Executive Summary

Q1 2024 delivered stable balance sheet growth but softer earnings; diluted EPS fell to $0.68, down 17.1% q/q and 28.4% y/y, as rising deposit costs compressed net interest income and margin .
Net interest margin declined to 3.42% (3.47% FTE) from 3.55% in Q4 2023 and 4.59% in Q1 2023; management attributed compression to a 25 bps increase in cost of funds amid heavier CDs and money market mix .
Asset quality improved materially: non-performing assets fell to $2.1M from $6.7M at year-end, aided by sale of a $4.5M CRE loan; coverage remained strong with ACL at 1.18% of loans .
Deposits grew $69.9M (+4.27% q/q) and loans grew $22.9M (+1.48% q/q), highlighting franchise momentum; board declared a $0.30 quarterly dividend (paid May 31, 2024) .
Potential stock catalysts: improving credit metrics and pending Cornerstone Bank acquisition support medium-term growth; near-term pressure from higher funding costs/NIM could temper estimate revisions .

What Went Well and What Went Wrong

What Went Well

Sharp improvement in asset quality: NPAs dropped to $2.1M from $6.7M at year-end, primarily due to sale of a $4.5M CRE loan; nonaccrual loans fell to 0.13% of total loans .
Solid core growth: total deposits rose $69.9M q/q (+4.27%) and net loans increased $22.9M q/q (+1.48%), with strength in commercial real estate and construction lending .
Management confidence and strategic expansion: “The anticipated addition of Cornerstone Bank will add to the Company’s central and southern New Jersey footprint…” — Edward Dietzler, President/CEO .

What Went Wrong

Margin compression: NIM fell 13 bps q/q to 3.42% as cost of funds rose 25 bps with a shift to higher-cost CDs and money markets; net interest income declined $562K q/q .
Expense pressure: non-interest expense increased $887K q/q (+8.1%) and $2.064M y/y (+21.1%), led by salaries/benefits and occupancy linked to integration and growth .
Earnings softness: diluted EPS fell to $0.68 from $0.82 in Q4 2023 and $0.95 in Q1 2023; net income decreased to $4.345M (-17.7% q/q, -28.7% y/y) .

Financial Results

Metric	Q1 2023	Q4 2023	Q1 2024
Total Revenue (NII + Non-Interest Income) ($USD Millions)	$18.035 (NII $16.661 + Non-Interest $1.374)	$17.789 (NII $16.010 + Non-Interest $1.779)	$17.433 (NII $15.448 + Non-Interest $1.985)
Net Interest Income ($USD Millions)	$16.661	$16.010	$15.448
Non-Interest Income ($USD Millions)	$1.374	$1.779	$1.985
Provision for Credit Losses ($USD Millions)	$0.265	$0.562	$0.186
Non-Interest Expense ($USD Millions)	$9.772	$10.949	$11.836
Net Income ($USD Millions)	$6.097	$5.282	$4.345
Diluted EPS ($USD)	$0.95	$0.82	$0.68
Net Interest Margin (%)	4.59%	3.55%	3.42%

Segment/Balance Mix

Loans ($USD Thousands)	Q4 2023	Q1 2024
Commercial Real Estate	$1,142,864	$1,162,741
Commercial & Industrial	$50,961	$45,930
Construction	$310,187	$321,009
Residential First-Lien	$38,040	$36,565
HE/Consumer	$8,081	$7,311
Total Loans	$1,550,133	$1,573,556

Deposits ($USD Thousands)	Q4 2023	Q1 2024
Non-Interest Checking	$249,282	$247,056
Interest-Bearing Demand	$247,939	$215,364
Savings	$146,484	$149,386
Money Market	$354,005	$378,652
Time Deposits	$638,031	$715,162
Total Deposits	$1,635,741	$1,705,620

KPIs

KPI	Q1 2023	Q4 2023	Q1 2024
ROAA (%)	1.56%	1.09%	0.89%
ROAE (%)	11.05%	8.93%	7.27%
Efficiency Ratio (non-GAAP) (%)	53.43%	61.01%	67.21%
Non-Performing Assets ($USD Thousands)	$6,456	$6,708	$2,115
ACL / Loans (%)	1.19%	1.19%	1.18%
Net Charge-offs ($USD Thousands)	$(3)	$(10)	$176

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Cash Dividend	Q2 2024 payment date (May 31, 2024)	Not stated	$0.30 per share; record date May 10, 2024; payable May 31, 2024	Maintained regular quarterly dividend practice
Strategic	2024	Pending acquisition of Cornerstone Financial Corp. expected to close Q2/Q3 2024	No change to timeline; reiterated transaction expectation	Maintained

Note: No quantitative guidance provided for revenue, margins, OpEx, tax rate, or segment-specific outlook in Q1 2024 materials .

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was available in our catalog; themes below reflect press releases/8-K commentary across periods.

Topic	Q-2 (Q3 2023)	Q-1 (Q4 2023)	Current Period (Q1 2024)	Trend
Interest Rate/Margin Dynamics	NIM fell to 3.76% with funding cost increase; building liquidity	NIM down to 3.55%; cost of funds +25 bps; liquidity high	NIM down to 3.42%; cost of funds +25 bps; CDs/money market mix pressure	Continued margin pressure
Liquidity/Deposits	Deposits +$290.2M YTD; immediate liquidity $206.9M; zero borrowings	Deposits +$288.0M y/y; strong liquidity; reduced borrowings	Deposits +$69.9M q/q; mix shift toward time deposits and money market	Growth with higher-cost mix
Asset Quality	NPAs $6.8M; CRE delinquency noted	NPAs $6.7M; sale of $4.5M CRE anticipated Q1 2024	NPAs $2.1M; $4.5M CRE loan sold; nonaccrual 0.13%	Improving markedly
Strategic M&A	Noah Bank integration benefits (bargain gain)	Cornerstone deal announced Jan 18, 2024	Cornerstone remains pending; footprint expansion emphasized	Steady execution
Expenses/Integration	Q3 reversal of some merger costs; still elevated expenses	Higher OpEx y/y; merger/integration costs impact full year	OpEx +8.1% q/q; salaries/occupancy up; integration continues	Persistent cost pressure

Management Commentary

“The Company continued its strong financial performance despite the industry’s challenging interest rate environment… The anticipated addition of Cornerstone Bank will add to the Company’s central and southern New Jersey footprint…” — Edward Dietzler, President/CEO .
Q4 backdrop: “Despite the significant impact from the interest rate environment and other industry pressures, the Bank increased loan and deposit balances while maintaining strong liquidity and good credit quality.” — Edward Dietzler .

Q&A Highlights

No Q1 2024 earnings call transcript available; no Q&A details provided in public filings/press materials for the period [ListDocuments returned none for earnings-call-transcript].

Estimates Context

S&P Global consensus estimates for Q1 2024 were unavailable via our data connector at time of retrieval.
Third-party aggregator context: InvestorPlace reported EPS consensus of $0.65 and revenue consensus of $15.59M; actual EPS was $0.68 and “total revenue” (defined as NII + non-interest income) was $17.43M, indicating beats on both metrics .
Given NIM compression and higher funding costs, near-term estimate revisions may skew cautious despite balance sheet growth .

Key Takeaways for Investors

Core earnings under pressure from funding cost increases and higher-cost deposit mix; watch for deposit repricing pace vs. asset yields to gauge NIM inflection .
Credit quality tailwinds are notable: NPAs fell sharply to $2.1M and nonaccruals to 0.13%; strong ACL coverage supports loss-absorption capacity .
Growth momentum intact: deposits +4.27% q/q and loans +1.48% q/q, with CRE and construction driving loan growth; expect continued origination pipeline execution .
Expense intensity elevated (salaries/occupancy), reflecting expansion/integration; monitor efficiency ratio (67.21%) for progress back toward low-60s or better .
Cornerstone acquisition remains a strategic catalyst to extend footprint and scale; regulatory/timing risk noted, but management reiterates confidence .
Dividend stability: $0.30 quarterly cash dividend declared and paid in Q2; supports total return profile pending margin normalization .
Trading lens: near-term shares may be sensitive to further NIM compression headlines; improving credit metrics and M&A close could be upside narrative drivers .

Princeton Bancorp, Inc. (BPRN)·Q1 2024 Earnings Summary