CZFS
Citizens Financial Services, Inc.
$71.58
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 65.6% below fair value
You pay
$71.58
Bear
$151.75
Fair
$208.18
Bull
$208.18
Bear
$151.75
+112.0%
ROTCE 11.0% → 2.92x TBV
Fair
$208.18
+190.8%
ROTCE 14.6% → 4.00x TBV
Bull
$208.18
+190.8%
ROTCE 16.8% → 4.00x TBV
Key Value Driver
ROTCE (14.6%) vs. cost of equity (6.4%)
Implied Market Multiple
1.38x
Summary
With ROTCE of 14.6% vs. 6.4% cost of equity, fair P/TBV is 4.00x on $52.04 tangible book, implying $208.18 per share. DDM cross-check: $39.50.
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: $39.50 (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