CUBI
Customers Bancorp, Inc.
$76.62
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 19.9% below fair value
You pay
$76.62
Bear
$66.95
Fair
$95.66
Bull
$124.35
Bear
$66.95
-12.6%
ROTCE 8.0% → 0.47x TBV
Fair
$95.66
+24.8%
ROTCE 10.6% → 0.78x TBV
Bull
$124.35
+62.3%
ROTCE 12.2% → 0.97x TBV
Key Value Driver
ROTCE (10.6%) vs. cost of equity (12.5%)
Implied Market Multiple
1.23x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $89.67 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $95.66 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 (12.5%). 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