CZNC
Citizens & Northern Corporation
$21.07
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 20.0% below fair value
You pay
$21.07
Bear
$14.24
Fair
$26.33
Bull
$33.59
Bear
$14.24
-32.4%
ROTCE 6.6% → 0.96x TBV
Fair
$26.33
+25.0%
ROTCE 8.8% → 1.77x TBV
Bull
$33.59
+59.4%
ROTCE 10.1% → 2.26x TBV
Key Value Driver
ROTCE (8.8%) vs. cost of equity (6.7%)
Implied Market Multiple
1.41x
Summary
With ROTCE of 8.8% vs. 6.7% cost of equity, fair P/TBV is 1.77x on $14.89 tangible book, implying $26.33 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.
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