First Bank FRBA Q2 2025 Earnings Preview Downside Ahead on Year-Over-Year Earnings Decline

Forward-Looking Analysis
First Bank (FRBA) is poised for a mixed second quarter of 2025, with analysts predicting a year-over-year decline in earnings despite an anticipated increase in revenue. The consensus expectation is for earnings per share (EPS) to see a slight decline, contrasting with a forecasted growth of 8.9% per annum in EPS over the longer term. Revenue for the quarter is projected to reach $34.15 million. Despite these short-term challenges, First Bank's earnings and revenue are expected to grow by 8.4% and 8.1% annually, respectively, indicating a positive long-term outlook. The company’s strategic actions, including the recent merger with Southern States Bancshares, are anticipated to strengthen its earnings profile and enhance liquidity. As First Bank navigates through these immediate challenges, the focus remains on balancing growth and maintaining credit quality, which could support a stronger performance in the subsequent quarters.

Historical Performance Review
In the first quarter of 2025, First Bank reported a net income of $9.38 million, with an earnings per share (EPS) of $0.37, which missed expectations by $0.02. The revenue for the quarter stood at $34.06 million, marking a year-over-year increase of 5.52% and exceeding estimates by $546.67K. The net interest margin expanded by 11 basis points to 3.65% as deposit funding costs fell by 14 basis points. Overall, the first quarter showed a mixed financial performance with a slight miss in EPS but a positive revenue growth.

Additional News
First Bank has announced the successful completion of its merger with Southern States Bancshares as of July 1, 2025. This merger is expected to expand the bank's size and reach, adding approximately $2.87 billion in total assets, $2.32 billion in loans, and $2.47 billion in deposits. The merger is anticipated to enhance First Bank's ability to serve its customers and communities with greater impact. The integration process is underway, with system conversions expected to be completed in the third quarter of 2025. This strategic move is aligned with First Bank's goal of enhancing value and performance, positioning it for stronger returns in the future.

Summary & Outlook
First Bank’s overall financial health appears stable despite the expected short-term earnings decline, with a positive outlook for long-term growth driven by strategic initiatives like the Southern States merger. The merger is a key growth catalyst, expected to significantly enhance First Bank’s scale and operational capabilities. Despite the anticipated challenges in the upcoming earnings report, the bank's solid capital position and strategic repositioning efforts, including balance sheet enhancements and improved liquidity, foster a bullish stance on its future prospects. As First Bank continues to integrate its recent acquisition, the focus remains on leveraging its expanded scale to drive shareholder value and seize growth opportunities.