First Financial Bankshares: Too Expensive To Upgrade, Too Exceptional To Downgrade

2026-03-11 11:10:53 ET

Back in early November of last year, I decided to revisit First Financial Bankshares ( FFIN ). For me, as a value investor, this kind of bank is one of the most difficult to rate. This stems from the fact that, as a value investor, I am wary of enterprises that trade at multiples that are higher than other firms that are similar typically do. Normally, such a valuation disparity would justify a ‘sell’ rating as opposed to a ‘hold’. But when you consider how high the quality of assets are, that makes it more challenging. I don't mind assigning premiums to companies that are high quality in nature. But figuring out the line between fairly valued on a quality adjusted basis and undervalued or overvalued is more art than science....

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