SMBC
Southern Missouri Bancorp, Inc.
$68.99
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.2% below fair value
You pay
$68.99
Bear
$54.39
Fair
$77.70
Bull
$101.01
Bear
$54.39
-21.2%
ROTCE 9.3% → 1.02x TBV
Fair
$77.70
+12.6%
ROTCE 12.4% → 1.62x TBV
Bull
$101.01
+46.4%
ROTCE 14.2% → 1.98x TBV
Key Value Driver
ROTCE (12.4%) vs. cost of equity (9.2%)
Implied Market Multiple
1.61x
Summary
With ROTCE of 12.4% vs. 9.2% cost of equity, fair P/TBV is 1.62x on $42.75 tangible book, implying $77.70 per share. DDM cross-check: $22.71.
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: $22.71 (71% 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