$32.31
$68.93
bear $32.31
base $59.41
bull $68.93
margin of safety $23.00
market price* $41.44
Community Bancorp is the Vermont holding company for Community National Bank, founded in 1851, with about $1.29 billion of assets, roughly $1.07 billion of deposits and about $965 million of loans. It runs 12 full-service offices across northern and central Vermont (Orleans, Essex, Caledonia, Washington, Franklin and Lamoille counties) plus loan offices in Chittenden County, Vermont and Grafton County, New Hampshire. It also owns 50% of CFS Partners, which owns a Vermont trust company. The stock moved from the OTCQX market to Nasdaq on February 2, 2026. What we measure. For a bank we count the cash it generates after paying depositors and lenders, remove one-year swings in receivables and payables, and treat loan-loss expense as a real, recurring cost. On that basis earnings per share were $1.28 in 2016, $2.53 in 2022, a low of $2.34 in 2024 (deposit costs repriced faster than loan yields) and $2.90 in 2025, a 24 percent jump as net interest income rose from $34.6 million to $40.9 million. Earnings compounded at about 9.5 percent a year over 2016-2025 and about 7.6 percent a year from 2021 to 2025. Income from the CFS Partners stake ($1.8 million in 2025) is non-cash and is left out of earnings; we add the stake separately at its $6.8 million book value, about $1.22 a share. Net income was $9.1 million in the first half of 2026 against $7.6 million a year earlier. The second half of 2025 averaged $4.7 million a quarter and the two 2026 quarters were $4.4 million and $4.7 million, all above the 2025 average of $4.2 million a quarter. That corroborates a higher level than the 2021-2025 middle-year figure of $2.41, so the base case starts from $3.05 a share, only 5 percent above 2025 and well below the 24 percent growth of the last year. Net interest income was $22.2 million in the first half of 2026, up 15 percent. Base case, about $59.41 a share. Earnings of $3.05 in the first year grow 3.5 percent a year through year five, 3 percent through year eight and 2.5 percent in years nine and ten, reaching about $4.02, and then stay flat. We credit only growth the bank has already shown it can repeat: it retained roughly 70 to 76 percent of its profit in 2024 and 2025 to fund balance-sheet growth, and per-share earnings have compounded well above these rates. The growth is not free; each year we deduct the capital that must be retained to support it (growth rate times tangible equity of about $18.25 a share). We do not credit margin expansion, new markets or acquisitions. The bank's 12.77 percent core capital ratio is far above the 7 percent minimum including buffer; we give no separate credit for that surplus. Business value is about $58.19 plus the CFS stake of $1.22. A bank has no debt to subtract in this approach, because deposits and borrowings are its raw material and interest is already deducted; the $12.9 million of floating-rate subordinated debentures due December 2037 is part of that funding cost. If earnings simply stayed at $2.41 forever with no growth, the value would be about $41. Bear case, about $32.31 a share. We replay a full credit cycle on the 2008-2010 pattern, when industry net charge-offs peaked near 2.5 percent of loans. We assume cumulative losses of 4 percent of the $965 million book over three years against a normal 0.1 percent a year: about $35.7 million before tax, $28.2 million after tax, or $5.04 a share, spread $1.26, $2.27 and $1.51. Before that, the 2023-2024 margin squeeze repeats (earnings $2.90, then $2.40). Underlying earnings of $2.30 in the stress years become $1.04, $0.03 and $0.79 after losses, then recover only to $1.80, $1.95 and $2.00, where they stay. The $2.00 permanent level is below the 2020-2021 level of about $2.12 to $2.16 because the low effective tax rate (about 17 percent against a 21 percent statutory rate, partly from low-income housing tax credits worth up to about $0.15 a share) is assumed to run off and not be replaced. Capital is not breached: earnings stay positive throughout, so no dilution is assumed. Business value is about $31.09 plus $1.22 for the CFS stake. The bear value is well above tangible book value of about $18.25 because the bank still earns $2.00 a share, about 11 percent on tangible equity, on a deposit franchise dating to 1851 even after the cycle; actual net charge-offs were only $0.4 million (0.04 percent of average loans) in 2025 and $1.3 million (0.14 percent) in 2024. Bull case, about $68.93 a share. The June-quarter 2026 earnings rate ($4.7 million, about $3.20 a share annualized) holds, and balance-sheet growth funded from retained profit runs at 6 percent a year through year five, 5 percent through year eight and 4 percent in years nine and ten, reaching $5.06, with the same capital charge and then flat earnings. This is below the 7.6 percent seen since 2021. Business value is about $67.71 plus $1.22. What we left out of all three cases: margin expansion from rates, further share buybacks (the bank repurchased $1.9 million of stock in 2025) and acquisitions, because none is a repeatable, evidenced source of growth. Points worth knowing. Earnings depend on a single rural region and on deposit pricing: $180.9 million of time deposits mature in 2026, uninsured deposits are $261.7 million, or about 24 percent of the total, and average non-accrual loans rose from $6.1 million in 2024 to $8.3 million in 2025. The bank's own rate simulation shows net interest income under sustained pressure after the first year if rates fall. Loan-loss expense has grown with the loan book ($1.37 million in 2025 against $0.50 million in 2016). The Series A preferred stock was redeemed in 2025, so earnings are not reduced for preferred dividends. Common dividends were about $4.0 million in 2025, roughly $0.71 a share. Margin-of-safety price, $23.00. We are fairly sure of the current earning level, because the last four quarters point to the same place and the bank has been profitable in each of the ten years examined, but not sure how long the 2025-26 margin lasts, since the bank's own history includes a squeeze (2022-2024) that cut earnings per share by about 7 percent. The worst realistic outcome is a repeat of that squeeze followed by a real-estate credit cycle; the bank would survive it without raising capital, but shareholders would see earnings of about $1 or less for three years. If we are wrong about the starting level and earnings revert to $2.41 with no growth, the shares are worth about $41; if the credit cycle comes, about $32. The price assumes a holding period of three to five years or longer, with a dividend of roughly $0.71 a share a year while the rest of the profit is retained to grow. At $23 the shares would be about 7.5 times first-year earnings of $3.05 and about 1.3 times tangible equity of $18.25 a share. Over a ten-year holding period on the base path, counting dividends plus the value of the remaining earnings at the end, the base case implies about 19.6 percent a year from $23; about 14.5 percent if earnings stay at $2.41; and about 10.5 percent in the bear case. The surplus capital and the CFS stake's retained income, which we give no credit for, make up the rest of the 20 percent target. We set the price below the bear value because the bear case on its own would imply only a modest yield at any higher price. Our previous analysis (September 1, 2026: base $40.95, bear $27.55, bull $52.39, margin-of-safety price $26.50) was estimated on a different basis, so its figures are not comparable with these. No new annual or quarterly filing has appeared since then.