WCCB
West Coast Community Bancorp
$49.80
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 56.8% below fair value
You pay
$49.80
Bear
$76.94
Fair
$115.27
Bull
$119.21
Bear
$76.94
+54.5%
ROTCE 12.1% → 2.58x TBV
Fair
$115.27
+131.5%
ROTCE 16.1% → 3.87x TBV
Bull
$119.21
+139.4%
ROTCE 18.5% → 4.00x TBV
Key Value Driver
ROTCE (16.1%) vs. cost of equity (7.1%)
Implied Market Multiple
1.67x
Summary
With ROTCE of 16.1% vs. 7.1% cost of equity, fair P/TBV is 3.87x on $29.80 tangible book, implying $115.27 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