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Tompkins Financial Corporation Reports Third Quarter Financial Results

Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation ("Tompkins" or the "Company") reported a net loss of $33.4 million for the third quarter of 2023. The quarterly results were negatively impacted by the sale of $429.6 million of available-for-sale debt securities, which resulted in an after-tax loss on the sale of securities of $47.5 million. Though this sale resulted in an operating loss in the third quarter of 2023, the transaction is expected to favorably impact securities revenue in future periods as the securities sold had an average yield of 0.93%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.12%. The weighted average life of the securities purchased and sold was approximately 4.3 years.

Tompkins President and CEO, Stephen Romaine, commented, "During the quarter we elected to proactively reposition the balance sheet which will improve securities revenue and we expect that the improved revenue will exceed the value of the loss recognized in the third quarter through time. We estimate securities revenue to improve by approximately $15.4 million over the next twelve months.

While the economic environment remains challenging for the banking industry, our capital and liquidity levels remain healthy and well positioned to meet the needs of our customers. We continued to see favorable growth trends, with annualized loan growth of 6.0% from the second to third quarter of this year and increased deposit balances over the same periods. We are also pleased to announce our cash dividend, which is reflective of our healthy capital position."

Diluted earnings per share for the third quarter of 2023 were a loss of $2.35, which reflects the impact of the after-tax losses of $3.34 per diluted share related to the sale of available-for-sale debt securities as noted above. Diluted earnings per share for the third quarter of 2022 were $1.48.

For the year-to-date period ended September 30, 2023, net income was a loss of $5.5 million, or a loss of $0.39 per diluted share. Year-to-date results were also negatively impacted by after-tax losses on the sale of securities totaling $52.9 million, or $3.69 loss per diluted share. For the same year-to-date period in 2022, net income was $65.5 million, or $4.53 per diluted share.

SELECTED HIGHLIGHTS FOR THE PERIOD:

  • Total loans at September 30, 2023 were up $82.5 million, or 1.5% (6.1% on an annualized basis) compared to the immediate prior quarter, and up $226.4 million, or 4.3%, from September 30, 2022.
  • Total deposits at September 30, 2023 were $6.6 billion, up $168.8 million, or 2.5% (10.4% on an annualized basis) from June 30, 2023, and down $313.3 million, or 4.5%, from September 30, 2022.
  • Loan to deposit ratio was stable at 82.1%, compared to 82.9% for the immediate prior quarter.
  • Regulatory Tier 1 capital to average assets was 9.01% at September 30, 2023, compared to 9.57% at June 30, 2023 and 9.14% at September 30, 2022.
  • Total nonperforming assets at September 30, 2023 represented 0.41% of total assets, which was flat compared to the immediate prior quarter and down from 0.45% at September 30, 2022.

NET INTEREST INCOME

Net interest income was $51.0 million for the third quarter of 2023, down from $51.9 million for the second quarter of 2023 and $58.1 million for the third quarter of 2022. Net interest margin was 2.75% for the third quarter of 2023, compared to 2.83% reported for the second quarter of 2023 and 3.04% reported for the third quarter of 2022. The decrease in net interest income and net interest margin during the third quarter, when compared to the second quarter of this year and the same quarter last year, was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment.

For the year-to-date period ended September 30, 2023, net interest income was $157.2 million, down $15.8 million, or 9.2%, when compared to the same period in 2022.

Average loans for the quarter ended September 30, 2023 were up $80.5 million, or 1.5%, from the second quarter of 2023, and were up $200.0 million, or 3.9%, compared to the quarter ended September 30, 2022. The increase in average loans over both prior periods was mainly in the commercial real estate portfolio. The average yield on interest-earning assets for the quarter ended September 30, 2023 was 4.06%, which was up from 3.91% for the quarter ended June 30, 2023, and up from 3.32% for the quarter ended September 30, 2022.

Average total deposits for the third quarter of 2023 were down $20.0 million, or 0.3%, compared to the second quarter of 2023, and down $394.4 million, or 5.8%, compared to the same period in 2022. The decrease as compared to the prior year was largely driven by a decline in stimulus funding and a tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve. The cost of interest-bearing deposits increased to 1.74% for the third quarter of 2023, compared to 1.41% for the second quarter of 2023, and 0.36% for the third quarter of 2022. The cost of interest-bearing deposits for the third quarter of 2023 increased 33 basis points from June 30, 2023. The ratio of average noninterest bearing deposits to average total deposits for the third quarter of 2023 was 31.0% compared to 31.1% for the second quarter of 2023. The average cost of interest-bearing liabilities for the third quarter of 2023 of 1.98%, represents an increase of 34 basis points over the second quarter of 2023, and an increase of 153 basis points over the same period in 2022.

NONINTEREST INCOME

Noninterest income was a loss of $41.6 million for the third quarter of 2023, which represents a decrease in noninterest income of $62.3 million compared to the third quarter of 2022. Year-to-date noninterest income was a loss of $8.6 million, which represents a decrease in noninterest income of $68.2 million compared to the same nine month period in 2022. The decrease in noninterest income in the third quarter of 2023 was largely due to the above noted sale of available-for-sale debt securities, which resulted in the recognition of a pre-tax loss of $62.9 million. Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts and card services income, for the third quarter of 2023 were collectively up $543,000, or 2.7%, over the same period in 2022.

NONINTEREST EXPENSE

Noninterest expense was $49.9 million for the third quarter of 2023, which was up $264,000, or 0.5%, over the third quarter of 2022. For the year-to-date period, noninterest expense of $152.0 million was up $6.4 million, or 4.4%, from the same period in 2022. The increase in noninterest expense in the nine months ended September 30, 2023 over the same period in 2022 was mainly in other operating expenses which were up $4.1 million and higher personnel-related expenses, which were up $2.7 million. Contributing to the growth in other expenses for the nine months ended September 30, 2023, compared to the same period in 2022 were the following: expenses related to the Company’s retirement plans, up $1.3 million; professional fees, up $699,000, New York State minimum tax, up $623,000; and FDIC insurance, up $777,000. The increase in personnel-related expenses was mainly in health insurance, which is up $1.5 million.

INCOME TAX EXPENSE

The provision for income taxes was a credit of $8.3 million for an effective rate of 20.0% for the third quarter of 2023, compared to tax expense of $6.8 million and an effective rate of 24.1% for the same quarter in 2022. For the first nine months of 2023, the provision for income taxes was a credit of $619,000 for an effective rate of 10.3% compared to tax expense of $20.1 million and an effective rate of 23.4% for the same period in 2022. The decrease in income tax expense between comparable periods reflects the decrease in pre-tax income, due primarily to the realized losses on the sale of certain available-for-sale securities and the anticipated retention of certain New York State tax benefits.

ASSET QUALITY

The allowance for credit losses represented 0.91% of total loans and leases at September 30, 2023, flat as compared to June 30, 2023, and up from 0.86% at September 30, 2022. The ratio of the allowance to total nonperforming loans and leases was 156.96% at September 30, 2023, compared to 154.76% at June 30, 2023 and 128.27% at September 30, 2022.

Provision for credit losses for the third quarter of 2023 was $1.2 million compared to $1.1 million for the same period in 2022. Provision for credit losses for the nine months ended September 30, 2023 was $2.6 million, compared to $1.4 million for the nine months ended September 30, 2022. The increase in provision expense for both the quarter and year-to-date periods was mainly driven by economic forecasts, loan growth, and changes in asset quality. Net charge-offs for the quarter ended September 30, 2023 were $177,000 compared to net charge-offs of $122,000 reported for the same period in 2022.

Nonperforming assets represented 0.41% of total assets at September 30, 2023, down from 0.43% at December 31, 2022 and 0.45% reported at September 30, 2022. At September 30, 2023, nonperforming loans and leases totaled $31.4 million, compared to $32.8 million at December 31, 2022 and $34.9 million at September 30, 2022. The increase in loans past due 30-89 days at quarter-end September 30, 2023, was mainly due to the inclusion of two commercial real estate loans to one relationship totaling $18.6 million. The Company believes that the existing collateral securing the loans is sufficient to cover the exposure as of September 30, 2023.

Special Mention and Substandard loans and leases totaled $122.9 million at September 30, 2023, reflecting an increase from the $98.3 million reported at December 31, 2022, and $106.7 million at September 30, 2022. The increase as compared to year-end in Special Mention and Substandard was mainly a result of the downgrade of one commercial real estate loan added to Special Mention during the second quarter of 2023 and the downgrade of one commercial real estate loan previously reported as Special Mention in the second quarter of 2023.

CAPITAL POSITION

Capital ratios at September 30, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 13.46% at September 30, 2023, compared to 14.42% at December 31, 2022 and 14.26% at September 30, 2022. The ratio of Tier 1 capital to average assets was 9.01% at September 30, 2023, compared to 9.34% at December 31, 2022 and 9.14% at September 30, 2022.

During the third quarter of 2023, the Company repurchased 41,781 common shares at an aggregate cost of $2.3 million. These shares were purchased under the Company's Stock Repurchase Program announced in the third quarter of 2021.

LIQUIDITY POSITION

The Company's liquidity position at September 30, 2023 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 Discount Window advances and Federal Home Loan Banks (FHLB) advances. The Company maintains ready access liquidity of $1.2 billion, or 15.1% of total assets at September 30, 2023. As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At September 30, 2023 the Company had an available borrowing capacity at the FHLB of $969.4 million. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At September 30, 2023 the available borrowing capacity with the Federal Reserve Bank was $91.8 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at September 30, 2023, the Company maintained $411.7 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, Tompkins Insurance Agencies, Inc., and offers wealth management services through Tompkins Financial Advisors. 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", or "anticipate", the negative and other variations of these terms and other similar words. 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; GDP 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 recent bank failures, the wars in Ukraine and Israel, 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)

As of

As of

ASSETS

9/30/2023

12/31/2022

 

 

(Audited)

 

 

 

Cash and noninterest bearing balances due from banks

$

75,370

$

18,572

Interest bearing balances due from banks

 

64,846

 

59,265

Cash and Cash Equivalents

 

140,216

 

77,837

 

 

 

Available-for-sale debt securities, at fair value (amortized cost of $1,583,075 at September 30, 2023 and $1,831,791 at December 31, 2022)

 

1,388,510

 

1,594,967

Held-to-maturity securities, at amortized cost (fair value of $252,978 at September 30, 2023 and $261,692 at December 31, 2022)

 

312,385

 

312,344

Equity securities, at fair value

 

741

 

777

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

 

5,434,860

 

5,268,911

Less: Allowance for credit losses

 

49,336

 

45,934

Net Loans and Leases

 

5,385,524

 

5,222,977

 

 

 

Federal Home Loan Bank and other stock

 

19,985

 

17,720

Bank premises and equipment, net

 

80,685

 

82,140

Corporate owned life insurance

 

86,708

 

85,556

Goodwill

 

92,602

 

92,602

Other intangible assets, net

 

2,421

 

2,708

Accrued interest and other assets

 

181,385

 

181,058

Total Assets

$

7,691,162

$

7,670,686

LIABILITIES

 

 

Deposits:

 

 

Interest bearing:

 

 

Checking, savings and money market

 

3,779,991

 

3,820,739

Time

 

880,412

 

631,411

Noninterest bearing

 

1,963,033

 

2,150,145

Total Deposits

 

6,623,436

 

6,602,295

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

 

56,120

 

56,278

Other borrowings

 

296,800

 

291,300

Other liabilities

 

102,450

 

103,423

Total Liabilities

$

7,078,806

$

7,053,296

EQUITY

 

 

Tompkins Financial Corporation shareholders' equity:

 

 

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,386,087 at September 30, 2023; and 14,555,741 at December 31, 2022

 

1,439

 

1,456

Additional paid-in capital

 

296,721

 

302,763

Retained earnings

 

495,123

 

526,727

Accumulated other comprehensive loss

 

(176,029)

 

(208,689)

Treasury stock, at cost – 128,096 shares at September 30, 2023, and 128,749 shares at December 31, 2022

 

(6,403)

 

(6,279)

Total Tompkins Financial Corporation Shareholders’ Equity

 

610,851

 

615,978

Noncontrolling interests

 

1,505

 

1,412

Total Equity

$

612,356

$

617,390

Total Liabilities and Equity

$

7,691,162

$

7,670,686

 

 

 

TOMPKINS FINANCIAL CORPORATION

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

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

Three Months Ended

Nine Months Ended

 

9/30/2023

9/30/2022

9/30/2023

9/30/2022

INTEREST AND DIVIDEND INCOME

 

 

 

 

Loans

$

67,030

$

55,041

$

191,399

$

158,677

Due from banks

 

125

 

85

 

447

 

190

Available-for-sale debt securities

 

6,599

 

7,157

 

19,960

 

20,990

Held-to-maturity securities

 

1,221

 

1,221

 

3,654

 

3,551

Federal Home Loan Bank and other stock

 

490

 

166

 

1,113

 

391

Total Interest and Dividend Income

 

75,465

$

63,670

$

216,573

$

183,799

INTEREST EXPENSE

 

 

 

 

Time certificates of deposits of $250,000 or more

 

3,158

 

563

 

7,472

 

1,389

Other deposits

 

16,348

 

3,631

 

39,861

 

6,898

Federal funds purchased and securities sold under agreements to repurchase

 

15

 

14

 

44

 

45

Other borrowings

 

4,931

 

1,351

 

12,041

 

2,480

Total Interest Expense

 

24,452

 

5,559

 

59,418

 

10,812

Net Interest Income

 

51,013

 

58,111

 

157,155

 

172,987

Less: Provision for credit loss expense

 

1,150

 

1,056

 

2,578

 

1,392

Net Interest Income After Credit for Credit Loss Expense

 

49,863

 

57,055

 

154,577

 

171,595

NONINTEREST INCOME

 

 

 

 

Insurance commissions and fees

 

11,397

 

10,825

 

29,578

 

28,571

Wealth management fees

 

4,342

 

4,337

 

13,529

 

13,850

Service charges on deposit accounts

 

1,754

 

1,917

 

5,140

 

5,452

Card services income

 

2,860

 

2,731

 

8,629

 

8,233

Other income

 

990

 

977

 

4,534

 

3,694

Net loss on securities transactions

 

(62,967)

 

(95)

 

(70,019)

 

(179)

Total Noninterest Income

 

(41,624)

 

20,692

 

(8,609)

 

59,621

NONINTEREST EXPENSE

 

 

 

 

Salaries and wages

 

23,811

 

25,344

 

73,660

 

73,012

Other employee benefits

 

7,319

 

6,489

 

20,707

 

18,627

Net occupancy expense of premises

 

3,108

 

3,258

 

9,734

 

9,930

Furniture and fixture expense

 

2,079

 

2,056

 

6,238

 

6,051

Amortization of intangible assets

 

83

 

218

 

250

 

655

Other operating expense

 

13,466

 

12,237

 

41,403

 

37,286

Total Noninterest Expenses

 

49,866

 

49,602

 

151,992

 

145,561

(Loss)/Income Before Income Tax (Benefit)/Expense

 

(41,627)

 

28,145

 

(6,024)

 

85,655

Income Tax (Benefit)/Expense

 

(8,304)

 

6,774

 

(619)

 

20,079

Net (Loss)/Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

 

(33,323)

 

21,371

 

(5,405)

 

65,576

Less: Net Income Attributable to Noncontrolling Interests

 

31

 

31

 

93

 

94

Net (Loss)/Income Attributable to Tompkins Financial Corporation

$

(33,354)

 

21,340

 

(5,498)

 

65,482

Basic (Loss) Earnings Per Share

$

(2.35)

$

1.49

$

(0.39)

$

4.55

Diluted (Loss) Earnings Per Share

$

(2.35)

$

1.48

$

(0.39)

$

4.53

 

 

 

 

 

 

 

 

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

 

Quarter Ended

Quarter Ended

 

September 30, 2023

September 30, 2022

 

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

$

11,585

$

125

4.29 %

$

63,516

$

85

0.53 %

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

1,890,659

 

7,294

1.53 %

 

2,276,380

 

7,853

1.37 %

State and municipal (2)

 

90,212

 

576

2.53 %

 

95,627

 

614

2.55 %

Other securities (2)

 

3,272

 

59

7.18 %

 

3,323

 

37

4.44 %

Total securities

 

1,984,143

 

7,929

1.59 %

 

2,375,330

 

8,504

1.42 %

FHLBNY and FRB stock

 

24,511

 

490

7.94 %

 

15,058

 

166

4.38 %

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

 

5,385,195

 

67,199

4.95 %

 

5,185,219

 

55,265

4.23 %

Total interest-earning assets

 

7,405,434

 

75,743

4.06 %

 

7,639,123

 

64,020

3.32 %

Other assets

 

224,442

 

 

 

214,724

 

 

Total assets

$

7,629,876

 

 

$

7,853,847

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

$

3,615,395

$

12,674

1.39 %

$

3,979,590

$

2,863

0.29 %

Time deposits

 

826,082

 

6,832

3.28 %

 

596,299

 

1,331

0.89 %

Total interest-bearing deposits

 

4,441,477

 

19,506

1.74 %

 

4,575,889

 

4,194

0.36 %

Federal funds purchased & securities sold under agreements to repurchase

 

57,624

 

15

0.10 %

 

53,810

 

14

0.10 %

Other borrowings

 

403,829

 

4,931

4.84 %

 

232,158

 

1,351

2.31 %

Total interest-bearing liabilities

 

4,902,930

 

24,452

1.98 %

 

4,861,857

 

5,559

0.45 %

Noninterest bearing deposits

 

1,990,320

 

 

 

2,250,263

 

 

Accrued expenses and other liabilities

 

101,646

 

 

 

106,403

 

 

Total liabilities

 

6,994,896

 

 

 

7,218,523

 

 

Tompkins Financial Corporation Shareholders’ equity

 

633,494

 

 

 

633,837

 

 

Noncontrolling interest

 

1,487

 

 

 

1,487

 

 

Total equity

 

634,980

 

 

 

635,324

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,629,876

 

 

$

7,853,847

 

 

Interest rate spread

 

 

2.08 %

 

 

2.87 %

Net interest income/margin on earning assets

 

 

51,291

2.75 %

 

 

58,461

3.04 %

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(278)

 

 

 

(350)

 

Net interest income per consolidated financial statements

 

$

51,013

 

 

$

58,111

 

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

 

Year to Date Period Ended

Year to Date Period Ended

 

September 30, 2023

September 30, 2022

 

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

$

12,630

$

447

4.73 %

$

94,988

$

190

0.27 %

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

1,965,039

 

22,022

1.50 %

 

2,291,635

 

22,960

1.34 %

State and municipal (2)

 

91,858

 

1,764

2.57 %

 

98,262

 

1,882

2.56 %

Other securities (2)

 

3,281

 

169

6.87 %

 

3,349

 

88

3.52 %

Total securities

 

2,060,178

 

23,955

1.55 %

 

2,393,247

 

24,930

1.39 %

FHLBNY and FRB stock

 

21,519

 

1,112

6.92 %

 

12,481

 

391

4.19 %

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

 

5,314,221

 

191,946

4.83 %

 

5,119,309

 

159,353

4.16 %

Total interest-earning assets

 

7,408,548

 

217,460

3.92 %

 

7,620,025

 

184,864

3.24 %

Other assets

 

224,594

 

 

 

244,615

 

 

Total assets

$

7,633,142

 

 

$

7,864,640

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

$

3,715,931

$

31,905

1.15 %

$

4,070,607

$

4,502

0.15 %

Time deposits

 

749,198

 

15,428

2.75 %

 

610,432

 

3,785

0.83 %

Total interest-bearing deposits

 

4,465,129

 

47,333

1.42 %

 

4,681,039

 

8,287

0.24 %

Federal funds purchased & securities sold under agreements to repurchase

 

57,077

 

44

0.10 %

 

57,606

 

45

0.10 %

Other borrowings

 

351,600

 

12,041

4.58 %

 

176,007

 

2,480

1.88 %

Total interest-bearing liabilities

 

4,873,806

 

59,418

1.63 %

 

4,914,652

 

10,812

0.29 %

Noninterest bearing deposits

 

2,019,917

 

 

 

2,183,258

 

 

Accrued expenses and other liabilities

 

100,491

 

 

 

104,445

 

 

Total liabilities

 

6,994,214

 

 

 

7,202,356

 

 

Tompkins Financial Corporation Shareholders’ equity

 

637,472

 

 

 

660,826

 

 

Noncontrolling interest

 

1,456

 

 

 

1,458

 

 

Total equity

 

638,928

 

 

 

662,284

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,633,142

 

 

$

7,864,640

 

 

Interest rate spread

 

 

2.29 %

 

 

2.95 %

Net interest income/margin on earning assets

 

 

158,042

2.85 %

 

 

174,052

3.05 %

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(888)

 

 

 

(1,065)

 

Net interest income per consolidated financial statements

 

$

157,155

 

 

$

172,987

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

Quarter-Ended

Year-Ended

Period End Balance Sheet

Sep-23

Jun-23

Mar-23

Dec-22

Sep-22

Dec-22

Securities

$

1,701,636

$

1,781,150

$

1,899,001

$

1,908,088

$

2,054,036

$

1,908,088

Total Loans

 

5,434,860

 

5,352,365

 

5,273,671

 

5,268,911

 

5,208,436

 

5,268,911

Allowance for credit losses

 

49,336

 

48,545

 

46,099

 

45,934

 

44,772

 

45,934

Total assets

 

7,691,162

 

7,626,238

 

7,644,371

 

7,670,686

 

7,779,941

 

7,670,686

Total deposits

 

6,623,436

 

6,454,651

 

6,509,009

 

6,602,295

 

6,936,726

 

6,602,295

Federal funds purchased and securities sold under agreements to repurchase

 

56,120

 

50,483

 

63,491

 

56,278

 

55,340

 

56,278

Other borrowings

 

296,800

 

387,100

 

327,000

 

291,300

 

101,000

 

291,300

Total common equity

 

610,851

 

634,967

 

648,322

 

615,978

 

571,453

 

615,978

Total equity

 

612,356

 

636,441

 

649,765

 

617,390

 

572,959

 

617,390

Average Balance Sheet

 

 

 

 

 

 

Average earning assets

$

7,405,434

$

7,409,714

$

7,410,553

$

7,568,656

$

7,639,123

$

7,607,078

Average assets

 

7,629,876

 

7,635,800

 

7,633,793

 

7,721,335

 

7,853,847

 

7,828,520

Average interest-bearing liabilities

 

4,902,930

 

4,883,026

 

4,834,712

 

4,828,561

 

4,861,857

 

4,892,952

Average equity

 

634,980

 

650,554

 

631,208

 

580,720

 

635,324

 

641,726

Share data

 

 

 

 

 

 

Weighted average shares outstanding (basic)

 

14,185,763

 

14,314,133

 

14,326,595

 

14,308,323

 

14,289,022

 

14,328,280

Weighted average shares outstanding (diluted)

 

14,224,748

 

14,346,787

 

14,389,673

 

14,385,884

 

14,367,149

 

14,404,294

Period-end shares outstanding

 

14,350,177

 

14,405,503

 

14,519,748

 

14,519,831

 

14,483,757

 

14,519,831

Common equity book value per share

$

42.57

$

44.08

$

44.65

$

42.42

$

39.45

$

42.42

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

$

36.01

$

37.54

$

38.16

$

35.93

$

32.93

$

35.93

**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

$

51,013

$

51,896

$

54,246

$

57,294

$

58,111

$

230,281

(Credit) provision for credit loss expense (5)

 

1,150

 

2,253

 

(825)

 

1,397

 

1,056

 

2,789

Noninterest income

 

(41,624)

 

12,615

 

20,400

 

18,351

 

20,692

 

77,972

Noninterest expense (5)

 

49,866

 

51,968

 

50,158

 

50,190

 

49,602

 

195,751

Income tax (benefit)/expense

 

(8,304)

 

1,784

 

5,901

 

4,478

 

6,774

 

24,557

Net (loss)/income attributable to Tompkins Financial Corporation

 

(33,354)

 

8,475

 

19,381

 

19,548

 

21,340

 

85,030

Noncontrolling interests

 

31

 

31

 

31

 

32

 

31

 

126

Basic (loss) earnings per share (4)

 

(2.35)

 

0.59

 

1.35

 

1.36

 

1.49

 

5.92

Diluted (loss) earnings per share (4)

 

(2.35)

 

0.59

 

1.35

 

1.36

 

1.48

 

5.89

Nonperforming Assets

 

 

 

 

 

 

Nonaccrual loans and leases

$

31,381

$

31,333

$

28,424

$

28,289

$

30,013

$

28,289

Loans and leases 90 days past due and accruing

 

52

 

34

 

13

 

25

 

161

 

25

Performing troubled debt restructuring*

 

0

 

0

 

0

 

4,530

 

4,730

 

4,530

Total nonperforming loans and leases

 

31,433

 

31,367

 

28,437

 

32,844

 

34,904

 

32,844

OREO

 

0

 

36

 

36

 

152

 

335

 

152

Total nonperforming assets

$

31,433

$

31,403

$

28,473

$

32,996

$

35,239

$

32,996

*No amount shown for periods subsequent to the Company's adoption of ASU 2022-02 effective January 1, 2023.

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

 

Quarter-Ended

Year-Ended

Delinquency - Total loan and lease portfolio

Sep-23

Jun-23

Mar-23

Dec-22

Sep-22

Dec-22

Loans and leases 30-89 days past due and

 

 

 

 

 

 

accruing

$

40,893

$

20,255

$

5,894

$

3,172

$

3,160

$

3,172

Loans and leases 90 days past due and accruing

 

52

 

34

 

13

 

25

 

161

 

25

Total loans and leases past due and accruing

 

40,945

 

20,289

 

5,907

 

3,197

 

3,321

 

3,197

Allowance for Credit Losses

Balance at beginning of period

$

48,545

$

46,099

$

45,934

$

44,772

$

43,793

$

42,843

Impact of adopting ASC 326

 

0

 

0

 

64

 

0

 

0

 

0

Provision (credit) for credit losses

 

968

 

2,419

 

(1,180)

 

1,352

 

1,101

$

2,499

Net loan and lease (recoveries) charge-offs

 

177

 

(27)

 

(1,281)

 

190

 

122

$

(592)

Allowance for credit losses at end of period

$

49,336

$

48,545

$

46,099

$

45,934

$

44,772

$

45,934

 

 

 

 

 

 

 

Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance at beginning of period

$

2,985

$

3,151

$

2,796

$

2,751

$

2,796

$

2,506

(Credit) provision for credit losses

 

182

 

(166)

 

355

 

45

 

(45)

$

290

Allowance for credit losses at end of period

$

3,167

$

2,985

$

3,151

$

2,796

$

2,751

$

2,796

Loan Classification - Total Portfolio

 

 

 

 

 

 

Special Mention

$

65,993

$

56,305

$

39,255

$

49,752

$

66,730

$

49,752

Substandard

 

56,947

 

61,820

 

46,315

 

48,537

 

40,007

 

48,537

Ratio Analysis

Credit Quality

 

 

 

 

 

 

Nonperforming loans and leases/total loans and leases

0.58 %

0.59 %

0.54 %

0.62 %

0.67 %

0.62 %

Nonperforming assets/total assets

0.41 %

0.41 %

0.37 %

0.43 %

0.45 %

0.43 %

Allowance for credit losses/total loans and leases

0.91 %

0.91 %

0.87 %

0.87 %

0.86 %

0.87 %

Allowance/nonperforming loans and leases

156.96 %

154.76 %

162.11 %

139.86 %

128.27 %

139.85 %

Net loan and lease losses annualized/total average loans and leases

0.01 %

0.00 %

(0.10) %

0.01 %

0.01 %

(0.01) %

Capital Adequacy

 

 

 

 

 

 

Tier 1 Capital (to average assets)

9.01 %

9.57 %

9.63 %

9.34 %

9.14 %

9.34 %

Total Capital (to risk-weighted assets)

13.46 %

14.48 %

14.62 %

14.42 %

14.26 %

14.42 %

Profitability (period-end)

 

 

 

 

 

 

Return on average assets *

(1.73) %

0.45 %

1.03 %

1.00 %

1.08 %

1.09 %

Return on average equity *

(20.84) %

5.22 %

12.45 %

13.36 %

13.33 %

13.25 %

Net interest margin (TE) *

2.75 %

2.83 %

2.99 %

3.02 %

3.04 %

3.05 %

* 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 accounting principles generally accepted in the United States of America (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

 

Sep-23

Jun-23

Mar-23

Dec-22

Sep-22

Dec-22

Total common equity

$

610,851

$

634,967

$

648,322

$

615,978

$

571,453

$

615,978

Less: Goodwill and intangibles

 

94,086

 

94,169

 

94,253

 

94,336

 

94,554

 

94,336

Tangible common equity (Non-GAAP)

 

516,765

 

540,798

 

554,069

 

521,642

 

476,899

 

521,642

Ending shares outstanding

 

14,350,177

 

14,405,503

 

14,519,748

 

14,519,831

 

14,483,757

 

14,519,831

Tangible book value per share (Non-GAAP)

$

36.01

$

37.54

$

38.16

$

35.93

$

32.93

$

35.93

(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 2023 and 2022 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, 2022.

(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 contact:

Stephen S. Romaine, President & CEO

Matthew Tomazin, Executive VP, CFO & Treasurer

Tompkins Financial Corporation (888) 503-5753

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