FFIN
First Financial Bankshares, Inc.
$35.32
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 20.9% above fair value
You pay
$35.32
Bear
$19.43
Fair
$29.20
Bull
$35.06
Bear
$19.43
-45.0%
ROTCE 11.9% → 1.62x TBV
Fair
$29.20
-17.3%
ROTCE 15.8% → 2.44x TBV
Bull
$35.06
-0.7%
ROTCE 18.2% → 2.93x TBV
Key Value Driver
ROTCE (15.8%) vs. cost of equity (8.8%)
Implied Market Multiple
3.16x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $35.00 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $29.20 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