FBIZ
First Business Financial Services, Inc.
$70.85
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 36.0% below fair value
You pay
$70.85
Bear
$71.97
Fair
$110.74
Bull
$134.00
Bear
$71.97
+1.6%
ROTCE 10.5% → 1.67x TBV
Fair
$110.74
+56.3%
ROTCE 14.0% → 2.58x TBV
Bull
$134.00
+89.1%
ROTCE 16.1% → 3.12x TBV
Adjust Assumptions
14.0%
7.9%
Key Value Driver
ROTCE (14.0%) vs. cost of equity (7.9%)
Implied Market Multiple
1.65x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$76.00
Divergence from AlphaVal
46%
Summary
With ROTCE of 14.0% vs. 7.9% cost of equity, fair P/TBV is 2.58x on $43.00 tangible book, implying $110.74 per share.
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.
Wall Street's average price target is $76.00 (from 10 analysts). Our estimate is 46% above the consensus -- consider that gap carefully.
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