It stands for tangible net asset value; the net asset value (or equity on the other side of the balance sheet) with the value of intangible assets (such as goodwill and other deferred assets, etc.) being deducted. More specifically, tangible net asset value (TNAV) means total assets minus (i) intangible assets, (ii) deferred tax assets, (iii) the aggregate liquidation value of the issued and outstanding preferred stock and (iv) total liabilities.

For banks and financial institutions, this measure of value is preferred over the plain net asset value (NAV) as it provides a better indication as to an entity’s value, ignoring value of tangible assets and goodwill due to their subjectivity and a buyer’s inability to recover their value in the case of liquidation (bankruptcy instigated).

At times of crisis, banks’ share prices tend to trade below 1x tangible net asset value for the worst interval of a crisis.