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Tompkins Financial Corporation Reports First Quarter Earnings

Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.35 for the first quarter of 2023, in line with the immediate prior quarter, and down 15.6% from diluted earnings per share of $1.60 reported in the first quarter of 2022. The first quarter results in the prior year included $2.0 million, pre-tax, ($0.10 per diluted share) in net fees related to the SBA's Paycheck Protection Program loans ("PPP"), compared to net fees of $2,000 in the current period.

Net income for the first quarter of 2023 was $19.4 million, a decrease of 16.7% from the $23.3 million reported for the same period in 2022. Increased funding costs coupled with increases in operating expense were the main drivers for the year-over-year decreases in net income.

Tompkins President and CEO, Stephen Romaine, commented, "The first quarter of 2023 was a tumultuous quarter for the banking industry. In times like these, our business model - built on strong customer relationships and sustainable financial performance - has helped differentiate Tompkins from companies with less tenable business models. Though we are not immune to certain headwinds facing our industry - as evident from reduced earnings in the first quarter - we are pleased to report an increase in our common equity for the second consecutive quarter, a strong liquidity position, while at the same time delivering an annualized return on equity of 12.45% in the first quarter of 2023."

SELECTED HIGHLIGHTS FOR THE PERIOD:

  • Key profitability measures remained healthy in the first quarter, with a return on average assets of 1.03% (up from 1.00% last quarter); net interest margin of 2.99% (down from 3.02% last quarter); and return on equity of 12.45% (down from 13.36% last quarter).
  • Regulatory Tier 1 capital to average assets improved for the sixth consecutive quarter, ending the first quarter of 2023 at 9.63%.
  • Total loans at March 31, 2023 were $5.3 billion, in line with the immediate prior quarter, and up $210.2 million, or 4.2% from March 31, 2022. Excluding PPP loans, total loans at March 31, 2023 were up 4.6% over the first quarter of 2022.
  • Total nonperforming assets at March 31, 2023 represented 0.37% of total assets and declined 13.7% from the most recent prior quarter.
  • Total deposits at March 31, 2023 were $6.5 billion, reflecting a 1.4% decrease compared to year-end 2022 and a decline of 7.2% when compared to same period last year.

NET INTEREST INCOME

Net interest margin was 2.99% for the first quarter of 2023, compared to 3.02% reported for the fourth quarter of 2022, and 3.04% at March 31, 2022. The decrease in margin from the fourth quarter of 2022 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.

Net interest income was $54.2 million for the first quarter of 2023, down from $57.3 million for the fourth quarter of 2022, and $56.6 million for the first quarter of 2022. Net interest income for the quarter ended March 31, 2023 was impacted by increases in interest expense, which totaled $15.0 million for the first quarter of 2023 compared to $2.6 million for the same period in 2022, partially offset by increased interest and dividend income, which increased by $10.1 million when compared to March 31, 2022.

Average loans for the quarter ended March 31, 2023 were up $41.6 million or 0.8% from the fourth quarter of 2022, and $195.3 million or 3.9% compared to the same period in 2022. The increase in average loans was mainly in the residential and commercial real estate portfolios compared to the quarter ended March 31, 2022. Asset yields for the quarter ended March 31, 2023 were up 25 basis points compared to the quarter ended December 31, 2022, and up 63 basis points compared to the same period in 2022.

Average total deposits for the first quarter of 2023 were down $144.9 million, or 2.2% compared to the fourth quarter of 2022, and down $328.2 million, or 4.8% compared to the same period in 2022. The decrease 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. Average deposit balances at March 31, 2023 are $1.3 billion or 23.9% higher than pre-pandemic levels reported at December 31, 2019. The cost of interest-bearing deposits increased to 1.10% for the first quarter of 2023, compared to 0.69% for the fourth quarter of 2022, and 0.17% for the first quarter last year. The increase was mainly driven by higher market interest rates as a result of the target federal funds rate increasing 450 basis points over the prior twelve months. The total cost of interest-bearing liabilities of 1.26% for the first quarter of 2023 represented an increase of 42 basis points over the fourth quarter of 2022, and an increase of 105 basis points over the same period in 2022. At March 31, 2023, the Company estimates total uninsured deposits of $2.6 billion, which is unchanged from December 31, 2022. The uninsured deposit balance of $2.6 billion at March 31, 2023 is made up of $1.1 billion of collateralized government deposits and $1.5 billion of uninsured customer deposits without liquid collateral pledged. Total insured deposits and collateralized government deposits represent 76.9% of the Company's total deposits of $6.5 billion at March 31, 2023.

NONINTEREST INCOME

Noninterest income of $20.4 million for the first quarter of 2023 was up $2.0 million, or 11.2% compared to the most recent prior quarter, and up $415,000, or 2.1% compared to the prior year quarter in 2022. Noninterest income represented 27.3% of total revenue at March 31, 2023, compared to 24.3% at December 31, 2022, and 26.1% at March 31, 2022. Increases in insurance and card service fees in the first quarter of 2023 compared to the prior year quarter were partially offset by lower wealth management fees, primarily due to market conditions.

NONINTEREST EXPENSE

Noninterest expense was $50.2 million for the first quarter of 2023, which was in line with the fourth quarter of 2022, and up $3.3 million, or 7.1% over the first quarter of 2022, with the increase largely driven by higher personnel-related costs. Increases in FDIC insurance rates, as well as increased spending on marketing and technology also contributed to expense growth in the first quarter of 2023 compared to the first quarter of 2022.

INCOME TAX EXPENSE

The Company's effective tax rate was 23.3% for the first quarter of 2023, compared to 23.0% for the same period in 2022.

ASSET QUALITY

The allowance for credit losses represented 0.87% of total loans and leases at March 31, 2023, unchanged from the prior quarter, and up from 0.83% at March 31, 2022. The ratio of the allowance to total nonperforming loans and leases improved to 162.11% for the first quarter of 2023, compared to 139.86% at December 31, 2022 and 139.20% at March 31, 2022.

Provision for credit losses for the first quarter of 2023 was a credit of $825,000 compared to a credit of $520,000 for the same period in 2022. Net recoveries for the quarter ended March 31, 2023 were $1.3 million compared to net recoveries of $17,000 reported for the same period in 2022.

Nonperforming assets represented 0.37% of total assets at March 31, 2023, down from 0.43% at December 31, 2022 and 0.38% at March 31, 2022. At March 31, 2023, nonperforming loans and leases totaled $28.4 million, compared to $32.8 million at December 31, 2022 and $30.3 million at March 31, 2022.

Special Mention and substandard loans and leases totaled $85.6 million at March 31, 2023, reflecting improvement from the $98.3 million reported for December 31, 2022 and the $135.1 million at March 31, 2022. The improvement over prior quarter was mainly a result of upgrades on two large commercial real estate loans previously reported as Special Mention.

CAPITAL POSITION

Capital ratios at March 31, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 14.62% at March 31, 2023, compared to 14.42% at December 31, 2022 and 14.23% at March 31, 2022. The ratio of Tier 1 capital to average assets was 9.63% at March 31, 2023, compared to 9.34% at December 31, 2022 and 8.89% at March 31, 2022.

LIQUIDITY POSITION

The Company's liquidity is well positioned and remains stable from the fourth quarter of 2022. 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 FHLB advances. The Company maintains ready access liquidity of $1.7 billion or 22.5% of assets. As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At March 31, 2023 the Company had an available borrowing capacity at the FHLB of $1.3 billion as compared to $1.3 billion in the fourth quarter of 2022. 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 March 31, 2023 the available borrowing capacity with the Federal Reserve Bank was $157.0 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at March 31, 2023, the Company maintained $265.3 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.

ABOUT TOMPKINS FINANCIAL CORPORATION

Tompkins Financial Corporation is a banking and financial services company serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania. Headquartered in Ithaca, NY, Tompkins Financial is parent to Tompkins Community Bank, 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 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 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 access other sources of liquidity; GDP growth; 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, such as state and local government mandates, SEC rule-making, the Dodd-Frank Act and Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; 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; 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; uncertainties arising from national and global events, including the war in Ukraine, as well as the potential impact of widespread protests, civil unrest, political uncertainty on the economy and the financial services industry, and pandemics or other public health crises, including the COVID-19 pandemic; and access to 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

CONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data)

As of

As of

ASSETS

03/31/2023

12/31/2022

 

 

(Audited)

 

 

 

Cash and noninterest bearing balances due from banks

$

49,753

 

$

18,572

 

Interest bearing balances due from banks

 

20,784

 

 

59,265

 

Cash and Cash Equivalents

 

70,537

 

 

77,837

 

 

 

 

Available-for-sale debt securities, at fair value (amortized cost of $1,795,423 at March 31, 2023 and $1,831,791 at December 31, 2022)

 

1,585,854

 

 

1,594,967

 

Held-to-maturity securities, at amortized cost (fair value of $258,755 at March 31, 2023 and $261,692 at December 31, 2022)

 

312,357

 

 

312,344

 

Equity securities, at fair value

 

790

 

 

777

 

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

 

5,273,671

 

 

5,268,911

 

Less: Allowance for credit losses

 

46,099

 

 

45,934

 

Net Loans and Leases

 

5,227,572

 

 

5,222,977

 

 

 

 

Federal Home Loan Bank and other stock

 

19,326

 

 

17,720

 

Bank premises and equipment, net

 

81,633

 

 

82,140

 

Corporate owned life insurance

 

86,175

 

 

85,556

 

Goodwill

 

92,602

 

 

92,602

 

Other intangible assets, net

 

2,605

 

 

2,708

 

Accrued interest and other assets

 

164,920

 

 

181,058

 

Total Assets

$

7,644,371

 

$

7,670,686

 

LIABILITIES

 

 

Deposits:

 

 

Interest bearing:

 

 

Checking, savings and money market

 

3,774,092

 

 

3,820,739

 

Time

 

725,338

 

 

631,411

 

Noninterest bearing

 

2,009,579

 

 

2,150,145

 

Total Deposits

 

6,509,009

 

 

6,602,295

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

 

63,491

 

 

56,278

 

Other borrowings

 

327,000

 

 

291,300

 

Other liabilities

 

95,106

 

 

103,423

 

Total Liabilities

$

6,994,606

 

$

7,053,296

 

EQUITY

 

 

Tompkins Financial Corporation shareholders' equity:

 

 

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,555,658 at March 31, 2023; and 14,555,741 at December 31, 2022

 

1,456

 

 

1,456

 

Additional paid-in capital

 

303,357

 

 

302,763

 

Retained earnings

 

537,331

 

 

526,727

 

Accumulated other comprehensive loss

 

(187,846

)

 

(208,689

)

Treasury stock, at cost – 120,879 shares at March 31, 2023, and 128,749 shares at December 31, 2022

 

(5,976

)

 

(6,279

)

Total Tompkins Financial Corporation Shareholders’ Equity

 

648,322

 

 

615,978

 

Noncontrolling interests

 

1,443

 

 

1,412

 

Total Equity

$

649,765

 

$

617,390

 

Total Liabilities and Equity

$

7,644,371

 

$

7,670,686

 

 

 

 

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

Three Months Ended

 

03/31/2023

03/31/2022

INTEREST AND DIVIDEND INCOME

 

 

Loans

$

60,842

 

$

51,131

 

Due from banks

 

139

 

 

41

 

Available-for-sale debt securities

 

6,743

 

 

6,770

 

Held-to-maturity securities

 

1,214

 

 

1,129

 

Federal Home Loan Bank and other stock

 

300

 

 

105

 

Total Interest and Dividend Income

 

69,238

 

$

59,176

 

INTEREST EXPENSE

 

 

Time certificates of deposits of $250,000 or more

 

1,788

 

 

426

 

Other deposits

 

10,394

 

 

1,620

 

Federal funds purchased and securities sold under agreements to repurchase

 

14

 

 

16

 

Other borrowings

 

2,796

 

 

500

 

Total Interest Expense

 

14,992

 

 

2,562

 

Net Interest Income

 

54,246

 

 

56,614

 

Less: (Credit) for credit loss expense

 

(825

)

 

(520

)

Net Interest Income After Credit for Credit Loss Expense

 

55,071

 

 

57,134

 

NONINTEREST INCOME

 

 

Insurance commissions and fees

 

9,509

 

 

9,317

 

Wealth management fees

 

4,509

 

 

4,917

 

Service charges on deposit accounts

 

1,746

 

 

1,779

 

Card services income

 

2,682

 

 

2,543

 

Other income

 

1,941

 

 

1,476

 

Net gain (loss) on securities transactions

 

13

 

 

(47

)

Total Noninterest Income

 

20,400

 

 

19,985

 

NONINTEREST EXPENSE

 

 

Salaries and wages

 

24,512

 

 

23,272

 

Other employee benefits

 

6,741

 

 

5,797

 

Net occupancy expense of premises

 

3,299

 

 

3,541

 

Furniture and fixture expense

 

2,054

 

 

1,991

 

Amortization of intangible assets

 

83

 

 

218

 

Other operating expense

 

13,469

 

 

12,020

 

Total Noninterest Expenses

 

50,158

 

 

46,839

 

Income Before Income Tax Expense

 

25,313

 

 

30,280

 

Income Tax Expense

 

5,901

 

 

6,976

 

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

 

19,412

 

 

23,304

 

Less: Net Income Attributable to Noncontrolling Interests

 

31

 

 

31

 

Net Income Attributable to Tompkins Financial Corporation

$

19,381

 

 

23,273

 

Basic Earnings Per Share

$

1.35

 

$

1.61

 

Diluted Earnings Per Share

$

1.35

 

$

1.60

 

 

 

 

 

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

 

Quarter Ended

Quarter Ended

 

March 31, 2023

March 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

$

12,733

$

139

 

4.42

%

$

134,129

$

41

 

0.12

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

 

2,033,307

 

7,424

 

1.48

%

 

2,293,611

 

7,362

 

1.30

%

State and municipal (2)

 

93,201

 

599

 

2.60

%

 

101,746

 

649

 

2.59

%

Other securities (2)

 

3,284

 

53

 

6.55

%

 

3,390

 

23

 

2.73

%

Total securities

 

2,129,792

 

8,076

 

1.54

%

 

2,398,747

 

8,034

 

1.36

%

FHLBNY and FRB stock

 

16,750

 

300

 

7.26

%

 

10,098

 

105

 

4.23

%

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

 

5,251,278

 

61,034

 

4.71

%

 

5,055,948

 

51,355

 

4.12

%

Total interest-earning assets

 

7,410,553

 

69,549

 

3.81

%

 

7,598,922

 

59,535

 

3.18

%

Other assets

 

223,240

 

 

 

311,125

 

 

Total assets

$

7,633,793

 

 

$

7,910,047

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

$

3,833,566

$

8,641

 

0.91

%

$

4,160,946

$

750

 

0.07

%

Time deposits

 

673,871

 

3,541

 

2.13

%

 

631,594

 

1,296

 

0.83

%

Total interest-bearing deposits

 

4,507,437

 

12,182

 

1.10

%

 

4,792,540

 

2,046

 

0.17

%

Federal funds purchased & securities sold under agreements to repurchase

 

57,523

 

14

 

0.10

%

 

64,237

 

16

 

0.10

%

Other borrowings

 

269,752

 

2,796

 

4.20

%

 

125,298

 

500

 

1.62

%

Total interest-bearing liabilities

 

4,834,712

 

14,992

 

1.26

%

 

4,982,075

 

2,562

 

0.21

%

Noninterest bearing deposits

 

2,065,701

 

 

 

2,108,825

 

 

Accrued expenses and other liabilities

 

102,172

 

 

 

106,120

 

 

Total liabilities

 

7,002,585

 

 

 

7,197,020

 

 

Tompkins Financial Corporation Shareholders’ equity

 

629,784

 

 

 

711,601

 

 

Noncontrolling interest

 

1,424

 

 

 

1,426

 

 

Total equity

 

631,208

 

 

 

713,027

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,633,793

 

 

$

7,910,047

 

 

Interest rate spread

 

 

2.55

%

 

 

2.97

%

Net interest income/margin on earning assets

 

 

54,557

 

2.99

%

 

 

56,973

 

3.04

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

 

(311

)

 

 

 

(359

)

 

Net interest income per consolidated financial statements

 

$

54,246

 

 

 

$

56,614

 

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

Quarter-Ended

Year-Ended

Period End Balance Sheet

Mar-23

Dec-22

Sep-22

Jun-22

Mar-22

Dec-22

Securities

$

1,899,001

$

1,908,088

$

2,054,036

$

2,204,851

$

2,285,527

$

1,908,088

Total Loans

 

5,273,671

 

5,268,911

 

5,208,436

 

5,162,503

 

5,063,451

 

5,268,911

Allowance for credit losses

 

46,099

 

45,934

 

44,772

 

43,793

 

42,126

 

45,934

Total assets

 

7,644,371

 

7,670,686

 

7,779,941

 

7,842,461

 

7,891,111

 

7,670,686

Total deposits

 

6,509,009

 

6,602,295

 

6,936,726

 

6,769,521

 

7,016,739

 

6,602,295

Federal funds purchased and securities sold under agreements to repurchase

 

63,491

 

56,278

 

55,340

 

50,075

 

57,115

 

56,278

Other borrowings

 

327,000

 

291,300

 

101,000

 

295,600

 

60,000

 

291,300

Total common equity

 

648,322

 

615,978

 

571,453

 

622,843

 

656,049

 

615,978

Total equity

 

649,765

 

617,390

 

572,959

 

624,318

 

657,492

 

617,390

Average Balance Sheet

 

 

 

 

 

 

Average earning assets

$

7,410,553

$

7,568,656

$

7,639,123

$

7,621,588

$

7,598,922

$

7,607,078

Average assets

 

7,633,793

 

7,721,335

 

7,853,847

 

7,830,645

 

7,910,047

 

7,828,520

Average interest-bearing liabilities

 

4,834,712

 

4,828,561

 

4,861,857

 

4,901,345

 

4,982,075

 

4,892,952

Average equity

 

631,208

 

580,720

 

635,324

 

639,354

 

713,027

 

641,726

Share data

 

 

 

 

 

 

Weighted average shares outstanding (basic)

 

14,326,595

 

14,308,323

 

14,289,022

 

14,317,415

 

14,400,003

 

14,328,280

Weighted average shares outstanding (diluted)

 

14,389,673

 

14,385,884

 

14,367,149

 

14,387,601

 

14,478,183

 

14,404,294

Period-end shares outstanding

 

14,519,748

 

14,519,831

 

14,483,757

 

14,504,604

 

14,561,450

 

14,519,831

Common equity book value per share

$

44.65

$

42.42

$

39.45

$

42.94

$

45.05

$

42.42

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

$

38.16

$

35.93

$

32.93

$

36.42

$

38.54

$

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

$

54,246

 

$

57,294

$

58,111

$

58,262

$

56,614

 

$

230,281

(Credit) provision for credit loss expense (5)

 

(825

)

 

1,397

 

1,056

 

856

 

(520

)

 

2,789

Noninterest income

 

20,400

 

 

18,351

 

20,692

 

18,944

 

19,985

 

 

77,972

Noninterest expense (5)

 

50,158

 

 

50,190

 

49,602

 

49,120

 

46,839

 

 

195,751

Income tax expense

 

5,901

 

 

4,478

 

6,774

 

6,329

 

6,976

 

 

24,557

Net income attributable to Tompkins Financial Corporation

 

19,381

 

 

19,548

 

21,340

 

20,869

 

23,273

 

 

85,030

Noncontrolling interests

 

31

 

 

32

 

31

 

32

 

31

 

 

126

Basic earnings per share (4)

 

1.35

 

 

1.36

 

1.49

 

1.45

 

1.61

 

 

5.92

Diluted earnings per share (4)

 

1.35

 

 

1.36

 

1.48

 

1.45

 

1.60

 

 

5.89

Nonperforming Assets

 

 

 

 

 

 

Nonaccrual loans and leases

$

28,424

$

28,289

$

30,013

$

24,665

$

25,200

$

28,289

Loans and leases 90 days past due and accruing

 

13

 

25

 

161

 

62

 

0

 

25

Performing troubled debt restructuring*

 

0

 

4,530

 

4,730

 

4,872

 

5,064

 

4,530

Total nonperforming loans and leases

 

28,437

 

32,844

 

34,904

 

29,599

 

30,264

 

32,844

OREO

 

36

 

152

 

335

 

122

 

88

 

152

Total nonperforming assets

$

28,473

$

32,996

$

35,239

$

29,721

$

30,352

$

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

Mar-23

Dec-22

Sep-22

Jun-22

Mar-22

Dec-22

Loans and leases 30-89 days past due and accruing

$

5,894

$

3,172

$

3,160

$

9,837

$

1,735

$

3,172

Loans and leases 90 days past due and accruing

 

13

 

25

 

161

 

62

 

0

 

25

Total loans and leases past due and accruing

 

5,907

 

3,197

 

3,321

 

9,899

 

1,735

 

3,197

Allowance for Credit Losses

Balance at beginning of period

$

45,934

 

$

44,772

$

43,793

 

$

42,126

 

$

42,843

 

$

42,843

Impact of adopting ASC 326

 

64

 

 

0

 

0

 

 

0

 

 

0

 

 

0

(Credit) provision for credit losses

 

(1,180

)

 

1,352

 

1,101

 

 

780

 

 

(734

)

$

2,499

Net loan and lease charge-offs (recoveries)

 

(1,281

)

 

190

 

122

 

 

(887

)

 

(17

)

$

(592

)

Allowance for credit losses at end of period

$

46,099

 

$

45,934

$

44,772

 

$

43,793

 

$

42,126

 

$

45,934

 

 

 

 

 

 

 

Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance at beginning of period

$

2,796

 

$

2,751

$

2,796

 

$

2,720

 

$

2,506

 

$

2,506

 

Provision (credit) for credit losses

 

355

 

 

45

 

(45

)

 

76

 

 

214

 

$

290

 

Allowance for credit losses at end of period

$

3,151

 

$

2,796

$

2,751

 

$

2,796

 

$

2,720

 

$

2,796

 

Loan Classification - Total Portfolio

 

 

 

 

 

 

Special Mention

$

39,255

$

49,752

$

66,730

$

72,270

$

92,380

$

49,752

Substandard

 

46,315

 

48,537

 

40,007

 

42,756

 

42,722

 

48,537

Ratio Analysis

Credit Quality

 

 

 

 

 

 

Nonperforming loans and leases/total loans and leases

0.54

%

0.62

%

0.67

%

0.57

%

0.60

%

0.62

%

Nonperforming assets/total assets

0.37

%

0.43

%

0.45

%

0.38

%

0.38

%

0.43

%

Allowance for credit losses/total loans and leases

0.87

%

0.87

%

0.86

%

0.85

%

0.83

%

0.87

%

Allowance/nonperforming loans and leases

162.11

%

139.86

%

128.27

%

147.95

%

139.20

%

139.85

%

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

(0.10

)%

0.01

%

0.01

%

(0.07

)%

0.00

%

(0.01

)%

Capital Adequacy

 

 

 

 

 

 

Tier 1 Capital (to average assets)

9.63 %

9.34 %

9.14 %

9.02 %

8.89 %

9.34 %

Total Capital (to risk-weighted assets)

14.62 %

14.42 %

14.26 %

14.07 %

14.23 %

14.42 %

Profitability (period-end)

 

 

 

 

 

 

Return on average assets *

1.03 %

1.00 %

1.08 %

1.07 %

1.19 %

1.09 %

Return on average equity *

12.45 %

13.36 %

13.33 %

13.09 %

13.24 %

13.25 %

Net interest margin (TE) *

2.99 %

3.02 %

3.04 %

3.09 %

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

 

Quarter-Ended

Year-ended

 

Mar-23

Dec-22

Sep-22

Jun-22

Mar-22

Dec-22

Total common equity

$

648,322

$

615,978

$

571,453

$

622,843

$

656,049

$

615,978

Less: Goodwill and intangibles

 

94,253

 

94,336

 

94,554

 

94,617

 

94,836

 

94,336

Tangible common equity (Non-GAAP)

 

554,069

 

521,642

 

476,899

 

528,226

 

561,213

 

521,642

Ending shares outstanding

 

14,519,748

 

14,519,831

 

14,483,757

 

14,504,604

 

14,561,450

 

14,519,831

Tangible book value per share (Non-GAAP)

$

38.16

$

35.93

$

32.93

$

36.42

$

38.54

$

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:

Stephen S. Romaine, President & CEO

Francis M. Fetsko, Executive VP, CFO & COO

Tompkins Financial Corporation (888) 503-5753

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