THFF
First Financial Corporation
$75.54
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 58.1% below fair value
You pay
$75.54
Bear
$125.71
Fair
$180.43
Bull
$180.43
Bear
$125.71
+66.4%
ROTCE 11.1% → 2.79x TBV
Fair
$180.43
+138.9%
ROTCE 14.8% → 4.00x TBV
Bull
$180.43
+138.9%
ROTCE 17.0% → 4.00x TBV
Key Value Driver
ROTCE (14.8%) vs. cost of equity (6.5%)
Implied Market Multiple
1.67x
Summary
With ROTCE of 14.8% vs. 6.5% cost of equity, fair P/TBV is 4.00x on $45.11 tangible book, implying $180.43 per share. DDM cross-check: $39.48.
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: $39.48 (78% 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