Capital
Tangible Book Value
Also known as TBV, Tangible Book, Net Tangible Book Value, Tangible Book Value per Share, TBVPS
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.
How to calculate tangible book value
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.
- Take total equity capital from the balance sheet.
- Subtract preferred stock to leave common equity.
- Subtract goodwill and other intangible assets. The result is tangible book value.
- For tangible book value per share, divide by common shares outstanding at the same date.
Worked example
Source: FFIEC Call Report Schedule RC, quarter ended June 30, 2026: total bank equity capital (RCFD3210), perpetual preferred stock (RCFD3838), goodwill (RCFD3163) and other intangible assets (RCFDJF76). The per-share figures are illustrative; bank subsidiaries do not report a public share count.
Why does tangible book value matter?
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 do you interpret tangible book value?
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.
How much of book value is tangible?
| Range | Label | Interpretation |
|---|---|---|
| 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. |
Frequently asked
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
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