Executive Summary

Net income increased 18.0% QoQ to $5.13M, with diluted EPS rising to $0.80 from $0.68; net interest margin improved 2 bps to 3.44%, and total revenue reached $18.06M, reflecting stronger core earnings despite a modest uptick in non-interest expense .
Year-over-year comparisons are distorted by the absence of a $9.7M bargain purchase gain recorded in Q2 2023; ex-this item, core profitability showed resilience, supported by loan and deposit growth and lower credit costs (provision reversal of $0.12M) .
The company received all approvals to acquire Cornerstone Financial; closing was expected August 23, 2024, expanding the NJ footprint and supporting future growth; a $0.30 quarterly dividend was declared (paid Aug 30) .
Catalysts: pending Cornerstone integration, continued deposit mix optimization, and stable credit quality (NPAs $3.2M, 0.20% nonaccrual); estimate-based beat/miss analysis unavailable due to lack of S&P Global consensus data at time of query .

What Went Well and What Went Wrong

What Went Well

Net interest income rose 3.4% QoQ to $15.97M, driven by higher interest income from expanded average earning assets; NIM improved to 3.44% QoQ as asset growth added 12 bps, partially offset by cost of funds (+10 bps) .
Deposits grew $63.3M YTD (+3.9%) with strength in money market (+$49.9M) and time deposits (+$41.3M), supporting liquidity and funding stability; average deposits increased $50.7M QoQ .
Credit quality remained strong: reversal of credit losses ($0.12M), low NPAs ($3.2M), and nonaccruals at 0.20% of loans; net charge-offs were a small recovery (-$15k) in Q2 .

Management quote: “The Company continued its strong financial performance with a 18.0% increase in net income over the first quarter of 2024, along with a modest increase in the net interest margin to 3.44%...” — Edward Dietzler, President/CEO .

What Went Wrong

Non-interest expense increased 1.5% QoQ (+$0.17M), led by data processing and communications (+$0.24M) and professional fees (+$0.08M), partially offset by lower occupancy (-$0.18M) and salaries (-$0.08M) .
Cost of funds continued to pressure margins YoY: NIM fell to 3.44% vs 3.95% in Q2 2023 as interest-bearing deposit costs rose with mix shifts toward higher-cost CDs and money market balances .
Non-interest income declined 82% YoY due to the lack of the $9.7M bargain purchase gain in the prior year; excluding this, non-interest income was steady with modest growth QoQ .

Financial Results

Metric	Q2 2023	Q1 2024	Q2 2024
Total Revenue ($USD Millions)	$17.53	$17.43	$18.06
Net Interest Income ($USD Millions)	$15.66	$15.45	$15.97
Net Income ($USD Millions)	$6.79	$4.35	$5.13
Diluted EPS ($USD)	$1.07	$0.68	$0.80
Net Interest Margin (%)	3.95%	3.42%	3.44%
Efficiency Ratio (%)	60.82%	67.21%	65.90%
ROAA (%)	1.60%	0.89%	1.03%

Segment/Balance Mix

Loans ($USD Thousands)	Dec 31, 2023	Jun 30, 2024
Commercial Real Estate	$1,142,864	$1,194,279
Commercial & Industrial	$50,961	$50,290
Construction	$310,187	$287,290
Residential First-Lien	$38,040	$36,075
Home Equity/Consumer	$8,081	$7,583
Total Loans	$1,550,133	$1,575,517
Loans, Net	$1,529,843	$1,554,888

Deposits ($USD Thousands)	Dec 31, 2023	Jun 30, 2024
Non-Interest Demand	$249,282	$245,073
Interest-Bearing Demand	$247,939	$223,759
Savings	$146,484	$146,935
Money Market	$354,005	$403,926
Time Deposits	$638,031	$679,379
Total Deposits	$1,635,741	$1,699,072

KPIs

KPI	Q2 2023	Q1 2024	Q2 2024
TBV/Share ($)	$34.78	$36.65	$36.96
Equity/Assets (%)	12.42%	12.16%	12.34%
Tier 1 Leverage (%)	13.43%	11.99%	12.21%
Allowance / Loans (%)	1.20%	1.18%	1.17%
Nonaccrual / Loans (%)	0.65%	0.13%	0.20%
Nonperforming Assets ($USD Millions)	$9.79	$2.12	$3.20

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share ($)	Q3 2024 payment	$0.30 (historical cadence)	$0.30 declared; payable Aug 30, 2024	Maintained
Cornerstone Acquisition Close	Q3 2024	Expected Q2/Q3 2024	Approvals received; expected close Aug 23, 2024	Firmed timeline
Financial Guidance (Revenue/Margins/OpEx/Tax)	2024	Not provided	Not provided	Maintained (no formal guidance)

Notes: No quantitative forward guidance on revenue, margins, OpEx, OI&E, or tax rate was provided in the press releases or 8-K .

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was available in our document set; themes below reflect management press releases.

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
Interest Rate Environment	Q1: NIM decreased 13 bps QoQ due to higher cost of funds (CDs/MM)	NIM improved 2 bps to 3.44%; asset growth added +12 bps, cost of funds +10 bps	Stabilizing NIM QoQ; YoY still lower
Deposits/Liquidity	Q1: Deposits +$69.9M QoQ; mix shift to CDs/MM	Average deposits +$50.7M QoQ; YTD deposits +$63.3M; MM and CDs up	Continued growth; higher-cost mix persists
Credit Quality	Q1: NPAs down to $2.1M; provision $0.19M	NPAs $3.2M; provision reversal $0.12M; nonaccrual 0.20%	Still strong; slight NPAs uptick from Q1
M&A/Footprint	Q1: Announced Cornerstone acquisition	All approvals received; close expected Aug 23	Execution milestone achieved
Tax Rate	Q1: Effective tax rate 19.7%	Effective tax rate 16.8% (Q2)	Lower effective rate QoQ
Non-GAAP Metrics	Q1: Efficiency 67.21%; NIM (FTE) 3.47%	Efficiency 65.90%; NIM (FTE) 3.48%	Operational efficiency improved QoQ

Management Commentary

Strategic message: Focus on profitable growth with disciplined liquidity and credit, leveraging Cornerstone to strengthen NJ footprint from NY to Philadelphia .
Quote: “The Company continues to increase average loan and deposit balances while maintaining strong liquidity and credit quality.” — Edward Dietzler .
Balance sheet positioning: Assets +$67.4M YTD, driven by AFS securities and net loans; deposits +$63.3M with MM and CDs offsetting declines in demand deposits .

Q&A Highlights

No Q2 2024 earnings call transcript was available; thus, there are no Q&A disclosures to summarize from this period [Search returned none].

Estimates Context

S&P Global Wall Street consensus estimates (EPS and revenue) were unavailable at the time of analysis, preventing beat/miss determination relative to Street expectations. As a result, estimate comparisons are not included in this recap.

Key Takeaways for Investors

Core earnings momentum: QoQ EPS improved to $0.80 with NIM stabilization and higher net interest income; efficiency ratio improved to 65.9%, signaling expense control progress .
Funding mix and margin: Deposit growth remains robust, but mix into higher-cost products creates cost-of-funds pressure; NIM recovery is modest and dependent on mix and rate trajectory .
Credit remains healthy: Provision reversal and low nonaccruals support earnings durability; allowance coverage at 1.17% remains prudent .
Balance sheet optionality: TBV/Share increased to $36.96 and equity/asset ratio at 12.34% provide capital flexibility amid growth initiatives .
Near-term catalyst: Cornerstone closing (Aug 23) offers accretive scale and geographic reinforcement; monitor integration and cost synergies post-close .
Dividend continuity: $0.30 per share quarterly dividend reaffirmed, enhancing shareholder return profile while maintaining strong capital ratios .
Watch items: Data processing and professional fees increased; monitor post-integration run-rate OpEx and continued pressure from higher-rate deposits on NIM .

Princeton Bancorp, Inc. (BPRN)·Q2 2024 Earnings Summary