NECB
Northeast Community Bancorp, Inc.
$27.41
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 71.0% below fair value
You pay
$27.41
Bear
$59.93
Fair
$94.51
Bull
$101.83
Bear
$59.93
+118.6%
ROTCE 9.5% → 2.35x TBV
Fair
$94.51
+244.8%
ROTCE 12.6% → 3.71x TBV
Bull
$101.83
+271.5%
ROTCE 14.5% → 4.00x TBV
Adjust Assumptions
12.6%
6.3%
Key Value Driver
ROTCE (12.6%) vs. cost of equity (6.3%)
Implied Market Multiple
1.08x
Summary
With ROTCE of 12.6% vs. 6.3% cost of equity, fair P/TBV is 3.71x on $25.46 tangible book, implying $94.51 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