OCFC
OceanFirst Financial Corp.
$19.43
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 3.9% above fair value
You pay
$19.43
Bear
$13.09
Fair
$18.70
Bull
$24.31
Bear
$13.09
-32.6%
ROTCE 4.7% → 0.30x TBV
Fair
$18.70
-3.8%
ROTCE 6.2% → 0.41x TBV
Bull
$24.31
+25.1%
ROTCE 7.2% → 0.57x TBV
Adjust Assumptions
6.2%
9.5%
Key Value Driver
ROTCE (6.2%) vs. cost of equity (9.5%)
Implied Market Multiple
1.03x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$19.00
Divergence from AlphaVal
2%
Summary
With ROTCE of 6.2% vs. 9.5% cost of equity, fair P/TBV is 0.41x on $18.84 tangible book, implying $18.70 per share. DDM cross-check: $11.50.
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 (6.2%) is below the minimum investors require (9.5%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $11.50 (39% 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