PRK
Park National Corporation
$192.19
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 6.8% above fair value
You pay
$192.19
Bear
$118.77
Fair
$179.93
Bull
$216.63
Bear
$118.77
-38.2%
ROTCE 11.3% → 1.80x TBV
Fair
$179.93
-6.4%
ROTCE 15.1% → 2.73x TBV
Bull
$216.63
+12.7%
ROTCE 17.4% → 3.29x TBV
Key Value Driver
ROTCE (15.1%) vs. cost of equity (8.1%)
Implied Market Multiple
2.92x
Summary
With ROTCE of 15.1% vs. 8.1% cost of equity, fair P/TBV is 2.73x on $65.80 tangible book, implying $179.93 per share. DDM cross-check: $204.52.
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