FDBC
Fidelity D & D Bancorp, Inc.
$52.47
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.6% below fair value
You pay
$52.47
Bear
$44.37
Fair
$69.59
Bull
$84.72
Bear
$44.37
-15.4%
ROTCE 9.7% → 1.18x TBV
Fair
$69.59
+32.6%
ROTCE 12.9% → 1.85x TBV
Bull
$84.72
+61.5%
ROTCE 14.8% → 2.25x TBV
Key Value Driver
ROTCE (12.9%) vs. cost of equity (8.8%)
Implied Market Multiple
1.39x
Summary
With ROTCE of 12.9% vs. 8.8% cost of equity, fair P/TBV is 1.85x on $37.66 tangible book, implying $69.59 per share. DDM cross-check: $54.63.
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