First Bank (FRBA) Stock Forecast & Price Target

First Bank is currently going through a difficult quarter with underperformance in credit, net interest income, and expenses. This has led to a reduction in EPS estimates, but with shares trading at 93% of TBVPS and 8x 2027E EPS, it is an opportunity to re-enter the stock. However, it is important to note that the company has experienced higher net charge-offs in recent periods, which may continue going forward and result in elevated provisioning of around $3 million per quarter until 2027.

First Bank is facing several challenges that may hinder its growth and profitability, including issues within its small business portfolio, which led to elevated net charge-offs and an increase in nonperforming assets. Despite management's confidence and efforts to contain these issues, there is a risk of further credit deterioration, which could result in lower valuations and hinder the bank's ability to grow its earning assets. Additionally, the bank's reliance on higher cost funding sources and potential M&A integration risks could also impact its profitability. As a result, the recommended rating is NEUTRAL with a lowered price target of $16, reflecting a 1.0x projected book value and a 9x estimated EPS for 2027.