CUBI
Customers Bancorp, Inc.
$76.31
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 21.9% below fair value
You pay
$76.31
Bear
$68.35
Fair
$97.65
Bull
$126.94
Bear
$68.35
-10.4%
ROTCE 8.0% → 0.45x TBV
Fair
$97.65
+28.0%
ROTCE 10.6% → 0.76x TBV
Bull
$126.94
+66.4%
ROTCE 12.2% → 0.94x TBV
Adjust Assumptions
10.6%
12.7%
Key Value Driver
ROTCE (10.6%) vs. cost of equity (12.7%)
Implied Market Multiple
1.22x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$93.75
Divergence from AlphaVal
4%
Summary
With ROTCE of 10.6% vs. 12.7% cost of equity, fair P/TBV is 0.76x on $62.51 tangible book, implying $97.65 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Return on equity (10.6%) is below the minimum investors require (12.7%). This means the bank is worth less than the net assets on its books.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly