FDBC
Fidelity D & D Bancorp, Inc.
$45.51
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.4% below fair value
You pay
$45.51
Bear
$43.57
Fair
$68.34
Bull
$83.20
Bear
$43.57
-4.3%
ROTCE 9.7% → 1.16x TBV
Fair
$68.34
+50.2%
ROTCE 12.9% → 1.81x TBV
Bull
$83.20
+82.8%
ROTCE 14.8% → 2.21x TBV
Key Value Driver
ROTCE (12.9%) vs. cost of equity (8.9%)
Implied Market Multiple
1.21x
Summary
With ROTCE of 12.9% vs. 8.9% cost of equity, fair P/TBV is 1.81x on $37.66 tangible book, implying $68.34 per share. DDM cross-check: $53.20.
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