First Financial Bancorp (FFBC)

Regional banking company First Financial Bancorp (NASDAQ:FFBC) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 16.3% year on year to $234 million. Its GAAP profit of $0.75 per share was 3% above analysts’ consensus estimates.

Company Overview

Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ:FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

First Financial Bancorp competes with other regional banks operating in the Midwest such as Fifth Third Bancorp (NASDAQ:FITB), Huntington Bancshares (NASDAQ:HBAN), KeyCorp (NYSE:KEY), and PNC Financial Services Group (NYSE:PNC), as well as with national banks and local community banks in its service areas.

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Over the last five years, First Financial Bancorp grew its revenue at a solid 7.3% compounded annual growth rate. Its growth beat the average banking company and shows its offerings resonate with customers, a helpful starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. First Financial Bancorp’s recent performance shows its demand has slowed as its annualized revenue growth of 1.8% over the last two years was below its five-year trend. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, First Financial Bancorp reported year-on-year revenue growth of 16.3%, and its $234 million of revenue exceeded Wall Street’s estimates by 2.5%.

Net interest income made up 72.7% of the company’s total revenue during the last five years, meaning lending operations are First Financial Bancorp’s largest source of revenue.

Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

First Financial Bancorp’s EPS grew at an astounding 11.3% compounded annual growth rate over the last five years, higher than its 7.3% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its efficiency ratio didn’t improve.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For First Financial Bancorp, its two-year annual EPS declines of 2.2% mark a reversal from its (seemingly) healthy five-year trend. These shorter-term results weren’t ideal, but given it was successful in other measures of financial health, we’re hopeful First Financial Bancorp can return to earnings growth in the future.

In Q3, First Financial Bancorp reported EPS of $0.75, up from $0.55 in the same quarter last year. This print beat analysts’ estimates by 3%. Over the next 12 months, Wall Street expects First Financial Bancorp’s full-year EPS of $2.70 to stay about the same.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.

First Financial Bancorp’s TBVPS grew at a decent 5% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 20.9% annually over the last two years from $11.08 to $16.19 per share.

Over the next 12 months, Consensus estimates call for First Financial Bancorp’s TBVPS to grow by 5.4% to $17.06, mediocre growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, First Financial Bancorp has averaged a Tier 1 capital ratio of 12.1%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, First Financial Bancorp has averaged an ROE of 10.2%, healthy for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This shows First Financial Bancorp has a decent competitive moat.

It was encouraging to see First Financial Bancorp beat analysts’ revenue expectations this quarter. We were also happy its tangible book value per share narrowly outperformed Wall Street’s estimates. On the other hand, its net interest income slightly missed and its efficiency ratio was worse than expected. Zooming out, we think this was a mixed quarter. Investors were likely hoping for more, and shares traded down 4.2% to $23.28 immediately following the results.

Updated: December 4, 2025 at 11:45 PM EST

Before deciding whether to buy First Financial Bancorp or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

First Financial Bancorp isn’t a terrible business, but it doesn’t pass our bar. First off, its revenue growth was uninspiring over the last five years. And while its estimated net interest income growth for the next 12 months is great, the downside is its estimated sales for the next 12 months are weak. On top of that, its net interest income growth was uninspiring over the last five years.

First Financial Bancorp’s P/B ratio based on the next 12 months is 0.9x. This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $29.83 on the company (compared to the current share price of $25.80).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.