| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 42.21 | -35 |
| Intrinsic value (DCF) | 60.98 | -6 |
| Graham-Dodd Method | 31.04 | -52 |
| Graham Formula | 83.84 | 29 |
First Financial Corporation (NASDAQ: THFF) is a regional bank holding company providing a comprehensive suite of financial services through its subsidiaries. Founded in 1834 and headquartered in Terre Haute, Indiana, the company operates 78 branches across west-central Indiana, east-central Illinois, western Kentucky, and middle and western Tennessee. Its offerings include commercial loans, residential real estate loans, home equity products, lease financing, and trust and insurance services. With a market capitalization of approximately $600 million, First Financial serves small businesses and retail customers in its regional footprint. The bank maintains a conservative risk profile, reflected in its low beta of 0.41, while delivering steady profitability with $47.3 million in net income and $4.00 diluted EPS in its latest fiscal year. As a community-focused institution with nearly 190 years of operating history, First Financial combines local market expertise with traditional banking stability in the competitive Midwest financial services sector.
First Financial Corporation presents a stable, dividend-paying investment opportunity for investors seeking regional bank exposure with lower volatility. The company's 0.41 beta indicates less sensitivity to market swings than peers, while its 4.8% dividend yield (based on $1.92 annual payout) provides income appeal. Strengths include a 190-year operating history, $603 million in operating cash flow, and conservative leverage with $215 million total debt against $935 million cash. However, the bank faces challenges from compressed net interest margins industry-wide and geographic concentration risk in Midwest markets. With a P/E ratio of approximately 15x (based on $4 EPS and $60 share price equivalent), valuation appears reasonable but not deeply discounted compared to regional bank peers. Investors should monitor commercial real estate exposure (21% of loans) and deposit competition in its rural markets.
First Financial competes in the crowded Midwest regional banking sector by leveraging its deep community ties and multi-generational customer relationships. The bank's competitive advantage stems from its localized decision-making - a contrast to larger national competitors - allowing faster response to small business lending needs. Its 78-branch network provides physical presence advantages in secondary markets where megabanks have reduced footprints. However, scale disadvantages emerge in technology investments; THFF's $6.1 million annual capex pales next to billion-dollar budgets of national players. The bank offsets this through selective digital partnerships rather than in-house development. Credit quality is a differentiator, with nonperforming assets at 0.35% of total assets (2023) versus 0.51% peer median. Deposit gathering remains challenging given lack of national brand recognition, though its 190-year history resonates with local customers. Commercial lending (60% of portfolio) focuses on niche industries like agricultural equipment financing where staff have specialized expertise. While not the lowest-cost provider, THFF competes on relationship banking - evidenced by 40%+ deposit market share in several Indiana counties. The bank must balance maintaining traditional strengths with accelerating digital adoption to retain younger demographics.