On Wednesday, Keefe, Bruyette & Woods adjusted its price target on First Financial Corp. (NASDAQ: THFF) shares, decreasing it to $43.00 from the previous $45.00. The firm maintained a Market Perform rating on the stock.
The revision follows First Financial's reported operating earnings of $0.95 per share, which did not meet the analysts' expectations. The company's performance was impacted by a combination of factors, including a decrease in net interest income (NII) as the net interest margin (NIM) declined by 10 basis points, lower fees, and expenses that were in line with predictions.
The firm noted that while loan growth was modest at 3% on a linked-quarter annualized (LQA) basis and credit trends remained steady, these factors contributed to a reduced provision for loan losses. However, the benefits were insufficient to counterbalance the softer pre-provision net revenue (PPNR).
Looking forward, the analysts at Keefe, Bruyette & Woods have expressed concerns over the lower starting point for NIM, which is anticipated to have a negative impact on the NII outlook for First Financial.
Additionally, the expected closure of First Financial's deal to acquire SimplyBank has been delayed, now projected to occur at the beginning of the third quarter of 2024 instead of the second quarter as previously anticipated. This delay is likely to postpone the anticipated benefits to First Financial's earnings per share (EPS).
As a result of these factors, Keefe, Bruyette & Woods has lowered its earnings estimates for First Financial for the years 2024 and 2025 by 10% and 3%, respectively. The Market Perform rating reaffirms the firm's neutral stance on the stock's anticipated performance.
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