MOFG
MidWestOne Financial Group, Inc.
$49.31
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 49.2% above fair value
You pay
$49.31
Bear
$23.14
Fair
$33.06
Bull
$42.98
Bear
$23.14
-53.1%
ROTCE 4.0% → 0.30x TBV
Fair
$33.06
-33.0%
ROTCE -13.3% → 0.30x TBV
Bull
$42.98
-12.8%
ROTCE -15.3% → 0.30x TBV
Adjust Assumptions
-13.3%
10.1%
Key Value Driver
ROTCE (-13.3%) vs. cost of equity (10.1%)
Implied Market Multiple
2.25x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$31.25
Divergence from AlphaVal
6%
Summary
With ROTCE of -13.3% vs. 10.1% cost of equity, fair P/TBV is 0.30x on $21.94 tangible book, implying $33.06 per share. DDM cross-check: $11.05.
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 (-13.3%) is below the minimum investors require (10.1%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $11.05 (67% below 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