Tangible book value earn earnback-up

Tangible book value per share tbvps definition investopedia. In fact, the link between tbv earnback and value creation is tenuous. Price to book value is a valuation ratio that is measured by stock price book value per share. Ellington residential mortgage reit price to book value earn. Tcfchemical merger of equals investor presentation tcf bank.

Tangible book value per share is the pershare value of a companys equity after removing any intangible assets. Tangible book value per share tbvps is the value of a companys tangible assets divided by its current outstanding shares. This article originally appeared on the subscriber side of snl financials website. The median tangible book value earnback period via the crossover method for the past seven years is shared above. The different approaches to calculating tangible book value dilution in. Tangible book value per share dilution old national bank. As you can see in this example, there is a major distortion of book value per share due to a major share repurchase done above the current book value per share number. An allcash acquisition will have a different effect on book value and. While tangible book value earnback is much ballyhooed and has lately been a metric that has led to some good deals not being done the true success of the deal is measured in what it does for the acquirers profitability once the majority of cost savings and synergies are achieved, he wrote. Assets such as property and equipment are considered to be tangible assets. The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. The median earnback period has approximated three3 years each of the past five5 years. One widely used but misleading metric is the dilution of tangible book value tbv that occurs. Tbv dilution and earnback are poor indicators of a transactions full.