PRK
Park National Corporation
$182.99
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 4.8% above fair value
You pay
$182.99
Bear
$115.24
Fair
$174.58
Bull
$210.19
Bear
$115.24
-37.0%
ROTCE 11.3% → 1.75x TBV
Fair
$174.58
-4.6%
ROTCE 15.1% → 2.65x TBV
Bull
$210.19
+14.9%
ROTCE 17.4% → 3.19x TBV
Adjust Assumptions
15.1%
8.2%
Key Value Driver
ROTCE (15.1%) vs. cost of equity (8.2%)
Implied Market Multiple
2.78x
Summary
With ROTCE of 15.1% vs. 8.2% cost of equity, fair P/TBV is 2.65x on $65.92 tangible book, implying $174.58 per share. DDM cross-check: $201.01.
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