FFIN
First Financial Bankshares, Inc.
$32.24
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 7.8% above fair value
You pay
$32.24
Bear
$19.89
Fair
$29.90
Bull
$35.90
Bear
$19.89
-38.3%
ROTCE 11.9% → 1.59x TBV
Fair
$29.90
-7.3%
ROTCE 15.8% → 2.39x TBV
Bull
$35.90
+11.4%
ROTCE 18.2% → 2.87x TBV
Key Value Driver
ROTCE (15.8%) vs. cost of equity (8.9%)
Implied Market Multiple
2.88x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $39.25 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $29.90 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.
Wall Street's average price target is $39.25 (from 15 analysts). Our estimate is 32% below 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