TCBI
Texas Capital Bancshares, Inc.
$89.58
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 20.9% below fair value
You pay
$89.58
Bear
$62.71
Fair
$113.22
Bull
$143.53
Bear
$62.71
-30.0%
ROTCE 6.8% → 0.75x TBV
Fair
$113.22
+26.4%
ROTCE 9.1% → 1.36x TBV
Bull
$143.53
+60.2%
ROTCE 10.5% → 1.72x TBV
Adjust Assumptions
9.1%
7.8%
Key Value Driver
ROTCE (9.1%) vs. cost of equity (7.8%)
Implied Market Multiple
1.07x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (39 analysts)
$108.75
Divergence from AlphaVal
4%
Summary
With ROTCE of 9.1% vs. 7.8% cost of equity, fair P/TBV is 1.36x on $83.49 tangible book, implying $113.22 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