How to Figure the Book Value of Bank Stock

by Bryan Keythman

The book value of a bank is equal to its assets minus its liabilities, which a bank reports on its balance sheet. Book value, which is also known as shareholders’ equity, measures a bank’s residual value that would remain if the bank sold its assets and paid off its debts. The book value per share of bank stock equals the bank’s book value divided by the number of common shares outstanding. A bank’s book value per share typically differs from its market value per share, which fluctuates as investors trade the bank’s stock.

1. Find a public bank’s balance sheet in either its 10-Q quarterly reports in its 10-K annual reports. You can download these reports from the investor relations section of a bank’s website or from the U.S. Securities and Exchange Commission’s online EDGAR database.

2. Identify the amount of total assets and the amount of total liabilities, which are listed on the balance sheet. Also, find the number of common shares outstanding, which are listed in the shareholders’ equity section of the balance sheet. For example, assume a bank has $100 million in total assets, $70 million in total liabilities and 3 million common shares outstanding.

3. Subtract total liabilities from total assets to calculate the bank’s book value. In this example, subtract $70 million from $100 million to get $30 million in book value.

4. Divide the bank’s book value by the number of common shares outstanding to calculate its book value per share of stock. Continuing with the example, divide $30 million in book value by 3 million shares outstanding to get $10 in book value per share.


  • Compare a bank’s book value per share to the stock’s market price per share. A market price that is less than book value per share may indicate that the bank’s stock is undervalued, but it may also indicate that the bank is in financial trouble. Research the bank further to determine your opinion of the stock.


  • If a bank has assets on its balance sheet that have decreased in value, but the bank has yet to recognize their value, its book value may inaccurately represent its assets’ residual value.


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