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First Financial Bankshares (FFIN) Could Be 34% Below Fair Value After Strong Earnings

Simply Wall St · 2d ago

Why the latest earnings matter for First Financial Bankshares stock

First Financial Bankshares (FFIN) reported higher net interest income and net income for the second quarter and first half of 2026 compared with a year earlier, alongside modestly higher earnings per share.

For the quarter ended June 30, 2026, net interest income was US$136.91 million versus US$123.73 million a year ago, while net income was US$71.89 million compared with US$66.66 million.

Basic and diluted earnings per share from continuing operations for the quarter were US$0.50, up from US$0.47 in the prior year period, giving shareholders a slightly higher earnings contribution per share.

Looking at the first six months of 2026, net interest income came in at US$271.71 million versus US$242.52 million a year earlier, with net income of US$143.44 million compared with US$128.00 million.

For that six month period, basic earnings per share from continuing operations were US$1.00 versus US$0.90 a year ago, while diluted earnings per share were US$1.00 compared with US$0.89, pointing to consistent per share performance across the share count.

See our latest analysis for First Financial Bankshares.

At a share price of US$34.68, First Financial Bankshares has added 15.52% on a year to date share price return and 6.12% over 90 days, while the 1 year total shareholder return has slipped 2.32%. This suggests recent momentum has picked up compared with a softer longer term experience.

If these earnings have you thinking about how other financial stocks are pricing risk and growth, it can be useful to widen your search with a focused screener such as 18 top founder-led companies

First Financial Bankshares has put up solid recent results and the share price has started to respond, so the real issue now is whether that US$34.68 price is still reasonable or already demanding too much.

Price-to-Earnings of 18.4x: Is it justified for First Financial Bankshares?

On a P/E of 18.4x versus a last close of $34.68, First Financial Bankshares looks richly priced compared with both the wider US market and its banking peers.

The P/E multiple compares what investors are paying today for each dollar of current earnings. For a bank like First Financial Bankshares it often reflects expectations for future profit growth, balance sheet quality, and perceived stability of the franchise. With earnings forecast to grow around 9% per year, the current valuation suggests investors are accepting a higher entry price relative to those earnings, even though the forecast growth rate is not particularly high against the broader US market.

That premium stands out when set against both the US Banks industry P/E of 11.9x and the peer group average of 12.5x. This means the stock trades on a meaningfully higher multiple than many comparable banks. It also sits above an estimated fair P/E of 13.3x, a level the market could move towards if sentiment or expectations around growth and returns adjust.

Explore the SWS fair ratio for First Financial Bankshares

Result: Price-to-Earnings of 18.4x (OVERVALUED)

However, investors in First Financial Bankshares still need to weigh the relatively high P/E, its low value score of 2, and a 1 year return that has declined 2.32%.

Find out about the key risks to this First Financial Bankshares narrative.

Another view on First Financial Bankshares’ valuation

While the 18.4x P/E suggests First Financial Bankshares is expensive against banks on 11.9x and peers on 12.5x, the SWS DCF model points the other way, with an estimated value of US$46.52 versus the current US$34.68. That gap frames a clear question: which signal do you trust more?

Look into how the SWS DCF model arrives at its fair value.

FFIN Discounted Cash Flow as at Jul 2026
FFIN Discounted Cash Flow as at Jul 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out First Financial Bankshares for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this mix of signals around First Financial Bankshares feels mixed to you, that is the point, markets often send conflicting messages. To see what is behind the optimism investors already have, and how it stacks up against the risks, take a closer look at the 4 key rewards

Looking for more investment ideas beyond First Financial Bankshares?

If First Financial Bankshares has sharpened your focus on quality and price, do not stop here. Broaden your watchlist now or risk missing other opportunities.

  • Target potential mispricings by reviewing companies screened as 50 high quality undervalued stocks and see which ones might deserve a closer look before other investors pay attention.
  • Strengthen your income plan by scanning for resilient payers through the 9 dividend fortresses so you are not relying on just one or two stocks for yield.
  • Lower concentration risk by spreading your attention across the 84 resilient stocks with low risk scores and identify businesses with steadier profiles that can complement holdings like First Financial Bankshares.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.