FFBC
First Financial Bancorp.
$31.00
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.0% below fair value
You pay
$31.00
Bear
$28.56
Fair
$40.80
Bull
$53.04
Bear
$28.56
-7.9%
ROTCE 12.4% → 1.52x TBV
Fair
$40.80
+31.6%
ROTCE 16.5% → 2.27x TBV
Bull
$53.04
+71.1%
ROTCE 19.0% → 2.72x TBV
Adjust Assumptions
16.5%
9.5%
Key Value Driver
ROTCE (16.5%) vs. cost of equity (9.5%)
Implied Market Multiple
2.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$35.00
Divergence from AlphaVal
17%
Summary
With ROTCE of 16.5% vs. 9.5% cost of equity, fair P/TBV is 2.27x on $14.78 tangible book, implying $40.80 per share. DDM cross-check: $13.51.
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: $13.51 (67% 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