Business Context and Reporting Period
Company: First Seacoast Bancorp, Inc. (FSEA)
Reporting Period: Fiscal Year Ended December 31, 2025
Business Overview: A savings and loan holding company operating primarily through its subsidiary, First Seacoast Bank. The bank serves the Seacoast region of New Hampshire and southern Maine with five full-service branches. Its business model focuses on taking deposits and investing in residential and commercial real estate loans, commercial and industrial loans, and investment securities.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Assets | $599.3 million | $580.8 million |
| Total Loans (Gross) | $419.5 million | $439.0 million |
| Total Deposits | $470.8 million | $454.2 million |
| Net Interest Income | $13.7 million | $11.9 million |
| Net Interest Margin | 2.33% | 2.09% |
| Non-Interest Income | $1.8 million | $3.9 million |
| Non-Interest Expense | $16.9 million | $15.9 million |
| Net Loss | $(0.8) million | $(0.5) million |
| Loss Per Share (Basic/Diluted) | $(0.23) | $(0.12) |
| Stockholders' Equity | $63.5 million | $62.1 million |
| Book Value Per Share | $13.54 | $12.97 |
Capital Ratios (Bank Only): The Bank is categorized as "well capitalized." Total Capital to Risk-Weighted Assets was 15.60% (2025) vs. 15.55% (2024). Tier 1 Capital to Risk-Weighted Assets was 14.56% (2025) vs. 14.52% (2024).
Material Changes vs. Prior Period
- Net Loss Increase: Net loss increased to $0.8 million from $0.5 million in 2024. This was driven by a $2.2 million decrease in non-interest income and a $1.1 million increase in non-interest expenses, partially offset by a $1.8 million increase in net interest income.
- Non-Interest Income Decline: The significant drop in non-interest income was primarily due to the absence of a one-time $2.5 million gain on the sale of land and buildings recognized in 2024.
- Expense Growth: Non-interest expenses rose 6.7%, driven by increases in salaries and benefits ($368k), equity compensation ($296k), and occupancy expenses ($414k) related to a 2024 sale-leaseback transaction.
- Loan Portfolio Contraction: Total loans decreased by $19.5 million (4.5%), with declines across residential, commercial real estate, and acquisition/development categories, offset slightly by growth in consumer loans.
- Deposit Growth: Total deposits increased by $16.6 million (3.7%), primarily due to a $16.2 million increase in time deposits.
- Asset Quality: Non-performing loans increased from $0 in 2024 to $0.5 million (0.11% of total loans) in 2025, consisting of two residential mortgages and one consumer loan.
Guidance, Outlook, and Risks
Management Commentary: Management continues to focus on growing the balance sheet organically, increasing commercial real estate and industrial lending, and maintaining strong asset quality. The company executed a sale-leaseback transaction in 2024 to optimize its real estate footprint, which increased occupancy expenses in 2025. The company repurchased 494,379 shares of common stock under its authorized program as of year-end.
Risks and Contingencies:
- Interest Rate Risk: The company is exposed to interest rate risk. A 200 basis point increase in rates is projected to decrease the economic value of equity by 22.8%, exceeding the policy limit of 20.0%.
- Credit Risk: While asset quality remains strong, the allowance for credit losses (ACL) is sensitive to macroeconomic forecasts. Management uses a one-year forecast period similar to 2014-2016 conditions.
- Cybersecurity: The company faces risks from cyber-attacks, though it maintains a layered defensive strategy and incident response plan. No material cybersecurity incidents were reported.
- Regulatory Capital: The company is subject to comprehensive regulation by the OCC and Federal Reserve. It currently meets all "well capitalized" requirements.
Investor Verification Checklist
- Non-Recurring Income: Verify the impact of the $2.5 million gain on sale of land/buildings in 2024 on year-over-year comparisons of non-interest income.
- Expense Trajectory: Monitor the run-rate of occupancy expenses following the 2024 sale-leaseback transaction and its impact on future profitability.
- Asset Quality Trends: Review the specific details of the new non-performing loans ($478k total) and the adequacy of the ACL coverage (716.95% of non-performing loans).
- Interest Rate Sensitivity: Assess the company's hedging strategy and capital adequacy given the projected 22.8% decline in economic value of equity under a +200bps rate shock scenario.
- Stock Repurchases: Confirm the remaining authorization under the stock repurchase program ($242,186 shares remaining as of Dec 31, 2025) and the company's commitment to capital return.