FCBC
First Community Bankshares, Inc.
$48.92
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.0% below fair value
You pay
$48.92
Bear
$41.92
Fair
$64.38
Bull
$73.25
Bear
$41.92
-14.3%
ROTCE 10.6% → 2.29x TBV
Fair
$64.38
+31.6%
ROTCE 14.1% → 3.52x TBV
Bull
$73.25
+49.7%
ROTCE 16.2% → 4.00x TBV
Adjust Assumptions
14.1%
6.9%
Key Value Driver
ROTCE (14.1%) vs. cost of equity (6.9%)
Implied Market Multiple
2.67x
Summary
With ROTCE of 14.1% vs. 6.9% cost of equity, fair P/TBV is 3.52x on $18.31 tangible book, implying $64.38 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.
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