COLB
Columbia Banking System, Inc.
$29.73
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.2% below fair value
You pay
$29.73
Bear
$19.28
Fair
$33.48
Bull
$42.00
Bear
$19.28
-35.2%
ROTCE 7.3% → 0.82x TBV
Fair
$33.48
+12.6%
ROTCE 9.7% → 1.42x TBV
Bull
$42.00
+41.3%
ROTCE 11.2% → 1.78x TBV
Key Value Driver
ROTCE (9.7%) vs. cost of equity (8.0%)
Implied Market Multiple
1.25x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $32.90 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $33.48 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.
Dividend-based valuation: $43.24 (28% above 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