First Financial (THFF) Net Interest Margin Strength Supports Bullish Narratives In Q3 FY 2025

First Financial (THFF) just posted its FY 2025 third quarter numbers, with total revenue of US$69.3 million and basic EPS of US$1.75 setting the tone for its latest update. The company has seen quarterly revenue move from US$48.99 million in Q2 FY 2024 to US$69.3 million in Q3 FY 2025, while basic EPS has shifted from US$0.74 to US$1.75 over the same stretch, giving investors a clear view of how the income line has tracked alongside the top line. With a trailing twelve month net profit margin of 29.5%, the story this quarter is really about how those earnings are being converted into profit.

See our full analysis for First Financial.

With the headline numbers on the table, the next step is to see how this recent performance lines up with the big-picture narratives investors have been using to frame First Financial, and where those stories might need an update.

Curious how numbers become stories that shape markets? Explore Community Narratives

4.25% net interest margin points to solid core banking spread

• First Financial reported a net interest margin of 4.25% in Q3 FY 2025, compared with 4.15% in Q2 FY 2025 and 4.11% in Q1 FY 2025, which sits alongside trailing twelve month net profit margin of 29.5% versus 22.9% last year.
• What stands out for a more bullish read is how these margin figures line up with the idea of a steady regional bank, because:
  • Net income excluding extra items has stayed in a fairly tight band across FY 2025, at US$18.4 million, US$18.6 million and US$20.8 million across Q1, Q2 and Q3, which fits the view of a traditional lender with relatively stable earnings from its core spread.
  • At the same time, trailing twelve month earnings growth of 70.3% and that 29.5% net profit margin both sit well with an optimistic take that First Financial’s conventional banking model can convert its interest spread into bottom line profit.

To see how this earnings momentum fits into the bigger story that investors are debating, take a look at the full balanced narrative on valuation, growth and risks: 📊 Read the full First Financial Consensus Narrative.

Loan book near US$4.0b with changing credit quality signals

• Total loans reached US$3,962.4 million in Q3 FY 2025, compared with US$3,891.3 million in Q2 FY 2025 and US$3,848.7 million in Q1 FY 2025, while non performing loans stood at US$19.3 million in Q3 FY 2025 versus US$9.8 million in Q2 FY 2025 and US$10.2 million in Q1 FY 2025.
• Bears would likely focus on those non performing loan figures when they question how resilient the bank’s loan book really is, because:
  • Non performing loans have moved around over the trailing periods, from US$15.9 million in Q2 FY 2024 to US$14.1 million in Q3 FY 2024 and US$13.3 million in Q4 FY 2024, before the more recent readings between roughly US$9.8 million and US$19.3 million, so credit quality is clearly a key swing factor to track.
  • With total loans now just under US$4.0b on the latest quarterly figure, even relatively small percentage shifts in non performing loans can attract cautious attention from investors who are worried about how quickly asset quality can affect earnings.

P/E of 10.7x and DCF fair value sit well below current metrics

• At a share price of US$66.69, the trailing P/E of 10.7x sits below the US Banks industry average of 11.8x and peer average of 11.2x, and the provided DCF fair value of US$134.63 is about 50.5% above the current price on these inputs.
• Supporters of a bullish view will point to this combination of earnings and valuation numbers as a key part of their case, because:
  • Trailing twelve month basic EPS of US$6.25 on net income excluding extra items of US$74.0 million means the bank’s profitability on recent data is what is driving that P/E of 10.7x, not a story stock with thin earnings.
  • The gap between the US$66.69 share price and the DCF fair value figure of US$134.63 sits alongside the lower than industry P/E, which together feed the argument that the market is valuing First Financial more conservatively than the supplied valuation model suggests.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on First Financial's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

First Financial’s rising non performing loans and shifting credit quality indicate that asset risk is an active concern alongside its otherwise solid profitability profile.

If you want banks and lenders with cleaner credit trends and stronger cushions, use our solid balance sheet and fundamentals stocks screener (388 results) today to focus on businesses structured to handle pressure.

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.

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