ESQ
Esquire Financial Holdings, Inc.
$118.89
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 10.1% above fair value
You pay
$118.89
Bear
$95.70
Fair
$108.02
Bull
$140.43
Bear
$95.70
-19.5%
ROTCE 13.2% → 4.00x TBV
Fair
$108.02
-9.1%
ROTCE 17.6% → 4.00x TBV
Bull
$140.43
+18.1%
ROTCE 20.2% → 4.00x TBV
Adjust Assumptions
17.6%
6.2%
Key Value Driver
ROTCE (17.6%) vs. cost of equity (6.2%)
Implied Market Multiple
4.97x
Summary
With ROTCE of 17.6% vs. 6.2% cost of equity, fair P/TBV is 4.00x on $23.92 tangible book, implying $108.02 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