RBCAA
Republic Bancorp, Inc.
$94.90
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 36.5% below fair value
You pay
$94.90
Bear
$94.19
Fair
$149.40
Bull
$182.52
Bear
$94.19
-0.7%
ROTCE 9.3% → 1.55x TBV
Fair
$149.40
+57.4%
ROTCE 12.4% → 2.46x TBV
Bull
$182.52
+92.3%
ROTCE 14.2% → 3.00x TBV
Adjust Assumptions
12.4%
7.4%
Key Value Driver
ROTCE (12.4%) vs. cost of equity (7.4%)
Implied Market Multiple
1.56x
Summary
With ROTCE of 12.4% vs. 7.4% cost of equity, fair P/TBV is 2.46x on $60.74 tangible book, implying $149.40 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