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How to value a bank?


bargainman
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Can anyone give me and others on the board a general primer on how to value a bank?  I only know a few very basic things.  ROA > 1% ROE > 12% as a general rule.  I've heard about tier 1 capital etc but I'm not 1005 sure what that means.  I remember reading that changes by the FASB 157 back in the day became one of the tipping points since banks could no longer count assets at original value and had to mark them to market when the market was imploding.    I understand that the bank has to hold a certain amount of capital/liquidity for all the loans they give out.  Other than that I've heard that WFC, JPM are the strongest banks. I've heard good things about PCBC as a jockey bet.  But I'm not sure what the 10 step checklist should be to evaluating banks.  Anyone care to share?  It'd be much appreciated.

 

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