First Bank : Annual Report to Shareholders (ARS) or Combined ARS/10-K

2023 annual report

momentum

2023 marked a pivotal year in First Bank's evolution into a middle market commercial bank. We closed our largest-ever acquisition, gaining meaningful presence in the highly attractive Main Line corridor of Philadelphia and adding approximately 19,000 new relationships to the First Bank family. Our parallel focus on acquisition and organic growth continued to drive diversification and strength in our deposit and loan portfolios.

We faced the challenges present across our industry with consistency and from a position of strength. We grew deposits amidst profound liquidity pressures and competition. We efficiently repositioned our balance sheet, enhancing our liquidity and interest rate risk positions while also improving future earnings potential. We also strategically invested in new business units and technology.

We believe a consistent strategy drives enhanced results. Our solid business model enabled the Bank to grow assets, add customers, increase revenues, incentivize employees, and return capital to shareholders with increasing momentum in 2023. First Bank has been steadily climbing to this point since our founding in 2007, and with new markets, branches, products and technology to propel us forward, we are eager to accomplish even more for our customers and shareholders in the future.

fast facts

We are a unique, commercially focused bank with branch locations in New Jersey, Pennsylvania and Florida, with approximately $3.61 billion in assets at the end of 2023.

Highly attractive market with		26 customer facilities and	Improved geographic and
highest population density in		286 company employees at	asset diversification
the country	12/31/2023	driven by successful M&A
			and new business units
Total adjusted net revenue		Efficiency ratio consistently	Diluted earnings per share of
grew 12.8% in 2023*		below 60%	$1.64 (adjusted) represents
			11.5% CAGR from 2018**
Proven asset growth with		Total deposits grew	Successful balance sheet
16.1% CAGR since 2018		29.4% from 12/31/2022	repositioning in 2023, selling
			$238.2 million in non-strategic
			loans and securities

Kroll Bond Rating Agency Investment Grade Rating

Consistently strong credit metrics, with NCOs/Avg Loans of 0.06% for 2023

Focus on shareholder return with a consistent common stock cash dividend and treasury share repurchases during 2023

• Excludes the net impact of loan and investment securities sales
• Excludes merger-related expenses, losses on the sale of loans and investments, and credit loss expenses on acquired loans

CONTENTS	2 Letter to Shareholders	6 Performance Overview	7 Selected Financial Information	8 Operations Review
13 Market Area & Branch Listing	14 Board of Directors	15 Executive Management	16 Bank Officers	17 Investment Profile

17 Corporate & Shareholder Information

invigorating our communities

First Bank is committed to the social and economic development of our local areas. With a longstanding mission to do right by our customers and neighbors, our efforts are focused on making generational and transformative impacts

to enhance the quality of life for residents across our communities. Since our founding we have worked closely with our community partners to continually assess their needs, offering grants and funding to help them with their economic and social initiatives.

In 2023 we were honored to relaunch a charitable foundation previously affiliated with Malvern Bank. The newly renamed FirstBank Charitable Foundation (FBCF) continues the philanthropic legacies of both organizations, aiming to make a sustained positive difference where our customers and employees live and work. Together with the Bank, the Foundation builds and leverages purposeful relationships with non-profit organizations, local businesses, public servants, and other pillars of the community to foster welcome change.

Since its founding, the Charitable Foundation has donated just over $1 million dollars to non-profit organizations impacting thousands of individuals in New Jersey, Pennsylvania, and Florida. These dedicated non-profit organizations are committed to civic and community well-being, education, arts and culture, health and human services,

and the environment. We are honored to continue and add to the meaningful work of the Foundation. In addition to the financial contributions of the Foundation, since 2018 our employees have also contributed over 6,800 in volunteer hours to support our community partners during the year.

1

to our shareholders, stakeholders, employees and friends:

2023 - A YEAR OF PERSEVERANCE AND CONTINUED TRANSFORMATION

There is an old adage that banking should be a boring business. Well, 2023 was not a boring year here at First Bank. On the heels of announcing our acquisition of Malvern Bank in December of 2022, things changed quickly in early 2023. The Federal Reserve continued moving vigorously to raise interest rates, in an effort to tamp down inflation. Specifically, from March 2022 to July 2023, the Fed Funds rate went from 0.25% to 5.50%. For historical perspective, this was the largest and fastest rate increase since the late 1970s. There is another market adage that says when the Fed starts raising rates, they keep going until "something breaks." In early March, cracks started emerging in the banking system. Banks that had taken on too much interest rate risk came under pressure. Then, as fear for the financial health of some of these institutions increased, deposits started moving away from banks with concentrated deposit positions and large embedded losses on their balance sheets. It became a very difficult spring for the industry as investors fled and deposit levels moved lower.

Over time, it became clear that the problem was largely isolated to a few regional banks with unique business models that left them overexposed to rapid changes in interest rates. In the spring of 2023, however, the magnitude of the problem wasn't entirely clear, and fear ruled the day. I remember those few weeks after the downfall of Silicon Valley Bank and Signature Bank vividly. I knew our balance sheet was strong and our interest rate risk position was well managed. I did not know if public perception would be able to fully grasp the differences between the "high flyers" that had gotten into trouble and the rest of the industry that was managed in a more conservative fashion. That moment in time, and our ability to effectively manage through those challenges, reminds me of the great scene in the movie Apollo 13. In the middle of the movie, as problems are mounting for the vessel on its way to the moon, one of the men in the control room comments that it could be the biggest disaster in NASA history. The man in charge of the mission (played by Ed Harris) responds, "with all due respect, I believe this will be our finest hour."

The First Bank model - the community/relationship banking model - didn't just survive a scare. We showed that

a bank built with great bankers and deep customer relationships can withstand stress and even thrive under pressure. To be clear, we were not immune from the challenges. We saw profit margins contract as funding costs moved higher. Importantly, though, our relationships held and our customers stayed. What had become an existential problem

for some, remained just a modest profitability challenge for us.

As the fear subsided, we shifted our focus to finalizing our Malvern acquisition. Despite some market concerns about regulatory approval of mergers, we were able to close the transaction in mid-July of 2023, just a couple of weeks later than initially expected. By early September we had completed the systems and signage conversions, and by the

2

end of the year we were operating effectively as a combined team. I am incredibly proud of the entire team that helped execute this merger so successfully. This was our largest acquisition to date, and the skills we developed on prior mergers helped to make this our most effective integration project ever.

The market turmoil of the spring did prompt us to revisit the strategic management of our combined balance sheet. Specifically, we chose to sell some loans and securities to bolster liquidity, improve our capital position, and enhance the future profitability of the franchise. Losses on the sale of assets combined with the costs associated with closing

the merger led to reduced profitability in the second half of the year. As a result of the merger and the balance sheet repositioning, First Bank enters 2024 from a position of strength, a unique position as many banks continue to struggle with shrinking margins and large embedded losses on the balance sheet.

The benefits of our merger with Malvern extend far beyond the repositioning and strengthening of our balance sheet. Thirteen (50%) of our branches now serve the Greater Philadelphia market, providing critical mass in a key market for growth. Additionally, successful cost savings initiatives will drive improved profitability. Our combined franchise now has critical mass in both the greater New York City and Philadelphia markets, along with enhanced liquidity, a more capital efficient balance sheet, a more liquid market for our stock, and an improved earnings trajectory. Our model of finding cost-effective acquisitions continues to bear fruit.

In addition to the benefits derived from the merger, 2023 was also a good year for our new, niche commercial lending businesses. Our Private Equity/Fund Banking group continued to add assets and make new relationships. Our Asset Based Lending group got off the ground, is now fully operational and closed several deals toward the end of the year. Our Small Business lending group also grew nicely as our new, automated online platform saw a nice uptick in applications during the year. We expect to see continued growth in each of these areas in 2024 as we work to reduce our overall commercial real estate exposure and enhance our commercial deposit base. Each of these initiatives is part of our transformation plan - evolving from a CRE-focused community bank to a diversified middle-market commercial lender.

Our digital banking initiatives also made nice progress during 2023. Our online small business loan application platform became fully operational and customer feedback has been very positive regarding the new streamlined application and approval process. On the deposit side, we selected a partner and are close to launching our new online deposit account opening and funding process. We plan to launch the business account application first, followed closely by the consumer account application. These digital initiatives will be enhanced by our new IT middleware structure, through which we aim to streamline the implementation process and reduce reliance on our core operating platform. These early successes mark promising progress toward this goal.

In summary, despite the significant market turbulence during the year, we accomplished many important strategic projects that leave us very well positioned to build on this momentum in 2024 and beyond.

3

A QUICK LOOK AHEAD TO 2024

Our core community banking business is well positioned for a bounce back year in 2024. Our cost of funds is starting to stabilize and should even start to move moderately lower once the Fed starts to lower short-term interest rates. Earning-asset yields continue to move higher as lower-rate loans mature and pay off and they get replaced by higher- rate loans. As some larger banks pull back from lending, we are seeing many new, high-quality loan opportunities emerging. And, our dedicated, relationship-based bankers continue to source new opportunities even as new deposit generation remains challenging due to excess liquidity continuing to trickle out of the banking system. We expect modest balance sheet growth, an improved margin, and a more streamlined expense base, which should all lead to improved profitability in 2024.

Asset quality continues to be solid. The Fed's current stance (flat to down rates) has taken the doomsday interest rate risk scenario off the table. While office property continues to be a challenged asset class, we have relatively modest office-property exposure, and our other commercial real estate segments are performing quite well. For our business customers, strong balance sheets and a healthy economy continue to drive strong results and solid asset quality.

In addition to the improved profit profile in our core community bank business, our newer commercial and small business lending segments seem poised to become an even more meaningful part of the overall franchise as we move forward. This will help drive in commercial deposits, improve earning-asset yields, and reduce commercial real estate concentrations. The ABL and PE / Fund Banking groups will even help to drive improved geographic diversity.

As our digital banking initiatives come online, we may see a nice improvement in non-interest income. As we usually do, as part of our prudent risk-management culture, we will take things slowly in Banking as a Service (BaaS) to ensure we have the infrastructure in place to manage these efforts effectively. However, we are currently exploring some very interesting BaaS opportunities. If run correctly, these businesses have the ability to scale up in a way that drives both revenue growth and deposits, in a very capital efficient manner. I view these new digital banking initiatives as interesting, relatively low-cost, "long shot" opportunities that may or may not bear fruit. If they do, they could be quite lucrative and a nice complement to our core banking businesses. Our business has grown to the point where we now have some resources that we can deploy into new, entrepreneurial areas. Not only do these initiatives provide interesting risk-reward characteristics, but they also help ensure that the bank stays relevant as the nature of our business changes over time.

One other important area of note for 2024 is our Residential and Consumer Lending group. We expect rates to stabilize and then move lower in 2024. To capitalize on this opportunity for a return to normalcy in consumer and residential mortgage borrowing, our existing consumer team, together with the great new residential lending platform that came over with Malvern, has plans to scale up new originations in 2024. This is another area where we hope to drive improved non-interest income in the future.

4

New business units and bright prospects don't materialize without great people. Fortunately, success attracts talent.

I'd like to highlight a few people that are driving growth in these new units. Michael Smith, together with Rob Kim and Casi Tiernan, is helping to drive growth in our small business customer segment and Treasury Management.

Mike Maiorino, together with Donna Calderaro and Carrie Squeo, will be building out our ABL segment. Ramzi Dagher and Adam Regnery will be building off their strong start with the PE/Fund Banking initiative. Darleen Gillespie, with her regional managers Denise Goetting and Sherri Schulz, along with Greg Dittrich in Government Banking,

will be making sure we have the deposits we need to fund all these great opportunities. John Shepardson and Gabe Dragos, together with the great Compliance and BSA teams, will be making sure our new digital banking initiatives are successful. While we embark on these newer initiatives, our more traditional community bank teams, led by Marianne DeSimone, Joseph Calabro (PA Regional President) and David DiStefano (NJ Regional President) continue to build on our strong core competencies. Of course, these are just a few of the many, many great team members

we have in our core banking businesses and our back office. Many banks our size struggle to attract great talent. I feel we are an outlier in this regard.

Predicting M&A can be difficult. I do suspect that we will see a rebound in deal-making over the next few years.

We will continue to look for opportunities, but our strategy won't change. M&A, for us, is a nice to have, not a need to have. I hope that we can find another opportunity to continue to create franchise value through thoughtful acquisitions, but we are prepared to grow and improve the franchise in either case.

I am sure 2024 will have some new surprises in store. Much like we couldn't have predicted the global pandemic or the banking crisis, our job is to manage the business to withstand these shocks and capitalize when times are good.

I'm hopeful that 2024 will be a year to capitalize. We are well positioned to build on the momentum we created in 2023 and take advantage of the opportunities.

Patrick L. Ryan

President and CEO

SA F E - H A R B O R STAT E M E N T

NOTE: This document 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 Bank's 2023 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.

5

performance overview

TOTAL STOCKHOLDERS' EQUITY			AVERAGE TOTAL EARNING ASSETS
AT 12-31, $ IN MILLIONS									FOR YEAR ENDED 12-31, $ IN BILLIONS
2018	194.8								2018	1.54
2019	226.4						2019	1.76
2020	238.1					2020	2.12
2021	266.7					2021	2.30
2022	289.6			2022	2.47
2023							370.9		2023	3.02
5-YEAR CAGR = 13.7%									5-YEAR CAGR = 14.4%

TOTAL LOANS

AT 12-31, $ IN BILLIONS

2018	1.46
2019	1.72
2020	2.05
2021	2.11
2022	2.34

TOTAL DEPOSITS

AT 12-31, $ IN BILLIONS

2018	1.39
2019	1.64
2020	1.90
2021	2.11
2022	2.29

2023	3.02	2023	2.97
5-YEAR CAGR = 15.6%		5-YEAR CAGR = 16.4%

BOOK VALUE PER SHARE

AT 12-31

2018	$10.43
2019	$11.07
2020	$12.08
2021	$13.69
2022	$14.89
2023	$14.85
5-YEAR CAGR = 7.3%

TOTAL NET REVENUE1

FOR YEAR ENDED 12-31, $ IN MILLIONS

2018	58.4
2019	62.4
2020	75.9
2021	89.6
2022	97.5
2023	103.8
5-YEAR CAGR = 12.2%

1 Total net revenue is the sum of net interest income and non-interest income

6

selected financial information

IN THOUSANDS, EXCEPT COMMON SHARE DATA

AT OR FOR THE YEAR ENDED DECEMBER 31,		2023		2018	5-YR CAGR
Selected Balance Sheet Data
Total assets	$	3,609,326	$	1,71 1,159	16. 1 %
Total loans		3,021,501		1,462,516	15.6%
Allowance for loan losses		42,397		15,135	22.9%
Total deposits		2,967,569		1,393,204	16.3%
Total borrowings		179,140		93,351	13.9%
Total subordinated debentures		55,261		21,856	20.4%
Total stockholders' equity		370,899		194,836	13.7%
Average total assets		3,177,571		1,617,614	14.5%
Average stockholders' equity		327,291		181,273	12.5%
Selected Income Statement Data
Interest and dividend income	$	174,017	$	72,738	19. 1 %
Interest expense		69,501		17,794	31.3%
Net interest income		104,516		54,944	13.7%
Provision for loan losses		7,943		3,447	18.2%
Net interest income after provision
for loan losses		96,573		51,497	13.4%
Non-interest income		(71 5)		3,452	NM
Non-interest expense		68,700		33,314	15.6%
Income before income taxes		27,158		21,635	4.7%
Income tax expense		6,261		4,046	9. 1 %
Net income	$	20,897	$	17,589	3.5%
Common Share Data
Diluted earnings per share	$	0.95	$	0.95	0.0%
Adjusted diluted earnings per share1		1.64		0.95	1 1.5%
Cash dividends paid		0.24		0. 1 2	14.9%
Diluted weighted average
common shares outstanding		22,072,616		18,571,537	3.5%
Book value per common share		14.85		10.43	7.3%
Common shares outstanding		24,968,122		18,676,056	6.0%
Selected Performance Ratios
Return on average assets		0.66%		1.09%
Adjusted return on average assets1		1 . 1 4%		1.1 0%
Return on average equity		6.38%		9.70%
Adjusted return on average equity1		1 1.06%		9.78%
Net interest margin, tax equivalent2		3.47%		3.57%
Efficiency ratio		55.32%		56. 1 3%
1
Selected Asset Quality Ratios
Nonperforming loans to total loans3		0.82%		0.44%
Allowance for loan losses
to nonperforming loans		170.52%		237.90%
Net loan charge offs to average loans		0.06%		0.00%
Capital Ratios
Stockholders' equity to assets		10.28%		1 1 .39%
Tier 1 leverage capital		9. 1 2%		10.40%
Common equity tier 1 capital		9.22%		10.85%
Tier 1 risk-based capital		9.22%		10.85%
Total risk-based capital		1 1.58%		13.1 2%

1

2

3

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 2023 calculation.
The tax equivalent adjustment is calculated using a federal income tax rate of 21% in 2018 and 2023.
Nonperforming loans consist of nonaccrual loans (including nonaccrual purchased credit deteriorated loans)	7
and loans past due 90 days or more and still accruing.

deposit growth momentum

Deposits grew over 29% in 2023, driven by the Malvern acquisition, which brought approximately 19,000 new customers and over $672 million in new deposits. We experienced a mix shift toward interest-bearing balances because of both the acquired balances and the interest rate environment, which drove significant industry-wide increases in funding costs. Total deposits measured $3.0 billion at 2023 year-end, representing compound annual growth of over 16% over the last five years, since 2018.

Through productive acquisition growth and organic deposit gathering efforts, we have increased our average deposits per branch to $114 million at the end of 2023, compared to $82 million just five years ago. Our deposit mix improved over this period as well, shifting away from costly time deposits.

Deposit initiatives are at the forefront of our growth strategy, and our sales teams have been reoriented to prioritize deposit generation. Goals and incentive compensation targets are aligned with this strategic priority to encourage optimal funding costs, solid net interest margin, fee revenue growth, and most importantly, deeper customer relationships.

Focus on commercial deposit growth

has led to an improved deposit mix.

TOTAL DEPOSITS

16.3% 5-YEAR CAGR

2018

$1.39 billion AT 12-31-18

16%

We continue to explore new opportunities and sources for deposit growth. This includes ongoing evaluation of new locations and new branches.

12%

44%

It also includes seeking new deposit sources, such as through online deposit account opening - an exciting new product we are thrilled to offer in 2024. We also successfully launched our new ZSuite Escrow product, which

will allow our customers to simplify their management of escrow and escrow subaccounting activities.

We have a disciplined approach to new business: we work to attract profitable relationships, which means relationships that bring in deposits, have adequate pricing, and, ideally, present the opportunity to benefit from fee-based services. Our commercial clients fit this profile well, and we continued to leverage the successful growth of our commercial deposit and cash management area to generate increased fees and increased services used per customer.

Growing non-interest bearing funding, managing our cost of deposits, and organic growth will continue to be key drivers of deposit momentum and net interest margin management in 2024.

28%

2023

$2.97 billion AT 12-31-23

17%

21% 22%

40%

Non-interest bearing demand deposits

Interest bearing demand deposits

Money market and savings deposits

Time deposits

8