CCNE
CNB Financial Corporation
$34.54
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 13.0% below fair value
You pay
$34.54
Bear
$27.80
Fair
$39.72
Bull
$51.64
Bear
$27.80
-19.5%
ROTCE 6.6% → 0.71x TBV
Fair
$39.72
+15.0%
ROTCE 8.8% → 1.31x TBV
Bull
$51.64
+49.5%
ROTCE 10.2% → 1.67x TBV
Adjust Assumptions
8.8%
7.7%
Key Value Driver
ROTCE (8.8%) vs. cost of equity (7.7%)
Implied Market Multiple
1.37x
Summary
With ROTCE of 8.8% vs. 7.7% cost of equity, fair P/TBV is 1.31x on $25.23 tangible book, implying $39.72 per share. DDM cross-check: $12.05.
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: $12.05 (70% 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