BHB
Bar Harbor Bankshares
$40.62
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 4.6% below fair value
You pay
$40.62
Bear
$29.82
Fair
$42.60
Bull
$55.38
Bear
$29.82
-26.6%
ROTCE 7.4% → 0.92x TBV
Fair
$42.60
+4.9%
ROTCE 9.9% → 1.58x TBV
Bull
$55.38
+36.3%
ROTCE 11.3% → 1.98x TBV
Adjust Assumptions
9.9%
7.7%
Key Value Driver
ROTCE (9.9%) vs. cost of equity (7.7%)
Implied Market Multiple
1.82x
Summary
With ROTCE of 9.9% vs. 7.7% cost of equity, fair P/TBV is 1.58x on $22.33 tangible book, implying $42.60 per share. DDM cross-check: $67.53.
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.
Dividend-based valuation: $67.53 (59% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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