Bank stocks are valued mainly with two linked numbers: price to tangible book value (P/TBV), which compares the share price with the bank's equity after removing goodwill, and return on tangible common equity (ROTCE), which shows how much profit the bank earns on that equity. On October 9, 2026, JPMorgan Chase (JPM) closed at $332.99, or 2.94 times its June 30, 2026 tangible book value of $113.35 per share, after reporting a second-quarter ROTCE of 29% [1][6]. Citigroup (C) traded at 1.28 times tangible book with a ROTCE of 13.0%, and Wells Fargo (WFC) at 1.81 times with 17.7% [2][3][7][8]. The gap between those multiples is mostly the gap in returns.
Why don't P/E and EV/EBITDA work well for banks?
For an industrial company, debt is a financing choice, so analysts look through it with enterprise value and EBITDA. For a bank, borrowed money is the raw material: deposits and bonds are borrowed and lent out again, and interest paid is a cost of doing business, not a financing decision. That makes enterprise value and EBITDA close to meaningless for a bank.
The price-to-earnings ratio (P/E) still appears in bank research, but bank earnings swing for reasons that have little to do with the core business. Provisions for loan losses rise and fall with the economy, and one-time gains can inflate a single quarter. JPMorgan's second-quarter 2026 net income of $21.2 billion included a $4.6 billion net gain related to Visa shares and $1.0 billion of gains on other equity investments [6]. A P/E built on that quarter would make the stock look cheaper than its recurring profits justify.
Equity is steadier. A bank's assets are mostly loans and securities carried close to their value, so the book value of equity is a reasonable measure of what shareholders own. That is why bank valuation starts from the balance sheet.
What is tangible book value, and what does P/TBV show?
Book value is shareholders' equity. Tangible book value removes goodwill and other intangible assets (the premium a bank paid when it bought other banks), because those cannot be sold to cover losses. Preferred stock is also removed, so the figure belongs to common shareholders only. Divide by common shares outstanding and you get tangible book value per share (TBVPS).
P/TBV is the share price divided by TBVPS. A multiple of 1.0x means the market values the bank at exactly the equity on its books; 2.0x means investors pay $2 for every $1 of tangible equity, which they will do only if they expect the bank to earn well above its cost of capital.
| Bank | Price, Oct 9, 2026 | TBVPS, Jun 30, 2026 | P/TBV | Book value per share | P/B |
|---|---|---|---|---|---|
| JPMorgan Chase (JPM) | $332.99 | $113.35 | 2.94x | $133.01 | 2.50x |
| Wells Fargo (WFC) | $83.55 | $46.13 | 1.81x | $54.48 | 1.53x |
| Citigroup (C) | $129.64 | $100.89 | 1.28x | $114.74 | 1.13x |
Source: closing prices from DataPorium stock pages [1][2][3]; book and tangible book value per share as reported in each bank's June 30, 2026 Form 10-Q [6][7][8]. Multiples are DataPorium calculations.
Banks compute tangible equity slightly differently (JPMorgan, for example, nets deferred taxes against goodwill), so use each bank's own reported TBVPS rather than mixing methods [6]. Book value also moves every quarter: JPMorgan's TBVPS rose from $103.40 a year earlier to $113.35, a 10% increase, so a P/TBV quoted months later on an old book value overstates the multiple [6].
What does ROTCE tell you, and how is it linked to P/TBV?
ROTCE is annualized net income available to common shareholders divided by average tangible common equity. It answers the question P/TBV raises: how hard does each dollar of tangible equity work? The three banks above reported second-quarter 2026 ROTCE of 29% (JPMorgan), 17.7% (Wells Fargo) and 13.0% (Citigroup) [6][7][8]. Rank the banks by ROTCE and by P/TBV and the order is the same.
The link is not a coincidence. A simple steady-growth model gives a "justified" P/TBV of (ROTCE minus growth) divided by (cost of equity minus growth). With an illustrative cost of equity of 10% and growth of 4%, a bank earning a 15% ROTCE would be worth about 1.8 times tangible book, and one earning exactly 10% would be worth 1.0 times. On the same logic, a bank that earns less than its cost of equity would trade below tangible book.
Adjust ROTCE for one-time items
Use a normal quarter, or strip out one-time items, before applying the model. JPMorgan's ROTCE was 23% in the first quarter of 2026 and 29% in the second, when the Visa gain and equity-investment gains were included [6]. The multiple the market pays reflects the recurring level, not the peak quarter.
For a bank, the price-to-tangible-book multiple is largely a verdict on ROTCE: banks that earn well above their cost of equity trade at a premium to tangible book, and banks that do not trade near it.
Which other numbers matter in a bank's results?
ROTCE is the outcome. Four drivers explain it, and each appears in every quarterly report.
- Net interest margin (NIM): net interest income divided by average interest-earning assets, the spread between what a bank earns on loans and securities and what it pays on deposits and debt. In the second quarter of 2026 it was 2.40% at JPMorgan (3.65% excluding its Markets business), 2.43% at Wells Fargo and 2.54% at Citigroup [6][7][8].
- Efficiency ratio: noninterest expenses divided by revenue; lower is better. JPMorgan's overhead ratio was 48%, Wells Fargo's efficiency ratio 60% and Citigroup's 57.4% in the second quarter of 2026 [6][7][8].
- Capital (CET1 ratio): common equity tier 1 capital divided by risk-weighted assets. Capital above the regulatory requirement can be returned through buybacks and dividends. JPMorgan reported 14.2% against an 11.5% requirement, and Citigroup 12.8% against 11.6%; Wells Fargo reported 10.26% under the standardized approach [6][7][8].
- Credit quality: net charge-offs (loans written off, minus recoveries) and noncurrent loans (90 or more days late or no longer accruing interest). JPMorgan's card charge-off rate was 3.34% in the second quarter of 2026 [6].
DataPorium's bank screener shows the same drivers for every insured bank, from the quarterly reports each bank subsidiary files. These figures cover the bank charter, not the whole holding company, so they differ from the companies' own ratios [4].
| Bank subsidiary (Q2 2026) | Total assets | ROA | ROE | NIM | Tier 1 leverage | Noncurrent loans |
|---|---|---|---|---|---|---|
| JPMorgan Chase Bank | $4.09 trillion | 1.59% | 18.6% | 2.88% | 7.5% | 0.78% |
| Bank of America (BAC) | $2.65 trillion | 1.13% | 12.3% | 2.53% | 7.1% | 0.65% |
| Citibank | $1.98 trillion | 1.06% | 11.7% | 3.02% | 7.9% | 0.66% |
| Wells Fargo Bank | $1.91 trillion | 1.38% | 14.9% | 3.13% | 8.0% | 1.04% |
| PNC Bank | $610 billion | 1.32% | 12.6% | 3.15% | 9.0% | 0.74% |
| Truist Bank | $548 billion | 1.16% | 10.0% | 3.14% | 9.8% | 0.72% |
Source: DataPorium Bank Screener, quarter ended June 30, 2026; ROA and ROE annualized from year-to-date profit [4].
Why interest rates and bond holdings matter
Banks hold large portfolios of fixed-rate bonds, and those lose market value when long-term yields rise. The 10-year Treasury yield was 5.24% on October 9, 2026, up from 4.14% a year earlier [9]. Losses on bonds a bank intends to hold to maturity do not reduce reported book value, but they matter if the bank is ever forced to sell. That is what happened at Silicon Valley Bank, which failed on March 10, 2023 with $209.0 billion of assets; the estimated cost to the deposit insurer was $18.7 billion [5]. Reading the securities note in the 10-Q, including unrealized losses on held-to-maturity bonds, is part of valuing any bank.
How to check a bank's quarterly report in five steps
- Find TBVPS and ROTCE on the first pages of the earnings release or the 10-Q, and note any one-time items listed next to net income.
- Compute P/TBV with the current price and the latest TBVPS, and compare it with the bank's own history and peers.
- Check the drivers: NIM, the efficiency ratio and net charge-offs, against the prior quarter and a year earlier.
- Check capital: CET1 against the requirement, which sets how much the bank can return through buybacks and dividends.
- Read the securities and deposit notes: unrealized bond losses and changes in uninsured or noninterest-bearing deposits.
Large banks report third-quarter results in mid-October, so each step can be repeated with new numbers. The DataPorium stock pages for JPMorgan, Wells Fargo and Citigroup show updated prices and statements as they are filed [1][2][3].
Frequently asked questions
What is a good price to tangible book value for a bank?
There is no fixed number; it depends on returns. A bank earning roughly its cost of equity, often estimated near 10%, tends to trade near 1.0x tangible book, while JPMorgan, with a 29% second-quarter 2026 ROTCE, traded at 2.94x on October 9, 2026 [1][6].
What is the difference between ROE and ROTCE?
ROE divides profit by all common equity; ROTCE divides it by tangible common equity, after removing goodwill and intangibles. ROTCE is higher for banks that grew by acquisition: JPMorgan's second-quarter 2026 ROE was 24% and its ROTCE 29% [6].
Why do bank stocks trade below book value?
Investors expect the bank to earn less than its cost of equity, or they doubt the value of its assets, for example loans that may default or bonds with unrealized losses. Citigroup traded at 1.13x book value on October 9, 2026, with a 13.0% second-quarter ROTCE [3][8].
What is net interest margin for a bank?
It is net interest income divided by average interest-earning assets. In the second quarter of 2026, it was 2.40% at JPMorgan, 2.43% at Wells Fargo and 2.54% at Citigroup [6][7][8].
Sources & References
- [1] DataPorium JPMorgan Chase (JPM) stock page (prices and financial statements)
- [2] DataPorium Wells Fargo (WFC) stock page (prices and financial statements)
- [3] DataPorium Citigroup (C) stock page (prices and financial statements)
- [4] DataPorium Bank Screener (quarterly results of every US bank, June 30, 2026)
- [5] DataPorium Banks and Credit Unions (bank failures since 1934)
- [6] JPMorgan Chase & Co., Form 10-Q for the quarter ended June 30, 2026
- [7] Wells Fargo & Company, Form 10-Q for the quarter ended June 30, 2026 (filed July 28, 2026)
- [8] Citigroup Inc., Form 10-Q for the quarter ended June 30, 2026 (filed August 6, 2026)
- [9] DataPorium Interest Rates (Treasury yield curve, October 9, 2026)
