HNVR
Hanover Bancorp, Inc.
$23.67
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 3.8% below fair value
You pay
$23.67
Bear
$17.22
Fair
$24.60
Bull
$31.98
Bear
$17.22
-27.2%
ROTCE 4.0% → 0.30x TBV
Fair
$24.60
+3.9%
ROTCE 4.3% → 0.30x TBV
Bull
$31.98
+35.1%
ROTCE 4.9% → 0.47x TBV
Adjust Assumptions
4.3%
6.0%
Key Value Driver
ROTCE (4.3%) vs. cost of equity (6.0%)
Implied Market Multiple
0.97x
Summary
With ROTCE of 4.3% vs. 6.0% cost of equity, fair P/TBV is 0.30x on $24.39 tangible book, implying $24.60 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.
Return on equity (4.3%) is below the minimum investors require (6.0%). This means the bank is worth less than the net assets on its books.
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