HIFS
Hingham Institution for Savings
$295.67
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.0% below fair value
You pay
$295.67
Bear
$206.45
Fair
$336.05
Bull
$413.81
Bear
$206.45
-30.2%
ROTCE 8.5% → 0.94x TBV
Fair
$336.05
+13.7%
ROTCE 11.4% → 1.53x TBV
Bull
$413.81
+40.0%
ROTCE 13.1% → 1.88x TBV
Adjust Assumptions
11.4%
8.8%
Key Value Driver
ROTCE (11.4%) vs. cost of equity (8.8%)
Implied Market Multiple
1.34x
Summary
With ROTCE of 11.4% vs. 8.8% cost of equity, fair P/TBV is 1.53x on $220.02 tangible book, implying $336.05 per share. DDM cross-check: $44.56.
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: $44.56 (87% 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