IBCP
Independent Bank Corporation
$36.86
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 37.7% below fair value
You pay
$36.86
Bear
$39.22
Fair
$59.15
Bull
$71.11
Bear
$39.22
+6.4%
ROTCE 11.6% → 1.83x TBV
Fair
$59.15
+60.5%
ROTCE 15.5% → 2.76x TBV
Bull
$71.11
+92.9%
ROTCE 17.8% → 3.31x TBV
Adjust Assumptions
15.5%
8.2%
Key Value Driver
ROTCE (15.5%) vs. cost of equity (8.2%)
Implied Market Multiple
1.72x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$39.50
Divergence from AlphaVal
50%
Summary
With ROTCE of 15.5% vs. 8.2% cost of equity, fair P/TBV is 2.76x on $21.46 tangible book, implying $59.15 per share. DDM cross-check: $34.22.
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: $34.22 (42% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $39.50 (from 8 analysts). Our estimate is 50% 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