SHBI
Shore Bancshares, Inc.
$22.65
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 10.4% below fair value
You pay
$22.65
Bear
$15.80
Fair
$25.29
Bull
$30.99
Bear
$15.80
-30.3%
ROTCE 9.0% → 1.06x TBV
Fair
$25.29
+11.7%
ROTCE 12.0% → 1.70x TBV
Bull
$30.99
+36.8%
ROTCE 13.8% → 2.09x TBV
Adjust Assumptions
12.0%
8.7%
Key Value Driver
ROTCE (12.0%) vs. cost of equity (8.7%)
Implied Market Multiple
1.53x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$25.75
Divergence from AlphaVal
2%
Summary
With ROTCE of 12.0% vs. 8.7% cost of equity, fair P/TBV is 1.70x on $14.85 tangible book, implying $25.29 per share. DDM cross-check: $7.47.
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: $7.47 (70% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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