SBSI
Southside Bancshares, Inc.
$34.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 18.3% below fair value
You pay
$34.35
Bear
$29.43
Fair
$42.04
Bull
$54.65
Bear
$29.43
-14.3%
ROTCE 8.0% → 1.18x TBV
Fair
$42.04
+22.4%
ROTCE 10.7% → 1.97x TBV
Bull
$54.65
+59.1%
ROTCE 12.3% → 2.44x TBV
Key Value Driver
ROTCE (10.7%) vs. cost of equity (7.4%)
Implied Market Multiple
1.58x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $35.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $42.04 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.
Dividend-based valuation: $21.15 (52% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $35.00 (from 8 analysts). Our estimate is 25% above the consensus -- consider that gap carefully.
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