OSBC
Old Second Bancorp, Inc.
$25.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 2.1% above fair value
You pay
$25.22
Bear
$17.29
Fair
$24.71
Bull
$32.12
Bear
$17.29
-31.4%
ROTCE 8.1% → 0.98x TBV
Fair
$24.71
-2.0%
ROTCE 10.8% → 1.63x TBV
Bull
$32.12
+27.4%
ROTCE 12.4% → 2.02x TBV
Key Value Driver
ROTCE (10.8%) vs. cost of equity (8.2%)
Implied Market Multiple
1.74x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $26.33 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $24.71 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.
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