PFIS
Peoples Financial Services Corp.
$71.39
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 28.2% below fair value
You pay
$71.39
Bear
$64.89
Fair
$99.50
Bull
$120.26
Bear
$64.89
-9.1%
ROTCE 10.7% → 1.56x TBV
Fair
$99.50
+39.4%
ROTCE 14.2% → 2.39x TBV
Bull
$120.26
+68.5%
ROTCE 16.4% → 2.89x TBV
Adjust Assumptions
14.2%
8.3%
Key Value Driver
ROTCE (14.2%) vs. cost of equity (8.3%)
Implied Market Multiple
1.72x
Summary
With ROTCE of 14.2% vs. 8.3% cost of equity, fair P/TBV is 2.39x on $41.57 tangible book, implying $99.50 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