CZFS
Citizens Financial Services, Inc.
$84.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 59.5% below fair value
You pay
$84.22
Bear
$147.85
Fair
$207.97
Bull
$207.97
Bear
$147.85
+75.5%
ROTCE 11.0% → 2.84x TBV
Fair
$207.97
+146.9%
ROTCE 14.6% → 4.00x TBV
Bull
$207.97
+146.9%
ROTCE 16.8% → 4.00x TBV
Adjust Assumptions
14.6%
6.5%
Key Value Driver
ROTCE (14.6%) vs. cost of equity (6.5%)
Implied Market Multiple
1.62x
Summary
With ROTCE of 14.6% vs. 6.5% cost of equity, fair P/TBV is 4.00x on $51.99 tangible book, implying $207.97 per share. DDM cross-check: $39.19.
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.
Dividend-based valuation: $39.19 (81% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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