First Bank (FRBA) Q3 2024 earnings summary

Executive summary

• Achieved robust loan and deposit growth in Q3 2024, with loans up $90 million and deposits up $82 million, including $19 million in non-interest-bearing deposits.

• Net income for Q3 2024 was $8.2 million ($0.32 per diluted share), a significant turnaround from a net loss of $1.3 million in Q3 2023.

• Tangible book value per share increased by $0.38, or 3%, quarter-over-quarter, reaching $13.84, up 11.2% annualized.

• Credit quality remained strong across all segments, including commercial real estate.

• Return on average assets was 0.88%, return on average equity 8.15%, and return on average tangible equity 9.42% for Q3 2024.

Financial highlights

• Net interest income rose to $30.1 million in Q3 2024, up 5.2% year-over-year, but down 1.5% sequentially due to margin compression.

• Reported net income of $8.2 million, or $0.32 per diluted share, with an 88 basis point return on average assets for Q3 2024.

• Loans grew nearly 12% annualized and deposits 11% annualized from Q2 2024.

• Net interest margin declined to 3.49% from 3.62% in the prior quarter, up 13 bps year-over-year but down 13 bps sequentially.

• Efficiency ratio remained strong at around 58%, below 60% for the 21st consecutive quarter.

Outlook and guidance

• Expectation of stable net interest margin with potential for improvement as deposit costs are managed lower.

• Projected loan funding for Q4 is solid and in line with historical growth, with a strong pipeline and continued business activity.

• Effective tax rate anticipated to be 24%-25% going forward, impacted by the New Jersey Corporate Transit Fee.

• Focus on organic growth, balance sheet optimization, and enhancing shareholder returns, including a new share repurchase program.