HIFS
Hingham Institution for Savings
$284.87
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.7% below fair value
You pay
$284.87
Bear
$200.51
Fair
$326.38
Bull
$401.90
Bear
$200.51
-29.6%
ROTCE 8.5% → 0.91x TBV
Fair
$326.38
+14.6%
ROTCE 11.4% → 1.48x TBV
Bull
$401.90
+41.1%
ROTCE 13.1% → 1.83x TBV
Key Value Driver
ROTCE (11.4%) vs. cost of equity (9.0%)
Implied Market Multiple
1.29x
Summary
With ROTCE of 11.4% vs. 9.0% cost of equity, fair P/TBV is 1.48x on $220.02 tangible book, implying $326.38 per share. DDM cross-check: $47.45.
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: $47.45 (85% 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