Press Release

PRINCETON, N.J.--(BUSINESS WIRE)-- Princeton Bancorp, Inc. (the “Company”) (NASDAQ - BPRN), the bank holding company for The Bank of Princeton (the “Bank”), today reported its unaudited financial condition and results of operations for the quarter and six months ended June 30, 2026.

President/CEO Edward Dietzler spoke to the quarter results, "We are pleased with our strong second quarter performance, which reflects the continued execution of our strategic priorities and the resilience of our franchise. Net income totaled $7.1 million, or diluted earnings per share of $1.04, supported by a 6% increase in net interest income and continued expansion of our net interest margin compared to the first quarter of 2026.”

The Company reported net income of $7.1 million, or $1.04 per diluted common share, for the second quarter of 2026, compared to $6.2 million, or $0.91 per diluted common share, for the first quarter of 2026, and net income of $688 thousand, or $0.10 per diluted common share, for the second quarter of 2025. The increase in net income for the second quarter of 2026 when compared to the first quarter of 2026 was primarily due to an increase in net interest income of $1.2 million, and an increase in the reversal of credit losses of $197 thousand, partially offset by an increase in non-interest expense of $231 thousand, and an increase in income tax expense of $281 thousand. The increase in net income for the second quarter of 2026 when compared to the second quarter of 2025 was primarily due to a decrease in the provision for credit losses of $7.3 million, an increase in net interest income of $1.2 million, and an increase in non-interest income of $185 thousand, partially offset by increases of $2.2 million in income tax expenses and $137 thousand in non-interest expense.

Review of Statements of Financial Condition
Total assets were $2.25 billion at June 30, 2026, a decrease of $34.1 million, or 1.49% when compared to $2.28 billion at December 31, 2025. The primary reasons for the decrease in total assets were related to decreases in cash and cash equivalents of $69.5 million and net loans of $44.6 million, partially offset by an increase in investment securities of $78.9 million. The decrease in the Company’s net loans consisted of decreases of $69.7 million in commercial real estate loans and $15.3 million in construction loans, partially offset by increases of $25.4 million in home equity and consumer loans, and $15.1 million in residential mortgages.

Total deposits on June 30, 2026, decreased $40.5 million, or 2.05%, when compared to December 31, 2025. The decrease in the Company’s deposits consisted primarily of decreases in certificates of deposit of $97.0 million, interest-bearing checking deposits of $20.9 million, and savings deposits of $3.0 million, partially offset by increases in money market deposits of $57.1 million, and non-interest checking deposits of $23.2 million. The decrease in the certificates was strategically planned, including a reduction in brokered deposits of $11 million, implemented by a pricing structure designed to reduce the Bank’s cost of funds. On balance sheet liquidity remains strong at June 30, 2026.

Total stockholders’ equity at June 30, 2026, increased $9.2 million, or 3.40% when compared to December 31, 2025. The increase was primarily due to an increase in retained earnings of $8.7 million (which consisted of $13.3 million in net income, partially offset by $4.6 million of cash dividends recorded during the period), and an increase in paid-in capital from the exercise of stock options of $939 thousand. The ratio of equity to total assets at June 30, 2026, and at December 31, 2025, was 12.4% and 11.9%, respectively.

Asset Quality
At June 30, 2026, non-performing assets totaled $16.3 million, a decrease of $195 thousand when compared to the amount at December 31, 2025.

Review of Quarterly and Six-Month Financial Results
Net interest income was $20.0 million for the second quarter of 2026, an increase of $1.2 million over the first quarter of 2026, and an increase of $1.2 million compared to $18.8 million for the second quarter of 2025. Net interest margin for the second quarter of 2026 was 3.86%, an increase of 23 basis points when compared to the first quarter of 2026, and an increase of 32 basis points when compared to the second quarter of 2025. The increase in net interest income when compared with the first quarter of 2026 was primarily related to a decrease in interest expense of $597 thousand, or 4.9%, and an increase in interest income of $585 thousand, or 1.9%. The increase in net interest income when compared with the second quarter of 2025 was primarily due to a $2.3 million decrease in interest expense, partially offset by a decrease in interest income of $1.1 million. When comparing the second quarter of 2026 and the second quarter of 2025 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 $68.8 million, as well as a decrease in the Company’s cost of funds of 40 basis points. The decrease in interest income for the second quarter of 2026 when compared to the second quarter of 2025 was due to a $46.6 million decrease in average interest-earning assets (caused mostly by a $50.4 million reduction in the average balance of loans, and a $39.7 million reduction in the average balance of total securities, partially offset by an increase of $43.5 million in the average balance of other interest-earning assets), and a 7-basis point decrease in the yield on interest-earning assets.

The Company recorded a reversal of credit losses of $353 thousand during the second quarter of 2026, which consisted of a $314 thousand decrease recorded to the allowance of credit losses on loans, and a $39 thousand decrease to the provision for credit losses related to unfunded commitments, which are recorded in other liabilities on the Company’s statements of financial condition. The current quarter's reversal of credit losses recorded on the Company’s statements of income was $197 thousand greater than when compared to the reversal of credit losses for the first quarter of 2026, and was $7.3 million lower when compared to the provision for credit losses for the second quarter of 2025. The coverage ratio of the allowance for credit losses to period end loans was 1.13% at June 30, 2026, and 1.12% at December 31, 2025.

Total non-interest income of $2.4 million for the second quarter of 2026 decreased $15 thousand or 0.6% when compared to the first quarter of 2026 and increased $185 thousand or 8.2% when compared to the second quarter of 2025. The decrease in the second quarter of 2026 when compared to the first quarter of 2026 was due to a decrease in other non-interest income of $421 thousand, which is related to a gain recorded on an equity investment in the amount of $232 thousand in the first quarter of 2026, partially offset by an increase of $380 thousand in loan fees. The increase over the prior year’s second quarter was primarily due to an increase in loan fees of $205 thousand, and in fees and service charges of $46 thousand, partially offset by a decrease in other non-interest income of $88 thousand.

Total non-interest expense of $13.6 million for the second quarter of 2026 increased $231 thousand, or 1.7%, when compared to the first quarter of 2026. This increase over the prior quarter was primarily due to increases in professional fees of $214 thousand, in salaries and employee benefits expense of $128 thousand, and in other non-interest expense of $119 thousand, partially offset by decreases in occupancy and equipment of $140 thousand, and in data processing and communications expenses of $46 thousand. Total non-interest expense for the second quarter of 2026 increased $137 thousand or 1.0% when compared to the second quarter of 2025. This increase was primarily related to increases in professional fees of $253 thousand, occupancy and equipment expense of $105 thousand, and salaries and employee benefits expense of $60 thousand, partially offset by decreases in federal deposit insurance expense of $115 thousand, office expense of $102 thousand, and other non-interest expense of $53 thousand.

For the quarter ended June 30, 2026, the Company recorded an income tax expense of $2.1 million, resulting in an effective tax rate of 22.9%, compared to an income tax expense of $1.8 million resulting in an effective tax rate of 22.6% for the quarter ended March 31, 2026 and compared to an income tax benefit of ($92) thousand resulting in an effective tax rate of (15.4)% for the quarter ended June 30, 2025.

For the six-month period ended June 30, 2026, the Company recorded net income of $13.3 million, or $1.95 per diluted common share, compared to $6.1 million, or $0.88 per diluted common share, for the same period in 2025. The increase in net income was primarily due to a decrease of $7.7 million in the provision for credit losses, an increase in net interest income of $1.3 million, an increase in non-interest income of $446 thousand, and a decrease in non-interest expense of $240 thousand, partially offset by an increase in income tax expense of $2.5 million, when compared to the prior year period.

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 29 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cranbury, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank 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 shareholders 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 potential impact of the global impact of foreign military conflicts in Iran, the Middle East and elsewhere, any future Federal budget stalemates in Congress, higher tariffs imposed by the Trump administration, higher inflation levels, and general economic and recessionary concerns, all of which could impact economic growth and could cause an increase in loan delinquencies, a reduction in financial transactions and business activities including decreased deposits and reduced loan originations, difficulties in managing liquidity in a rapidly changing and unpredictable market, and supply chain disruptions. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; the timing and nature of the regulatory response to any applications filed by the Company and the Bank; developments in technology, such as artificial intelligence, and our ability to incorporate innovative technologies in our business and provide products and services that satisfy our customers' expectations for convenience and security; other acquisitions; changes in consumer spending and saving habits; those risks under the heading “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025; and the success of the Company at managing the risks involved in the foregoing.

The Company 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.