Tompkins Financial Corporation Reports Increase In First Quarter Earnings

Tompkins Financial Corporation (NYSE Amex: TMP)

Tompkins Financial Corporation reported record first quarter net income of $8.8 million for the first quarter of 2011, an increase of 4.2% from the $8.4 million reported for the same period in 2010. Diluted earnings per share were $0.80 for the first quarter of 2011, a 2.6% increase from the $0.78 reported for the first quarter of 2010.

President and CEO Stephen S. Romaine commented, “We are very pleased to report that first quarter earnings represented the best first quarter in our Company’s history. Results for the quarter benefited from our diversified revenue stream, as growth in wealth management fees, insurance commission, and card services fees helped offset a decline in net interest income.”

Selected highlights for the first quarter of 2011 are included below:
  • Capital levels showed continued growth during the quarter and ratios remain well above the regulatory well capitalized minimums. Tier I capital as a percentage of average assets was 8.22%; and the ratio of total capital to risk-weighted assets of 13.66%. These ratios are up from 8.02% and 13.42%, respectively at December 31, 2010.
  • Total loans were $1.9 billion at March 31, 2011, up $27.3 million or 1.5% from March 31, 2010.
  • The level of nonperforming assets declined for the second consecutive quarter, although nonperforming assets levels remain above the totals reported at March 31, 2010. The ratio of nonperforming assets to total assets of 1.40% at March 31, 2011, continues to be well below the most recent peer averages published by the Federal Reserve and we were continuing to receive regular payments on approximately 69% of loan balances that we categorize as nonperforming.
  • Total deposits were $2.6 billion at quarter end, up 4.0% from the same period in 2010. Noninterest-bearing deposits totaled $520.6 million at March 31, 2011, an increase of 18.6% over the first quarter of 2010.
  • Other borrowings of $140.4 million at March 31, 2011 were down 26.3% from March 31, 2010, as deposit growth was used to pay down overnight borrowings with the FHLB.
  • The net interest margin for the first quarter of 2011 was 3.78% compared to 3.95% for the first quarter of 2010. Despite the decline in net interest margin, net interest income of $27.5 million for the first quarter of 2011 was down less than 1.5% when compared to the same quarter last year due to growth in earning assets (primarily in the securities portfolio).
  • Noninterest income was $12.5 million for the quarter, up 10.4% from the same period prior year. Fee income from investment services, insurance, and card services were all up for the quarter, while service charges on deposit accounts declined. Other income in the first quarter of 2011 included a $504,000 gain related to an investment in a Small Business Investment Company.
  • Noninterest expense was $25.2 million for the quarter, up 2.9% from the first quarter of 2010. The increase was mainly centered in salaries and employee benefits.
  • The provision for loan and lease losses was $1.9 million in the first quarter of 2011, compared to $2.2 million in the first quarter of 2010. Net charge-offs for the quarter of $1.7 million are up over the $1.2 million recorded for the same quarter last year, yet remain well below the most recent peer averages published by the Federal Reserve.
  • The Company’s allowance for loan and lease losses totaled $28.0 million at March 31, 2011, which represented 1.46% of total loans, compared to $27.8 million and 1.46% at December 31, 2010 and $25.4 million and 1.34% at March 31, 2010. The allowance for loan and lease losses, as a percentage of nonperforming loans improved during the most recent quarter to 64.33% from 61.46% in December 2010.

Mr. Romaine added, “Although the business and regulatory climates remain challenging, we are encouraged by these first quarter results that showed growth in earnings, revenue, and capital over the same period last year. As we celebrate our Company’s 175 th anniversary in 2011, we remain more committed than ever to our strategy of long term sustainable growth that has served us so well during the most recent, and many previous, economic downturns.”

Tompkins Financial Corporation operates 45 banking offices in the New York State markets served by the Company's three community banks - Tompkins Trust Company, The Bank of Castile, and Mahopac National Bank, insurance through Tompkins Insurance Agencies, Inc. and wealth management through Tompkins Financial Advisors.

"Safe Harbor" Statement under the Private Securities Litigation Reform of 1995:

This press release may include forward-looking statements with respect to revenue sources, growth, market risk, and corporate objectives. The Company assumes no duty, and specifically disclaims any obligation, to update forward-looking statements, and cautions that these statements are subject to numerous assumptions, risks, and uncertainties, all of which could change over time. Actual results could differ materially from forward-looking statements.

_______________________________________________________________________________

1 Federal Reserve peer ratio as of December 31, 2010, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.
   
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
 
(In thousands, except share and per share data) (Unaudited) As of As of
ASSETS 03/31/2011 12/31/2010
 
Cash and noninterest bearing balances due from banks $ 40,009

$
47,339
Interest bearing balances due from banks 7,605 2,226
Federal funds sold 17,400 0
Money market funds     100       100  
Cash and Cash Equivalents 65,114 49,665
 
Trading securities, at fair value 21,831 22,837
Available-for-sale securities, at fair value 1,049,504 1,039,608
Held-to-maturity securities, fair value of $51,258 at March 31, 2011, and $56,064
at December 31, 2010 50,108 54,973
Loans and leases, net of unearned income and deferred costs and fees 1,914,344 1,910,358
Less: Allowance for loan and lease losses     28,035       27,832  
Net Loans and Leases 1,886,309 1,882,526
 
Federal Home Loan Bank stock and Federal Reserve Bank stock 17,575 21,985
Bank premises and equipment, net 44,867 46,103
Corporate owned life insurance 41,935 40,024
Goodwill 41,649 41,649
Other intangible assets, net 4,039 4,207
Accrued interest and other assets     55,963       56,766  
Total Assets   $ 3,278,894    

$
3,260,343  
 
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market 1,348,182 1,230,815
Time 743,720 741,829
Noninterest bearing     520,615       523,229  
Total Deposits 2,612,517 2,495,873
 
Federal funds purchased and securities sold under agreements to repurchase 182,009 183,609
Other borrowings, including certain amounts at fair value of $11,454 at March 31, 2011
and $11,629 at December 31, 2010 140,353 244,193
Trust preferred debentures 25,061 25,060
Other liabilities     36,717       38,200  
Total Liabilities   $ 2,996,657     $ 2,986,935  
 
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
10,988,320 at March 31, 2011; and 10,934,385 at December 31, 2010 1,099 1,093
Additional paid-in capital 200,444 198,114
Retained earnings 81,513 76,446
Accumulated other comprehensive income (loss) 19 (1,260 )
Treasury stock, at cost – 88,400 shares at March 31, 2011, and 92,025 shares
at December 31, 2010 (2,323 ) (2,437 )
 
Total Tompkins Financial Corporation Shareholders’ Equity 280,752 271,956
Noncontrolling interests     1,485       1,452  
Total Equity   $ 282,237     $ 273,408  
Total Liabilities and Equity   $ 3,278,894     $ 3,260,343  
   
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(In thousands, except per share data) (Unaudited) 03/31/2011 03/31/2010
INTEREST AND DIVIDEND INCOME
Loans $ 25,701 $ 26,618
Due from banks 6 12
Federal funds sold 3 4
Trading securities 235 309
Available-for-sale securities 7,687 9,000
Held-to-maturity securities 365 407
Federal Home Loan Bank stock and Federal Reserve Bank stock     290       284  
Total Interest and Dividend Income     34,287       36,634  
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more 849 1,178
Other deposits 2,625 3,827
Federal funds purchased and repurchase agreements 1,291 1,425
Trust preferred debentures 405 367
Other borrowings     1,575       1,893  
Total Interest Expense     6,745       8,690  
Net Interest Income     27,542       27,944  
Less: Provision for loan/lease losses     1,910       2,183  
Net Interest Income After Provision for Loan/Lease Losses     25,632       25,761  
NONINTEREST INCOME
Investment services income 3,841 3,738
Insurance commissions and fees 3,374 3,166
Service charges on deposit accounts 1,984 2,057
Card services income 1,245 975
Mark-to-market (loss) gain on trading securities (50 ) 90
Mark-to-market gain (loss) on liabilities held at fair value 174 (128 )
Other income 1,829 1,304
Net gain on securities transactions     95       118  
Total Noninterest Income     12,492       11,320  
NONINTEREST EXPENSES
Salaries and wages 10,825 10,339
Pension and other employee benefits 4,031 3,911
Net occupancy expense of premises 1,894 1,881
Furniture and fixture expense 1,038 1,183
FDIC insurance 1,050 911
Amortization of intangible assets 170 202
Other operating expense     6,208       6,067  
Total Noninterest Expenses     25,216       24,494  
Income Before Income Tax Expense     12,908       12,587  
Income Tax Expense     4,102       4,138  
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation     8,806       8,449  
Less: Net income attributable to noncontrolling interests     33       33  
Net Income Attributable to Tompkins Financial Corporation   $ 8,773     $ 8,416  
Basic Earnings Per Share $ 0.80 $ 0.78
Diluted Earnings Per Share   $ 0.80     $ 0.78  
           
Average Consolidated Balance Sheet and Net Interest Analysis
Year to Date Period Ended Year to Date Period Ended
      March 31, 2011     March 31, 2010
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 $ 16,151 $ 6 0.15 % $ 37,885 $ 12 0.13 %
Money market funds 100 - 0.00 % 100 - 0.00 %
Securities (1)
U.S. Government securities 928,576 6,988 3.05 % 827,808 8,219 4.03 %
Trading securities 22,542 235 4.23 % 31,279 309 4.01 %
State and municipal (2) 112,328 1,447 5.22 % 105,139 1,573 6.07 %
Other securities (2)   15,237     180     4.79 %     18,563     224     4.89 %
Total securities 1,078,683 8,850 3.33 % 982,789 10,325 4.26 %
Federal Funds Sold 8,767 3 0.14 % 9,080 4 0.18 %
FHLBNY and FRB stock 18,923 290 6.21 % 19,633 284 5.87 %
Loans, net of unearned income (3)
Real estate 1,368,589 18,429 5.46 % 1,327,849 18,840 5.75 %
Commercial loans (2) 456,691 6,022 5.35 % 472,900 6,260 5.37 %
Consumer loans 72,532 1,254 7.01 % 84,083 1,460 7.04 %
Direct lease financing   8,752     131     6.07 %     11,634     176     6.14 %
Total loans, net of unearned income   1,906,564     25,836     5.50 %     1,896,466     26,736     5.72 %
Total interest-earning assets   3,029,188     34,985     4.68 %     2,945,953     37,361     5.14 %
 
Other assets 223,379 227,111
 
Total assets 3,252,567 3,173,064
                                 
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market 1,309,121 1,171 0.36 % 1,229,168 1,790 0.59 %
Time deposits > $100,000 309,746 849 1.11 % 335,260 1,178 1.42 %
Time deposits < $100,000 424,028 1,434 1.37 % 429,464 1,873 1.77 %
Brokered time deposits < $100,000   6,074     20     1.34 %     37,242     164     1.79 %
Total interest-bearing deposits 2,048,969 3,474 0.69 % 2,031,134 5,005 1.00 %
Federal funds purchased & securities sold under agreements
to repurchase 185,456 1,291 2.82 % 187,753 1,425 3.08 %
Other borrowings 171,659 1,575 3.72 % 199,202 1,893 3.85 %
Trust preferred debentures   25,061     405     6.55 %     25,056     367     5.94 %
Total interest-bearing liabilities 2,431,145 6,745 1.13 % 2,443,145 8,690 1.44 %
 
Noninterest bearing deposits 507,673 440,113
Accrued expenses and other liabilities 36,466 40,220
Total liabilities 2,975,284 2,923,478
 
Tompkins Financial Corporation Shareholders’ equity 275,814 248,119
Noncontrolling interest 1,469 1,467
Total equity 277,283 249,586
 
Total liabilities and equity $ 3,252,567 $ 3,173,064
Interest rate spread     3.55 %     3.70 %
Net interest income/margin on earning assets 28,240 3.78 % 28,671 3.95 %
 
Tax Equivalent Adjustment (698 ) (727 )
 
Net interest income per consolidated financial statements         $ 27,542               $ 27,944      
(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 a combined New York State and Federal effective
income tax rate of 40% 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 condensed consolidated financial statements included in Part I of the

Company's annual report on Form 10-K for the fiscal year ended December 31, 2010.
           
Tompkins Financial Corporation - Summary Financial Data (Unaudited)
                                 
(In thousands, except per share data   Quarter-Ended   Year-Ended
  Mar-11     Dec-10     Sep-10     Jun-10     Mar-10     Dec-10
 
Period End Balance Sheet                                    
Securities   $ 1,121,443   $ 1,117,418   $ 1,053,038   $ 1,023,220   $ 1,026,301   $ 1,117,418
Loans and leases, net of unearned income and
deferred costs and fees     1,914,344     1,910,358     1,914,064     1,900,303     1,887,038     1,910,358
Allowance for loan and lease losses     28,035     27,832     28,684     26,530     25,366     27,832
Total assets     3,278,894     3,260,343     3,247,111     3,161,648     3,206,763     3,260,343
                                     
Total deposits     2,612,517     2,495,873     2,528,528     2,460,223     2,512,201     2,495,873
Federal funds purchased and securities sold under
agreements to repurchase     182,009     183,609     191,596     175,336     181,255     183,609
Other borrowings     140,353     244,193     182,779     189,561     190,545     244,193
Trust preferred debentures     25,061     25,060     25,059     25,058     25,057     25,060
Shareholders' equity     282,237     273,408     276,495     268,683     254,444     273,408
 
Average Balance Sheet                                    
Average earning assets   $ 3,029,188   $ 3,010,361   $ 2,937,795   $ 2,953,673   $ 2,945,953   $ 2,962,056
Average assets     3,252,567     3,243,822     3,168,478     3,181,476     3,173,064     3,191,840
Average interest-bearing liabilities     2,431,145     2,424,998     2,372,630     2,424,245     2,443,145     2,416,085
Average equity     277,283     280,051     273,517     260,197     249,586     265,943
 
Share data                                    
Weighted average shares outstanding (basic)     10,905,197     10,888,138     10,845,106     10,818,218     10,724,644     10,812,502
Weighted average shares outstanding (diluted)     10,955,430     10,936,042     10,893,642     10,876,421     10,776,934     10,864,450
Period-end shares outstanding     10,953,410     10,898,475     10,878,813     10,830,001     10,793,573     10,898,475
Book value per share     25.77     25.09     25.42     24.81     23.57     25.09
 
Income Statement                                    
Net interest income   $ 27,542   $ 27,861   $ 27,864   $ 28,106   $ 27,944   $ 111,775
Provision for loan/lease losses     1,910     1,433     3,483     1,408     2,183     8,507
Noninterest income     12,492     12,281     11,227     11,331     11,320     46,159
Noninterest expense     25,216     25,183     24,852     24,516     24,494     99,045
Income tax expense     4,102     4,602     3,233     4,447     4,138     16,420
Net income attributable to Tompkins Financial
Corporation     8,773     8,892     7,490     9,033     8,416     33,831
Noncontrolling interests     33     32     33     33     33     131
Basic earnings per share   $ 0.80   $ 0.82   $ 0.69   $ 0.84   $ 0.78   $ 3.13
Diluted earnings per share   $ 0.80   $ 0.81   $ 0.69   $ 0.83   $ 0.78   $ 3.11
 
Asset Quality                                    
Net charge-offs     1,707     2,285     1,329     244     1,167     5,025
Nonaccrual loans and leases     39,902     41,501     48,966     33,645     29,521     41,501
Loans and leases 90 days past due and accruing     1,266     1,217     1,737     1,758     51     1,217
Troubled debt restructurings not included above     2,411     2,564     3,264     3,264     3,703     2,564
Total nonperforming loans and leases     43,579     45,282     53,967     38,667     33,275     45,282
OREO     2,270     1,255     1,845     1,638     558     1,255
Nonperforming assets     45,849     46,537     55,812     40,305     33,833     46,537
 
 
                                 
RATIO ANALYSIS   Quarter-Ended   Year-Ended
Credit Quality     Mar-11     Dec-10     Sep-10     Jun-10     Mar-10     Dec-10
Net loan and lease losses/ average loans                                    
and leases *     0.36%     0.48%     0.28%     0.05%     0.25%     0.26%
Nonperforming loans and leases/loans and leases     2.28%     2.37%     2.82%     2.03%     1.76%     2.37%
Nonperforming assets/assets     1.40%     1.43%     1.72%     1.27%     1.06%     1.43%
Allowance/nonperforming loans and leases     64.33%     61.46%     53.15%     68.61%     76.23%     61.46%
Allowance/loans and leases     1.46%     1.46%     1.50%     1.40%     1.34%     1.46%
 
Capital Adequacy (period-end)                                    
Tier I capital / average assets     8.22%     8.02%     8.01%     7.77%     7.56%     8.02%
Total capital / risk-weighted assets     13.66%     13.42%     13.14%     13.10%     12.56%     13.42%
 
Profitability                                    
Return on average assets *     1.09%     1.09%     0.94%     1.14%     1.08%     1.06%
Return on average equity *     12.83%     12.60%     10.86%     13.92%     13.68%     12.72%
Net interest margin (TE) *     3.78%     3.75%     3.85%     3.91%     3.95%     3.86%
* Quarterly ratios have been annualized

Copyright Business Wire 2010

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