FFWM
First Foundation Inc.
$5.90
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 49.0% above fair value
You pay
$5.90
Bear
$3.29
Fair
$3.96
Bull
$5.15
Bear
$3.29
-44.2%
ROTCE 4.0% → 0.30x TBV
Fair
$3.96
-32.9%
ROTCE -17.0% → 0.30x TBV
Bull
$5.15
-12.7%
ROTCE -19.6% → 0.30x TBV
Adjust Assumptions
-17.0%
9.4%
Key Value Driver
ROTCE (-17.0%) vs. cost of equity (9.4%)
Implied Market Multiple
0.54x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$7.35
Divergence from AlphaVal
46%
Summary
With ROTCE of -17.0% vs. 9.4% cost of equity, fair P/TBV is 0.30x on $10.98 tangible book, implying $3.96 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.
Return on equity (-17.0%) is below the minimum investors require (9.4%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $7.35 (from 11 analysts). Our estimate is 46% 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