PRK
Park National Corporation
$169.58
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 3.6% below fair value
You pay
$169.58
Bear
$116.10
Fair
$175.89
Bull
$211.76
Bear
$116.10
-31.5%
ROTCE 11.3% → 1.76x TBV
Fair
$175.89
+3.7%
ROTCE 15.1% → 2.67x TBV
Bull
$211.76
+24.9%
ROTCE 17.4% → 3.22x TBV
Key Value Driver
ROTCE (15.1%) vs. cost of equity (8.2%)
Implied Market Multiple
2.58x
Summary
With ROTCE of 15.1% vs. 8.2% cost of equity, fair P/TBV is 2.67x on $65.80 tangible book, implying $175.89 per share. DDM cross-check: $198.08.
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