RBCAA
Republic Bancorp, Inc.
$91.11
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 38.5% below fair value
You pay
$91.11
Bear
$93.44
Fair
$148.20
Bull
$181.05
Bear
$93.44
+2.6%
ROTCE 9.3% → 1.54x TBV
Fair
$148.20
+62.7%
ROTCE 12.4% → 2.44x TBV
Bull
$181.05
+98.7%
ROTCE 14.2% → 2.98x TBV
Adjust Assumptions
12.4%
7.4%
Key Value Driver
ROTCE (12.4%) vs. cost of equity (7.4%)
Implied Market Multiple
1.5x
Summary
With ROTCE of 12.4% vs. 7.4% cost of equity, fair P/TBV is 2.44x on $60.74 tangible book, implying $148.20 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