First Bancorp stock price target raised to $53 from $50 at KBW

Keefe, Bruyette & Woods raised its price target on First Bancorp (FBNC) to $53.00 from $50.00, maintaining an Outperform rating, following the bank's strong second-quarter 2025 operating results which surpassed expectations due to improved net interest income and provisioning. The firm highlighted a 7 basis point increase in net interest margin to 3.33%, robust 6% linked-quarter annualized loan growth, and a strong 14.6% CET1 ratio, leading to increased 2025 and 2026 EPS estimates. These factors, alongside a recent dividend increase and positive analyst outlooks, position FBNC for continued organic growth in the Southeast.

Analysis

First Bancorp (FBNC) has received a positive catalyst with Keefe, Bruyette & Woods raising its price target to $53.00 and reiterating an Outperform rating, driven by second-quarter 2025 operating results that surpassed consensus expectations. The outperformance was primarily fueled by stronger-than-expected net interest income, which led to a 7 basis point sequential increase in net interest margin to 3.33%. This fundamental strength is complemented by robust balance sheet growth, evidenced by a 6% linked-quarter annualized increase in loans. The bank's capital position is a significant highlight, with a Common Equity Tier 1 (CET1) ratio of 14.6%, which KBW identifies as a key lever for future earnings per share growth. Consequently, KBW has upwardly revised its EPS estimates to $3.75 for 2025 and $4.10 for 2026, projecting a 5-6% organic growth rate for 2025. This bullish outlook is further supported by a recent dividend increase to $0.23 per share. While Piper Sandler initiated coverage with a more cautious Neutral rating and a $48 price target, it also acknowledged the bank's potential for organic growth, M&A, and consistent credit performance, providing a balanced but generally constructive view on the company's prospects within the Southeast regional banking sector.

Key Decisions for Investors

• Given the strong earnings beat, expanding net interest margin, and upwardly revised EPS estimates, investors may view the current environment as favorable for FBNC, aligning with KBW's Outperform rating.
• Monitor subsequent quarters for continued momentum in loan growth and NIM expansion, as these are the core metrics underpinning the positive analyst revisions and the primary drivers of the investment thesis.
• Consider the strong 14.6% CET1 ratio as a source of strategic optionality, which could translate into catalysts such as M&A or enhanced capital returns beyond the recent dividend hike.
• Note the valuation divergence between KBW's $53 target and Piper Sandler's $48 target, which provides a potential range for assessing entry or exit points while factoring in the more cautious Neutral stance from Piper Sandler.