ESQ
Esquire Financial Holdings, Inc.
$122.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.4% below fair value
You pay
$122.83
Bear
$127.15
Fair
$134.08
Bull
$134.08
Bear
$127.15
+3.5%
ROTCE 13.2% → 3.79x TBV
Fair
$134.08
+9.2%
ROTCE 17.6% → 4.00x TBV
Bull
$134.08
+9.2%
ROTCE 20.2% → 4.00x TBV
Key Value Driver
ROTCE (17.6%) vs. cost of equity (6.4%)
Implied Market Multiple
3.66x
Summary
With ROTCE of 17.6% vs. 6.4% cost of equity, fair P/TBV is 4.00x on $33.52 tangible book, implying $134.08 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