UCB
United Community Banks, Inc.
$33.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.9% below fair value
You pay
$33.22
Bear
$26.70
Fair
$38.14
Bull
$49.58
Bear
$26.70
-19.6%
ROTCE 9.2% → 1.05x TBV
Fair
$38.14
+14.8%
ROTCE 12.3% → 1.67x TBV
Bull
$49.58
+49.3%
ROTCE 14.1% → 2.05x TBV
Key Value Driver
ROTCE (12.3%) vs. cost of equity (9.0%)
Implied Market Multiple
1.49x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $39.50 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $38.14 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: $21.22 (44% 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