FBNC
First Bancorp
$64.05
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 51.9% above fair value
You pay
$64.05
Bear
$29.53
Fair
$42.18
Bull
$54.83
Bear
$29.53
-53.9%
ROTCE 7.2% → 0.67x TBV
Fair
$42.18
-34.1%
ROTCE 9.6% → 1.17x TBV
Bull
$54.83
-14.4%
ROTCE 11.0% → 1.47x TBV
Key Value Driver
ROTCE (9.6%) vs. cost of equity (8.8%)
Implied Market Multiple
2.29x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $69.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $42.18 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.
Dividend-based valuation: $14.75 (55% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $69.50 (from 16 analysts). Our estimate is 52% below 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