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Total deposits on March 31, 2025, decreased $22.0 million, or 1.08%, when compared to December 31, 2024. The decrease in the Company's deposits consisted of decreases in money market deposits of $26.5 million, certificates of deposit of $17.1 million, and non-interest-bearing deposits of $10.5 million, These were partially offset by increases in interest-bearing demand deposits of $30.5 million, and savings deposits of $1.7 million.

Total stockholders' equity at March 31, 2025, increased $4.9 million or 1.89% when compared to December 31, 2024. The increase was primarily due to an increase in retained earnings of $3.3 million, which consisted of $5.4 million in net income, partially offset by $2.1 million of cash dividends recorded during the period, an increase in paid-in capital of $544 thousand, and a decrease in accumulated other comprehensive loss of $1.3 million. These were partially offset by a $163 thousand purchase of treasury stock. The ratio of equity to total assets at March 31, 2025 and at December 31, 2024 was 11.5% and 11.2%, respectively.

Asset Quality

At March 31, 2025, non-performing assets totaled $26.5 million, a decrease of $614 thousand when compared to the amount at December 31, 2024.

Review of Quarterly Financial Results

Net interest income was $18.8 million for the first quarter of 2025, compared to $18.0 million for the fourth quarter of 2024 and $15.4 million for the first quarter of 2024. The increase from the previous quarter was the result of a decrease in interest expense of $1.1 million, or 7.1%, partially offset by a decrease in interest income of $365 thousand, or 1.1%. The net interest margin for the first quarter of 2025 was 3.51%, an increase of 23 basis points when compared to the fourth quarter of 2024, and an increase by 9 basis points when compared to the first quarter of 2024. When comparing the first quarter of 2025 and the fourth quarter of 2024 periods, the decrease in interest expense and the increase in net interest margin were primarily associated with a decrease in total interest-bearing deposits of $8.3 million and a 17-basis point decrease in the rate on such deposits. This resulted in a decrease in the Company's cost of funds of 13 basis points.  The decrease in interest income for the first quarter was due to a $20.9 million decrease in average interest-earning assets (caused mostly by a $75.3 million reduction in the average balance of Federal funds sold), partially offset by an 11-basis point increase in the yield on interest-earning assets when compared to the fourth quarter of 2024.

When comparing the first quarter of 2025 and first quarter of 2024, net-interest income increased by $3.3 million, which was primarily due to an increase in average interest-earning assets of $347.0 million and an increase of 3 basis points in the yield earned on interest-earning assets, partially offset by the increase in average interest-bearing deposits of $306.8 million. The Bank's cost of funds decreased by 12 basis points compared to the first quarter of 2024.

The Company recorded a provision for credit losses of $268 thousand during the first quarter of 2025, which consisted of an increase in the required reserve for credit losses on loans in the amount of $225 thousand and a increase in the reserve for unfunded liabilities of $43 thousand. The current quarter's provision recorded on the Company's statements of income was $172 thousand lower when compared to the provision for credit losses for the fourth quarter of 2024, and was $82 thousand higher when compared to the first quarter of 2024.  For the quarter ended March 31, 2025, the Company recorded charge-offs of $84 thousand and recoveries of $143 thousand. The coverage ratio of the allowance for credit losses to period end loans was 1.29% at March 31, 2025 and 1.30% at December 31, 2024.

Total non-interest income of $2.2 million for the first quarter of 2025 increased $163 thousand or 8.0% when compared to the fourth quarter of 2024, and increased $205 thousand or 10.3% when compared to the first quarter of 2024. The increase from the first quarter of 2025 when compared to the fourth quarter of 2024 was due to an increase in other non-interest income of $151 thousand, and an increase of $38 thousand in loan fees. The increase over the prior year's first quarter was primarily due to an increase in income from bank owned life insurance of $90 thousand and an increase in other non-interest income of $85 thousand.

Total non-interest expense of $13.8 million for the first quarter of 2025 increased $1.0 million, or 8.0%, when compared to the fourth quarter of 2024. This increase over the prior quarter was primarily due to increases in salaries and employee benefits expense of $654 thousand, data processing and communications expenses of $268 thousand, and federal deposit insurance expense of $256 thousand, partially offset by a decrease in other non-interest expense of $155 thousand. Total non-interest expense for the first quarter of 2025 increased $2.0 million or 16.5% when compared to the first quarter of 2024. This increase was primarily related to increases in salaries and employee benefits expense of $652 thousand, data processing and communications expense of $466 thousand, federal deposit insurance expense of $260 thousand, occupancy and equipment expense of $256 thousand, professional fees of $237 thousand and core deposit intangible expense of $108 thousand.

For the quarter ended March 31, 2025, the Company recorded an income tax expense of $1.5 million, resulting in an effective tax rate of 21.9%, compared to an income tax expense of $1.6 million resulting in an effective tax rate of 23.4% for the quarter ended December 31, 2024 and compared to an income tax expense of $1.0 million resulting in an effective tax rate of 19.7% for the quarter ended March 31, 2024.

About Princeton Bancorp, Inc. and The Bank of Princeton

Princeton Bancorp, Inc. is the holding company for The Bank of Princeton, a community bank founded in 2007.  The Bank is a New Jersey state-chartered commercial bank with 28 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury.  There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation.

Forward-Looking Statements

The Company may from time to time make written or oral "forward-looking statements," including statements contained in the Company's filings with the Securities and Exchange Commission, in its reports to stockholders and in other communications by the Company (including this press release), which are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company's control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher tariffs imposed by the Trump administration, higher inflation levels, and general economic and recessionary concerns, all of which could impact economic growth and could cause an increase in loan delinquencies, a reduction in financial transactions and business activities including decreased deposits and reduced loan originations, difficulties in managing liquidity in a rapidly changing and unpredictable market, and supply chain disruptions. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the integration of the businesses of the Company and Cornerstone Bank following the completion of the transaction; the global impact of the military conflicts in the Ukraine and the Middle East; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank's products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors' products and services; the willingness of customers to substitute competitors' products and services for the Bank's products and services; credit risk associated with the Bank's lending activities; risks relating to the real estate market and the Bank's real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; other acquisitions; changes in consumer spending and saving habits; those risks under the heading "Risk Factors" set forth in the Bank's Annual Report on Form 10-K for the year ended December 31, 2024,  and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as required by applicable law or regulation.