TowneBank logo TOWN - TowneBank

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
BUY 0
BUY 2
HOLD 4
SELL 0
STRONG
SELL 0
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Overvalued Mild
Trading 13.4% above fair value
Current Price $35.80
Bear Case $18.23 49.1% downside ($18.23 - $35.80) / $35.80 = -49.1% ROTCE 7.3% → 0.80x TBV
Fair Value $31.58 11.8% downside ($31.58 - $35.80) / $35.80 = -11.8% ROTCE 9.8% → 1.39x TBV
Bull Case $39.59 10.6% upside ($39.59 - $35.80) / $35.80 = 10.6% ROTCE 11.3% → 1.75x TBV

Adjust Assumptions

9.8%
8.2%

Key Value Driver

ROTCE (9.8%) vs. cost of equity (8.2%)

Implied Market Multiple 1.58x

Plain-Language Summary

With ROTCE of 9.8% vs. 8.2% cost of equity, fair P/TBV is 1.39x on $22.66 tangible book, implying $31.58 per share.

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.

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