SBSI
Southside Bancshares, Inc.
$30.20
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.1% below fair value
You pay
$30.20
Bear
$30.66
Fair
$43.80
Bull
$56.94
Bear
$30.66
+1.5%
ROTCE 8.0% → 1.13x TBV
Fair
$43.80
+45.0%
ROTCE 10.7% → 1.88x TBV
Bull
$56.94
+88.5%
ROTCE 12.3% → 2.33x TBV
Adjust Assumptions
10.7%
7.6%
Key Value Driver
ROTCE (10.7%) vs. cost of equity (7.6%)
Implied Market Multiple
1.39x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$35.00
Divergence from AlphaVal
25%
Summary
With ROTCE of 10.7% vs. 7.6% cost of equity, fair P/TBV is 1.88x on $21.70 tangible book, implying $43.80 per share. DDM cross-check: $20.76.
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: $20.76 (53% 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