For more information contact:
Stephen S. Romaine, President & CEO
Matthew Tomazin, Executive VP, CFO & Treasurer
Tompkins Financial Corporation (888) 503-5753
For Immediate Release
Friday, October 27, 2023
Tompkins Financial Corporation Reports Third Quarter Financial Results
ITHACA, NY - Tompkins Financial Corporation (NYSE American: TMP)
Tompkins Financial Corporation ("Tompkins" or the "Company") reported a net loss of $33.4 million for the third quarter of 2023. The quarterly results were negatively impacted by the sale of $429.6 million of available-for-sale debt securities, which resulted in an after-tax loss on the sale of securities of $47.5 million. Though this sale resulted in an operating loss in the third quarter of 2023, the transaction is expected to favorably impact securities revenue in future periods as the securities sold had an average yield of 0.93%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.12%. The weighted average life of the securities purchased and sold was approximately 4.3 years.
Tompkins President and CEO, Stephen Romaine, commented, "During the quarter we elected to proactively reposition the balance sheet which will improve securities revenue and we expect that the improved revenue will exceed the value of the loss recognized in the third quarter through time. We estimate securities revenue to improve by approximately $15.4 million over the next twelve months.
While the economic environment remains challenging for the banking industry, our capital and liquidity levels remain healthy and well positioned to meet the needs of our customers. We continued to see favorable growth trends, with annualized loan growth of 6.0% from the second to third quarter of this year and increased deposit balances over the same periods. We are also pleased to announce our cash dividend, which is reflective of our healthy capital position."
Diluted earnings per share for the third quarter of 2023 were a loss of $2.35, which reflects the impact of the after-tax losses of $3.34 per diluted share related to the sale of available-for-sale debt securities as noted above. Diluted earnings per share for the third quarter of 2022 were $1.48.
For the year-to-date period ended September 30, 2023, net income was a loss of $5.5 million, or a loss of $0.39 per diluted share. Year-to-date results were also negatively impacted by after-tax losses on the sale of securities totaling $52.9 million, or $3.69 loss per diluted share. For the same year-to-date period in 2022, net income was $65.5 million, or $4.53 per diluted share.
SELECTED HIGHLIGHTS FOR THE PERIOD:
•Total loans at September 30, 2023 were up $82.5 million, or 1.5% (6.1% on an annualized basis) compared to the immediate prior quarter, and up $226.4 million, or 4.3%, from September 30, 2022.
•Total deposits at September 30, 2023 were $6.6 billion, up $168.8 million, or 2.5% (10.4% on an annualized basis) from June 30, 2023, and down $313.3 million, or 4.5%, from September 30, 2022.
•Loan to deposit ratio was stable at 82.1%, compared to 82.9% for the immediate prior quarter.
•Regulatory Tier 1 capital to average assets was 9.01% at September 30, 2023, compared to 9.57% at June 30, 2023 and 9.14% at September 30, 2022.
•Total nonperforming assets at September 30, 2023 represented 0.41% of total assets, which was flat compared to the immediate prior quarter and down from 0.45% at September 30, 2022.
NET INTEREST INCOME
Net interest income was $51.0 million for the third quarter of 2023, down from $51.9 million for the second quarter of 2023 and $58.1 million for the third quarter of 2022. Net interest margin was 2.75% for the third quarter of 2023, compared to 2.83% reported for the second quarter of 2023 and 3.04% reported for the third quarter of 2022. The decrease in net interest income and net interest margin during the third quarter, when compared to the second quarter of this year and the same quarter last year, was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment.
For the year-to-date period ended September 30, 2023, net interest income was $157.2 million, down $15.8 million, or 9.2%, when compared to the same period in 2022.
Average loans for the quarter ended September 30, 2023 were up $80.5 million, or 1.5%, from the second quarter of 2023, and were up $200.0 million, or 3.9%, compared to the quarter ended September 30, 2022. The increase in average loans over both prior periods was mainly in the commercial real estate portfolio. The average yield on interest-earning assets for the quarter ended September 30, 2023 was 4.06%, which was up from 3.91% for the quarter ended June 30, 2023, and up from 3.32% for the quarter ended September 30, 2022.
Average total deposits for the third quarter of 2023 were down $20.0 million, or 0.3%, compared to the second quarter of 2023, and down $394.4 million, or 5.8%, compared to the same period in 2022. The decrease as compared to the prior year was largely driven by a decline in stimulus funding and a tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve. The cost of interest-bearing deposits increased to 1.74% for the third quarter of 2023, compared to 1.41% for the
second quarter of 2023, and 0.36% for the third quarter of 2022. The cost of interest-bearing deposits for the third quarter of 2023 increased 33 basis points from June 30, 2023. The ratio of average noninterest bearing deposits to average total deposits for the third quarter of 2023 was 31.0% compared to 31.1% for the second quarter of 2023. The average cost of interest-bearing liabilities for the third quarter of 2023 of 1.98%, represents an increase of 34 basis points over the second quarter of 2023, and an increase of 153 basis points over the same period in 2022.
NONINTEREST INCOME
Noninterest income was a loss of $41.6 million for the third quarter of 2023, which represents a decrease in noninterest income of $62.3 million compared to the third quarter of 2022. Year-to-date noninterest income was a loss of $8.6 million, which represents a decrease in noninterest income of $68.2 million compared to the same nine month period in 2022. The decrease in noninterest income in the third quarter of 2023 was largely due to the above noted sale of available-for-sale debt securities, which resulted in the recognition of a pre-tax loss of $62.9 million. Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts and card services income, for the third quarter of 2023 were collectively up $543,000, or 2.7%, over the same period in 2022.
NONINTEREST EXPENSE
Noninterest expense was $49.9 million for the third quarter of 2023, which was up $264,000, or 0.5%, over the third quarter of 2022. For the year-to-date period, noninterest expense of $152.0 million was up $6.4 million, or 4.4%, from the same period in 2022. The increase in noninterest expense in the nine months ended September 30, 2023 over the same period in 2022 was mainly in other operating expenses which were up $4.1 million and higher personnel-related expenses, which were up $2.7 million. Contributing to the growth in other expenses for the nine months ended September 30, 2023, compared to the same period in 2022 were the following: expenses related to the Company’s retirement plans, up $1.3 million; professional fees, up $699,000, New York State minimum tax, up $623,000; and FDIC insurance, up $777,000. The increase in personnel-related expenses was mainly in health insurance, which is up $1.5 million.
INCOME TAX EXPENSE
The provision for income taxes was a credit of $8.3 million for an effective rate of 20.0% for the third quarter of 2023, compared to tax expense of $6.8 million and an effective rate of 24.1% for the same quarter in 2022. For the first nine months of 2023, the provision for income taxes was a credit of $619,000 for an effective rate of 10.3% compared to tax expense of $20.1 million and an effective rate of 23.4% for the same period in 2022. The decrease in income tax expense between comparable periods reflects the decrease in pre-tax income, due primarily to the realized losses on the sale of certain available-for-sale securities and the anticipated retention of certain New York State tax benefits.
ASSET QUALITY
The allowance for credit losses represented 0.91% of total loans and leases at September 30, 2023, flat as compared to June 30, 2023, and up from 0.86% at September 30, 2022. The ratio of the allowance to total nonperforming loans and leases was 156.96% at September 30, 2023, compared to 154.76% at June 30, 2023 and 128.27% at September 30, 2022.
Provision for credit losses for the third quarter of 2023 was $1.2 million compared to $1.1 million for the same period in 2022. Provision for credit losses for the nine months ended September 30, 2023 was $2.6 million, compared to $1.4 million for the nine months ended September 30, 2022. The increase in provision expense for both the quarter and year-to-date periods was mainly driven by economic forecasts, loan growth, and changes in asset quality. Net charge-offs for the quarter ended September 30, 2023 were $177,000 compared to net charge-offs of $122,000 reported for the same period in 2022.
Nonperforming assets represented 0.41% of total assets at September 30, 2023, down from 0.43% at December 31, 2022 and 0.45% reported at September 30, 2022. At September 30, 2023, nonperforming loans and leases totaled $31.4 million, compared to $32.8 million at December 31, 2022 and $34.9 million at September 30, 2022. The increase in loans past due 30-89 days at quarter-end September 30, 2023, was mainly due to the inclusion of two commercial real estate loans to one relationship totaling $18.6 million. The Company believes that the existing collateral securing the loans is sufficient to cover the exposure as of September 30, 2023.
Special Mention and Substandard loans and leases totaled $122.9 million at September 30, 2023, reflecting an increase from the $98.3 million reported at December 31, 2022, and $106.7 million at September 30, 2022. The increase as compared to year-end in Special Mention and Substandard was mainly a result of the downgrade of one commercial real estate loan added to Special Mention during the second quarter of 2023 and the downgrade of one commercial real estate loan previously reported as Special Mention in the second quarter of 2023.
CAPITAL POSITION
Capital ratios at September 30, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 13.46% at September 30, 2023, compared to 14.42% at December 31, 2022 and 14.26% at September 30, 2022. The ratio of Tier 1 capital to average assets was 9.01% at September 30, 2023, compared to 9.34% at December 31, 2022 and 9.14% at September 30, 2022.
During the third quarter of 2023, the Company repurchased 41,781 common shares at an aggregate cost of $2.3 million. These shares were purchased under the Company's Stock Repurchase Program announced in the third quarter of 2021.
LIQUIDITY POSITION
The Company's liquidity position at September 30, 2023 was stable and consistent with the immediately prior quarter. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and Federal Home Loan Banks (FHLB) advances. The Company maintains ready access liquidity of $1.2 billion, or 15.1% of total assets at September 30, 2023. As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At September 30, 2023 the Company had an available borrowing capacity at the FHLB of $969.4 million. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At September 30, 2023 the available borrowing capacity with the Federal Reserve Bank was $91.8 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at September 30, 2023, the Company maintained $411.7 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.
ABOUT TOMPKINS FINANCIAL CORPORATION
Tompkins Financial Corporation is a banking and financial services company serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania. Headquartered in Ithaca, NY, Tompkins Financial is parent to Tompkins Community Bank, Tompkins Insurance Agencies, Inc., and offers wealth management services through Tompkins Financial Advisors. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this press release that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", the negative and other variations of these terms and other similar words. Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company’s operations and economic environment, all of which are difficult to predict and many of which are beyond the control of the Company, that could cause actual results of the Company to differ materially from those expressed and/or implied by forward-looking statements and historical performance. The following factors, in addition to those listed as Risk Factors in Item 1A in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission are among those that could cause actual results to differ materially from the forward-looking statements: changes in general economic, market and regulatory conditions; our ability to attract and retain deposits and other sources of liquidity; GDP growth and inflation trends; the impact of the interest rate and inflationary environment on the Company's business, financial condition and results of operations; other income or cash flow anticipated from the Company's operations, investment and/or lending activities; changes in laws and regulations affecting banks, bank holding companies
and/or financial holding companies, including the Dodd-Frank Act, and state and local government mandates; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; technological developments and changes; cybersecurity incidents and threats, the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; governmental and public policy changes, including environmental regulation; reliance on large customers; the ability to access financial resources in the amounts, at the times, and on the terms required to support the Company's future businesses; and the economic impact of national and global events, including the response to recent bank failures, the wars in Ukraine and Israel, widespread protests, civil unrest, political uncertainty, and pandemics or other public health crises. The Company does not undertake any obligation to update its forward-looking statements.
| TOMPKINS FINANCIAL CORPORATION | ||||||||
| CONSOLIDATED STATEMENTS OF CONDITION | ||||||||
| (In thousands, except share and per share data) | As of | As of | ||||||
| ASSETS | 9/30/2023 | 12/31/2022 | ||||||
| (Audited) | ||||||||
| Cash and noninterest bearing balances due from banks | $ | 75,370 | $ | 18,572 | ||||
| Interest bearing balances due from banks | 64,846 | 59,265 | ||||||
| Cash and Cash Equivalents | 140,216 | 77,837 | ||||||
| Available-for-sale debt securities, at fair value (amortized cost of $1,583,075 at September 30, 2023 and $1,831,791 at December 31, 2022) | 1,388,510 | 1,594,967 | ||||||
| Held-to-maturity securities, at amortized cost (fair value of $252,978 at September 30, 2023 and $261,692 at December 31, 2022) | 312,385 | 312,344 | ||||||
| Equity securities, at fair value | 741 | 777 | ||||||
| Total loans and leases, net of unearned income and deferred costs and fees | 5,434,860 | 5,268,911 | ||||||
| Less: Allowance for credit losses | 49,336 | 45,934 | ||||||
| Net Loans and Leases | 5,385,524 | 5,222,977 | ||||||
| Federal Home Loan Bank and other stock | 19,985 | 17,720 | ||||||
| Bank premises and equipment, net | 80,685 | 82,140 | ||||||
| Corporate owned life insurance | 86,708 | 85,556 | ||||||
| Goodwill | 92,602 | 92,602 | ||||||
| Other intangible assets, net | 2,421 | 2,708 | ||||||
| Accrued interest and other assets | 181,385 | 181,058 | ||||||
| Total Assets | $ | 7,691,162 | $ | 7,670,686 | ||||
| LIABILITIES | ||||||||
| Deposits: | ||||||||
| Interest bearing: | ||||||||
| Checking, savings and money market | 3,779,991 | 3,820,739 | ||||||
| Time | 880,412 | 631,411 | ||||||
| Noninterest bearing | 1,963,033 | 2,150,145 | ||||||
| Total Deposits | 6,623,436 | 6,602,295 | ||||||
| Federal funds purchased and securities sold under agreements to repurchase | 56,120 | 56,278 | ||||||
| Other borrowings | 296,800 | 291,300 | ||||||
| Other liabilities | 102,450 | 103,423 | ||||||
| Total Liabilities | $ | 7,078,806 | $ | 7,053,296 | ||||
| EQUITY | ||||||||
| Tompkins Financial Corporation shareholders' equity: | ||||||||
| Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,386,087 at September 30, 2023; and 14,555,741 at December 31, 2022 | 1,439 | 1,456 | ||||||
| Additional paid-in capital | 296,721 | 302,763 | ||||||
| Retained earnings | 495,123 | 526,727 | ||||||
| Accumulated other comprehensive loss | (176,029) | (208,689) | ||||||
| Treasury stock, at cost – 128,096 shares at September 30, 2023, and 128,749 shares at December 31, 2022 | (6,403) | (6,279) | ||||||
| Total Tompkins Financial Corporation Shareholders’ Equity | 610,851 | 615,978 | ||||||
| Noncontrolling interests | 1,505 | 1,412 | ||||||
| Total Equity | $ | 612,356 | $ | 617,390 | ||||
| Total Liabilities and Equity | $ | 7,691,162 | $ | 7,670,686 | ||||
| TOMPKINS FINANCIAL CORPORATION | ||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
| (In thousands, except per share data) (Unaudited) | Three Months Ended | Nine Months Ended | ||||||||||||
| 9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | |||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||
| Loans | $ | 67,030 | $ | 55,041 | $ | 191,399 | $ | 158,677 | ||||||
| Due from banks | 125 | 85 | 447 | 190 | ||||||||||
| Available-for-sale debt securities | 6,599 | 7,157 | 19,960 | 20,990 | ||||||||||
| Held-to-maturity securities | 1,221 | 1,221 | 3,654 | 3,551 | ||||||||||
| Federal Home Loan Bank and other stock | 490 | 166 | 1,113 | 391 | ||||||||||
| Total Interest and Dividend Income | 75,465 | $ | 63,670 | $ | 216,573 | $ | 183,799 | |||||||
| INTEREST EXPENSE | ||||||||||||||
| Time certificates of deposits of $250,000 or more | 3,158 | 563 | 7,472 | 1,389 | ||||||||||
| Other deposits | 16,348 | 3,631 | 39,861 | 6,898 | ||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 15 | 14 | 44 | 45 | ||||||||||
| Other borrowings | 4,931 | 1,351 | 12,041 | 2,480 | ||||||||||
| Total Interest Expense | 24,452 | 5,559 | 59,418 | 10,812 | ||||||||||
| Net Interest Income | 51,013 | 58,111 | 157,155 | 172,987 | ||||||||||
| Less: Provision for credit loss expense | 1,150 | 1,056 | 2,578 | 1,392 | ||||||||||
| Net Interest Income After Credit for Credit Loss Expense | 49,863 | 57,055 | 154,577 | 171,595 | ||||||||||
| NONINTEREST INCOME | ||||||||||||||
| Insurance commissions and fees | 11,397 | 10,825 | 29,578 | 28,571 | ||||||||||
| Wealth management fees | 4,342 | 4,337 | 13,529 | 13,850 | ||||||||||
| Service charges on deposit accounts | 1,754 | 1,917 | 5,140 | 5,452 | ||||||||||
| Card services income | 2,860 | 2,731 | 8,629 | 8,233 | ||||||||||
| Other income | 990 | 977 | 4,534 | 3,694 | ||||||||||
| Net loss on securities transactions | (62,967) | (95) | (70,019) | (179) | ||||||||||
| Total Noninterest Income | (41,624) | 20,692 | (8,609) | 59,621 | ||||||||||
| NONINTEREST EXPENSE | ||||||||||||||
| Salaries and wages | 23,811 | 25,344 | 73,660 | 73,012 | ||||||||||
| Other employee benefits | 7,319 | 6,489 | 20,707 | 18,627 | ||||||||||
| Net occupancy expense of premises | 3,108 | 3,258 | 9,734 | 9,930 | ||||||||||
| Furniture and fixture expense | 2,079 | 2,056 | 6,238 | 6,051 | ||||||||||
| Amortization of intangible assets | 83 | 218 | 250 | 655 | ||||||||||
| Other operating expense | 13,466 | 12,237 | 41,403 | 37,286 | ||||||||||
| Total Noninterest Expenses | 49,866 | 49,602 | 151,992 | 145,561 | ||||||||||
| (Loss)/Income Before Income Tax (Benefit)/Expense | (41,627) | 28,145 | (6,024) | 85,655 | ||||||||||
| Income Tax (Benefit)/Expense | (8,304) | 6,774 | (619) | 20,079 | ||||||||||
| Net (Loss)/Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation | (33,323) | 21,371 | (5,405) | 65,576 | ||||||||||
| Less: Net Income Attributable to Noncontrolling Interests | 31 | 31 | 93 | 94 | ||||||||||
| Net (Loss)/Income Attributable to Tompkins Financial Corporation | $ | (33,354) | 21,340 | (5,498) | 65,482 | |||||||||
| Basic (Loss) Earnings Per Share | $ | (2.35) | $ | 1.49 | $ | (0.39) | $ | 4.55 | ||||||
| Diluted (Loss) Earnings Per Share | $ | (2.35) | $ | 1.48 | $ | (0.39) | $ | 4.53 | ||||||
| Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited) | ||||||||||||||||||||
| Quarter Ended | Quarter Ended | |||||||||||||||||||
| September 30, 2023 | September 30, 2022 | |||||||||||||||||||
| Average | Average | |||||||||||||||||||
| Balance | Average | Balance | Average | |||||||||||||||||
| (Dollar amounts in thousands) | (QTD) | Interest | Yield/Rate | (QTD) | Interest | Yield/Rate | ||||||||||||||
| ASSETS | ||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||
| Interest-bearing balances due from banks | $ | 11,585 | $ | 125 | 4.29 | % | $ | 63,516 | $ | 85 | 0.53 | % | ||||||||
| Securities (1) | ||||||||||||||||||||
| U.S. Government securities | 1,890,659 | 7,294 | 1.53 | % | 2,276,380 | 7,853 | 1.37 | % | ||||||||||||
| State and municipal (2) | 90,212 | 576 | 2.53 | % | 95,627 | 614 | 2.55 | % | ||||||||||||
| Other securities (2) | 3,272 | 59 | 7.18 | % | 3,323 | 37 | 4.44 | % | ||||||||||||
| Total securities | 1,984,143 | 7,929 | 1.59 | % | 2,375,330 | 8,504 | 1.42 | % | ||||||||||||
| FHLBNY and FRB stock | 24,511 | 490 | 7.94 | % | 15,058 | 166 | 4.38 | % | ||||||||||||
| Total loans and leases, net of unearned income (2)(3) | 5,385,195 | 67,199 | 4.95 | % | 5,185,219 | 55,265 | 4.23 | % | ||||||||||||
| Total interest-earning assets | 7,405,434 | 75,743 | 4.06 | % | 7,639,123 | 64,020 | 3.32 | % | ||||||||||||
| Other assets | 224,442 | 214,724 | ||||||||||||||||||
| Total assets | $ | 7,629,876 | $ | 7,853,847 | ||||||||||||||||
| LIABILITIES & EQUITY | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||
| Interest bearing checking, savings, & money market | $ | 3,615,395 | $ | 12,674 | 1.39 | % | $ | 3,979,590 | $ | 2,863 | 0.29 | % | ||||||||
| Time deposits | 826,082 | 6,832 | 3.28 | % | 596,299 | 1,331 | 0.89 | % | ||||||||||||
| Total interest-bearing deposits | 4,441,477 | 19,506 | 1.74 | % | 4,575,889 | 4,194 | 0.36 | % | ||||||||||||
| Federal funds purchased & securities sold under agreements to repurchase | 57,624 | 15 | 0.10 | % | 53,810 | 14 | 0.10 | % | ||||||||||||
| Other borrowings | 403,829 | 4,931 | 4.84 | % | 232,158 | 1,351 | 2.31 | % | ||||||||||||
| Total interest-bearing liabilities | 4,902,930 | 24,452 | 1.98 | % | 4,861,857 | 5,559 | 0.45 | % | ||||||||||||
| Noninterest bearing deposits | 1,990,320 | 2,250,263 | ||||||||||||||||||
| Accrued expenses and other liabilities | 101,646 | 106,403 | ||||||||||||||||||
| Total liabilities | 6,994,896 | 7,218,523 | ||||||||||||||||||
| Tompkins Financial Corporation Shareholders’ equity | 633,494 | 633,837 | ||||||||||||||||||
| Noncontrolling interest | 1,487 | 1,487 | ||||||||||||||||||
| Total equity | 634,980 | 635,324 | ||||||||||||||||||
| Total liabilities and equity | $ | 7,629,876 | $ | 7,853,847 | ||||||||||||||||
| Interest rate spread | 2.08 | % | 2.87 | % | ||||||||||||||||
| Net interest income/margin on earning assets | 51,291 | 2.75 | % | 58,461 | 3.04 | % | ||||||||||||||
| Tax Equivalent Adjustment | (278) | (350) | ||||||||||||||||||
| Net interest income per consolidated financial statements | $ | 51,013 | $ | 58,111 | ||||||||||||||||
| Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited) | ||||||||||||||||||||
| Year to Date Period Ended | Year to Date Period Ended | |||||||||||||||||||
| September 30, 2023 | September 30, 2022 | |||||||||||||||||||
| Average | Average | |||||||||||||||||||
| Balance | Average | Balance | Average | |||||||||||||||||
| (Dollar amounts in thousands) | (YTD) | Interest | Yield/Rate | (YTD) | Interest | Yield/Rate | ||||||||||||||
| ASSETS | ||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||
| Interest-bearing balances due from banks | $ | 12,630 | $ | 447 | 4.73 | % | $ | 94,988 | $ | 190 | 0.27 | % | ||||||||
| Securities (1) | ||||||||||||||||||||
| U.S. Government securities | 1,965,039 | 22,022 | 1.50 | % | 2,291,635 | 22,960 | 1.34 | % | ||||||||||||
| State and municipal (2) | 91,858 | 1,764 | 2.57 | % | 98,262 | 1,882 | 2.56 | % | ||||||||||||
| Other securities (2) | 3,281 | 169 | 6.87 | % | 3,349 | 88 | 3.52 | % | ||||||||||||
| Total securities | 2,060,178 | 23,955 | 1.55 | % | 2,393,247 | 24,930 | 1.39 | % | ||||||||||||
| FHLBNY and FRB stock | 21,519 | 1,112 | 6.92 | % | 12,481 | 391 | 4.19 | % | ||||||||||||
| Total loans and leases, net of unearned income (2)(3) | 5,314,221 | 191,946 | 4.83 | % | 5,119,309 | 159,353 | 4.16 | % | ||||||||||||
| Total interest-earning assets | 7,408,548 | 217,460 | 3.92 | % | 7,620,025 | 184,864 | 3.24 | % | ||||||||||||
| Other assets | 224,594 | 244,615 | ||||||||||||||||||
| Total assets | $ | 7,633,142 | $ | 7,864,640 | ||||||||||||||||
| LIABILITIES & EQUITY | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||
| Interest bearing checking, savings, & money market | $ | 3,715,931 | $ | 31,905 | 1.15 | % | $ | 4,070,607 | $ | 4,502 | 0.15 | % | ||||||||
| Time deposits | 749,198 | 15,428 | 2.75 | % | 610,432 | 3,785 | 0.83 | % | ||||||||||||
| Total interest-bearing deposits | 4,465,129 | 47,333 | 1.42 | % | 4,681,039 | 8,287 | 0.24 | % | ||||||||||||
| Federal funds purchased & securities sold under agreements to repurchase | 57,077 | 44 | 0.10 | % | 57,606 | 45 | 0.10 | % | ||||||||||||
| Other borrowings | 351,600 | 12,041 | 4.58 | % | 176,007 | 2,480 | 1.88 | % | ||||||||||||
| Total interest-bearing liabilities | 4,873,806 | 59,418 | 1.63 | % | 4,914,652 | 10,812 | 0.29 | % | ||||||||||||
| Noninterest bearing deposits | 2,019,917 | 2,183,258 | ||||||||||||||||||
| Accrued expenses and other liabilities | 100,491 | 104,445 | ||||||||||||||||||
| Total liabilities | 6,994,214 | 7,202,356 | ||||||||||||||||||
| Tompkins Financial Corporation Shareholders’ equity | 637,472 | 660,826 | ||||||||||||||||||
| Noncontrolling interest | 1,456 | 1,458 | ||||||||||||||||||
| Total equity | 638,928 | 662,284 | ||||||||||||||||||
| Total liabilities and equity | $ | 7,633,142 | $ | 7,864,640 | ||||||||||||||||
| Interest rate spread | 2.29 | % | 2.95 | % | ||||||||||||||||
| Net interest income/margin on earning assets | 158,042 | 2.85 | % | 174,052 | 3.05 | % | ||||||||||||||
| Tax Equivalent Adjustment | (888) | (1,065) | ||||||||||||||||||
| Net interest income per consolidated financial statements | $ | 157,155 | $ | 172,987 | ||||||||||||||||
Tompkins Financial Corporation - Summary Financial Data (Unaudited)
| (In thousands, except per share data) | ||||||||||||||||||||
| Quarter-Ended | Year-Ended | |||||||||||||||||||
| Period End Balance Sheet | Sep-23 | Jun-23 | Mar-23 | Dec-22 | Sep-22 | Dec-22 | ||||||||||||||
| Securities | $ | 1,701,636 | $ | 1,781,150 | $ | 1,899,001 | $ | 1,908,088 | $ | 2,054,036 | $ | 1,908,088 | ||||||||
| Total Loans | 5,434,860 | 5,352,365 | 5,273,671 | 5,268,911 | 5,208,436 | 5,268,911 | ||||||||||||||
| Allowance for credit losses | 49,336 | 48,545 | 46,099 | 45,934 | 44,772 | 45,934 | ||||||||||||||
| Total assets | 7,691,162 | 7,626,238 | 7,644,371 | 7,670,686 | 7,779,941 | 7,670,686 | ||||||||||||||
| Total deposits | 6,623,436 | 6,454,651 | 6,509,009 | 6,602,295 | 6,936,726 | 6,602,295 | ||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 56,120 | 50,483 | 63,491 | 56,278 | 55,340 | 56,278 | ||||||||||||||
| Other borrowings | 296,800 | 387,100 | 327,000 | 291,300 | 101,000 | 291,300 | ||||||||||||||
| Total common equity | 610,851 | 634,967 | 648,322 | 615,978 | 571,453 | 615,978 | ||||||||||||||
| Total equity | 612,356 | 636,441 | 649,765 | 617,390 | 572,959 | 617,390 | ||||||||||||||
| Average Balance Sheet | ||||||||||||||||||||
| Average earning assets | $ | 7,405,434 | $ | 7,409,714 | $ | 7,410,553 | $ | 7,568,656 | $ | 7,639,123 | $ | 7,607,078 | ||||||||
| Average assets | 7,629,876 | 7,635,800 | 7,633,793 | 7,721,335 | 7,853,847 | 7,828,520 | ||||||||||||||
| Average interest-bearing liabilities | 4,902,930 | 4,883,026 | 4,834,712 | 4,828,561 | 4,861,857 | 4,892,952 | ||||||||||||||
| Average equity | 634,980 | 650,554 | 631,208 | 580,720 | 635,324 | 641,726 | ||||||||||||||
| Share data | ||||||||||||||||||||
| Weighted average shares outstanding (basic) | 14,185,763 | 14,314,133 | 14,326,595 | 14,308,323 | 14,289,022 | 14,328,280 | ||||||||||||||
| Weighted average shares outstanding (diluted) | 14,224,748 | 14,346,787 | 14,389,673 | 14,385,884 | 14,367,149 | 14,404,294 | ||||||||||||||
| Period-end shares outstanding | 14,350,177 | 14,405,503 | 14,519,748 | 14,519,831 | 14,483,757 | 14,519,831 | ||||||||||||||
| Common equity book value per share | $ | 42.57 | $ | 44.08 | $ | 44.65 | $ | 42.42 | $ | 39.45 | $ | 42.42 | ||||||||
| Tangible book value per share (Non-GAAP)** | $ | 36.01 | $ | 37.54 | $ | 38.16 | $ | 35.93 | $ | 32.93 | $ | 35.93 | ||||||||
| **See "Non-GAAP measures" below for a discussion of non-GAAP financial measures and a reconciliation of non-GAAP financial measures to the most directly comparable financial measures presented in accordance with GAAP. | ||||||||||||||||||||
| Income Statement | ||||||||||||||||||||
| Net interest income | $ | 51,013 | $ | 51,896 | $ | 54,246 | $ | 57,294 | $ | 58,111 | $ | 230,281 | ||||||||
| (Credit) provision for credit loss expense (5) | 1,150 | 2,253 | (825) | 1,397 | 1,056 | 2,789 | ||||||||||||||
| Noninterest income | (41,624) | 12,615 | 20,400 | 18,351 | 20,692 | 77,972 | ||||||||||||||
| Noninterest expense (5) | 49,866 | 51,968 | 50,158 | 50,190 | 49,602 | 195,751 | ||||||||||||||
| Income tax (benefit)/expense | (8,304) | 1,784 | 5,901 | 4,478 | 6,774 | 24,557 | ||||||||||||||
| Net (loss)/income attributable to Tompkins Financial Corporation | (33,354) | 8,475 | 19,381 | 19,548 | 21,340 | 85,030 | ||||||||||||||
| Noncontrolling interests | 31 | 31 | 31 | 32 | 31 | 126 | ||||||||||||||
| Basic (loss) earnings per share (4) | (2.35) | 0.59 | 1.35 | 1.36 | 1.49 | 5.92 | ||||||||||||||
| Diluted (loss) earnings per share (4) | (2.35) | 0.59 | 1.35 | 1.36 | 1.48 | 5.89 | ||||||||||||||
| Nonperforming Assets | ||||||||||||||||||||
| Nonaccrual loans and leases | $ | 31,381 | $ | 31,333 | $ | 28,424 | $ | 28,289 | $ | 30,013 | $ | 28,289 | ||||||||
| Loans and leases 90 days past due and accruing | 52 | 34 | 13 | 25 | 161 | 25 | ||||||||||||||
| Performing troubled debt restructuring* | 0 | 0 | 0 | 4,530 | 4,730 | 4,530 | ||||||||||||||
| Total nonperforming loans and leases | 31,433 | 31,367 | 28,437 | 32,844 | 34,904 | 32,844 | ||||||||||||||
| OREO | 0 | 36 | 36 | 152 | 335 | 152 | ||||||||||||||
| Total nonperforming assets | $ | 31,433 | $ | 31,403 | $ | 28,473 | $ | 32,996 | $ | 35,239 | $ | 32,996 | ||||||||
| *No amount shown for periods subsequent to the Company's adoption of ASU 2022-02 effective January 1, 2023. | ||||||||||||||||||||
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
| Quarter-Ended | Year-Ended | |||||||||||||||||||
| Delinquency - Total loan and lease portfolio | Sep-23 | Jun-23 | Mar-23 | Dec-22 | Sep-22 | Dec-22 | ||||||||||||||
| Loans and leases 30-89 days past due and | ||||||||||||||||||||
| accruing | $ | 40,893 | $ | 20,255 | $ | 5,894 | $ | 3,172 | $ | 3,160 | $ | 3,172 | ||||||||
| Loans and leases 90 days past due and accruing | 52 | 34 | 13 | 25 | 161 | 25 | ||||||||||||||
| Total loans and leases past due and accruing | 40,945 | 20,289 | 5,907 | 3,197 | 3,321 | 3,197 | ||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||
| Balance at beginning of period | $ | 48,545 | $ | 46,099 | $ | 45,934 | $ | 44,772 | $ | 43,793 | $ | 42,843 | ||||||||
| Impact of adopting ASC 326 | 0 | 0 | 64 | 0 | 0 | 0 | ||||||||||||||
| Provision (credit) for credit losses | 968 | 2,419 | (1,180) | 1,352 | 1,101 | $ | 2,499 | |||||||||||||
| Net loan and lease (recoveries) charge-offs | 177 | (27) | (1,281) | 190 | 122 | $ | (592) | |||||||||||||
| Allowance for credit losses at end of period | $ | 49,336 | $ | 48,545 | $ | 46,099 | $ | 45,934 | $ | 44,772 | $ | 45,934 | ||||||||
| Allowance for Credit Losses - Off-Balance Sheet Exposure | ||||||||||||||||||||
| Balance at beginning of period | $ | 2,985 | $ | 3,151 | $ | 2,796 | $ | 2,751 | $ | 2,796 | $ | 2,506 | ||||||||
| (Credit) provision for credit losses | 182 | (166) | 355 | 45 | (45) | $ | 290 | |||||||||||||
| Allowance for credit losses at end of period | $ | 3,167 | $ | 2,985 | $ | 3,151 | $ | 2,796 | $ | 2,751 | $ | 2,796 | ||||||||
| Loan Classification - Total Portfolio | ||||||||||||||||||||
| Special Mention | $ | 65,993 | $ | 56,305 | $ | 39,255 | $ | 49,752 | $ | 66,730 | $ | 49,752 | ||||||||
| Substandard | 56,947 | 61,820 | 46,315 | 48,537 | 40,007 | 48,537 | ||||||||||||||
Ratio Analysis
| Credit Quality | ||||||||||||||||||||
| Nonperforming loans and leases/total loans and leases | 0.58 | % | 0.59 | % | 0.54 | % | 0.62 | % | 0.67 | % | 0.62 | % | ||||||||
| Nonperforming assets/total assets | 0.41 | % | 0.41 | % | 0.37 | % | 0.43 | % | 0.45 | % | 0.43 | % | ||||||||
| Allowance for credit losses/total loans and leases | 0.91 | % | 0.91 | % | 0.87 | % | 0.87 | % | 0.86 | % | 0.87 | % | ||||||||
| Allowance/nonperforming loans and leases | 156.96 | % | 154.76 | % | 162.11 | % | 139.86 | % | 128.27 | % | 139.85 | % | ||||||||
| Net loan and lease losses annualized/total average loans and leases | 0.01 | % | 0.00 | % | (0.10) | % | 0.01 | % | 0.01 | % | (0.01) | % | ||||||||
| Capital Adequacy | ||||||||||||||||||||
| Tier 1 Capital (to average assets) | 9.01 | % | 9.57 | % | 9.63 | % | 9.34 | % | 9.14 | % | 9.34 | % | ||||||||
| Total Capital (to risk-weighted assets) | 13.46 | % | 14.48 | % | 14.62 | % | 14.42 | % | 14.26 | % | 14.42 | % | ||||||||
| Profitability (period-end) | ||||||||||||||||||||
| Return on average assets * | (1.73) | % | 0.45 | % | 1.03 | % | 1.00 | % | 1.08 | % | 1.09 | % | ||||||||
| Return on average equity * | (20.84) | % | 5.22 | % | 12.45 | % | 13.36 | % | 13.33 | % | 13.25 | % | ||||||||
| Net interest margin (TE) * | 2.75 | % | 2.83 | % | 2.99 | % | 3.02 | % | 3.04 | % | 3.05 | % | ||||||||
| * Quarterly ratios have been annualized | ||||||||||||||||||||
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
Non-GAAP Measures
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as reconciliation to the comparable GAAP measure, is provided in the below tables. The Company believes the non-GAAP measures provide meaningful comparisons of our underlying operational performance and facilitate management's and investors' assessments of business and performance trends in comparison to others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a measure of the Company's profitability or liquidity; they are in addition to, and are not a substitute for, financial measures under GAAP. The non-GAAP financial measures presented herein may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies. Further, the Company may utilize other measures to illustrate performance in the future. Non-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP.
| Reconciliation of Tangible Book Value Per Share (non-GAAP) to Common Equity Book Value Per Share (GAAP) | ||||||||||||||||||||
| Quarter-Ended | Year-ended | |||||||||||||||||||
| Sep-23 | Jun-23 | Mar-23 | Dec-22 | Sep-22 | Dec-22 | |||||||||||||||
| Total common equity | $ | 610,851 | $ | 634,967 | $ | 648,322 | $ | 615,978 | $ | 571,453 | $ | 615,978 | ||||||||
| Less: Goodwill and intangibles | 94,086 | 94,169 | 94,253 | 94,336 | 94,554 | 94,336 | ||||||||||||||
| Tangible common equity (Non-GAAP) | 516,765 | 540,798 | 554,069 | 521,642 | 476,899 | 521,642 | ||||||||||||||
| Ending shares outstanding | 14,350,177 | 14,405,503 | 14,519,748 | 14,519,831 | 14,483,757 | 14,519,831 | ||||||||||||||
| Tangible book value per share (Non-GAAP) | $ | 36.01 | $ | 37.54 | $ | 38.16 | $ | 35.93 | $ | 32.93 | $ | 35.93 | ||||||||
(1) Average balances and yields on available-for-sale securities are based on historical amortized cost.
(2) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2023 and 2022 to increase tax exempt interest income to taxable-equivalent basis.
(3) Nonaccrual loans are included in the average asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company's consolidated financial statements included in Part I of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
(4) Earnings per share for the full fiscal year may not equal the sum of the quarterly earnings per share as a result of rounding of average shares.
(5) Amounts in prior periods' financial statements are reclassified when necessary to conform to the current period's presentation.
