BANC
Banc of California, Inc.
$17.18
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 83.7% above fair value
You pay
$17.18
Bear
$6.54
Fair
$9.35
Bull
$12.28
Bear
$6.54
-61.9%
ROTCE 5.3% → 0.30x TBV
Fair
$9.35
-45.6%
ROTCE 7.1% → 0.45x TBV
Bull
$12.28
-28.5%
ROTCE 8.2% → 0.60x TBV
Adjust Assumptions
7.1%
10.9%
Key Value Driver
ROTCE (7.1%) vs. cost of equity (10.9%)
Implied Market Multiple
0.84x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$15.00
Divergence from AlphaVal
38%
Summary
With ROTCE of 7.1% vs. 10.9% cost of equity, fair P/TBV is 0.45x on $20.40 tangible book, implying $9.35 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.
Return on equity (7.1%) is below the minimum investors require (10.9%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $15.00 (from 27 analysts). Our estimate is 38% below the consensus -- consider that gap carefully.
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