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Tompkins Financial Corporation Reports Second Quarter Financial Results

Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.10 for the second quarter of 2024, down 6.8% from the immediate prior quarter, and up 86.4% from diluted earnings per share of $0.59 reported in the second quarter of 2023. Net income for the second quarter of 2024 was $15.7 million, down $1.2 million or 7.1% compared to the most recent prior quarter, and up $7.2 million, or 85.0%, when compared to the $8.5 million reported for the same period in 2023. The increase in diluted earnings per share and net income compared to the results for the second quarter of 2023 largely reflects the Company's sale of $80.9 million of available-for-sale securities which resulted in a $7.1 million (or $0.37 per share) loss on securities transactions in the second quarter of 2023.

For the six months ended June 30, 2024, diluted earnings per share were $2.29, up 18.0% from $1.94 for the six months ended June 30, 2023. Year-to-date net income was $32.6 million for the six month period ended June 30, 2024, up $4.7 million, or 16.9%, when compared to $27.9 million for the same six month period in 2023. The growth in year-to-date diluted earnings per share and net income relative to the year-to-date results for the same six month period in 2023 is similarly attributable to the impact caused by the loss on securities transactions described above.

Tompkins President and CEO, Stephen Romaine, commented, "Our year to date and second quarter results have been positively impacted by a stabilizing net interest margin and growth throughout our business. Year over year loans are up 7.7% and year to date noninterest income was up 33%, or 10% excluding the impact from the loss on the sale of securities in the second quarter of 2023. We have remained focused on expenses with noninterest expenses year to date lower by 2.3%. As we continue to leverage our balance sheet we are seeing strengthening operating results with stabilizing and growing revenue and lower expenses. We look forward to driving growth through quality customer relationships supported by our strong capital and liquidity."

SELECTED HIGHLIGHTS FOR THE PERIOD:

  • Net interest margin for the second quarter of 2024 was 2.73%, unchanged from the first quarter of 2024, and down from 2.83% for the second quarter of 2023.
  • Total cost of funds was up 10 basis points compared to the first quarter 2024, down from a 24 basis point increase from the fourth quarter of 2023 to the first quarter of 2024.
  • Fee-based services (insurance, wealth management, service charges on deposit accounts and cards) revenues for the second quarter of 2024 were up $903,000 or 5.0% compared to the second quarter of 2023.
  • Total operating expenses of $49.9 million for the second quarter of 2024 were in line with the most recent prior quarter, and down $2.0 million or 3.9% compared to the second quarter of 2023.
  • Total loans at June 30, 2024 were up $121.3 million, or 2.2% (8.7% on an annualized basis) compared to the immediate prior quarter, and up $409.5 million, or 7.7%, from June 30, 2023.
  • Total deposits at June 30, 2024 were $6.3 billion, down $163.7 million, or 2.5% from March 31, 2024, and $168.8 million, or 2.6%, from June 30, 2023.
  • Loan to deposit ratio at June 30, 2024 was 91.7%, compared to 87.5% for the immediate prior quarter.
  • Regulatory Tier 1 capital to average assets was 9.15% at June 30, 2024, up compared to 9.08% reported at March 31, 2024, and down compared to 9.57% at June 30, 2023.

NET INTEREST INCOME

Net interest income was $51.0 million for the second quarter of 2024, up from $50.7 million for the first quarter of 2024, and down from $51.9 million for the second quarter of 2023. Net interest income for the quarter ended June 30, 2024 was impacted by increases in interest expense, which totaled $34.3 million for the second quarter of 2024 compared to $20.0 million for the same period in 2023, partially offset by increased interest and dividend income, which increased by $13.4 million when compared to the second quarter of 2023.

For the six months ended June 30, 2024, net interest income was $101.6 million, down $4.5 million or 4.3% when compared to the same period in 2023.

Net interest margin was 2.73% for the second quarter of 2024, unchanged from the first quarter of 2024, and down from the 2.83% reported for the second quarter of 2023. The decrease in net interest margin, when compared to the prior year, was mainly driven by higher funding costs, driven by market rates and higher borrowings due to lower deposit balances, and was partially offset by higher yields on interest earnings assets.

Average loans for the quarter ended June 30, 2024 were up $65.9 million, or 1.2%, from the first quarter of 2024, and were up $382.8 million, or 7.2%, compared to the prior year second quarter. The increase in average loans over both prior periods was mainly in the commercial real estate and commercial and industrial portfolios. The average yield on interest-earning assets for the quarter ended June 30, 2024 was 4.56%, which was up from 4.47% for the prior quarter ended March 31, 2024, and up from 3.91% for the quarter ended June 30, 2023.

Average total deposits for the second quarter of 2024 were down $42.9 million, or 0.7%, compared to the first quarter of 2024, and down $128.3 million or 2.0% compared to the same period in 2023. The decrease compared to the prior quarter was mainly driven by seasonal deposit trends, while the decrease compared to the prior year was largely driven by inflation and persistent rate competition for deposits due to the current interest rate environment and tightening monetary policy. The cost of interest-bearing deposits of 2.27% for the second quarter of 2024 was up 10 basis points from 2.17% for the first quarter of 2024, and up 86 basis points from 1.41% for the second quarter of 2023. The ratio of average noninterest bearing deposits to average total deposits for the second quarter of 2024 was 29.1% compared to 28.8% for the first quarter of 2024, and 31.1% for the quarter ended June 30, 2023. The average cost of interest-bearing liabilities for the second quarter of 2024 of 2.64% represents an increase of 13 basis points over the first quarter of 2024, and an increase of 100 basis points over the same period in 2023.

NONINTEREST INCOME

Noninterest income represented 29.9% of total revenue for the second quarter of 2024 compared to 30.4% for the first quarter of 2024, and 19.6% for the second quarter of 2023. Noninterest income of $21.8 million for the second quarter of 2024 was up $9.2 million or 72.6% compared to the same period in 2023. Year-to-date noninterest income of $43.9 million was up $10.9 million or 33.0% compared to the same period in 2023. The increase in quarterly and year-to-date noninterest income compared to the same periods in 2023 was mainly due to a $7.1 million loss on the sale of available-for-sale securities discussed above. Also included in the increase in the second quarter of 2024 over the same period prior year are fee-based revenues which included insurance commissions and fees, up $415,000, wealth management fees, up $171,000, service charges on deposit accounts, up $126,000, and card services income, up $191,000.

NONINTEREST EXPENSE

Noninterest expense was $49.9 million for the second quarter of 2024, which was down $2.0 million or 3.9% compared to the second quarter of 2023. Year-to-date noninterest expense for the period ended June 30, 2024 was $99.8 million, a decrease of $2.3 million or 2.3% compared to the $102.1 million reported for the same period in 2023. The decrease was mainly driven by lower other expenses (legal fees, marketing expense, professional fees, and travel and meeting expense) and lower salaries, wages and other employee benefits in the second quarter of 2024 compared to the same period in 2023.

INCOME TAX EXPENSE

The provision for income tax expense was $4.9 million for an effective rate of 23.8% for the second quarter of 2024, compared to tax expense of $1.8 million and an effective rate of 17.3% for the same quarter in 2023. For the first six months of 2024, the provision for income tax expense was $10.1 million and the effective tax rate was 23.6% compared to provision expense of $7.7 million and an effective tax rate of 21.6% for the same period in 2023. Lower tax expense for both the quarter and year-to-date periods in 2023 was mainly a result of lower income associated with the loss on the sale of securities described above.

ASSET QUALITY

The allowance for credit losses represented 0.92% of total loans and leases at June 30, 2024, unchanged from the most recent prior quarter and December 31, 2023. The ratio of the allowance to total nonperforming loans and leases was 84.94% at June 30, 2024, compared to 82.47% at March 31, 2024, and 154.76% at June 30, 2023. The decrease in the ratio compared to the same prior year period was due to the increase in nonperforming loans and leases discussed in more detail below.

Provision for credit losses for the second quarter of 2024 was $2.2 million compared to provision expense of $2.3 million for the same period in 2023. Provision for credit losses for the six months ended June 30, 2024 was $3.0 million compared to $1.4 million for the six months ended June 30, 2023. The increase in provision expense for the year-to-date period compared to the same period in 2023 was mainly driven by loan growth and changes in off balance sheet reserves driven by an increase in loan pipeline. Net charge-offs for the second quarter of 2024 were $509,000 compared to net recoveries of $27,000 reported for the same period in 2023.

Nonperforming assets represented 0.79% of total assets at June 30, 2024, down from 0.81% reported at March 31, 2024, and up compared to 0.41% at June 30, 2023. At June 30, 2024, nonperforming loans and leases totaled $62.5 million, compared to $62.7 million at March 31, 2024 and $31.4 million at June 30, 2023. The increase in nonperforming loans and leases at June 30, 2024 compared to results at June 30, 2023 was mainly due to the addition in the fourth quarter of 2023 of one relationship totaling approximately $33.3 million with two commercial real estate properties included in the office space and mixed use properties portion of the commercial real estate portfolio. The Company believes that the existing collateral securing the loans is sufficient to cover the exposure as of June 30, 2024.

Special Mention and Substandard loans and leases totaled $116.2 million at June 30, 2024, compared to $118.7 million reported at March 31, 2024, and $118.1 million reported at June 30, 2023.

CAPITAL POSITION

Capital ratios at June 30, 2024 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 13.26% at June 30, 2024, compared to 13.43% at March 31, 2024, and 14.48% at June 30, 2023. The ratio of Tier 1 capital to average assets was 9.15% at June 30, 2024, compared to 9.08% at March 31, 2024, and 9.57% at June 30, 2023.

LIQUIDITY POSITION

The Company's liquidity position at June 30, 2024 was stable and consistent with the immediately prior quarter. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank's Discount Window advances and Federal Home Loan Banks (FHLB) advances. The Company maintains ready access to liquidity of $1.4 billion, or 17.3% of total assets at June 30, 2024. As a member of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At June 30, 2024 the Company had an available borrowing capacity at the FHLB of $661.8 million. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain loans and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At June 30, 2024 the available borrowing capacity with the Federal Reserve Bank was $137.7 million, secured by loans. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at June 30, 2024, the Company maintained $553.3 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.

ABOUT TOMPKINS FINANCIAL CORPORATION

Tompkins Financial Corporation is a banking and financial services company serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania. Headquartered in Ithaca, NY, Tompkins Financial is parent to Tompkins Community Bank and Tompkins Insurance Agencies, Inc. Tompkins Community Bank provides a full array of wealth management services under the Tompkins Financial Advisors brand, including investment management, trust and estate, financial and tax planning services. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this press release that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", "commit", or "anticipate", the negative and other variations of these terms and other similar words. Examples of forward-looking statements may include statements regarding the sufficiency of existing collateral to cover exposure related to nonperforming loans, and the strength of our balance sheet. Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company’s operations and economic environment, all of which are difficult to predict and many of which are beyond the control of the Company, that could cause actual results of the Company to differ materially from those expressed and/or implied by forward-looking statements and historical performance. The following factors, in addition to those listed as Risk Factors in Item 1A in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission are among those that could cause actual results to differ materially from the forward-looking statements: changes in general economic, market and regulatory conditions; our ability to attract and retain deposits and other sources of liquidity; gross domestic product growth and inflation trends; the impact of the interest rate and inflationary environment on the Company's business, financial condition and results of operations; other income or cash flow anticipated from the Company's operations, investment and/or lending activities; changes in laws and regulations affecting banks, bank holding companies and/or financial holding companies, including the Dodd-Frank Act, and state and local government mandates; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; technological developments and changes; cybersecurity incidents and threats; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; governmental and public policy changes, including environmental regulation; reliance on large customers; the ability to access financial resources in the amounts, at the times, and on the terms required to support the Company's future businesses; and the economic impact of national and global events, including the response to bank failures, war and geopolitical matters (including the war in Israel and potential for broader regional conflict and the war in Ukraine), widespread protests, civil unrest, political uncertainty, and pandemics or other public health crises. The Company does not undertake any obligation to update its forward-looking statements.

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data) (Unaudited)

As of

As of

ASSETS

06/30/2024

12/31/2023

 

 

(Audited)

 

 

 

Cash and noninterest bearing balances due from banks

$

60,337

 

$

67,212

 

Interest bearing balances due from banks

 

10,578

 

 

12,330

 

Cash and Cash Equivalents

 

70,915

 

 

79,542

 

 

 

 

Available-for-sale debt securities, at fair value (amortized cost of $1,463,965 at June 30, 2024 and $1,548,482 at December 31, 2023)

 

1,317,458

 

 

1,416,650

 

Held-to-maturity debt securities, at amortized cost (fair value of $264,588 at June 30, 2024 and $267,455 at December 31, 2023)

 

312,430

 

 

312,401

 

Equity securities, at fair value

 

766

 

 

787

 

Total loans and leases, net of unearned income and deferred costs and fees

 

5,761,864

 

 

5,605,935

 

Less: Allowance for credit losses

 

53,059

 

 

51,584

 

Net Loans and Leases

 

5,708,805

 

 

5,554,351

 

 

 

 

Federal Home Loan Bank and other stock

 

41,382

 

 

33,719

 

Bank premises and equipment, net

 

77,279

 

 

79,687

 

Corporate owned life insurance

 

75,453

 

 

67,884

 

Goodwill

 

92,602

 

 

92,602

 

Other intangible assets, net

 

2,193

 

 

2,327

 

Accrued interest and other assets

 

170,239

 

 

179,799

 

Total Assets

$

7,869,522

 

$

7,819,749

 

LIABILITIES

 

 

Deposits:

 

 

Interest bearing:

 

 

Checking, savings and money market

 

3,453,049

 

 

3,484,878

 

Time

 

979,292

 

 

998,013

 

Noninterest bearing

 

1,853,555

 

 

1,916,956

 

Total Deposits

 

6,285,896

 

 

6,399,847

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

 

35,989

 

 

50,996

 

Other borrowings

 

773,627

 

 

602,100

 

Other liabilities

 

97,917

 

 

96,872

 

Total Liabilities

$

7,193,429

 

$

7,149,815

 

EQUITY

 

 

Tompkins Financial Corporation shareholders' equity:

 

 

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,429,124 at June 30, 2024; and 14,441,830 at December 31, 2023

 

1,443

 

 

1,444

 

Additional paid-in capital

 

298,647

 

 

297,183

 

Retained earnings

 

516,566

 

 

501,510

 

Accumulated other comprehensive loss

 

(135,670

)

 

(125,005

)

Treasury stock, at cost – 126,450 shares at June 30, 2024, and 132,097 shares at December 31, 2023

 

(6,356

)

 

(6,610

)

Total Tompkins Financial Corporation Shareholders’ Equity

 

674,630

 

 

668,522

 

Noncontrolling interests

 

1,463

 

 

1,412

 

Total Equity

$

676,093

 

$

669,934

 

Total Liabilities and Equity

$

7,869,522

 

$

7,819,749

 

 

 

 

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data) (Unaudited)

Three Months Ended

Six Months Ended

 

06/30/2024

03/31/2024

06/30/2023

06/30/2024

06/30/2023

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

Loans

$

73,646

 

$

71,599

 

$

63,527

 

$

145,245

 

$

124,369

 

Due from banks

 

184

 

 

154

 

 

183

 

 

338

 

 

322

 

Available-for-sale debt securities

 

9,371

 

 

9,611

 

 

6,618

 

 

18,982

 

 

13,361

 

Held-to-maturity debt securities

 

1,219

 

 

1,218

 

 

1,219

 

 

2,437

 

 

2,433

 

Federal Home Loan Bank and other stock

 

820

 

 

601

 

 

323

 

 

1,421

 

 

623

 

Total Interest and Dividend Income

 

85,240

 

$

83,183

 

$

71,870

 

$

168,423

 

$

141,108

 

INTEREST EXPENSE

 

 

 

 

 

Time certificates of deposits of $250,000 or more

 

4,048

 

 

4,010

 

 

2,526

 

 

8,058

 

 

4,313

 

Other deposits

 

21,236

 

 

20,424

 

 

13,119

 

 

41,660

 

 

23,513

 

Federal funds purchased and securities sold under agreements to repurchase

 

11

 

 

13

 

 

15

 

 

24

 

 

29

 

Other borrowings

 

8,992

 

 

8,061

 

 

4,314

 

 

17,053

 

 

7,111

 

Total Interest Expense

 

34,287

 

 

32,508

 

 

19,974

 

 

66,795

 

 

34,966

 

Net Interest Income

 

50,953

 

 

50,675

 

 

51,896

 

 

101,628

 

 

106,142

 

Less: Provision for credit loss expense

 

2,172

 

 

854

 

 

2,253

 

 

3,026

 

 

1,428

 

Net Interest Income After Provision for Credit Loss Expense

 

48,781

 

 

49,821

 

 

49,643

 

 

98,602

 

 

104,714

 

NONINTEREST INCOME

 

 

 

 

 

Insurance commissions and fees

 

9,087

 

 

10,259

 

 

8,672

 

 

19,346

 

 

18,181

 

Wealth management fees

 

4,849

 

 

4,937

 

 

4,678

 

 

9,786

 

 

9,187

 

Service charges on deposit accounts

 

1,766

 

 

1,796

 

 

1,640

 

 

3,562

 

 

3,386

 

Card services income

 

3,278

 

 

2,939

 

 

3,087

 

 

6,217

 

 

5,769

 

Other income

 

2,802

 

 

2,220

 

 

1,603

 

 

5,022

 

 

3,544

 

Net loss on securities transactions

 

(6

)

 

(14

)

 

(7,065

)

 

(20

)

 

(7,052

)

Total Noninterest Income

 

21,776

 

 

22,137

 

 

12,615

 

 

43,913

 

 

33,015

 

NONINTEREST EXPENSE

 

 

 

 

 

Salaries and wages

 

24,919

 

 

24,697

 

 

25,337

 

 

49,616

 

 

49,849

 

Other employee benefits

 

6,545

 

 

6,411

 

 

6,647

 

 

12,956

 

 

13,388

 

Net occupancy expense of premises

 

3,139

 

 

3,557

 

 

3,327

 

 

6,696

 

 

6,626

 

Furniture and fixture expense

 

1,910

 

 

2,125

 

 

2,105

 

 

4,035

 

 

4,159

 

Amortization of intangible assets

 

80

 

 

76

 

 

84

 

 

156

 

 

167

 

Other operating expense

 

13,349

 

 

12,991

 

 

14,468

 

 

26,340

 

 

27,937

 

Total Noninterest Expenses

 

49,942

 

 

49,857

 

 

51,968

 

 

99,799

 

 

102,126

 

Income Before Income Tax Expense

 

20,615

 

 

22,101

 

 

10,290

 

 

42,716

 

 

35,603

 

Income Tax Expense

 

4,902

 

 

5,198

 

 

1,784

 

 

10,100

 

 

7,685

 

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

 

15,713

 

 

16,903

 

 

8,506

 

 

32,616

 

 

27,918

 

Less: Net Income Attributable to Noncontrolling Interests

 

31

 

 

31

 

 

31

 

 

62

 

 

62

 

Net Income Attributable to Tompkins Financial Corporation

$

15,682

 

 

16,872

 

 

8,475

 

 

32,554

 

 

27,856

 

Basic Earnings Per Share

$

1.10

 

$

1.19

 

$

0.59

 

$

2.29

 

$

1.94

 

Diluted Earnings Per Share

$

1.10

 

$

1.18

 

$

0.59

 

$

2.29

 

$

1.94

 

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)

 

Quarter Ended

Quarter Ended

 

June 30, 2024

March 31, 2024

 

Average

 

 

Average

 

 

 

Balance

 

Average

Balance

 

Average

(Dollar amounts in thousands)

(QTD)

Interest

Yield/Rate

(QTD)

Interest

Yield/Rate

ASSETS

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

Interest-bearing balances due from banks

$

11,707

$

184

 

6.33

%

$

12,202

$

154

 

5.08

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

1,717,975

 

10,067

 

2.36

%

 

1,756,122

 

10,303

 

2.36

%

State and municipal (2)

 

89,518

 

566

 

2.55

%

 

89,886

 

570

 

2.55

%

Other securities

 

3,260

 

59

 

7.32

%

 

3,278

 

60

 

7.32

%

Total securities

 

1,810,753

 

10,692

 

2.38

%

 

1,849,286

 

10,933

 

2.38

%

FHLBNY and FRB stock

 

37,681

 

820

 

8.76

%

 

34,613

 

601

 

6.99

%

Total loans and leases, net of unearned income (2)(3)

 

5,687,548

 

73,839

 

5.22

%

 

5,621,604

 

71,779

 

5.14

%

Total interest-earning assets

 

7,547,689

 

85,535

 

4.56

%

 

7,517,705

 

83,467

 

4.47

%

Other assets

 

262,372

 

 

 

283,420

 

 

Total assets

$

7,810,061

 

 

$

7,801,125

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

 

3,498,746

 

15,754

 

1.81

%

 

3,546,216

 

15,036

 

1.71

%

Time deposits

 

987,348

 

9,530

 

3.88

%

 

988,891

 

9,398

 

3.82

%

Total interest-bearing deposits

 

4,486,094

 

25,284

 

2.27

%

 

4,535,107

 

24,434

 

2.17

%

Federal funds purchased & securities sold under agreements to repurchase

 

40,298

 

11

 

0.11

%

 

48,779

 

13

 

0.10

%

Other borrowings

 

688,611

 

8,992

 

5.25

%

 

622,951

 

8,061

 

5.21

%

Total interest-bearing liabilities

 

5,215,003

 

34,287

 

2.64

%

 

5,206,836

 

32,508

 

2.51

%

Noninterest bearing deposits

 

1,837,325

 

 

 

1,831,244

 

 

Accrued expenses and other liabilities

 

94,764

 

 

 

96,292

 

 

Total liabilities

 

7,147,092

 

 

 

7,134,373

 

 

Tompkins Financial Corporation Shareholders’ equity

 

661,523

 

 

 

665,333

 

 

Noncontrolling interest

 

1,446

 

 

 

1,419

 

 

Total equity

 

662,969

 

 

 

666,752

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,810,061

 

 

$

7,801,125

 

 

Interest rate spread

 

 

1.91

%

 

 

1.95

%

Net interest income (TE)/margin on earning assets

 

 

51,248

 

2.73

%

 

 

50,959

 

2.73

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(295

)

 

 

 

(284

)

 

Net interest income

 

$

50,953

 

 

 

$

50,675

 

 

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)

 

Quarter Ended

Quarter Ended

 

June 30, 2024

June 30, 2023

 

Average

 

 

Average

 

 

 

Balance

 

Average

Balance

 

Average

(Dollar amounts in thousands)

(QTD)

Interest

Yield/Rate

(QTD)

Interest

Yield/Rate

ASSETS

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

Interest-bearing balances due from banks

$

11,707

$

184

 

6.33

%

$

13,585

$

183

 

5.40

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

1,717,975

 

10,067

 

2.36

%

 

1,972,719

 

7,304

 

1.49

%

State and municipal (2)

 

89,518

 

566

 

2.55

%

 

92,194

 

590

 

2.57

%

Other securities

 

3,260

 

59

 

7.32

%

 

3,288

 

56

 

6.86

%

Total securities

 

1,810,753

 

10,692

 

2.38

%

 

2,068,201

 

7,950

 

1.54

%

FHLBNY and FRB stock

 

37,681

 

820

 

8.76

%

 

23,211

 

323

 

5.59

%

Total loans and leases, net of unearned income (2)(3)

 

5,687,548

 

73,839

 

5.22

%

 

5,304,717

 

63,709

 

4.82

%

Total interest-earning assets

 

7,547,689

 

85,535

 

4.56

%

 

7,409,714

 

72,165

 

3.91

%

Other assets

 

262,372

 

 

 

226,086

 

 

Total assets

$

7,810,061

 

 

$

7,635,800

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

$

3,498,746

$

15,754

 

1.81

%

$

3,701,229

$

10,590

 

1.15

%

Time deposits

 

987,348

 

9,530

 

3.88

%

 

745,970

 

5,055

 

2.72

%

Total interest-bearing deposits

 

4,486,094

 

25,284

 

2.27

%

 

4,447,199

 

15,645

 

1.41

%

Federal funds purchased & securities sold under agreements to repurchase

 

40,298

 

11

 

0.11

%

 

56,083

 

15

 

0.11

%

Other borrowings

 

688,611

 

8,992

 

5.25

%

 

379,744

 

4,314

 

4.56

%

Total interest-bearing liabilities

 

5,215,003

 

34,287

 

2.64

%

 

4,883,026

 

19,974

 

1.64

%

Noninterest bearing deposits

 

1,837,325

 

 

 

2,004,560

 

 

Accrued expenses and other liabilities

 

94,764

 

 

 

97,660

 

 

Total liabilities

 

7,147,092

 

 

 

6,985,246

 

 

Tompkins Financial Corporation Shareholders’ equity

 

661,523

 

 

 

649,097

 

 

Noncontrolling interest

 

1,446

 

 

 

1,457

 

 

Total equity

 

662,969

 

 

 

650,554

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,810,061

 

 

$

7,635,800

 

 

Interest rate spread

 

 

1.91

%

 

 

2.27

%

Net interest income (TE)/margin on earning assets

 

 

51,248

 

2.73

%

 

 

52,191

 

2.83

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(295

)

 

 

 

(295

)

 

Net interest income

 

$

50,953

 

 

 

$

51,896

 

 

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)

 

Year to Date Period Ended

Year to Date Period Ended

 

June 30, 2024

June 30, 2023

 

Average

 

 

Average

 

 

 

Balance

 

Average

Balance

 

Average

(Dollar amounts in thousands)

(YTD)

Interest

Yield/Rate

(YTD)

Interest

Yield/Rate

ASSETS

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

Interest-bearing balances due from banks

$

11,955

$

338

 

5.69

%

$

13,161

$

322

 

4.93

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

1,737,049

 

20,370

 

2.36

%

 

2,002,846

 

14,728

 

1.48

%

State and municipal (2)

 

89,702

 

1,137

 

2.55

%

 

92,695

 

1,188

 

2.58

%

Other securities

 

3,269

 

119

 

7.32

%

 

3,286

 

110

 

6.70

%

Total securities

 

1,830,020

 

21,626

 

2.38

%

 

2,098,827

 

16,026

 

1.54

%

FHLBNY and FRB stock

 

36,147

 

1,421

 

7.90

%

 

19,998

 

623

 

6.29

%

Total loans and leases, net of unearned income (2)(3)

 

5,654,576

 

145,616

 

5.18

%

 

5,278,145

 

124,744

 

4.77

%

Total interest-earning assets

 

7,532,698

 

169,001

 

4.51

%

 

7,410,131

 

141,715

 

3.86

%

Other assets

 

272,895

 

 

 

224,671

 

 

Total assets

$

7,805,593

 

 

$

7,634,802

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

$

3,522,481

$

30,790

 

1.76

%

$

3,767,032

$

19,230

 

1.03

%

Time deposits

 

988,119

 

18,928

 

3.85

%

 

710,119

 

8,596

 

2.44

%

Total interest-bearing deposits

 

4,510,600

 

49,718

 

2.22

%

 

4,477,151

 

27,826

 

1.25

%

Federal funds purchased & securities sold under agreements to repurchase

 

44,538

 

24

 

0.11

%

 

56,799

 

29

 

0.10

%

Other borrowings

 

655,781

 

17,053

 

5.23

%

 

325,052

 

7,111

 

4.41

%

Total interest-bearing liabilities

 

5,210,919

 

66,795

 

2.58

%

 

4,859,002

 

34,966

 

1.45

%

Noninterest bearing deposits

 

1,834,284

 

 

 

2,034,961

 

 

Accrued expenses and other liabilities

 

95,529

 

 

 

99,905

 

 

Total liabilities

 

7,140,732

 

 

 

6,993,868

 

 

Tompkins Financial Corporation Shareholders’ equity

 

663,428

 

 

 

639,494

 

 

Noncontrolling interest

 

1,433

 

 

 

1,440

 

 

Total equity

 

664,861

 

 

 

640,934

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,805,593

 

 

$

7,634,802

 

 

Interest rate spread

 

 

1.93

%

 

 

2.41

%

Net interest income (TE)/margin on earning assets

 

 

102,206

 

2.73

%

 

 

106,749

 

2.90

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(578

)

 

 

 

(607

)

 

Net interest income

 

$

101,628

 

 

 

$

106,142

 

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

Quarter-Ended

Year-Ended

Period End Balance Sheet

Jun-24

Mar-24

Dec-23

Sep-23

Jun-23

Dec-23

Securities

$

1,630,654

$

1,679,542

$

1,729,838

$

1,701,636

$

1,781,150

$

1,729,838

Total Loans

 

5,761,864

 

5,640,524

 

5,605,935

 

5,434,860

 

5,352,365

 

5,605,935

Allowance for credit losses

 

53,059

 

51,704

 

51,584

 

49,336

 

48,545

 

51,584

Total assets

 

7,869,522

 

7,778,034

 

7,819,749

 

7,691,162

 

7,626,238

 

7,819,749

Total deposits

 

6,285,896

 

6,449,616

 

6,399,847

 

6,623,436

 

6,454,651

 

6,399,847

Federal funds purchased and securities sold under agreements to repurchase

 

35,989

 

43,681

 

50,996

 

56,120

 

50,483

 

50,996

Other borrowings

 

773,627

 

522,600

 

602,100

 

296,800

 

387,100

 

602,100

Total common equity

 

674,630

 

667,906

 

668,522

 

610,851

 

634,967

 

668,522

Total equity

 

676,093

 

669,338

 

669,934

 

612,356

 

636,441

 

669,934

Average Balance Sheet

 

 

 

 

 

 

Average earning assets

$

7,547,689

$

7,517,705

$

7,407,976

$

7,405,434

$

7,409,714

$

7,408,404

Average assets

 

7,810,061

 

7,801,125

 

7,666,982

 

7,629,876

 

7,635,800

 

7,641,672

Average interest-bearing liabilities

 

5,215,003

 

5,206,836

 

5,020,544

 

4,902,930

 

4,883,026

 

4,910,792

Average equity

 

662,969

 

666,752

 

622,280

 

634,980

 

650,554

 

634,732

Share data

 

 

 

 

 

 

Weighted average shares outstanding (basic)

 

14,214,574

 

14,211,910

 

14,194,503

 

14,185,763

 

14,314,133

 

14,254,661

Weighted average shares outstanding (diluted)

 

14,239,626

 

14,238,357

 

14,246,024

 

14,224,748

 

14,346,787

 

14,301,221

Period-end shares outstanding

 

14,395,204

 

14,405,019

 

14,405,920

 

14,350,177

 

14,405,503

 

14,405,920

Common equity book value per share

$

46.86

$

46.37

$

46.41

$

42.57

$

44.08

$

46.41

Tangible book value per share (Non-GAAP)**

$

40.35

$

39.85

$

39.88

$

36.01

$

37.54

$

39.88

**See "Non-GAAP measures" below for a discussion of non-GAAP financial measures and a reconciliation of non-GAAP financial measures to the most directly comparable financial measures presented in accordance with GAAP.

Income Statement

 

 

 

 

 

 

Net interest income

$

50,953

$

50,675

$

52,359

$

51,013

 

$

51,896

$

209,514

Provision for credit loss expense (5)

 

2,172

 

854

 

1,761

 

1,150

 

 

2,253

 

4,339

Noninterest income

 

21,776

 

22,137

 

18,850

 

(41,624

)

 

12,615

 

10,241

Noninterest expense (5)

 

49,942

 

49,857

 

51,300

 

49,866

 

 

51,968

 

203,292

Income tax expense/(benefit)

 

4,902

 

5,198

 

3,114

 

(8,304

)

 

1,784

 

2,495

Net income/(loss) attributable to Tompkins Financial Corporation

 

15,682

 

16,872

 

15,003

 

(33,354

)

 

8,475

 

9,505

Noncontrolling interests

 

31

 

31

 

31

 

31

 

 

31

 

124

Basic earnings (loss) per share (4)

 

1.10

 

1.19

 

1.06

 

(2.35

)

 

0.59

 

0.66

Diluted earnings (loss) per share (4)

 

1.10

 

1.18

 

1.05

 

(2.35

)

 

0.59

 

0.66

Nonperforming Assets

 

 

 

 

 

 

Nonaccrual loans and leases

$

62,253

$

62,544

$

62,165

$

31,381

$

31,333

$

62,165

Loans and leases 90 days past due and accruing

 

215

 

151

 

101

 

52

 

34

 

101

Total nonperforming loans and leases

 

62,468

 

62,695

 

62,266

 

31,433

 

31,367

 

62,266

OREO

 

80

 

0

 

131

 

0

 

36

 

131

Total nonperforming assets

$

62,548

$

62,695

$

62,397

$

31,433

$

31,403

$

62,397

Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued

 

Quarter-Ended

Year-Ended

Delinquency - Total loan and lease portfolio

Jun-24

Mar-24

Dec-23

Sep-23

Jun-23

Dec-23

Loans and leases 30-89 days past due and accruing

$

5,286

$

8,015

$

4,210

$

40,893

$

20,255

$

4,210

Loans and leases 90 days past due and accruing

 

215

 

151

 

101

 

52

 

34

 

101

Total loans and leases past due and accruing

 

5,501

 

8,166

 

4,311

 

40,945

 

20,289

 

4,311

Allowance for Credit Losses

Balance at beginning of period

$

51,704

$

51,584

$

49,336

 

$

48,545

$

46,099

 

$

45,934

 

Impact of adopting ASC 326

 

0

 

0

 

0

 

 

0

 

0

 

 

64

 

Provision for credit losses

 

1,864

 

348

 

2,658

 

 

968

 

2,419

 

$

4,865

 

Net loan and lease charge-offs (recoveries)

 

509

 

228

 

410

 

 

177

 

(27

)

$

(721

)

Allowance for credit losses at end of period

$

53,059

$

51,704

$

51,584

 

$

49,336

$

48,545

 

$

51,584

 

 

 

 

 

 

 

 

Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance at beginning of period

$

2,776

$

2,270

$

3,167

 

$

2,985

$

3,151

 

$

2,796

 

Provision (credit) for credit losses

 

308

 

506

 

(897

)

 

182

 

(166

)

$

(526

)

Allowance for credit losses at end of period

$

3,084

$

2,776

$

2,270

 

$

3,167

$

2,985

 

$

2,270

 

Loan Classification - Total Portfolio

 

 

 

 

 

 

Special Mention

$

48,712

$

46,302

$

50,368

$

65,993

$

56,305

$

50,368

Substandard

 

67,509

 

72,412

 

72,717

 

56,947

 

61,820

 

72,717

Ratio Analysis

Credit Quality

 

 

 

 

 

 

Nonperforming loans and leases/total loans and leases

1.08

%

1.11

%

1.11

%

0.58

%

0.59

%

1.11

%

Nonperforming assets/total assets

0.79

%

0.81

%

0.80

%

0.41

%

0.41

%

0.80

%

Allowance for credit losses/total loans and leases

0.92

%

0.92

%

0.92

%

0.91

%

0.91

%

0.92

%

Allowance/nonperforming loans and leases

84.94

%

82.47

%

82.84

%

156.96

%

154.76

%

82.84

%

Net loan and lease losses (recoveries) annualized/total average loans and leases

0.04

%

0.02

%

0.03

%

0.01

%

0.00

%

(0.01

)%

Capital Adequacy

 

 

 

 

 

 

Tier 1 Capital (to average assets)

9.15

%

9.08

%

9.08

%

9.01

%

9.57

%

9.08

%

Total Capital (to risk-weighted assets)

13.26

%

13.43

%

13.36

%

13.46

%

14.48

%

13.36

%

Profitability (period-end)

 

 

 

 

 

 

Return on average assets *

0.81

%

0.87

%

0.78

%

(1.73

)%

0.45

%

0.12

%

Return on average equity *

9.51

%

10.18

%

9.56

%

(20.84

)%

5.22

%

1.50

%

Net interest margin (TE) *

2.73

%

2.73

%

2.82

%

2.75

%

2.83

%

2.84

%

Average yield on interest-earning assets*

4.56

%

4.47

%

4.34

%

4.06

%

3.91

%

4.03

%

Average cost of deposits*

1.61

%

1.54

%

1.43

%

1.20

%

0.97

%

1.09

%

Average cost of funds*

1.96

%

1.86

%

1.62

%

1.41

%

1.16

%

1.27

%

* Quarterly ratios have been annualized

Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principals (GAAP). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as reconciliation to the comparable GAAP measure, is provided in the below tables. The Company believes the non-GAAP measures provide meaningful comparisons of our underlying operational performance and facilitate management's and investors' assessments of business and performance trends in comparison to others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a measure of the Company's profitability or liquidity; they are in addition to, and are not a substitute for, financial measures under GAAP. The non-GAAP financial measures presented herein may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies. Further, the Company may utilize other measures to illustrate performance in the future. Non-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP.

Reconciliation of Tangible Book Value Per Share (non-GAAP) to Common Equity Book Value Per Share (GAAP)

 

Quarter-Ended

Year-Ended

 

Jun-24

Mar-24

Dec-23

Sep-23

Jun-23

Dec-23

Total common equity

$

674,630

$

667,906

$

668,522

$

610,851

$

634,967

$

668,522

Less: Goodwill and intangibles

 

93,847

 

93,926

 

94,003

 

94,086

 

94,169

 

94,003

Tangible common equity (Non-GAAP)

 

580,783

 

573,980

 

574,519

 

516,765

 

540,798

 

574,519

Ending shares outstanding

 

14,395,204

 

14,405,019

 

14,405,920

 

14,350,177

 

14,405,503

 

14,405,920

Tangible book value per share (Non-GAAP)

$

40.35

$

39.85

$

39.88

$

36.01

$

37.54

$

39.88

(1) Average balances and yields on available-for-sale securities are based on historical amortized cost.

(2) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2024 and 2023 to increase tax exempt interest income to taxable-equivalent basis.

(3) Nonaccrual loans are included in the average asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company's consolidated financial statements included in Part I of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

(4) Earnings per share for the full fiscal year may not equal the sum of the quarterly earnings per share as a result of rounding of average shares.

(5) Amounts in prior periods' financial statements are reclassified when necessary to conform to the current period's presentation.

Contacts

For more information:

Stephen S. Romaine, President & CEO

Matthew Tomazin, Executive VP, CFO & Treasurer

Tompkins Financial Corporation (888) 503-5753

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