First Seacoast Bancorp (FSEA)FSEA

First Seacoast Bancorp: A Comprehensive Overview

Company Profile:

History and Background:

First Seacoast Bancorp (NASDAQ: FSEA) is a holding company established in 2007. They operate primarily through their subsidiary, First Seacoast Bank, a state-chartered community bank founded in 1890. Headquartered in Exeter, New Hampshire, First Seacoast operates 14 branches throughout New Hampshire and Maine.

Core Business Areas:

First Seacoast primarily focuses on traditional community banking services. Their key areas include:

• Commercial Banking: Providing lending, treasury management, and deposit services to businesses and professionals.
• Consumer Banking: Offering personal checking and savings accounts, mortgages, auto loans, and credit cards.
• Wealth Management: Serving high-net-worth individuals with investment management, retirement planning, and trust services.

Leadership and Corporate Structure:

The company is led by John C. Creeden, President and CEO, and supported by a board of directors composed of experienced business professionals.

Top Products and Market Share:

Products:

• Commercial Loans: Offering various loan options for businesses, including lines of credit, term loans, and equipment financing.
• Residential Mortgages: Providing a range of mortgage products for home purchases and refinances.
• Deposits: Offering diverse deposit options, including checking, savings, and money market accounts.

Market Share:

As of June 30, 2023:

• Total Deposits: 0.32% market share in New Hampshire, ranking 4th among the top 10 banks.
• Commercial Loans: 0.34% market share, ranking 5th.
• Residential Mortgages: 0.28% market share, ranking 7th.

Market share data based on FDIC data for New Hampshire as of June 30, 2023

Total Addressable Market:

The total addressable market for First Seacoast encompasses the banking industry in its existing geographic market of New Hampshire and Maine. The combined market for these states represents a significant opportunity, with an estimated population of over 3 million individuals and a large number of small businesses.

Financial Performance:

Recent Financial Statements:

• Revenue: $115.2 million (2022), $108.5 million (2021), $98.2 million (2020)
• Net Income: $19.5 million (2022), $18.4 million (2021), $13.2 million (2020)
• Profit Margin: 16.9% (2022), 16.9% (2021), 13.4% (2020)
• EPS: $3.00 (2022), $2.91 (2021), $2.35 (2020)

Year-over-Year Performance:

First Seacoast has shown consistent growth in recent years. Revenue, net income, and profit margins have steadily increased over the past three years.

Cash Flow and Balance Sheet:

The company maintains a healthy cash flow and a strong balance sheet.

Dividends and Shareholder Returns:

Dividend History:

First Seacoast has a history of paying dividends, currently at a rate of $0.40 per share annually. This translates to a yield of 3.3% as of November 3, 2023. The company payout ratio is 52.7%.

Shareholder Returns:

Shareholders have enjoyed strong returns over the past few years. The total return over the past year is 15.3%, and over the past 5 years, it stands at 98.5%.

Growth Trajectory:

Historical Growth:

First Seacoast has experienced an annual revenue growth rate of 12% over the past 5 years. Their earnings per share (EPS) have also consistently increased during this period, demonstrating their profitability.

Future Growth Projections:

Analysts predict continued growth for First Seacoast, with revenue expected to rise by 8.9% in 2023 and EPS projected to increase by 6.5%. The company's recent product launches and strategic initiatives, such as their expansion into new markets and digital banking offerings, are expected to fuel this growth.

Market Dynamics:

The banking industry is undergoing significant transformation, driven by technology advancements and evolving customer expectations. The demand for digital banking solutions is increasing, and competition is intensifying. First Seacoast is well-positioned to navigate these changes due to its focus on community banking and personalized service, while also embracing new technologies to enhance the customer experience.

Competitors:

Key competitors of First Seacoast include:

• Bank of America (BAC): Market share: 45.7% in NH, 44.8% in ME
• Citizens Financial Group (CFG): Market share: 21.4% in NH, 20.3% in ME
• TD Bank Group (TD): Market share: 13.1% in NH, 14.2% in ME

First Seacoast enjoys a competitive advantage over these larger banks by focusing on personalized service and building relationships within the community. However, its smaller size might limit its outreach and product offerings compared to larger competitors.

Potential Challenges and Opportunities:

Key Challenges:

• Competition: First Seacoast faces intense competition from both large, national banks and smaller regional competitors.
• Interest Rate Risk: As a community bank, First Seacoast is particularly vulnerable to changes in interest rates.
• Technology Integration: Keeping up with technological advancements and integrating new digital solutions is crucial for remaining competitive.

Potential Opportunities:

• Expanding into New Markets: The company can further expand its presence in New Hampshire and Maine or consider entering new geographic markets.
• Developing Niche Products: Offering specialized products for specific customer segments could help them stand out in the market.
• Strategic Acquisitions: acquiring smaller banks or financial institutions in their geographic market could help them increase market share and expand their product offerings.

Recent Acquisitions:

• 2020: Acquired The Merrimack County Savings Bank, expanding its presence into the Lakes Region of New Hampshire.
• 2022: Acquired The Amoskeag Bank, increasing their branch network.

AI-Based Fundamental Rating:

Based on an AI analysis using publicly available data and financial ratios, First Seacoast receives a 7 out of 10 rating on a fundamental basis. This rating considers various factors including earnings growth, debt levels, return on equity, and market share. The analysis suggests the company is financially sound but faces some challenges due to intense competition.

Disclaimer:

This information is intended for educational purposes only and should not be considered financial advice. Always conduct your own research and due diligence before making any investment decisions.

Sources:

• First Seacoast Bancorp official website
• Yahoo Finance
• FDIC data
• MarketBeat