River Financial Corp (RVRF) stock intrinsic value fair value estimate & owner earnings analysis

River Financial Corporation is the holding company for River Bank & Trust, founded in 2006 and based in Prattville, Alabama. At the end of 2025 it had 23 full-service offices across Alabama, plus loan production offices in Tuscaloosa and Destin, Florida, with $3.79 billion of assets, $2.71 billion of loans, $3.33 billion of deposits and $293.6 million of shareholder equity. About 76.6% of loans are secured by real estate. The bank is a single business, so there are no separate segments. Its shares have no established public market; they trade only occasionally in private deals and over the counter under the symbol RVRF, so trades may be slow and the price hard to pin down. How we measured earnings. For a bank we start from cash generated by operations, remove swings in loans held for sale, accrued interest and other assets and liabilities, subtract stock compensation, and subtract the part of capital spending needed just to stand still. Per share, this gives $1.55 (2016), $1.82 (2017), $1.84 (2018), $1.66 (2019), $4.29 (2020), $4.34 (2021), $4.32 (2022), $3.67 (2023), $4.65 (2024) and $6.00 (2025). The figure rose in steps as the bank grew from a $0.7 billion to a $3.3 billion deposit base. We anchor on the median of 2023 through 2025, $4.65, because those years show the bank at its current size and include both the weaker year of 2023 and the stronger results since. We deliberately did not anchor on 2025 alone: it is the strongest year, and it also includes $10.1 million of losses on securities sales that are added back because they are non-cash. Because a bank's provision for loan losses is also added back in this method, we deduct expected loan write-offs ourselves, about $0.40 per share a year, matching net charge-offs of 0.11% to 0.13% of average loans in 2024 and 2025 ($3.3 million in 2025). What changed recently. Net income rose from $31.3 million in 2024 to $42.1 million in 2025. Net interest income climbed from $94.4 million to $121.7 million as the net interest margin widened from 3.01% to 3.53%; average loans grew about 10.3% and loan yields rose from 6.29% to 6.52%, mainly as existing loans repriced. Net income for the first half of 2026 was $28.0 million against $20.5 million a year earlier, about $14 million in each of the first two quarters versus an average of roughly $10.8 million a quarter in the second half of 2025. That supports the higher margin, but two quarters is not enough for us to lift the earnings level, so it is treated as a reason the anchor is cautious rather than as new earnings power. Growth check. Owner earnings per share grew 29% in 2025 ($4.65 to $6.00). The base case assumes only 5% in year one, below that pace, because the 2025 jump came with a widening of the margin from 3.01% to 3.53% that we do not assume repeats. Base case ($81 per share). Earnings start at $4.65 per share. We credit only growth the bank has already shown it can repeat and pay for from its own earnings: net new loans of $533 million, $436 million, $246 million and $226 million in 2022 through 2025, funded by retained profits (only about 10% of 2025 net income, $4.2 million, was paid as dividends) and deposit growth of $260 million in 2025 and $337 million in 2024. Balance-sheet growth is set well below that record and fades: 5%, 5%, 4%, 4%, 3%, 3%, 2%, 2%, 1%, 1% over ten years, then none. Growth is not free for a bank, so each year we hold back the equity needed to support it, about $37.50 of equity per share today. After year ten the bank keeps earning what it earns, with no further growth, because its deposit franchise and record of profits in every year we can see (2015 through 2025) are structural. We leave out margin expansion beyond today's level, share gains, and the Tuscaloosa and Destin offices, which are approved but not yet proven. Bear case ($51 per share). Earnings fall back to the 2023 level of $3.67 per share and stay there with no growth. Credit costs rise to about 0.5% of loans for three years, against about 0.12% now; the bank's provision for loan losses reached $8.6 million in 2020, about 0.7% of year-end loans, so this has happened before. That costs roughly $1 per share a year for three years. Other named pressures are the 76.6% real estate concentration, a $40 million subordinated note that was fixed at 4.00% until March 15, 2026 and now floats at three-month SOFR plus 3.42 percentage points, and the 2023 sale of 968,904 new shares for $32.9 million, which shows growth has needed outside capital before. Bull case ($124 per share). Earnings start at the 2025 level of $6.00 per share, which the first half of 2026 supports, and the bank keeps growing its balance sheet at 8%, 8%, 7%, 7%, 6%, 5%, 4%, 3%, 2% and 1%, below the 2022 to 2025 record, before levelling off. Loan losses stay near today's level. What the shares appear to be worth. Our estimates are $51 (bear), $81 (base) and $124 (bull). The margin-of-safety price of $40 sits below the bear case to allow for a leveraged, real-estate-heavy lender, a wide gap between cases, and a thinly traded stock for which the company itself makes no market. What could make this wrong. A sharp real estate downturn in Alabama, a margin that falls back toward 2024 levels as deposit costs or asset yields shift, or a need to sell more shares to fund growth. We reviewed the second-quarter 2026 report only through its reported figures, not its narrative, so our view of 2026 rests on those figures alone.