NBBK
NB Bancorp, Inc. Common Stock
$21.64
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 3.3% above fair value
You pay
$21.64
Bear
$5.95
Fair
$20.95
Bull
$30.04
Bear
$5.95
-72.5%
ROTCE 4.6% → 0.30x TBV
Fair
$20.95
-3.2%
ROTCE 6.1% → 1.06x TBV
Bull
$30.04
+38.8%
ROTCE 7.0% → 1.52x TBV
Key Value Driver
ROTCE (6.1%) vs. cost of equity (6.0%)
Implied Market Multiple
1.09x
Summary
With ROTCE of 6.1% vs. 6.0% cost of equity, fair P/TBV is 1.06x on $19.83 tangible book, implying $20.95 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