CBAN
Colony Bankcorp, Inc.
$19.80
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 26.8% below fair value
You pay
$19.80
Bear
$15.18
Fair
$27.06
Bull
$34.19
Bear
$15.18
-23.4%
ROTCE 7.0% → 0.89x TBV
Fair
$27.06
+36.7%
ROTCE 9.3% → 1.58x TBV
Bull
$34.19
+72.7%
ROTCE 10.7% → 2.00x TBV
Key Value Driver
ROTCE (9.3%) vs. cost of equity (7.3%)
Implied Market Multiple
1.16x
Summary
With ROTCE of 9.3% vs. 7.3% cost of equity, fair P/TBV is 1.58x on $17.10 tangible book, implying $27.06 per share. DDM cross-check: $9.54.
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: $9.54 (65% 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