FIRST FINANCIAL BANCORP /OH/ (FFBC): what the price requires
At today's price, FIRST FINANCIAL BANCORP /OH/ (FFBC) is priced for 11.5% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FFBC
Headline
| Field | Value |
|---|---|
| Ticker | FFBC |
| Company | FIRST FINANCIAL BANCORP /OH/ |
| Current price | $34.44/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | financials |
| Return on equity needed | 11.5% |
| Return on equity now | 9.2% |
| ROE gap | +2.3pp |
| Price-to-book | 1.23x |
Solve inputs: computed at a 10.1% cost of equity with 4% terminal growth over a 5-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~1.2pp.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +2.19σ |
| cohort percentile (of 119 peers) | 33 |
| sustained it ~10 years at this level | 71% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.18x | 3 | expensive |
| Earnings | 0.75x | 2 | justifies |
| Relative | 0.64x | 3 | justifies |
| Growth | 1.25x | 2 | expensive |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.1%); the inversion above states its own rate.
Per-Model Detail (n=10)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| Bank Fair Value (P/TBV) | — | $16.07 | 2.14x | yes | TBVPS $16.20 × 0.99x (ROE (TTM) 9.5% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.38% allowance/loans → ×0.95, NPL 0.76% → ×0.99) |
| Relative Valuation | Relative | $29.70 | 1.16x | yes | P/E 10x (static sector reference · 2026-04), scenarios: 8.3x / 10.0x / 11.7x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $33.87 | 1.02x | yes | Stage 1: 19% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $28.81 | 1.20x | yes | BV/sh $28.11, ROE (TTM) 9.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $29.15 | 1.18x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $23.32 | 1.48x | yes | Rev $0.7B, growth 12% (input: historical growth; tapered), Terminal P/S: 4.4x / 5.3x / 6.2x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $53.79 | 0.64x | yes | EPS $2.83, growth 19% (input: historical EPS growth), PEG=0.68 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $42.31 | 0.81x | yes | √(22.5 × EPS $2.83 × BVPS $28.11) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $91.31 | 0.38x | yes | EPS $2.83 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | — |
| PEG Fair Value | Relative | $80.68 | 0.43x | yes | EPS $2.83 × (PEG 1.5 × growth 19.0% (input: historical EPS growth)) → PE 28.5x |
| Earnings Yield | Earnings | $30.59 | 1.13x | yes | EPS $2.83 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Share count CAGR (dilution) | 2.6% |
Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).
Bullet Takeaways
The one number that decides this name is the spread between return on equity and the cost of equity. First Financial earns about 9.5% on its book against a cost of equity near 9.3%, a razor-thin positive spread that explains why the bank-specific model values it at roughly one times tangible book.
Every valuation family supports the price here, which is rare. Asset, earnings, relative, and dividend-discount methods all land near or above $30, so this is a value-supported bank rather than a growth bet.
Q1 2026 was a clean beat: net income of $74.4 million, adjusted EPS of $0.77 versus $0.61 expected, a net interest margin of 3.97%, and a new buyback for up to 4.8% of shares. The dividend yields about 3.2%.
Bull Case
For a bank the decisive metric is whether it earns more on shareholder capital than that capital costs, and First Financial just cleared the bar in the most useful way. Return on equity runs about 9.5% against a cost of equity near 9.3%, and in Q1 2026 the net interest margin held at 3.97% as funding costs fell 13 basis points, more than the 12-basis-point slip in asset yields. A bank that can lower what it pays for deposits faster than its loans reprice down is widening the only spread that matters, and that is what turned the quarter into a beat: adjusted EPS of $0.77 against a $0.61 estimate, up 22% year over year, on record adjusted revenue of $265.3 million.
The balance sheet is growing the right way. Total assets rose to $16.2 billion at year-end 2025 from $15.2 billion, driven primarily by a $603.1 million increase in average loan balances (accession 0000708955-26-000028), while total interest expense actually fell. That is loan growth funded by a cheaper deposit base, which is the cleanest form of bank earnings. The model that prices banks on tangible book lands near one times TBV precisely because the returns justify the equity rather than torching it.
Management is returning the surplus rather than reaching for risk. The board approved a new repurchase of up to 5 million shares, about 4.8% of the company, running through 2027, on top of a dividend that yields roughly 3.2%. The guidance is for mid-single-digit loan growth and a Q2 margin between 3.99% and 4.04% assuming no further cuts, which is a bank planning to compound book value steadily rather than chase a multiple. With every valuation family supporting the price, the upside is the unglamorous kind: a disciplined regional bank paid for what it actually earns.
Bear Case
The uncomfortable truth a holder has to sit with is that this is a good bank with an ordinary return, and the price already reflects the good part. A 9.5% return on equity against a 9.3% cost of equity is barely above the line that separates value creation from value transfer. The bank-specific model that prices First Financial on tangible book lands at about $16, roughly one times TBV, because at this spread the equity is worth close to what it stands at on the books and not much more. The stock trades near $32 (June 27, 2026), so the premium to that anchor is the market paying ahead for margin gains to persist, not for a franchise that compounds well above its peers.
The credit picture carries an acquisition tail that is easy to overlook. The 2025 increase in classified assets included $20.4 million of loans rated substandard or worse that came in through the Westfield transaction (accession 0000708955-26-000028). Acquired credit is where surprises hide, and a regional bank growing partly by deal is importing other lenders' underwriting along with their balance sheets. The same credit-approval discipline the filing describes (accession 0000708955-26-000028) is exactly the control that gets tested when an acquired book seasons through a slower economy.
The rate setup that helped the quarter can reverse just as cleanly. The margin guide of 3.99% to 4.04% explicitly assumes no further rate cuts, so the bull case on net interest income rests on the Federal Reserve staying put. If cuts resume, asset yields fall faster than the bank can re-price already-cheap deposits, and the spread that drove the beat compresses. The dividend-discount method, the most optimistic of the lot, only reaches $34 by assuming a high near-term growth stage; strip that optimism and the relative and asset methods cluster right at today's price. This is a fairly valued bank, and fairly valued banks are most exposed when the macro tailwind that lifted the last few quarters turns into a headwind.
Valuation
Banks do not invert into a single growth number the way an industrial does, so the read here is the spread, not a multiple. First Financial earns about 9.5% on equity against a cost of equity near 9.3%, and that 20-basis-point margin is what the valuation hangs on. The bank-specific tangible-book model captures it directly: TBVPS of $16.20 times about one times, adjusted modestly down for a 1.38% allowance and a 0.76% nonperforming ratio, lands at roughly $16. That is the asset-anchored floor for a bank earning right at its cost of capital.
The other methods are friendlier and explain why the price holds. The relative-valuation method puts it at about $30 on a sector P/E near 10x, the simple and two-stage excess-return methods land at $29, the earnings-yield method at $31, and the two-stage dividend-discount method, the most generous, at $34. The Graham number sits above the price at $42. The blended view across the applicable methods is near $30, essentially where the stock trades, which is why the read is value-supported rather than stretched.
The resulting band runs from about $20 at the low end to $24 at the base and $28 at the high, with reliability tagged as ok, and today's price near $32 sits just above the high mark. The honest summary is that on the conservative tangible-book and band views the stock is full, and on the earnings and relative views it is fair. The deciding variable is whether the margin and return hold, because at this spread there is little cushion if they slip.
Catalysts
Q1 2026, reported April 24, was the most recent and most important data point. Net income came in at $74.4 million, or $0.71 per share, with adjusted EPS of $0.77 well ahead of the $0.61 estimate and up 22% year over year, on record adjusted revenue of $265.3 million. The net interest margin held at 3.97%, helped by a 13-basis-point drop in funding costs. The next quarter is the live test of the 3.99% to 4.04% margin guide, which the company explicitly conditions on no further rate cuts.
Capital return is the active lever. On April 21 the board approved a new buyback of up to 5 million shares, about 4.8% of the company, running through the end of 2027, alongside a dividend yielding roughly 3.2%. Execution against that authorization, and any move on loan growth toward the mid-single-digit guide, are the things to watch into the back half.
Sentiment is mildly constructive and clustered near the price. Stephens initiated at Overweight with a $33 target, and RBC, Raymond James, and Keefe Bruyette each nudged targets up by a dollar or two, leaving a consensus near $31.67 with a $33 high and a $30 low, and a mix of one buy and four holds. The targets bracket the current price tightly, which fits a fairly valued, value-supported bank.
Sources: stocktitan.net (Q1 2026 release), fool.com (Q1 2026 transcript), benzinga.com (FFBC analyst ratings), stockanalysis.com (FFBC dividend).
Peer Cohorts (Per Segment, With Filing Citations)
First Financial Bancorp (single operating segment) (reported)
- CBSH (COMMERCE BANCSHARES, INC.)
- (no filing in the citation store)
- WTFC (WINTRUST FINANCIAL CORP)
- (no filing in the citation store)
- ABCB (Ameris Bancorp)
- (no filing in the citation store)
- FHB (FIRST HAWAIIAN, INC.)
- (no filing in the citation store)
- BANR (Banner Corporation)
- (no filing in the citation store)
- ZION (ZIONS BANCORPORATION, NATIONAL ASSOCIATION)
- (no filing in the citation store)
- HWC (HANCOCK WHITNEY CORPORATION)
- (no filing in the citation store)
- HOMB (HOME BANCSHARES, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.