BRKL
Brookline Bancorp, Inc.
$10.95
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.9% below fair value
You pay
$10.95
Bear
$8.70
Fair
$12.43
Bull
$16.16
Bear
$8.70
-20.5%
ROTCE 5.4% → 0.30x TBV
Fair
$12.43
+13.5%
ROTCE 7.1% → 0.59x TBV
Bull
$16.16
+47.6%
ROTCE 8.2% → 0.79x TBV
Key Value Driver
ROTCE (7.1%) vs. cost of equity (9.3%)
Implied Market Multiple
1.01x
Summary
With ROTCE of 7.1% vs. 9.3% cost of equity, fair P/TBV is 0.59x on $10.81 tangible book, implying $12.43 per share. DDM cross-check: $8.51.
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.
Return on equity (7.1%) is below the minimum investors require (9.3%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $8.51 (32% below 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