CBAN
Colony Bankcorp, Inc.
$20.02
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 26.4% below fair value
You pay
$20.02
Bear
$15.25
Fair
$27.19
Bull
$34.36
Bear
$15.25
-23.8%
ROTCE 7.0% → 0.89x TBV
Fair
$27.19
+35.8%
ROTCE 9.3% → 1.59x TBV
Bull
$34.36
+71.6%
ROTCE 10.7% → 2.01x TBV
Key Value Driver
ROTCE (9.3%) vs. cost of equity (7.3%)
Implied Market Multiple
1.17x
Summary
With ROTCE of 9.3% vs. 7.3% cost of equity, fair P/TBV is 1.59x on $17.10 tangible book, implying $27.19 per share. DDM cross-check: $9.57.
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: $9.57 (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