Companies

Princeton's Net Interest Margin Widens to 3.86%

The Tip Desk · July 23, 2026 · 3 min read

Net interest income reached $20.0 million in the second quarter as the margin widened 23 basis points to 3.86%.

Princeton Bancorp (BPRN), the holding company for The Bank of Princeton, reported net interest income of $20.0 million for the three months ended June 30, 2026, up $1.2 million from the first quarter, as the net interest margin widened 23 basis points to 3.86%.

Interest expense fell $597 thousand, or 4.9%, and interest income rose $585 thousand, or 1.9%.

Net income was $7.1 million, or $1.04 a share, up $852 thousand, or 13.7%, from $6.2 million, or $0.91 a share, in the first quarter. The company said the increase was primarily due to the $1.2 million rise in net interest income and a $197 thousand larger reversal of credit losses, partially offset by higher non-interest expense and income tax expense.

Against the year-earlier quarter, net interest income also rose $1.2 million and the margin widened 32 basis points. The company attributed the year-over-year interest-expense decline and margin expansion primarily to a $68.8 million drop in average interest-bearing deposits and a 40-basis-point lower cost of funds. Average interest-earning assets declined $46.6 million, led by a $50.4 million drop in average loans and a $39.7 million drop in average securities; the yield on interest-earning assets was 6.10%.

The company recorded a $353 thousand reversal of credit losses, $197 thousand larger than the $156 thousand reversal in the first quarter, versus a $6.96 million provision a year earlier. Allowance coverage of period-end loans was 1.13% at June 30, 2026. Non-performing assets were $16.3 million, down $195 thousand from December 31, 2025, after remaining steady at $16.5 million at March 31.

Total assets were $2.25 billion at June 30, 2026. Net loans declined $44.6 million from December 31, 2025, with commercial real estate down $69.7 million and construction down $15.3 million, partially offset by $25.4 million of home equity and consumer growth and $15.1 million of residential mortgage growth. Cash and cash equivalents fell $69.5 million; investment securities rose $78.9 million.

Total deposits fell $40.5 million, or 2.05%, from December 31, 2025. Certificates of deposit dropped $97.0 million, including an $11 million planned reduction in brokered deposits that the company said was implemented through a pricing structure designed to reduce the cost of funds. Money-market deposits rose $57.1 million and non-interest checking rose $23.2 million. The company said balance-sheet liquidity remained strong.

Non-interest income was $2.4 million, down $15 thousand, or 0.6%, from the first quarter, as other income fell $421 thousand after a $232 thousand equity-investment gain in the prior quarter, while loan fees rose $380 thousand. Non-interest expense was $13.6 million, up $231 thousand, or 1.7%, led by professional fees up $214 thousand and salaries up $128 thousand, offset by occupancy down $140 thousand. The effective tax rate was 22.9%.

Stockholders’ equity was $280 million at June 30, 2026, and the equity-to-assets ratio was 12.4%. Book value was $41.09 a share. President/CEO Edward Dietzler said the quarter reflected continued execution of strategic priorities and the resilience of the franchise.

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