First Bank (FRBA) Stock Forecast & Price Target

First Bank is viewed positively because the small business credit issue appears isolated, with elevated NCOs of about 60 bps tied to a relatively small book of less than $100M, while management expects charge-offs to moderate and remain largely reserved. Despite the NPA increase of 20 bps quarter over quarter to 0.66%, the bank still shows strong underlying credit protection through healthy LTV/DSCR and a 1.39% total allowance, supporting confidence in asset quality. Capital flexibility also strengthens the outlook, as completing the remaining $20M buyback could retire about 5% of shares while still leaving a 12.5% TRBC, making repurchases attractive with shares below TBVPS.

First Bank is facing fundamental pressure from a weak 1Q26, where credit costs, net interest income, and expenses all missed expectations, prompting a 20% cut to this year’s EPS estimate and roughly 10% for next year. Asset quality remains a key concern because elevated provisioning tied to small business lending losses and higher net charge-offs could persist, with about $3 million per quarter expected through 2027, while the loan/deposit ratio above 100% and reliance on costly funding sources limit margin flexibility. Although loan growth momentum may improve from the +0.3% L/Q start, NIM still fell to 3.69% and competitive deposit pricing, inconsistent credit performance, and no clear catalyst argue for a negative outlook.