First Bank (FRBA) investor relations material

Executive summary

• Q1 2026 net income was $7.6 million ($0.30 per diluted share), down from $9.4 million ($0.37 per share) in Q1 2025, due to elevated credit costs in the small business portfolio and high loan payoff activity, but management expects profitability to improve as these issues are addressed.

• Return on average assets was 0.79% and return on average equity was 6.89%, both lower year-over-year.

• Tangible book value per share grew 9.9% year-over-year to $15.90, with continued focus on efficient operations and margin strength.

• Proactive measures have been taken to revamp product parameters and sales processes for small business loans, with all known issues charged off or reserved.

• Loan growth in April and a strong pipeline provide optimism for meeting full-year growth targets.

Financial highlights

• Net interest income was $34.0 million, up 6.0% year-over-year, but decreased $2.2 million sequentially due to lower average loan balances and reduced prepayment fees.

• Net interest margin was 3.69%, up from 3.65% a year ago but down from 3.74% in the prior quarter, and remains strong versus peers.

• Non-interest income rose to $2.4 million, up $413,000 year-over-year and from $2.3 million in Q4, mainly from higher gains on loan sales and investment earnings.

• Non-interest expenses were $20.9 million, up 2.7% year-over-year and from $17.1 million in Q4, mainly due to higher salaries, benefits, and the absence of a prior quarter gain on sale of OREO assets.

• Credit loss expense surged to $5.6 million from $1.5 million a year ago, reflecting elevated net charge-offs in the small business portfolio.

• Tax expense was $2.3 million with an effective tax rate of 22.7%.

Outlook and guidance

• Management expects expenses to remain stable for the rest of 2026, with Q1 levels serving as a reasonable run rate.

• Loan and deposit growth are anticipated to strengthen, supporting higher net interest income.

• Net interest margin is expected to remain healthy but could face pressure from deposit competition and a flat yield curve.

• Profitability is projected to improve as credit costs normalize and loan growth accelerates.

• Anticipates future effective tax rate of 24–25%, excluding discrete stock compensation items.