TSBK
Timberland Bancorp, Inc.
$45.59
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 63.3% below fair value
You pay
$45.59
Bear
$77.26
Fair
$124.14
Bull
$126.75
Bear
$77.26
+69.5%
ROTCE 8.9% → 2.44x TBV
Fair
$124.14
+172.3%
ROTCE 11.8% → 3.92x TBV
Bull
$126.75
+178.0%
ROTCE 13.6% → 4.00x TBV
Adjust Assumptions
11.8%
6.0%
Key Value Driver
ROTCE (11.8%) vs. cost of equity (6.0%)
Implied Market Multiple
1.44x
Summary
With ROTCE of 11.8% vs. 6.0% cost of equity, fair P/TBV is 3.92x on $31.69 tangible book, implying $124.14 per share. DDM cross-check: $1583.05.
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: $1583.05 (1175% above 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