First Bank Raises Loan Growth Target to $300 Million in 2027
Key Facts
First Bank raised its target for total loan growth to closer to $300 million in 2027, from the $200 million it had targeted over the past few years, the head of lending said on the third-quarter earnings call. The target reflects a shift toward faster credit expansion after loans increased by $50.2 million in the third quarter, equivalent to annual growth of about 6%. The official said the increase was led by lending to commercial and industrial borrowers, owner-occupied commercial real estate and construction projects. He also said commercial and industrial loans, including owner-occupied real estate, accounted for 65% of new business through September 30. He said the bank is focusing on these activities because of their associated deposits and lower turnover.
Management's comments on expansion coincided with final regulatory approval of a share repurchase program, according to the call transcript. The authorization allows the bank to buy up to 1.2 million shares for a total amount not exceeding $24 million and runs through September 2027. These are maximum program limits, not an announcement that purchases have been completed or how many shares have actually been repurchased. The board also announced a 33% increase in the quarterly cash dividend to $0.12 per share. The moves put returning capital to shareholders alongside funding loan growth, without disclosing how much of the authorization will actually be used.
The bank reported net income of $12.2 million, or $0.49 per diluted share, in the third quarter of 2026, compared with $10.9 million and $0.43 per share in the second quarter. The result also exceeded the third quarter of 2025, when the bank reported net income of $11.7 million and diluted earnings of $0.47 per share. The comparison reflects an improvement in earnings on both a quarterly and annual basis, alongside growth in loans and deposits during the quarter. Deposits increased by $43 million, while the bank used excess liquidity to repay $90 million in wholesale borrowings. This use of liquidity points to credit expansion being funded while part of the bank's wholesale borrowings was reduced.
New loans closed and funded during the quarter totaled $124 million. Weighted loan funding in the pipeline reached $363 million on September 30, compared with $326 million in March and $323 million in June. The head of lending said that level was about 12% above the average of the prior two readings, and that he hoped it would support a strong fourth quarter and a good start to 2027. The funding pipeline indicates business that may convert into loans, while the $300 million target remains a management goal rather than an achieved result. The official said, "We hope that leads to a solid fourth quarter and a good start to 2027."
On operating efficiency, the efficiency ratio improved to 52.4% in the third quarter from 54.5% in the second quarter. The bank said this marked the 29th consecutive quarter in which the ratio remained below 60%. The metric compares expenses with revenue and provides a parallel measure of the trajectory of lending growth and earnings improvement during the period. As for profitability in 2027, the chief executive said the bank expects it to continue improving. He added that more than 25% of assets reprice immediately when the Federal Reserve moves, which could support the net interest margin, while noting that deposit rates could face pressure. He said, "We should be able to maintain a stable margin, with some potential improvement."
The bank's stock, FRBA, closed at $18.55 on October 22, 2026, according to EL7 data. The close followed the release of third-quarter results and final regulatory approval of the repurchase program. The data available here do not include the session's high and low prices, so the price cited is limited to the closing level. Management's focus in the coming period is on converting weighted funding in the pipeline into funded loans, with the program running through September 2027. The 2027 target also rests on the expansion described by the head of lending, while profitability expectations remain tied to asset sensitivity and potential pressure on deposit pricing.