Princeton Bancorp, Inc.

Notes to Consol idated Financial Statements (unaudited)

Note 1 – Summary of Significant Accounting Policies

Organization and Nature of Operations

The Bank of Princeton (the “Bank”) was incorporated on March 5, 2007, under the laws of the State of New Jersey and is a New Jersey state-chartered banking institution. The Bank was granted its bank charter on April 17,2007, commenced operations on April 23, 2007, and is a full-service bank providing personal and business lending and deposit services. As a state-chartered bank, the Bank is subject to regulation by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation (“FDIC”). The area served by the Bank, through its 36 branches, is generally an area within an approximate 50-mile radius of Princeton, NJ, including parts of Burlington, Camden, Gloucester, Hunterdon, Mercer, Middlesex, Ocean, and Somerset Counties in New Jersey, and additional areas in portions of Philadelphia, Montgomery, and Bucks Counties in Pennsylvania. The Bank also has two retail branches and conducts loan origination activities in select areas of New York.

The Bank offers traditional retail banking services, one-to-four-family residential mortgage loans, multi-family and commercial mortgage loans, construction loans, commercial business loans and consumer loans, including home equity loans and lines of credit.

On January 10, 2023, Princeton Bancorp, Inc., a Pennsylvania corporation formed by the Bank (the “Company”), acquired all the outstanding stock of the Bank in a corporate reorganization. As a result, the Bank became the sole direct subsidiary of the Company, the Company became the holding company for the Bank and the stockholders of the Bank became stockholders of the Company. As of June 30, 2026, the Company and its subsidiaries had 238 total employees and 237 full-time equivalent employees.

Basis of Financial Statement Presentation

The unaudited consolidated financial statements include the accounts of the Company, its wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiaries: Bayard Lane, LLC, Bayard Properties, LLC, 112 Fifth Avenue, LLC, TBOP Delaware Investment Company and TBOP REIT, Inc. All significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission and the FDIC. Accordingly, they do not include all the information and disclosures required by GAAP for annual financial statements. In management’s opinion, the unaudited consolidated financial statements contain all adjustments, which include normal and recurring adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods presented. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses and evaluation of the potential impairment of goodwill.

Management believes that the allowance for credit losses is adequate as of June 30, 2026. While management uses current information to recognize losses on loans, future additions to the allowance for credit losses may be necessary based on changes in economic conditions in the market area or other factors.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to effect certain changes that result in additions to the allowance based on their judgments about information available to them at the time of their examinations.

Note 1 – Summary of Significant Accounting Policies (continued)

Segment Reporting

The Company has determined that all of its banking divisions and subsidiaries meet the aggregation criteria of Accounting Standards Codification (ASC) 280, Segment Reporting, as its current operating model is structured whereby banking divisions and subsidiaries serve a similar customer base utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the Company’s Chief Executive Officer, who has been identified as the chief operating decision maker (“CODM”).

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company’s consolidated statements of income. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of income.

Reclassifications

Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year’s presentation.

Recent Accounting Pronouncements Not Yet Adopted

ASU 2023-06, “Disclosure Improvements” amends disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The effective dates will depend, in part, on whether an entity is already subject to the SEC’s current disclosure requirements. This ASU is not expected to have a material impact on the Company’s consolidated financial statements.

ASU 2024-03, “Disaggregation of Income Statement Expenses,” requires the disclosure of further disaggregated detail of specific expense categories in the financial statement notes.. The amendments are effective for fiscal years beginning after December 15, 2026, are applied prospectively, and early adoption is permitted. The Company is currently evaluating the impact and does not expect adoption to have a material impact on its consolidated financial statements.

ASU 2025-08, “Financial Instruments—Credit Losses: Purchased Loans,” expands the gross‑up approach for the allowance for credit losses to certain purchased seasoned loans. The amendments are effective for fiscal years beginning after December 15, 2026, are applied prospectively, and early adoption is permitted. The Company is currently evaluating the impact and does not expect adoption to have a material impact on its consolidated financial statements.

Note 2 – Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares outstanding for the period adjusted to include the effect of outstanding stock options, if dilutive, using the treasury stock method. Shares issued during any period are weighted for the portion of the period they were outstanding.

Note 2 – Earnings Per Share (concluded)

The following schedule presents earnings per share data for thethree and six months ended June 30, 2026 and 2025 (in thousands, except per share data):

Restricted stock units and options to purchase 150,354 shares of common stock at a weighted average exercise price of $32.17 were included in the computation of diluted earnings per share for thethree and six months ended June 30, 2026. There wereno antidilutive shares to be excluded from the computation of diluted earnings per share at June 30, 2026.

Restricted stock units and options to purchase 210,698 shares of common stock at a weighted average exercise price of $26.02 were included in the computation of diluted earnings per share for thethree and six months ended June 30, 2025. There wereno antidilutive shares to be excluded from the computation of diluted earnings per share at June 30, 2025.

Note 3 – Investment Securities

The following summarizes the amortized cost and fair value of securities available-for-sale at June 30, 2026 and December 31, 2025 with gross unrealized gains and losses therein:

Note 3 – Investment Securities (continued)

The unrealized losses, categorized by the length of time in a continuous loss position, and the fair value of related securities available-for-sale at June 30, 2026 and December 31, 2025 are as follows:

Note 3 – Investment Securities (concluded)

The amortized cost and fair value of securities available-for-sale at June 30, 2026 by contractual maturity are shown below. Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:

The Company uses a defined methodology for allowance for credit losses on its investment securities available-for-sale. The Company didnot have an allowance for credit losses on its investment securities available-for-sale as of June 30, 2026 or 2025.

The Company’s securities primarily consist of the following types of instruments; U.S. guaranteed mortgage-backed securities, U.S. guaranteed agency bonds, state and political subdivision issued bonds, mortgage related securities guaranteed by the SBA and U.S. treasury notes. We believe it is reasonable to expect that the securities with a credit guarantee of the U.S. government will have a zero-credit loss. Therefore, no reserve was recorded for U.S. guaranteed securities or bonds at June 30, 2026. The state and political subdivision securities carry a minimum investment rating of A by either Moody’s or Standard and Poor’s. Some of the smaller municipalities also have insurance to cover the Company in the event of default. Therefore, the Company did not project a credit loss and no reserve was recorded as of June 30, 2026.

At June 30, 2026, the Company’s available-for-sale securities portfolio consisted of approximately 279 securities, of which 134 available-for-sale securities were in an unrealized loss position for more than twelve months and 51 available-for-sale securities were in an unrealized loss position for less than twelve months. The available-for-sale securities in an unrealized loss position for more than twelve months consisted of 81 municipal securities aggregating $25.1 million with a loss of $2.3 million,48 mortgage-backed securities-GSE aggregating $28.8 million with a loss of $5.2 million,4 agency securities aggregating $5.4 million with a loss of $787 thousand and 1 SBA security aggregating $218 thousand with a loss of $1 thousand. The Company does not intend to sell these securities, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. Unrealized losses primarily relate to interest rate fluctuations and not credit concerns.

Accrued interest receivable on investment securities represents interest earned but not yet collected on the Company’s available-for-sale and held-to-maturity securities portfolios. Accrued interest receivable related to investments, at June 30, 2026 and December 31, 2025 was $1.5 million and $1.1 million, respectively. Accrued interest receivable is generally written off when collection of the underlying interest is deemed uncollectible, which typically occurs when the related security is placed on nonaccrual status. When a security is placed on nonaccrual, previously accrued but uncollected interest is reversed from interest income. There wereno investment securities on nonaccrual status andno write-offs of accrued interest receivable for the three-month period ended June 30, 2026 and for the year ended December 31, 2025.

There areno securities pledged as of June 30, 2026 and December 31, 2025.

Note 4 – Loans Receivable

Loans receivable, net at June 30, 2026 and December 31, 2025 were comprised of the following:

The Company purchased $33.7 million in residential loans and $27.1 million in consumer loans during thesix months ended June 30, 2026. The Company purchased $108.2 million in residential loans and $8.7 million in consumer loans during the twelve months ended December 31, 2025.

The Company uses the discounted cash flow ("DCF") methodology in determining the allowance for credit losses (“ACL”), which projects future losses, based on historical and peer loss data. Qualitative adjustments to the DCF methodology include and consider changes in national, regional, and local economic and business conditions, an assessment of the lending environment, including underwriting standards, and other factors affecting credit quality. There were no significant changes to the Company’s ACL methodology for the quarter ended June 30, 2026.

The following table presents the components of the allowance for credit losses:

The following table presents nonaccrual loans by segment of the loan portfolio as of June 30, 2026 and December 31, 2025:

The calculation of the allowance for credit losses does not include any accrued interest receivable. The Company’s policy is to write off any interest not collected after 90 days past due, or earlier, when the ability to collect principal and interest according to the contractual terms is in doubt. During the six months ended June 30, 2026, the Company wrote off $508 thousand in accrued interest receivable for loans, compared to $675 thousand for thesix months ended June 30, 2025. Accrued interest receivable related to loans, at June 30, 2026 and December 31, 2025, was $6.1 million and $6.7 million, respectively. The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loan receivables by the length of time a recorded payment is past due. The following table presents the segments of the loan portfolio, summarized by the past due status as of June 30, 2026:

The following table presents the segments of the loan portfolio summarized by the past due status as of December 31, 2025:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis and assigns one of the following ratings: pass, special mention, substandard and doubtful. The Company engages a third party to review its assessment on a semiannual basis. The Company classifies residential and consumer loans as either performing or nonperforming based on payment status.

The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of June 30, 2026. Gross charge-offs are included for the six months ended June 30, 2026.

The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of December 31, 2025. Gross charge-offs are included for the year ended December 31, 2025.

The following table presents the allowance for credit losses on loans receivable at and for thethree months ended June 30, 2026:

The reversal of credit losses on the Consolidated Statement of Income is $353 thousand comprising of a decrease of $314 thousand to the allowance for credit losses on loans and a $39 thousand decrease to the reserve for unfunded liabilities.

The following table presents the allowance for credit losses on loans receivable at and for the six months ended June 30, 2026:

The reversal of credit losses on the Consolidated Statement of Income is $509 thousand comprising of a decrease of $604 thousand to the allowance for credit losses on loans and a $95 thousand increase to the reserve for unfunded liabilities.

The following table presents the allowance for credit losses on loans receivable at and for the three months ended June 30, 2025:

The provision for credit losses on the Consolidated Statement of Income is $7.0 million comprising of an increase of $6.9 million to the allowance for credit losses on loans and a $7 thousand increase to the reserve for unfunded liabilities.

The following table presents the allowance for credit losses on loans receivable at and for the six months ended June 30, 2025:

The provision for credit losses on the Consolidated Statement of Income is $7.2 million comprising of an increase of $7.1 million to the allowance for credit losses on loans and a $50 thousand increase to the reserve for unfunded liabilities.

Note 4 – Loans Receivable (concluded)

As of June 30, 2026, the Company hadnine loans totaling $16.3 million that were individually analyzed for potential credit loss. Eight of the loans aggregating $16.0 million were individually evaluated collateral dependent loans andone loan for $325 thousand used present value of future cash flows to determine if a write down was needed. As of December 31, 2025, the Company hadnine loans totaling $16.6 million that were individually analyzed for potential credit loss. Eight of the loans aggregating $16.2 million were individually evaluated collateral dependent loans andone loan for $394 thousand used present value of future cash flows to determine if a write down was needed.

Occasionally, the Company will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. Typically, such concessions may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, extension of additional credit based on receipt of adequate collateral, or a deferment or reduction of payments (principal or interest) which materially alters the Company’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination. When principal forgiveness is provided, the amount forgiven is charged off against the allowance for credit losses on loans. There wereno modifications to borrowers with financial difficulties and no previously modified loans that defaulted during thesix months ended June 30, 2026, and the twelve-months ended December 31, 2025.

Note 5 – Deposits

The components of deposits were as follows:

Note 6 – Borrowings

The Company hadno outstanding borrowings at June 30, 2026 and December 31, 2025.

Note 7 – Fair Value Measurements and Disclosures

The Company follows the guidance on fair value measurements now codified as FASB ASC Topic 820, “Fair Value Measurement” (“Topic 820”). Fair value measurements are not adjusted for transaction costs. Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

Management uses its best judgment in estimating the fair value of the Company’s financial instruments, however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in sales transactions on the dates indicated. The estimated fair value amounts have been measured as of their respective period-end and have not been re-evaluated or updated for the purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each period-end.

The fair value measurement hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2026 were as follows:

Note 7 – Fair Value Measurements and Disclosures (continued)

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy, used at December 31, 2025 were as follows:

There wereno liabilities measured at fair value on a recurring basis, at June 30, 2026 or December 31, 2025.

Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

There wereno assets measured at fair value on a nonrecurring basis at June 30, 2026 or December 31, 2025.

There wereno transfers between fair value hierarchy levels during thesix months ended June 30, 2026 or for the year ended December 31, 2025. The Company’s policy is to recognize transfers between levels as of the end of the reporting period.

The following methods and assumptions were used by the Company in estimating fair value disclosures:

Investment Securities

The fair value of securities available-for-sale (carried at fair value) and held-to-maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. Level 2 debt securities are valued by a third-party pricing service commonly used in the banking industry, and not adjusted by management. Level 2 fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, live trading levels, trade execution date, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things.

Individual evaluated loans

Individual loans carried at fair value are those loans in which the Company has measured for a reserve and are generally based on the fair value of the related loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds, discounted for estimated selling costs or other factors the Company determines will impact collection of proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

Note 7 – Fair Value Measurements and Disclosures (continued)

The carrying amounts and estimated fair value of financial instruments at June 30, 2026 are as follows:

The carrying amounts and estimated fair value of financial instruments at December 31, 2025 are as follows:

The fair value of cash and cash equivalents, restricted bank stock, accrued interest receivable, equity method investments, and accrued interest payable are measured at the Company’s carrying amount.

The fair value of loans, deposits and borrowings are measured on a discounted cash flow basis using current rates and terms.

Mortgage servicing rights are carried at estimated fair value. The estimated fair value is obtained through independent third-party valuations.

Note 7 – Fair Value Measurements and Disclosures (concluded)

Limitations

The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors.

These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, the foregoing estimates may not reflect the actual amount that could be realized if all or substantially all the financial instruments were offered for sale. This is due to the fact that no market exists for a sizable portion of the loan, deposit and off-balance sheet instruments.

In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be practical due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.

Note 8 – Leases

Leases (ASC Topic 842) establishes a right of use model that requires a lessee to record a right of use asset (“ROU”) and a lease liability for all leases with terms longer than 12 months. The Company is obligated under 30 operating lease agreements for 28 branches and its corporate offices with terms extending through 2042. The Company’s lease agreements include options to renew at the Company’s discretion. The extensions are reasonably certain to be exercised, therefore they were considered in the calculations of the ROU asset and lease liability.

The following table represents the classification of the Company’s right of use asset and lease liability.

As of June 30, 2026, the weighted-average remaining lease terms for operating leases was 9.8 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.55%. The Company used Federal Home Loan Bank (“FHLB”) fixed rate advances or at the time the lease was placed in service for the term most closely aligning with remaining lease term.

Future minimum payments under operating leases with terms longer than 12 months are as follows at June 30, 2026 (in thousands):

Note 9 – Goodwill and Core Deposit Intangible

In accordance with ASC 805, the Company has recorded goodwill and core deposit intangible (“CDI”) assets related to prior acquisitions. CDI assets are amortized over a 10-year period using the sum-of-the-years’-digits method. In accordance with GAAP, goodwill is evaluated for impairment annually, or more frequently if events or changes in circumstances indicate potential impairment. The Company performs its annual goodwill impairment assessment as of May 31. Management has determined that the Company’s community banking operations constitute a single reporting unit, which is also the Company’s only operating segment.

ASC Topic 350-20 guidance requires an annual review of the fair value of a Reporting Unit that has goodwill in order to determine if it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a Reporting Unit is less than its carrying amount, including goodwill. A qualitative factor test can be performed to determine whether it is necessary to perform a quantitative goodwill impairment test. If this qualitative test determines it is not more likely than not (less than 50% probability) that the fair value of the Reporting Unit is less than the Carrying Value, then the Company does not have to perform a quantitative test and goodwill can be considered not impaired. After performing the qualitative factor test, the result was the Company determined that a quantitative test would be performed at May 31, 2026, primarily due to the Company’s common stock trading at 80.0% of book value. This was a possible indication that a goodwill impairment may exist. The result of this quantitative test indicates that fair value is greater than book value and that no Reporting Unit goodwill impairment exists. Management noted no events or changes in circumstances subsequent to the May 31, 2026 annual impairment assessment that would indicate a potential impairment of goodwill.

The changes in the carrying amount of goodwill and core deposit intangible assets are summarized as follows:

As of June 30, 2026, the remaining current fiscal year and future fiscal periods amortization for the core deposit intangible is (in thousands):

Note 10 – Subsequent Events

On July 22, 2026, the Board of Directors declared a cash dividend of $0.35 per share of common stock to shareholders of record on August 5, 2026, payable on August 28, 2026.

Note 11 – Risk and Uncertainties

The occurrence of events which adversely affect the global, national, and regional economies may have a negative impact on our business. Like other financial institutions, our business relies upon the ability and willingness of our customers to transact business with us, including banking, borrowing and other financial transactions. A strong and stable economy at each of the local, federal, and global levels is often a critical component of consumer confidence and typically correlates positively with our customers’ ability and willingness to transact certain types of business with us. Local and global events outside of our control which disrupt the New Jersey, Pennsylvania, New York, United States and/or global economy may therefore negatively impact our business and financial condition.

Government economic programs intended to backstop and bolster the economy through the pandemic have ended, and the nation’s economy has entered an inflationary phase. The Consumer Price Index has risen to levels not experienced since the 1980s while the labor market remains very tight, contributing additional inflationary pressure. To address the inflation problem, the Federal Reserve has reversed course on its previously accommodative monetary policies and modestly decreased short-term interest rates. These actions are intended to slow overall economic activity and risk entering the economy into a recession.

Regional conflicts around the world, including between Russia and Ukraine, tensions involving Iran and Israel, and broad instability in the Middle East, have exacerbated supply chain disruptions, contributed to volatility in energy and commodity markets, and increased geopolitical and economic uncertainty. Escalation of these conflicts, including potential disruptions to global energy supplies and international trade routes, could adversely affect financial markets, inflation, interest rates, and overall economic conditions. Any or all could have negative downstream effects on the Company’s operating results, the extent of which is indeterminable at this time.