SMBC
Southern Missouri Bancorp, Inc.
$69.93
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 23.1% below fair value
You pay
$69.93
Bear
$58.92
Fair
$90.92
Bull
$110.12
Bear
$58.92
-15.7%
ROTCE 10.4% → 1.25x TBV
Fair
$90.92
+30.0%
ROTCE 13.8% → 1.93x TBV
Bull
$110.12
+57.5%
ROTCE 15.9% → 2.33x TBV
Adjust Assumptions
13.8%
9.1%
Key Value Driver
ROTCE (13.8%) vs. cost of equity (9.1%)
Implied Market Multiple
1.48x
Summary
With ROTCE of 13.8% vs. 9.1% cost of equity, fair P/TBV is 1.93x on $47.21 tangible book, implying $90.92 per share. DDM cross-check: $24.40.
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: $24.40 (73% 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