CCNE
CNB Financial Corporation
$30.65
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 22.8% below fair value
You pay
$30.65
Bear
$27.80
Fair
$39.72
Bull
$51.64
Bear
$27.80
-9.3%
ROTCE 6.6% → 0.68x TBV
Fair
$39.72
+29.6%
ROTCE 8.8% → 1.26x TBV
Bull
$51.64
+68.5%
ROTCE 10.2% → 1.60x TBV
Key Value Driver
ROTCE (8.8%) vs. cost of equity (7.9%)
Implied Market Multiple
1.22x
Summary
With ROTCE of 8.8% vs. 7.9% cost of equity, fair P/TBV is 1.26x on $25.22 tangible book, implying $39.72 per share. DDM cross-check: $11.37.
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: $11.37 (71% 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