First Bank Posts 3.69% Margin, $2.4M Non-Interest Income, $50M Loan Growth
First Bank’s Q1 2026 net interest margin held at 3.69% while efficiency ratio stayed below 60% for a 27th straight quarter, but elevated small business credit costs weighed on earnings. Non-interest income rose to $2.4 million and April saw $50 million in net loan growth, indicating early Q2 momentum.
1. Q1 Earnings and Credit Costs
First Bank reported Q1 earnings below expectations as elevated small business credit costs reduced net income; management allocated $2 million in specific reserves and slowed new production to stabilize delinquencies, which have now fallen below $100 million.
2. Efficiency and Income Trends
The bank maintained an efficiency ratio under 60% for the 27th consecutive quarter and delivered a net interest margin of 3.69%, while non-interest income increased to $2.4 million, driven by higher earnings from small business investment funds.
3. Small Business Portfolio Stress
Portfolio stress stemmed from smaller-ticket lines of credit and term loans outside SBA programs, prompting process revamps and tightened underwriting; management reports delinquencies are stabilizing after addressing economic volatility and marketing aggressiveness.
4. Loan Growth and Capital Strategy
April saw net loan growth of $50 million, and the bank plans opportunistic share buybacks supported by strong capital levels; executives also project stable margins despite deposit pricing pressure and are exploring AI investments to offset technology costs.