GABC
German American Bancorp, Inc.
$49.56
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 21.6% below fair value
You pay
$49.56
Bear
$41.66
Fair
$63.24
Bull
$76.19
Bear
$41.66
-15.9%
ROTCE 11.2% → 2.08x TBV
Fair
$63.24
+27.6%
ROTCE 15.0% → 3.15x TBV
Bull
$76.19
+53.7%
ROTCE 17.2% → 3.80x TBV
Adjust Assumptions
15.0%
7.5%
Key Value Driver
ROTCE (15.0%) vs. cost of equity (7.5%)
Implied Market Multiple
2.47x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$54.50
Divergence from AlphaVal
16%
Summary
With ROTCE of 15.0% vs. 7.5% cost of equity, fair P/TBV is 3.15x on $20.05 tangible book, implying $63.24 per share. DDM cross-check: $108.01.
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: $108.01 (71% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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