Share Price
Market Cap
Market Cap -- The equity market capitalization of the company. It is defined as diluted shares multiplied by the current share price. I don't use the basic share count because the diluted share count takes into account options that could be converted into common shares as well as the potential issuance of new common shares in exchange for securities such as convertible preferred stock or convertible notes. The prudent investor should use the diluted share count figure because it accounts for all outstanding shares (minus treasury shares) in addition to contingent ownership claims which have not yet actually become common stock.
Enterprise Value
Enterprise Value -- This figure is arrived at by adding the company's market cap to long-term debt (including preferred stock) and subtracting from that product the cash and highly securities held for short-term purposes on the balance sheet. Randy defined this last year.
I take a shortcut to enterprise value for banks because I deal with the large-cap regional banks. For smaller banks, one would use the basic share count for the market cap part and then add all long-term debt and subtract cash. I would recommend not using this all that extensively in looking at banks because part of the cash & equivalents on a bank's balance sheet is represented by statutorily-required reserve balances, which can't be taken out of the business by an acquirer. In addition, bank capital isn't all long-term, so long-term debt just doesn't capture the total economic cost of acquiring a bank or financial company. For non-financial companies, this expression of a company's capitalization is infinitely more useful. If you don't feel like using enterprise value, you can forget about it.
Price/Book
Price/ Tangible Book
BVPS
Price/Assets
Price/Net Loans
Price/Deposits
Price/Tangible Assets
EV/Tangible Assets
Price/Revenues
P/E
Amortization-Adjusted P/E
Discount/Premium to Group
EPS
Cash EPS
Diluted Sharecount
1998 EPS Estimate
1999 EPS Estimate
Multiple on 1998 Est.
Multiple on 1999 Est.
Amort-Adjusted Multiple on 1999
Discount/Premium to Group
Capital Productivity/Efficiency
Asset Turnover2
Asset Turnover
Asset Turnover -- This is an asset activity ratio. Ever wonder why a supermarket can do well on net margins in the 2% area? Because they turn over their inventory so many times per year. That's why you always see stocking and inventory checks going on in a supermarket. Investors place too much emphasis on margins and not enough emphasis on asset and capital turnover. Those are the measures that help you spot a Home Depot (NYSE: HD) early, in fact. Anyway, in this application, we're looking at very low asset turnover. Banks turn their assets very, very slowly, but they use a lot of leverage and have very good margins, as we explained in the Amex ROE conundrum in an article titled "ROE2" that appeared here last week. The best bank in the world would have very high asset turnover, like American Express (NYSE: AXP), very high margins like NationsBank (NYSE: NB) or US Bancorp (NYSE: USB), and average leverage. To really juice up such a bank's returns, you'd increase the leverage, but also increase risks.
ROE2
ROE
Amortization Adjusted ROE
ROA
ROA2
Net margin2
Net Margin
Efficiency Ratio
Interest Income/AEA
Interest Expense/AEA
NIM/Tangible Assets
Net Share Buybacks (Including preferred)
Dividends on Common
Retention Rate
Payout Ratio on AAEarnings
Owners' Yield
Balance Sheet
Cash & Nonearning Assets
Cash & Nonearning Last Year
Long Term Debt
Shareholder's Equity
Last Year Equity
Tangible Equity
Total Assets
Last Year Assets
Total Liabilities
Goodwill
Last Year's Goodwill
Gross Loans
Loan Loss Reserves
Loan Loss Reserves %
Leverage
Equity/Tangible Assets
Average Equity/Average Assets
Avg. Assets/Avg. Equity (Tangible)
Average Equity/Average Assets Avg. Assets/Avg. Equity (Tangible) -- These are both measures of leverage a bank employs. As part of looking at bank's basic business model, I look at three components of return on equity (ROE) -- leverage, margins, and asset turnover. Together, these determine the company's return on equity. The formula for average equity to average assets is:
((shareholders' equity at beginning of the year + shareholders' equity at end of the year) / 2) / (assets at beginning of year + assets at end of year) / 2)).
For the second measure, I want to look at leverage without including goodwill in the shareholders' equity base or the asset base. We've talked about the meaning of goodwill and its amortization before, so we'll skip the basics on that and talk about why we take goodwill out of this leverage ratio. Goodwill is not an asset that is counted as capital by bank regulators here or elsewhere, according to the dictates of the Bank for International Settlements in its 1988 Basle Accord. As such, goodwill cannot be used as collateral in taking on loans or as reserve capital in lending out money. In assessing the true leverage of a bank, then, investors want to wipe out the asset in their leverage models. The formula for average assets to average equity (tangible) is:
((assets at beginning of year + assets at end of year - goodwill at beginning of year - goodwill at end of year) / 2) / ((equity at beginning of year + equity at end of year - goodwill at beginning of year - goodwill at end of year) / 2 )
Loans to Deposits
LT Debt/Equity
Leveraged Capital Ratio
Tier 1 Capital Ratio
Total Risk Based Capital Ratio
Income Statement
Revenues
Interest Income (TTM)
Interest Expense (TTM)
Net Interest Income
Provision for Loan Losses
Charge Offs
Net Charge Offs
Noninterest Income (TTM)
Noninterest Expense (TTM)
Net Income for Common (TTM)
Amortization Adjusted Earnings
Noninterest income/interest income
Noninterest income/revenues
Noninterest income/NII
Amort. Adjusted Net/Revs.
Amortization of Intangibles
Credit Quality
Nonperforming Loans
Nonperforming Assets
Nonperforming Assets Ratio
Reserves/Nonperforming Loans
Months Charge-Offs in Reserves
Deposits
Deposits
Noninterest bearing deposits
Noninterest deposits/deposits
Deposits/Liabilities
Risk-Based Capital Productivity
ROE2*Tier1
Leverage*Turns*Net Margin
