MCB
Metropolitan Bank Holding Corp.
$90.92
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 28.2% above fair value
You pay
$90.92
Bear
$49.66
Fair
$70.95
Bull
$92.24
Bear
$49.66
-45.4%
ROTCE 7.2% → 0.55x TBV
Fair
$70.95
-22.0%
ROTCE 9.6% → 0.96x TBV
Bull
$92.24
+1.4%
ROTCE 11.0% → 1.21x TBV
Key Value Driver
ROTCE (9.6%) vs. cost of equity (9.8%)
Implied Market Multiple
1.28x
Summary
With ROTCE of 9.6% vs. 9.8% cost of equity, fair P/TBV is 0.96x on $71.05 tangible book, implying $70.95 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.
Return on equity (9.6%) is below the minimum investors require (9.8%). This means the bank is worth less than the net assets on its books.
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