PFIS
Peoples Financial Services Corp.
$69.07
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 29.0% below fair value
You pay
$69.07
Bear
$63.42
Fair
$97.24
Bull
$117.53
Bear
$63.42
-8.2%
ROTCE 10.7% → 1.53x TBV
Fair
$97.24
+40.8%
ROTCE 14.2% → 2.34x TBV
Bull
$117.53
+70.2%
ROTCE 16.4% → 2.83x TBV
Key Value Driver
ROTCE (14.2%) vs. cost of equity (8.4%)
Implied Market Multiple
1.66x
Summary
With ROTCE of 14.2% vs. 8.4% cost of equity, fair P/TBV is 2.34x on $41.57 tangible book, implying $97.24 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.
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