ITIC
Investors Title Company
$297.97
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 18.3% below fair value
You pay
$297.97
Bear
$237.90
Fair
$364.78
Bull
$440.91
Bear
$237.90
-20.2%
ROTCE 10.7% → 1.82x TBV
Fair
$364.78
+22.4%
ROTCE 14.2% → 2.78x TBV
Bull
$440.91
+48.0%
ROTCE 16.4% → 3.37x TBV
Adjust Assumptions
14.2%
7.7%
Key Value Driver
ROTCE (14.2%) vs. cost of equity (7.7%)
Implied Market Multiple
2.27x
Summary
With ROTCE of 14.2% vs. 7.7% cost of equity, fair P/TBV is 2.78x on $131.02 tangible book, implying $364.78 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