OBT
Orange County Bancorp, Inc.
$34.05
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 58.8% below fair value
You pay
$34.05
Bear
$54.49
Fair
$82.73
Bull
$83.08
Bear
$54.49
+60.0%
ROTCE 11.2% → 2.62x TBV
Fair
$82.73
+143.0%
ROTCE 14.9% → 3.98x TBV
Bull
$83.08
+144.0%
ROTCE 17.2% → 4.00x TBV
Key Value Driver
ROTCE (14.9%) vs. cost of equity (6.7%)
Implied Market Multiple
1.64x
Summary
With ROTCE of 14.9% vs. 6.7% cost of equity, fair P/TBV is 3.98x on $20.77 tangible book, implying $82.73 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