First Bank (FRBA) Q3 2026 Earnings Call: Margin Expands, 2027 Loan Target Rises

First Bank (NASDAQ: FRBA) reported stronger third-quarter 2026 profitability as net interest margin expanded, loans and deposits grew, and operating efficiency improved. Management also raised the quarterly dividend, authorized a new share repurchase program and outlined a higher loan growth target for 2027.

Key Takeaways

• Net income was $12.2 million, or $0.49 per diluted share, with diluted EPS increasing $0.06, or 12.5%, from the prior quarter. Return on average assets reached 1.18%.
• Tax-equivalent net interest margin expanded 6 basis points sequentially to 3.74%, supported by higher loan yields, disciplined deposit pricing and balance-sheet optimization.
• Loans increased $50.2 million, or approximately 6% annualized, while deposits rose $43 million, or approximately 5% annualized.
• The efficiency ratio improved to 52.4% from 54.5% in the second quarter. Noninterest expense was $20.3 million, equal to 1.97% of average assets.
• The Board raised the quarterly dividend by 33% to $0.12 per share and authorized repurchases of up to 1.2 million shares, with an aggregate value of up to $24 million, through September 2027.
• Management is targeting 2027 loan growth closer to $300 million, up from the approximately $200 million annual target used in recent years.

Core Financial Data

Business and Operating Performance

Commercial lending drove balance-sheet growth. C&I, owner-occupied commercial real estate and construction lending led the quarter’s loan expansion. C&I loans represented 22.5% of total loans, compared with 21.9% one year earlier.

First Bank closed and funded $124 million of new loans during the quarter, while loan payoffs moderated to $53 million. C&I loans, including owner-occupied real estate, accounted for 65% of new business through September 30. Investor real estate represented approximately 30%, with the remainder in consumer lending.

Probable funding in the loan pipeline reached $363 million at September 30, up about 12% from the average of the March and June quarter-end levels. Management said opportunities were spread across regional lending, SBA, private equity, asset-based lending and investor real estate.

Funding actions included repaying $90 million of wholesale borrowings, reducing brokered deposits by $44 million and purchasing approximately $57 million of low-risk investment securities that offered higher yields than cash.

Average noninterest-bearing deposits increased $32 million during the quarter, although period-end balances declined $48.7 million from June 30. Management attributed part of the point-to-point decline to normal fluctuations while also noting increased pricing pressure.

Credit costs remained concentrated in Business Express. Approximately 95% of roughly $8.5 million in year-to-date charge-offs came from that portfolio, while charge-offs outside Business Express were close to zero. Management reported fewer new issues and improving delinquencies in October. After quarter-end, First Bank also received a $5.5 million paydown on one problem loan, while a $9.5 million senior living loan participation was expected by management to be repaid in full later in the fourth quarter.

Management Outlook

Management expects loan and deposit growth to support net interest income and believes the net interest margin can remain stable, with potential upside. First Bank is slightly asset sensitive, and more than 25% of assets reprice immediately when the Federal Reserve changes rates. However, management cautioned that higher deposit costs could offset part of the benefit.

For 2027, management is targeting total loan growth closer to $300 million, compared with the approximately $200 million annual target of recent years. The larger pipeline and additional investor real estate capacity underpin that objective.

The company aims to reduce noninterest expense as a percentage of average assets from 1.97% to 1.90%, potentially around mid-2027, subject to continued expense restraint and asset growth. Longer term, management said a range of 1.80% to 1.90% could be achievable, depending on investment opportunities.

First Bank expects its effective tax rate to remain at or below 25%. Management also expects SBA loan sale activity to support higher gains, although it does not anticipate a material near-term change in total noninterest income.

Risks and Areas to Watch

• Deposit competition has intensified following the recent increase in rates. Management expects interest-bearing deposit costs to rise and noninterest-bearing balances to remain under pressure.
• Acquisition accounting accretion is expected to decline over time, creating a headwind for net interest margin.
• Business Express remains the main source of credit losses. Management expects losses to moderate but said the timing and pace of improvement remain difficult to predict.
• Further rate increases could delay new commercial real estate projects or lead borrowers to reassess project economics, although management had not observed a significant pullback at the time of the call.
• The 2027 expense ratio and loan growth goals depend on both disciplined cost control and successful conversion of the commercial loan pipeline.

Analyst Q&A Highlights

On deposits, management said C&I relationships are generating additional deposits, while retail promotions in CDs and more liquid products are being used selectively. Pricing remains difficult, but the company expects attractive loan spreads to help offset higher funding costs.

On margin sensitivity, management said First Bank should benefit initially from higher rates because a larger proportion of assets than liabilities reprices immediately. Balance-sheet actions taken late in the quarter—including reducing higher-cost borrowings and brokered deposits—also support management’s expectation for a stable margin with possible upside.

Management indicated that recent new loan pricing was generally in the high-6% to 7% range. The quarterly weighted average cited for new originations was approximately 6.90%, with most loans priced at spreads of more than 200 basis points over the five-year Treasury or Federal Home Loan Bank benchmark.

Regarding Business Express, management said tighter underwriting and renewal standards have been in place since problems emerged. It believes the segment could return to profitability if annualized credit costs normalize to approximately 2% to 3%.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Hello, everyone. Thank you for joining us, and welcome to the First Bank Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Patrick Ryan, President and CEO. Patrick, please go ahead.

Patrick Ryan

Thank you. I'd like to welcome everyone today to First Bank's Third Quarter 2026 Earnings Call. I am joined by Andrew Hibshman, our Chief Financial Officer; and Peter Cahill, our Chief Lending Officer. Before we begin, Andrew will read the safe harbor statement.

Andrew Hibshman

The following discussion may contain forward-looking statements concerning the financial condition, results of operations and business of First Bank. We caution that such statements are subject to a number of uncertainties, and actual results could differ materially. And therefore, you should not place undue reliance on any forward-looking statements we make. We may not update any forward-looking statements we make today for future events or developments. Information about risks and uncertainties are described under Item 1A Risk Factors in our annual report on Form 10-K for the year ended December 31, 2025, filed with the FDIC. Pat, back to you.

Patrick Ryan

Thanks, Andrew. In the third quarter, we saw continued improvement. Our balance sheet growth continued at a healthy pace, including loans, which were up $50 million during the quarter, and deposits, which increased $43 million during the quarter, leaving us ahead of plan for deposit growth so far this year. Our margin improved nicely to 3.74%, driving our return on average assets back up to 1.18%. Noninterest expense came in at $20.3 million, and our noninterest expense to average assets ratio came down to 1.97%, working towards our goal of 1.90%. Our pre-provision return on average assets came in at 1.79%, an increase of 8 basis points compared to the prior quarter. I wanted to highlight some additional strategic considerations before I turn it over to Andrew and Peter to provide some additional details.

First, I want to point out that our strong capital position gives us significant flexibility, and we intend to pull several levers to optimize our results moving forward. We started by announcing an increase to our quarterly dividend, moving it up to $0.12 per share, a 33% increase. We also announced our new buyback plan, which we intend to use to take advantage of market opportunities as we move forward through the end of this year and into next year. And we also see opportunities to leverage our capital for increased organic growth as our middle market commercial lending businesses gain momentum, and we have additional investor real estate capacity, which Peter will discuss later.

Some earnings tailwinds should help drive continued improved profitability. Specifically, we are modestly asset sensitive, which could help if rates move higher. We have a relatively small investment portfolio, which minimizes our risk for AOCI degradation if rates do move higher. Our expense containment initiatives should help drive efficiency even lower as we move forward. Improved growth rates will help drive efficiency and profitability, and our healthy level of ACL, coupled with improving credit metrics, should create opportunities as well. In summary, we think we're in a good position to finish the year strong and the prospects for even better profitability in 2027 look good. At this time, I'd like to turn it over to Andrew to discuss some additional details of our financial results. Andrew?

Andrew Hibshman

Thanks, Pat. For the 3 months ended September 30, 2026, we recorded net income of $12.2 million or $0.49 per diluted share, which translates to 1.18% return on average assets. Strong net interest income growth and continued operating discipline drove improvement to our bottom line with diluted earnings per share increasing $0.06 or about 12.5% on a linked quarter basis. Net interest income increased $2 million or 5.6% compared to the linked quarter and increased $1.2 million or 3.4% compared to the third quarter of last year. Compared to the linked quarter, net interest income increased primarily due to growth in average earning assets, higher loan yields, disciplined deposit pricing and continued balance sheet optimization.

Loan yields increased 15 basis points linked quarter to 6.48%, while our total cost of deposits increased only 5 basis points to 2.47% -- as a result, our tax equivalent net interest margin expanded 6 basis points to 3.74%. We continue to expect acquisition accounting accretion to decline over time and the competitive environment for deposits remains challenging. These are margin headwinds. However, we have also -- we also continue to see opportunities to grow higher-yielding commercial relationships and optimize our funding and balance sheet mix. We successfully put that strategy into action this quarter by using excess liquidity to pay down $90 million in wholesale borrowings. We've reduced brokered deposits by $44 million and purchased approximately $57 million of low-risk investment securities, offering higher yields than cash.

With these changes, we still have a well-balanced asset and liability position, and we believe continued loan and deposit growth should support net interest income growth regardless of what happens with rates. We're pleased with our loan and deposit growth during the quarter. Loans grew $50.2 million or approximately 6% annualized, led by C&I, owner-occupied commercial real estate and construction lending. Our high-yielding C&I portfolio grew to comprise 22.5% of total loans at the end of Q3 compared to 21.9% a year ago. Credit costs and metrics were generally stable during the quarter. Provision expense was $2.2 million, essentially unchanged from the linked quarter. We did see slightly higher net charge-offs of $1.9 million compared to $1.6 million in the second quarter, and those charge-offs again primarily reflect activity in our Business Express portfolio. This portfolio continues to run down, and we expect any future losses will moderate from recent quarters. We are not seeing any meaningful signs of stress in our other loan segments.

Nonperforming assets rose slightly to $35.7 million during the quarter. However, since quarter end, NPAs have been reduced, and we have seen improvement in some early credit indicators, such as slightly lower delinquencies in our Business Express portfolio so far in October. Our allowance for credit losses remains essentially stable at 1.37% of total loans and represented approximately 132% of nonperforming loans. We believe our reserve coverage ratio remains strong. Our loan growth was supported by another strong quarter of deposit generation with total deposits increasing $43 million or approximately 5% annualized. Continuing to grow deposits while controlling our overall cost of deposits and improving our overall funding profile is a primary focus for us.

During the quarter, we continued to onboard new relationships while expanding existing client relationships. Total deposits increased $43 million or $87 million if you exclude the $44 million decline in brokered deposits, and our cost of deposits rose by just 5 basis points. We saw a point-to-point decline in noninterest-bearing deposits of $48.7 million from June 30 through September 30. However, average noninterest-bearing deposits increased $32 million during the quarter. Some of the point-to-point decline was due to normal fluctuations. However, we are seeing increased pricing pressure with the recent run-up in rates, and we expect this will have an impact on our cost of interest-bearing deposits and put pressure on our noninterest-bearing balances. We remain focused on striking the appropriate balance between growth and pricing discipline. Our teams are incented to generate core profitably based relationship-based deposits, and we expect our efforts will continue to generate meaningful opportunities across our footprint.

Looking ahead, our commercial deposit pipelines remain healthy, and we are using select promos to drive new personal customers to the bank. While we expect heightened industry competition will pressure deposit pricing, we believe our diversified funding base positions us well to support future loan growth while prudently managing funding costs. Noninterest income was $2 million for the third quarter of 2026 compared to $2.1 million in the linked second quarter. We are seeing a nice pipeline of SBA loan sale activity, which should lead to increased gains on loan sales. However, noninterest income continues to be a small portion of our revenue, and we do not expect to see any material changes in the short term. Noninterest expense was $20.3 million for the third quarter, modestly higher than the second quarter and primarily attributable to salaries and employee benefits. The increase in salaries and benefits was primarily driven by 1 additional day during the quarter, increased staff due to our summer intern program and a slight increase in incentive comp due to the stronger performance in Q3.

Despite the increase, we continue to demonstrate favorable operating leverage. Our efficiency ratio improved to 52.4% from 54.5% in the second quarter and marked our 29th consecutive quarter operating below 60%. We believe our efficiency continues to be a significant differentiator for our franchise. We remain highly focused on expense management and have demonstrated a track record of disciplined cost control. Tax expense totaled $4.0 million during the quarter with an effective tax rate of approximately 25%. Consistent with our prior guidance, we continue to anticipate being able to keep our effective tax rate at or below 25%. Our capital ratios remained strong, and capital generation was another highlight of the quarter. Tangible book value per share increased to $16.59 from $16.27 at June 30, representing an annual growth of nearly 8%.

Consistent with our confidence in earnings performance and capital generation, our Board approved a 33% increase in the quarterly dividend. We also received final regulatory approval for a new share repurchase program, authorizing the repurchase of up to 1.2 million shares with an aggregate value of up to $24 million, which will run through September 2027. Our disciplined capital management strategies, including maintaining a relatively modest dividend compared to peers, executing measured stock buybacks and emphasizing more profitable growth has positioned us with significant capital optionality. Going forward, we expect to continue driving shareholder value through a combination of strong asset and core earnings growth, a healthy cash dividend and opportunistic share repurchases. At this time, I'll turn it over to Peter Cahill, our Chief Lending Officer, for his remarks. Peter?

Peter Cahill

Thanks, Andrew. As Pat and Andrew mentioned, we had a good quarter in lending, where loans were up $50 million, which is right on our growth plan for the year. We continue to see good new business. New loans closed and funded during the quarter totaled $124 million, and we had the benefit in the third quarter of a more normalized level of loan payoffs. We had $53 million of loan payoffs this quarter, which is below the average we had in the first half of the year. Final period-end numbers are also impacted by regular principal amortization and fluctuations in line of credit usage.

As the earnings release shows, investor real estate loans, a major part of our business, declined a bit in Q3. We've described in previous meetings that we've been focusing on C&I growth, believing that's where the deposits are and that those types of loans experience less turnover. We saw some good growth in C&I again this quarter, led by our regional banking teams as well as our specialized lending groups. Through September 30, C&I loans, including owner-occupied real estate loans, made up 65% of our new business.

Investor real estate made up around 30%, and the balance was in consumer lending. Regarding business in the pipeline, our new loans pipeline looks good. We look at probable funding on a loan-by-loan basis. And at September 30, probable funding stood at $363 million. For comparison, levels in March and June were $326 million and $323 million, respectively. So we're up about 12% from the average of those 2 quarter ends. This, we hope, will lead to a solid fourth quarter and good beginning to 2027.

Looking at asset quality, I don't have a lot to add to what's been mentioned. Issues coming out of Business Express have slowed, but we're building some optimism there. We've referenced previously a couple of larger problem real estate loans. Some good news on those, although it came post quarter end, Andrew referenced it. Just after the end of the quarter, we received a $5.5 million paydown on one of them. If you recalculated our criticized classified ratio, it would have brought that down to about 2.24%. That's below the average for the past 8 quarters, which is around 240 basis points. Then the other problem real estate loan that we've mentioned briefly in the past, a $9.5 million participation in a loan for a senior living facility, we've learned that an agreement has been accepted by the court and all indications are that, that loan will be paid in full later in the fourth quarter. So we're very happy to hear that as well.

Looking forward, we're doing our best to convert our loan pipeline into new business. We're still focused on meeting the loan growth goal for this year. Beyond the fourth quarter, the business opportunities we're seeing are spread throughout all of our banking units. The regional lending team should continue to do very well. We made a significant addition to our leadership team in the Pennsylvania region, which we hope will drive growth going forward. After a slow start to the year, our SBA team has built a nice pipeline.

Private equity and asset-based lending are both looking at a lot of new business. And in the investor real estate area, more opportunities are being reviewed than they've looked at in past quarters.

With the actions we've taken in targeting C&I relationships, our investor real estate to capital ratio is down well below where it's been in previous years. And we think that creates an opportunity to accelerate loan growth heading into next year. So as a result of what we're seeing throughout the business units, as we think about 2027, we're setting our sights on total loan growth that's up from the $200 million annual number that we've targeted the past couple of years to a targeted growth rate closer to $300 million. So based on all this, I'm pretty optimistic about finishing the year strong and about 2027 as well. That covers it for a lending review, and I'll turn things now back to Pat for final comments. Pat?

Patrick Ryan

Thanks, Peter, and thanks, Andrew, for that additional info. And at this point, I'll turn it back to the operator to open up for Q&A.

Operator

[Operator Instructions] Your first question comes from the line of Bader Hijleh with Piper Sandler.

Question-and-Answer Session

Bader Hijleh

This is Bader on for Justin. I just wanted to start out on the deposit side of things. That's been a positive story so far this year. So maybe if you guys could talk about how you're thinking about maybe deposits continuing to keep pace to fund loan growth. And then maybe your thoughts on the level of competition on the deposit side as well.

Patrick Ryan

Yes. I'll hit a couple of highlights and turn it over to Andrew. I think the short answer, obviously, is we continue to grow in our C&I book. We're doing, I think, a good job of making sure we're getting a lot of additional relationship deposits. There's also significant fluctuation in that book. So it becomes a little bit tricky to predict quarter-to-quarter, but the underlying trends there certainly seem positive. So that's been good news. And obviously, we still play in the retail space on the deposit side. And from time to time as needed, we'll get competitive with a market rate on a CD or money market. So we continue to look for opportunities to grow in that segment as well. And Andrew, why don't you jump in and talk a little bit about what you've been working on with the retail teams.

Andrew Hibshman

Yes. Just to hit on the pricing pressure, there it's definitely accelerated, obviously, with the run-up in rates over the last month or so, deposit pricing pressure has continued to be stiff. But we're used to that. I mean the markets we're in, we're always dealing with a lot of pricing pressure. We've got some promos we recently rolled out to generate some loan -- deposit growth in the CD market. We're also doing some targeted marketing in some certain industries with like a more liquid promo. That's not a marketed promo, but something we're out letting our teams use to sell. So we're definitely going to see some pressure. Pricing is tough. But on the flip side of that, we're, I think, seeing some good opportunities on the loan side and the spreads are pretty good there. So I do expect that deposit pricing is going to be tough and it's going to move higher, but we think we can offset that in the loan book. And I'm really expecting to see a stable margin. Hopefully, we can see some slight improvement in the margin going forward.

Bader Hijleh

That's helpful. And then just switching gears to the margin. Are you guys able to quantify your comment on the asset repricing benefit you guys have left? And then to the extent to which that -- those floating rate exposures you guys have to mitigate any pressure like you said, on the funding side?

Patrick Ryan

Yes. Well, the good news, we've got 25% plus of our assets that reprice immediately when the Fed moves. Now obviously, there's some giveback there depending on what you need to do on the deposit side, but we have a much smaller percentage of our liabilities that will reprice automatically. And so that gives us time to move slowly and really gauge the market and see where they are. Now over time, you end up having to give some of that back, but you don't need to do it right away. So the short-term benefits are real. But Andrew, if you want to jump in and talk a little more about kind of where you see the margin going? I know it's hard to predict because it's dependent on competition, but anything you want to add there?

Andrew Hibshman

Yes. I think Pat hit it well. I mean, day 1, when the Fed makes a rate change, we see positives, right? We have more assets that reprice immediately. And then on the deposit side, we've been really trying to hold the line as much as we can. But there's obviously a lot of areas where we need to move higher. We are slightly asset sensitive. So just running models. If rates go higher, we do better. So a lot of positive tailwinds we have there from a margin standpoint. But again, I mean, the deposit thing, sometimes you got to take what the market gives you. So there's going to be some added pressure there. But we've historically maintained a very balanced asset-liability position.

We're still in a very similar place than we've been since I've been here over the last 10 years. But we are slightly asset sensitive right now. So as rates move higher, it should be at least a slight benefit, but we'll see how the deposit market shapes up. And we also did some things, as I mentioned, late in the quarter, we paid off some borrow -- higher cost borrowings. We did some reallocation of some cash into investments, right, towards the end of the quarter when rates moved higher, and we let some brokered money roll off the balance sheet as well. So a lot of positive things going on. I think we can confidently say that we can -- we should be able to maintain a stable margin with some upside.

Operator

Our next question comes from the line of David Bishop with Hovde Group. Our next question comes from the line of Jake Civiello with D.A. Davidson.

Parker Wittmann

This is Parker Wittmann on for Jake Civiello this morning. I just had one quick question on credit here for you regarding the Business Express portfolio. And apologies if I missed this during the prepared remarks, but any chance you could size up the kind of remaining exposure within the portfolio for runoff and kind of when you expect impacts on net charge-offs, provisioning to be a little bit less meaningful?

Patrick Ryan

Yes, sure. Obviously, it's hard to predict the future. But as Peter mentioned, we're seeing a slowdown in new issues emerging. We're seeing some improvements on the delinquency side. So I don't know that we have a definitive answer, but I think we feel comfortable saying that things are getting better, and we think they will continue to incrementally get better. Obviously, we're probably 18 months out from when we first noticed some challenges there, and we started making significant changes to how we were analyzing, how we were sourcing and onboarding. And so I would tell you that anything new that's been originated, which hasn't been much, has been done according to much tighter standards. Everything that gets renewed is getting done at much tighter standards.

And so again, it's a portfolio given the yields that we don't expect the credit cost to be 0. But if we can get it back down to a more reasonable sort of 2%, even 3% annualized, I think we'll be back to generating profitability out of that segment. And the good news is when you look at charge-offs year-to-date, I think the total might be something around $8.5 million and 95% of that was in the Business Express portfolio, which obviously we're not happy about. But the good news is the non-Business Express charge-offs year-to-date are close to 0. So we're seeing real strong performance throughout the remainder of the portfolio, which is a positive.

And as we mentioned, we had some good news come sort of right after the end of the third quarter, but significant paydown on a nonperformer and a criticized loan that was showing improved performance and got upgraded. And so kind of across the bank, we're seeing some reasons for optimism on credit and Business Express is slowly getting better. But I think as we showed this quarter, even with having to do some additional charge-offs, still able to earn some reasonable returns.

Operator

Your next question comes from the line of David Bishop with Hovde Group.

David Bishop

Can you guys hear me?

Patrick Ryan

Yes, we got you now, Dave.

David Bishop

Perfect. Apologies. I don't know what happened before. Pat, you mentioned before the reduction in the operating expense to average asset ratios getting closer to your 190 target. Is that something you guys are looking to improve upon as you move into '27 and beyond? Just curious if you have any longer-term targets for that ratio?

Patrick Ryan

Well, I think the goal throughout '27 is to get to the 190. We hope it doesn't take us until Q4 to get there. But I think through incremental efforts we've made to contain costs, to reduce costs to slow the growth and that obviously hits the numerator. And while we're concurrently looking to show some decent growth, that hits the denominator. And so we think getting to that 190 at some point sort of during the middle of '27 is possible. Obviously, both things need to happen, right? We've got to slow the expense -- continue to slow the expenses and see the asset growth. But we have reason to believe we can achieve both those goals. And we did a lot of analysis looking back at that ratio over time.

I think sort of pre-COVID, we were operating before we launched some of our new kind of niche commercial businesses in the 180 range. We obviously had some expense increase through the Malvern acquisition and the addition of these new business units. And I think as those business units scale up and we continue to take out costs where we can, longer term, could we get back to the 180? It's certainly possible, Dave. We've been there before, but I think our goal is to get to the 190, and then we'll see where we are. And obviously, it depends on new investment opportunities, right? Getting down to the lower level is good news from a short-term performance perspective. But may also be an indicator that there hadn't been new opportunities that looked like quality investments. So I think living for us, if we can live between the 180 and the 190 and continue to look for little niche growth opportunities, that's probably where we want to be.

David Bishop

Got it. Appreciate that color. And then I don't know if Peter or Andy, any sense in terms of what new loan origination yields were this quarter versus roll-off? And is the third quarter average yield number, the 15 basis point increase, a good number sort of to model a go-forward yield on?

Peter Cahill

Well, Andrew may be -- it will come up with the number, but we continue to price most of our loans at a spread over the 5-year treasury or FHLB, and we're getting spreads north of 200 basis points. So we're pretty consistent there. It's really an exception to the rule when we dip below that spread. Andrew, do you have the numbers handy on what the quarterly average -- weighted average might have been on new business?

Andrew Hibshman

I'll bring it up, give me one more second. But yes, I mean, I think just to add some just high-level commentary on that as I'm pulling it up. Yes, I mean, I think the third quarter, we saw a 15 basis point increase in loan yields and the Fed increased rates on September 18, I think it was. So I think that's a reasonable kind of baseline bottom for where loan yields are going to go as we move forward. Obviously, we're not -- not everything is repricing. But as Pat mentioned, we have a pretty big chunk. A lot of that -- over 25% now is kind of liquid -- more liquid assets, but we have a chunk of loans that are going to move higher immediately when the Fed moves. So yes, we should see nice improvement in loan yields into the fourth quarter, and I'll pull up the origination rates in the second.

Patrick Ryan

Dave, I can tell you going off memory that it depends on the mix, but looking at the last couple of months and just the new originations, I think the average for one of the months was close to 7.25%. One of them might have been down in the sort of 6.75% range. But that's also dependent on what types of loans got originated in those months. So certainly, there's the full quarter benefit of everything that repriced during the quarter that will flow through into Q4. And as Peter said, the market now for most new business is in the high 6s or 7s. And so we think there's still good opportunities to make a good spread there.

Andrew Hibshman

Yes. So just to put some exact numbers on that, the weighted average spread for the quarter was about 6.90%.

David Bishop

6.90%. And then just curious, with the backup in rates, notwithstanding what happened, I guess, yesterday, have you seen the gear sort of lock up or slow on the commercial real estate front there as projects maybe require more equity or tougher to debt service coverage? Just curious what you're hearing from your folks on the ground.

Patrick Ryan

Yes. Listen, I think when you see a big change, like we saw yesterday, that can cause people to try to get back to the table to renegotiate if there's still wiggle room on a deal that's sort of in process. But I don't think it's really gumming up the general traditional like I had a 5-year loan that came due, I got to refinance and roll it over. You're going to do it -- you're going to try to get the best rate you can, but you're not going to not refinance it and it may slow things down a little bit and new projects that haven't come out of the ground yet, people might sharpen their pencil and make sure the projects still make sense. But the short answer is we have not seen a significant pullback or slowdown based on what's happened over the last month or 2. But if they move again, is that a potential risk? Yes, certainly, it is.

David Bishop

Got it. I appreciate that color. And I guess one final for me. I guess I maybe missed the announcement on the new market President, the new leader. Any color you can provide there in terms of his background, et cetera?

Patrick Ryan

Yes. No, we're excited. Dan Cuneo joined the team, I think, about 1.5 months ago, and Dan's got a breadth of experience at community banks and regional banks, all within that Southern Jersey, Southeastern PA market. And so we're excited. We think he's going to be a great addition, and we're looking forward to seeing a rev up on the growth side with him helping to lead the team there.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Patrick Ryan, President and CEO, for closing remarks.

Patrick Ryan

Okay. Thanks, everyone. We appreciate your time today. Appreciate your interest in First Bank, and we look forward to regrouping with everybody once we get through the end of fourth quarter. Thanks, everyone.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.