UMBF
UMB Financial Corporation
$143.76
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 2.9% above fair value
You pay
$143.76
Bear
$89.43
Fair
$139.74
Bull
$169.92
Bear
$89.43
-37.8%
ROTCE 9.8% → 1.27x TBV
Fair
$139.74
-2.8%
ROTCE 13.1% → 1.98x TBV
Bull
$169.92
+18.2%
ROTCE 15.1% → 2.40x TBV
Adjust Assumptions
13.1%
8.6%
Key Value Driver
ROTCE (13.1%) vs. cost of equity (8.6%)
Implied Market Multiple
2.03x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$166.56
Divergence from AlphaVal
16%
Summary
With ROTCE of 13.1% vs. 8.6% cost of equity, fair P/TBV is 1.98x on $70.66 tangible book, implying $139.74 per share. DDM cross-check: $39.40.
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: $39.40 (72% 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