Regional Banks Show Margin Gains, Divergent Valuations

Regional and specialty banks reported broad margin improvement and sharp earnings rebounds, driven by cost cuts, digital investments and pockets of commercial strength, though sustainability and valuation differences remain investor concerns. C&F Financial's net margin rose to 20.9% from 16.4% a year earlier, earnings accelerated, and the stock trades at $68.92 versus an estimated fair value of $135.70 (P/E 8.5x). First Financial Bancorp posted 17% earnings growth and a 31.6% net margin, with analysts forecasting outsized earnings and revenue growth and a low P/E of 8.9x. First Western Financial's margins rebounded to 13.2% (from 3.1%) with a 403.7% earnings surge and EPS forecasts near 39% annually, though the shares carry a premium and face competitive deposit and loan pressure. First Bank delivered a 29.2% net margin and 24.7% EPS growth while trading below estimated fair value ($15.66 vs. $25.14) at a 10.1x P/E. First American reported a turnaround—margins to 6.8% and earnings up 419.7%—driven by commercial title strength, but analysts caution the outperformance may be episodic and longer-term growth forecasts lag the broader market.