Central Plains Bancshares, Inc. (CPBI) stock intrinsic value fair value estimate & owner earnings analysis

Central Plains Bancshares is the holding company for Home Federal Bank, a federally chartered savings institution originally chartered in 1935 and headquartered in Grand Island, Nebraska, which has recently opened new full-service branches in Lincoln and Hastings, Nebraska. The company converted from mutual to full stock ownership in October 2023, raising roughly $41 million in the offering. That conversion left the bank carrying substantially more capital than a bank its size typically needs -- equity was about 16% of assets at fiscal year-end March 2026, versus a more normal 10% for a thrift of this kind -- so part of the company's value today is excess capital sitting on the balance sheet earning a modest return until it is lent out, returned to shareholders, or otherwise put to work. The core lending and deposit business has been improving. Net interest margin rose from 3.56% in fiscal 2025 to 3.80% in fiscal 2026, and net income grew from $3.65 million to $4.00 million over the same period, with the improvement continuing into the June 2026 quarter (net income up about 51% from a year earlier). Management has been buying back stock below book value -- 43,183 shares in fiscal 2026 at an average price of $15.70, against a book value near $21 per share -- a sensible use of some of the excess capital. The company pays no cash dividend. Credit quality overall is clean, but there is one concentration worth naming: agricultural loans make up about $43 million, or roughly 11%, of the $402 million loan book, and as of March 2026 virtually all of the bank's (still small, $1.6 million) nonaccrual loans were agricultural. That is not a current problem, but it is a reminder that a downturn in farm-commodity prices in this part of Nebraska would show up here first. Three cases, each run out as far as its own story holds up and discounted at the same rate, with risk carried in the spread between them rather than in the discount rate itself: Bear case: the agricultural concentration weighs on credit costs through a farm-economy downturn, and the excess capital continues to sit largely unused rather than being lent out or returned to shareholders, so earnings simply fail to grow over the next decade. That works out to about $21 per share -- close to today's tangible book value, a reasonable floor for a bank that stops growing but keeps operating. Base case: the margin and earnings improvement seen in fiscal 2026 continues, but at a more moderate pace than the past year's own growth rate, as the bank keeps growing loans and deposits (deposits grew about $44 million in fiscal 2026) and gradually puts more of its excess capital to work, with growth tapering to roughly 3% a year by year ten as that capital gets absorbed. That produces a value of roughly $34 per share. Bull case: capital deployment goes well -- the new Lincoln and Hastings branches ramp up to full productivity, buybacks continue at an attractive discount to book value, and return on equity moves from today's roughly 4.6% toward the 8-9% more typical of an efficient, well-capitalized community bank. That case is worth roughly $60 per share. In all three cases, value beyond the ten-year forecast is simply held flat at whatever level that scenario reaches by year ten, rather than assumed to keep growing -- the bank's 90-year operating history supports the franchise continuing to exist, but nothing in the filings points to a specific reason for continued earnings growth beyond that horizon, so we do not assume any. One accounting note: our estimate of ongoing owner earnings runs a bit above reported net income, mainly because a bank's spending on buildings and equipment is small relative to its earnings, while non-cash items such as depreciation, loan-loss provisions and pension costs are added back. A new-branch construction project (Lincoln and Hastings) inflated capital spending in fiscal 2025; we treated that spending as one-time growth investment rather than an ongoing cost, since the filings identify the project by name and location and show it completed in fiscal 2026. The margin-of-safety price of $22 carries a meaningful discount to the base-case estimate while standing close to the bear-case floor, which we think is the right balance for a small, thinly-traded company with only about two full years of public financial history to judge from. That price also assumes at least one more full fiscal year confirming that the fiscal 2026 margin and earnings improvement holds or builds further, rather than reverting toward the softer fiscal 2025 level. Compared with our previous look at this company, this update reflects a full additional year of results (fiscal 2026, plus the June 2026 quarter) showing the margin and earnings improvement continuing, and it also reflects a change in how we weigh the three cases: we now discount the bear, base and bull cases at the same rate and let the spread between them carry all of the risk, rather than using a higher discount rate for the cases we saw as riskier. That change by itself raises the estimated range versus before, separate from the better recent results.