FFBC
First Financial Bancorp.
$35.61
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.9% below fair value
You pay
$35.61
Bear
$27.37
Fair
$39.10
Bull
$50.83
Bear
$27.37
-23.1%
ROTCE 12.4% → 1.55x TBV
Fair
$39.10
+9.8%
ROTCE 16.5% → 2.31x TBV
Bull
$50.83
+42.7%
ROTCE 19.0% → 2.77x TBV
Key Value Driver
ROTCE (16.5%) vs. cost of equity (9.4%)
Implied Market Multiple
2.41x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $34.00 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $39.10 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: $13.19 (68% 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