ITIC
Investors Title Company
$290.33
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 21.1% below fair value
You pay
$290.33
Bear
$240.06
Fair
$368.09
Bull
$444.90
Bear
$240.06
-17.3%
ROTCE 10.7% → 1.83x TBV
Fair
$368.09
+26.8%
ROTCE 14.2% → 2.81x TBV
Bull
$444.90
+53.2%
ROTCE 16.4% → 3.40x TBV
Adjust Assumptions
14.2%
7.6%
Key Value Driver
ROTCE (14.2%) vs. cost of equity (7.6%)
Implied Market Multiple
2.22x
Summary
With ROTCE of 14.2% vs. 7.6% cost of equity, fair P/TBV is 2.81x on $131.02 tangible book, implying $368.09 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