IBOC
International Bancshares Corporation
$72.78
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 35.6% below fair value
You pay
$72.78
Bear
$73.32
Fair
$113.00
Bull
$136.81
Bear
$73.32
+0.7%
ROTCE 10.4% → 1.54x TBV
Fair
$113.00
+55.3%
ROTCE 13.9% → 2.37x TBV
Bull
$136.81
+88.0%
ROTCE 16.0% → 2.87x TBV
Key Value Driver
ROTCE (13.9%) vs. cost of equity (8.2%)
Implied Market Multiple
1.52x
Summary
With ROTCE of 13.9% vs. 8.2% cost of equity, fair P/TBV is 2.37x on $47.75 tangible book, implying $113.00 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