CLBK
Columbia Financial, Inc.
$11.56
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 331.3% above fair value
You pay
$11.56
Bear
$1.88
Fair
$2.68
Bull
$4.01
Bear
$1.88
-83.8%
ROTCE 4.0% → 0.30x TBV
Fair
$2.68
-76.8%
ROTCE 5.0% → 0.49x TBV
Bull
$4.01
-65.3%
ROTCE 5.7% → 0.86x TBV
Adjust Assumptions
5.0%
6.0%
Key Value Driver
ROTCE (5.0%) vs. cost of equity (6.0%)
Implied Market Multiple
2.48x
Summary
With ROTCE of 5.0% vs. 6.0% cost of equity, fair P/TBV is 0.49x on $4.66 tangible book, implying $2.68 per share.
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.
Return on equity (5.0%) is below the minimum investors require (6.0%). This means the bank is worth less than the net assets on its books.
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