UCB
United Community Banks, Inc.
$35.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 7.4% below fair value
You pay
$35.35
Bear
$24.03
Fair
$38.19
Bull
$46.69
Bear
$24.03
-32.0%
ROTCE 9.2% → 1.08x TBV
Fair
$38.19
+8.0%
ROTCE 12.3% → 1.71x TBV
Bull
$46.69
+32.1%
ROTCE 14.1% → 2.09x TBV
Key Value Driver
ROTCE (12.3%) vs. cost of equity (8.8%)
Implied Market Multiple
1.59x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $38.33 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $38.19 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.
Dividend-based valuation: $21.70 (43% 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