It seems to be a wise idea to add the First Financial Bankshares FFIN stock to your portfolio now. The company is well-poised for top-line growth, driven by continued improvement in loans and deposit balances. Also, FFIN is expected to keep enhancing shareholder value through efficient capital distributions, given its solid balance sheet.

Analysts seem optimistic regarding the company’s earnings growth prospects. Over the past 30 days, the Zacks Consensus Estimate for FFIN’s 2024 earnings has been revised 2% upward. Hence, First Financial currently carries a Zacks Rank #2 (Buy).

Looking at its price performance, FFIN shares have gained 16.6% so far this year against the industry’s decline of 1.1%.

Image Source: Zacks Investment Research

Mentioned below are a few factors that make First Financial a good investment option now.

Revenue Strength: FFIN has been witnessing consistent improvement in revenues, driven by growth in loans and deposit balances. Over the last four years (ended 2023), total revenues saw a compound annual growth rate (CAGR) of 5.5%, with the uptrend continuing in the first six months of 2024.

Backed by strong balance sheet and liquidity positions, the company is expected to be able to undertake inorganic expansion moves, which will further support top-line growth. In 2024 and 2025, FFIN revenues are projected to grow 9.4% and 6.4% year over year, respectively.

Earnings Growth: FFIN recorded earnings growth of 4.2% over the last three to five years. The upward trend is expected to continue in the near term. In 2024 and 2025, the company’s earnings are projected to improve 9.4% and 7.2%, respectively.

Superior Return on Equity (ROE): First Financial has an ROE of 14.01% compared with the industry average of 9.94%. This indicates the company’s superiority in utilizing shareholders’ funds.

Strong Leverage: FFIN’s debt/equity ratio is nil against the industry average of 0.14. The relatively strong financial health of the company is likely to help it perform better than its peers in a dynamic business environment.

Other Stocks Worth Considering

A couple of other top-ranked stocks from the finance space are Sierra Bancorp BSRR and Northrim BanCorp, Inc. NRIM. BSRR currently sports a Zacks Rank #1 (Strong Buy) and NRIM carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sierra Bancorp’s current-year earnings estimates have been revised 12.7% upward over the past 60 days. BSRR shares have gained 44.7% over the past six months.

The consensus estimate for Northrim’s current-year earnings has been revised 4.7% upward over the past 60 days. Over the past six months, NRIM’s share price has increased 26.7%.