Princeton Bancorp, Inc.

AI-generated fair value estimate for this company.

Method: Single-stage residual income (Gordon-growth) model for banks: V = BVPS + (ROE-COE)/(COE-g) x BVPS. Inputs: BVPS $41.09 (Q2 2026 actual); normalized sustainable ROE 10.0% (TTM ROE ~9.3% on $25.86M TTM net income / ~$279.9M equity, trending up per Q2 2026 annualized run-rate of ~10.1% on NIM expansion); cost of equity 9.5% (CAPM: 4.2% risk-free + 0.9 beta x 5.5% ERP); long-run sustainable book-value growth g 4.0% (below the ~6.3% full-retention rate implied by 36.7% payout ratio, applied conservatively given limited reinvestment runway for a $2.25B community bank). Shares outstanding ~6.83M diluted.

Reasoning: Banks are valued off book value and the spread between ROE and cost of equity, not FCF, since capital/leverage and equity are central to the business model and 'free cash flow' is not economically meaningful for a depository institution. BPRN trades at 1.05x book value for 6.8M shares at $43.16; NIM has expanded for several consecutive quarters (3.86% in Q2 2026) and the 2023 IFS Bancorp acquisition is now fully integrated, supporting a sustainable ROE modestly above its cost of equity, which justifies a small premium to book value rather than the pure dividend-yield-only valuation.