First Bank
Annual Report 2019

Plain-text annual report

F O C U S E D O N P E R F O R M A N C E 2 0 1 9 A N N U A L R E P O R T R E C O R D O F G R O W T H Four Whole Bank Acquisitions Completed S IN CE 2 014 Total Asset Growth Rate of 197% S IN CE 2 014 Loan Growth of 215% S IN CE 2 014 175% Increase in Deposits S IN CE 2 014 Net Income Up 130% S IN CE 201 4 C O N T E N T S MARKET OVERVIEW 1 LETTER TO SHAREHOLDERS 2 2019 PERFORMANCE 8 SELECTED FINANCIAL INFORMATION 9 OPERATIONS REVIEW 10 COMPANY PROFILE 18 FIRST BANK LOCATIONS 19 BOARD OF DIRECTORS 20 EXECUTIVE MANAGEMENT / BANK OFFICERS 22 INVESTMENT PROFILE 24 CORPORATE AND SHAREHOLDER INFORMATION 25 P L A Y I N G T O A B R O A D A U D I E N C E Our primary banking service area is the New York City to Philadelphia corridor, one of the more desirable banking markets in the country. The region has an affluent economy, with a strong, diverse array of employers and ties to New York City’s well-paying financial industries. We offer a full range of deposit and loan products to individuals and businesses through 18 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Hamilton Square, Lawrence, Mercerville, Pennington, Randolph, Somerset and Williamstown, New Jersey, and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. Headquartered in Hamilton, New Jersey, we service Mercer, Hunterdon, SUSSEX Middlesex, Monmouth and Ocean counties in central New Jersey. Our locations in northern New Jersey service Somerset, Morris, Warren, Sussex, Essex, Union and Hudson counties. Our Eastern Pennsylvania WARREN MORRIS region services Bucks, Montgomery, Philadelphia, Delaware and Chester counties in Pennsylvania, and also includes the southern New Jersey counties of Burlington, Gloucester and Camden. ESSEX ESSEX UNION NYC HUNTERDON HUDSON SOMERSET MIDDLESEX BUCKS MERCER MONMOUTH FIRST BANK REGIONAL STRUCTURE NORTHERN NEW JERSEY REGION CENTRAL NEW JERSEY REGION EASTERN PENNSYLVANIA REGION ★ HEADQUARTERS AND FIRST BANK BRANCH FIRST BANK BRANCH MONTGOMERY PHILADELPHIA CHESTER OCEAN DELAWARE BURLINGTON GLOUCESTER CAMDEN I N V E S T M E N T R A T I O N A L E Preeminent community bank in central NJ with strong growth potential via further expansion throughout NJ and eastern PA Focus on non-interest expense control to generate stronger operating leverage Focus on improved funding mix through growth of lower cost, core commercial deposits Opportunity for valuation enhancement as bank moves into larger asset category Russell 3000 Index component 1 T O O U R S H A R E H O L D E R S , S T A K E H O L D E R S , E M P L O Y E E S A N D F R I E N D S : 2019: A YEAR OF UNDERLYING PROGRESS DESPITE CHALLENGES As we suspected one year ago, 2019 proved to be a challenging year. We knew margin compression and tax changes would work against us, and they did. Nevertheless, we accomplished quite a bit. We also came up short in a couple of important areas. The year started strong with solid first quarter earnings and a successful core IT systems conversion. I can’t say enough good things about the great teamwork involved with this project. Overall, we kept the customer issues to a minimum and we worked tirelessly to resolve the issues that did materialize. Thanks to this conversion and upgrade, our bank is much better positioned for the future, but the energy and man-hours required by this project cannot be overstated. The time spent internally for six solid months certainly impacted our business development efforts and new business pipeline. Not long after we completed the conversion, the team was hard at work on our fourth bank acquisition. Once again, we were faced with a strategically important project that required a reallocation of resources. Our due diligence and M&A conversion teams did a great job bringing the Grand Bank team into the First Bank family. As a result of our organic growth and Grand Bank merger, we eclipsed the $2.0-billion-asset-threshold by the end of the third quarter. While we were making progress in important areas, we also had some challenges during the second and third quarters. The interest rate environment during the year created a scenario where for a relatively short period of time, our liability costs remained high while our asset yields started to move lower. By the end of the year, we were able to move our deposit costs lower and improve the margin in Q4, but our full year results were certainly impacted by the lower margin for the year. The relatively flat (and sometimes inverted) yield curve did not help either. Like most banks, we perform better when the yield on longer term assets exceeds shorter term assets. Because the typical spread was lower in 2019, our margin came down. For example, our margin in Q3 of 2018 was 3.60%. In Q3 2019, it had moved down to 3.15%. Hard work reducing our deposit pricing brought our margin back up over 3.30% by Q4. We also endured a changing tax environment in New Jersey. For example, our income tax expense in 2019 was over $1.5 million higher compared to 2018, despite having a lower level of pre-tax income in 2019. Additional New Jersey tax expense included a one-time charge related to the valuation of our NJ deferred tax asset. Going forward we anticipate an effective tax rate that should be closer to 25%, lower than the 29% rate we experienced in 2019. We also had elevated credit costs in 2019 that cut into our profitability. Our provision for loan losses in 2019 was $537 thousand higher compared to 2018, despite slower loan growth. After several years of minimal charge-offs, we dealt with some credit issues during 2019. We understand that credit costs won’t be near zero every year. That said, it is our job to keep credit costs low and we will be working hard to keep them low going forward. Despite these challenges, had our margin or our tax rate been in line with 2018 levels, we would have enjoyed another year of earnings growth. Even with the lower margin and higher tax rate, we still earned over $13 million during the year (and that’s after one-time expenses related to the merger and the tax changes). Nevertheless, our goals for organic growth and earnings for the year were higher than we achieved and we take that responsibility seriously. To that end, we made several adjustments during 2019 to help ensure we’re able to meet our 2020 goals — we adjusted staff; we modified our organizational structure in a few key areas; and we revised our goals and incentives to make sure we’re rewarding the right activities. As a result of these changes, we’re leaner and more focused than we’ve ever been. As you can see from the cover of this annual report, we’re laser “Focused on Performance.” 2 Before we discuss our prospects for 2020, I’d like to provide a little more detail regarding our financial results for 2019. LOAN GROWTH The loan portfolio grew $261 million in 2019, an increase of almost 18%. A little more than half of that increase came from the Grand Bank merger and the remainder was organically generated. Our loan mix remained relatively stable, with Investor CRE loans increasing slightly to 52.1% of total loans. That was up from 50.6% at the end of 2018. Our goal remains to have Investor CRE loans equal to 45 to 50% of total loans. During the year, our yield on loans was 5.04%, a slight increase over the 5.02% loan yield during 2018. We feel pretty good about that result given the declining interest rate environment in the second half of the year. At year-end, our non-performing loans came to 1.32% of total loans, up from 0.44% at year-end 2018. Net charge-offs during the year were $1.9 million, up from the prior year, when we experienced net charge-offs of only $9,000. Our allowance for loan losses was 76% of non-performing loans by year end, down from a high of 238% at the end of 2018. Challenges during the year came primarily from our C&I portfolio. The Investor CRE portfolio continued to perform very well. DEPOSIT GROWTH Our total deposits increased by $248 million, or 18%, during 2019. Importantly, our non-interest bearing (NIB) deposits increased to $276 million at the end of 2019, up from $219 million at the end of 2018, an increase of $57 million. We were pleased with the growth in this area, as our ratio of NIB to total deposits increased from 15.7% to 16.8% in 2019. We are moving forward toward our goal of 20% NIB deposits. Another goal we set during the year was to reduce the difference between our cost of interest bearing liabilities compared to peer banks in our markets. For the fourth quarter of 2018, our cost was nine basis points higher than the peer median. By the time we reached the fourth quarter of 2019, that differential had come down to zero. I’m proud of our team for the great work and discipline required to reach this goal so quickly. In our early years, we paid up for deposits so that we wouldn’t lose the opportunity to bring on quality loan customers. Our hope and expectation was that we could work those costs down over time as customers became more familiar with our locations and great service. I’m very pleased to report that we’re seeing that strategy come to fruition. In 2020, as we moderate our loan growth aspirations, thereby reducing some of the pressure on our funding sources, we believe we can continue to see improvements in our funding costs. Commercial deposit growth is one area where we fell short of plan. Commercial deposits did grow during the year, just not to the level we had targeted. Some of that variance to plan can be attributed to the core system conversion during the first part of the year. As I mentioned earlier, we spent a lot of time managing the transition, which took away from our ability to drive new business. As the result of a great team effort, we’ve established a nice pipeline of commercial deposit customers and I’m optimistic about our growth potential in this category in 2020. NET INTEREST MARGIN The good news regarding the margin in 2019 is that we were able to reverse the compression we experienced through the first three quarters of 2019. Our margin declined from 3.44% during the fourth quarter of 2018 to 3.15% during the third quarter of 2019. That reduction of almost 30 bps makes a big impact when you’ve got a $2 billion balance sheet. Our efforts to control and improve funding costs helped reverse that trend in the fourth quarter as our margin improved to 3.34%. Inevitably, changes in the rate environment or the shape of the yield curve can have short term impacts on profitability, both positive as we saw in 2018, or negative as we saw in 2019. It takes time to make adjustments based upon the new rate environment. But, if the interest rate position of the bank is well managed, as ours is, adjustments can and do get made to bring profitability back to better levels. 3 ADDITION OF GRAND BANK Our merger with Grand Bank closed on September 30, 2019. The conversion took place in early December and our two newest Mercer County NJ locations are up and running on the First Bank systems. With six branch locations in Mercer County, we have further solidified our position as the preeminent community bank in the county. We also brought over some great people and great new customers that will help us continue to build and grow our presence in Central NJ. I’d like to take a moment to thank our new Board member and former Grand Bank Chairman, Peter Pantages, for all his hard work during the past year — getting the merger agreement finalized and helping with the transition of staff and customers. These projects always require hard work and extra effort and cooperation from both sides is critical. Thank you, Peter. I’d also like to thank the members of the Grand Bank staff. Change is never easy, but our newest team members worked hard and kept an open mind, which helped to facilitate a good transition. So, how did those developments impact profitability in 2019? NET INCOME AND EARNINGS PER SHARE Net income was $13.4 million and diluted EPS was $0.69 compared to $17.6 million and $0.95 per diluted share in 2018. These bottom line results reflect a reduced net interest margin, one-time merger-related costs, higher taxes, and elevated credit costs. PRE-PROVISION, NET REVENUE (PPNR) This is a metric we follow to see how we’re progressing when you extract some of the non-operating components of profitability. The metric is calculated by taking our net interest income (before the provision for loan losses), adding non-interest income excluding non-recurring items (gains or losses on sales or securities, bargain purchase gains, and gains on recovery of acquired loans), and subtracting non-interest expense excluding non-recurring items (merger-related expenses). We look at this non-GAAP measure on a quarterly basis to get a sense of our core operating earnings trends. You will find each of the components listed above broken out in our audited financial statements. PPNR of $25.9 million in 2019 was up slightly from $25.3 million in 2018. Because this metric excludes the provision for loan losses, non-recurring expenses and tax changes, it gives a closer look at just the impact from growth and the changing margin. It shows that much of the benefit of growth during the year was offset by declines in the margin. BOOK VALUE We closed the year with book value of $11.07 per share, an increase of $0.64, or 6.1%, compared to year-end 2018. Tangible book value per share reached $10.17 at the end of 2019, an increase of $0.67, or 7.1%, compared to year-end 2018. Continued growth of book value will be an important driver of future value creation for our shareholders. Over the past five years, book value per share has increased $4.19, or 60.9%, and tangible book value per share has increased $2.94, or 41%. We believe that tangible book value per share growth should continue to improve as the benefits of our prior acquisitions get fully realized. ROA AND ROE Our ROA was 0.99% for the first quarter of 2019; it dipped down to 0.64% and 0.23% in the second and third quarters, but bounced back to 1.02% in the fourth quarter. Adjusted ROA, primarily excluding the impact of the NJ DTA revaluation, moved up to 1.13% in the fourth quarter. As our cover for this annual report clearly highlights, we’re focused on performance and ROA is probably our most important metric. In 2020 we plan to show that we’ve built a great bank with strong earnings power. Strong ROA performance will be the best indicator of whether we’re meeting our goals. ROE followed a similar trend to ROA in 2019 — 8.79% in the first quarter, 5.64% and 2.11% in quarters two and three, and back up to 9.17% in quarter four. Adjusted ROE reached 10.18% in the fourth quarter. Given the presence of intangible assets on our balance sheet from prior acquisitions, we also look at ROATCE, return on average tangible common equity. That ratio reached 11.18% for the fourth quarter of 2019. Strong earnings coupled with stock repurchase activity in 2020 will help us push these key ratios even higher. 4 2020: Continued Growth with a Greater Focus on Profitability We have progressed from a start-up venture to a high growth and solidly profitable community bank over the past eleven years, as we’ve worked effectively to balance growth and profitability. Early on, we knew scale would be important given the changing competitive and regulatory landscape. That drive to scale helped us reach $2.0 billion in assets in a relatively short period of time. It also drove a significant amount of reinvestment back into the franchise. Going forward, we plan to rebalance the scales — with more focus on current operating profit while still making important strategic investments. We don’t consider this a binary or “black and white” proposition. Rather, it’s like gradations on a scale. In the very early days, we needed to grow to build a strong base for future earnings. As we’ve matured as a company, we’ve been gradually rebalancing the scales. That process will continue into 2020. Our strong profitability metrics in the fourth quarter of 2019 give us reason for optimism that our efforts to improve near-term profitability are working. We want 2020 to be a year where we can show the true potential of the excellent franchise we’ve created. We expect to drive earnings growth in three ways — lower funding costs to protect the margin, continued expense management, and incremental additional fee income. A FOCUS ON LOWER FUNDING COSTS AND MORE MODERATE ASSET GROWTH We continue to generate significant lending opportunities, with robust activity in our loan pipeline. In 2020, we plan to focus on margin protection rather than net interest income dollar growth. The pace at which we generate core deposits will also influence our loan funding. Our commercial deposit pipeline has been building nicely since the conversion and we appear poised to drive solid growth in this category. We believe that this will provide greater flexibility in how we set CD rates in 2020, and help to drive down our funding costs. We had success with this strategy in the latter part of 2019 and we have significant opportunities to continue to move CD costs down in 2020. The overall level of CD retention at lower rates will also impact our asset growth levels during the first half of 2020. The bottom line is that we will be more focused on earnings growth over asset growth in 2020. CONTINUED EXPENSE MANAGEMENT There are two basic levers available to grow earnings — increase revenues and control expenses. Given that we’re planning to moderate asset growth, and that will constrain revenue growth to some degree, we will continue to actively manage expenses to drive earnings growth. I believe our track record on expense management has been good, but our efforts to control spending will continue in earnest in 2020. In fact, we’ve already made some changes in that direction over the past couple of months: we streamlined and centralized our investor real estate lending group; we rebalanced our lending and deposit teams to reduce costs at the higher end of the pay scale with lower-priced support staff; and we effectively achieved our cost cutting goals from the Grand Bank merger. Our efficiency ratio reached a low of 53.2% in the fourth quarter of 2019. While that number might be artificially low given some higher than normal fee income results in that quarter, we will certainly be working to keep the efficiency ratio below the 60% level that we realized during most of 2019. IMPROVED NON-INTEREST INCOME Fee income will continue to remain a smaller component of our overall revenue mix. That said, outside of major business line shifts, we still have opportunities to drive additional income to the Bank. We’re anticipating that non-interest income from SBA loan sales and loan interest rate swaps will help drive improvement in this area. We expect that this will be a continuation of a modest trend where non-interest income, not including gains on recovery of acquired loans, as a percentage of net revenues improved from 3.6% in 2015 to 5.2% in 2019. We have opted to not chase dollars in businesses where we don’t have knowledge, expertise or competitive advantage. SBA and loan swaps are good examples of opportunities for increased fee income where we can leverage our core strengths as a commercial lender. 5 Focused on Performance People often debate the virtues of quantity versus quality. For First Bank, this debate must be framed in the context of company life cycle and business conditions. In the early stages of our development, when the drive for scale was so critical, quantity was a primary focus. In the current UPDATE ON NOVEL CORONAVIRUS The current international public health issue related to the novel coronavirus, COVID-19, has the potential to impact business activity for financial institutions generally and for First Bank. Although there is no way to accurately estimate how large an impact this will have on the economic environment, and given our much-improved size Bank’s customers, demand for our products and and scale, quality will take on even more importance. services or the Federal Reserve’s potential to While we’re disappointed with the market’s current valuation of First Bank, we believe that we have the appropriate strategy in place to improve our bottom line performance, along with continuing to build long-term enduring value. We have assembled a strong and very competitive franchise in a relatively brief period of time, and demonstrated an ability to generate strong organic growth. We continue to attract the top banking talent available take action to mitigate the economic impact, we continue to monitor market conditions and are preparing to respond to a range of scenarios. We believe that the near-term operating strategy described in this report is appropriate for the economic conditions which now appear likely for some portion or all of 2020. We are also actively evaluating what precautions are in our region. We’re working to create a high-performing, necessary to reduce the possibility that our truly-differentiated community bank that delivers an customers or employees could be exposed to the exceptional customer experience. We believe we’re on the virus and will take all appropriate measures. right path to building an engine that drives superior shareholder returns. Famous investor Benjamin Graham once said: “In the short run, the market is a voting machine but in the long run it is a weighing machine.” One of my jobs is to try and help the market stop voting and start weighing the real intrinsic value of the First Bank franchise. The most important thing we can do to make that happen is to “Focus on Performance.” The other thing I need to do is help raise awareness and visibility regarding First Bank and the strong and valuable franchise we’ve created. Those will be my top priorities in 2020. Lastly, a special thanks to our customers, employees, and shareholders. Without all three working together the Bank cannot be successful. We appreciate your support and dedication and we look forward to sharing more good news with you as we move forward. Sincerely, Patrick L. Ryan President and CEO Note: The foregoing material contains forward-looking statements concerning the financial condition, results of operations and business of the Bank. We caution that such statements are subject to a number of uncertainties, including but not limited to those set forth under the caption “Item 1A – Risk Factors” in the accompanying annual report on Form 10-K, as well as changes in economic activity in our markets, changes in interest rates and changes in regulation and the regulatory environment, and actual results could differ materially, and, therefore, readers should not place undue reliance on any forward-looking statements. The Bank does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. 6 2 0 1 9 P E R F O R M A N C E H I G H L I G H T S Net income for 2019 of $13.4 million, or $0.69 per diluted share Total net revenue* increased to $62.4 million Total loans of $1.7 billion at yearend, a 17.8% increase from 2018 Total deposits grew by 17.8% to $1.6 billion at 2019 yearend Total assets reach $2.0 billion, up $300.4 million, or 17.6% from 12-31-2018 Successful integration of Grand Bank merger Completion of core IT system conversion to Fiserv * Total net revenue is the sum of net interest income and non-interest income. 7 Total Assets AT 12-31, $ IN BILLIONS Total Loans AT 12-31, $ IN BILLIONS 0.86 1.07 1.45 1.71 2.01 0.74 0.89 1.17 1.39 1.64 23.8 28.9 39.7 54.9 58.4 25.5 30.5 41.8 58.4 62.4 2015 2016 2017 2018 2019 5-YEAR CAGR = 25.8% Total Stockholders’ Equity AT 12-31, $ IN MILLIONS 2015 2016 2017 2018 2019 5-YEAR CAGR = 28.4% Net Income FOR YEAR ENDED 12-31, $ IN MILLIONS 2015 2016 2017 2018 2019 5-YEAR CAGR = 18.2% Book Value Per Share $ AT 12-31 2015 2016 2017 2018 2019 0.69 0.90 1.23 1.46 1.72 68.8 88.8 163.3 194.8 226.4 3.9 6.4 7.0 17.6 13.4 7.26 7.78 9.36 10.43 11.07 2015 2016 2017 2018 2019 5-YEAR CAGR = 24.3% Total Deposits AT 12-31, $ IN BILLIONS 2015 2016 2017 2018 2019 5-YEAR CAGR = 22.4% Net Interest Income FOR YEAR ENDED 12-31, $ IN MILLIONS 2015 2016 2017 2018 2019 5-YEAR CAGR = 22.4% Total Net Revenue FOR YEAR ENDED 12-31, $ IN MILLIONS 2015 2016 2017 2018 2019 8 5-YEAR CAGR = 18.8% 5-YEAR CAGR = 10.0% Selected Financial Information IN THOUSANDS, EXCEPT COMMON SHARE DATA AT OR FOR THE YEAR ENDED DECEMBER 31, 2019 2014 5-YR CAGR Efficiency Ratio1 % FOR YEAR ENDED 12-31 71.7 61.2 55.3 56.1 58.0 Selected Balance Sheet Data Total assets Total loans Allowance for loan losses Total deposits Total borrowings Total subordinated debentures Total stockholders’ equity Average total assets Average stockholders’ equity Selected Income Statement Data Interest and dividend income $ Interest expense $ 2,011,587 1,723,574 17,245 1,640,867 105,476 21,964 226,393 1,858,291 207,338 Net interest income Provision for loan losses Net interest income after provision for loan losses Non-interest income Non-interest expense Income before income taxes Income tax expense $ $ 677,458 547,759 6,104 596,482 14,000 — 64,759 597,811 61,530 25,350 4,137 21,213 2,438 18,775 5,099 15,820 8,054 2,218 84,170 25,804 58,366 3,984 54,382 3,995 39,364 19,013 5,568 Net income $ 13,445 $ 5,836 Common Share Data Diluted earnings per share Cash dividends paid Book value per common share Tangible book value per common share1 Common shares outstanding Selected Performance Ratios Return on average assets Adjusted return on average assets1 Return on average equity Adjusted return on average equity1 Adjusted return on average tangible common equity1 Net interest margin, tax equivalent2 Efficiency ratio1 Selected Asset Quality Ratios Nonperforming loans to total loans3 Allowance for loan losses to nonperforming loans Net loan charge offs to average loans Capital Ratios Stockholders’ equity to assets Tier 1 leverage capital Common equity tier 1 capital4 Tier 1 risk-based capital Total risk-based capital $ 0.69 0.12 11.07 $ 10.17 20,458,665 $ 0.63 — 6.88 $ 6.84 9,408,491 0.72% 0.88% 6.48% 7.93% 8.67% 3.32% 58.00% 0.98% 0.54% 9.48% 5.23% 5.26% 3.75% 68.46% 1.32% 1.30% 75.82% 0.12% 11.25% 10.27% 10.74% 10.74% 12.79% 85.83% 0.22% 9.56% 9.72% — 10.96% 12.00% 1 This measure is not recognized under U.S. GAAP and is therefore a non-U.S. GAAP financial measure. See our annual report on Form 10-K for a reconciliation of the 2019 calculation. 2 The tax equivalent adjustment is calculated using a federal income tax rate of 21% in 2019 and 34% in 2014. 3 Nonperforming loans consist of nonaccrual loans and loans past due 90 days or more and still accruing. 4 New regulatory capital measure calculated under Basel III rules which became effective January 1, 2015. 24.3% 25.8% 23.1% 22.4% 49.8% N/M 28.4% 2 5.5% 2 7.5% 2 7.1% 44.2% 22.4% 10.3% 23.7% (4.8%) 20.0% 18.7% 20.2% 18.2% 1.8% N/M 10.0% 8.3% 16.8% 2015 2016 2017 2018 2019 Net Charge-Offs/Average Loans % AT 12-31 0.14 0.10 0.08 0.00 0.12 2015 2016 2017 2018 2019 Return on Average Assets % FOR YEAR ENDED 12-31 0.51 0.66 0.57 1.09 0.72 2015 2016 2017 2018 2019 Return on Average Equity % FOR YEAR ENDED 12-31 5.74 8.08 5.60 9.70 6.48 2015 2016 2017 2018 2019 9 OUR SUCCESS IS BUILT ON OUR CORE VALUES OF INTEGRITY, CUSTOMER FOCUS AND A DESIRE TO GET THINGS DONE. WE PROVIDE OUR CUSTOMERS REAL RELATIONSHIPS WITH PERSONAL BANKERS THAT OFFER QUICK AND THOUGHTFUL ADVICE. 10 F I N E - T U N I N G O U R S O U N D Delivering High Quality Service We are working to enhance the value contained in the 18-branch banking franchise we’ve assembled throughout New Jersey and eastern Pennsylvania, in highly desirable markets characterized by very strong income and business activity demographics. Although we have an abundance of banking competitors, there are relatively few strong community banks in the high wealth and densely populated New York City to Philadelphia corridor. With a full range of bank products and services, we are strongly positioned to target business from individuals, businesses, and governmental entities located in our primary service areas. We are successfully expanding our brand into communities located in the New York City to Philadelphia corridor by providing a superior customer experience, including access to our decision makers, along with competitive interest rates and fees. We hire, develop and retain quality employees who seek to be part of a dynamic and growing institution with a rising market profile throughout New Jersey and eastern Pennsylvania. Our service area is economically and geographically diverse with an abundance of customers with sophisticated banking needs and a desire for the personalized service we provide. Our philosophy of relationship banking and our in-market expertise are the key differentiating factors that drive our ability to attract and retain new customers. Our decision to expand our service footprint into eastern Pennsylvania was driven by similar market demographics including household income, business activity and population density. The eastern Pennsylvania and central New Jersey region is more urbanized than the nation as a whole, and studies by the Philadelphia Federal Reserve Bank (PFRB) cite evidence that community banks in this area tend to be larger. PFRB research also found that area community banks have a comparative advantage in lending to the region’s small businesses because they maintain relationships that rely on soft information about firms and their business environment developed over a long history of doing business with the firm. This finding is consistent with the results that First Bank has realized during the last five years, as we grew our loan portfolio by an average of nearly 26% per year by focusing on building strong relationships with our clients. This approach enables our associates to anticipate the needs of our customers and react quickly, a strong competitive advantage over the region’s larger institutions. The economic strength and business activity level of our market area has made it possible for us to grow to a size that allows us to better leverage economies of scale for both organic and acquired expansion. We see no shortage of customers that prefer our personalized relationship approach to banking. This preference for service, combined with a continuation of economic studies that indicate relatively robust activity for the region in the foreseeable future, indicates that 2020 offers considerable opportunity and promise for First Bank. 11 A B I G B A N D H I T T I N G B I G N O T E S Accretive M&A Complements Organic Growth We opened our doors for business in April 2007 and had total assets of just $20.0 million at December 31, 2007. In just 13 years, First Bank has grown to more than $2 billion in total assets with bottom line profitability of more than $13.4 million in 2019. The Bank’s expansion is a reflection of our early focus on organic growth within our targeted service area. More recently we have employed a balance of organic growth and targeted acquisitions to expand our service area or strengthen our position within an existing market. The Bank’s growth was dramatic in the early years, reflecting our smaller asset size, an effective and targeted strategy and a vibrant market area with attractive demographics. An effective operating strategy and strong commitment to growth resulted in the quadrupling of our asset size from 2010 to 2015, with most of the increase coming from organic activities. With our ongoing commitment to profitable growth, it’s not surprising that the Bank’s asset size more than doubled since 2015, reflecting continued strong organic growth initiatives along with acquisitions located in and around our original central New Jersey market area. Our strategy involves evaluating opportunities to acquire whole banks, business lines or branches that complement our market expansion objectives. Our approach to acquisitions is always disciplined and effective and with four successful transactions during the last five years we consider this activity to be a core competency of our team. The first of our four transactions closed during the first quarter of 2014 when we acquired Heritage Community Bank. This transaction immediately accelerated our growth trajectory creating a $600 million asset institution with eight branch locations throughout New Jersey. Seeking to maintain a balance between organic and acquired growth we crossed the Delaware River in 2015 and opened a de novo location in Trevose, Pennsylvania, our 10th customer service location. We complemented the Trevose branch opening and attained additional scale in Pennsylvania in 2017 with the acquisition of Bucks County Bank, which added approximately $200 million in assets along with additional service locations in the desirable northeast suburbs of Philadelphia. We increased our market presence in southern New Jersey in second quarter 2018 by acquiring Delanco Bancorp, which added two branches in Burlington County, our 16th and 17th locations. During 2019 we had the opportunity to enhance First Bank’s market presence in Mercer County and add a diversified, high-yielding loan portfolio through the acquisition of Grand Bank N.A., which closed in the third quarter. The combination of strong organic loan growth and acquisition activity resulted in a five-year compound annual growth rate of 25.8% through December 31, 2019, driven by our strong commercial lending presence. First Bank’s M&A team is led by Andrew L. Hibshman, FSVP/ Chief Accounting Officer; John F. Shepardson, FSVP/Chief Administrative Officer; and, Stephen F. Carman, EVP/Chief Financial Officer. 12 COMBINATION OF ORGANIC AND ACQUIRED GROWTH DISCIPLINED AND EFFECTIVE APPROACH TO ACQUISITIONS M&A IS A CORE COMPETENCY OF OUR TEAM 13 WE COMPLETED AN IMPORTANT INFRASTRUCTURE STRATEGIC INITIATIVE IN 2019, BY CONVERTING TO A NEW INFORMATION TECHNOLOGY CORE SYSTEM. 14 A N A C O U S T I C A L L Y S O U N D A P P R O A C H An Infrastructure for Profitable Growth During the last three years we have continuously invested in building an infrastructure capable of handling our double-digit organic growth, as well as multiple whole-bank acquisitions that expanded our banking footprint and added scale to our operations. While we have made some bricks and mortar investments during that time, our primary focus has been on people and technology. We have strengthened our back-office support to enable our regional teams to more effectively originate new loans and attract core deposits. We have evaluated and invested in enhanced technology that drives internal operating efficiencies for all of our customer-facing associates. We have put in place the infrastructure necessary to support our $2 billion institution, as well as the growth we expect to generate over the next several years. Our service footprint has expanded significantly in recent years, reflecting a growth strategy that utilizes whole bank acquisitions and targeted de novo locations which complement the existing coverage area. Our market area now covers 15 counties throughout New Jersey, as well as another five counties in eastern Pennsylvania, resulting in a total area of approximately 7,840 square miles. To effectively handle an area of this size with varied demographics, we established regional lending teams to make sure we have a solid core of relationship managers in each market who are focused on commercial and industrial (C&I) relationships and the deposits that come with them. We have also developed specialty lending teams to service focus areas such as investor real estate, which has long been an important part of our commercial lending activity. With the 2019 acquisition of Grand Bank, we acquired an SBA lending team that we intend to leverage to grow this part of our business and to support SBA borrowing activity across our market area. During 2019, we completed an important strategic initiative related to our infrastructure by converting to a new information technology core system. We had conducted a detailed evaluation of potential options and determined that Fiserv had the best combination of technology and the most efficient cost structure to meet our growth needs for the foreseeable future. We believe that new technology improves the effectiveness of our customer-facing associates, as well as providing better visibility into real-time performance and results by geographic region. During 2020, we plan to advance some additional profitability and growth initiatives which include: banker business development training to attract new C&I customers to First Bank; the launch of an online account opening platform; digital marketing campaigns to increase the reach of our brand beyond the geographic footprint of our physical locations; staff mix optimization to increase the number of proactive business development team members in the marketplace; and, improved reporting to track individual sales goals versus monthly production. Our IT system conversion was led by Gabriel K. Dragos, SVP/Head of Operations; Gregory Weckel, VP/Information Technology Manager; David D. Lidster, FSVP/Chief Technology Officer and Belinda L. Blazic, SVP/Loan Administration Manager (not pictured). 15 W E L L - O R C H E S T R A T E D P L A N N I N G Strategic Focus With a five-year compound annual growth rate for total assets of more than 24%, First Bank has been one of the country’s fasting growing community banks during that period. While we intend to continue to grow our franchise in 2020 and beyond, we plan to enhance our focus on the Company’s bottom line through smart targeted growth and by carefully managing non-interest expenses. We believe that by leveraging our existing service footprint in 2020, we can obtain a more moderate level of growth with significantly improved profit metrics. The growth of First Bank staffing levels is expected to be modest in 2020 as we plan to add some additional support staff, such as portfolio managers, underwriters or loan administrators as needed to support our regional sales teams. We are focused on controlling costs throughout the Bank. Our efficiency ratio for 2019 was a solid 58.00% and our objective for 2020 is to match or better this performance. An important strategic objective for 2020 is to lower the Bank’s cost of funding by focusing on lower cost core deposits. We made headway on this effort during the fourth quarter of 2019 by allowing some price-sensitive time deposits to run off, which was reflected in a 14 basis-point drop in the average rate for interest bearing deposits from the linked third quarter. This effort was also helped by a nearly $40 million increase in our average non-interest-bearing deposits balance compared to third quarter 2019, reflecting the positive impact of the Grand Bank acquisition and favorable results related to our commercial and non-interest bearing deposit gathering efforts. We expect to maintain a very disciplined pricing policy for time deposits in 2020, while at the same time working to retain these balances. Our Commercial Deposits team is led by Emilio Cooper, EVP/Chief Deposits Officer and also includes Karen J. Conway, VP/Business Banker; Casi L. Tiernan, SVP/Head of Cash Management; Thomas P. Fehn, Jr., SVP/Retail & Business Banking Market Manager; and, Ryan D. Earley, VP/Business Banker (not pictured). 16 Performance Accolades Our company’s substantial growth in recent years garnered recognition from two important regional business media organizations. Each year the Philadelphia Business Journal honors the 76 fastest growing companies in the Greater Philadelphia area in its Soaring 76 list. First Bank was included among the 2019 honorees, which are required to have a sustained revenue growth history from 2016 through the end of 2018. Similarly, in 2019 First Bank was once again named to the NJBIZ Fast 50, a list that celebrates the dynamic growth of New Jersey companies. Similar to the Soaring 76, the Fast 50 honorees were chosen based on an evaluation of revenue increases from the past three years. We received favorable deposit and debt ratings from Kroll Bond Rating Agency (KBRA) in 2019, a Nationally Recognized Statistical Rating Organization registered with the U.S. Securities and Exchange Commission. KBRA’s ratings and stable outlook cited our successful strategy utilizing both acquisitions and organic growth to build scale within our service footprint, resulting in improved operating leverage and enhanced profitability, as well as an enhanced capital position. We believe the favorable ratings may offer additional capital market flexibility and provides current and future customers additional assurance of our sound operating environment. IN 2019, WE RECEIVED FAVORABLE DEPOSIT AND DEBT RATINGS FROM KROLL BOND RATING AGENCY, A NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION. 17 F I R S T B A N K P R O F I L E Bauer Financial 5-Star rated bank (top ranking) ★★★★★ NEW JERSEY STATE-CHARTERED BANK HEADQUARTERS – HAMILTON, NJ $2.0 billion in assets AT 12-31-19 MARKET AREA New York City to Philadelphia corridor Investment grade ratings on deposit products and debt FROM KROLL BOND RATING AGENCY IN 2019 LOAN PORTFOLIO COMPOSITION COMMERCIAL REAL ESTATE 75.1% AND COMMERCIAL AND INDUSTRIAL 13.9% Traditional range of deposit and loan products 18 full-service branches in New Jersey and Pennsylvania 18 F I R S T B A N K L O C A T I O N S ADMINISTRATIVE 2465 Kuser Road Hamilton, NJ 08690 877 821 2265 1395 Yardville-Hamilton Square Road Hamilton, NJ 08691 877 821 2265 2297 Route #33 Hamilton Square, NJ 08690 609 514 3900 FULL SERVICE BRANCHES NEW JERSEY CINNAMINSON 506 US Route 130 North Suite #1 Cinnaminson, NJ 08077 856 303 8899 CRANBURY 2664 US Route 130 Cranbury, NJ 08512 609 642 1064 DELANCO 615 Burlington Avenue Delanco, NJ 08075 856 461 0611 DENVILLE 530 East Main Street (Route 53) Denville, NJ 07834 973 625 1407 EWING 1340 Parkway Avenue Ewing, NJ 08628 609 643 0470 FLEMINGTON 334 Highway 31 North Flemington, NJ 08822 908 751 0318 HAMILTON 2465 Kuser Road Hamilton, NJ 08690 609 528 4400 HAMILTON SQUARE 2265 Route #33 Hamilton Square, NJ 08690 609 269 1619 LAWRENCE PENNSYLVANIA DOYLESTOWN 200 South Main Street Doylestown, PA 18901 215 230 7533 TREVOSE 4956-66 Old Street Road Trevose, PA 19053 267 984 4537 WARMINSTER 356 York Road Warminster, PA 18974 215 441 4118 WEST CHESTER 121 North Walnut Street Suite 320 West Chester, PA 19380 590 Lawrence Square Boulevard South 484 881 3800 Lawrence, NJ 08648 609 587 3111 MERCERVILLE 1 Edinburg Road Mercerville, NJ 08619 609 269 1616 PENNINGTON 3 Tree Farm Road Pennington, NJ 08534 609 281 5808 RANDOLPH 1206 Sussex Turnpike Randolph, NJ 07869 973 895 5800 SOMERSET 225 DeMott Lane Somerset, NJ 08873 732 649 1999 WILLIAMSTOWN 1020 North Black Horse Pike Williamstown, NJ 08094 856 728 3400 19 B O A R D O F D I R E C T O R S PATRICK M. RYAN CHAIRMAN Owner of North Buffalo Advisors, LLC; former President and Chief Executive Officer of Yardville National Bank D IRE CTO R S INCE 2 01 1 BOA RD CO MMI TTEE S Asset/Liability, Compliance, Information Technology LESLIE E. GOODMAN VICE CHAIRMAN LEAD INDEPENDENT DIRECTOR Principal of The Eagle Group of Princeton, Inc.; Director of Wawa, Inc. D IRE CTO R S INCE 2 008 BOA RD CO MMI TTEE S Asset/Liability (Chair), Compensation and Personnel PATRICK L. RYAN President and Chief Executive Officer of First Bank D IRE CTO R S INCE 2 008 BOA RD CO MMI TTEE S Asset/Liability, Compliance, Information Technology ELBERT G. BASOLIS, JR. President and Owner of Garrison Enterprises Inc. D IRE CTO R S INCE 2 008 BOA RD CO MMI TTEE S Information Technology (Chair), Nominating and Governance, Compensation and Personnel 2 0 DOUGLAS C. BORDEN Partner of Borden Perlman Insurance Agency DI R ECTO R SIN CE 2 01 7 B OA RD CO MMI TTEES Nominating and Governance (Chair), Compensation and Personnel, Information Technology CHRISTOPHER B. CHANDOR Chief Executive Officer of Penn’s Grant Corporation; former Vice Chairman of Bucks County Bank DI R ECTO R SIN CE 2 01 7 B OA RD CO MMI TTEES Audit and Risk Management, Compliance, Nominating and Governance PATRICIA A. COSTANTE Chairman and Chief Executive Officer of MDAdvantage Insurance Company DI R ECTO R SIN CE 2 01 9 B OA RD CO MMI TTEES Asset/Liability, Audit and Risk Management, Compliance SCOTT R. GAMBLE Principal of Patriot Financial Partners, L.P. DI R ECTO R SIN CE 2 020 B OA RD CO MMI TTEES Asset/Liability, Compensation and Personnel, Audit and Risk Management, Compliance DEBORAH PAIGE HANSON Principal, Executive Vice President and Fund Manager of The Hampshire Companies D IRE CTO R S INCE 2 01 6 BOA RD CO MMI TTEE S Compensation and Personnel (Chair), Nominating and Governance, Information Technology PETER PANTAGES Former Chairman, President and Chief Executive Officer of Grand Bank DI R ECTO R SIN CE 2 01 9 B OA RD CO MMI TTEES Audit and Risk Management, Compliance, Information Technology GARY S. HOFING Principal of The Eagle Group of Princeton, Inc; former Vice President of Hofing Management, LLC D IRE CTO R S INCE 2 01 6 BOA RD CO MMI TTEE S Asset/Liability, Compliance, Information Technology GLENN M. JOSEPHS Partner of Friedman, LLP; former Partner, Bagell, Josephs, Levine and Company, LLC D IRE CTO R S INCE 2 008 BOA RD CO MMI TTEE S Audit and Risk Management (Chair), Nominating and Governance, Compensation and Personnel MICHAEL E. SALZ President of Linden Bulk Transportation Co., LLC DI R ECTO R SIN CE 2 01 7 B OA RD CO MMI TTEES Audit and Risk Management, Asset/Liability, Compensation and Personnel JOHN E. STRYDESKY Certified Public Accountant; Owner of Strydesky & Company, CPAs/Business Consultants DI R ECTO R SIN CE 2 01 0 B OA RD CO MMI TTEES Compliance (Chair), Audit and Risk Management, Asset/Liability All directors also serve on the Strategic Planning and Board Loan Committees. 21 E X E C U T I V E M A N A G E M E N T T E A M PATRICK L. RYAN PRESIDENT | CHIEF EXECUTIVE OFFICER Pat Ryan has served as President and Chief Executive Officer of First Bank since 2013. In 2008, Mr. Ryan worked with the investor group that recapitalized the Bank, joined the Bank’s Board of Directors and was appointed Chief Operating Officer. Prior to this time he was First Senior Vice President, Emerging Markets Manager for Yardville National Bank. Mr. Ryan joined Yardville National Bank in 2005 as head of Strategic Planning and Corporate Development, responsible for strategy, mergers and acquisitions, branch expansion, investor relations, research and analysis. PETER J. CAHILL EXECUTIVE VICE PRESIDENT | CHIEF LENDING OFFICER Peter Cahill has served as Chief Lending Officer of First Bank since 2008, when he joined the Bank, and was appointed an Executive Vice President in December 2013. Prior to joining First Bank he served as Senior Vice President/Sales Manager for PNC Financial Services Group from October 2007 to October 2008. In addition, Mr. Cahill held senior level positions with Midlantic National Bank, Fleet Boston and Yardville National Bank. Mr. Cahill has 40 years of banking experience. STEPHEN F. CARMAN EXECUTIVE VICE PRESIDENT | CHIEF FINANCIAL OFFICER Steve Carman has served as Chief Financial Officer of First Bank since 2008, when he joined the Bank, and was appointed an Executive Vice President in December 2013. Mr. Carman served as Executive Vice President and Chief Financial Officer of Yardville National Bank from 1992 until 2007. Mr. Carman spent his entire 30-year banking career prior to joining First Bank at Yardville National Bank. Mr. Carman has more than 40 years of banking experience. EMILIO COOPER EXECUTIVE VICE PRESIDENT | CHIEF DEPOSITS OFFICER Emilio Cooper has served as Chief Deposits Officer of First Bank since joining the Bank in October 2018. He is responsible for leading the Retail and Commercial Deposit areas and accelerating the Bank’s core deposit growth. Mr. Cooper has over 20 years of banking experience, both locally and in the Midwest. Most recently, he was the Head of Sales and Distribution for US Retail Banking at BMO Harris Bank, a $110 billion asset bank with over 500 locations. Prior to BMO, he held the role of Retail Director for Citizens Bank in the Greater Philadelphia area and Community Bank President for Wells Fargo/Wachovia. 2 2 B A N K O F F I C E R S FIRST SENIOR VICE PRESIDENTS Joseph R. Calabro Pennsylvania Regional President Marianne E. DeSimone Lending Group Manager David J. DiStefano Northern New Jersey Regional President Andrew L. Hibshman Chief Accounting Officer David D. Lidster Chief Technology Officer Maria E. Mayshura Chief Risk Officer Gene C. McCarthy Central New Jersey Regional President Arlene S. Pedovitch Senior Credit Officer John F. Shepardson Chief Administrative Officer SENIOR VICE PRESIDENTS Scott A. Bachman Commercial Lending Relationship Manager I Belinda L. Blazic Loan Administration Manager Kimberly Cerasi Human Resources Officer Scott W. Civil Market Executive Michael B. Cook Manager Investor Real Estate Gabriel K. Dragos Head of Operations Thomas P. Fehn, Jr. Retail Market Manager Lewis R. Fogg, Jr. Retail & Business Banking Market Manager Nancy C. German Deposit Operations Officer Terrance R. Howard Market Executive Sriramulu Krishnamurthy SBA Manager Maria Leibowitz-Curry Chief Compliance Officer Lauretta Lucchesi Team Leader David Hill Marx Commercial Lending Relationship Manager I Debra A. Morreale Business Systems Gregorio Perri, Jr. Consumer Lending Manager Donald Theobald, Jr. Controller Casi L. Tiernan Head of Cash Management Richard Tocci Manager Investor Real Estate VICE PRESIDENTS Joseph F. Browarski Loan Workout Officer Richard L. Burzynski Commercial Lending Relationship Manager I Michael P. Cahill Commercial Lending Relationship Manager I Marjorie A. Callahan Relationship Manager Elizabeth F. Camishion Systems Application Administrator Edward Caporellie, Jr. Branch Sales Manager Joseph Cavalchire Commercial Lending Relationship Manager II Louis A. Cialarante Commercial Lending Relationship Manager I David A. Colby Branch Area Manager – Central New Jersey East Karen J. Conway Business Banker Joan S. Costa Loan Administration Assistant Manager Cori Cubberley Loan Accounting Manager Kimberly Dargay Branch Operations Manager Ryan D. Earley Business Banker Jason Fischer Commercial Lending Relationship Manager I Brent Gardner Consumer Loan Officer Denise Goetting Branch Area Manager - Nothern New Jersey Robert Goldzman Commercial Lending Relationship Manager I Robert C. Gossenberger Branch Sales Manager Philip M. Heberling Commercial Lending Relationship Manager I Paula Huergo Strategic Planning Officer Kyle E. Johnson Head of Training, Retail/Analytics Project Manager Gregory S. Kay Branch Sales Manager Christopher M. Kelly Commercial Lending Relationship Manager II Amanda M. Kenny Internal Audit Manager Brett Lawrence Commercial Lending Relationship Manager I Larry F. Lee Loan Workout Manager Michelle Mack Compliance Officer Tina Middleton Commercial Lending Relationship Manager I Carol Monaghan Branch Sales Manager James F. Monaghan III Senior Financial Projects Manager James T. Muller Branch Area Manager – Central New Jersey West Sarah M. Pearson CRA Officer John C. Pettit Branch Area Manager – Southern New Jersey Frank P. Puleio Business Development Officer Katherine M. Rowley Branch Operations Manager Brendan P. Ryan Bank Secrecy Act Officer Sandra K. Ryan Branch Sales Manager Kyle Smith Commercial Lending Relationship Manager I John M. Thompson Treasury Management Sales Officer Anchal A. Trivedi Credit Manager Jennifer Wallace-Dressner Assistant Controller Marie Wanat Branch Area Manager – Bucks/Montgomery Counties, PA Gregory Weckel Information Technology Manager Caryn Wilson Retail & Business Banking Operations Officer Mark F. Wrobel Commercial Lending Relationship Manager I ASSISTANT VICE PRESIDENTS Alexandra Acevedo Treasury Management Sales Support Brian W. Ballentine Branch Operations Manager Sharon E. Bokma Branch Operations Manager Michael R. Borkowski Branch Sales Manager Linda Deckman Underwriter Gwendelyn C. Fisher Marketing Manager Patrick L. Giallombardo Commercial Real Estate Administrator Michele M. Green SBA Portfolio Manager/Senior Underwriter Jonathan O. Jacobs Private Banker Veena Jain Branch Operations Manager Keith M. Jolliffe Senior Credit Analyst/Team Leader Judith Koch Branch Operations Manager Jason M. Koenigsberg Branch Sales Manager William J. Mellon Senior Credit Underwriter Ruth Powell Branch Operations Manager Padmaja Racharla Senior Credit Analyst Patricia L. Schofield Branch Operations Manager Stacy L. Schwartz Deposit Operations Supervisor Diane L. Smith Underwriter Traci L. Sundberg Financial Investigations & AML Manager Sharon A. Unger Deposit Operations Analyst II Andrew K. Varsallona IT Support Specialist ASSISTANT TREASURERS Shatha N. Abbasi Auditor Thomas P. Bay Commercial Lending Relationship Manager I Donna Bencivengo Executive Assistant and Corporate Secretary Samantha K. Dayton Loan Accounting Assistant Manager Angelique DeGazon Loan Accounting Specialist Sharon Grabowski Loan Accounting Cynthia Huber Branch Operations Manager Cynthia Tigeleiro Branch Operations Manager Maria A. Tramo Operations Coordinator for Retail & Business Banking Kelly L. Valenza Benefits and Payroll Coordinator Carrie M. Walchko Bank Secrecy Act Specialist Michelle Zimmerman Branch Operations Manager 23 Investment Profile AT 3-5-20 Closing Share Price Market Capitalization Price/Earnings (LTM) Price/Tangible Book Forward Dividend Yield 52-week High 52-week Low Average Daily Trading Volume 3 MO AVG Shares Outstanding Float Earnings per Share (diluted) FOR YEAR ENDED 12-31, $ 2015 2016 2017 2018 2019 Stock Ownership AT 12-31-19 AT 12-31-19 $9.73 $199.1M 14.1 X 95.7% 1.20% $11.82 $9.61 24,695 20.5M 15.7M 0.41 0.61 0.48 0.95 0.69 RETAIL 45% IN SID E 11% INSTITUTIONAL 44% 24 C O R P O R A T E A N D S H A R E H O L D E R I N F O R M A T I O N CO RPO RAT E HE AD QUARTERS FIRST BANK 2465 Kuser Road Hamilton, NJ 08690 877 821 2265 firstbanknj.com A N NUAL SHAREHOLDER MEET IN G INFORM ATION The Annual Shareholders’ Meeting will be held at 10:00 am on April 29, 2020 at: The Stone Terrace* 2275 Kuser Road Hamilton, NJ 08690 IN VESTOR RELATIONS Shareholders seeking information about us may obtain press releases SHAREHOLD ER ACCOUNT INQUI RI ES Shareholders who wish to change the name, address or ownership of their stock or replace lost certificates or require additional services should contact our Stock Registrar and Transfer Agent. STOCK REGISTR AR AND TRANSFER AGENT FIRST CLASS/REGISTERED/CERTIFIED MAIL Computershare Investor Services P.O. Box 505000 Louisville, KY 40233-5000 COURIER SERVICES Computershare Investor Services 462 South 4th Street, Suite 1600 Louisville, KY 40202 and FDIC filings by visiting SHAREHOLDER SERVICES NUMBER firstbanknj.com.Additional inquiries 1 800 368 5948 can be directed to: Chief Financial Officer 1395 Yardville-Hamilton Square Road Hamilton, NJ 08691 or by calling 609 643 0136 INVESTOR CENTRE PORTAL computershare.com/investor STOCK LISTING First Bank’s common stock is traded on the NASDAQ Global Market under the symbol FRBA. * Due to the current restrictions on large gatherings of individuals related to the spread of novel coronavirus, COVID-19, First Bank may need to conduct the 2020 annual meeting of shareholders virtually. We will provide updates on this matter on the First Bank web site: www.firstbanknj.com S A F E - H A R B O R S TAT E M E N T Note: The foregoing material contains forward-looking statements concerning the financial condition, results of operations and business of the Bank. We caution that such statements are subject to a number of uncertainties, including but not limited to those set forth under the caption “Item 1A – Risk Factors” in the accompanying annual report on Form 10-K, as well as changes in economic activity in our markets, changes in interest rates and changes in regulation and the regulatory environment. If one or more events related to these or other risks or uncertainties materialize, or if First Bank's underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank's behalf may issue. First Bank is a member of the FDIC, an Equal Opportunity Employer and an Equal Housing Lender. ANALYST COVERAGE The following analysts published research on First Bank in 2019: Nicholas Cucharale Piper Sandler 212 466 7922 nick.cucharale@psc.com Joseph Fenech Hovde Group 312 386 5909 jfenech@hovdegroup.com 25 2 4 6 5 K U S E R R OA D H A M I LTO N , N E W J E R S E Y 0 8 6 9 0 8 7 7. 8 2 1 . B A N K F I R S T B A N K N J .CO M F I R S T B A N K PA .CO M N A S DAQ : F R B A 

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