WTBA
West Bancorporation, Inc.
$30.41
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 2.4% below fair value
You pay
$30.41
Bear
$19.59
Fair
$31.16
Bull
$38.10
Bear
$19.59
-35.6%
ROTCE 9.2% → 1.26x TBV
Fair
$31.16
+2.5%
ROTCE 12.2% → 2.00x TBV
Bull
$38.10
+25.3%
ROTCE 14.1% → 2.44x TBV
Adjust Assumptions
12.2%
8.1%
Key Value Driver
ROTCE (12.2%) vs. cost of equity (8.1%)
Implied Market Multiple
1.95x
Summary
With ROTCE of 12.2% vs. 8.1% cost of equity, fair P/TBV is 2.00x on $15.61 tangible book, implying $31.16 per share. DDM cross-check: $13.12.
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.
Dividend-based valuation: $13.12 (58% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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