31,
  
2026
  $3,679 
2027
   3,428 
2028
   3,157 
2028
   2,953 
2030
   2,446 
Thereafter
   13,926 
  
 
 
 
Total future operating lease payment
   29,589 
Amounts representing interest
   (7,348) 
  
 
 
 
Present value of net future lease payments
  $22,241 
  
 
 
 
 
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PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 8 – Leases (concluded)
 
   
Three Months Ended
 
   
March 31,
 
   
2025
   
2024
 
   (In thousands) 
Lease cost:
    
Operating lease
  $1,025   $987 
Short-term lease cost
   66    48 
  
 
 
   
 
 
 
Total lease cost
  $1,091   $1,035 
  
 
 
   
 
 
 
Other information:
    
Cash paid for amounts included in the measurement of lease liabilities
  $940   $898 
  
 
 
   
 
 
 
Note 9 – Goodwill and Core Deposit Intangible
In accordance with ASC 805, the Company recorded $5.5 million of goodwill along with a core deposit intangible asset of $2.8 million for the Cornerstone Bank acquisition in 2024 and recorded $8.9 million of goodwill along with a core deposit intangible asset of $4.2 million for the five branches acquired in 2019. The Noah Bank acquisition that occurred in 2023 did not generate any goodwill, but the Bank recorded $98 thousand in core deposit intangible asset. The core deposit intangible assets are being amortized over 10 years, using the sum of the year’s digits. Except as set forth below, GAAP requires that goodwill be tested for impairment annually based on closing date or more frequently if impairment indicators arise. The reporting unit was determined to be our community banking operations, which is our only operating segment.
ASC Topic
350-20
guidance requires an annual review of the fair value of a Reporting Unit that has goodwill in order to determine if it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a Reporting Unit is less than its carrying amount, including goodwill. A qualitative factor test can be performed to determine whether it is necessary to perform a quantitative goodwill impairment test. If this qualitative test determines it is not more likely than not (less than 50% probability) that the fair value of the Reporting Unit is less than the Carrying Value, then the Company does not have to perform a quantitative test and goodwill can be considered not impaired. The Company performed its annual review at May 31, 2024 and determined that it was more than 50% probable the fair value of the Reporting Unit exceeds the Carrying Value, therefore a quantitative test was not required as of May 31, 2024.
The changes in the carrying amount of goodwill and core deposit intangible assets are summarized as follows:
 
       
Core Deposit
 
   
Goodwill
   
Intangible
 
   (In thousands) 
Balance at December 31, 2024
  $14,381   $3,632 
Amortization expense
   —     (229) 
  
 
 
   
 
 
 
Balance at March 31, 2025
  $14,381   $3,403 
  
 
 
   
 
 
 
 
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PRINCETON BANCORP, INC.
Notes to Consolidated Financial Statements (unaudited)
 
Note 9 – Goodwill and Core Deposit Intangible (concluded)
 
As of March 31, 2025, the remaining current fiscal year and future fiscal periods amortization for the core deposit intangible is (in thousands):
 
   
Amount
 
   (In thousands) 
2025
   618 
2026
   717 
2027
   587 
2028
   457 
2029
   327 
Thereafter
   697 
  
 
 
 
Total
  $3,403 
  
 
 
 
Note 10 – Subsequent Events
On April 22, 2025, the Board of Directors declared a cash dividend of $0.30 per share of common stock to shareholders of record on May 6, 2025, payable on May 29, 2025.
Note 11 – Risk and Uncertainties
The occurrence of events which adversely affect the global, national, and regional economies may have a negative impact on our business. Like other financial institutions, our business relies upon the ability and willingness of our customers to transact business with us, including banking, borrowing and other financial transactions. A strong and stable economy at each of the local, federal, and global levels is often a critical component of consumer confidence and typically correlates positively with our customers’ ability and willingness to transact certain types of business with us. Local and global events outside of our control which disrupt the New Jersey, Pennsylvania, New York, United States and/or global economy may therefore negatively impact our business and financial condition.
Government economic programs intended to backstop and bolster the economy through the pandemic have ended, and the nation’s economy has entered an inflationary phase. The Consumer Price Index has risen to levels not experienced since the 1980s while the labor market remains very tight, contributing additional inflationary pressure. To address the inflation problem, the Federal Reserve has reversed course on its previously accommodative monetary policies and modestly decreased short-term interest rates. These actions are intended to slow overall economic activity and risk entering the economy into a recession. Regional conflicts around the world, including between Russia and Ukraine, have exacerbated pandemic-related supply chain issues, upset numerous global markets including energy and certain raw materials, and generally added to economic uncertainty and geopolitical instability. Any or all could have negative downstream effects on the Company’s operating results, the extent of which is indeterminable at this time.
 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with the unaudited consolidated interim financial statements contained in Part I, Item 1 of this report, and with our audited consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in our Form 10-K as of and for the year ended December 31, 2024.

Cautionary Statement Regarding Forward-Looking Statements

The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission, in its reports to stockholders and in other communications by the Company (including this press release), which are made in good faith by the Company 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 Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher tariffs imposed by the Trump administration, higher inflation levels, and general economic and recessionary concerns, all of which could impact economic growth and could cause an increase in loan delinquencies, a reduction in financial transactions and business activities including decreased deposits and reduced loan originations, difficulties in managing liquidity in a rapidly changing and unpredictable market, and supply chain disruptions. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the integration of the businesses of the Company and Cornerstone Bank; the global impact of the military conflicts in the Ukraine and the Middle East; 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 Company and Bank conduct 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; 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 Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; other acquisitions; changes in consumer spending and saving habits; those risks under the heading “Risk Factors” set forth in the Bank’s Annual Report on Form 10-K for the year ended December 31, 2024, and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company 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 Company, except as required by applicable law or regulation.

Throughout this document, references to “we,” “us,” or “our” refer to the Company and the Bank.

 

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Executive Overview

The Company is the holding company for The Bank of Princeton (the “Bank”), a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 28 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation (“FDIC”).

The Company’s common stock trades on the “Nasdaq Global Select Market” under ticker symbol, “BPRN.”

Critical Accounting Policies and Estimates

The Company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are summarized in Note 1 to the consolidated financial statements included in the 2024 Annual Report on Form 10-K. There have been no changes to the Critical Accounting Estimates since the Company filed its Annual Report on Form 10-K for the year ended December 31, 2024.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements included in the 2024 Annual Report on Form 10-K and Note 1- Summary of Significant Accounting Policies in this document.

Economy

The first quarter of 2025 opened with optimism regarding economic resilience, the potential for tax cuts, and expectations for a more favorable regulatory environment for businesses. That optimism was replaced by a growing sense of uncertainty around trade policy. The economic data proved mostly stable although there was early evidence of uncertainty. Financial markets also showed signs of uncertainty with equities and Treasury yields falling into quarter-end.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

General

Total assets were $2.32 billion at March 31, 2025, a decrease of $22.1 million, or 0.95% when compared to $2.34 billion at the end of 2024. The primary reasons for the decrease in total assets were related to decreases in cash of $49.7 million and in investment securities of $7.9 million, partially offset by an increase in net loans of $37.7 million. The decreases in cash and investment securities were caused in part by the decrease in deposits discussed below. The increase in the Company’s net loans consisted of increases of $29.2 million in residential mortgages, and $19.0 million in commercial real estate (“CRE”) loans, all partially offset by decreases of $8.0 million in construction loans and $2.9 million in commercial and industrial loans.

Cash and cash equivalents

Cash and cash equivalents decreased $49.7 million, or 42.3%, to $67.7 million at March 31, 2025 compared to December 31, 2024.

 

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Investment securities

Total available-for-sale investment securities decreased $7.9 million, or 3.2%, to $239.2 million at March 31, 2025 compared to December 31, 2024. This decrease was primarily related to decreases in mortgage-backed securities of U.S. government sponsored enterprises and U.S treasury securities during the three-months ended March 31, 2025.

Loans

Loans, net of deferred loan fees and costs, increased $37.7 million, or 2.1%, to $1.86 billion at March 31, 2025 compared to December 31, 2024. The increase in the Company’s net loans consisted of increases of $29.2 million in residential mortgages, and $19.0 million in commercial real estate loans, all partially offset by decreases of $8.0 million in construction loans and $2.9 million in commercial and industrial loans.

The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied and non-owner-occupied CRE loans, was $1.40 billion or 75.5% of total loans of $1.86 billion at March 31, 2025. There were 766 loans in the Company’s CRE portfolio with an average and median loan size of $1.8 million and $0.6 million, respectively. Loan to Value (“LTV”) estimates are less than 70% for $1.29 billion or 92.6% of the CRE portfolio and less than 80% for $1.39 billion or 99.6% of the CRE portfolio.

The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value for the periods presented (dollars in thousands):

 

   March 31, 2025  December 31, 2024 
   Balance   % of portfolio  Weighted Average
LTV		  Balance   % of portfolio  Weighted Average
LTV		 
Commercial Real Estate         

Multi Family

   524,234    37.4%   53.0%   533,287    38.6%   53.6% 

Owner Occupied

   411,895    29.3%   36.2%   407,798    29.4%   36.3% 

Land

   27,745    2.0%   63.0%   25,241    1.8%   73.9% 

Non Owner Occupied

         

Retail

   114,490    8.2%   42.6%   100,771    7.3%   42.5% 

Office Building

   104,435    7.4%   44.0%   104,388    7.5%   43.5% 

Industrial/Warehousing

   83,329    5.9%   45.0%   73,417    5.3%   44.9% 

Mixed Use

   47,677    3.4%   43.7%   48,076    3.5%   43.7% 

Restaurants

   21,429    1.5%   39.2%   22,650    1.6%   39.3% 

Healthcare

   10,158    0.7%   52.7%   10,268    0.7%   53.3% 

Other

   58,716    4.2%   44.5%   59,189    4.3%   45.6% 
  

 

 

   

 

 

   

 

 

   

 

 

  

Total non owner occupied

   440,234    31.3%    418,759    30.2%  
  

 

 

   

 

 

   

 

 

   

 

 

  

Total Commercial Real Estate

   1,404,108    100.0%    1,385,085    100.0%  
  

 

 

   

 

 

   

 

 

   

 

 

  

The following table presents the geographic markets of the commercial real estate portfolio for the periods presented (dollars in thousands):

 

   March 31, 2025  December 31, 2024 
   Balance   % of portfolio  Balance   % of portfolio 

Geographical Market

       

New York

   637,112    45.3%   639,994    46.1% 

New Jersey

   548,319    39.1%   540,896    39.1% 

Pennslyvania

   197,725    14.1%   184,084    13.3% 

Other

   20,952    1.5%   20,111    1.5% 
  

 

 

   

 

 

  

 

 

   

 

 

 
   1,404,108    100.00%   1,385,085    100.00% 
  

 

 

   

 

 

  

 

 

   

 

 

 

For the three-months ended March 31, 2025, charge-offs were $84 thousand and recoveries were $143 thousand. For the three-months ended December 31, 2024, charge-offs were $107 thousand and recoveries were $21 thousand. The coverage ratio of the allowance for credit losses to period end loans was 1.29% at March 31, 2025 and 1.30% at December 31, 2024.

 

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At March 31, 2025, non-performing assets totaled $26.5 million, a decrease of $614 thousand when compared to the amount at December 31, 2024. Non-performing assets as a percentage of total loans, net of deferred fees and costs, was 1.43% at March 31, 2025 and 1.48% at December 31, 2024.

Deposits

Total deposits on March 31, 2025, decreased $22.0 million, or 1.08%, when compared to December 31, 2024. The decrease in the Company’s deposits consisted of decreases in money market deposits of $26.5 million, certificates of deposit of $17.1 million, and non-interest-bearing deposits of $10.5 million, These were partially offset by increases in interest-bearing demand deposits of $30.5 million, and savings deposits of $1.7 million.

At March 31, 2025, the Company had approximately $645.1 million in uninsured deposits, consisting of $85.5 million in non-interest-bearing demand deposits, $230.6 million in interest-bearing demand deposits, $152.8 million in money market accounts, $24.7 million in savings deposits and $151.5 million in certificates of deposits.

Borrowings

The Company had no outstanding borrowings at March 31, 2025 or December 31, 2024.    

Stockholders’ equity

Total stockholders’ equity at March 31, 2025, increased $4.9 million or 1.89% when compared to December 31, 2024. The increase was primarily due to an increase in retained earnings of $3.3 million, which consisted of $5.4 million in net income, partially offset by $2.1 million of cash dividends recorded during the period, an increase in paid-in capital of $544 thousand, and a $1.3 million decrease in our accumulated other comprehensive loss. These were partially offset by a $163 thousand purchase of treasury stock. The ratio of equity to total assets at March 31, 2025 and at December 31, 2024 was 11.5% and 11.2%, respectively.

Liquidity

Our liquidity, represented by cash and cash equivalents, is a product of our operating, investing and financing activities. Our primary sources of funds are deposits, principal repayments of securities and outstanding loans, and funds provided from operations. In addition, we invest excess funds in short-term interest-earnings assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and

securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.

As a member of the FHLB we are eligible to borrow funds in an aggregate amount of up to 50% of the Company’s total assets, subject to its collateral requirements. The Company maintained a $110.0 million letter of credit with the FHLB supporting municipal deposits as of March 31, 2025. Based on available eligible securities and qualified real estate loan collateral, the Company had the ability to borrow an additional $540.5 million as of March 31, 2025.

As of March 31, 2025, the Bank was eligible to use the Federal Reserve discount window for borrowings. Based on assets pledged as collateral as of the applicable date, the Bank’s borrowing availability was approximately $10.0 million at March 31, 2025. As of March 31, 2025, the Company had no outstanding advances from the discount window.

The Company is also a shareholder of Atlantic Community Bancshares, Inc., the parent company of Atlantic Community Bankers Bank (“ACBB”). As of March 31, 2025, the Company had available borrowing capacity with ACBB of $10.0 million to provide short-term liquidity generally for a period of not more than fourteen days. No amounts were outstanding under our line of credit with ACBB at March 31, 2025.

We believe that our current sources of funds provide adequate liquidity for our current cash flow needs.

 

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Capital Resources

Regulatory Capital Requirements. Federally insured, state-chartered non-member banks are required to maintain minimum levels of regulatory capital. Current FDIC capital standards require these institutions to satisfy a common equity Tier 1 capital requirement and a Tier 1 capital requirement, a leverage capital requirement and a risk-based capital requirement.

In addition, in order to make capital distributions and pay discretionary bonuses to executive officers without restriction, an institution must also maintain additional common equity in excess of the minimum requirements. This excess is referred to as a capital conservation buffer. At March 31, 2025, the required capital conservation buffer is 2.50%.

Under the risk-based capital requirements, “total” capital (a combination of core and “supplementary” capital) must equal at least 8.0% of “risk-weighted” assets. The FDIC also is authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis. Management believes, as of March 31, 2025, that the Bank meets all capital adequacy requirements to which it is subject and is “well capitalized” under applicable regulations.

The Bank’s actual capital amounts and ratios and the regulatory requirements at March 31, 2025 and December 31, 2024 are presented below:

 

   Actual  For capital conservation
buffer requirement		  To be well capitalized
under prompt corrective
action provision		 
   Amount   Ratio  Amount   Ratio  Amount   Ratio 
   (Dollars in thousands) 

March 31, 2025:

          

Total capital (to risk-weighted assets)

  $276,526    13.681%  $212,223    10.500%  $202,117    10.000% 

Tier 1 capital (to risk-weighted assets)

  $252,584    12.497%  $171,799    8.500%  $161,694    8.000% 

Common equity tier 1 capital (to risk-weighted assets)

  $252,584    12.497%  $141,482    7.000%  $131,376    6.500% 

Tier 1 leverage capital (to average assets)

  $252,584    10.913%  $150,443    6.500%  $115,725    5.000% 

December 31, 2024:

          

Total capital (to risk-weighted assets)

  $270,633    13.490%  $210,648    10.500%  $200,617    10.000% 

Tier 1 capital (to risk-weighted assets)

  $246,976    12.311%  $170,524    8.500%  $160,493    8.000% 

Common equity tier 1 capital (to risk- weighted assets)

  $246,976    12.311%  $140,432    7.000%  $130,401    6.500% 

Tier 1 leverage capital (to average assets)

  $246,976    10.577%  $151,776    6.500%  $116,750    5.000% 

 

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Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024

General

The Company reported net income of $5.4 million, or $0.77 per diluted common share, for the first quarter of 2025, compared to net income of $4.3 million, or $0.68 per diluted common share, for the first quarter of 2024. The increase in net income for the first quarter of 2025 when compared to the first quarter of 2024 was primarily due to increases of $3.2 million and $205 thousand in net interest income after provision for credit losses and non-interest income, respectively, partially offset by increases of $2.0 million and $443 thousand in non-interest expense and income tax expense, respectively.

Interest income

Interest income increased $5.2 million for the three months ended March 31, 2025, compared to the same period in 2024. Interest income on loans increased $4.7 million due to increases in both the average balance of loans of $300.2 million and the yield of 2 basis points. Interest on taxable available-for-sale securities increased $2.1 million due to a 127 basis point increase in yield and a $145.3 million increase in the average balance of taxable available-for-sale securities. Other interest and dividend income decreased $1.5 million due to a decrease in average balance of $97.7 million and a decrease in the yield of 97 basis points.

Interest expense

Interest expense on deposits increased $1.9 million to $14.5 million for the three-month period ended March 31, 2025 over the same prior year period, due to an increase in the average balance of interest-bearing deposits of $306.8 million, partially offset by a decrease in the rate paid on interest-bearing deposits of 15 basis points.

Provision for credit losses

The Company recorded a provision for credit losses of $268 thousand during the first quarter of 2025, which consisted of a provision to the reserve for credit losses on loans in the amount of $225 thousand and a provision to the reserve for unfunded liabilities of $43 thousand. The current quarter’s provision recorded on the Company’s statements of income was $82 thousand higher when compared to the first quarter of 2024. For the quarter ended March 31, 2025, the Company recorded charge-offs of $84 thousand and recoveries of $143 thousand.

Non-interest income

Total non-interest income was $2.2 million for the three-months ended March 31, 2025, an increase of $205 thousand or 10.3% when compared to the same prior year period.

Non-interest expense

Total non-interest expense was impacted by the Cornerstone Bank acquisition in the third quarter of 2024. It was $13.8 million for the three-months ended March 31, 2025, an increase of $2.0 million or 16.5% when compared to the same prior year period. This increase was primarily related to increases in salaries and employee benefits expense of $652 thousand, data processing and communications expense of $466 thousand, federal deposit insurance expense of $260 thousand, occupancy and equipment expense of $256 thousand, professional fees of $237 thousand and core deposit intangible expense of $108 thousand.

Provision for income taxes

For the quarter ended March 31, 2025, the Company recorded an income tax expense of $1.5 million, resulting in an effective tax rate of 21.9%, compared to an income tax expense of $1.1 million resulting in an effective tax rate of 19.7% for the quarter ended March 31, 2024.

 

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Average Balances, Net Interest Income, and Yields Earned and Rates Paid

The following table shows for the three-month period indicated the total dollar amount of interest earned from average interest earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities and the resulting costs, expressed both in dollars and rates. Average loan receivables balances include non-accrual loans. Average yields have been annualized. Tax-exempt incomes and yields have not been adjusted to a tax-equivalent basis, as the impacts were not deemed to be significant.

 

   Three Months Ended March 31,       
   2025  2024  Change 2025 vs 2024 
   Average
Balances		   Income/
Expense		   Yield
Rates		  Average
Balances		   Income/
Expense		   Yield
Rates		  Average
Balances		  Yield
Rates		 
   (Dollars in thousands) 

Interest-earning assets:

             

Loans receivable

  $1,851,439   $29,624    6.49%  $1,551,206   $24,940    6.47%  $300,233   0.02% 

Securities

             

Taxable available-for-sale

   203,992    2,616    5.13%   58,742    564    3.86%   145,250   1.27% 

Tax exempt available-for-sale

   39,978    284    2.84%   40,758    285    2.81%   (780)   0.03% 

Held-to-maturity

   160    2    5.33%   182    2    4.42%   (22)   0.91% 

Federal funds sold

   53,314    580    4.41%   148,069    2,009    5.46%   (94,755)   -1.05% 

Other interest earning-assets

   16,028    189    4.78%   18,954    266    5.64%   (2,926)   -0.86% 
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

  

Total interest-earning assets

   2,164,911   $33,295    6.24%   1,817,911   $28,066    6.21%   347,000   0.03% 
    

 

 

      

 

 

     

Other non-earnings assets

   170,945       140,660       30,285  
  

 

 

      

 

 

      

 

 

  

Total assets

  $2,335,856      $1,958,571      $377,285  
  

 

 

      

 

 

      

 

 

  

Interest-bearing liabilities

             

Demand

  $ 325,278   $ 1,556    1.94%  $ 242,030   $ 1,193    1.98%  $ 83,248   -0.04% 

Savings

   171,404    948    2.24%   147,672    921    2.51%   23,732   -0.27% 

Money markets

   476,338    3,640    3.10%   364,150    3,557    3.93%   112,188   -0.83% 

Certificates of deposit

   765,942    8,394    4.45%   678,306    6,947    4.12%   87,636   0.34% 
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

  

Total deposit

   1,738,962    14,538    3.39%   1,432,158    12,618    3.54%   306,804   -0.15% 

Borrowings

   —     —     N/A   —     —     0.00%   —    N/A 
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

  

Total interest-bearing liabilities

   1,738,962   $14,538    3.39%   1,432,158   $12,618    3.54%   306,804   -0.15% 
    

 

 

      

 

 

     

Non-interest-bearing deposits

   287,506       244,089       43,417  

Other liabilities

   45,354       42,094       3,260  
  

 

 

      

 

 

      

 

 

  

Total liabilities

   2,071,822       1,718,341       353,481  

Stockholders’ equity

   264,034       240,230       23,804  
  

 

 

      

 

 

      

 

 

  

Total liabilities and stockholder’s equity

  $2,335,856      $1,958,571      $377,285  
  

 

 

      

 

 

      

 

 

  

Net interest-earnings assets

  $ 425,949      $ 385,753      $ 40,196  

Net interest income; interest rate spread

       2.85%       2.67%    0.18% 

Net interest margin

    $18,757    3.51%    $15,448    3.42%  $ 3,309   0.10% 
    

 

 

      

 

 

    

 

 

  

 

33

Table of Contents

Rate/Volume Analysis

The following table reflects the changes in our interest income and interest expense segregated into amounts attributable to changes in volume and in yields on interest-earning assets and interest-bearing liabilities during the periods indicated.

 

   Three Months Ended March 31,
2025 vs . 2024
Increase (Decrease) Due to		 
   Rate   Volume   Net 
   (In thousands) 

Interest and dividend income:

      

Loans receivable, including fees

  $5   $4,679   $4,684 

Securities available-for-sale

      

Taxable

   358    1,694    2,052 

Tax-exempt

   6    (7)    (1) 

Securities held-to-maturity

   —     —     —  

Federal funds sold

   (752)    (677)    (1,429) 

Other interest and dividend income

   (80)    3    (77) 
  

 

 

   

 

 

   

 

 

 

Total interest and dividend income

  $(463)   $5,692   $5,229 
  

 

 

   

 

 

   

 

 

 

Interest expense

      

Demand

  $(26)   $389   $363 

Savings

   (105)    133    28 

Money markets

   (849)    932    83 

Certificates of deposit

   549    897    1,446 

Borrowings

   —     —     —  
  

 

 

   

 

 

   

 

 

 

Total interest expense

  $(431)   $2,351   $1,920 
  

 

 

   

 

 

   

 

 

 

Change in net interest income

  $(32)   $3,341   $3,309 
  

 

 

   

 

 

   

 

 

 

 

34

Table of Contents

How We Manage Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk which is inherent in our lending, investment and deposit gathering activities. To that end, management actively monitors and manages interest rate risk exposure. In addition to market risk, our primary risk is credit risk on our loan portfolio. We attempt to manage credit risk through our loan underwriting and oversight policies.

The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements and performance objectives, and manage the risk consistent with approved guidelines. We seek to manage our exposure to risks from changes in interest rates while at the same time trying to improve our net interest spread. We monitor interest rate risk as such risk relates to our operating strategies. We have established an Asset/Liability Committee which is comprised of both Management and members of the Board of Directors. The Asset/Liability Committee meets on a regular basis and is responsible for reviewing our asset/liability policies and interest rate risk position. Both the extent and direction of shifts in interest rates are uncertainties that could have a negative impact on future earnings.

Gap Analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring the Company’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate-sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to affect adversely net interest income while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to affect adversely net interest income.

The table on the next page sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at March 31, 2025, which we expect, based upon certain assumptions, to reprice or mature in each of the future time periods shown (the “GAP Table”). Except as stated below, the amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at March 31, 2025, based on contractual maturities, anticipated prepayments, and scheduled rate adjustments within a three-month period and subsequent selected time intervals. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and anticipated prepayments of adjustable-rate loans and fixed-rate loans, and as a result of contractual rate adjustments on adjustable-rate loans.

 

35

Table of Contents
   3 Months or
Less		  More than 3
Months to 1
Year		  More than 1
Year to 3 Years		  More than 3
Years to 5
Years		  More than 5
Years		  Non-Rate
Sensitive		  Total Amount 

(Dollars in thousands)

        

Interest-earning assets: (1)

        

Investment securities

  $22,235  $39,585  $64,336  $32,892  $91,817  $(11,472)  $239,393 

Loans receivable

   428,110   216,932   568,904   516,333   116,723   (14,405)   1,832,597 

Other interest-earnings assets (2)

   47,032   —    —    —    —    —    47,032 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total interest-earning assets

  $497,377  $256,517  $633,240  $549,225  $208,540  $(25,877)  $2,119,022 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Interest-bearing liabilities:

        

Checking and savings accounts

  $ 503,578   $ —   $ —   $ —   $ —   $ 503,578 

Money market accounts

   464,012   —    —    —    —    —    464,012 

Certificate accounts

   333,267   382,468   33,682   3,163   —    —    752,580 

Borrowings

   —    —    —    —    —    —    —  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total interest-bearing liabilities

  $1,300,857  $382,468  $33,682  $3,163  $—   $—   $1,720,170 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Interest-earning assets less interest-bearing liabilities

  $(803,480)  $(125,951)  $599,558  $546,062  $208,540  $(25,877)  $398,852 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Cumulative interest-rate sensitivity gap (3)

  $(803,480)  $(929,431)  $(329,873)  $216,189  $424,729   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   

Cumulative interest-rate gap as a percentage of total assets at March 31, 2025

   -34.66%   -40.09%   -14.23%   9.33%   18.32%   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   

Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities at March 31, 2025

   38.23%   44.79%   80.79%   112.57%   124.69%   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   
 
(1)

Interest-earnings assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities.

(2)

Includes interest-bearing bank balances, FHLB Stock and Federal Funds Sold

(3)

Interest-rate sensitivity gap represents the difference between total interest-earning assets and total interest-bearing liabilities.

Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate loans, have features which restrict changes in interest rates both on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase.

 

36

Table of Contents

Net Portfolio Value Analysis. Our interest rate sensitivity is also monitored by management through the use of a model which generates estimates of the changes in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The following table sets forth our NPV as of March 31, 2025, and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated.

 

Change in Interest Rates  Net Portfolio Value  NPV as % of Portfolio
Value of Assets		 

In Basis Points (Rate Shock)

  Amounts   $ Change  % Change  EVE/EVA1  Change 
       (Dollars in thousands)       

300

  $306,783   $(43,389)   -12.39%   14.07%   (1.03) 

200

  $323,140   $(27,032)   -7.72%   14.52%   (0.58) 

100

  $336,132   $(14,040)   -4.01%   14.80%   (0.30) 

Static

  $350,172   $—     15.10%  

(100)

  $362,926   $12,754   3.64%   15.38%   0.28 

(200)

  $367,180   $17,008   4.86%   15.35%   0.25 

(300)

  $359,511   $9,339   2.67%   14.84%   (0.26) 

 

1 

Economic Value of Equity (EVE) divded by Economic Value of Assets (EVA)

As is the case with the GAP Table, certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV require the making of certain assumptions which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the models presented assume that the composition of our interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV model provides an indication of interest rate risk exposure at a particular point in time, such model is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

 

37

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company, such as the Company, is not required to provide the information by this Item. Certain market risk disclosure is set forth in Item 2 above under “How We Manage Market Risk.”

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Management, with the participation of the Company’s Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule l3a-l5 (e) promulgated under the Exchange Act) as of March 31, 2025. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of March 31, 2025 to ensure that the information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in FDIC rules and forms.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting identified during the quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

38

Table of Contents
PART II–OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
There have been no material changes to the risk factors set forth under the Part I, Item 1.A. Risk Factors as set forth in the Company’s Annual Report on Form
10-K
for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Company’s repurchase of shares of common stock for the three months ended March 31, 2024 were as follows:
 
   
Total
Number of
Shares
Purchased
   
Average
Price
Paid Per
Share
   
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Program
1
   
Maximum Number
of Shares that May
Yet be Purchased
Under Plans or
Programs 
1
 
Period
        
         286,500 
January 1 - 31, 2025
   —    $—     —     286,500 
February 1 - 28, 2025
   —    $—     —     286,500 
March 1 - 31, 2025
   5,250   $31.10    5,250    281,250 
  
 
 
   
 
 
   
 
 
   
   5,250   $31.10    5,250   
  
 
 
   
 
 
   
 
 
   
 
1
 
On August 10, 2023, the Company announced a stock repurchase program to repurchase up to 314,000 shares of common stock, approximately 5% of the Company’s outstanding shares of common stock, over a period of time necessary to complete such repurchases.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the fiscal quarter ended March 31, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule
10b5-1(c)
or any
“non-Rule
10b5-1
trading arrangement”.
 
39

Table of Contents

Item 6. Exhibits

 

Exhibit
Number		  

Description

 31.1  Rule 13a-14(a) Certification on the Principal Executive Officer
 31.2  Rule 13a-14(a) Certification on the Principal Financial Officer
 32  Section 1350 Certifications
101.INS  Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH  Inline XBRL Taxonomy Extension Schema Document
101.CAL  Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB  Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE  Inline XBRL Taxonomy Extension Label Linkbase Document
104  Cover Page Interactive Data File (embedded within the Inline XBRL document

 

40

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

   Princeton Bancorp, Inc.
Date: May 9, 2025  By: 

/s/ Edward Dietzler

   Edward Dietzler
   Chief Executive Officer and President
   (Principal Executive Officer)
  By: 

/s/ George Rapp

   George Rapp
   Executive Vice President and Chief Financial Officer
   (Principal Financial and Accounting Officer)

 

41

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