First Bank (Hamilton) (NASDAQ:FRBA) Q3 2023 Earnings Conference Call October 26, 2023 9:00 AM ET Company Participants Patrick Ryan - President, CEO & Director Andrew Hibshman - EVP, Treasurer & CFO Darleen Gillespie - Head, Retail, First Senior VP & Chief Retail Banking Officer Peter Cahill - EVP & Chief Lending Officer Conference Call Participants Justin Crowley - Piper Sandler & Co. Manuel Navas - D.A. Davidson & Co. Operator Ladies and gentlemen, thank you for standing by. My name is Sara, and I will be ...

Financial Data and Key Metrics Changes - The company reported a net income of $6.8 million for Q2 2023, translating to $0.35 per diluted share, with a return on average assets of 0.97% [24] - Net income declined by $190,000 from the previous quarter and by $2.0 million compared to Q2 2022 [6] - The tax equivalent net interest margin decreased to 3.28% in Q2 2023 from 3.52% in the previous quarter [7] Business Line Data and Key Metrics Changes - Loans increased by $44 million in Q2 2023, compared to an increase of $55 million in Q1 2023 [25] - C&I loans represented 73% of new loans closed and funded in Q2, slightly down from 74% in Q1 [15] - Noninterest expenses were $13.8 million in Q2 2023, up 2.4% from Q1 2023 [9] Market Data and Key Metrics Changes - Total deposits grew by $158 million in Q2 2023, recovering from a decline of $52 million in Q1 2023 [25] - Noninterest-bearing deposits increased by $13 million in Q2 2023, rebounding from a decrease of $40 million in Q1 [7] - The cost of deposits increased by 50 basis points from Q1 2023 due to competitive pressures [11] Company Strategy and Development Direction - The company aims to leverage the Malvern Bank acquisition to enhance its presence in Southeastern Pennsylvania and improve balance sheet management [3] - Strategic investments in people and technology are expected to yield long-term benefits despite causing near-term earnings drag [3] - The focus is on optimizing the balance sheet for better risk-adjusted profitability and shareholder value [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong asset quality metrics despite industry headwinds [2] - The current interest rate environment is expected to continue exerting pressure on margins, but the company is focused on maintaining loan pricing to improve yields [7] - The integration of Malvern Bank is anticipated to provide significant liquidity and balance sheet flexibility [7] Other Important Information - The company plans to incur the majority of merger-related expenses in Q3 2023, with expected cost savings to be realized by the end of Q4 2023 [10] - The allowance for credit losses to total loans remained steady at 1.25%, with modest net charge-offs year-to-date [26] Q&A Session Summary Question: When is the systems conversion scheduled to take place? - The systems conversion is scheduled for the weekend of September 9, 10, and 11 [43] Question: What is the organic loan growth target for the full year? - The typical target for organic growth is around $200 million, with flexibility based on market conditions and quality of deals [44] Question: Can you discuss general demand for loans? - There is less activity in the market, but businesses are still engaging in deliberate borrowing, with a slowdown in payoffs contributing to net loan growth [45] Question: What is the focus within C&I lending? - The focus is broad-based within C&I, including small micro-business lending and asset-based lending, alongside core market teams seeking quality opportunities [66] Question: How is the company approaching deposit growth? - The company is reallocating staff to focus more on market engagement and relationship building to drive deposit growth [75]

Financial Data and Key Metrics Changes - For Q1 2023, First Bank reported a net income of $7.0 million, or $0.36 per diluted share, with a return on average assets of 1.03%. Excluding merger-related expenses, diluted EPS would have been $0.38, translating to a 1.1% return on average assets [16][24][30] - The net interest margin (NIM) decreased to 3.52% from 3.69% in Q4 2022, primarily due to increased deposit costs and a decline in loan yields [25][39] - Total deposits decreased by $52 million during Q1 2023, with non-interest-bearing deposits down $40 million and interest-bearing deposits down 12% [25][48] Business Line Data and Key Metrics Changes - Commercial loan growth continued, with loans increasing by $55 million in Q1 2023, primarily driven by C&I lending, which accounted for over 80% of the growth [17][19] - Non-interest income decreased to $964,000 from $1.4 million in Q4 2022, mainly due to a decline in loan fees and losses on the sale of securities [33] - Non-interest expenses rose to $13.5 million, an increase of 8.3% compared to Q4 2022, driven by higher salaries and occupancy expenses related to new regional centers [36][39] Market Data and Key Metrics Changes - The bank experienced manageable deposit outflows, primarily attributed to customers seeking higher-yielding investment options rather than concerns about banking stability [18][44] - Non-interest-bearing demand deposits as a percentage of total deposits decreased to 20.7% from 22% in the previous quarter, while time deposits increased to 24.7% from 23.1% [49] - The bank's liquidity position improved, with an available liquidity to adjusted uninsured deposit ratio of approximately 106% as of April 2023 [30][28] Company Strategy and Development Direction - The company is undergoing a strategic transformation, focusing on diversifying its business geographically and across lines of business to enhance profitability and shareholder value [22][39] - The merger with Malvern Bank is a top priority, expected to create opportunities for growth and improve balance sheet management [10][76] - The bank aims to shift its loan portfolio composition, targeting a gradual decrease in investor real estate loans while increasing C&I and owner-occupied loans [82][84] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the community banking model's resilience, noting that strategic investments made during the quarter will drive future earnings [15][20] - The current interest rate environment is expected to continue exerting pressure on the margin, but management is confident in the bank's ability to maintain strong core profitability [39][122] - The bank is focused on quality loan growth, emphasizing the importance of economically attractive business opportunities rather than chasing growth for its own sake [124][125] Other Important Information - The bank's allowance for credit losses on loans was increased to 1.25% of total loans following the adoption of CECL [30][31] - The bank has implemented measures to enhance liquidity, including increasing borrowings and pledging securities [27][28] Q&A Session Summary Question: What is the long-term vision for the composition of the loan portfolio? - Management aims to gradually shift the loan portfolio to reduce investor real estate loans to around 50% and increase C&I and owner-occupied loans [82][84] Question: Where are the most opportunities geographically? - Opportunities are broad-based across all regions, with active pipelines and good performance noted in North Jersey, Central Jersey, South Jersey, and Southeastern PA [86] Question: Is there expected relief in expenses in the near term? - Expenses are expected to remain higher in the short run due to new hires and strategic initiatives, but management is actively looking for cost-saving opportunities [90][92] Question: What is the status of share buybacks? - There is capacity for share buybacks, with 1.2 million shares remaining on the authorization, but timing will depend on shareholder and regulatory approvals related to the merger [116][120] Question: How is the bank approaching loan growth targets in the current environment? - Management is not changing the budgeted loan growth target of approximately $200 million but emphasizes the importance of quality over quantity in loan growth [124][125]

First Bank (NASDAQ:FRBA) Q4 2022 Earnings Conference Call January 26, 2023 9:00 AM ET Company Participants Patrick Ryan - President & Chief Executive Officer Andrew Hibshman - Chief Financial Officer Peter Cahill - Chief Lending Officer Conference Call Participants David Bishop - Hovde Group Manuel Navas - D.A. Davidson Operator Now let me turn the call over to Patrick Ryan, President and CEO. So, Patrick, you may begin. Thank you, and good morning, everybody. Welcome to our fourth quarter earnings conferen ...

Financial Data and Key Metrics Changes - The company reported a net income of $10.2 million for Q3 2022, translating to $0.52 per diluted share, with a return on average assets of 1.57% [14] - The net interest margin expanded by 21 basis points during the quarter, reaching 3.7% [4][18] - Return on tangible common equity was above 15%, and the efficiency ratio remained below 50% for the seventh consecutive quarter [6] - Non-performing assets to total assets declined to just 21 basis points, reflecting improved asset quality [6][25] Business Line Data and Key Metrics Changes - Year-to-date net loan growth was $185 million, representing a 12% annualized growth rate, excluding PPP loans [7][31] - Total loans increased by $36.5 million in Q3 2022, with a total of $101 million in new loans closed and funded during the quarter [16][32] - Non-interest income decreased to $944,000 from $1.5 million in Q2 2022, primarily due to lower loan sale income and fees [26] Market Data and Key Metrics Changes - Total deposits increased by $25 million during Q3 2022, although non-interest-bearing deposits decreased by $16.4 million [17] - The company anticipates an acceleration of deposit costs due to the rising interest rate environment [9] Company Strategy and Development Direction - The company is refocusing on deposit growth after a period of excess liquidity, emphasizing the importance of core deposit generation [11][60] - New opportunities are being explored in niche areas such as asset-based lending and small business lending, alongside traditional commercial banking [12] - The company is also looking to expand its presence in private equity fund banking, which is expected to diversify its portfolio and enhance profitability [63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong loan growth despite potential market slowdowns due to rising interest rates [48][51] - The company is well-positioned to take advantage of opportunities arising from recent M&A activity in the market [48] - Management indicated that while deposit pricing pressures are increasing, they expect to maintain margins at current levels [21][70] Other Important Information - The company repurchased 59,885 shares at an average price of $13.97 during Q3 2022, which had a marginal impact on tangible book value per share [24] - The allowance for loan losses as a percentage of loans was reduced to 1.09%, supported by a significant decline in non-performing loans [25] Q&A Session Summary Question: Loan growth expectations in light of rising deposit costs - Management noted that while there may be a slight slowdown in demand due to rising rates, they expect to see opportunities from recent M&A activity [48][51] Question: Future loan sales in the SBA environment - Management indicated a preference to hold new SBA production loans for now, with potential for future sales depending on the rate environment [53][54] Question: Capital return strategies including stock repurchase - Management stated that they are considering various methods to return capital to shareholders, including stock buybacks and dividends, depending on market conditions [56][57] Question: Changes in deposit and funding strategies - Management clarified that the refocus on deposits is more about returning to a normal operational mindset rather than a complete revamp of strategies [60] Question: Performance of the new private equity fund banking group - Management expressed optimism about the new group, expecting it to contribute significantly to loan growth and deposit generation over time [63][64] Question: Loan fees turning negative - Management explained that the negative loan fees were due to accounting nuances related to early payoffs of SBA loans [66][67]

First Bank (NASDAQ:FRBA) Q2 2022 Earnings Conference Call July 27, 2022 9:00 AM ET CompanyParticipants Andrew Hibshman - Chief Financial Officer Patrick Ryan - President & Chief Executive Officer Peter Cahill - Chief Lending Officer Conference Call Participants Nick Cucharale - Piper Sandler Manuel Navas - D.A. Davidson David Bishop - Hovde Group Operator Hello, everyone and welcome to the First Bank Earnings Conference Call Second Quarter 2022. My name is Emily and I will be moderating today's event. [Oper ...

First Bank (NASDAQ:FRBA) Q1 2022 Earnings Conference Call April 26, 2022 9:00 AM ET Company Participants Patrick Ryan – President, Chief Executive Officer Andrew Hibshman – Chief Financial Officer Peter Cahill – Chief Lending Officer Conference Call Participants Nicholas Cucharale – Piper Sandler Manuel Navas – D.A. Davidson David Bishop – Hovde Group Erik Zwick – Boenning & Scattergood Operator Everyone, and welcome to First Bank First Quarter 2022 Earnings Call. If you would let the opportunity to ask a q ...

First Bank (NASDAQ:FRBA) Q4 2021 Earnings Conference Call January 27, 2022 9:00 AM ET Company Participants Patrick Ryan - President, Chief Executive Officer Andrew Hibshman - Chief Financial Officer Peter Cahill - Chief Lending Officer Conference Call Participants Nick Cucharale - Piper Sandler Bryce Rowe - The Hovde Group Erik Zwick - Boenning & Scattergood Manuel Navas – D.A. Davidson Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamp ...

Financial Data and Key Metrics Changes - In Q3 2021, the company reported net income of $9 million or $0.46 per diluted share, marking the second highest net income quarter in the bank's history and the highest for pre-provision net revenue at $12.3 million [17] - Return on assets exceeded 1.4% for the third consecutive quarter, and return on tangible common equity was over 15% [7] - Non-interest income averaged $1.8 million per quarter over the past five quarters, up 37% from the previous average of $1.3 million [8] Business Line Data and Key Metrics Changes - Net loan growth was muted in Q3, with a $13 million increase in loans excluding PPP loan forgiveness, compared to an increase of $86 million in non-PPP loans in Q2 [18] - Total deposits increased by $9.7 million during Q3, with a reduction in reliance on higher-cost time deposits [21] - Non-performing loans increased slightly but remained lower as a percentage of total loans compared to the previous year [28] Market Data and Key Metrics Changes - The company experienced a reduction in the utilization of working capital lines of credit, with a decline from 52% at the end of 2020 to 43% by September 30, 2021 [43] - The loan pipeline grew to $265 million by the end of Q3, a 33% increase from the previous quarter [45] Company Strategy and Development Direction - The company plans to leverage the acquisition of two branches from OceanFirst Bank to enhance deposit growth and customer acquisition [12] - The focus remains on managing excess liquidity while driving down the cost of deposits [13] - The company aims to maintain a strong commercial loan pipeline and expects loan growth in Q4 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the commercial pipeline and prospects for loan growth in Q4, despite muted loan growth in Q3 [20] - The company anticipates strong net loan growth in Q4, supported by the acquisition of new branches and a robust lending pipeline [12][45] Other Important Information - The efficiency ratio improved to below 46% in Q3, down from 46.66% in Q2, reflecting controlled non-interest expense growth [32] - The company announced an increase in dividends and a renewal of its stock buyback plan, reinforcing its strong financial position [8][15] Q&A Session Summary Question: Plans for branch acquisition and impact on margin - Management indicated that the strong pipeline would likely lead to deploying excess liquidity into commercial loans, with some opportunities to reduce overall liquidity [55][56] Question: Stability of margin expectations - Management expects to maintain a stable margin, despite the roll-off of PPP fees, and is focused on bringing in low-cost deposits [57][58] Question: Structural changes in deposit trends - Management noted a balancing act in deposit pricing, with no significant shifts observed, and highlighted ongoing opportunities in commercial deposits [60][61] Question: Loan pipeline yields and competition - Loan yields have remained consistent, with healthy competition in the market, and the average yield for new loans was reported at approximately 3.95% [62][63] Question: Dividend increase rationale - The dividend increase was seen as a catch-up to pre-COVID levels and a reflection of improved profitability, with a focus on maintaining the ability to deliver on dividends [67][70] Question: Expense management outlook - Management aims to keep non-interest expense growth in the low single digits, despite recent hires and branch acquisitions [71][72] Question: SBA lending program growth expectations - The SBA lending program is expected to contribute significantly to non-interest income, with optimistic projections for growth in the coming year [77][78]

First Bank (NASDAQ:FRBA) Q2 2021 Earnings Conference Call July 27, 2021 9:00 AM ET Company Representatives Patrick Ryan - President, Chief Executive Officer Andrew Hibshman - Chief Financial Officer Peter Cahill - Chief Lending Officer Emilio Cooper - Chief Deposits Officer Conference Call Participants Bryce Rowe - The Hovde Group Erik Zwick - Boenning and Scattergood Nick Cucharale - Piper Sandler Operator Good day, and welcome to the First Bank Second Quarter 2021 Earnings Call. All participants will be i ...