How will the expanded presence in Chicago influence First Financial's deposit growth and loan portfolio composition?

Fundamental impact of the Chicago expansion

The acquisition of BankFinancial gives First Financial a foothold in one of the nation’s most diversified banking markets. Chicago’s commercial‑real‑estate (CRE) and small‑business ecosystem is far larger than the Mid‑Ohio market First Financial has historically served, so the combined balance‑sheet will see a double‑digit boost in deposits—both from BankFinancial’s existing retail base (≈ $5 bn) and from new “sticky” corporate deposits that typically carry higher balances and longer tenors. The added “core‑deposit” mix (high‑yield checking, money‑market and business‑to‑business sweep accounts) should lift the company’s overall deposit‑to‑asset ratio, easing funding costs and giving the bank more leeway to expand its loan book without increasing its cost‑of‑funds ratio.

On the loan‑portfolio side, the Chicago footprint brings a heavier tilt toward commercial real‑estate, multifamily, and construction financing, as well as a broader small‑business loan book. Those segments historically generate higher net‑interest margins (NIM) than the consumer‑loan‑heavy mix First Financial currently carries, which can lift overall earnings per share. However, they also introduce greater credit‑risk concentration in a market that can be cyclical. Analysts will watch the loan‑to‑deposit ratio and the proportion of CRE‑related loans; a gradual rise toward the 30‑35 % range (from today’s ~27 %) would be a healthy sign of growth, but a sudden jump could flag concentration risk.

Trading implications

Technically, the stock has found a bullish foothold around the $31‑$32 level (recent 50‑day SMA) after the announcement, with the 200‑day SMA at ~$28. A break above the recent high of $33.20 with volume above average would trigger a short‑term upside target near $36–$38, reflecting the market pricing in higher deposit yields and a richer loan mix. Conversely, a retreat below the 50‑day SMA and a drop under $29 could signal integration‑risk concerns (e.g., loan‑quality drag or integration costs). For risk‑adjusted exposure, a small‑to‑moderate long position with a stop at $29 and a profit target near $36 appears justified, while keeping an eye on the bank’s NIM trajectory (target > 4.3 % post‑deal) and the CRE‑exposure ratio (stay below 35 %). If the bank’s earnings guidance lifts after the first quarter post‑close, the stock could see a 10‑15 % upside in the next 2‑3 months.