UCB
United Community Banks, Inc.
$35.64
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 5.9% below fair value
You pay
$35.64
Bear
$23.82
Fair
$37.86
Bull
$46.28
Bear
$23.82
-33.2%
ROTCE 9.2% → 1.07x TBV
Fair
$37.86
+6.2%
ROTCE 12.3% → 1.70x TBV
Bull
$46.28
+29.8%
ROTCE 14.1% → 2.08x TBV
Adjust Assumptions
12.3%
8.9%
Key Value Driver
ROTCE (12.3%) vs. cost of equity (8.9%)
Implied Market Multiple
1.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$39.00
Divergence from AlphaVal
3%
Summary
With ROTCE of 12.3% vs. 8.9% cost of equity, fair P/TBV is 1.70x on $22.30 tangible book, implying $37.86 per share. DDM cross-check: $20.44.
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: $20.44 (46% 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