BPRN 10-K & 10-Q changes, risk factors and insider trading
Princeton Bancorp, Inc. · Nasdaq · State Commercial Banks · CIK 1913971 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Issuance of “blank‑check” preferred stock could adversely affect holders of our common stock.”
New heading “Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.”
New heading “Competition from alternative payment processing systems and lending platforms and digital asset service providers may reduce our revenue.”
New heading “We cannot guarantee that our allocation of capital to various alternatives will enhance long-term stockholder value.”
New heading “Changes to tax laws, regulations or interpretations could adversely affect our financial condition or results of operations.”
Largest changes
“Under the supervision of the CFPB, our consumer and business banking products and services are subject to heightened regulatory oversight and scrutiny with respect to compliance with consumer laws and regulations. We may face a greater number or wider scope of investigations, enforcement actions, and litigation in the future related to consumer practices, thereby increasing costs associated with responding to or defending such actions. …”see in full comparison
“Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, reductions in federal subsidies or grants, social or labor unrest, or political disputes and military conflicts, that cause a material disruption in our customers’ supply chains, could have a negative impact on their business and ability to repay their borrowings with us. …”see in full comparison
“Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.”see in full comparison
“Competition from alternative payment processing systems and lending platforms and digital asset service providers may reduce our revenue.”see in full comparison
“Changes to tax laws, regulations or interpretations could adversely affect our financial condition or results of operations.”see in full comparison
“Changes in tax laws, regulatory requirements and/or the interpretation or enforcement of such laws and regulations by state or federal tax regulators could occur. These changes in the law or interpretations may be retroactive to previous periods and as a result could negatively affect our current and future financial performance. An increase in our corporate tax rate or the imposition of any interest and penalties could have an unfavorable impact on our earnings and capital generation abilities. …”see in full comparison
Full comparison: every changed paragraph (41)
• Credit and Interest Rate Risks
• Risks Related to the Bank’s Common Stock
• Economic Risks
• Operational Risks
• Strategic Risks
• Risks Related to the Regulation of our Industry
A portion of our construction loans are unseasoned, meaning that they were originated relatively recently. Our limited time with these loans does not provide us with a significant payment history pattern with which to judge future collectability. As a result, it may be difficult to predict the future performance of our loan portfolio. These loans may have delinquency or charge off levels above our expectations, which could negatively affect our performance.
These loans may have delinquency or charge off levels above our expectations, which could negatively affect our performance.
Net interest income, the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities, represents a significant portion of our earnings. Both increases and decreases in the interest rate environment may reduce our profits. We expect that we will continue to realize income from the spread between the interest we earn on loans, securities and other interest earning assets, and the interest we pay on deposits, and borrowings (when applicable). The net interest spread is affected by the differences between the maturity and repricing characteristics of our interest earning assets and interest-bearing liabilities. Our interest-earning assets may not reprice as slowly or rapidly as our interest-bearing liabilities.
The market value of our securities portfolio may decline and result in other than temporary impairment charges. The value of the securities in our portfolio is affected by factors that impact the U.S. securities markets in general as well as specific financial sector factors and entities. Uncertainty in the market regarding the financial sector has at times negatively impacted the value of securities within our portfolio. Further declines in these sectors may in future result in other than temporary impairment charges.
Asset quality may deteriorate as borrowers become unable to repay their loans.
RISKS RELATED TO THE BANK’SCOMPANY'S COMMON STOCK
The Holding Company’s ability to pay dividends depends primarily on receiving dividends from the Bank, which is subject to regulatory limits and the Bank’s performance.
The Company is a bank holding company and banking operations are conducted by its subsidiary, the Bank. The Company’s ability to pay dividends depends on its receipt of dividends from the Bank. Dividend payments from the Bank are subject to legal and regulatory limitations, generally based on net profits and retained earnings, imposed by the various banking regulatory agencies. The ability of the Bank to pay dividends is also subject to its profitability, financial condition, capital expenditures, other cash flow requirements, and other factors deemed relevant by its Board of Directors. There is no assurance that the Bank will be able to pay dividends in the future, and if able, that the dividends will be at the same rate as 2024,2025, or that the Company will generate adequate cash flow from the Bank to pay dividends in the future. It is also the policy of the Federal Reserve that a bank holding company generally may only pay dividends on common stock out of net income available to common shareholders over the past twelve months and only if the prospective rate of earnings retention appears consistent with a bank holding company’s capital needs, asset quality, and overall financial condition. A bank holding company also should not maintain a dividend level that places undue pressure on the capital of such institution’s subsidiaries, or that may undermine the bank holding company’s ability to serve as a source of strength for such subsidiaries. The Company’s failure to pay dividends on its common stock could have a material adverse effect on the market price of its common stock.
Issuance of “blank‑check” preferred stock could adversely affect holders of our common stock.
Our Articles of Incorporation authorize 2,000,000 shares of preferred stock that may be issued in one or more series with terms established solely by the Company's Board of Directors and without further shareholder approval. The issuance of preferred stock could dilute the voting power of the common stock, reduce the likelihood of dividend payments on the common stock if preferred dividends are declared, and adversely affect the rights of common shareholders in the event of liquidation. In addition, the ability to issue preferred stock could be used as an anti‑takeover measure, which may discourage or prevent a transaction that holders of our common stock may consider desirable. No preferred shares are currently outstanding.
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. Over the past year, in response to a pronounced rise in inflation, the Federal Reserve has raised certain benchmark interest rates to combat inflation. As discussed above under “CREDIT AND INTEREST RATE RISKS— Changes in interest rates may adversely affect our earnings and financial condition.”, as inflation increases and market interest rates rise, the value of the Company’s investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments. In addition, inflation generally increases the cost of goods and services the Company uses in its business operations, such as electricity and other utilities, and also generally increases employee wages, any of which can increase the Company’s non-interest expenses. Furthermore, the Company’s customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with the Company. Sustained higher interest rates by the Federal Reserve to tame persistent inflationary price pressures could also push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States and the Company’s markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for the Company’s products and services, all of which, in turn, would adversely affect the Company’s business, financial condition and results of operations.
Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.
Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, reductions in federal subsidies or grants, social or labor unrest, or political disputes and military conflicts, that cause a material disruption in our customers’ supply chains, could have a negative impact on their business and ability to repay their borrowings with us. In the event of disruptions in our customers’ supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all. Additionally, changes in distribution of federal funds or freezing of federal funds, including Congressional federal budget impasses and reductions in federal workforce causing unemployment, could have an adverse effect on the ability of consumers and businesses to pay debts and/or affect the demand for loans and deposits.
The large bank failures during the first half of 2023 and related negative media attention generated significant market trading volatility among publicly traded bank holding companies and, in particular, regional, as well as community banks like the Company. Similar developments in the future could negatively impact customer confidence in regional and community banks, which could prompt customers to move their deposits to larger financial institutions. Further, if competition for deposits has increased in recent periods, andincreases, the cost of funding haswill likely similarly increased,increase, putting pressure on our net interest margin. If we were required to sell a portion of our securities portfolio to address liquidity needs, we may incur losses, including as a result of the negative impact of rising interest rates on the value of our securities portfolio, which could negatively affect our earnings and our capital. If we were required to raise additional capital in the current environment, any such capital raise may be on unfavorable terms, thereby negatively impacting book value and profitability. While we have taken actions to improve our funding, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.
Our deposits have been our primary funding source. In current market conditions, depositors may choose to redeploy their funds into higher yielding investments, the stock market or other investment alternatives, regardless of our effort to retain such depositors. If this occurs, it will hamper our ability to grow deposits and could result in a net outflow of deposits. Our average total deposits for the year ended December 31, 2024 of $1.83 billion were $318.9 million higher than the $1.51 billion for the year ended December 31, 2023, but a substantial portion of that deposit growth was due to the CFC acquisition. We will continue to focus on deposit growth, which we use to fund loan originations. However, if we are unable to sufficiently increase our deposit balances, we will be required to increase our use of alternative sources of funding, including FHLB advances, or to increase our deposit rates in order to attract additional deposits, each of which would increase our cost of funds.
Our average total deposits for the year ended December 31, 2025 of $1.98 billion were $151.9 million higher than the $1.83 billion for the year ended December 31, 2024. We will continue to focus on deposit growth, which we use to fund loan originations. However, if we are unable to sufficiently increase our deposit balances, we will be required to increase our use of alternative sources of funding, including FHLB advances, or to increase our deposit rates in order to attract additional deposits, each of which would increase our cost of funds.
telecommunications;
data processing;
automation;
artificial intelligence;
digital assets;
Internet banking, including mobile banking;
social media;
debit cards and so-called “smart cards”; and remote deposit capture.
Competition from alternative payment processing systems and lending platforms and digital asset service providers may reduce our revenue.
Technology and other changes are allowing consumers and businesses to complete financial transactions that historically have involved banks through alternative methods. For example, the wide acceptance of internet-based commerce has resulted in a number of alternative payment processing systems and lending platforms in which banks play only minor roles. Customers can also maintain funds in prepaid debit cards or digital currencies and pay bills and transfer funds directly without the direct assistance of banks. The diminishing role of banks as financial intermediaries has resulted and could continue to result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the potential loss of lower cost deposits as a source of funds could have a material adverse effect on our business, financial condition and results of operations.
While we do not offer products relating to digital assets, including cryptocurrencies, stablecoins and other similar assets, there has been a significant increase in digital asset adoption globally over the past several years. Certain characteristics of digital asset transactions, such as the speed with which such transactions can be conducted, the ability to transact without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the anonymous nature of the transactions, are appealing to certain consumers notwithstanding the various risks posed by such transactions. Accordingly, digital asset service providers-which, at present are not subject to the same degree of scrutiny and oversight as banking organizations and other financial institutions-are becoming active competitors to more traditional financial institutions. The process of eliminating banks as intermediaries, known as "disintermediation," could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the lower cost of deposits as a source of funds could have a material adverse effect on our financial condition and results of operations. Potential partnerships with digital asset companies, moreover, could also entail significant investment.
The Bank does not utilize AI for decision-making processes or internal bot usage as any automation within the Bank is driven by macros and predefined rule-based workflows rather than AI-driven models. AI technology, however, is employed within select third-party solutions integrated into our operations. These include SentinelOneSophos for advanced cybersecurity threat detection and response, Verafin for fraud detection and AML compliance, the Glia Chatbot for enhancing customer service interactions, and CATO Networks for AI-driven network security and optimization. These third-party tools that utilize a limited AI model support security, risk management, and operational efficiency but do not influence credit, lending, or other decision-making functions within the Bank. We do not believe that these products pose a material risk on the company’sCompany’s business or financial results.
We cannot guarantee that our allocation of capital to various alternatives will enhance long-term stockholder value.
Our business plan calls for us to execute a variety of strategies to allocate and deploy any excess capital including, but not limited to, continued organic balance sheet growth and diversification, stock repurchases, and payment of regular cash dividends. Additionally, we will carefully consider acquisition opportunities to further deploy capital when we expect such opportunities to significantly enhance long-term shareholder value. If we are unable to effectively and timely deploy capital through these strategies, it may constrain growth in earnings and return on equity and thereby diminish potential growth in stockholder value.
The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions, including restrictions on conducting acquisitions or establishing new branches. During the last year,few years, several banking institutions have received large fines for non-compliance with these laws and regulations. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations.
Under the supervision of the CFPB, our consumer and business banking products and services are subject to heightened regulatory oversight and scrutiny with respect to compliance with consumer laws and regulations. We may face a greater number or wider scope of investigations, enforcement actions, and litigation in the future related to consumer practices, thereby increasing costs associated with responding to or defending such actions. Also, federal and state regulators have been increasingly focused on sales practices of branch personnel, including taking regulatory action against other financial institutions. In addition, increased regulatory inquiries and investigations, as well as any additional legislative or regulatory developments affecting our consumer businesses, and any required changes to our business operations resulting from these developments, could result in significant loss of revenue, require remuneration to our customers, trigger fines or penalties, limit the products or services we offer, limit the fees we are able to charge, require us to increase our prices and, therefore, reduce demand for our products, impose additional compliance costs on us, increase the cost of collection, cause harm to our reputation, or otherwise adversely affect our consumer businesses.
Changes to tax laws, regulations or interpretations could adversely affect our financial condition or results of operations.
Changes in tax laws, regulatory requirements and/or the interpretation or enforcement of such laws and regulations by state or federal tax regulators could occur. These changes in the law or interpretations may be retroactive to previous periods and as a result could negatively affect our current and future financial performance. An increase in our corporate tax rate or the imposition of any interest and penalties could have an unfavorable impact on our earnings and capital generation abilities. Similarly, the Bank’s clients could experience varying effects from changes in tax laws and such effects, whether positive or negative, may have a corresponding impact on our business and the economy as a whole. In addition, changes to regulatory requirements could increase our costs of regulatory compliance and may significantly affect the markets in which we do business, the markets for and value of our loans and investments, and our ongoing operations, costs and profitability.
We are limited in the amount we can loan to a single borrower by the amount of our capital. Generally, under current law, we may lend up to 15% of our unimpaired capital and surplus, including capital notes, to any one borrower. See “Business – Supervision and Regulation - Loans to One Borrower.” Based upon our current capital levels, the amount we may lend is less than that of many of our larger competitors and may discourage potential borrowers who have credit needs in excess of our lending limit from doing business with us. We may accommodate larger loans by selling participations in those loans to other financial institutions, but this ability may not always be available.
Management's Discussion & Analysis (MD&A)
New heading “Overview and Strategy”
Largest changes
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). Thesee in full comparisonfollowingmostfactors,significantamongfactorsothers,that could causethefutureCompany’s financial performanceresults to differ materially fromthethoseplans,anticipatedobjectives,byexpectations, estimates and intentions expressed in suchour forward-looking statements include the potential impact of partial government shutdown caused by budget stalemate in Congress, higher tariffs imposed by the Trump administration, higher inflation levels, and general economic 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: theextentglobal impact of foreign military conflicts; theadverseimpact of anycurrent orfuture pandemics or other natural disasterson our customers, prospects and business, including related supply chain shortage of goods; 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 andtheBank conduct operations; the imposition of tariffs or other domestic or international governmental policies impacting the value of the products of our borrowers; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;inflation, interest rate,market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the 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;acquisitions and difficulties and delays in integrating the businesses of the acquired company, including CFC, and the Company fully realizing cost savings andotherbenefits of suchacquisitions; changes in consumer spending and saving habits; those risks described in Item 1. “Business,” Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report; and the success of the Company at managing the risks involved in the foregoing.
“Goodwill and Core Deposit Intangible. For mergers and acquisitions, we are required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their fair value. The difference between consideration and the net fair value of assets acquired is recorded as goodwill or a bargain purchase gain if the acquired net fair value of assets acquired exceeds the consideration. …”see in full comparison
“Both goodwill and the core deposit intangible asset are reviewed for impairment annually or when events and circumstances indicate that an impairment may have occurred. Applicable accounting 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. …”see in full comparison
“Comparison of Financial Condition at December 31, 2025 and December 31, 2024 Comparison of Operating Results for the Years Ended December 31, 2025 and 2024 Rate/Volume Analysis Liquidity, Commitments and Capital Resources Off-Balance Sheet Arrangements Impact of Inflation Exposure to Changes in Interest Rates Critical Accounting Policies and Estimates Recently Issued Accounting Standards”see in full comparison
Total stockholders’ equity at December 31,see in full comparison2024,2025, increased$21.8$8.7 million or9.09%3.31% when compared to December 31,2023.2024. The increase was primarily due tothe $21.6 million increase in paid-in capital which is primarily associated with the issuance of $20.0 million of common stock related to the acquisition of CFC, andan increase in retained earnings of$2.5$9.8million,million (which consisted of$10.2$18.6 million in netincomeincome, partially offset by$7.7$8.6 million ofcashdividends recorded during theperiod, which increase was partially offset byperiod), an increase in paid-in capital of $3.0 million primarily due to the exercise of stock options, and a decrease in accumulated other comprehensive loss of$1.4$3.7million.million due to reductions in market interest rates and in investment securities, partially offset by a $7.9 million increase in treasury stock due to our stock repurchase program. The ratio of equity to total assets at December 31,20242025, and at December 31,20232024, was11.2%11.9% and12.5%,11.2%, respectively.The current period ratio decrease was primarily due to the CFC acquisition.
Full comparison: every changed paragraph (37)
Comparison of Financial Condition at December 31, 2025 and December 31, 2024 Comparison of Operating Results for the Years Ended December 31, 2025 and 2024 Rate/Volume Analysis Liquidity, Commitments and Capital Resources Off-Balance Sheet Arrangements Impact of Inflation Exposure to Changes in Interest Rates Critical Accounting Policies and Estimates Recently Issued Accounting Standards
Overview and Strategy
We remain focused on establishing and retaining customer relationships by offering a broad range of traditional financial services and products, competitively priced and delivered in a responsive manner to small businesses, to professionals and individuals in our market area. As a community bank, we seek to provide superior customer service that is highly personalized, efficient and responsive to local needs. To better serve our customers, we endeavor to provide state-of-the-artadvanced delivery systems with ATMs, current operating software, timely reporting, online bill pay and other similar up-to-date products and services. We seek to deliver these products and services with the care and professionalism expected of a community bank and with a special dedication to personalized customer service.
to provide local businesses, professionals and individuals with banking services responsive to and determined by their needs and local market conditions;
to attract deposits and loans through competitive pricing, responsiveness and service; and to provide a reasonable return to stockholders on capital invested.
Total assets were $2.34$2.29 billion at December 31, 2024,2025, ana increasedecrease of $423.7$55.1 million, or 22.11%2.35% when compared to $1.92$2.34 billion at the end of 2023.2024. The primary reasonsreason for the increasedecrease in total assets werewas therelated acquisitionto a decrease in investment securities of CFC$64.6 onmillion, Augustpartially 23,offset 2024,by whichan had approximately $303.5 millionincrease in assets at closing,cash and increasescash fromequivalents existingof core$18.3 operations.million.
Cash and cash equivalents decreasedincreased $33.2$18.3 million, or 22.06%,15.6%, to $117.3$135.7 million at December 31, 20242025 compared to December 31, 2023.2024.
Total available-for-sale investment securities increaseddecreased million$64.6 $155.8,million, or 170.57%,26.1%, to $247.2$182.6 million at December 31, 20242025 compared to December 31, 2023.2024. ThisThe increasedecrease was relatedprimarily due to principal repayments of $77.7 million and $3.5 million of maturities or calls of available-for-sale securities during 2025, partially offset by purchases of available for sale securities in the amount of $11.6 million and a decrease of $5.1 million attributed to the purchaseunrealized oflosses mortgage-backed securities of U.S. government sponsored enterprises, and U.S government agency securities, alongassociated with $14.0 million in securities acquired in the CFCavailable-for-sale acquisition during the year ended December 31, 2024.portfolio.
Loans, net of deferred loan fees and costs, increaseddecreased $270.5$2.5 million, or 17.47%,0.1%, to $1.82 billion at December 31, 20242025 compared to December 31, 2023.2024. The primary reasons for the increasedecrease in net loans were the $255.5 million in loans acquired from CFC and a $15.0 million increase from existing operations. The increase in the Company’s net loans consisted of increasesdecreases of $242.2$47.7 million in construction loans, $41.6 million in commercial real estate loans, $41.9and $16.3 million in commercial and industrial loans, $30.0partially offset by increases of $95.8 million in residential mortgages, and $10.1$7.2 million in home equity and consumer loans,loans. allCommercial partiallyloan offsetbalances bydecreased due to increased selectivity in new loan originations and a decreasecontinued offocus $53.0on millioncredit in construction loans.quality.
At December 31, 2024,2025, non-performing assets totaled $27.1$16.6 million, ana increasedecrease of $20.4$10.6 million when compared to the amount at December 31, 2023.2024. The increasedecrease was due toprimarily the delinquencyresult of two commercial real estate loans totaling $25.4$10.0 million with collateral supporting each loan. The Company is a participant in thesecharge-offs loansrecorded andduring is2025, currentlyof evaluatingwhich its$9.9 optionsmillion withwas recorded during the leadsecond bank,quarter includingof but not limited to placing the loans on the market for sale.2025.
Total deposits on December 31, 2025, decreased $56.4 million, or 2.78%, when compared to December 31, 2024. The decrease in the Company’s deposits consisted primarily of decreases in certificates of deposit of $45.0 million, money market deposits of $26.3 million, non-interest-bearing demand deposits of $15.0 million, and savings deposits of $3.1 million, partially offset by an increase in interest-bearing demand deposits of $33.0 million.
Total deposits on December 31, 2024, increased $396.9 million, or 24.26%, when compared to December 31, 2023. The primary reasons for the increase in total deposits were the $282.8 million in deposits acquired from CFC and an increase of $114.1 million from existing branch operations. The increase in the Company’s deposits consisted of increases in money market deposits of $136.5 million, certificates of deposit of $131.6 million, interest-bearing demand deposits of $52.6 million, non-interest-bearing deposits of $51.7 million, and savings deposits of $24.4 million.
Total stockholders’ equity at December 31, 2024,2025, increased $21.8$8.7 million or 9.09%3.31% when compared to December 31, 2023.2024. The increase was primarily due to the $21.6 million increase in paid-in capital which is primarily associated with the issuance of $20.0 million of common stock related to the acquisition of CFC, and an increase in retained earnings of $2.5$9.8 million,million (which consisted of $10.2$18.6 million in net incomeincome, partially offset by $7.7$8.6 million of cash dividends recorded during the period, which increase was partially offset byperiod), an increase in paid-in capital of $3.0 million primarily due to the exercise of stock options, and a decrease in accumulated other comprehensive loss of $1.4$3.7 million.million due to reductions in market interest rates and in investment securities, partially offset by a $7.9 million increase in treasury stock due to our stock repurchase program. The ratio of equity to total assets at December 31, 20242025, and at December 31, 20232024, was 11.2%11.9% and 12.5%,11.2%, respectively. The current period ratio decrease was primarily due to the CFC acquisition.
We manage our balance sheet based on a number of interrelated criteria, such as changes in interest rates, fluctuations in certain asset and liability categories whose changes are not totally controlled by us, swingschanges in deposit account balances driven by depositors’ needs, prepayments and issuer call options exercised on securities available for sale, early payoffs on loans, investment opportunities presented by market conditions, lending originations, capital provided by earnings, and active management of our overall liquidity positions. The management of these dynamic and interrelated elements of our balance sheet results in fluctuations in balance sheet items throughout the year.
Comparison of Operating Results for the Years Ended December 31, 2024,2025, and 2023December 31, 2024
For the year ended December 31, 2024,2025, the Company recorded net income of $18.6 million, or $2.71 per diluted common share, compared to $10.2 million, or $1.55 per diluted common share, compared to $25.8 million, or $4.03 per diluted common share, for the same period in 2023.2024. This year-to-date decreaseincrease was primarily the result of a $9.7 bargain purchase gain which included a tax benefit of $2.0 million in 2023 from the Company’s acquisition of Noah Bank in May of 2023, and the purchase accounting adjustments recorded in 2024 reducing net income, which were related to the Cornerstone "CFC" acquisition, whichand included anmerger increaserelated expenses of $1.5$7.8 million in the provision for credit losses when comparing both periods.million.
Net interest income for the twelve-month period ended December 31, 2024,2025, was $66.5$75.8 million, an increase of $1.5$9.3 million, or 2.3%,14.0%, from 2023.2024. The increase from the previous year was the result of an increase in interest income of $24.8$7.6 million, or 25.2%,6.2%, partiallyand offseta by an increasedecrease in interest expense of $23.3$1.7 million, or 70.1%.3.0%.
Total interest and dividend income increased $24.8$7.6 million, or 25.2%,6.2%, to $122.9$130.6 million for the year ended December 31, 2024,2025, compared to $98.2$122.9 million for the prior year. The improvement in interest income resulted from an increase in average interest-earning assets of $148.2 million, partially offset by a decrease in the yield on earning assets of 318 basis points to 6.25% and an increase in average interest-earning assets of $315.2 million6.17% for the twelve-month period ended December 31, 2024.2025.
Interest income and fees on loans increased $19.3$9.2 million, or 21.6%,8.5%, to $108.6$117.8 million for the year ended December 31, 2024,2025, compared to $89.3$108.6 million for the prior year. The increase was attributable to both a $213.5$166.0 million increase in the average balancebalance, andpartially offset by a 379 basis point increasedecrease in the year-over-year average yield on loans to 6.53%,6.44%, due to risingdeclining interest rates over the period.
Interest income on securities increased approximately $3.6$4.0 million, or 144.43%,65.3%, for the year ended December 31, 2024,2025, compared to the prior year. The increase was attributable to both a $65.6$73.9 million increase in the average balance and a 11044 basis point increase in the year-over-year average yield on investments to 4.06%4.50% Other interest and dividends increaseddecreased $1.9$5.5 million, or 29.1%,67%, to $8.3$2.7 million for the year ended December 31, 2024,2025, compared to $6.4$8.3 million for the prior year due to ana increasedecrease of $26.9$88.2 million in the average balances ofDue federalfrom fundsFederal sold,Reserve partiallyBank, offsetand bya an 8113 basis point decrease in the yield on fedrespective funds sold.funds.
Total interest expense increaseddecreased $23.3$1.7 million, or 70.1%,3.0%, for the year ended December 31, 20242025 compared to the prior year. This increasedecrease was the result of a 9937 basis point increasedecrease in the cost of interest-bearing deposits and partially offset by an increase of $302.7$125.2 million in average interest-bearing deposits.
The provision for credit losses for the twelve months ended December 31, 2024,2025, was $5.1$6.7 million compared with a provision of $3.1$5.1 million for the 20232024 period. The $5.1$6.7 million provision for 20242025 consists of a $5.5$6.6 million provision associated with the company’sCompany’s loan portfolio, offset byand a credit to the provision of $360$38 thousand associated with unfunded commitments. The provision for credit losses on loans includes $3.2 million related to non-purchased-credit-deteriorated loans acquired in the CFC acquisition. See the section above titled “Analysis of Allowance for Credit Losses” for a discussion of our allowance for credit losses methodology, including additional information regarding the determination of the provision for credit losses.
Total non-interest income for the year ended December 31, 2025, increased $312 thousand, or by 3.8%, primarily due an increase in bank owned life insurance of $326 thousand, and in fees and service charges of $247 thousand, partially offset by a decrease in loan fees of $278 thousand.
Total non-interest income for the year ended December 31, 2024, decreased $9.0 million, or by 52.4%, primarily due to the $9.7 million bargain purchase gain from the Noah Bank acquisition recorded in 2023, partially offset by a 2024 increase in other non-interest income of $646 thousand and an increase in income from bank owned life insurance of $380 thousand over the same period in 2023.
For the year ended December 31, 2024,2025, non-interest expense was $56.8$53.9 million, compared to $48.7$56.8 million for 2023.2024. The increasedecrease of $8.0$2.8 million was primarily attributed to acquisition related expenses of $7.8 million recorded in 2024, partially offset by increases in salaries and employee benefits of $2.7$1.7 million, occupancy and equipment of $1.2 million, professional fees of $515 thousand, data processing and communications of $352$1.1 million, professional fees of $763 thousand, occupancy and equipment of $527 thousand, and federal deposit insurance of $254$448 thousand and merger-related expenses of $2.2 million during 20242025 over the same period in 2023. The CFC acquisition caused a significant portion of such increases.2024.
For the year ended December 31, 2024,2025, income tax expense was $2.6$5.1 million resulting in an effective tax rate of 20.1%21.4% compared to income tax expense of $4.6$2.6 million and an effective tax rate of 15.1%20.1% for the year ended December 31, 2023.2024. This decreaseincrease in income taxes was due to the income taxes on the $9.7 million bargain purchase gain from the Noah Bank acquisition, recordeddecrease in the year ended December 31, 2023, and an increase in 2024 merger related expenses of $2.2$7.8 million when comparing the years ended December 31, 20242025 and 2023.2024.
Average Balance Sheets. The following table sets forth average balance sheets, yields and costs, and certain other information for the years indicated. The average yields and costs of funds shown are derived by dividing income or expense by the daily average balance of assets or liabilities, respectively, for the periods presented. Net loan fees of $4.1 million and $2.8 million were recorded for the twelve months ended December 31, 2024 and 2023, respectively. Nonaccrual loans are included in the average balance of loans receivable, net for all periods presented. No tax-equivalent adjustments have been made as they were deemed insignificant.
We strive to maintain sufficient liquidity to fund operations, loan demand and to satisfy fluctuations in deposit levels. We are required to have enough investments that qualify as liquid assets in order to maintain sufficient liquidity to ensure safe and sound banking operations. Liquidity may increase or decrease depending upon the availability of funds and comparative yields on investments in relation to the return on loans. We attempt to maintain adequate but not excessive liquidity, and liquidity management is both a daily and long-term function of our business management. We manage our liquidity in accordance with a board of directors-approved asset-liability policy, which is administered by our asset-liability committee (“ALCO”). ALCO reports interest rate sensitivity, liquidity, capital and investment-related matters on a quarterly basis to ourthe Company's board of directors.
We had the following off-balance sheet financial instruments whose contract amounts represent credit risk at December 3131, 2025:
(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.
Economic Value of Equity (EVE) divided 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 also 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.
Goodwill and Core Deposit Intangible. For mergers and acquisitions, we are required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their fair value. The difference between consideration and the net fair value of assets acquired is recorded as goodwill or a bargain purchase gain if the acquired net fair value of assets acquired exceeds the consideration. Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates and realizable collateral values. The allowance for credit losses for PCD loans is recognized within acquisition accounting. The allowance for credit losses for non-PCD assets is recognized as provision for credit losses in the same reporting period as the merger or acquisition. Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the merger or acquisition. The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations.
Both goodwill and the core deposit intangible asset are reviewed for impairment annually or when events and circumstances indicate that an impairment may have occurred. Applicable accounting 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 then Carrying Value, therefore a quantitative test was not required as of May 31, 2024.
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 followingmost factors,significant amongfactors others,that could cause thefuture Company’s financial performanceresults to differ materially from thethose plans,anticipated objectives,by expectations, estimates and intentions expressed in suchour forward-looking statements include the potential impact of partial government shutdown caused by budget stalemate in Congress, higher tariffs imposed by the Trump administration, higher inflation levels, and general economic 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 extentglobal impact of foreign military conflicts; the adverse impact of any current or future pandemics or other natural disasters on our customers, prospects and business, including related supply chain shortage of goods; 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 the Bank conduct operations; the imposition of tariffs or other domestic or international governmental policies impacting the value of the products of our borrowers; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the 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; acquisitions and difficulties and delays in integrating the businesses of the acquired company, including CFC, and the Company fully realizing cost savings and other benefits of such acquisitions; changes in consumer spending and saving habits; those risks described in Item 1. “Business,” Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report; and the success of the Company at managing the risks involved in the foregoing.
What changed in the latest 10-Q
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, 2025. Additional risks not presently known to the Company, or that the Company currently deems immaterial, may also adversely affect the business, financial condition or results of operations.
Largest changes
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, 2025. Additional risks not presently known to the Company, or that the Company currently deems immaterial, may also adversely affect the business, financial condition or results of operations.see in full comparison
Full comparison: every changed paragraph (1)
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, 2025. Additional risks not presently known to the Company, or that the Company currently deems immaterial, may also adversely affect the business, financial condition or results of operations.
Management's Discussion & Analysis (MD&A)
New heading “Rate/Volume Analysis”
New heading “Comparison of Operating Results for the six months ended June 30, 2026 and 2025”
New heading “Interest income”
New heading “Interest expense”
New heading “Provision for credit losses”
New heading “Non-interest income”
New heading “Non-interest expense”
New heading “Provision for income taxes”
New heading “Average Balances, Net Interest Income, and Yields Earned and Rates Paid”
Largest changes
“Comparison of Operating Results for the six months ended June 30, 2026 and 2025”see in full comparison
“Average Balances, Net Interest Income, and Yields Earned and Rates Paid”see in full comparison
Full comparison: every changed paragraph (52)
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 global impact of foreign military conflicts, the potential impact of any future Federal budget stalemates in Congress, 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 global impact of foreign military conflicts; 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; the timing and nature of the regulatory response to any applications filed by the Company and the Bank; developments in technology, such as artificial intelligence, and our ability to incorporate innovative technologies in our business and provide products and services that satisfy our customers' expectations for convenience and security; other acquisitions; changes in consumer spending and saving habits; those risks under the heading “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025; and the success of the Company at managing the risks involved in the foregoing.
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 2829 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cranbury, 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 is a member of the Federal Deposit Insurance Corporation (“FDIC”).
Economic conditions during the firstsecond quarter of 2026 remained mixed, characterized by moderating growth, resilient labor markets, and inflation trending downward but still modestly above the target of the Federal Reserve. Consumer spending continued to support economic activity but showed signs of softening amid elevated interest rates and reduced excess savings, while business investment remained constrained by tighter financial conditions. The Federal Reserve maintained a restrictive monetary policy stance during the quarter, contributing to higher borrowing costs, modest tightening in credit availability, and continued pressure on interest-sensitive sectors, including commercial real estate. Looking ahead, economic conditions remain uncertain, with risks dependent on the trajectory of inflation, labor market conditions, and the timing of potential monetary policy adjustments.
Comparison of Financial Condition at MarchJune 31,30, 2026 and December 31, 2025
Total assets were $2.25 billion at MarchJune 31,30, 2026, a decrease of $31.4$34.1 million, or 1.37%1.49% when compared to $2.29 billion at the end of 2025. The primary reasons for the decrease in total assets were related to decreases in cash and cash equivalents of $15.9$69.5 million and investmentin securitiesloans of $18.0$44.9 million, partially offset by an increase in netinvestment loanssecurities of $2.7$78.9 million.
Cash and cash equivalents decreased $15.9$69.5 million, or 11.7%,51.2%, to $119.8$66.2 million at MarchJune 31,30, 2026 compared to December 31, 2025.
Total available-for-sale investment securities decreasedincreased $18.0$78.9 million, or 9.9%,43.2%, to $164.6$261.5 million at MarchJune 31,30, 2026 compared to December 31, 2025. This decreaseincrease was related to the purchase of $109.4 million in mortgage-backed securities of U.S. government sponsored enterprises, partially offset by payoffs of mortgage-backed securities of U.S. government sponsored enterprises and U.S government agency securities during the threesix months ended MarchJune 31,30, 2026.
Loans, net of deferred loan fees and costs, increaseddecreased $2.7$44.9 million, or 0.15%,2.47%, to $1.82$1.77 billion at MarchJune 31,30, 2026 compared to December 31, 2025. The increasedecrease in the Company’s net loans consisted of increasesdecreases of $69.7 million in commercial real estate loans and $15.3 million in construction loans, partially offset by increases of $10.8$25.4 million in home equity and consumer loans,loans $6.7and $15.1 million in residential mortgages, $4.1 million in commercial and industrial loans, and $1.4 million in construction loans, and, partially offset by a decrease of $20.0 million in commercial real estate loans.mortgages.
The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied and non-owner-occupied CRE loans, was $1.32$1.27 billion or 72.6%71.8% of total loans of $1.82$1.77 billion at MarchJune 31,30, 2026. There were 721705 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 $1.21$1.16 billion or 92.5%92.1% of the CRE portfolio and less than 80% for $1.31$1.26 billion or 99.6% of the CRE portfolio.
For the three and six months ended MarchJune 31,30, 2026, charge-offs were $14$4 thousand,thousand and $18 thousand and recoveries were $12$248 thousand.thousand and $261 thousand, respectively. The coverage ratio of the allowance for credit losses to period end loans was 1.10%1.13% at MarchJune 31,30, 2026 and 1.12% at December 31, 2025.
At MarchJune 31,30, 2026, non-performing assets remained steady at $16.5$16.3 million, compared to $16.6 million at December 31, 2025. Non-performing assets as a percentage of total loans, net of deferred fees and costs, remained steady at 0.91%0.92% forat MarchJune 31,30, 2026 compared to 0.91% at December 31, 2025.
Total deposits on MarchJune 31,30, 2026, decreased $33.5$40.5 million, or 1.70%,2.05%, when compared to December 31, 2025. The decrease in the Company’s deposits consisted primarily of decreases in certificates of deposit of $53.2$97.0 million andmillion, interest-bearing demandchecking deposits of $25.3$20.9 million, and savings deposits of $3.0 million, partially offset by increases in money market deposits of $26.5$57.1 million, non-interest-bearingand demandnon-interest checking deposits of $17.2 million, and savings deposits of $1.3$23.2 million. On balance sheet liquidity remains strong at MarchJune 31,30, 2025.2026.
At MarchJune 31,30, 2026, the Company had approximately $613.3$666.0 million in uninsured deposits, consisting of $84.3$80.3 million in non-interest-bearing demand deposits, $220.1$230.1 million in interest-bearing demand deposits, $172.5$227.7 million in money market accounts, $24.5$25.8 million in savings deposits and $111.9$102.1 million in certificates of deposits.
The Company had no outstanding borrowings at MarchJune 31,30, 2026 and December 31, 2025.
Total stockholders’ equity at MarchJune 31,30, 2026 increased $2.9$9.2 million, or 1.07%,3.40%, when compared to December 31, 2025. The increase was primarily due to an increase in retained earnings of $3.7$8.7 million (which consisted of $6.2$13.3 million in net income, partially offset by $2.5$4.6 million of cash dividends recorded during the period), partially offset byand an increase in accumulatedpaid-in other comprehensive losscapital of $845$989 thousand due to increases in market interest rates.thousand. The ratio of equity to total assets at MarchJune 31,30, 2026 and December 31, 2025 was 12.1%12.4% and 11.9%, respectively.
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 $100.0 million letter of credit with the FHLB supporting municipal deposits as of MarchJune 31,30, 2026. Based on available eligible securities and qualified real estate loan collateral, the Company had the ability to borrow an additional $539.0$523.5 million as of MarchJune 31,30, 2026.
As of MarchJune 31,30, 2026, the Bank was eligible to use the Federal Reserve discount window for borrowings, based on assets pledged as collateral as of the applicable date. As of MarchJune 31,30, 2026, 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 MarchJune 31,30, 2026, 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 MarchJune 31,30, 2026.
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 MarchJune 31,30, 2026, 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 MarchJune 31,30, 2026, 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 MarchJune 31,30, 2026 and December 31, 2025 are presented below:
Comparison of Operating Results for the three months ended MarchJune 31,30, 2026 and 2025
The Company reported net income of $6.2$7.1 million, or $0.91$1.04 per diluted common share, for the firstthree quartermonths ofended June 30, 2026, compared to a$688 net income of $5.4 million,thousand, or $0.77$0.10 per diluted common share,share for the firstsame quarterperiod ofin 2025. The increase in net income for the firstsecond quarter of 2026 when compared to the firstsecond quarter of 2025 was primarily due to an increase in non-interest income of $261 thousand, an increase in net-interest income of $101 thousand, a decrease in non-interest expense of $377 thousand, and a decrease in the provision for credit losses of $424$7.3 million, an increase in net interest income of $1.2 million, and an increase in non-interest income of $185 thousand, partially offset by an increaseincreases of $312$2.2 thousandmillion in income tax expenses and $137 thousand in non-interest expense.
Interest income decreased $2.2$1.1 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. Interest income on loans decreased $1.6$939 millionthousand due to a decrease of $50.4 million in the average balance of loans of $51.2 million,loans, and a decrease of 173 basis points on the yield on loans. Interest on taxable available-for-sale securities decreased $1.1$466 millionthousand due to a 55 basis point decrease in yield and a $71.3$39.5 million decrease in the average balance of taxable available-for-sale securities. Other interest and dividend income increased $441$320 thousand due to an increase of $43.5 million in average balances of $61.8 million,balances, partially offset by a decrease of 77 basis points in the yield of 73 basis points.yield.
Interest expense decreased $2.3 million to $12.2$11.6 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. Interest expense decreased primarily due to a decrease of $68.8 million in the average balance of interest-bearing deposits of $69.5 million and a decrease of 4243 basis points in the rate paid on interest-bearing deposits over the same prior year period.
The Company recorded a reversal of credit losses of $156$353 thousand during the firstthree quartermonths ofended June 30, 2026, which consisted of a $290$314 thousand decrease recorded to the allowance of credit losses on loans, offsetand bya an increasedecrease to the provision for credit losses of $134$39 thousand related to unfunded commitments, which are recorded in other liabilities on the Company’s statements of financial condition. This reversal represented a decrease in the provision for credit losses of $7.3 million from the three-months ended June 30, 2025. There were charge-offs of $14$4 thousand recorded, and recoveries were $12$248 thousand, for the three months ended MarchJune 31,30, 2026.
Total non-interest income was $2.5$2.4 million for the three months ended MarchJune 31,30, 2026, an increase of $261$185 thousand or 11.9%8.2% when compared to the same prior year period. The increase over the prior year’s firstsecond quarter was primarily due to increasesan increase in otherloan non-interest incomefees of $303$205 thousand, an increaseand in fees and service charges of $69 thousand, and an increase in income from bank-owned life insurance of $36$46 thousand, partially offset by a decrease in loan fees of $147 thousand. The increase in other non-interest income for the first quarter was related to a net gain on an equity investment in the amount of $232$88 thousand.
Total non-interest expense was $13.4$13.6 million for the three months ended MarchJune 31,30, 2026, aan decreaseincrease of $377$137 thousand or 2.7%1.0% when compared to the same prior year period. This decreaseincrease was primarily related to a decreaseincreases in professional fees of $253 thousand, occupancy and equipment expense of $105 thousand, and salaries and employee benefits expense of $147$60 thousand, andpartially aoffset decreaseby decreases in federal deposit insurance expense of $233$115 thousand, office expense of $102 thousand, and other non-interest expense of $53 thousand.
For the three months ended MarchJune 31,30, 2026, the Company recorded an income tax expense of $1.8$2.1 million, resulting in an effective tax rate of 22.6%,22.9%, compared to an income tax expensebenefit of $1.5($92) millionthousand resulting in an effective tax rate of 21.9%(15.4%) for the three months ended MarchJune 31,30, 2025.
The following table shows for the three-month period indicated the total dollar amount of interest earned from average interest earninginterest-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.
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.
Comparison of Operating Results for the six months ended June 30, 2026 and 2025
General
The Company reported net income of $13.3 million, or $1.95 per diluted common share, for the six months ended June 30, 2026, compared to a net income of $6.1 million, or $0.88 per diluted common share, for the six months ended June 30, 2025. The increase in net income was primarily due to a decrease of $7.7 million in the provision for credit losses, an increase in net interest income of $1.3 million, an increase in non-interest income of $446 thousand, and a decrease in non-interest expense of $240 thousand, partially offset by an increase in income tax expense of $2.5 million, when compared to the prior year period.
Interest income
Interest income decreased $3.3 million for the six months ended June 30, 2026, compared to the same period in 2025. Interest income on loans decreased $2.5 million due to a decrease of $50.8 million in the average balance of loans, and a decrease of 9 basis points on the yield on loans. Interest on taxable available-for-sale securities decreased $1.6 million due to a 28 basis point decrease in yield and a $55.3 million decrease in the average balance of taxable available-for-sale securities. Other interest and dividend income increased $761 thousand due to an increase of $52.6 million in average balances, partially offset by a decrease of 76 basis points in the yield.
Interest expense
Interest expense decreased $4.7 million to $23.8 million for the six months ended June 30, 2026, compared to the same period in 2025. Interest expense decreased primarily due to a decrease of $69.1 million in the average balance of interest-bearing deposits and a decrease of 43 basis points in the rate paid on interest-bearing deposits, over the same prior year period.
Provision for credit losses
The Company recorded a reversal of credit losses of $509 thousand during the six months ended June 30, 2026, and recorded a $7.2 million provision for credit losses for the six-month period ended June 30, 2025. The decrease for the six-month period ended June 30, 2026, compared with the same prior year period, is primarily associated with a charge-off recorded during the prior period, in the amount of $9.9 million, which included a $2.4 million specific reserve that had previously been reserved in the allowance for credit losses. There were charge-offs of $18 thousand recorded, and recoveries were $261 thousand, for the six months ended June 30, 2026.
Non-interest income
Total non-interest income was $4.9 million for the six months ended June 30, 2026, an increase of $446 thousand or 10.0% when compared to the same prior year period. The increase over the prior year period was primarily due to increases in other non-interest income of $215 thousand, an increase in fees and service charges of $115 thousand, an increase in income from bank-owned life insurance of $58 thousand, and an increase in loan fees of $58 thousand.
Non-interest expense
Total non-interest expense was $27.1 million for the six months ended June 30, 2026 , a decrease of $240 thousand or 0.9% when compared to the same prior year period. This decrease was primarily related to a decrease in federal deposit insurance expense of $348 thousand, a decrease in other non-interest expense of $123 thousand, and a decrease in salaries and employees benefits of $87 thousand, partially offset by an increase in professional fees of $252 thousand.
Provision for income taxes
For the six months ended June 30, 2026, the Company recorded an income tax expense of $3.9 million, resulting in an effective tax rate of 22.8%, compared to an income tax expense of $1.4 million resulting in an effective tax rate of 18.9% for the six months ended June 30, 2025.
Average Balances, Net Interest Income, and Yields Earned and Rates Paid
The following table shows for the six-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.
The table below sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at MarchJune 31,30, 2026, 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 MarchJune 31,30, 2026, 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.
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 MarchJune 31,30, 2026, and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated.
1.
BPRN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (2 insiders, 2 trade dates, 10,605 shares, about $455.3K) and open-market sales in 4 filings (4 insiders, 4 trade dates, 14,804 shares, about $575.2K). Net open-market shares: -4,199 (purchases minus sales); net value about -$119.8K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-12 | Tuchman Martin |
Open-market purchase | 10,534 | $42.98 | $452.8K |
| 2026-08-06 | Clark Matthew T. |
Open-market sale | 1,428 | $41.95 | $59.9K |
| 2026-07-31 | Distler Stephen |
Open-market sale | 8,776 | $41.48 | $364.0K |
| 2026-06-10 | Adkins Stephanie |
Open-market sale | 1,600 | $35.04 | $56.1K |
| 2026-05-28 | Clark Matthew T. |
Open-market purchase | 71 | $36.20 | $2.6K |
| 2023-04-03 | Tuchman Martin |
Open-market sale | 3,000 | $31.72 | $95.2K |
Well-known investors holding BPRN (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 46,786 | $1.8M | 0.0% | Added 26% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 22,264 | $844.9K | 0.0% | Added 61% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 15,110 | $573.4K | 0.0% | Added 51% |
| Millennium Management (Israel Englander) | 2026-06-30 | 6,363 | $241.5K | 0.0% | Reduced 14% |