1st Colonial Bancorp, Inc. Reports Third Quarter 2025 Results

Third Quarter Highlights include:

• Net income was $1.1 million for the third quarter of 2025, a decrease of $691 thousand, or 38% from the same quarter in 2024 and a $1.1 million, or 49%, increase from the second quarter of 2025.
• Core net income (non-GAAP¹) for the third quarter of 2025 was $1.9 million, a $53 thousand increase from $1.8 million for the same quarter in 2024 and a $172 thousand increase from $1.7 million for the second quarter of 2025.
• Net interest margin for the quarter ended September 30, 2025 was 3.35% compared to 3.16% for the same period in 2024 and 3.19% for the quarter ended June 30, 2025.
• Book value per share increased 8% to $17.56 as of September 30, 2025 from $16.20 as of December 31, 2024.
• Leverage ratio for the Bank was 10.27% as of September 30, 2025 from 10.68% as of December 31, 2024.
• On September 24, 2025, 1^st Colonial Bancorp, Inc. (“1^st Colonial”) and Mid Penn Bancorp, Inc. (“Mid Penn”) announced that the companies entered into an Agreement and Plan of Merger pursuant to which Mid Penn will acquire 1st Colonial in a cash and stock transaction valued at approximately $101 million. The transaction is expected to close late in the first quarter or early in the second quarter of 2026, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by 1st Colonial shareholders. As a result, 1^st Colonial realized merger-related expenses of $744 thousand in the third quarter 2025.

1st Colonial Bancorp, Inc. (OTCPK: FCOB), holding company of 1^st Colonial Community Bank, today reported net income of $1.1 million, or $0.23 per diluted share, for the three months ended September 30, 2025, compared to net income of $1.8 million, or $0.37 per diluted share, for the three months ended September 30, 2024. For the nine months ended September 30, 2025, net income was $5.1 million, or $1.02 per diluted share, compared to $5.4 million, or $1.09 per diluted share, for the same period in 2024. Excluding the impact of $744 thousand in merger-related expenses, net income and diluted earnings per share, respectively, were $1.9 million (non-GAAP¹) and $0.38 (non-GAAP¹) for the quarter ended September 30, 2025.

Robert White, President and Chief Executive Officer, commented, “For the third quarter, our team continued to remain focused on delivering exceptional service to our clients, as we continue to grow and expand our customer base. Due to our strong capital ratios and our confidence in our asset quality we redeemed the Company’s $10.75 million in subordinated debt on the initial call date of September 1, 2025. We look forward to the strategic merger with Mid Penn Bancorp, Inc. in 2026 for it will create tremendous opportunity for our Team Members, valued customers, our dedicated shareholders and the communities we serve.”

(Non-GAAP¹) Non-GAAP financial measures referenced in this release are used by management to measure performance in operating the business that management believes enhances investors’ ability to better understand the underlying business performance and trends related to core business activities. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the non-GAAP reconciliation tables in this release. Non-GAAP measures should not be used as a substitute for the closest comparable GAAP measurements.

Operating Results

Net Interest Income

The net interest margin was 3.35% for the third quarter of 2025 compared to 3.16% for the third quarter of 2024. The average yield on interest-earning assets decreased ten basis points from 5.51% for the quarter ended September 30, 2024 to 5.41% for the quarter ended September 30, 2025. The average rate paid on average interest-bearing liabilities decreased 33 basis points from 2.80% for the third quarter of 2024 to 2.47% for the third quarter of 2025. When compared to the second quarter of 2025, the third quarter 2025 net interest margin increased 16 basis points from 3.19% and was mainly related to a nine basis point improvement in the average yield on interest earning assets coupled with a six basis point reduction in the average rate paid on interest-bearing liabilities.

Net interest margin was 3.27% for the nine months ended September 30, 2025 compared to 3.19% for the nine months ended September 30, 2024. The average yield on interest-earning assets declined 12 basis points while the average rate paid on average interest-bearing liabilities decreased 25 basis points.

Net interest income for the three months ended September 30, 2025 and 2024 was $6.8 million and $6.2 million, respectively. The $628 thousand increase in net interest income was primarily attributable to a $315 thousand increase in interest income earned on average interest-earning investment securities coupled with a $401 thousand reduction in interest paid on average interest-bearing liabilities. For the third quarter of 2025, average investment securities grew $24.6 million from $111.1 million for the third quarter of 2024. Additionally, average loan balances increased $5.6 million to $629.4 million from $623.8 million for the third quarter of 2024. Average commercial and home equity loans and lines outstanding increased $11.6 million and $19.1 million, respectively. Average outstanding constructions loans, which have higher interest rates based on the Wall Street Journal (WSJ) prime rate, declined $12.2 million for the third quarter of 2025 when compared to the same period in 2024 and residential mortgages decreased $11.9 million over the same period. When compared to the second quarter of 2025, net interest income grew $279 thousand.

For the first nine months of 2025, net interest income grew $1.5 million, or 8.4%, to $19.9 million from $18.4 million for the same period in 2024. The growth in net interest income was primarily attributable to a $1.0 million increase in interest income earned on average interest-earning assets coupled with a $504 thousand decreased in the interest paid on average interest-bearing liabilities. During the first nine months of 2025, the average balances of investment securities and interest-earning cash grew $32.1 million and $17.9 million, respectively, and contributed an additional $1.2 million and $446 thousand, respectively, to interest income. Average loan balances declined $5.3 million, of which $8.6 million was related to construction loans, and resulted in a $873 thousand reduction in interest income.

For the third quarter of 2025, interest expense was $4.2 million, a decrease of $401 thousand from $4.6 million for the third quarter of 2024. For the third quarter of 2025, average interest-bearing deposits increased $30.7 million, or 4.9%, from the third quarter of 2024. Average savings and money market balances accounts increased $45.7 million from $73.0 million for the third quarter of 2024 and contributed an additional $439 thousand in interest expense. Average brokered CDs declined $24.8 million from $103.0 million for the third quarter of 2024 and led to a $512 thousand reduction in interest expense. Average borrowings declined $9.8 million and led to a $164 thousand reduction in interest expense. Contributing to the reduction in average borrowings was the redemption of the $10.75 million in subordinated debt on the first call date of September 1, 2025. When compared to the second quarter of 2025, total interest expense decreased $164 thousand from $4.3 million. The average rate paid on interest bearing liabilities was 2.47% for the third quarter of 2025 compared to 2.53% for the second quarter of 2025 and 2.80% for the third quarter of 2024.

For nine months ended September 30, 2025, interest expense was $12.7 million, a decrease of $504 thousand from $13.2 million for the same period in 2024. Average interest-bearing deposits increased $52.9 million, or 8.5%, from $620.0 million for the comparable 2024 period and contributed an additional $186 thousand in interest expense. Average interest checking and savings and money market accounts grew $25.1 million and $40.9 million, respectively, while average brokered CD balances decreased $11.6 million. Average borrowings decreased $15.7 million, or 56.7%, during the first three quarters of 2025 compared to the same period in 2024 and resulted in a $690 thousand reduction in interest expense. The average rate paid on interest bearing liabilities was 2.47% for the nine months ended September 30, 2025 compared to 2.72% for the same period in 2024.

Provision for Credit Losses

For the three months ended September 30, 2025, the provision for credit losses was $185 thousand and included $139 thousand for loans and $46 thousand for off balance sheet (“OBS”) commitments, which are the Bank’s commitments to fund loans. For the three months ended September 30, 2024, the provision for credit losses was $82 thousand and included $120 thousand for loans and a provision release of $38 thousand for OBS commitments. For the third quarter of 2025 net charge-offs were $56 thousand compared to $291 thousand for the third quarter of 2024. We recorded net charge-offs of $183 thousand in the second quarter of 2025.

For the nine months ended September 30, 2025, the provision for credit losses was $619 thousand and included $452 thousand for loans and $167 thousand for OBS commitments. For the nine months ended September 30, 2024, the provision for credit losses was a net release of $202 thousand and included $140 thousand for loans and $62 thousand for OBS commitments. Net charge-offs were $212 thousand for the first three quarters of 2025 compared to $383 thousand for the same period in 2024.

Noninterest Income

Noninterest income for the third quarter of 2025 was $1.3 million, an increase of $321 thousand, or 34%, from $944 thousand for the third quarter of 2024. Income from the origination and sales of residential mortgages grew $228 thousand, or 35%, from the third quarter in 2024. In the third quarter of 2025, we sold $32.5 million in residential mortgages compared to $27.4 million in the third quarter of 2024. When compared to the second quarter of 2025, noninterest income for the third quarter of 2025 decreased $533 thousand, or 30%, from $1.8 million. In the second quarter of 2025, the company received payroll tax refunds for the Employee Retention Credit in the amount of $779 thousand related to refund claims filed for certain quarters in 2020 and 2021. The refund was recorded in other noninterest income.

For the nine months ended September 30, 2025, noninterest income was $3.9 million, an increase of $1.3 million, or 49.7%, from $2.6 million for the same period in 2024. As previously cited, we received payroll tax refunds for the Employee Retention Credit in the amount of $779 thousand in the second quarter of 2025. Income from the origination and sales of residential mortgages grew $348 thousand, or 19.7%, from $1.8 million for the first three quarters of 2024 to $2.1 million for the first three quarters in 2025. For the nine months ended September 30, 2025, we sold 97% of the mortgage loan originations compared to 90% of the mortgage loan originations for the same period in 2024.

Noninterest Expense

For the three months ended September 30, 2025, noninterest expense was $6.3 million and increased $1.6 million, or 34.8%, from $4.6 million for the comparable period in 2024. Merger-related expenses totaled $744 thousand and included due diligence costs, legal expenses and investment banking expenses related to delivery of a fairness opinion to its Board of Directors. Salaries and benefits and data processing expenses increased $594 thousand and $73 thousand in accordance with our 2025 operating budget as we continue to make investments in the Company. When compared to the second quarter of 2025, non-interest expense for the third quarter of 2025 increased $935 thousand and was mainly due to merger-related expenses.

Noninterest expense was $16.8 million for the nine months ended September 30, 2025 and increased $2.6 million, or 18.2%, from $14.2 million for the same period in 2024. Salaries and benefits grew $1.1 million, or 13.5%, mainly due to an increase in personnel, annual merit increases and a rise in costs associated with medical benefits. As previously cited, merger related expenses were $747 thousand. Data processing, lending, and marketing expenses increased $220 thousand, $222 thousand and $65 thousand, respectively. The increase in data processing expenses was mostly related to technological enhancements. The increase in marketing expenses associated with the execution of our marketing strategy has led to the growth in new deposit customer relationships.

Income Taxes

For the three and nine months ended September 30, 2025, income tax expenses were $477 thousand and $1.4 million, respectively, compared to $556 thousand and $1.6 million for the three and nine months ended September 30, 2024, respectively.

Financial Condition

Assets

As of September 30, 2025, total assets were $843.1 million and decreased $33.9 million, or 3.9%, from $877.1 million as of June 30, 2025. Total assets grew $1.6 million from $841.5 million as of December 31, 2024. Proceeds from called U.S. government agency bonds were utilized for the redemption of maturing brokered CDs.

Total loans were $623.6 million as of September 30, 2025, a decrease of $4.9 million from $628.5 million as of June 30, 2025. Total loans increased $1.1 million from $622.5 million as of December 31, 2024. Home equity loans and lines of credit, commercial and commercial real estate loans grew $17.9 million, $6.9 million and $5.2 million during the first nine months of 2025. Construction loans and residential mortgages declined $15.7 million and $13.9 million, respectively. As of September 30, 2025, loans held for sale were $3.3 million and decreased $6.9 million and $3.0 million from $10.2 million as of June 30, 2025 and $6.3 million as of December 31, 2024, respectively.

Investments decreased $27.8 million, or 18.3%, to $124.2 million as of September 30, 2025 from $152.0 million as of June 30, 2025. Investments were $118.7 million as of December 31, 2024. During the first three quarters of 2025, we purchased $51.5 million in callable U.S. government agency bonds and received $54 million in called and maturity payments. Additionally, we made a net investment of $13.1 million in short-term municipal bond anticipation notes. During the nine months ended September 30, 2025, we received $4.1 million in principal paydowns on mortgage-backed securities and $2.75 million in subordinated debt was called. The unrealized loss in the investment portfolio was $2.4 million as of September 30, 2025 compared to $3.0 million as of June 30, 2025 and $4.3 million as of December 31, 2024. Cash and cash equivalents increased $5.8 million from $57.4 million as of June 30, 2025 to $63.1 million as of September 30, 2025. Cash and cash equivalents were $67.4 million as of December 31, 2024.

Asset Quality

As of September 30, 2025, the allowance for credit losses (“ACL”) for loans was $9.2 million, or 1.47%, of total loans compared to $9.1 million, or 1.45%, of total loans as of June 30, 2025. The ACL was $9.0 million, or 1.44%, of total loans as of December 31, 2024. As of September 30, 2025, non-performing assets were $4.3 million compared to $4.1 million as of June 30, 2025 and $1.7 million as of December 31, 2024. The ACL to non-accrual loans was 228.8% as of September 30, 2025 compared to 233.9% as of June 30, 2025 and 616.7% as of December 31, 2024. As of September 30, 2025, the ratio of non-performing assets to total assets was 0.52% compared to 0.47% as of June 30, 2025 and 0.20% as of December 31, 2024.

Liabilities

Total deposits were $722.1 million as of September 30, 2025, a decrease of $21.4 million, or 2.9%, from $743.5 million as of June 30, 2025. As of September 30, 2025, total deposits declined $25.6 million, or 3.4%, from $747.7 million as of December 31, 2024. Municipal interest checking accounts, interest checking deposits, and money market accounts decreased $37.2 million, $13.5 million, and $2.7 million, respectively, while savings accounts and retail CDs increased $31.3 million and $5.6 million. Brokered CDs decreased $9.0 million. The decline in municipal balances is due to the cyclical nature of these balances and was expected.

As of September 30, 2025, short-term borrowings were $30.5 million and decreased $4.5 million from June, 2025 and increased $30.5 million from December 31, 2024. The increase in short-term borrowings was to supplement funding requirements.

Due to our strong capital ratios and our confidence in our asset quality we redeemed the Company’s $10.75 million in subordinated debt on the initial call date of September 1, 2025. The subordinated debt coupon was scheduled to reprice at an interest rate that exceeded 11% from the initial fixed coupon of 7%.

Shareholder’s Equity

Total shareholders’ equity was $84.3 million as of September 30, 2025, compared to $82.6 million as of June 30, 2025, and $78.2 million as of December 31, 2024. The accumulated comprehensive loss improved to $1.8 million as of September 30, 2025 compared to $2.2 million as of June 30, 2025 and $3.1 million as of December 31, 2024. The accumulated comprehensive loss is related to the unrealized loss in our investment portfolio. Tangible book value per share increased $0.35 from $17.21 as of June 30, 2025 to $17.56 as of September 30, 2025. Tangible book value per share was $16.20 as of December 31, 2024.

Agreement and Plan of Merger with Mid Penn

On September 24, 2025, 1st Colonial and Mid Penn (NASDAQ: MBP) announced that the companies entered into an Agreement and Plan of Merger pursuant to which Mid Penn will acquire 1st Colonial in a cash and stock transaction valued at approximately $101 million (the “Transaction”). The Transaction is expected to close late in the first quarter or early in the second quarter of 2026, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by 1st Colonial shareholders. Mr. Robert White commented, “We are thrilled to be joining forces with Mid Penn, a recognized regional banking leader. The combination will allow for an expansion of our product and service offering, as well as bring greater financial capacity for continued investment in our company and our communities.”

Consolidated Financial Statements and Other Highlights:

GAAP to NON-GAAP RECONCILIATION

(Unaudited, dollars in thousands, except per share data)

Net income, annualized return on average assets, and annualized return on average equity excluding non-recurring income and expenses are determined by methods other than in accordance with generally accepted accounting principles (“GAAP”) and are considered non-GAAP financial measures. Pre-merger related expenses and the employee retention credit are excluded from core earnings. Management believes that these non-GAAP financial measures are useful because they enhance the ability of management and investors to evaluate and compare our core operating results from period to period.

About 1^st Colonial Bancorp, Inc.

1st Colonial Bancorp, Inc, is a Pennsylvania corporation headquartered in Mount Laurel, New Jersey, and the parent company of 1st Colonial Community Bank (the “Bank”). The Bank provides a range of business and consumer financial services, placing emphasis on customer service and access to decision makers. Headquartered in Collingswood, New Jersey, the Bank has branches in Westville, New Jersey and Limerick, Pennsylvania. The bank also has administrative offices in Mount Laurel, New Jersey. To learn more, call (877) 785-8550 or visit www.1stcolonial.com.

“Safe Harbor” Statement

In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to 1st Colonial Bancorp, Inc.’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance, and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond 1st Colonial Bancorp, Inc.’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation, the impact of the ongoing pandemic and government responses thereto; on the U.S. economy, including the markets in which we operate; actions that we and our customers take in response to these factors and the effects such actions have on our operations, products, services and customer relationships; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; escalating tariff and other trade policies and the resulting impacts on market volatility and global trade; and the effects of inflation, a potential recession, among others, could cause 1st Colonial Bancorp, Inc.’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements.

In addition, factors relating to the Transaction that could cause or contribute to actual results differing materially from those contained or implied in forward-looking statements or historical performance include, in addition to those factors identified elsewhere in this press release the occurrence of any event, change or other circumstances that could give rise to the right of Mid Penn or 1st Colonial to terminate the definitive merger agreement governing the terms and conditions of the Transaction; the outcome of any legal proceedings that may be instituted against Mid Penn or 1st Colonial; the possibility that revenue or expense synergies or the other expected benefits of the Transaction may not fully materialize or may take longer to realize than expected, or may be more costly to achieve than anticipated, including as a result of the impact of, or problems arising from, the integration of the two companies, the strength of the economy and competitive factors in the areas where Mid Penn and 1st Colonial do business, or other unexpected factors or events; the possibility that the Transaction may not be completed when expected or at all because required regulatory, shareholder or other approvals or other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect Mid Penn or 1st Colonial or the expected benefits of the Transaction); the risk that Mid Penn is unable to successfully and promptly implement its integration strategies; reputational risks and potential adverse reactions from or changes to the relationships with the companies’ customers, employees or other business partners, including resulting from the announcement or the completion of the Transaction; the dilution caused by Mid Penn’s issuance of common stock in connection with the Transaction; diversion of management’s attention and time from ongoing business operations and other opportunities on matters relating to the Transaction; and other factors that may affect the future results of Mid Penn and 1st Colonial, including continued pressures and uncertainties within the banking industry and Mid Penn’s and 1st Colonial’s markets, including changes in interest rates and deposit amounts and composition, adverse developments in the level and direction of loan delinquencies, charge-offs, and estimates of the adequacy of the allowance for loan losses, increased competitive pressures, asset and credit quality deterioration, the impact of proposed or imposed tariffs by the U.S. government or retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers or any recession or slowdown in economic growth particularly in the markets in which Mid Penn or 1st Colonial operate, and legislative, regulatory, and fiscal policy changes and related compliance costs. These factors are not necessarily all of the factors that could cause Mid Penn’s or 1st Colonial’s actual results, performance, or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other unknown or unpredictable factors also could harm Mid Penn’s or 1st Colonial’s results.

1st Colonial Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. 1st Colonial Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by 1st Colonial Bancorp, Inc. or by or on behalf of 1st Colonial Community Bank.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with the Transaction, Mid Penn will file with the SEC a Registration Statement on Form S-4 to register the shares of Mid Penn common stock to be issued in connection with the Transaction that will include a proxy statement of 1st Colonial and a prospectus of Mid Penn (the “proxy statement/prospectus”), as well as other relevant documents concerning the Transaction. The definitive proxy statement/prospectus will be sent to the shareholders of 1st Colonial seeking their approval of the Transaction and other related matters. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF 1ST COLONIAL ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN THEY BECOME AVAILABLE AND EACH OTHER RELEVANT DOCUMENT FILED WITH THE SEC BY MID PENN IN CONNECTION WITH THE TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Shareholders will be able to obtain a free copy of the definitive proxy statement/prospectus, as well as other filings containing information about the Transaction, Mid Penn and 1st Colonial, without charge, at the SEC’s website, http://www.sec.gov. Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to 1st Colonial’s Investor Relations via email at IR@1stcolonial.com or by telephone to Mary Kay Shea, EVP and Chief Financial Officer at (856) 885-2391.

PARTICIPANTS IN THE SOLICITATION

Mid Penn, 1st Colonial and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of 1st Colonial in connection with the Transaction under the rules of the SEC. Information regarding Mid Penn’s directors and executive officers is available in Mid Penn’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 13, 2025 and in Mid Penn’s definitive proxy statement relating to its 2025 Annual Meeting of Shareholders, which was filed with the SEC on March 28, 2025; and other documents filed by Mid Penn with the SEC. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus relating to the Transaction. Free copies of this proxy statement/prospectus may be obtained as described in the preceding paragraph.

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