BY
Byline Bancorp, Inc.
$36.32
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 19.1% below fair value
You pay
$36.32
Bear
$28.17
Fair
$44.87
Bull
$54.89
Bear
$28.17
-22.4%
ROTCE 9.1% → 1.20x TBV
Fair
$44.87
+23.5%
ROTCE 12.2% → 1.91x TBV
Bull
$54.89
+51.1%
ROTCE 14.0% → 2.34x TBV
Adjust Assumptions
12.2%
8.3%
Key Value Driver
ROTCE (12.2%) vs. cost of equity (8.3%)
Implied Market Multiple
1.55x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$43.00
Divergence from AlphaVal
4%
Summary
With ROTCE of 12.2% vs. 8.3% cost of equity, fair P/TBV is 1.91x on $23.51 tangible book, implying $44.87 per share. DDM cross-check: $21.50.
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: $21.50 (52% 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