UCB
United Community Banks, Inc.
$33.78
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 10.6% below fair value
You pay
$33.78
Bear
$26.46
Fair
$37.80
Bull
$49.14
Bear
$26.46
-21.7%
ROTCE 9.2% → 1.00x TBV
Fair
$37.80
+11.9%
ROTCE 12.3% → 1.59x TBV
Bull
$49.14
+45.5%
ROTCE 14.1% → 1.94x TBV
Adjust Assumptions
12.3%
9.2%
Key Value Driver
ROTCE (12.3%) vs. cost of equity (9.2%)
Implied Market Multiple
1.51x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$39.67
Divergence from AlphaVal
5%
Summary
With ROTCE of 12.3% vs. 9.2% cost of equity, fair P/TBV is 1.59x on $22.30 tangible book, implying $37.80 per share. DDM cross-check: $19.15.
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: $19.15 (49% 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