Tompkins Financial Corporation Reports Fourth Quarter Financial Results

Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.05 for the fourth quarter of 2023, down 22.8% compared to the fourth quarter of 2022. Net income for the fourth quarter of 2023 was $15.0 million, down $4.5 million or 23.3% compared to the $19.5 million reported for the fourth quarter of 2022. Contributing to the lower quarterly results were increased funding costs and increased operating expenses, which included costs related to three branch closures during the fourth quarter of 2023 as well as personnel-related charges.

For the year ended December 31, 2023, diluted earnings per share of $0.66 were down 88.8% compared to the year ended December 31, 2022. Net income for 2023 was $9.5 million, a decrease of $75.5 million compared to the year ended December 31, 2022. Significant contributors to the year-over-year decrease in net income included a previously announced after-tax loss of $52.9 million, or $3.69 loss per diluted share, related to the sale of $510.5 million of available-for-sale debt securities, increased funding costs and an increase in operating expenses. The sale of securities and subsequent reinvestment in the second and third quarters of 2023 is favorably impacting securities revenue as the securities sold had an average yield of 0.86%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.09%. Average yields on securities for the fourth quarter of 2023 were 2.33%, compared to 1.59% for the third quarter of 2023, and 1.44% for the fourth quarter of 2022.

Tompkins President and CEO, Stephen Romaine, commented, "In the fourth quarter we continued to execute on strategic initiatives and are pleased to announce our expanded presence in Syracuse with the grand opening of our City Center office. For the quarter we saw positive momentum with our net interest margin expanding, strong quarterly loan growth driving full year loan growth of 6.4%, signs of stabilization in our deposit base and growth in our noninterest related revenue. During the quarter we also recognized non-recurring expenses relating to three branch closures and other personnel-related expenses intended to help offset future expense growth. While the economic environment remains challenging for the industry we look forward to 2024 with our strong capital and liquidity position to continue to drive growth of quality customer relationships."

SELECTED HIGHLIGHTS FOR THE PERIOD:

  • Net interest margin for the fourth quarter of 2023 expanded to 2.82%, compared to 2.75% for the third quarter of 2023.
  • Total loans at December 31, 2023 were up $171.1 million, or 3.2% (12.6% on an annualized basis), compared to the immediate prior quarter, and up $337.0 million, or 6.4%, from December 31, 2022.
  • Total deposits at December 31, 2023 were $6.4 billion, down $223.6 million, or 3.4% (13.5% on an annualized basis), from September 30, 2023, and down $202.5 million, or 3.1%, from December 31, 2022.
  • Loan to deposit ratio was 87.6%, compared to 82.1% for the immediate prior quarter.
  • Regulatory Tier 1 capital to average assets was 9.08% at December 31, 2023, compared to 9.01% at September 30, 2023 and 9.34% at December 31, 2022.

NET INTEREST INCOME

Net interest income was $52.4 million for the fourth quarter of 2023, up from $51.0 million for the third quarter of 2023 and down from $57.3 million for the fourth quarter of 2022. Net interest margin was 2.82% for the fourth quarter of 2023, compared to 2.75% reported for the third quarter of 2023 and 3.02% reported for the fourth quarter of 2022. The increase in net interest income and net interest margin during the fourth quarter of this year compared to the third quarter of 2023 was primarily due to securities purchased in the second and third quarter of 2023 yielding higher interest rates compared to securities sold during the same periods. The increase in securities yields was partially offset by the reversal of $1.0 million of accrued interest during the fourth quarter related to loans that moved to nonaccrual status during the quarter, as described further below under the heading Asset Quality. The decreases in net interest income and net interest margin compared to the fourth quarter of last year were primarily attributable to increased interest costs on interest-bearing liabilities outpacing increased interest income on interest earning assets due to the higher interest rate environment.

For the year ended December 31, 2023, net interest income was $209.5 million, down $20.8 million, or 9.0%, when compared to the same period in 2022.

Average loans for the quarter ended December 31, 2023 were up $101.5 million, or 1.9%, from the third quarter of 2023, and were up $277.0 million, or 5.3%, compared to the quarter ended December 31, 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 December 31, 2023 was 4.3%, which was up from 4.1% for the quarter ended September 30, 2023, and up from 3.6% for the quarter ended December 31, 2022.

Average total deposits for the fourth quarter of 2023 were up $58.4 million, or 0.9%, compared to the third quarter of 2023, while period end balances were down $223.6 million compared to the third quarter of 2023 driven by seasonal deposit trends. Average deposits for the quarter were down $227.8 million, or 3.4%, compared to the same period in 2022. 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 increased to 2.04% for the fourth quarter of 2023, compared to 1.74% for the third quarter of 2023, and 0.69% for the fourth quarter of 2022. The cost of interest-bearing deposits for the fourth quarter of 2023 increased 135 basis points compared to the fourth quarter of 2022, and 123 basis points for the year ended December 31, 2023 compared to the same period in 2022. The ratio of average noninterest bearing deposits to average total deposits for the fourth quarter of 2023 was 29.6% compared to 31.0% for the third quarter of 2023, and 30.8% for the year ended December 31, 2023. The average cost of interest-bearing liabilities for the fourth quarter of 2023 of 2.25% represents an increase of 27 basis points over the third quarter of 2023, and an increase of 141 basis points over the same period in 2022.

NONINTEREST INCOME

Noninterest income of $18.9 million for the fourth quarter of 2023 was up 2.7% compared to the same period in 2022. The increase was mainly due to gains on securities transactions of $46,000 compared to losses on securities transactions of $455,000, and increases in fee-based revenues which include insurance commissions and fees, up $143,000, wealth management fees, up $181,000 and card services income, up $68,000.

Noninterest income for the year ended December 31, 2023 was $10.2 million, which represents a decrease in noninterest income of $67.7 million compared to the same period in 2022. The decrease in noninterest income was largely due to the previously noted sales of available-for-sale debt securities, mainly in the third quarter of 2023, which resulted in the recognition of a pre-tax loss of $70.0 million for the year ended December 31, 2023. Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts and card services income, for the year ended December 31, 2023 were collectively up $1.0 million, or 1.4%, over the same period in 2022.

NONINTEREST EXPENSE

Noninterest expense was $51.3 million for the fourth quarter of 2023, which was up $1.1 million, or 2.2%, over the fourth quarter of 2022. The increases were mainly in premises and furniture and fixtures, up $799,000, and other operating expenses, up $1.7 million; partially offset by lower salaries and wages. The increase in premises and furniture and fixtures was mainly due to $720,000 of expense related to branch closures. Contributing to the increase in other operating expense were: FDIC expense, up $723,000; technology, up $434,000; expenses related to the Company's retirement plans, up $428,000; charitable contributions and donations, up $315,000; and accrual for New York State minimum tax, up $207,000. Salaries and wages included $638,000 of personnel-related charges, which were more than offset by lower incentive related accruals.

For the year-to-date period, noninterest expense of $203.3 million was up $7.5 million, or 3.9%, from the same period in 2022. The increase in noninterest expense for the year-ended December 31, 2023 over the same period in 2022 was mainly in employee benefits and other noninterest expense. The increase in employee benefits was mainly in health insurance, which was up $1.8 million. Salaries and wages were down as annual merit increases were offset by lower incentive related accruals. Contributing to the increases in other expenses were the following: FDIC insurance, up $1.5 million; New York State minimum tax expense, up $830,000; professional fees, up $604,000; and charitable donations, up $317,000. Premises and furniture and fixtures expenses were up over prior year mainly as a result of expense related to branch closures of $879,000.

INCOME TAX EXPENSE

The provision for income tax expense of $3.1 million for an effective rate of 17.2% for the fourth quarter of 2023, compared to tax expense of $4.5 million and an effective rate of 18.6% for the same quarter in 2022. The fourth quarter 2023 included the impact of surrendering certain separate account BOLI policies, which added $1.8 million to tax expense for the quarter. For the year-ended 2023, the provision for income tax expense of $2.5 million for an effective rate of 20.6% compared to tax expense of $24.6 million and an effective rate of 22.4% 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.

ASSET QUALITY

The allowance for credit losses represented 0.92% of total loans and leases at December 31, 2023, up from 0.91% at September 30, 2023, and up from 0.87% at December 31, 2022. The ratio of the allowance to total nonperforming loans and leases was 82.84% at December 31, 2023, compared to 156.96% at September 30, 2023 and 139.86% at December 31, 2022. The decrease in the ratio compared to prior periods was due to the increase in nonperforming loans and leases discussed in more detail below.

Provision for credit losses for the fourth quarter of 2023 was $1.8 million compared to $1.4 million for the same period in 2022. Provision for credit losses for the year ended December 31, 2023 was $4.3 million, compared to $2.8 million for the year ended December 31, 2022. The increase in provision expense for both the quarter and year-to-date periods was mainly driven by loan growth, economic forecasts, and changes in asset quality. Net charge-offs for the fourth quarter of 2023 were $410,000 compared to net charge-offs of $190,000 reported for the same period in 2022.

Nonperforming assets represented 0.80% of total assets at December 31, 2023, up from 0.41% reported at September 30, 2023 and 0.43% at December 31, 2022. At December 31, 2023, nonperforming loans and leases totaled $62.3 million, compared to $31.4 million at September 30, 2023 and $32.8 million at December 31, 2022. The increase in nonperforming loans at quarter-end December 31, 2023, was mainly due to the addition of one relationship with two commercial real estate properties in the hospitality portfolio totaling approximately $33.8 million. The Company believes that the existing collateral securing the loans is sufficient to cover the exposure as of December 31, 2023. These loans were included in loans past due 30-89 days and accruing at the end of third quarter of 2023. Loans past due 30-89 days and accruing as a percentage of total loans decreased from 0.75% at the end of the third quarter of 2023 to 0.08% at the end of the fourth quarter of 2023.

Special Mention and Substandard loans and leases totaled $123.1 million at December 31, 2023, reflecting an increase from the $122.9 million reported at September 30, 2023, and $98.3 million reported at December 31, 2022.

CAPITAL POSITION

Capital ratios at December 31, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 13.36% at December 31, 2023, compared to 13.46% at September 30, 2023, and 14.42% at December 31, 2022. The ratio of Tier 1 capital to average assets was 9.08% at December 31, 2023, compared to 9.01% at September 30, 2023, and 9.34% at December 31, 2022.

LIQUIDITY POSITION

The Company's liquidity position at December 31, 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 $1.4 billion, or 18.3% of total assets at December 31, 2023. As a member of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At December 31, 2023 the Company had an available borrowing capacity at the FHLB of $642 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 December 31, 2023 the available borrowing capacity with the Federal Reserve Bank was $92.6 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at December 31, 2023, the Company maintained $687.0 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. Examples of forward-looking statements may include statements regarding the expected increases in revenue attributable to the reinvestment of proceeds from the sale of available-for-sale debt securities in securities with higher estimated yields and the sufficiency of existing collateral to cover exposure related to nonperforming loans. 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 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

12/31/2023

12/31/2022

 

 

(Audited)

 

 

 

Cash and noninterest bearing balances due from banks

$

67,212

 

$

18,572

 

Interest bearing balances due from banks

 

12,330

 

 

59,265

 

Cash and Cash Equivalents

 

79,542

 

 

77,837

 

 

 

 

Available-for-sale debt securities, at fair value (amortized cost of $1,548,482 at December 31, 2023 and $1,831,791 at December 31, 2022)

 

1,416,650

 

 

1,594,967

 

Held-to-maturity debt securities, at amortized cost (fair value of $267,455 at December 31, 2023 and $261,692 at December 31, 2022)

 

312,401

 

 

312,344

 

Equity securities, at fair value

 

787

 

 

777

 

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

 

5,605,935

 

 

5,268,911

 

Less: Allowance for credit losses

 

51,584

 

 

45,934

 

Net Loans and Leases

 

5,554,351

 

 

5,222,977

 

 

 

 

Federal Home Loan Bank and other stock

 

33,719

 

 

17,720

 

Bank premises and equipment, net

 

79,687

 

 

82,140

 

Corporate owned life insurance

 

67,884

 

 

85,556

 

Goodwill

 

92,602

 

 

92,602

 

Other intangible assets, net

 

2,327

 

 

2,708

 

Accrued interest and other assets

 

179,799

 

 

181,058

 

Total Assets

$

7,819,749

 

$

7,670,686

 

LIABILITIES

 

 

Deposits:

 

 

Interest bearing:

 

 

Checking, savings and money market

 

3,484,878

 

 

3,820,739

 

Time

 

998,013

 

 

631,411

 

Noninterest bearing

 

1,916,956

 

 

2,150,145

 

Total Deposits

 

6,399,847

 

 

6,602,295

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

 

50,996

 

 

56,278

 

Other borrowings

 

602,100

 

 

291,300

 

Other liabilities

 

96,872

 

 

103,423

 

Total Liabilities

$

7,149,815

 

$

7,053,296

 

EQUITY

 

 

Tompkins Financial Corporation shareholders' equity:

 

 

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,441,830 at December 31, 2023; and 14,555,741 at December 31, 2022

 

1,444

 

 

1,456

 

Additional paid-in capital

 

297,183

 

 

302,763

 

Retained earnings

 

501,510

 

 

526,727

 

Accumulated other comprehensive loss

 

(125,005

)

 

(208,689

)

Treasury stock, at cost – 132,097 shares at December 31, 2023, and 128,749 shares at December 31, 2022

 

(6,610

)

 

(6,279

)

Total Tompkins Financial Corporation Shareholders’ Equity

 

668,522

 

 

615,978

 

Noncontrolling interests

 

1,412

 

 

1,412

 

Total Equity

$

669,934

 

$

617,390

 

Total Liabilities and Equity

$

7,819,749

 

$

7,670,686

 

 

 

 

TOMPKINS FINANCIAL CORPORATION

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

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

Three Months Ended

Year Ended

 

12/31/2023

12/31/2022

12/31/2023

12/31/2022

INTEREST AND DIVIDEND INCOME

 

 

 

 

Loans

$

69,035

$

58,930

 

$

260,434

 

$

217,607

 

Due from banks

 

227

 

181

 

 

674

 

 

371

 

Available-for-sale debt securities

 

9,717

 

6,939

 

 

29,677

 

 

27,929

 

Held-to-maturity debt securities

 

1,222

 

1,221

 

 

4,876

 

 

4,771

 

Federal Home Loan Bank and other stock

 

584

 

254

 

 

1,697

 

 

646

 

Total Interest and Dividend Income

 

80,785

$

67,525

 

$

297,358

 

$

251,324

 

INTEREST EXPENSE

 

 

 

 

Time certificates of deposits of $250,000 or more

 

3,949

 

909

 

 

11,421

 

 

2,298

 

Other deposits

 

19,526

 

6,973

 

 

59,387

 

 

13,870

 

Federal funds purchased and securities sold under agreements to repurchase

 

14

 

14

 

 

58

 

 

60

 

Other borrowings

 

4,937

 

2,335

 

 

16,978

 

 

4,815

 

Total Interest Expense

 

28,426

 

10,231

 

 

87,844

 

 

21,043

 

Net Interest Income

 

52,359

 

57,294

 

 

209,514

 

 

230,281

 

Less: Provision for credit loss expense

 

1,761

 

1,397

 

 

4,339

 

 

2,789

 

Net Interest Income After Credit for Credit Loss Expense

 

50,598

 

55,897

 

 

205,175

 

 

227,492

 

NONINTEREST INCOME

 

 

 

 

Insurance commissions and fees

 

7,773

 

7,630

 

 

37,351

 

 

36,201

 

Wealth management fees

 

4,422

 

4,241

 

 

17,951

 

 

18,091

 

Service charges on deposit accounts

 

1,773

 

1,913

 

 

6,913

 

 

7,365

 

Card services income

 

2,859

 

2,791

 

 

11,488

 

 

11,024

 

Other income

 

1,977

 

2,231

 

 

6,511

 

 

5,925

 

Net gain (loss) on securities transactions

 

46

 

(455

)

 

(69,973

)

 

(634

)

Total Noninterest Income

 

18,850

 

18,351

 

 

10,241

 

 

77,972

 

NONINTEREST EXPENSE

 

 

 

 

Salaries and wages

 

23,710

 

25,249

 

 

97,370

 

 

98,261

 

Other employee benefits

 

6,626

 

6,342

 

 

27,333

 

 

24,969

 

Net occupancy expense of premises

 

3,544

 

3,163

 

 

13,278

 

 

13,093

 

Furniture and fixture expense

 

2,425

 

2,007

 

 

8,663

 

 

8,058

 

Amortization of intangible assets

 

84

 

218

 

 

334

 

 

873

 

Other operating expense

 

14,911

 

13,211

 

 

56,314

 

 

50,497

 

Total Noninterest Expenses

 

51,300

 

50,190

 

 

203,292

 

 

195,751

 

Income Before Income Tax Expense

 

18,148

 

24,058

 

 

12,124

 

 

109,713

 

Income Tax Expense

 

3,114

 

4,478

 

 

2,495

 

 

24,557

 

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

 

15,034

 

19,580

 

 

9,629

 

 

85,156

 

Less: Net Income Attributable to Noncontrolling Interests

 

31

 

32

 

 

124

 

 

126

 

Net Income Attributable to Tompkins Financial Corporation

$

15,003

 

19,548

 

 

9,505

 

 

85,030

 

Basic Earnings Per Share

$

1.06

$

1.36

 

$

0.66

 

$

5.92

 

Diluted Earnings Per Share

$

1.05

$

1.36

 

$

0.66

 

$

5.89

 

 

 

 

 

 

 

 

 

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

 

Quarter Ended

Quarter Ended

 

December 31, 2023

December 31, 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

$

14,351

$

227

 

6.28

%

$

58,488

$

181

 

1.23

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

1,789,043

 

10,411

 

2.31

%

 

2,186,858

 

7,627

 

1.38

%

State and municipal (2)

 

90,070

 

574

 

2.53

%

 

94,377

 

608

 

2.56

%

Other securities (2)

 

3,242

 

60

 

7.37

%

 

3,270

 

47

 

5.68

%

Total securities

 

1,882,355

 

11,045

 

2.33

%

 

2,284,505

 

8,282

 

1.44

%

FHLBNY and FRB stock

 

24,555

 

584

 

9.44

%

 

15,942

 

255

 

6.33

%

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

 

5,486,715

 

69,197

 

5.00

%

 

5,209,721

 

59,140

 

4.50

%

Total interest-earning assets

 

7,407,976

 

81,053

 

4.34

%

 

7,568,656

 

67,858

 

3.56

%

Other assets

 

259,006

 

 

 

152,679

 

 

Total assets

$

7,666,982

 

 

$

7,721,335

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

$

3,643,919

$

14,915

 

1.62

%

$

3,905,570

$

5,888

 

0.60

%

Time deposits

 

925,790

 

8,560

 

3.67

%

 

615,493

 

1,994

 

1.28

%

Total interest-bearing deposits

 

4,569,709

 

23,475

 

2.04

%

 

4,521,063

 

7,882

 

0.69

%

Federal funds purchased & securities sold under agreements to repurchase

 

51,903

 

14

 

0.10

%

 

55,701

 

14

 

0.10

%

Other borrowings

 

398,932

 

4,937

 

4.91

%

 

251,797

 

2,335

 

3.68

%

Total interest-bearing liabilities

 

5,020,544

 

28,426

 

2.25

%

 

4,828,561

 

10,231

 

0.84

%

Noninterest bearing deposits

 

1,920,510

 

 

 

2,196,992

 

 

Accrued expenses and other liabilities

 

103,648

 

 

 

115,063

 

 

Total liabilities

 

7,044,702

 

 

 

7,140,615

 

 

Tompkins Financial Corporation Shareholders’ equity

 

620,789

 

 

 

579,223

 

 

Noncontrolling interest

 

1,491

 

 

 

1,497

 

 

Total equity

 

622,280

 

 

 

580,720

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,666,982

 

 

$

7,721,335

 

 

Interest rate spread

 

 

2.09

%

 

 

2.72

%

Net interest income/margin on earning assets

 

 

52,627

 

2.82

%

 

 

57,627

 

3.02

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(268

)

 

 

 

(333

)

 

Net interest income per consolidated financial statements

 

$

52,359

 

 

 

$

57,294

 

 

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

 

Year to Date Period Ended

Year to Date Period Ended

 

December 31, 2023

December 31, 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

$

13,064

$

674

 

5.16

%

$

85,788

$

371

 

0.43

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

1,920,678

 

32,433

 

1.69

%

 

2,265,226

 

30,587

 

1.35

%

State and municipal (2)

 

91,407

 

2,338

 

2.56

%

 

97,283

 

2,490

 

2.56

%

Other securities (2)

 

3,272

 

229

 

6.99

%

 

3,329

 

135

 

4.06

%

Total securities

 

2,015,357

 

35,000

 

1.74

%

 

2,365,838

 

33,212

 

1.40

%

FHLBNY and FRB stock

 

22,284

 

1,697

 

7.63

%

 

13,354

 

646

 

4.84

%

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

 

5,357,699

 

261,144

 

4.87

%

 

5,142,098

 

218,494

 

4.25

%

Total interest-earning assets

 

7,408,404

 

298,515

 

4.03

%

 

7,607,078

 

252,723

 

3.32

%

Other assets

 

233,268

 

 

 

221,442

 

 

Total assets

$

7,641,672

 

 

$

7,828,520

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

$

3,697,780

$

46,820

 

1.27

%

$

4,029,008

$

10,389

 

0.26

%

Time deposits

 

793,709

 

23,988

 

3.02

%

 

611,708

 

5,779

 

0.94

%

Total interest-bearing deposits

 

4,491,489

 

70,808

 

1.58

%

 

4,640,716

 

16,168

 

0.35

%

Federal funds purchased & securities sold under agreements to repurchase

 

55,773

 

58

 

0.10

%

 

57,126

 

60

 

0.10

%

Other borrowings

 

363,530

 

16,978

 

4.67

%

 

195,110

 

4,815

 

2.47

%

Total interest-bearing liabilities

 

4,910,792

 

87,844

 

1.79

%

 

4,892,952

 

21,043

 

0.43

%

Noninterest bearing deposits

 

1,994,861

 

 

 

2,186,720

 

 

Accrued expenses and other liabilities

 

101,287

 

 

 

107,122

 

 

Total liabilities

 

7,006,940

 

 

 

7,186,794

 

 

Tompkins Financial Corporation Shareholders’ equity

 

633,267

 

 

 

640,258

 

 

Noncontrolling interest

 

1,465

 

 

 

1,468

 

 

Total equity

 

634,732

 

 

 

641,726

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,641,672

 

 

$

7,828,520

 

 

Interest rate spread

 

 

2.24

%

 

 

2.89

%

Net interest income/margin on earning assets

 

 

210,671

 

2.84

%

 

 

231,680

 

3.05

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(1,157

)

 

 

 

(1,399

)

 

Net interest income per consolidated financial statements

 

$

209,514

 

 

 

$

230,281

 

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

Quarter-Ended

Year-Ended

Period End Balance Sheet

Dec-23

Sep-23

Jun-23

Mar-23

Dec-22

Dec-23

Securities

$

1,729,838

$

1,701,636

$

1,781,150

$

1,899,001

$

1,908,088

$

1,729,838

Total Loans

 

5,605,935

 

5,434,860

 

5,352,365

 

5,273,671

 

5,268,911

 

5,605,935

Allowance for credit losses

 

51,584

 

49,336

 

48,545

 

46,099

 

45,934

 

51,584

Total assets

 

7,819,749

 

7,691,162

 

7,626,238

 

7,644,371

 

7,670,686

 

7,819,749

Total deposits

 

6,399,847

 

6,623,436

 

6,454,651

 

6,509,009

 

6,602,295

 

6,399,847

Federal funds purchased and securities sold under agreements to repurchase

 

50,996

 

56,120

 

50,483

 

63,491

 

56,278

 

50,996

Other borrowings

 

602,100

 

296,800

 

387,100

 

327,000

 

291,300

 

602,100

Total common equity

 

668,522

 

610,851

 

634,967

 

648,322

 

615,978

 

668,522

Total equity

 

669,934

 

612,356

 

636,441

 

649,765

 

617,390

 

669,934

Average Balance Sheet

 

 

 

 

 

 

Average earning assets

$

7,407,976

$

7,405,434

$

7,409,714

$

7,410,553

$

7,568,656

$

7,408,404

Average assets

 

7,666,982

 

7,629,876

 

7,635,800

 

7,633,793

 

7,721,335

 

7,641,672

Average interest-bearing liabilities

 

5,020,544

 

4,902,930

 

4,883,026

 

4,834,712

 

4,828,561

 

4,910,792

Average equity

 

622,280

 

634,980

 

650,554

 

631,208

 

580,720

 

634,732

Share data

 

 

 

 

 

 

Weighted average shares outstanding (basic)

 

14,194,503

 

14,185,763

 

14,314,133

 

14,326,595

 

14,308,323

 

14,254,661

Weighted average shares outstanding (diluted)

 

14,246,024

 

14,224,748

 

14,346,787

 

14,389,673

 

14,385,884

 

14,301,221

Period-end shares outstanding

 

14,405,920

 

14,350,177

 

14,405,503

 

14,519,748

 

14,519,831

 

14,405,920

Common equity book value per share

$

46.41

$

42.57

$

44.08

$

44.65

$

42.42

$

46.41

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

$

39.88

$

36.01

$

37.54

$

38.16

$

35.93

$

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

$

52,359

$

51,013

 

$

51,896

$

54,246

 

$

57,294

$

209,514

Provision (credit) for credit loss expense (5)

 

1,761

 

1,150

 

 

2,253

 

(825

)

 

1,397

 

4,339

Noninterest income

 

18,850

 

(41,624

)

 

12,615

 

20,400

 

 

18,351

 

10,241

Noninterest expense (5)

 

51,300

 

49,866

 

 

51,968

 

50,158

 

 

50,190

 

203,292

Income tax expense/(benefit)

 

3,114

 

(8,304

)

 

1,784

 

5,901

 

 

4,478

 

2,495

Net (loss)/income attributable to Tompkins Financial Corporation

 

15,003

 

(33,354

)

 

8,475

 

19,381

 

 

19,548

 

9,505

Noncontrolling interests

 

31

 

31

 

 

31

 

31

 

 

32

 

124

Basic earnings (loss) per share (4)

 

1.06

 

(2.35

)

 

0.59

 

1.35

 

 

1.36

 

0.66

Diluted earnings (loss) per share (4)

 

1.05

 

(2.35

)

 

0.59

 

1.35

 

 

1.36

 

0.66

Nonperforming Assets

 

 

 

 

 

 

Nonaccrual loans and leases

$

62,165

$

31,381

$

31,333

$

28,424

$

28,289

$

62,165

Loans and leases 90 days past due and accruing

 

101

 

52

 

34

 

13

 

25

 

101

Performing troubled debt restructuring*

 

0

 

0

 

0

 

0

 

4,530

 

0

Total nonperforming loans and leases

 

62,266

 

31,433

 

31,367

 

28,437

 

32,844

 

62,266

OREO

 

131

 

0

 

36

 

36

 

152

 

131

Total nonperforming assets

$

62,397

$

31,433

$

31,403

$

28,473

$

32,996

$

62,397

*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

Dec-23

Sep-23

Jun-23

Mar-23

Dec-22

Dec-23

Loans and leases 30-89 days past due and

 

 

 

 

 

 

accruing

$

4,210

$

40,893

$

20,255

$

5,894

$

3,172

$

4,210

Loans and leases 90 days past due and accruing

 

101

 

52

 

34

 

13

 

25

 

101

Total loans and leases past due and accruing

 

4,311

 

40,945

 

20,289

 

5,907

 

3,197

 

4,311

Allowance for Credit Losses

Balance at beginning of period

$

49,336

 

$

48,545

$

46,099

 

$

45,934

 

$

44,772

$

45,934

 

Impact of adopting ASC 326

 

0

 

 

0

 

0

 

 

64

 

 

0

 

64

 

Provision (credit) for credit losses

 

2,658

 

 

968

 

2,419

 

 

(1,180

)

 

1,352

$

4,865

 

Net loan and lease (recoveries) charge-offs

 

410

 

 

177

 

(27

)

 

(1,281

)

 

190

$

(721

)

Allowance for credit losses at end of period

$

51,584

 

$

49,336

$

48,545

 

$

46,099

 

$

45,934

$

51,584

 

 

 

 

 

 

 

 

Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance at beginning of period

$

3,167

 

$

2,985

$

3,151

 

$

2,796

 

$

2,751

$

2,796

 

(Credit) provision for credit losses

 

(897

)

 

182

 

(166

)

 

355

 

 

45

$

(526

)

Allowance for credit losses at end of period

$

2,270

 

$

3,167

$

2,985

 

$

3,151

 

$

2,796

$

2,270

 

Loan Classification - Total Portfolio

 

 

 

 

 

 

Special Mention

$

50,368

$

65,993

$

56,305

$

39,255

$

49,752

$

50,368

Substandard

 

72,717

 

56,947

 

61,820

 

46,315

 

48,537

 

72,717

Ratio Analysis

Credit Quality

 

 

 

 

 

 

Nonperforming loans and leases/total loans and leases

1.11 %

0.58 %

0.59 %

0.54 %

0.62 %

1.11 %

Nonperforming assets/total assets

0.80 %

0.41 %

0.41 %

0.37 %

0.43 %

0.80 %

Allowance for credit losses/total loans and leases

0.92 %

0.91 %

0.91 %

0.87 %

0.87 %

0.92 %

Allowance/nonperforming loans and leases

82.84 %

156.96 %

154.76 %

162.11 %

139.86 %

82.84 %

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

0.03 %

0.01 %

0.00 %

(0.10) %

0.01 %

(0.01) %

Capital Adequacy

 

 

 

 

 

 

Tier 1 Capital (to average assets)

9.08 %

9.01 %

9.57 %

9.63 %

9.34 %

9.08 %

Total Capital (to risk-weighted assets)

13.36 %

13.46 %

14.48 %

14.62 %

14.42 %

13.36 %

Profitability (period-end)

 

 

 

 

 

 

Return on average assets *

0.78 %

(1.73) %

0.45 %

1.03 %

1.00 %

0.12 %

Return on average equity *

9.56 %

(20.84) %

5.22 %

12.45 %

13.36 %

1.50 %

Net interest margin (TE) *

2.82 %

2.75 %

2.83 %

2.99 %

3.02 %

2.84 %

* 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

 

Dec-23

Sep-23

Jun-23

Mar-23

Dec-22

Dec-23

Total common equity

$

668,522

$

610,851

$

634,967

$

648,322

$

615,978

$

668,522

Less: Goodwill and intangibles

 

94,003

 

94,086

 

94,169

 

94,253

 

94,336

 

94,003

Tangible common equity (Non-GAAP)

 

574,519

 

516,765

 

540,798

 

554,069

 

521,642

 

574,519

Ending shares outstanding

 

14,405,920

 

14,350,177

 

14,405,503

 

14,519,748

 

14,519,831

 

14,405,920

Tangible book value per share (Non-GAAP)

$

39.88

$

36.01

$

37.54

$

38.16

$

35.93

$

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 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:

Stephen S. Romaine, President & CEO

Matthew Tomazin, Executive VP, CFO & Treasurer

Tompkins Financial Corporation (888) 503-5753

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