PRK
Park National Corporation
$190.54
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 3.2% above fair value
You pay
$190.54
Bear
$121.90
Fair
$184.68
Bull
$222.34
Bear
$121.90
-36.0%
ROTCE 11.3% → 1.85x TBV
Fair
$184.68
-3.1%
ROTCE 15.1% → 2.81x TBV
Bull
$222.34
+16.7%
ROTCE 17.4% → 3.38x TBV
Adjust Assumptions
15.1%
8.0%
Key Value Driver
ROTCE (15.1%) vs. cost of equity (8.0%)
Implied Market Multiple
2.9x
Summary
With ROTCE of 15.1% vs. 8.0% cost of equity, fair P/TBV is 2.81x on $65.80 tangible book, implying $184.68 per share. DDM cross-check: $218.57.
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