CALB
California BanCorp
$25.09
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 16.5% below fair value
You pay
$25.09
Bear
$18.49
Fair
$30.04
Bull
$36.97
Bear
$18.49
-26.3%
ROTCE 8.6% → 0.83x TBV
Fair
$30.04
+19.7%
ROTCE 11.4% → 1.34x TBV
Bull
$36.97
+47.3%
ROTCE 13.2% → 1.65x TBV
Adjust Assumptions
11.4%
9.5%
Key Value Driver
ROTCE (11.4%) vs. cost of equity (9.5%)
Implied Market Multiple
1.12x
Summary
With ROTCE of 11.4% vs. 9.5% cost of equity, fair P/TBV is 1.34x on $22.36 tangible book, implying $30.04 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