ITIC
Investors Title Company
$283.96
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 19.9% below fair value
You pay
$283.96
Bear
$231.31
Fair
$354.68
Bull
$428.70
Bear
$231.31
-18.5%
ROTCE 10.7% → 1.77x TBV
Fair
$354.68
+24.9%
ROTCE 14.2% → 2.71x TBV
Bull
$428.70
+51.0%
ROTCE 16.4% → 3.27x TBV
Key Value Driver
ROTCE (14.2%) vs. cost of equity (7.8%)
Implied Market Multiple
2.17x
Summary
With ROTCE of 14.2% vs. 7.8% cost of equity, fair P/TBV is 2.71x on $131.02 tangible book, implying $354.68 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