CZNC
Citizens & Northern Corporation
$25.19
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.5% below fair value
You pay
$25.19
Bear
$15.40
Fair
$28.47
Bull
$36.32
Bear
$15.40
-38.9%
ROTCE 6.6% → 1.03x TBV
Fair
$28.47
+13.0%
ROTCE 8.8% → 1.91x TBV
Bull
$36.32
+44.2%
ROTCE 10.1% → 2.44x TBV
Adjust Assumptions
8.8%
6.5%
Key Value Driver
ROTCE (8.8%) vs. cost of equity (6.5%)
Implied Market Multiple
1.69x
Summary
With ROTCE of 8.8% vs. 6.5% cost of equity, fair P/TBV is 1.91x on $14.89 tangible book, implying $28.47 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