FFBC
First Financial Bancorp.
$30.73
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 20.5% below fair value
You pay
$30.73
Bear
$27.06
Fair
$38.66
Bull
$50.26
Bear
$27.06
-11.9%
ROTCE 12.4% → 1.52x TBV
Fair
$38.66
+25.8%
ROTCE 16.5% → 2.27x TBV
Bull
$50.26
+63.6%
ROTCE 19.0% → 2.72x TBV
Key Value Driver
ROTCE (16.5%) vs. cost of equity (9.5%)
Implied Market Multiple
2.08x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $32.25 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $38.66 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: $13.01 (68% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $32.25 (from 19 analysts). Our estimate is 27% 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