First Bank’s Q1 Surge: A Banking Stock to Watch in 2025?

Investors, gather ‘round! Let’s dissect the latest earnings from First Bank, which just announced a $39.4 million net income for Q1 2025—a 42% jump from the same quarter last year. The numbers are popping, but what does this mean for your portfolio? Let’s break it down.

First off, EPS hit $0.84, outpacing the prior quarter’s $0.81 and nearly doubling from Q1 2024’s $0.59. That’s a strong beat, and the adjusted EPS held steady at $0.85, proving the bank’s core earnings are rock-solid. But here’s the kicker: this isn’t just a one-trick pony.

The Loan Machine Is Firing on All Cylinders

First Bank’s loan portfolio grew to $9.77 billion, a 7.14% annualized surge. Commercial and industrial loans jumped by $91.8 million, and consumer lending added $67.9 million. Even better? They’re not chasing risky deals. Nonperforming loans dipped to 0.79% of total loans, and net charge-offs are a minuscule 0.14% annually. That’s a credit quality win in a world where many banks are sweating defaults.

But wait—there’s a snag. Construction loans dropped by $65.4 million, and nonperforming loans did edge up slightly from Q1 2024. Still, CEO Chris Holmes is right: this bank is “well-positioned” with $11.2 billion in deposits and a 15.2% risk-based capital ratio, giving it a cushion to weather economic bumps.

The Net Interest Margin (NIM) Playbook

Here’s where banks make or break their profits: NIM rose to 3.55%, up from 3.42% a year ago. How’d they do it? By slashing the rate on deposits—down 24 basis points to 3.13%—while only modestly lowering loan yields. That’s smart management in a low-rate environment.

The Dark Cloud in the Efficiency Ratio

Now, let’s not ignore the elephant in the room. Noninterest expenses jumped to $79.55 million, driven by higher performance-based compensation. The core efficiency ratio ticked up to 59.9%, which is still manageable but a red flag if it keeps climbing. Cramer’s rule: banks should aim for below 60% to stay competitive. They’re there—but just barely.

The Wildcard: Mergers and Buybacks

First Bank isn’t just resting on its laurels. It’s buying back shares—208,680 this quarter—and announced a merger with Southern States Bancshares, Inc.. That deal could boost its footprint in key markets like Asheville, NC, where new branches are already humming. Mergers are risky, but with $12.8% CET1 capital, they’ve got the ammo to make it work.

Bottom Line: A Buy with an Eye on the Horizon

First Bank is no slouch. With loan growth, a strong NIM, and solid credit metrics, it’s a standout in a sector that’s been shaky. The merger and buybacks signal confidence, and shares could rally if they execute smoothly.

But investors, don’t get complacent. Keep an eye on noninterest expenses and the efficiency ratio. If that creeps above 60%, I’ll be the first to sound the alarm. For now? This is a buy, especially if you’re looking for a bank with growth legs in a turbulent economy.

Final Verdict: First Bank’s Q1 results are a bullish signal. The merger and loan momentum could push shares higher—just don’t lose sight of the cost controls. Stay tuned!

—Cramer’s Bottom Line—
FRST is a hold for now, but if that efficiency ratio stays under 60% and the merger clicks, it’s a strong buy. Keep watching those loan pipelines!