HBCP
Home Bancorp, Inc.
$61.20
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 52.3% below fair value
You pay
$61.20
Bear
$82.14
Fair
$128.28
Bull
$155.96
Bear
$82.14
+34.2%
ROTCE 9.8% → 1.84x TBV
Fair
$128.28
+109.6%
ROTCE 13.1% → 2.88x TBV
Bull
$155.96
+154.8%
ROTCE 15.1% → 3.50x TBV
Adjust Assumptions
13.1%
7.2%
Key Value Driver
ROTCE (13.1%) vs. cost of equity (7.2%)
Implied Market Multiple
1.37x
Summary
With ROTCE of 13.1% vs. 7.2% cost of equity, fair P/TBV is 2.88x on $44.61 tangible book, implying $128.28 per share. DDM cross-check: $147.28.
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