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Tompkins Financial Corporation Reports Increase In Fourth Quarter Earnings And Record 2011 Earnings

Tompkins Financial Corporation (TMP–NYSE Amex)

Tompkins Financial Corporation reported net income of $9.4 million for the fourth quarter of 2011, an increase of 5.6% over the $8.9 million reported for the same period in 2010. Diluted earnings per share were $0.84 for the fourth quarter of 2011, a 3.7% increase over the $0.81 reported for the fourth quarter of 2010.

For the twelve months ended December 31, 2011, net income was $35.4 million, an increase of 4.7% over net income of $33.8 million for the same period in 2010. Full year 2011 diluted earnings per share totaled $3.20, an increase of 2.9% over the $3.11 reported for 2010.

Stephen S. Romaine, President and CEO stated, “2011 was a strong year for our Company with net income and total assets at record levels. In an economic environment that continued to be challenging, we were able to grow both loans and deposits in 2011. We are also pleased with the favorable trends that we are seeing in asset quality measures, with classified loans down from prior quarter and year end 2010.”

Selected highlights for the fourth quarter and year-to-date period included:

  • Return on average equity was 12.02% in 2011, which ranks in the top 15% of our most recent peer group average as published by the Federal Reserve 1.
  • Total loans were $2.0 billion at December 31, 2011, up $71.5 million or 3.7% from December 31, 2010.
  • Total deposits were $2.7 billion at December 31, 2011, up 6.6% from the same period in 2010. Noninterest-bearing deposits totaled $616.4 million at December 31, 2011, an increase of 17.8% over the same period in 2010.
  • Total revenue was $39.2 million for the fourth quarter of 2011 and $159.4 million for the twelve months ended December 31, 2011, down 2.4% and up 0.9%, respectively, compared to the same periods in 2010.
  • The net interest margin for the fourth quarter of 2011 was 3.62%, compared to 3.71% for the third quarter of 2011, and 3.75% for the fourth quarter of 2010. For the year to date, net interest margin was 3.72% in 2011, compared to 3.86% for 2010. Despite the decline in net interest margin over the past 12 months, net interest income of $28.0 million for the fourth quarter of 2011 and $111.4 million for the full year of 2011 were comparable to the same periods in 2010. Growth in interest earning assets, primarily in the securities portfolio, helped mitigate the earnings impact of the decline in margin.
  • Noninterest income was down 8.8% for the quarter and up 4.0% for the full year 2011 compared to the same periods in 2010. Card services income and insurance commissions and fees were up from the prior year for both the quarter and year to date periods. Investment services income was down 10.3% for the quarter and was flat for the twelve months ended December 31, 2011, when compared to the same periods in 2010. Other income was down $958,000 or 39.2% for the quarter and up $374,000 or 5.9% for the twelve months ended December 31, 2011 compared to the same periods in 2010. Contributing to the decrease from prior quarter were lower loan fees and lower gains on the sale of residential mortgage loans.
  • Noninterest expense for the fourth quarter of 2011 was $24.2 million, down 3.9% compared to the same period prior year. Noninterest expense for the year-to-date period was $98.6 million, comparable to the twelve months ended December 31, 2010. A reduction in FDIC insurance costs contributed to the decrease in noninterest expense for both the fourth quarter and full year.
  • Provision for loan and lease losses was $1.2 million for the fourth quarter of 2011, down from $4.9 million in the third quarter of 2011, and $1.4 million in the fourth quarter of 2010. For the full year, provision for loan and lease losses was $8.9 million, up from $8.5 million in 2010. The third quarter provision was largely the result of an increase in loan charge-offs during the period, which included a single credit that represented 91.7% of the $5.5 million in gross charge offs during the third quarter.
  • Nonperforming assets were generally flat when compared to the most recent two quarters, and are down 8.2% when compared to the same quarter last year. The ratio of nonperforming assets to total assets of 1.26% at December 31, 2011, has improved for five consecutive quarters and remains well below the most recent peer averages of 3.10% published as of September 30, 2011, by the Federal Reserve 1. The Company continues to receive regular payments on over 64% of loan balances that we categorize as nonperforming.
  • The Company’s allowance for loan and lease losses totaled $27.6 million at December 31, 2011, which represented 1.39% of total loans, compared to $27.8 million and 1.46% at December 31, 2010. The allowance for loan and lease losses covered 66.65% of nonperforming loans as of December 31, 2011, reflecting improvement from 61.46% at December 31, 2010.
  • Capital levels continued to improve during the quarter and ratios remain well above the regulatory well capitalized minimums. Tier 1 capital as a percentage of average assets was 8.51%; and the ratio of total capital to risk-weighted assets was 14.17%.

Mr. Romaine, added, “Although the interest rate and economic environment will remain a challenge for our business, our strong balance sheet and earnings performance, along with a dedicated and professional team of employees, continues to position us well to take advantage of new growth opportunities.”

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