First Industrial Realty Trust Maintains Outperform Rating by RBC CapitalFirst Industrial Realty Trust (NYSE: FR) is a leading entity in the real estate investment trust (REIT) sector, focusing on the ownership, operation, and development of industrial properties. On February 9, 2026, RBC Capital upheld its "Outperform" rating for FR, with the stock priced at $59.62. RBC Capital also increased the price target to $66, as reported by StreetInsider.FR's stock is currently valued at $59.62, witnessing a minor d ...

Core Insights - First Bank reported solid profitability metrics in Q4 2025, with a return on average assets (ROAA) of 1.21%, up from 1.10% year-over-year, and return on tangible common equity improving to 12.58% from 11.82% [3] - The bank's net interest margin (NIM) for Q4 was 3.74%, an increase of 20 basis points from Q4 2024, while the full-year NIM was 3.69% compared to 3.57% in 2024 [4] - Despite a quarterly decline in total loans, loans were up $149 million, or approximately 5%, over the last 12 months, with commercial and industrial (C&I) loans leading the growth [2] Loan Production and Payoffs - In 2025, First Bank funded $429 million in new loans, with only 20% of that occurring in Q4, and average loan growth for the year was $267 million [2] - Q4 loan payoffs totaled $135 million, representing 47% of all payoffs for the year, and were primarily driven by investor real estate loans [1][2] Deposit Strategy - Total deposits declined by $21 million in Q4, mainly due to a $27.1 million drop in brokered deposits, as the bank focused on profitable relationships [7] - Time deposits were reduced by $38 million, or 18% annualized, contributing to an 8% decrease in money market and savings balances during the quarter [8] Credit Quality - Credit quality was described as mixed, with core commercial real estate (CRE) delinquency at 0.02% at year-end, while non-performing assets to total assets rose to 46 basis points from 36 basis points [10][12] - The allowance for credit losses increased to 1.38% of total loans from 1.25%, driven by charge-offs in the small business portfolio [12] Expenses and Capital Actions - Non-interest income was $2.3 million in Q4, slightly down from $2.4 million in Q3, while non-interest expenses decreased to $17.1 million from $19.7 million [16][17] - The efficiency ratio was reported at 49.46%, remaining below 60% for the 26th consecutive quarter, and tangible book value per share increased to $15.81, up more than 12% annualized [18] Future Outlook - For 2026, First Bank aims for $200 million in net loan growth, with expectations of contributions from asset-based lending and community banking [20] - The bank plans to continue reducing acquisition accounting accretion and anticipates stable margins while lowering deposit costs [20][22]

Financial Performance & Profitability - EPS grew by 11% year-over-year, reaching $5.47 in 2025 compared to $4.93 in 2024[11] - ROAA was 1.4% and ROAE was 14.1% in 2025[11] - Total deposits increased by 12%, with 2% growth excluding deposits gained from the acquisition[11] - Net interest margin was 3.47% in 2025, slightly down from 3.58% in 2024[11] Loan Portfolio & Asset Quality - Commercial loans increased by 6% including the acquisition, and 2% excluding it[11] - Nonperforming assets to total assets ratio stood at 0.12% at the end of 2025[11] - Net loan charge-offs to average loans were 0.04% in 2025[11] - Floating Rate Commercial Loans accounted for $3,046.8 million, while Fixed Rate Commercial Loans were $871.9 million[108] Capitalization & Shareholder Value - CET1 capital ratio was 11.0% at the end of 2025, up from 10.7% at the end of 2024[11] - Tangible book value per share was $36.78 at the end of 2025, compared to $33.14 at the end of 2024[11] Acquisition & Strategic Initiatives - The acquisition of Eastern Michigan Financial Corporation closed on December 31, 2025[25] - The loan-to-deposit ratio decreased to 91% at YE 2025 from 98% at YE 2024[11,26]

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $20.1 million, or $0.99 per diluted share for Q3 2025, reflecting strong financial results [4] - Return on average assets (ROAA) and return on average equity (ROAE) improved to 132 basis points and 13.31% respectively, both up notably from previous periods [5] - Full-year 2025 guidance for ROAA was revised to exceed 115 basis points, up from 110 basis points, and ROAE to greater than 12%, up from 11.25% [5] Business Line Data and Key Metrics Changes - Loan growth was reported at 1.2%, driven by commercial lending, while total deposits increased by 3.9% [4] - Total commercial loans reached approximately $3 billion, reflecting a 1.6% increase from the previous quarter and an 8.3% increase year-over-year [6] - Consumer indirect loan balances increased by 0.6% from the previous quarter but were down 4.1% year-over-year [8] Market Data and Key Metrics Changes - The company experienced strong commercial growth in upstate New York, particularly in the Syracuse region due to Micron Technologies' investment [8] - Residential lending showed modest growth, with mortgage and home equity applications up 12% and 11% year-over-year respectively [9] Company Strategy and Development Direction - The company aims for profitable organic growth and anticipates raising profitability targets for 2026 [21] - A focus on maintaining a strong balance sheet and managing funding costs is evident, with expectations for incremental margin improvement in 2026 [15][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities ahead, citing strong performance and a healthy pipeline for future growth [21] - The company is preparing for potential rate cuts and expects to manage margins effectively in 2026 [24] Other Important Information - Non-interest income was reported at $12.1 million, up 13.6% from the previous quarter, driven by various revenue streams [16] - The efficiency ratio for the year-to-date was about 58%, indicating strong revenue growth relative to expenses [19] Q&A Session Summary Question: Outlook on margin and potential rate cuts - Management indicated that while margins may see a modest decline in Q4, they expect a recovery in 2026 as new loan production and cost management take effect [24][25] Question: Thoughts on share buyback activity - Management expressed satisfaction with the board's approval of the buyback, viewing it as a means to support share value [26] Question: Loan growth expectations for 2026 - Management conveyed optimism about achieving mid-single-digit growth rates in loans as they build their financial plan for 2026 [27]

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