FMNB
Farmers National Banc Corp.
$14.14
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 38.7% below fair value
You pay
$14.14
Bear
$16.14
Fair
$23.06
Bull
$29.98
Bear
$16.14
+14.1%
ROTCE 13.6% → 2.08x TBV
Fair
$23.06
+63.1%
ROTCE 18.2% → 3.06x TBV
Bull
$29.98
+112.0%
ROTCE 20.9% → 3.65x TBV
Key Value Driver
ROTCE (18.2%) vs. cost of equity (8.6%)
Implied Market Multiple
1.85x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $16.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $23.06 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 $16.00 (from 7 analysts). Our estimate is 55% 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