First Seacoast Bancorp, Inc. (FSEA): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at First Seacoast Bancorp, Inc. (FSEA) right after the Q3 2025 results, trying to map out the real competitive pressure points in its New Hampshire/Southern Maine turf. Honestly, the landscape is tough: depositors are demanding higher yields, making funding costs a real headache, and you've got big national players and nimble fintechs nipping at the edges of their $\mathbf{62.7\%}$ residential loan book. Given that First Seacoast Bancorp, Inc. (FSEA) is a minor player with a market cap around $\mathbf{\$55.56}$ million, understanding exactly where the power lies-from suppliers like the FHLB to digital substitutes-is defintely key to seeing their near-term strategy. Let's break down the five forces shaping their next move.

First Seacoast Bancorp, Inc. (FSEA) - Porter's Five Forces: Bargaining power of suppliers

When looking at First Seacoast Bancorp, Inc. (FSEA), the suppliers are primarily providers of funding-that is, depositors and wholesale funding sources like the Federal Home Loan Bank (FHLB). The power these suppliers hold is directly tied to the cost and availability of that capital, which has been a major theme in the late 2025 banking environment.

Funding for First Seacoast Bancorp, Inc. is concentrated with its core depositor base and wholesale borrowings, notably advances from the FHLB. You can see this reliance in the balance sheet structure as of September 30, 2025. The FHLB remains a key, non-discretionary source of wholesale funding, though First Seacoast Bancorp, Inc. has worked to manage this. Specifically, there was a $25.0 million long-term advance from the FHLB with a fixed interest rate of 4.38%, which was callable by the FHLB on December 8, 2025, and quarterly thereafter. As of the third quarter end, FHLB Borrowings were reported at $51.7 million.

Depositors definitely have increased bargaining power in the current environment. The pressure from depositors demanding higher yields to keep pace with market rates is real. While I don't have the exact average cost of deposits for First Seacoast Bancorp, Inc. for late 2025, the overall trend is clear: the cost of funds is rising. This is why core deposit growth is a stated strategic focus to reduce reliance on higher-cost funding alternatives. The bank saw its total Deposits rise 5.7% to $480.0 million as of September 30, 2025, which suggests active efforts to attract and retain this cheaper funding source.

To give you a clearer picture of the deposit base, which represents the largest supplier group, here is a breakdown of certain liability categories as of September 30, 2025:

The presence of $75.0 million in brokered time deposits indicates a reliance on more rate-sensitive, potentially less sticky funding, which elevates supplier power from that segment. To counter this, First Seacoast Bancorp, Inc.'s strategy centers on deepening relationships to secure more stable, lower-cost funding. The push for core deposit growth is an action taken to mitigate the bargaining power of these funding suppliers by increasing the stickiness and reducing the overall weighted-average cost of liabilities. You're trying to lock in capital cheaply.

The bargaining power of suppliers for First Seacoast Bancorp, Inc. can be summarized by these key dynamics:

• FHLB advances are a necessary, but callable, wholesale source.
• Depositors exert pressure via yield competition.
• Brokered deposits represent a higher-cost, more volatile funding source.
• Core deposit growth is the primary lever to reduce supplier power.

The fact that net interest income improved in Q3 2025 to $3.45 million suggests that, despite the pressure, First Seacoast Bancorp, Inc. is managing the cost of these suppliers effectively relative to asset yields for now. Finance: draft the sensitivity analysis for the December 2025 FHLB maturity by next Tuesday.

First Seacoast Bancorp, Inc. (FSEA) - Porter's Five Forces: Bargaining power of customers

You're looking at First Seacoast Bancorp, Inc.'s customer power, and honestly, it's a tightrope walk. For depositors, the power is definitely leaning high. Switching costs for retail banking are lower than ever, thanks to digital options. If you're a depositor, you can move your money pretty easily now, so First Seacoast Bancorp, Inc. has to stay competitive on rates. As of September 30, 2025, the bank held total deposits of $480.0 million, which shows they are still attracting funds, but the pressure to offer attractive yields on those deposits is real.

For the borrowing side of the ledger, power is also significant, especially when you look at commercial clients. These businesses aren't locked in; they can shop around with regional and national lenders easily. First Seacoast Bancorp, Inc. is competing for loan volume against much larger players. Their total net loans stood at $430.0 million as of September 30, 2025. The bank is trying to offset this by focusing on talent attraction from larger regional banks to maintain a disciplined lending approach.

Retail customers, while perhaps less likely to jump ship for a small difference, are still sensitive. They value the community focus-the bank was founded in 1890 and has its headquarters in Dover, New Hampshire-but they react quickly to interest rate changes on their savings accounts. The bank's ability to retain these core relationships is key to keeping funding costs manageable. The bank's total assets were $609.6 million as of September 30, 2025.

The composition of the loan portfolio highlights where the most intense competition for loan pricing occurs. The loan portfolio is heavily weighted toward residential real estate, a segment where pricing is highly transparent and competitive. While the prompt mentions a 62.7% weighting as of late 2024, the latest detailed breakdown we have, as of June 30, 2025, shows a very similar concentration in one- to four-family residential mortgage loans. If onboarding takes 14+ days, churn risk rises, even for community banks. Anyway, here's the quick math on the loan book from the end of Q2 2025:

This concentration means First Seacoast Bancorp, Inc. is constantly battling for market share in mortgages against larger regional and national mortgage providers. The bank's strategy to attract talent from larger regional banks suggests an awareness of the need to compete on service and product sophistication, not just local presence. The power of customers is managed by the bank's focus on core relationship banking, but the numbers show the loan book is exposed to the highly competitive residential market.

You can see the customer power dynamic reflected in deposit structure, too. While total deposits grew to $480.0 million by September 30, 2025, the bank relies on specific funding sources:

• Time deposits >$250,000: $21.9 million
• Brokered time deposits: $75.0 million
• FHLB Borrowings (as of Sept 30, 2025): $51.7 million

Finance: draft 13-week cash view by Friday.

First Seacoast Bancorp, Inc. (FSEA) - Porter's Five Forces: Competitive rivalry

The competitive rivalry facing First Seacoast Bancorp, Inc. in the New Hampshire/Southern Maine market is intense, driven by both local incumbents and aggressive out-of-state entrants. This dynamic puts constant pressure on pricing for both lending and deposit gathering activities.

First Seacoast Bancorp, Inc. is definitely a minor player in this landscape, evidenced by its market capitalization of approximately $55.56 million as of late 2025. To put that into perspective, a key local competitor like Bank of New Hampshire reports total assets exceeding $2.5 billion. Furthermore, the market sees significant expansion from Maine-based institutions. For example, Bar Harbor Bank & Trust's acquisition of Woodsville Guaranty Savings Bank, which closed in the second half of 2025, brought in a competitor with $456 million in net loans and $530 million in deposits as of December 31, 2024.

Competition for core funding and loan volume is fierce, which directly pressures the Net Interest Margin (NIM). First Seacoast Bancorp, Inc.'s NIM for the third quarter of 2025 stood at 2.32%, an improvement from 2.08% in Q3 2024, and the year-to-date figure was 2.30% compared to 2.10% for the same period in 2024. This margin expansion suggests some success in asset-liability management despite the competitive environment, though the bank's reliance on FHLB Borrowings at $51.7 million as of September 30, 2025, indicates continued need for wholesale funding sources.

The broader banking industry also presents rivalry from non-bank sources. Research suggests that nearly a quarter of middle-market companies and 16% of small businesses plan to seek funding from non-traditional lenders in 2025. To combat this, First Seacoast Bancorp, Inc. is actively competing by shifting its focus toward higher-yielding asset classes. Here's a look at the loan portfolio composition, using the latest available detailed figures for context on the bank's asset mix:

This strategic pivot is necessary because, as of September 30, 2025, the bank's total Net Loans stood at $430.0 million against total Deposits of $480.0 million. The bank is clearly working to optimize earning assets, as its Net Interest & Dividend Income for the first nine months of 2025 reached $10.05 million.

The competitive pressures manifest in several key areas for First Seacoast Bancorp, Inc.:

• Deposit Competition: Deposits grew 5.7% to $480.0 million by September 30, 2025, but this included $75.0 million in brokered time deposits.
• Loan Competition: The bank faces pressure from larger regional banks with assets over $2.5 billion.
• Non-Bank Lenders: 16% of small businesses plan to use non-traditional lenders for funding.
• Profitability Headwinds: The bank reported a nine-month net loss of $(758,000) YTD 2025, despite Q3 net income of $390,000.

To counter the margin squeeze, the bank is focusing on loan types that typically command higher yields, such as Commercial Real Estate and Commercial & Industrial (C&I) loans, which represented a significant portion of the portfolio even in 2023.

First Seacoast Bancorp, Inc. (FSEA) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive forces shaping First Seacoast Bancorp, Inc.'s business model as of late 2025. The threat of substitutes is particularly acute because the core products-loans and deposits-are increasingly commoditized by alternatives that offer superior convenience or yield, especially in this rate environment.

The threat from large national banks is significant because they possess scale advantages that allow for massive investment in digital infrastructure. While First Seacoast Bancorp, Inc. has digital capabilities, the sheer scale of competitors means their platforms are often more robust. For instance, in 2025, the total value of transactions in the digital payments market was anticipated to hit USD 20.09 trillion. Furthermore, traditional banks are expected to be the sixth weakest long-term competitive threat, suggesting non-traditional entities are gaining ground.

Fintech companies are chipping away at both sides of the balance sheet. They offer specialized, low-cost services that bypass the traditional branch model. Digital lending funding in the US reached $1.8 billion in the first half of 2025, and more than 60% of U.S. personal loan originations are now completed online via these platforms. On the service side, AI-powered chatbots handled 78% of consumer service inquiries in 2025, highlighting the automation advantage.

Non-bank lenders directly substitute for a large portion of First Seacoast Bancorp, Inc.'s loan book. The bank's residential loan portfolio, which the outline suggests is 62.7% of its lending, is a prime target. The overall US fintech market size was USD 58.01 billion in 2025, much of which is focused on faster, more convenient credit access than traditional origination processes allow.

Here's a quick look at how First Seacoast Bancorp, Inc.'s balance sheet components compare to the scale of these substitute markets as of September 30, 2025, or the latest available data:

Money market funds and Treasury bills are direct substitutes for First Seacoast Bancorp, Inc.'s deposit products, especially when rates are attractive. In a high-rate environment, these alternatives offer liquidity with potentially better yields, pulling core funding away. The total US Money Market Fund assets reached a record $7.9 trillion in October 2025. This massive pool of easily accessible, short-term cash represents a constant, high-volume alternative to the bank's checking, savings, and Certificate of Deposit (CD) accounts. You need to watch the cost of your time deposits, which stood at $21.9 million for those over $250,000 as of September 30, 2025, against the yields offered by these MMFs.

The pressure from these substitutes manifests in several ways for First Seacoast Bancorp, Inc.:

• Digital platforms from large banks offer superior user experience, with 77% of consumers preferring mobile/computer management.
• Fintechs capture a growing share of lending, with 63% of US personal loan originations now digital.
• The sheer volume of MMFs-totaling $7.57 trillion in late November 2025-competes directly for your customer's idle cash.
• The US national debt, which includes Treasury bills, reached $38 trillion as of November 2025, indicating massive government competition for capital.
• The bank's low non-performing loan ratio of 0.05% as of September 30, 2025, is a strength, but it doesn't shield deposit gathering from yield competition.

Finance: draft a sensitivity analysis showing deposit outflow risk if MMF yields exceed FSEA's average CD rate by more than 50 basis points by next quarter.

First Seacoast Bancorp, Inc. (FSEA) - Porter's Five Forces: Threat of new entrants

You're assessing the competitive landscape for First Seacoast Bancorp, Inc. as of late 2025, and the threat of new entrants, while historically high for community banks, is being reshaped by digital models. For First Seacoast Bancorp, Inc., which manages total assets of $609.6 million as of September 30, 2025, the barriers to entry for traditional competitors remain substantial, but the digital-first challenger presents a different kind of pressure.

Threat from large national or super-regional banks is high due to their capital and technology resources. These behemoths possess balance sheets that dwarf First Seacoast Bancorp, Inc.'s $609.6 million in assets, allowing them to absorb initial losses, deploy massive technology budgets, and offer sophisticated digital platforms without the legacy infrastructure constraints that sometimes plague older institutions. To be fair, First Seacoast Bancorp, Inc. maintains strong capital buffers, reporting a Total Risk-Based capital ratio of 15.53% against a minimum of 10.50% and a Tier 1 Leverage ratio of 8.44% against a 4.0% requirement as of Q3 2025, which helps defend against aggressive pricing from larger players. Still, their scale means they can enter a local market with significant, sustained investment.

Regulatory barriers (chartering, capital requirements) are high for de novo (new) community banks. The process itself is a major deterrent, often taking between 12 to 24 months to secure federal approval before a single deposit is taken. The initial capital outlay is significant; legal fees alone can run $200,000 or more just for the application and compliance setup, with consulting fees potentially adding another $150,000 or more. This high friction is evident in historical data: while 181 new bank charters were issued in 2007, the average number of new charters annually from 2010 to 2023 dropped to fewer than 6. Policymakers are aware, as evidenced by proposed legislation aiming to ease these strains by instituting a three-year phase-in period for capital requirements for new banks.

Here's a quick comparison showing the established scale of First Seacoast Bancorp, Inc. versus the hurdles a new entrant faces:

The company's community-focused model and 135-year history provide a local barrier to entry. First Seacoast Bancorp, Inc. has been rooted in the Seacoast community since 1890, a legacy of 135 years that builds deep customer trust and local knowledge. This is supported by a physical presence, operating five branch offices across the Seacoast region of New Hampshire. That local entrenchment is hard for an unknown entity to replicate quickly.

New entrants can bypass physical branches by using a purely digital operating model. This is the primary vector for lower-cost, rapid entry today. A purely digital bank avoids the significant capital expenditure and operational drag of maintaining physical locations, like First Seacoast Bancorp, Inc.'s five branches. Such an entrant competes on convenience and potentially lower overhead, though they must still clear the high regulatory hurdles for chartering and deposit insurance. You need to watch how quickly digital-only banks can gain traction in the local deposit base.

The key regulatory hurdles that act as barriers include:

• Meeting stringent regulatory capitalization standards.
• Demonstrating integrity of founders and management.
• Developing a comprehensive, hundreds-of-pages-long business plan.
• Securing FDIC deposit insurance approval.
• Passing background checks for organizers and directors.

Finance: draft a sensitivity analysis on deposit attrition if a well-funded digital competitor enters a key zip code by Q2 2026.