ITIC
Investors Title Company
$241.26
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 28.0% below fair value
You pay
$241.26
Bear
$218.58
Fair
$335.16
Bull
$405.10
Bear
$218.58
-9.4%
ROTCE 10.7% → 1.67x TBV
Fair
$335.16
+38.9%
ROTCE 14.2% → 2.56x TBV
Bull
$405.10
+67.9%
ROTCE 16.4% → 3.09x TBV
Key Value Driver
ROTCE (14.2%) vs. cost of equity (8.0%)
Implied Market Multiple
1.84x
Summary
With ROTCE of 14.2% vs. 8.0% cost of equity, fair P/TBV is 2.56x on $131.02 tangible book, implying $335.16 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