FMNB
Farmers National Banc Corp.
$15.03
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 42.8% below fair value
You pay
$15.03
Bear
$18.40
Fair
$26.28
Bull
$34.16
Bear
$18.40
+22.4%
ROTCE 13.6% → 2.04x TBV
Fair
$26.28
+74.9%
ROTCE 18.2% → 3.00x TBV
Bull
$34.16
+127.4%
ROTCE 20.9% → 3.58x TBV
Adjust Assumptions
18.2%
8.7%
Key Value Driver
ROTCE (18.2%) vs. cost of equity (8.7%)
Implied Market Multiple
2.22x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$16.00
Divergence from AlphaVal
64%
Summary
With ROTCE of 18.2% vs. 8.7% cost of equity, fair P/TBV is 3.00x on $6.76 tangible book, implying $26.28 per share. DDM cross-check: $10.76.
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: $10.76 (59% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $16.00 (from 7 analysts). Our estimate is 64% above 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