Is First Citizens BancShares ($FCNCA) Quietly Engineering a Banking Empire No One Saw Coming?
Why ROTCE and ROE Tells Us A Lot of Long Term Returns
Return on Equity (ROE) and Return on Tangible Equity (ROTCE) tells us the return of that $1.
Victuars focus so much on ROTCE mainly because it tells us which bank earns more relative to the book value. Tangible equity is taking total equity minus goodwill, intangibles and preferred stocks because banks frequently have non-performing loans (as a system) and they would have to sell assets to shore up the balance sheet. You cannot sell goodwill and intangibles.
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