INBK
First Internet Bancorp
$23.67
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 25.1% below fair value
You pay
$23.67
Bear
$22.13
Fair
$31.61
Bull
$41.10
Bear
$22.13
-6.5%
ROTCE 4.0% → 0.30x TBV
Fair
$31.61
+33.6%
ROTCE -9.9% → 0.30x TBV
Bull
$41.10
+73.6%
ROTCE -11.4% → 0.30x TBV
Key Value Driver
ROTCE (-9.9%) vs. cost of equity (9.0%)
Implied Market Multiple
0.58x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $26.50 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.61 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.
Return on equity (-9.9%) is below the minimum investors require (9.0%). This means the bank is worth less than the net assets on its books.
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