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Arrow Financial CorporationCorporate HQ Bayard Lane 183 Bayard Lane Princeton, NJ 08540 609.874.7033 www.thebankofprinceton.com Main: 609.921.1700 Operations Center 403 Wall Street Princeton, NJ 08540 New Jersey Bordentown 335 Farnsworth Avenue Bordentown, NJ 08505 609.291.8200 Browns Mills 101 Pemberton Browns Mills Road Browns Mills, NJ 08015 609.893.5540 Chambers St. 21 Chambers Street Princeton, NJ 08542 609.921.6800 Chesterfield 305 Bordentown– Chesterfield Road Chesterfield, NJ 08515 609.324.1256 Cream Ridge 403 Route 539 Cream Ridge, NJ 08514 609.757.1120 Deptford 1895 Hurffville Road Sewell, NJ 08080 856.227.9440 Hamilton 339 Route 33 Hamilton, NJ 08619 609.584.0011 Lakewood 12 America Avenue, 7B Lakewood, NJ 08701 732.835.7320 Lambertville 10 Bridge Street Lambertville, NJ 08530 609.397.0333 Lawrenceville 2999 Princeton Pike Lawrenceville, NJ 08648 609.882.0500 Monroe 1 Rossmoor Drive, Ste 120 Monroe Twp, NJ 08831 609.655.7790 Quakerbridge Rd. 3745 Quakerbridge Road Hamilton, NJ 08619 609.981.8900 Montgomery 1185 Route 206 North Princeton, NJ 08540 609.497.0500 Nassau St. 194 Nassau Street Princeton, NJ 08542 609.921.3311 New Brunswick 1 Spring Street, Ste 102 New Brunswick, NJ 08901 732.993.0066 Pennington 2 Route 31 South Pennington, NJ 08534 609.730.8500 Piscataway 1642 Stelton Road, Ste 410 Piscataway, NJ 08854 732.743.3500 Princeton Jct. 11 Cranbury Road Princeton Junction, NJ 08550 609.759.8100 Sicklerville 483 Cross Keys Road Sicklerville, NJ 08081 856.728.0343 Pennsylvania Cheltenham 470 W. Cheltenham Avenue Philadelphia, PA 19126 215.224.6400 Chestnut St. 1839 Chestnut Street Philadelphia, PA 19103 215.996.7380 Chinatown 921 Arch Street Philadelphia, PA 19107 215.923.6200 North Wales 1222 Welsh Road North Wales, PA 19454 215.631.9911 24 Locations Across New Jersey and Pennsylvania 2020 ANNUAL REPORT Expanding Our Reach to be Closer to Where You Need Us. Adaptable Resourceful Diligent Resilient Steadfast Committed Table of Contents Letter to the Shareholders.....................i -ii 2020 Form 10-K...................................................1 Who We Are...................................................... 117 Providing Banking Solutions to Customers Where and How They Need Them. Dear Fellow Shareholders, Despite the economic and social challenges that occurred during 2020 caused • For the year, the Bank reduced its cost of funds (including non-interest by the COVID-19 pandemic, our top priorities during this year were to keep our deposits) by 62 basis points to 0.98%, compared to 2019. Edward J. Dietzler President Chief Executive Officer The Bank had a very strong year despite contending with the pandemic. staff safe, continue to assist our customers with their financial needs, and look for opportunities to enhance the value to you, our shareholders. The Bank of Princeton completed a successful year with earnings of $13.8 million, or $2.01 per diluted common share, representing a 36.1% increase over 2019. Total assets grew to $1.6 billion, a 10.2% increase from the year prior. These results and increasing the cash dividend were a part of the Bank’s strategic initiative of increasing shareholder value along with controlled prudent growth of the Bank’s loan portfolio, which grew $177.0 million during 2020. Total deposits increased $129.0 million during the same period. The Bank continued with its branch expansion by the addition of three new branches during 2020, expanding our territory into Lakewood and Piscataway, and increasing our presence within the Center City Philadelphia area with our Chestnut Street branch. With these additions, the Bank’s franchise expanded to twenty-four branches. Management’s focus is developing and expanding its market footprint through growth of new banking relationships. The Bank is approaching its 14th year of operation and continues its success by staying the course with its original core mission of targeting the commercial real estate and small business communities for their lending needs, and staying significantly involved in the community. The Bank’s strong capital position provides the opportunity for future organic growth, as well as the ability to take advantage of acquisition opportunities when they present themselves. Notable Highlights for 2020 • Net loans increased $178.3 million to nearly $1.37 billion at year-end 2020 and reflected a 15% increase year over year. • The efficiency ratio for 2020 declined to 52.6%, a significant improvement f rom the same period in 2019 ratio of 59.77%. • Participation in the Paycheck Protection Program (PPP) provided over 1,500 loans to business and non-profit organizations totaling $183.5 million, and provided an increase in business checking accounts. Continuing its support of the community, the Bank is currently participating in the second phase of PPP loans, which commenced in January 2021, and already has over $80.0 million in 2021 commitments in this program. • The Bank successfully opened three new full-service branch locations: Lakewood in the 2nd Quarter 2020, and Chestnut Street in Center City Philadelphia and Piscataway, both in the 3rd Quarter 2020. • The Bank reduced the ratio of nonperforming loans to total loans to below 0.12% as of December 31, 2020. Although 2020 was a difficult year for the banking industry, the Bank took steps to transition its funding structure and decrease its cost of funds by 176%, going from a 4th Quarter 2019 run rate of 1.57% to 0.68% for the 4th Quarter 2020. This transformational effort increased our net interest margin to 3.63% from 3.10% for the same comparative period. To help achieve this result, we repositioned our funding mix by decreasing our time deposits, which represented 40% of 4th Quarter 2019 funding, to 29% for the 4th Quarter 2020, and for the same period took non-interest-bearing checking from 12% of deposits to 17%. The uncertainty in credit quality caused by the COVID-19 pandemic made for a challenging time. Management took various actions to help insulate the Bank from the harm caused by a downturn in the economy. The Bank first slowed our traditional commercial production to hold our loans outstanding flat year over year, and allowed PPP loans (which are loans guaranteed by the Small Business Administration) to grow to $175.9 million at year-end. In addition, the Bank worked with its current customers to modify payment terms on $263 million of loans during the year, of which $218 million returned to their original payments bringing the total at year-end down to $45 million. Finally, we recorded a $5.2 million credit provision, bringing our credit allowance to $16 million, or 1.35% of period end loans excluding PPP product. Non-performing loans actually declined during 2020 to $1.7 million at year-end 2020. Management is very pleased with the overall result of our credit initiatives. The Bank continues to make significant investments in digital technologies which allows our clients to remotely access the many Bank products and services. In addition, while our existing clients can benefit from this convenience, this technology also allows the Bank to recruit new consumer and business customers within our footprint and surrounding market areas. The Board and Management of the Bank remain committed to providing the highest level of customer service along with being a strong partner in the communities we serve. We are extremely proud of our employees for their response to the challenges of COVID-19. i ii 2020 ANNUAL REPORT Richard J. Gillespie Chairman of the Board Maintaining focus on serving our customers throughout the pandemic remained vital. 2020 Financial Reports The Bank of Princeton 1 The Bank of Princeton The Bank of Princeton TABLE OF CONTENTS Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Market for the Registrant's Common Equity, Related Stockholder Matters Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operation Quantitative and Qualitative Disclosures about Market Risk Financial State and Supplementary Data Changes In and Disagreements with Accounts on Accounting Financial Disclosure Controls and Procedures Other Information PART I Item 1 Item 1A Item 1B Item 2 Item 3 Item 4 PART II Item 5 Item 6 Item 7 Item 7A Item 8 Item 9 Item 9A Item 9B PART III Item 10 Item 11 Item 12 Item 13 Item 14 Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters. Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services PART IV Item 15 Item 16 Exhibits: Financial Statement Schedules Form 10-K Summary Signatures PAGE 4 20 29 29 31 31 32 35 36 49 50 105 105 106 106 106 106 107 107 108 109 110 This page intentionally left blank 2 3 3 The Bank of Princeton The Bank of Princeton 4 5 The Bank of Princeton The Bank of Princeton 6 7 The Bank of Princeton The Bank of Princeton 8 9 The Bank of Princeton The Bank of Princeton 10 11 The Bank of Princeton The Bank of Princeton 12 13 The Bank of Princeton The Bank of Princeton 14 15 The Bank of Princeton The Bank of Princeton 16 17 The Bank of Princeton The Bank of Princeton 18 19 The Bank of Princeton The Bank of Princeton 20 21 The Bank of Princeton The Bank of Princeton 22 23 The Bank of Princeton The Bank of Princeton 24 25 The Bank of Princeton The Bank of Princeton 26 27 The Bank of Princeton The Bank of Princeton 28 29 The Bank of Princeton The Bank of Princeton 30 31 The Bank of Princeton The Bank of Princeton 32 33 The Bank of Princeton The Bank of Princeton 34 35 The Bank of Princeton The Bank of Princeton 36 37 The Bank of Princeton The Bank of Princeton 38 39 The Bank of Princeton The Bank of Princeton 40 41 The Bank of Princeton The Bank of Princeton 42 43 The Bank of Princeton The Bank of Princeton 44 45 The Bank of Princeton The Bank of Princeton 46 47 The Bank of Princeton The Bank of Princeton 48 49 The Bank of Princeton The Bank of Princeton 50 51 The Bank of Princeton The Bank of Princeton 52 53 The Bank of Princeton The Bank of Princeton 54 55 The Bank of Princeton The Bank of Princeton THE BANK OF PRINCETON CONSOLIDATE STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Dollars in thousands) Common stock Paid-in Capital Retained Earnings Accumlated other comprehensive (loss) income Total Balance, January 1, 2018 Net income Other comprehensive income Stock options exercised (97,850 shares) Directors compensation (6,430 shares) Dividends declared $0.03 per share Stock-based compensation expense Balance, December 31, 2018 Net income Other comprehensive income Adoption of ASU Topic 842 Stock options exercised (98,852 shares) Directors compensation (7,082 shares) Dividends declared $0.26 per share Stock-based compensation expense Balance, December 31, 2019 Net income Other comprehensive income Stock options exercised (21,520 shares) Directors compensation (5,388 shares) Dividends declared $0.40 per share Dividend reinvestment plan (1,461 shares) Stock-based compensation expense Balance, December 31, 2020 $ $ $ $ $ $ $ $ 32,756 - - 490 32 - - 33,278 - - - 494 35 - - 33,807 - - 108 27 - 7 - 33,949 $ 76,350 - - 883 168 - 494 77,895 - - - 848 165 - 307 79,215 - - 179 93 - 24 197 79,708 59,122 14,708 - - - (200) - 73,630 10,142 - (219) - - (1,280) - 82,273 13,806 - - - (2,709) - - 93,370 $ 67 $ - (552) - - - - (485) - 1,115 - - - - - 630 $ - 1,161 - - - - - 1,791 $ $ $ $ $ $ $ $ 168,295 14,708 (552) 1,373 200 (200) 494 184,318 10,142 1,115 (219) 1,342 200 (1,280) 307 195,925 13,806 1,161 287 120 (2,709) 31 197 208,818 56 See notes to consolidated financial statements 57 57 The Bank of Princeton The Bank of Princeton 58 59 The Bank of Princeton The Bank of Princeton 60 61 The Bank of Princeton The Bank of Princeton 62 63 The Bank of Princeton The Bank of Princeton 64 65 The Bank of Princeton The Bank of Princeton 66 67 The Bank of Princeton The Bank of Princeton 68 69 The Bank of Princeton The Bank of Princeton 70 71 The Bank of Princeton The Bank of Princeton 72 73 The Bank of Princeton The Bank of Princeton Note 3 – Investment Securities (Continued) maturities of securities available-for-sale amounted to $11.0 million for the twelve months ended December 31, 2020, which included approximately $49,000 in gross realized gains. There were no sales of securities available-for-sale for the twelve months ended December 31, 2019. Proceeds from the calls and maturities of securities available-for-sale amounted to $16.4 million for the twelve months ended December 31, 2019, which included approximately $31,000 in gross realized gains. There were no securities pledged as collateral for NJ Governmental Unit Deposit Protection Act (“GUDPA”) deposits at December 31, 2020 or 2019. Note 4 – Loans Receivable Loans receivable, net was comprised of the following: December 31, 2020 December 31, 2019 Commercial real estate Commercial and industrial Construction Residential first-lien mortgage Home equity/Consumer Payroll Protection Program ("PPP") Total loans Deferred fees and costs Allowance for loan losses Loans, net $ 812,043 40,597 263,032 66,857 9,929 175,878 1,368,336 (4,850) (16,027) 1,347,459 $ $ 853,876 43,504 189,789 89,067 13,753 - 1,189,989 (3,419) (12,557) 1,174,013 $ The following table presents nonaccrual loans by segment of the loan portfolio: Commercial real estate Commercial and industrial Construction Residential first-lien mortgage Total nonaccrual loans December 31, 2020 $ $ 1,030 132 370 144 1,676 December 31, 2019 $ 2,071 - 371 - 2,442 $ $ 74 74 75 The Bank of Princeton The Bank of Princeton 76 77 The Bank of Princeton The Bank of Princeton Note 4 – Loans Receivable (Continued) The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loan receivable by the length of time a recorded payment is past due. The following table presents the segments of the loan portfolio summarized by the past due status as of December 31, 2020: 30-59 Days Past Due $ 952 39 - 1,274 - 5 2,270 $ 60-89 Days Past Due - $ - - - - - $ - With no related allowance recorded: Commercial real estate Commercial and industrial Construction Residential first-lien mortgage Home equity/Consumer PPP Total with no related allowance Greater than 90 days Total Past Due (Dollars in thousands) Current Total Loans Receivable $ $ $ $ 1,030 132 370 - 144 - 1,676 1,982 171 370 1,274 144 5 3,946 810,061 40,426 262,662 65,583 9,785 175,873 1,364,390 812,043 40,597 263,032 66,857 9,929 175,878 1,368,336 $ $ $ $ Loans Receivable >90 Days and Accruing - $ - - - - - $ - The following table presents the segments of the loan portfolio summarized by the past due status as of December 31, 2019: 30-59 Days Past Due 566 $ - - 1,184 42 - 1,792 $ 60-89 Days Past Due - $ - - - - - $ - With no related allowance recorded: Commercial real estate Commercial and industrial Construction Residential first-lien mortgage Home equity/Consumer PPP Total with no related allowance Greater than 90 days Total Past Due (Dollars in thousands) $ $ 2,064 - 371 - - - 2,435 2,630 - 371 1,184 42 - 4,227 $ $ Total Loans Receivable $ 853,876 43,504 189,789 89,067 13,753 - Current $ 851,246 43,504 189,418 87,883 13,711 - $ 1,185,762 $ 1,189,989 Loans Receivable >90 Days and Accruing - $ - - - - - $ - 78 78 79 The Bank of Princeton The Bank of Princeton 80 81 The Bank of Princeton The Bank of Princeton 82 83 The Bank of Princeton The Bank of Princeton Note 6 – Deposits The components of deposits at December 31 were as follows (Dollars in thousands): December 31, 2020 December 31, 2019 Demand, non-interest-bearing checking Demand, interest-bearing checking Savings Money Market Time deposits, $250,000 and over Time deposits, other $ 215,381 288,769 178,932 305,290 72,424 306,470 1,367,266 $ 15.75% 21.12% 13.09% 22.33% 5.30% 22.41% 100.00% $ 141,338 212,552 154,756 294,940 132,622 301,682 1,237,890 $ 11.42% 17.17% 12.50% 23.83% 10.71% 24.37% 100.00% Money market accounts totaling $20.1 million and $47.7 million at December 31, 2020 and 2019, respectively were originated through a reciprocal deposit relationship. 2021 2022 2023 2024 2025 and over $ 191,087 61,382 37,683 56,764 31,978 Total $ 378,894 At December 31, 2020, the scheduled maturities of certificates of deposit were as follows (Dollars in thousands): The Bank’s time deposits of $100,000 or more represent 11.84% of total deposits at December 31, 2020 and are included in the table above. Approximately $96.1 million and $35.6 million at December 31, 2019 and 2018, respectively were originated through brokers. Related party deposits were approximately $4.3 million and $4.4 million at December 31, 2020 and 2019 respectively. Deposit overdrafts reclassified as loan balances were $552,000 and $590,000 at December 31, 2020 and 2019, respectively. Note 7 – Borrowings The Bank’s borrowings consist of FHLB-NY overnight and short-term advances. The Bank utilizes federal funds purchased to meet short-term liquidity needs. The FHLB-NY has non-specific blanket collateral on the Bank’s loan portfolio as of December 31, 2020 and 2019. At December 31, 2020 and 2019, the Bank had no outstanding borrowings. At December 31, 2020, the Bank had a maximum borrowing capacity with the FHLB-NY, subject to certain collateral restrictions, of $252.6 million, with $195.5 million available. The Bank is also a shareholder in Atlantic Community Bancshares, Inc., the holding company of ACBB. As of December 31, 2020, the Bank 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 are outstanding with the ACBB at December 31, 2020. 84 84 85 The Bank of Princeton The Bank of Princeton 86 87 The Bank of Princeton The Bank of Princeton 88 89 The Bank of Princeton The Bank of Princeton Note 11 – Leases On January 1, 2019, the Bank adopted FASB ASU No. 2016-02, “Leases (Topic 842).” Leases (Topic 842) establishes a right of use model that requires a leasee to record a right of use (“ROU”) and a lease liability for all leases with terms longer 12 months. The Bank has elected the short-term lease recognition exemption such that the Bank will not recognize ROU or lease liabilities for leases with a term less than 12 months from the commencement date. The Bank is obligated under 20 operating leases agreements for 19 branches and its corporate offices with terms extending through 2039. The Bank’s lease agreements include options to renew at the Bank’s discretion. The extensions are reasonably certain to be exercised, therefore it was considered in the calculations of the ROU asset and lease liability. The following table represents the classification of the Bank’s right of use and lease liabilities (Dollars in thousands): Operating Lease Right of Use Asset: Gross carrying amount Increased asset from new lease Prior lease liability Hindsight practical expedient adjustment Accumulated amortization Statement of Financial Condition Location December 31, 2020 December 31, 2019 $ 14,533 5,768 - - (1,893) $ 12,817 3,685 (274) (219) (1,476) Net book value Operating lease right-of-use asset $ 18,408 $ 14,533 Operating Lease liabilities: Lease liabilities Operating lease liability $ 18,987 $ 15,040 For the year ended December 31, 2020, the weighted-average remaining lease terms for operating leases was 12.4 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.95%. The Bank used current FHLB fixed rate advances at the time the lease was placed in service for the term most closely aligning with remaining lease term to determine the discount rate. 90 90 91 The Bank of Princeton The Bank of Princeton 92 93 The Bank of Princeton The Bank of Princeton Note 14 – Fair Value Measurements and Disclosure (Continued) For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2020, were as follows: (Level 1) Quoted Price in Active Markets for Identical Assets (Level 2) Significant Other Observable Inputs (Level 3) Significant Unobservable Inputs Total Fair Value December 31, 2020 (dollars in thousands) Description Impaired loans $ - $ - $ - $ - $ $ 2,086 2,086 $ $ 2,086 2,086 For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2019, were as follows: (Level 1) Quoted Price in Active Markets for Identical Assets (Level 2) Significant Other Observable Inputs (Level 3) Significant Unobservable Inputs Total Fair Value December 31, 2019 (dollars in thousands) Description Impaired loans $ - $ - $ - $ - $ $ 2,115 2,115 $ $ 2,115 2,115 The following table presents quantitative information with regards to Level 3 fair value measurements at December 31, 2020. Description Fair Value December 31, 2020 Valuation Technique Unobservable Input (dollars in thousands) Discount Range (Weighted Average) 0.0% -29.1% Impaired loans $ 2,086 Collateral 1 adjustment (11.1%) 1 Fair value is generally determined through independent appraisal of the underlying collateral, primarily using comparable sales. 94 95 95 The Bank of Princeton The Bank of Princeton Note 14 – Fair Value Measurements and Disclosure (Continued) The following table presents quantitative information with regards to Level 3 fair value measurements at December 31, 2019. Description Fair Value December 31, 2019 Valuation Technique Unobservable Input (dollars in thousands) Discount Impaired loans Impaired loans $ 2 Cashflow 1 $ 2,113 Collateral 2 adjustment Discount adjustment Range (Weighted Average 6.0% ( 6.0%) 0.0% -23.8% ( 9.2%) 1 Fair value for this loan was determined through calculating the present value of future cash flows. 2 Fair value is generally determined through independent appraisal of the underlying collateral, primarily using comparable sales. The following methods and assumptions were used by the Bank in estimating fair value disclosures: Investment Securities The fair value of securities available-for-sale (carried at fair value) and held-to-maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. Level 2 debt securities are valued by a third-party pricing service commonly used in the banking industry. Level 2 fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, live trading levels, trade execution date, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things. Impaired loans (generally carried at fair value) Impaired loans carried at fair value are those impaired loans in which the Bank has measured impairment generally based on the fair value of the related loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds, discounted for estimated selling costs or other factors the Bank determines will impact collection of proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Other real estate owned (generally carried at fair value) Other real estate owned is adjusted to fair value, less estimated selling costs, upon transfer of loans to other real estate owned. Subsequently, other real estate owned is carried at the lower of carrying value or fair value less cost to sell. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. The discount adjustment from the appraised value is a significant unobservable input in the determination of the fair value for other real estate owned. These assets are included as Level 3 fair values. 96 96 97 The Bank of Princeton The Bank of Princeton 98 99 The Bank of Princeton The Bank of Princeton 100 101 The Bank of Princeton The Bank of Princeton 102 103 The Bank of Princeton The Bank of Princeton Note 18 – Subsequent Events On March 9, 2021, the Board of Directors announced that is has adopted a stock repurchase program to commence on the later of April 1, 2021 or the date approval of such program is received from the New Jersey Department of Banking and Insurance. Under the stock repurchase program, management is authorized to repurchase up to 5% of the Bank’s outstanding shares of common stock, with a total cost not to exceed $10.4 million. As of today, the Bank had 6,795,779 shares of common stock outstanding and five percent of such amount would be 339,788 shares. The stock repurchase program does not obligate the Bank to acquire any particular amount of common stock, and it may be limited, suspended or terminated at any time without prior notice. This program has been approved by the FDIC. On January 27, 2021, the Board of Directors declared a cash dividend of $0.12 per share of common stock. The dividend was paid on March 1, 2021 to shareholders of record at the close of business on February 12, 2021. Note 19 – Risk and Uncertainties On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread throughout the United States and around the world. The COVID-19 pandemic has adversely affected, and continue to adversely affect economic activity globally, nationally and locally. Actions taken around the world to help mitigate the spread of COVID-19 include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19 and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Bank operates. Due to the COVID-19 pandemic, market interest rates have declined significantly, with the 10-year Treasury bond falling below 1.00 percent on March 3, 2020 for the first time. Such events also have adversely affected business and consumer confidence, generally, and the Bank and its customers, and their respective suppliers, vendors and processors, have been adversely affected. On March 3, 2020, the Federal Open Market Committee reduced the targeted federal funds interest rate range by 50 basis points to 1.00 percent to 1.25 percent. This range was further reduced to 0 percent to 0.25 percent on March 16, 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to, among other provisions, provide emergency assistance for individuals, families and businesses affected by the COVID-19 pandemic. These reductions in interest rates and other effects of the COVID-19 pandemic will likely adversely affect the Bank's financial condition, results of operations, liquidity and capital in future periods. It is unknown how long the adverse conditions associated with the COVID-19 pandemic will last and what the complete financial effect will be to the Bank. It is reasonably possible that estimates made in the financial statements could be materially and adversely impacted in the near term as a result of these conditions, including expected credit losses on loan receivables. On March 22, 2020, the federal banking agencies issued an “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus”. This guidance encourages financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19. The guidance goes on to explain that in consultation with the FASB staff that the federal banking agencies conclude that short-term modifications (e.g. six months) made on a good faith basis to borrowers who were current as of the implementation date of a relief program are not Troubled Debt Restructurings (“TDRs”). Section 4013 of the CARES Act also addressed COVID-19 related modifications and specified that COVID-19 related modifications on loans that were current as of December 31, 2019 are not TDRs. The Bank is actively assisting customers by providing short-term modifications in the form of deferrals of interest, principal and/or escrow for terms ranging from one to six months. On December 27, 2020, the 2021 Consolidated Appropriations Act (“CAA”) was signed into law, providing for, among other things, further suspension (ending on the earlier of January 1, 2022 or 60 days after the date the national emergency concerning COVID-19 terminates) of the exception for loan modifications to not be classified as TDRs if certain criteria are met. As of December 31, 2020, the Bank had 14 loans with a balance of $45.0 million remaining on deferral. Since December 31, 2020, there have been no new borrower request to have their loan modified using the guidelines set forth in the CARES Act. 104 104 105 The Bank of Princeton The Bank of Princeton 106 107 The Bank of Princeton The Bank of Princeton 108 109 The Bank of Princeton The Bank of Princeton 110 111 The Bank of Princeton The Bank of Princeton 112 113 The Bank of Princeton The Bank of Princeton 114 115 The Bank of Princeton Notes Who We Are Board of Directors Richard J. Gillespie Chairman Stephen A. Distler Vice Chairman Edward J. Dietzler President Chief Executive Officer Ross E. Wishnick Vice Chairman Judith A. Giacin Robert N. Ridolfi, Esq. Stephen K. Shueh Martin Tuchman 116 117 Who We Are Executive Management Edward J. Dietzler President Chief Executive Officer Daniel J. O’Donnell, Esq. Executive Vice President Chief Operating Officer & General Counsel George S. Rapp Executive Vice President Chief Financial Officer Christopher M. Tonkovich Executive Vice President Chief Credit Officer Stephanie M. Adkins Executive Vice President Chief Lending Officer Established in 2007, The Bank of Princeton opened its first branch for business on the 23rd of April. Since then the Bank has grown to include twenty-four branch locations and a comprehensive Operations Center that serve the Mercer, Burlington, Camden, Gloucester, Hunterdon, Middlesex, Monmouth, Ocean, and Somerset counties in New Jersey along with four branches in the Montgomery County and Philadelphia markets in Pennsylvania. Our Team Marketing Barbara A. Cromwell, SVP Human Resources Anna Maria Miller, SVP Retail Administration Debra L. Von Gonten, SVP Rose Russo, AVP Amy Zuccarello, AVP Information Technology Matthew T. Clark, SVP Kyndle E. Alig, VP John Critelli, AVP Operations & Compliance Karen D. Pfeifer, SVP Angela Bancroft, VP Jamie Wilson, VP Justin Naidoo, AVP Security & Facilities Keith R. Bitzel, VP Ryan M. Cavicchio, AVP Loan Administration Mary Beth Gorecki, SVP Lukasz Gargas, VP Michelle Goldstein, VP Amela Muslic, VP Stanley Plytynski, VP Lana Tremblay, VP Denise Youn, VP Steven Beck, AVP Theresa Harris-Norfleet, AVP Ann Marie Hennelly, AVP Eileen McBride, AVP David Mulryne, AVP Wanda Szymanski, AVP Thomas Waszkiewicz, AVP Finance Jeffrey T. Hanuscin, SVP Carmen Lloja-MacKenzie, AVP Rosemary Tumino, AVP Commercial Lenders Arthur M. Birenbaum, SVP William McCoy, SVP Kris Muse, SVP Paul Bencivengo, VP William McDowell, VP Michele Lewis-Fleming, AVP Market Managers Princeton Region Roseanne Maresma, AVP, RRM* Henrry Polanco, Bayard Lane Daniel Pereira, Lakewood Patricia Kilgannon, Montgomery Wendy J. Evans, Monroe Darshana Jadav, Nassau Street Central Region Nedgine Douge, AVP, RRM* Paul Sabol, Bordentown Donna Craddock, Browns Mills Shannon Bennett, Chesterfield Jeralyn H. Lang, Cream Ridge Barbara Brehaut, Hamilton Lourdes Pagan, Quakerbridge Road Southern Region Kelly Zane, AVP, RRM* ShaQuanna Moss, Arch Street Sera Yu, Cheltenham Sokha Eng, Chestnut Street Christina Lerro, Deptford Mi Kyung Kim, North Wales Carole McGuirl, Sicklerville Western Region Karin van Garderen, AVP, RRM* Jonathan Collins, Lambertville Yvette Windsor, Lawrenceville Keisha Patrick-Davey, New Brunswick Nathalie Cassion, Pennington Miriam Colón, Piscataway Rhoda Sundhar, Princeton Junction * Regional Retail Manager 118 119 101 Foundation Aim2Place Arm in Arm Arts Council of Princeton Big Brothers Big Sisters of Mercer County Housing Initiatives of Princeton Philadelphia Chinatown Hunterdon Healthcare Foundation Development Corporation I Believe in Pink Isles, Inc. Planned Lifetime Assistance Network of NJ Jamesburg Parent-Teacher Association Police Unity Tour Inc., Chapter 10 Jewish Family & Children’s Service Princeton Family YMCA Bordentown Historical Society of Greater Mercer County Princeton Mercer Regional Chamber Calvary Chapel Gloucester County JFCS Mobile Food Pantry Princeton Public Library Catholic Charities Diocese of Metuchen Joint Effort - Princeton Catholic Charities Diocese of Trenton Safe Streets Weekend Central Jersey Housing Resource Center KinderSmile Foundation Chapin School Princeton Korean American Association Princeton Senior Resource Center Princeton University Summer Chamber Concerts Project Freedom Chesterfield Township School of Greater Philadelphia Puerto Rican Action Board District Parent-Teacher Association Lambertville Area Education Rebuilding Together Philadelphia Clarifi Foundation Send Hunger Packing Princeton Thank You to Our Community Partners for the Difference You Make. Lambertville-West Amwell Youth Society of Saint Vincent de Paul Corner House Foundation The greatness of a community is most accurately measured by the compassionate actions of its members. — Coretta Scott King Delaware River Steamboat Floating Baseball & Softball Association Sourland Conservancy Classroom, Inc., SPLASH Lawrence Township Education Spread the Joy Delaware River Towns Chamber Foundation Thomas Edison State University of Commerce & Visitors Bureau, The Lawrenceville Main Street Foundation Downtown Bordentown Association LifeTies, Inc. Elijah’s Promise Mainstage Center for the Arts Foundation for Bordentown Meals on Wheels in Greater Traditions, Inc., The New Brunswick Town Clock Community Development Corporation Trenton Area Soup Kitchen, The Trenton Catholic Academy Friendly Sons & Daughters of Mercer County Community Trinity Church St. Patrick of Mercer County, The College Foundation Girls on the Run Mercer County Turkey Trot Global Connections Foundation NJ Corp Mercerville Fire Company Gloucester Township Fire District #5 Middlesex County Regional Grant Chapel AME Church Greater Philadelphia Asian Social Services Center Chamber of Commerce Monroe Township Girls Softball Montgomery Baseball League United Nations Association of the United States of America, Southern New Jersey Chapter United Way of Hunterdon County Veterans of Foreign Wars Post #3525, District #18 West Windsor Arts Council Greater Philadelphia Coalition Montgomery / Rocky Hill Rotary Club West Windsor - Plainsboro Against Hunger Grounds for Sculpture Montgomery Township - Regional School District Economic Development Commission Yeshivas Ohr Hatorah Habitat for Humanity of Burlington Montgomery Township County and Greater Philadelphia Education Foundation YMCA Camp Mason YWCA Princeton Habitat for Humanity Philadelphia Montgomery Township Volunteer Habitat for Humanity, Raritan Valley Chapter Hamilton Area YMCA Fire Company No. 1 Montgomery Township Volunteer Fire Company No. 2 Hamilton Educational Foundation Morven Museum & Garden Hamilton Township Board of Education Mount Carmel Guild of Trenton Hatzola EMS of Central Jersey HomeFront Notre Dame High School Parkinson Alliance, The Hopewell Valley Arts Council Pennington Public Library Hopewell Valley Veterans Association Pennington Volunteer Fire Company Hopewell Valley YMCA Philabundance 120 121
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