TMP
Tompkins Financial Corporation
$85.80
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 57.4% below fair value
You pay
$85.80
Bear
$137.22
Fair
$201.28
Bull
$239.72
Bear
$137.22
+59.9%
ROTCE 14.0% → 2.28x TBV
Fair
$201.28
+134.6%
ROTCE 18.6% → 3.35x TBV
Bull
$239.72
+179.4%
ROTCE 21.4% → 3.99x TBV
Key Value Driver
ROTCE (18.6%) vs. cost of equity (8.4%)
Implied Market Multiple
1.43x
Summary
With ROTCE of 18.6% vs. 8.4% cost of equity, fair P/TBV is 3.35x on $60.07 tangible book, implying $201.28 per share. DDM cross-check: $50.19.
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: $50.19 (75% 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