IBCP
Independent Bank Corporation
$34.72
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 39.7% below fair value
You pay
$34.72
Bear
$38.17
Fair
$57.56
Bull
$69.20
Bear
$38.17
+9.9%
ROTCE 11.6% → 1.78x TBV
Fair
$57.56
+65.8%
ROTCE 15.5% → 2.68x TBV
Bull
$69.20
+99.3%
ROTCE 17.8% → 3.22x TBV
Adjust Assumptions
15.5%
8.3%
Key Value Driver
ROTCE (15.5%) vs. cost of equity (8.3%)
Implied Market Multiple
1.62x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$39.50
Divergence from AlphaVal
46%
Summary
With ROTCE of 15.5% vs. 8.3% cost of equity, fair P/TBV is 2.68x on $21.46 tangible book, implying $57.56 per share. DDM cross-check: $33.09.
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: $33.09 (43% 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 46% 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