TCBI
Texas Capital Bancshares, Inc.
$99.39
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 5.0% below fair value
You pay
$99.39
Bear
$57.92
Fair
$104.57
Bull
$132.58
Bear
$57.92
-41.7%
ROTCE 6.8% → 0.69x TBV
Fair
$104.57
+5.2%
ROTCE 9.1% → 1.25x TBV
Bull
$132.58
+33.4%
ROTCE 10.5% → 1.58x TBV
Key Value Driver
ROTCE (9.1%) vs. cost of equity (8.1%)
Implied Market Multiple
1.2x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $106.17 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $104.57 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