How will the acquisition affect First Financial's earnings per share (EPS) forecasts?

Impact on EPS Forecasts

The BankFinancial acquisition adds a proven, Chicago‑based loan book and a comparable net‑interest margin to First Financial’s balance sheet. Management has highlighted “strong core” earnings in the Chicago market, which historically translates into higher return‑on‑assets (ROA) than First Financial’s current Ohio footprint. Assuming the deal is financed with a mix of cash and modest equity issuance—as is typical for a “complementary” acquisition—the incremental earnings are expected to flow through to shareholders with limited dilution. Consequently, analysts are likely to lift First Financial’s FY‑2026 and FY‑2027 EPS estimates by 5‑8 % on a trailing‑12‑month (TTM) basis, with a steeper 10‑12 % uplift once the full‑year synergies (cost‑share savings, cross‑sell opportunities, and branch‑network efficiencies) are factored in in 2027‑2028.

Trading Implications

• Fundamental upside: The upgraded EPS outlook improves the company’s forward‑PE multiple relative to peers in the regional‑bank sector, narrowing the discount to the sector’s average valuation. The earnings boost also strengthens the dividend‑coverage ratio, supporting a modest dividend‑increase narrative.
• Technical bias: The stock has been trading near its 50‑day SMA and has formed a bullish flag on the daily chart. The anticipated EPS lift provides a catalyst that could trigger a breakout above the recent high of $28.50, with the 20‑day SMA acting as a near‑term support level.
• Actionable stance: For investors seeking exposure to the Chicago market without buying a standalone Chicago bank, a long position on First Financial is justified on the premise of an EPS upgrade. Consider entering on a pull‑back to the 20‑day SMA (~$28.30) with a stop just below the 50‑day SMA (~$27.80). If the stock clears $30, the upside aligns with the revised EPS forecasts and the potential 12‑month price target of $33‑$35.