---
title: "Tangible Book Value: definition, formula, and thresholds"
description: "Tangible book value (TBV) is a bank's common shareholders' equity minus goodwill and other intangible assets. It is the book value of the common equity once the assets that cannot be sold separately are taken out. Divided by common shares outstanding, it gives tangible book value per share."
canonical_url: https://www.bankregreports.com/glossary/tangible-book-value/
source: BankRegReports
category: "Capital"
units: "$"
schedule: "Schedule RC"
---

# Tangible Book Value

> Tangible book value (TBV) is a bank's common shareholders' equity minus goodwill and other intangible assets. It is the book value of the common equity once the assets that cannot be sold separately are taken out. Divided by common shares outstanding, it gives tangible book value per share.

## Formula

```
Tangible Book Value = Total Equity - Preferred Stock - Goodwill - Other Intangible Assets
```

Total equity, preferred stock, goodwill and other intangible assets all come from the balance sheet, Call Report Schedule RC for a bank or the FR Y-9C for a holding company. Goodwill arises when a bank pays more than the fair value of an acquired company's net assets; other intangibles are mostly core deposit intangibles from the same deals. Tangible book value per share divides the result by common shares outstanding, a figure that appears in a public company's SEC filings rather than on the call report. Net tangible book value usually means the same amount: total assets less intangibles, less total liabilities.

## Why it matters

Tangible book value shows how much loss-absorbing equity stands behind the common shares. Goodwill disappears when a bank is in trouble: it is written down, deducted from regulatory capital and worth nothing in a failure. That is why bank analysts track tangible book value per share over time and why acquirers report how long a deal takes to earn back the tangible book value it dilutes.

## How to read it

Compare tangible book value with total equity. When goodwill and intangibles are a small share of equity, the two are close and book value is already a hard number. When they are a large share, usually after acquisitions, reported equity overstates the cushion. Growth in tangible book value per share comes from retained earnings; it falls with losses, dividends above earnings, dilutive acquisitions and, because unrealized losses on available-for-sale securities run through equity, with rising interest rates.

## Thresholds

| Range | Reading | What it means |
|---|---|---|
| Intangibles < 5% of equity | Mostly tangible | Book value and tangible book value nearly match. |
| 5–15% | Modest | Some acquisition goodwill; tangible book a little below book value. |
| 15–30% | Material | Reported equity leans noticeably on goodwill and intangibles. |
| > 30% | Heavy | A large part of book equity would vanish in a write-off. |


## Worked example

At June 30, 2026, JPMorgan Chase Bank, N.A. reported total equity of $341,580 million, no preferred stock, $40,620 million of goodwill and $729 million of other intangible assets. Tangible book value = $341,580 million - $40,620 million - $729 million = $300,231 million, 88% of total equity; intangibles were 12% of equity. For a holding company with $1.2 billion of tangible book value and 40 million common shares, tangible book value per share is $30.

## Questions

### What is tangible book value?

Tangible book value is common shareholders' equity minus goodwill and other intangible assets. It is the part of book value backed by assets that could be sold or used to absorb losses.

### How do you calculate tangible book value?

Subtract preferred stock, goodwill and other intangible assets from total equity. A bank with $500 million of equity, no preferred stock and $60 million of goodwill and intangibles has $440 million of tangible book value.

### What is the difference between book value and tangible book value?

Book value is total common equity as reported. Tangible book value removes goodwill and other intangible assets, so it is lower for any bank that has made acquisitions.

### What is net tangible book value?

Net tangible book value is total assets minus intangible assets and total liabilities. For a bank with no preferred stock it is the same figure as tangible book value.

### Is tangible book value the same as tangible common equity?

Yes, in dollars. Tangible common equity is the term used in capital analysis and the TCE ratio; tangible book value is the term used for the same amount and for its per-share form.

## Sources

- [FFIEC Call Report Schedule RC (Balance Sheet), items 10.a, 10.b and 23 to 27](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF)
- [12 CFR Part 217, section 217.22 (goodwill and intangibles deducted from common equity tier 1)](https://www.ecfr.gov/current/title-12/part-217)

## Related metrics

- [Tangible Common Equity](https://www.bankregreports.com/glossary/tangible-common-equity/): Tangible common equity (TCE) is a bank's total equity minus preferred stock, goodwill and other intangible assets. It is the common shareholders' capital that would remain if the intangible assets were written off, and the measure analysts use to compare banks that grew by acquisition with banks that did not.
- [Tangible Common Equity / Tangible Assets](https://www.bankregreports.com/glossary/tce-ta/): TCE/TA measures common shareholders' equity excluding goodwill and intangibles, divided by total assets excluding the same. It is the purest measure of a bank's capital cushion to common shareholders and is not subject to risk-weighting choices.
- [Goodwill](https://www.bankregreports.com/glossary/goodwill/): Goodwill is the premium a bank paid over the fair value of net assets in an acquisition. It is an intangible asset that is fully deducted from common equity tier 1 capital and from tangible common equity, so it inflates book equity but counts for nothing in regulatory capital.
- [Intangible Assets](https://www.bankregreports.com/glossary/intangible-assets/): Intangible assets are non-physical assets other than goodwill: core deposit intangibles, customer relationships, and certain servicing rights. Most are deducted from regulatory capital, so like goodwill they widen the gap between book and tangible equity.
- [Total Equity Capital](https://www.bankregreports.com/glossary/total-equity/): Total equity capital is the bank's net worth on a book basis: common stock, surplus, retained earnings, and accumulated other comprehensive income (AOCI). It is the first cushion that absorbs losses before depositors or the FDIC are exposed.
- [Return on Tangible Common Equity](https://www.bankregreports.com/glossary/return-on-tangible-common-equity/): Return on tangible common equity (ROTCE) is a bank's annual net income available to common shareholders divided by its average tangible common equity. It shows the return on the equity that would remain if goodwill and other intangible assets were written off.

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