Tompkins Financial Corporation Reports Increased Second Quarter Earnings

Company Release - 7/24/2020 9:00 AM ET

ITHACA, N.Y.--(BUSINESS WIRE)-- Tompkins Financial Corporation (NYSE American:TMP):

Tompkins Financial Corporation reported diluted earnings per share of $1.44 for the second quarter of 2020, up 13.4% compared to $1.27 reported in the second quarter of 2019. Net income for the second quarter of 2020 was $21.4 million, compared to $19.4 million reported for the same period in 2019.

For the year-to-date period ended June 30, 2020, diluted earnings per share were $1.97, down 25.1% from the same period in 2019. Year-to-date net income was $29.4 million, down from $40.4 million, for the same period in 2019. Results for the 2020 year-to-date period were negatively impacted by economic stress resulting from the COVID-19 pandemic, which contributed to the $16.3 million provision for credit losses recognized during the first quarter of 2020.

Mr. Romaine commented, "We are pleased to report strong financial results for the quarter despite a very challenging business climate. Although the longer term impact of the pandemic and related economic conditions are still unknown, there have been several recent positive trends noted with certain national economic indicators, such as reduced levels of unemployment, improving retail sales and improving consumer confidence. At Tompkins, we have seen several positive trends as well, with very strong mortgage application volumes in the second quarter, higher levels of debit card spending, and favorable credit quality measures when compared to last quarter. We are encouraged by some of these recent favorable trends, though the recent rise in COVID-19 cases nationally makes it clear that much uncertainty remains. We will remain vigilant in monitoring risk trends as we navigate these challenging times.”

SELECTED HIGHLIGHTS FOR THE SECOND QUARTER:

  • Total loans of $5.4 billion were up $568 million, or 11.7% over June 30, 2019. The increase over the prior year included $465.6 million of PPP loans funded during the second quarter of 2020.
  • Total deposits of $6.4 billion increased by $1.4 billion, or 27.8% over June 30, 2019.
  • Net interest margin was 3.45% for the second quarter of 2020, up from 3.44% for the first quarter of 2020, and 3.43% for the fourth quarter of 2019.
  • The ratio of Total Capital to risk-weighted assets improved to 13.95%, up from 13.62% at March 31, 2020, and 13.53% at December 31, 2019.

NET INTEREST INCOME
Net interest income was $56.4 million for the second quarter of 2020, compared to $52.3 million reported for the second quarter of 2019. For the year-to-date period, net interest income was $109.3 million, an increase of $5.1 million or 4.9% from the same six-month period in 2019.

Net interest income benefited from growth in average loans. Average loans were up $297.7 million, or 6.2% in the first six months of 2020, compared to the same six month period in 2019. The increase in average loans includes the benefit of $465.6 million of loans originated under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") in the second quarter of 2020. Asset yields were down 20 basis points compared to the first six months of 2019, which reflects the impact of reductions in market interest rates during the first six months of 2020, and the addition of the lower yielding PPP loans originated in the second quarter.

Average total deposits were up $778.1 million, or 15.7% in the first six months of 2020, versus the same period in 2019. Average noninterest deposits were up $251.3 billion or 18.7% in the first six months of 2020, compared to the same period in 2019. Average deposit balances benefited from $465.6 million of PPP loan originations during the second quarter of 2020, the majority of which were deposited in Tompkins checking accounts. The average rate paid on interest-bearing deposit products in the first six months of 2020 decreased by 21 basis points over the same period in 2019.

Net interest margin was 3.45% for the second quarter of 2020, up compared to the 3.34% reported for the second quarter of 2019, and 3.44% for the first quarter of 2020. The improved net interest margin year-over-year was largely driven by lower funding costs, reflecting lower deposit rates and growth in deposit balances, which were used to reduce higher cost other borrowing balances.

As a result of its participation in the SBA's PPP, in the second quarter the Company recorded net deferred loan fees of $2.3 million, which are included in interest income.

NONINTEREST INCOME
Noninterest income represented 24.8% of total revenues in the first six months of 2020, as compared to 26.7% in the same period in 2019. Noninterest income of $17.2 million for the second quarter of 2020 was down 7.3% compared to the same period in 2019. For the year-to-date period, noninterest income of $36.1 million was down 4.7% from the same period in 2019. Total fee based services in the second quarter of 2020 were $14.7 million, down 10.5% compared to the same period in 2019. The reduction in fee based income in 2020 is largely related to the pandemic-related travel and business restrictions, which reduced card services and service charge income. Other noninterest income for the second quarter of 2020 included $691,000 related to gains on sales of residential mortgage loans.

NONINTEREST EXPENSE
Noninterest expense was $46.9 million for the second quarter of 2020, up $818,000, or 1.8%, over the second quarter of 2019. For the year-to-date period, noninterest expense was $92.6 million, up $2.3 million, or 2.6%, from the same period in 2019. The increase in noninterest expense for both the second quarter and year-to-date periods was primarily attributable to normal annual increases in salaries and wages. Other expense for the second quarter and year-to-date period of 2020 included $1.2 million and $1.7 million, respectively, related to allowance for credit losses for off-balance sheet exposures. Other expense during the quarter also included a loss of $675,000 related to the pending sale of real estate.

INCOME TAX EXPENSE
The Company's effective tax rate was 20.5% for the second quarter of 2020, compared to 19.6% for the same period in 2019. The effective tax rate for the six months ended June 30, 2020 was 20.2%, compared to 20.3% reported for the same period in 2019.

ASSET QUALITY
Asset quality trends remained strong in the second quarter of 2020. Nonperforming assets represented 0.40% of total assets at June 30, 2020, down from 0.47% at December 31, 2019. Nonperforming asset levels continue to be below the most recent Federal Reserve Board Peer Group Average1 of 0.49%.

Provision for credit losses in the second quarter of 2020 was a negative provision of $348,000 compared to an expense of $601,000 for the same period in 2019. Provision expense for the six months ended June 30, 2020 was $15.9 million, compared to $1.0 million for the same period in 2019. The first quarter of 2020 included provision expense of $16.3 million related to the impact of the economic shutdown related to COVID-19 on economic forecasts and other model assumptions relied upon by management in determining the allowance. Net recoveries for the second quarter of 2020 were $26,000 compared to net charge-offs of $139,000 reported in the second quarter of 2019.

The allowance for credit losses represented 0.96% of total loans and leases at June 30, 2020, compared to 1.06% at March 31, 2020, 0.81% at December 31, 2019, and 0.84% at June 30, 2019. The decline in the ratio during the second quarter this year is largely due to the increase in loan balances being largely driven by $465.6 million of PPP loans for which no reserves have been allocated. The ratio of the allowance to total nonperforming loans and leases was 172.62% at June 30, 2020, improved from 126.90% at December 31, 2019, and 171.42% at June 30, 2019.

Overall credit quality has been supported by several initiatives initiated by the Company in response to the pandemic. As previously announced, Tompkins has initiated and participated in a number of credit initiatives to support employees and customers who have been impacted by the economic conditions associated with the COVID-19 pandemic. For non-executive employees affected by COVID-19, the Company implemented a low interest loan program. The Company also implemented a payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. Weekly deferral requests for the last week of June were down 98% from peak levels the Company experienced in late March. As of June 30, 2020, the Company had granted payment deferral requests for approximately 3,900 loans totaling $2.3 billion to individuals and businesses. As of July 20, 2020, nearly 50% of loans that had received deferrals had begun making regular payments.

As previously noted, the Company participated in the U.S. Small Business Administration (SBA) Paycheck Protection Program (“PPP”). This program provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related expenses and certain other eligible business operating costs, all in accordance with the rules and regulations established by the SBA. The Company began accepting applications for PPP loans on April 3, 2020, and had funded approximately 2,997 loans totaling about $465.6 million as of June 30, 2020.

CAPITAL POSITION
Capital ratios remained well above the regulatory minimums for well capitalized institutions. The ratio of Total capital to risk-weighted assets improved to 13.95% at June 30, 2020, up from 13.62% at March 31, 2020, and 13.53% at December 31, 2019. The ratio of Tier 1 capital to average assets was 8.79% at June 30, 2020, down from 9.61% at December 31, 2019, and 9.25% at June 30, 2019. The current period Tier 1 capital to average assets was negatively impacted by $465.6 million of PPP loans originated in the second quarter of 2020.

ABOUT TOMPKINS FINANCIAL CORPORATION

Tompkins Financial Corporation is a 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 Trust Company, Tompkins Bank of Castile, Tompkins Mahopac Bank, Tompkins VIST 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 of 1995:

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Examples of forward-looking statements in this press release include, without limitation, those regarding the novel coronavirus (COVID-19) and our plans in response to the coronavirus. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", 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 certain 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. The following factors, in addition to those listed as Risk Factors in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, are among those that could cause actual results to differ materially from the forward-looking statements: changes in general economic, market and regulatory conditions; the severity and duration of the coronavirus outbreak and the impact of the outbreak (including the government’s response to the outbreak) on economic and financial markets, potential regulatory actions, and modifications to our operations, products, and services relating thereto; disruptions in our and our customers’ operations and loss of revenue due to pandemics, epidemics, widespread health emergencies, government-imposed travel/business restrictions, or outbreaks of infectious diseases such as the coronavirus, and the associated adverse impact on our financial position, liquidity, and our customers’ abilities to repay their obligations to us or willingness to obtain financial services products from the Company; the development of an interest rate environment that may adversely affect the Company’s interest rate spread, 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, such as the Dodd-Frank Act, Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; legislative and regulatory changes in response to COVID-19 with which we and our subsidiaries must comply, including the CARES Act and the rules and regulations promulgated thereunder, and state and local government mandates; technological developments and changes; 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; and financial resources in the amounts, at the times and on the terms required to support the Company’s future businesses. The Company does not undertake any obligation to update its forward-looking statements.

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION

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

As of

 

As of

ASSETS

06/30/2020

 

12/31/2019

 

 

 

Cash and noninterest bearing balances due from banks

$

472,108

 

$

136,010

 

Interest bearing balances due from banks

7,018

 

1,972

 

Cash and Cash Equivalents

479,126

 

137,982

 

 

 

 

Available-for-sale debt securities, at fair value (amortized cost of $1,301,271 at June 30, 2020 and $1,293,239 at December 31, 2019)

1,335,153

 

1,298,587

 

Equity securities, at fair value (amortized cost $934 at June 30, 2020 and $915 at December 31, 2019)

934

 

915

 

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

5,424,285

 

4,917,550

 

Less: Allowance for credit losses

52,082

 

39,892

 

Net Loans and Leases

5,372,203

 

4,877,658

 

 

 

 

Federal Home Loan Bank and other stock

19,044

 

33,695

 

Bank premises and equipment, net

89,934

 

94,355

 

Corporate owned life insurance

83,606

 

82,961

 

Goodwill

92,447

 

92,447

 

Other intangible assets, net

5,500

 

6,223

 

Accrued interest and other assets

104,109

 

100,800

 

Total Assets

$

7,582,056

 

$

6,725,623

 

LIABILITIES

 

 

Deposits:

 

 

Interest bearing:

 

 

Checking, savings and money market

3,759,478

 

3,080,686

 

Time

699,166

 

675,014

 

Noninterest bearing

1,918,877

 

1,457,221

 

Total Deposits

6,377,521

 

5,212,921

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

50,889

 

60,346

 

Other borrowings

325,000

 

658,100

 

Trust preferred debentures

17,120

 

17,035

 

Other liabilities

113,497

 

114,167

 

Total Liabilities

$

6,884,027

 

$

6,062,569

 

EQUITY

 

 

Tompkins Financial Corporation shareholders' equity:

 

 

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,950,368 at June 30, 2020; and 15,014,499 at December 31, 2019

1,495

 

1,501

 

Additional paid-in capital

335,268

 

338,507

 

Retained earnings

386,025

 

370,477

 

Accumulated other comprehensive loss

(21,048

)

(43,564

)

Treasury stock, at cost – 119,092 shares at June 30, 2020, and 123,956 shares at December 31, 2019

(5,187

)

(5,279

)

Total Tompkins Financial Corporation Shareholders’ Equity

696,553

 

661,642

 

 

 

 

Noncontrolling interests

1,476

 

1,412

 

Total Equity

$

698,029

 

$

663,054

 

Total Liabilities and Equity

$

7,582,056

 

$

6,725,623

 

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

Three Months Ended

Six Months Ended

 

06/30/2020

06/30/2019

06/30/2020

06/30/2019

INTEREST AND DIVIDEND INCOME

 

 

 

 

Loans

$

56,133

 

$

56,740

$

111,747

$

112,064

Due from banks

1

 

$

10

7

$

20

Available-for-sale debt securities

6,922

 

$

7,686

14,066

$

15,544

Held-to-maturity securities

0

 

$

863

0

$

1,721

Federal Home Loan Bank and other stock

389

 

$

794

824

$

1,672

Total Interest and Dividend Income

63,445

 

$

66,093

126,644

$

131,021

INTEREST EXPENSE

 

 

 

 

Time certificates of deposits of $250,000 or more

860

 

774

1,703

$

1,360

Other deposits

3,917

 

6,816

10,272

$

12,827

Federal funds purchased and securities sold under agreements to repurchase

21

 

33

57

$

77

Trust preferred debentures

253

 

327

542

$

656

Other borrowings

2,028

 

5,825

4,735

$

11,869

Total Interest Expense

7,079

 

13,775

17,309

$

26,789

Net Interest Income

56,366

 

52,318

109,335

$

104,232

Less: Provision for credit loss expense

(348

)

601

15,946

$

1,046

Net Interest Income After Provision for Credit Loss Expense

56,714

 

51,717

93,389

$

103,186

NONINTEREST INCOME

 

 

 

 

Insurance commissions and fees

7,255

 

7,752

15,300

$

15,797

Investment services income

3,920

 

3,907

8,122

$

7,991

Service charges on deposit accounts

1,248

 

2,021

3,231

$

4,019

Card services income

2,283

 

2,750

4,466

$

5,540

Other income

2,466

 

1,806

4,570

$

4,284

Net gain on securities transactions

5

 

284

448

$

296

Total Noninterest Income

17,177

 

18,520

36,137

$

37,927

NONINTEREST EXPENSE

 

 

 

 

Salaries and wages

23,037

 

22,088

45,531

$

43,189

Other employee benefits

5,886

 

5,662

11,570

$

11,273

Net occupancy expense of premises

3,040

 

3,258

6,368

$

6,859

Furniture and fixture expense

1,888

 

1,996

3,873

$

3,975

Amortization of intangible assets

375

 

418

749

$

830

Other operating expense

12,662

 

12,648

24,537

$

24,153

Total Noninterest Expenses

46,888

 

46,070

92,628

$

90,279

Income Before Income Tax Expense

27,003

 

24,167

36,898

$

50,834

Income Tax Expense

5,540

 

4,743

7,449

$

10,338

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

21,463

 

19,424

29,449

$

40,496

Less: Net Income Attributable to Noncontrolling Interests

32

 

32

69

$

64

Net Income Attributable to Tompkins Financial Corporation

$

21,431

 

19,392

$

29,380

$

40,432

Basic Earnings Per Share

$

1.44

 

$

1.27

$

1.97

$

2.64

Diluted Earnings Per Share

$

1.44

 

$

1.27

$

1.97

$

2.63

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

Year to Date Period Ended

Year to Date Period Ended

 

June 30, 2020

June 30, 2020

June 30, 2019

 

 

Average

 

 

 

Average

 

 

 

Average

 

 

 

 

Balance

 

Average

 

Balance

 

Average

 

Balance

 

Average

(Dollar amounts in thousands)

 

Quarter
Ended

Interest

Yield/
Rate

 

Year
Ended

Interest

Yield/
Rate

 

Year
Ended

Interest

Yield/
Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances due from banks

$

4,541

$

1

0.09

%

$

3,033

$

7

0.46

%

$

2,232

$

20

1.81

%

Securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government securities

 

1,199,999

6,298

2.11

%

 

1,197,376

12,874

2.16

%

 

1,399,542

16,168

2.33

%

State and municipal (3)

 

109,621

743

2.73

%

 

103,550

1,409

2.74

%

 

93,872

1,264

2.72

%

Other securities (3)

 

3,433

32

3.75

%

 

3,428

68

3.99

%

 

3,416

81

4.78

%

Total securities

 

1,313,053

7,073

2.17

%

 

1,304,354

14,351

2.21

%

 

1,496,830

17,513

2.36

%

FHLBNY and other stock

 

21,691

389

7.21

%

 

24,124

824

6.87

%

 

47,349

1,672

7.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans and leases, net of unearned income (3)(4)

 

5,276,794

56,441

4.30

%

 

5,095,414

112,348

4.43

%

 

4,797,709

112,636

4.73

%

Total interest-earning assets

 

6,616,079

63,904

3.89

%

 

6,426,925

127,530

3.99

%

 

6,344,120

131,841

4.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets

 

797,866

 

 

 

616,521

 

 

 

398,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

7,413,945

 

 

$

7,043,446

 

 

$

6,742,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing checking, savings & money market

$

3,660,190

1,935

0.21

%

$

3,436,366

6,301

0.37

%

$

2,943,765

9,441

0.65

%

Time deposits

 

704,460

2,842

1.62

%

 

692,354

5,674

1.65

%

 

658,242

4,746

1.45

%

Total interest-bearing deposits

 

4,364,650

4,777

0.44

%

 

4,128,720

11,975

0.58

%

 

3,602,007

14,187

0.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased & securities sold under

 

 

 

 

 

 

 

 

 

 

 

 

agreements to repurchase

 

52,464

21

0.16

%

 

57,996

57

0.20

%

 

63,451

77

0.24

%

Other borrowings

 

391,547

2,028

2.08

%

 

444,988

4,735

2.14

%

 

971,119

11,869

2.46

%

Trust preferred debentures

 

17,092

253

5.95

%

 

17,071

542

6.38

%

 

16,900

656

7.83

%

Total interest-bearing liabilities

 

4,825,753

7,079

0.59

%

 

4,648,775

17,309

0.75

%

 

4,653,477

26,789

1.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

1,788,108

 

 

 

1,598,884

 

 

 

1,347,538

 

 

Accrued expenses and other liabilities

 

109,609

 

 

 

111,141

 

 

 

101,409

 

 

Total liabilities

 

6,723,470

 

 

 

6,358,800

 

 

 

6,102,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tompkins Financial Corporation Shareholders’ equity

 

689,018

 

 

 

683,206

 

 

 

639,015

 

 

Noncontrolling interest

 

1,457

 

 

 

1,440

 

 

 

1,443

 

 

Total equity

 

690,475

 

 

 

684,646

 

 

 

640,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,413,945

 

 

$

7,043,446

 

 

$

6,742,882

 

 

Interest rate spread

 

 

 

3.30

%

 

 

 

3.24

%

 

 

 

3.03

%

Net interest income/margin on earning assets

 

 

56,825

3.45

%

 

 

110,221

3.45

%

 

 

105,052

3.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent adjustments

 

 

(459

)

 

 

 

(886

)

 

 

 

(820

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income per consolidated financial statements

 

 

$

56,366

 

 

 

$

109,335

 

 

 

$

104,232

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter-Ended

Year-Ended

Period End Balance Sheet

 

Jun-20

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Dec-19

Securities

$

1,336,087

 

$

1,353,567

 

$

1,299,502

 

$

1,282,026

 

$

1,330,719

 

$

1,299,502

 

Total Loans

 

5,424,285

 

 

4,937,822

 

 

4,917,550

 

 

4,857,073

 

 

4,855,802

 

 

4,917,550

 

Allowance for credit losses

 

52,082

 

 

52,404

 

 

39,892

 

 

41,371

 

 

40,790

 

 

39,892

 

Total assets

 

7,582,056

 

 

6,743,114

 

 

6,725,623

 

 

6,627,982

 

 

6,654,390

 

 

6,725,623

 

Total deposits

 

6,377,521

 

 

5,409,363

 

 

5,212,921

 

 

5,369,990

 

 

4,988,897

 

 

5,212,921

 

Federal funds purchased and securities sold under agreements to repurchase

 

50,889

 

 

68,993

 

 

60,346

 

 

50,541

 

 

63,978

 

 

60,346

 

Other borrowings

 

325,000

 

 

457,983

 

 

658,100

 

 

429,000

 

 

824,562

 

 

658,100

 

Trust preferred debentures

 

17,120

 

 

17,078

 

 

17,035

 

 

16,992

 

 

16,949

 

 

17,035

 

Total common equity

 

696,553

 

 

681,153

 

 

661,642

 

 

658,358

 

 

656,201

 

 

661,642

 

Total equity

 

698,029

 

 

682,597

 

 

663,054

 

 

659,865

 

 

657,677

 

 

663,054

 

 

Average Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

Average earning assets

$

6,616,079

 

$

6,237,773

 

$

6,188,442

 

$

6,203,078

 

$

6,337,983

 

$

6,268,440

 

Average assets

 

7,413,945

 

 

6,672,948

 

 

6,613,202

 

 

6,621,412

 

 

6,742,409

 

 

6,679,578

 

Average interest-bearing liabilities

 

4,825,753

 

 

4,471,797

 

 

4,374,572

 

 

4,415,079

 

 

4,638,249

 

 

4,523,088

 

Average equity

 

690,475

 

 

678,817

 

 

664,441

 

 

659,650

 

 

650,079

 

 

651,341

 

Share data

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (basic)

14,681,956

 

14,718,948

 

14,726,023

 

14,827,114

 

15,019,710

 

14,907,057

 

Weighted average shares outstanding (diluted)

14,714,848

 

14,774,269

 

14,790,503

 

14,887,626

 

15,085,945

 

14,973,951

 

Period-end shares outstanding

14,914,458

 

14,907,947

 

14,978,589

 

14,975,750

 

15,160,719

 

14,978,589

 

Common equity book value per share

$

46.70

 

$

45.69

 

$

44.17

 

$

43.96

 

$

43.28

 

$

44.17

 

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

$

40.19

 

$

39.15

 

$

37.64

 

$

37.40

 

$

36.77

 

$

37.64

 

** 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

$

56,366

 

$

52,969

 

$

53,240

 

$

53,156

 

$

52,318

 

$

210,628

 

Provision (credit) for credit loss expense

 

(348)

 

 

16,294

 

 

(1,000)

 

 

1,320

 

 

601

 

 

1,366

 

Noninterest income

 

17,177

 

 

18,960

 

 

17,972

 

 

19,534

 

 

18,520

 

 

75,433

 

Noninterest expense

 

46,888

 

 

45,740

 

 

45,900

 

 

45,655

 

 

46,070

 

 

181,834

 

Income tax expense

 

5,540

 

 

1,909

 

 

5,200

 

 

5,478

 

 

4,743

 

 

21,016

 

Net income attributable to Tompkins Financial Corporation

 

21,431

 

 

7,949

 

 

21,080

 

 

20,206

 

 

19,392

 

 

81,718

 

Noncontrolling interests

 

32

 

 

37

 

 

32

 

 

31

 

 

32

 

 

127

 

Basic earnings per share (5)

$

1.44

 

$

0.53

 

$

1.41

 

$

1.34

 

$

1.27

 

$

5.39

 

Diluted earnings per share (5)

$

1.44

 

$

0.53

 

$

1.40

 

$

1.34

 

$

1.27

 

$

5.37

 

Nonperforming Assets

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans and leases

$

23,183

 

$

23,556

 

$

24,281

 

$

23,568

 

$

18,906

 

$

24,281

 

Loans and leases 90 days past due and accruing

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

Troubled debt restructuring not included above

 

6,988

 

 

7,137

 

 

7,154

 

 

6,528

 

 

4,889

 

 

7,154

 

Total nonperforming loans and leases

 

30,171

 

 

30,693

 

 

31,435

 

 

30,096

 

 

23,795

 

 

31,435

 

OREO

 

274

 

 

466

 

 

428

 

 

888

 

 

2,229

 

 

428

 

Total nonperforming assets

$

30,445

 

$

31,159

 

$

31,863

 

$

30,984

 

$

26,024

 

$

31,863

 

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

 

Quarter-Ended

Year-Ended

Delinquency - Total loan and lease portfolio

 

Jun-20

 

Mar-20

 

Dec-19

 

Sep-19

 

Jun-19

 

Dec-19

Loans and leases 30-89 days past due and accruing

$

8,352

 

$

9,328

 

$

3,724

 

$

3,519

 

$

4,376

 

$

3,724

 

Loans and leases 90 days past due and accruing

 

0

 

 

0

 

 

794

 

 

1,219

 

 

1,229

 

 

794

 

Total loans and leases past due and accruing

 

8,352

 

 

9,328

 

 

4,518

 

 

4,738

 

 

5,605

 

 

4,518

 

Allowance for Credit Losses*

Balance at beginning of period

$

52,404

 

$

39,892

 

$

41,371

 

$

40,790

 

$

40,328

 

$

43,410

 

Impact of adopting ASC 326

 

0

 

 

(2,534

)

 

0

 

 

0

 

 

0

 

 

0

 

Provision (credit) for credit losses

 

(348

 

16,294

 

 

(1,000

)

 

1,320

 

 

601

 

 

1,366

 

Net loan and lease (recoveries) charge-offs

 

(26

)

 

1,248

 

 

479

 

 

739

 

 

139

 

 

4,884

 

Allowance for credit losses at end of period

$

52,082

 

$

52,404

 

$

39,892

 

$

41,371

 

$

40,790

 

$

39,892

 

*CECL was adopted January 1, 2020. Prior periods reflect the allowance for credit losses for loans under the incurred loss methodology.

Loan Classification - Total Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

Special Mention

$

44,741

 

$

37,121

 

 

29,800

 

$

41,575

 

$

36,884

 

$

29,800

 

Substandard

 

48,046

 

 

52,894

 

 

60,499

 

 

61,682

 

 

47,627

 

 

60,499

 

Ratio Analysis

Credit Quality

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans and leases/total loans and leases (6)

 

0.56

%

 

0.62

%

 

0.64

%

 

0.62

%

 

60.49

%

 

0.64

%

Nonperforming assets/total assets

 

0.40

%

 

0.46

%

 

0.47

%

 

0.47

%

 

0.39

%

 

0.47

%

Allowance for credit losses/total loans and leases

 

0.96

%

 

1.06

%

 

0.81

%

 

0.85

%

 

0.84

%

 

0.81

%

Allowance/nonperforming loans and leases

 

172.62

%

 

170.74

%

 

126.90

%

 

137.46

%

 

171.42

%

 

126.90

%

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

 

0.00

%

 

0.10

%

 

0.04

%

 

0.06

%

 

0.01

%

 

0.10

%

Capital Adequacy

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to average assets)

 

8.79

%

 

9.53

%

 

9.61

%

 

9.43

%

 

9.25

%

 

9.61

%

Total Capital (to risk-weighted assets)

 

13.95

%

 

13.62

%

 

13.53

%

 

13.36

%

 

13.34

%

 

13.53

%

Profitability (period-end)

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets *

 

1.16

%

 

0.48

%

 

1.26

%

 

1.21

%

 

1.15

%

 

1.22

%

Return on average equity *

 

12.48

%

 

4.71

%

 

12.59

%

 

12.15

%

 

11.96

%

 

12.55

%

Net interest margin (TE) *

 

3.45

%

 

3.44

%

 

3.44

%

 

3.43

%

 

3.34

%

 

3.39

%

** 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. 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 Net Income Attributable to Tompkins Financial Corporation (GAAP) to Net Operating Income Available to Common Shareholders (Non-GAAP) and Reconciliation of Diluted Earnings Per Share (GAAP) to Adjusted Diluted Earnings Per Share (Non-GAAP)

 

Quarter-Ended

Year-Ended

 

 

Jun-20

 

 

Mar-20

 

 

Dec-19

 

 

Sep-19

 

 

Jun-19

 

 

Dec-19

 

Net income available to common shareholders

$

21,431

 

$

7,949

 

$

21,081

 

$

20,206

 

$

19,392

 

$

81,718

 

Less: income attributable to unvested stock-based compensations awards

 

251

 

 

99

 

 

334

 

 

317

 

 

306

 

 

1,306

 

Net earnings allocated to common shareholders (GAAP)

 

21,180

 

 

7,850

 

 

20,747

 

 

19,889

 

 

19,086

 

 

80,412

 

Diluted earnings per share (GAAP)

$

1.44

 

$

0.53

 

$

1.40

 

$

1.34

 

$

1.27

 

$

5.37

 

Adjustments for non-operating income and expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-down of real estate pending sale

 

673

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

Total Adjustments

 

673

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

Tax (benefit) expense

 

(165

)

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

Total adjustments, net of tax

 

508

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

Net operating income available to common shareholders (Non-GAAP)

 

21,688

 

 

7,850

 

 

20,747

 

 

19,889

 

 

19,086

 

 

80,412

 

Weighted average shares outstanding (diluted)

14,714,848

 

14,774,269

 

14,790,503

 

14,887,626

 

15,085,945

 

14,973,951

 

Adjusted diluted earnings per share (Non-GAAP)

$

1.47

 

$

0.53

 

$

1.40

 

$

1.34

 

$

1.27

 

$

5.37

 

 

Year-to-Date

 

Jun-20

Jun-19

Net income available to common shareholders

$

29,380

 

$

40,432

 

Less: income attributable to unvested stock-based compensation awards

350

 

655

 

Net earnings allocated to common shareholders (GAAP)

29,030

 

39,777

 

Diluted earnings per share (GAAP)

$

1.97

 

$

2.64

 

Adjustments for non-operating income and expense:

 

 

Write-down of real estate pending sale

673

 

0

 

Tax (benefit) expense

(165

0

 

Total adjustments, net of tax

508

 

0

 

Net operating income available to common shareholders (Non-GAAP)

29,538

 

39,777

 

Weighted average shares outstanding (diluted)

14,714,848

 

15,085,945

 

Adjusted diluted earnings per share (Non-GAAP)

$

2.01

 

$

2.64

 

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

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

Total common equity

$

696,553

 

$

681,153

 

$

661,642

 

$

658,358

 

$

656,201

 

$

661,642

 

Less: Goodwill and intangibles (7)

 

97,107

 

 

97,481

 

 

97,855

 

 

98,277

 

 

98,698

 

 

97,855

 

Tangible common equity (Non-GAAP)

 

599,446

 

 

583,672

 

 

563,787

 

 

560,081

 

 

557,503

 

 

563,787

 

Ending shares outstanding

14,914,458

 

14,907,947

 

14,978,589

 

14,975,750

 

15,160,719

 

14,978,589

 

Tangible book value per share (Non-GAAP)

$

40.19

 

$

39.15

 

$

37.64

 

$

37.40

 

$

36.77

 

$

37.64

 

(1) Federal Reserve peer ratio as of March 31, 2020 the most recent data available, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.

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

(3) Interest income includes the tax effects of taxable-equivalent basis.

(4) 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, 2019.

(5) Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares

(6) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans. The risk of credit loss on these loans has been considered by virtue of the Company's estimate of acquisition-date fair value and these loans are considered accruing as the Company primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows.

(7) "Goodwill and intangibles" as shown in the above tables, equal total intangible assets less mortgage servicing rights.

 

Stephen S. Romaine, President & CEO
Francis M. Fetsko, Executive VP, CFO & COO
Tompkins Financial Corporation (888) 503-5753

Source: Tompkins Financial Corporation

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