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Stock Analysis & ValuationFirst Savings Financial Group, Inc. (FSFG)

Previous Close
$33.98
Sector Valuation Confidence Level
High
Valuation methodValue, $Upside, %
Artificial intelligence (AI)29.29-14
Intrinsic value (DCF)22.94-32
Graham-Dodd Method25.54-25
Graham Formula24.94-27

Strategic Investment Analysis

Company Overview

First Savings Financial Group, Inc. (NASDAQ: FSFG) is a regional bank holding company operating through its subsidiary, First Savings Bank, serving consumers and businesses in southern Indiana. The company operates across three key segments: Core Banking, SBA Lending, and Mortgage Banking. Its diversified financial services include deposit products like checking, savings, and time deposits, as well as a broad range of loans—residential and commercial real estate, construction, consumer loans, and more. Additionally, FSFG engages in mortgage banking, investment activities, and insurance services, including property and casualty insurance. With 15 branches, the bank maintains a strong regional presence. Founded in 2008 and headquartered in Jeffersonville, Indiana, FSFG plays a vital role in local economic growth by supporting small businesses and residential lending. Its conservative risk profile and community-focused approach position it as a stable player in the regional banking sector.

Investment Summary

First Savings Financial Group (FSFG) presents a conservative investment opportunity with a low beta (0.413), indicating lower volatility compared to the broader market. The company’s diversified revenue streams—spanning core banking, SBA lending, and mortgage banking—provide stability, while its net income of $13.6M and diluted EPS of $1.98 reflect steady profitability. However, its modest market cap (~$183M) and regional focus limit scalability, and its total debt of $350M warrants monitoring. The dividend yield (~3.3% based on a $0.61/share payout) may appeal to income-focused investors, but growth prospects are tied to local economic conditions. Regulatory risks and competition from larger banks are key considerations.

Competitive Analysis

FSFG’s competitive advantage lies in its hyper-local focus, deep community relationships, and diversified lending portfolio, which includes niche segments like SBA loans. Its small size allows for agility in serving southern Indiana’s underserved markets, where larger banks may lack personalized service. However, its regional concentration also poses risks, as economic downturns in its operating area could disproportionately impact performance. Compared to national or super-regional banks, FSFG lacks scale in technology and cost efficiency, but it compensates with lower customer attrition and tailored solutions. The mortgage banking segment benefits from local real estate trends, though rising interest rates could pressure margins. Its reinsurance and captive insurance operations add a unique revenue stream, but these are minor contributors. Competitively, FSFG must contend with both larger banks (e.g., Huntington Bancshares) and local credit unions, which often offer lower-cost products.

Major Competitors

  • Huntington Bancshares Incorporated (HBAN): HBAN dominates the Midwest with a vast branch network and robust digital banking platform. Its scale allows for competitive loan pricing and higher operational efficiency, but it lacks FSFG’s localized customer intimacy. Weakness: Exposure to broader economic cycles.
  • Seacoast Banking Corporation of Florida (SBCF): SBCF, though geographically distant, is a comparable regional player with a strong SBA lending focus. Its Florida market offers higher growth potential but greater volatility. Strength: Diversified commercial lending. Weakness: Limited overlap with FSFG’s Indiana niche.
  • First Financial Corporation (THFF): An Indiana-based peer, THFF shares FSFG’s community banking focus but with a broader Midwest footprint. Strength: Similar localized lending expertise. Weakness: Less specialization in SBA loans compared to FSFG.
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