NECB
Northeast Community Bancorp, Inc.
$23.99
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 74.8% below fair value
You pay
$23.99
Bear
$60.42
Fair
$95.29
Bull
$101.69
Bear
$60.42
+151.9%
ROTCE 9.5% → 2.38x TBV
Fair
$95.29
+297.2%
ROTCE 12.6% → 3.75x TBV
Bull
$101.69
+323.9%
ROTCE 14.5% → 4.00x TBV
Key Value Driver
ROTCE (12.6%) vs. cost of equity (6.3%)
Implied Market Multiple
0.94x
Summary
With ROTCE of 12.6% vs. 6.3% cost of equity, fair P/TBV is 3.75x on $25.42 tangible book, implying $95.29 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