IBOC
International Bancshares Corporation
$76.53
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.4% below fair value
You pay
$76.53
Bear
$74.60
Fair
$114.97
Bull
$139.19
Bear
$74.60
-2.5%
ROTCE 10.4% → 1.56x TBV
Fair
$114.97
+50.2%
ROTCE 13.9% → 2.41x TBV
Bull
$139.19
+81.9%
ROTCE 16.0% → 2.92x TBV
Key Value Driver
ROTCE (13.9%) vs. cost of equity (8.1%)
Implied Market Multiple
1.6x
Summary
With ROTCE of 13.9% vs. 8.1% cost of equity, fair P/TBV is 2.41x on $47.75 tangible book, implying $114.97 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