MUNCY COLUMBIA FINANCIAL Corp (CCFN) stock intrinsic value fair value estimate & owner earnings analysis

Muncy Columbia Financial Corporation is the holding company for Journey Bank, a community bank in central and north-central Pennsylvania with about $1.67 billion of assets, $1.18 billion of loans and $1.41 billion of deposits at the end of 2025. The company in its present form dates from the November 2023 merger of CCFNB Bancorp and Muncy Bank Financial, so only two full years of combined results exist. Everything below is stated per share after the 2026 three-for-one stock split. Earlier estimates on this company were prepared on a different basis and are not comparable. What the business earns. We measure earnings as the cash the bank generates from operations, less working-capital swings, stock compensation and the capital spending needed to keep the branches and systems running. On that basis owner earnings were $1.62 in 2022 (the smaller pre-merger bank), $0.90 in the 2023 merger year, $1.32 in 2024 and $1.82 in 2025. The 2023 year is set aside because of merger costs and a $2.5 million loan-loss provision on acquired loans. 2022 describes a different, much smaller business. The 2025 figure rose 38% over 2024 because the bank repaid most of its expensive short-term borrowings (down from $68.4 million to $12.5 million) and its tax-equivalent net interest margin widened from 3.46% to 4.08%. Reported net income was higher still, $2.28 per share in 2025, because it includes $9.6 million of non-cash accretion of the discount on loans acquired in the merger. Operating cash flow does not include that accretion, so our earnings measure does not either. That accretion runs off as the acquired loans repay ($10.7 million in 2024, $9.6 million in 2025), and we give it no credit in any case. First-half 2026 net income was $14.3 million, or $1.35 a share, against $1.33 in the second half of 2025 and $0.95 in the first half of 2025; the two quarters were $0.68 and $0.67. Two corroborating halves justify moving our earnings level part of the way up from the 2025 figure, not all the way. First-half 2026 operating cash flow of $22.2 million is not a run rate: about $9 million of it is net proceeds from selling loans held for sale, including the January 2026 sale of $9.8 million of loans for $9.1 million at a $0.7 million pre-tax loss. We reconciled net income plus non-cash items to operating cash flow for 2024 and 2025 and both tie exactly. We reviewed the filings only through reported figures for the second quarter of 2026. A bank's funding is its raw material, so deposits and the $53 million of borrowings are treated as an operating cost already deducted from earnings, and no separate debt is subtracted. The bank funds its loans with room to spare (loans are 83% of deposits), equity is 11.5% of assets, and book value is $18.15 per share ($14.98 tangible, after $25.6 million of goodwill and $8.0 million of core deposit intangibles). Base case: $39. Owner earnings are $2.00 per share in 2026. That is 10% above 2025 ($1.82) and sits below the $2.14 we get by annualizing the first half of 2026 against the 2025 relationship between net income and owner earnings. Growth then runs at 2% a year for ten years, to about $2.44, and is held flat afterward. The 2% is credited because loans grew $47 million in 2024 and $43 million in 2025, about 4% a year, funded by deposit growth of 9% in 2025 and the bank's own retained earnings; we credit half of that pace because it is only two years of record. In the earnings path, the 2025 owner-earnings growth was 38% and year-one growth beyond the 2026 level is 2%, below the trailing figure, so no reversal of a slowdown is assumed. We left out further acquisitions (one merger of equals is not a repeatable record), any margin expansion beyond 2025, and any value from loan accretion. After year ten we hold earnings flat rather than growing them: a deposit franchise that has operated for over a century keeps producing what it earns today, and nothing we can evidence adds to it. Bear case: $19.80. Two things go wrong. First, earnings fall back to the 2024 level of $1.32 (margin near 3.46% and heavier borrowing) with no growth. Second, a full credit cycle like 2008 to 2010 arrives in years three to five. Industry net charge-offs peaked at roughly 2.5% of loans in that cycle. We assume cumulative losses of 2.0% on the $1.18 billion loan book ($23.6 million, below the industry peak because the book is about 42% residential mortgages, though commercial real estate is a third of loans at about $400 million), plus an $8 million reserve build, less $2.4 million of normal provisions: $29.2 million pre-tax, $23.0 million after tax, or $2.17 per share spread over three years ($0.72 a year). Interest lost on non-accruing loans takes another $0.20 a year. Earnings in those three years fall to about $0.40 and then return to $1.32. Capital stays above regulatory minimums because earnings remain positive, so no dilution is assumed. The bear value sits above tangible book of $14.98 because the bank still earns through the downturn, has a $1.4 billion deposit base, and returns to full earnings afterward. Today's non-accrual loans are $11.5 million, 0.98% of loans, covered 86% by the $10.0 million allowance, up from $10.0 million a year earlier, which tells us the cycle risk is real. Bull case: $46.90. Owner earnings start at the first-half 2026 run rate of $2.14 and grow 4% a year for ten years, the loan growth pace of 2024 and 2025, to about $3.05, flat afterward. The bank keeps its present margin. What the three cases owe. For a bank the cases already deduct interest, so owner earnings are valued directly: business value and per-share value are the same, and no debt is subtracted in any case. What would make this wrong. If the 4.08% margin was a one-time high and earnings settle at the 2024 level without a credit cycle, the shares are worth about $22. If earnings stay at $2.00 with no growth, about $33. With only two full years of combined results, the bank's true earning level is not yet fully proven. How we arrive at a margin-of-safety price of $15.00. We are fairly, but not fully, sure of the earnings level: it is built on two full years and corroborated by two more halves, but the margin is the widest in the record. The worst plausible outcome is the commercial real estate cycle in the bear case, and the structure survives it: there is no holding-company debt, equity is 11.5% of assets, deposits cover loans, and total borrowings are only $53 million. Outcomes no case models include deposit flight or a large operational loss at a small bank; nothing in the filings points to either. If we are wrong about the margin and the credit cycle together, the shares are worth roughly $20; if wrong only about margin, about $22. The price assumes a holding period of four to five years for the price to reflect value, and the bank paid $8.1 million in dividends in 2025, about $0.77 per share. At $15.00, essentially tangible book value, that dividend alone is about 5% a year and 2026 owner earnings of $2.00 are a 13% yield on that price, with most of the retained portion rebuilding book value. That mix of income, a price covered by tangible assets and a downside case that still earns money is what supports a 20% annual return target. A higher price would rely on the margin holding, which we cannot evidence.