First Financial Bankshares currently trades at $34.91 per share and has shown little upside over the past six months, posting a small loss of 4.4%. The stock also fell short of the S&P 500’s 14.9% gain during that period.

Is now the time to buy FFIN? Or does the price properly account for its business quality and fundamentals? Find out in our full research report, it’s free.

Why Does FFIN Stock Spark Debate?

With roots dating back to 1890 and a network spanning over 70 locations across the Lone Star State, First Financial Bankshares (NASDAQ: FFIN) is a Texas-focused regional bank providing commercial banking, trust services, and wealth management across numerous communities throughout the state.

Two Things to Like:

1. Long-Term Revenue Growth Shows Momentum

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.

Thankfully, First Financial Bankshares’s 6.2% annualized revenue growth over the last five years was decent. Its growth was slightly above the average banking company and shows its offerings resonate with customers.

2. EPS Increasing Steadily

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

First Financial Bankshares’s solid 6.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.

One Reason to be Careful:

Net Interest Income Points to Soft Demand

Markets consistently prioritize net interest income over non-recurring fees, recognizing its superior quality compared to the more unpredictable revenue streams.

First Financial Bankshares’s net interest income has grown at a 7.3% annualized rate over the last five years, slightly worse than the broader banking industry.

Final Judgment

First Financial Bankshares’s positive characteristics outweigh the negatives. With its shares underperforming the market lately, the stock trades at 2.7× forward P/B (or $34.91 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.

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