BFST
Business First Bancshares, Inc.
$31.41
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 18.7% below fair value
You pay
$31.41
Bear
$23.84
Fair
$38.61
Bull
$47.48
Bear
$23.84
-24.1%
ROTCE 8.7% → 1.02x TBV
Fair
$38.61
+22.9%
ROTCE 11.5% → 1.65x TBV
Bull
$47.48
+51.1%
ROTCE 13.3% → 2.03x TBV
Adjust Assumptions
11.5%
8.6%
Key Value Driver
ROTCE (11.5%) vs. cost of equity (8.6%)
Implied Market Multiple
1.34x
Summary
With ROTCE of 11.5% vs. 8.6% cost of equity, fair P/TBV is 1.65x on $23.39 tangible book, implying $38.61 per share. DDM cross-check: $15.67.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $15.67 (59% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly