CBAN
Colony Bankcorp, Inc.
$19.97
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.5% below fair value
You pay
$19.97
Bear
$12.80
Fair
$22.83
Bull
$28.84
Bear
$12.80
-35.9%
ROTCE 7.0% → 0.89x TBV
Fair
$22.83
+14.3%
ROTCE 9.3% → 1.59x TBV
Bull
$28.84
+44.4%
ROTCE 10.7% → 2.01x TBV
Adjust Assumptions
9.3%
7.3%
Key Value Driver
ROTCE (9.3%) vs. cost of equity (7.3%)
Implied Market Multiple
1.39x
Summary
With ROTCE of 9.3% vs. 7.3% cost of equity, fair P/TBV is 1.59x on $14.38 tangible book, implying $22.83 per share. DDM cross-check: $9.51.
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: $9.51 (58% 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