First Financial Corporation Common Stock (THFF) fair value

ACCE thesis

First Financial Corporation (THFF) is the holding company for First Financial Bank, a regional bank whose revenue comes mostly from net interest income on commercial, agricultural and residential loans and deposits across Indiana, Illinois, Kentucky and Ohio. The franchise is a deposit-gathering regional bank with a long record of community banking relationships, and that local deposit base is its main structural advantage over larger competitors that have pulled back from smaller markets. Revenue growth of 15.5% and a 13.4% return on equity suggest the balance sheet is earning well at current rates, and the 40.7% operating margin reflects that spread. The stock trades at 10.3 times trailing and 8.9 times forward earnings, a discount to the group that leaves room for a re-rating if loan growth and credit quality hold. The main thing to test is whether net interest margin can stay firm as deposit costs reprice, and whether the 15.5% revenue growth is organic or acquisition-driven. At an 877M market cap with no index membership, the name is small enough to be overlooked, which is a reason to look at the filings and not a reason to act on the multiple alone.