First Bank Sees Brighter Skies Ahead Despite Disappointing Q1 Results
Despite a disappointing first quarter earnings report, First Bank is optimistic about its future prospects. The company's President and CEO, Patrick Ryan, took the stage during the Q1 2026 earnings call to address concerns surrounding the bank's performance.
In a effort to reassure investors, Ryan explained that elevated credit costs and high loan payoff activity were primarily responsible for the disappointing results. However, he emphasized that the company has taken proactive measures to clean up its small business portfolio and manage the associated risks.
According to Ryan, the company's product parameters and sales processes have been revamped since last summer, with all known issues in the portfolio either being charged off in full or specific reserves established. This move aims to mitigate potential losses and ensure that credit quality remains within manageable levels.
The net interest margin was also a point of concern for the bank, as it declined slightly due to reduced purchase accounting accretion income and heightened deposit competition. Nevertheless, First Bank's Chief Financial Officer, Andrew Hibshman, noted that the company's 3.69% net interest margin still compares favorably to its peers.
One positive takeaway from the earnings call was the news of strong loan growth in April, with net loan growth up $50 million through mid-April. This puts the bank on track to meet its loan growth goals for the year, despite a slower start.
First Bank's capital levels remain strong, providing a buffer against potential risks and giving the company significant dry powder for share buybacks should attractive opportunities arise.
In conclusion, while First Bank's Q1 results may have been underwhelming, its leadership is confident that profitability will return to stronger levels in 2026. As Ryan noted, "we believe we'll see a return to strong balance sheet growth as we move forward, as payoffs normalize."
