TMP
Tompkins Financial Corporation
$97.19
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 51.8% below fair value
You pay
$97.19
Bear
$137.39
Fair
$201.54
Bull
$240.02
Bear
$137.39
+41.4%
ROTCE 14.0% → 2.29x TBV
Fair
$201.54
+107.4%
ROTCE 18.6% → 3.36x TBV
Bull
$240.02
+147.0%
ROTCE 21.4% → 4.00x TBV
Adjust Assumptions
18.6%
8.4%
Key Value Driver
ROTCE (18.6%) vs. cost of equity (8.4%)
Implied Market Multiple
1.62x
Summary
With ROTCE of 18.6% vs. 8.4% cost of equity, fair P/TBV is 3.36x on $60.07 tangible book, implying $201.54 per share. DDM cross-check: $55.59.
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: $55.59 (72% 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