TMP
Tompkins Financial Corporation
$97.80
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 52.6% below fair value
You pay
$97.80
Bear
$140.76
Fair
$206.48
Bull
$240.27
Bear
$140.76
+43.9%
ROTCE 14.0% → 2.34x TBV
Fair
$206.48
+111.1%
ROTCE 18.6% → 3.44x TBV
Bull
$240.27
+145.7%
ROTCE 21.4% → 4.00x TBV
Adjust Assumptions
18.6%
8.3%
Key Value Driver
ROTCE (18.6%) vs. cost of equity (8.3%)
Implied Market Multiple
1.63x
Summary
With ROTCE of 18.6% vs. 8.3% cost of equity, fair P/TBV is 3.44x on $60.07 tangible book, implying $206.48 per share. DDM cross-check: $56.77.
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: $56.77 (73% 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