Tompkins Financial Corporation (NYSE Amex: TMP)

Tompkins Financial Corporation reported record net income of $9.4 million for the second quarter of 2011, an increase of 4.1% over the $9.0 million reported for the same period in 2010. Diluted earnings per share were $0.85 for the second quarter of 2011, a 2.4% increase over the $0.83 reported for the second quarter of 2010.

For the six months ended June 30, 2011, net income was $18.2 million compared to $17.4 million for the same period prior year. Diluted earnings per share totaled $1.65 for the first six months of 2011, an increase of 2.5% over the $1.61 reported for the first six months of 2010.

Selected highlights for the second quarter and year-to-date period included:
  • Diluted earnings per share as of June 30, 2011, reflect the best quarter and year-to-date results in Company history.
  • The Company’s board of directors approved a cash dividend of $0.36 per share to be paid in the third quarter of 2011, a 5.9% increase from the immediately preceding quarter. The increase follows a trend of 22 consecutive years of increases in annual cash dividends paid to shareholders through the 2010 calendar year.
  • Total revenue was $40.0 million for the second quarter of 2011 and $80.0 million for the first six months of 2011, up 1.3% and 1.6%, respectively, over the same periods in 2010.
  • Total loans were $1.9 billion at June 30, 2011, up $20.4 million or 1.1% from June 30, 2010.
  • Total deposits were $2.6 billion at quarter end, up 4.5% from the same period in 2010. Noninterest-bearing deposits totaled $536.3 million at June 30, 2011, an increase of 13.1% over the same period in 2010.
  • The net interest margin for the second quarter of 2011 was 3.77%, compared to 3.78% for the first quarter of 2011, and 3.91% for the second quarter of 2010. Despite the decline in net interest margin over the past 12 months, net interest income of $28.0 million for the second quarter of 2011 was down less than 1.0% when compared to the same quarter last year. Growth in earning assets, primarily in the securities portfolio, helped mitigate the earnings impact of the decline in margin.
  • Noninterest income was up 6.0% for the quarter and up 8.2% for the year-to-date period. Fee income from investment services, insurance, and card services were all up for both the quarter and year-to-date periods, while service charges on deposit accounts declined. The lower level of service charges on deposit accounts was impacted by regulatory changes that went into effect in the third quarter of 2010.
  • Noninterest expense for the second quarter of 2011 was $25.2 million, up 2.6% over the same period prior year. Noninterest expense for the year-to-date period was $50.4 million, an increase of 2.8% over the first six months of 2010.
  • Favorable trends in net charge-offs and nonperforming assets contributed to a decline in the provision for loan and lease losses from $1.4 million in the second quarter of 2010, to $1.0 million in the second quarter of 2011.
  • Nonperforming assets declined for the third consecutive quarter, although nonperforming assets levels remain above the totals reported at June 30, 2010. The ratio of nonperforming assets to total assets of 1.30% at June 30, 2011, continues to be well below the most recent peer averages published by the Federal Reserve. The Company continues to receive regular payments on over 60% of loan balances that we categorize as nonperforming.
  • Net charge-offs declined for the second consecutive quarter. Although net charge-offs for the quarter of $679,000 are up over the $244,000 recorded for the same quarter last year, they remain well below the most recent peer averages published by the Federal Reserve.
  • The Company’s allowance for loan and lease losses totaled $28.4 million at June 30, 2011, which represented 1.48% of total loans, compared to $27.8 million and 1.46% at December 31, 2010, and $26.5 million and 1.40% at June 30, 2010. The allowance for loan and lease losses coverage of nonperforming loans improved during the most recent quarter to 69.23% up from 61.46% at December 31, 2010, and 68.61% at June 30, 2010.
  • Capital levels showed continued growth during the quarter and ratios remain well above the regulatory well capitalized minimums. Tier 1 capital as a percentage of average assets was 8.39%; and the ratio of total capital to risk-weighted assets was 13.98%. These ratios are up from 8.02% and 13.42%, respectively at December 31, 2010.

Stephen S. Romaine, President and CEO stated, “We are pleased to report that Tompkins Financial has achieved record financial performance through the first half of 2011. We are proud of this achievement as well as our improving asset quality trends. This performance during these trying economic times shows the strength of our brand of community banking.”

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 March 31, 2011, 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 06/30/2011 12/31/2010
Cash and noninterest bearing balances due from banks $ 49,576 $ 47,339
Interest bearing balances due from banks 1,803 2,226
Money market funds         100           100  
Cash and Cash Equivalents 51,479 49,665
 
Trading securities, at fair value 21,102 22,837
Available-for-sale securities, at fair value 1,087,700 1,039,608

Held-to-maturity securities, fair value of $30,439 at June 30, 2011, and $56,064

at December 31, 2010
29,761 54,973
Loans and leases, net of unearned income and deferred costs and fees 1,920,716 1,910,358
Less: Allowance for loan and lease losses         28,361           27,832  
Net Loans and Leases 1,892,355 1,882,526
 
Federal Home Loan Bank stock and Federal Reserve Bank stock 18,800 21,985
Bank premises and equipment, net 44,749 46,103
Corporate owned life insurance 42,299 40,024
Goodwill 44,032 41,649
Other intangible assets, net 4,470 4,207
Accrued interest and other assets         50,851           56,766  

Total Assets
      $ 3,287,598         $ 3,260,343  
 
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market 1,320,669 1,230,815
Time 715,062 741,829
Noninterest bearing         536,277           523,229  
Total Deposits 2,572,008 2,495,873
 
Federal funds purchased and securities sold under agreements to repurchase 178,545 183,609
Other borrowings, including certain amounts at fair value of $11,656 at June 30, 2011
and $11,629 at December 31, 2010 172,643 244,193
Trust preferred debentures 25,062 25,060
Other liabilities         39,280           38,200  
Total Liabilities       $ 2,987,538         $ 2,986,935  
 
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
11,087,804 at June 30, 2011; and 10,934,385 at December 31, 2010 1,109 1,093
Additional paid-in capital 204,284 198,114
Retained earnings 87,188 76,446
Accumulated other comprehensive income (loss) 8,375 (1,260 )
Treasury stock, at cost – 90,588 shares at June 30, 2011, and 92,025 shares
at December 31, 2010 (2,413 ) (2,437 )
 
Total Tompkins Financial Corporation Shareholders’ Equity 298,543 271,956
Noncontrolling interests         1,517           1,452  
Total Equity       $ 300,060         $ 273,408  
Total Liabilities and Equity       $ 3,287,598         $ 3,260,343  
 
 
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
           
Three Months Ended Six Months Ended
(In thousands, except per share data) (Unaudited) 06/30/2011       06/30/2010 06/30/2011       06/30/2010
INTEREST AND DIVIDEND INCOME
Loans $ 25,883 $ 26,750 $ 51,584 $ 53,369
Due from banks 4 10 9 22
Federal funds sold 1 6 5 9
Trading securities 220 278 455 588
Available-for-sale securities 7,896 8,794 15,583 17,793
Held-to-maturity securities 331 394 696 802
Federal Home Loan Bank stock and Federal Reserve Bank stock         219         218         509         501
Total Interest and Dividend Income         34,554         36,450         68,841         73,084
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more 868 1,146 1,717 2,324
Other deposits 2,565 3,502 5,190 7,329
Federal funds purchased and securities sold under agreements to repurchase 1,248 1,308 2,540 2,733
Trust preferred debentures 388 436 792 803
Other borrowings         1,533         1,952         3,108         3,845
Total Interest Expense         6,602         8,344         13,347         17,034
Net Interest Income         27,952         28,106         55,494         56,050
Less: Provision for loan and lease losses         1,005         1,408         2,915         3,591
Net Interest Income After Provision for Loan and Lease Losses         26,947         26,698         52,579         52,459
NONINTEREST INCOME
Investment services income 3,825 3,604 7,665 7,341
Insurance commissions and fees 3,459 3,191 6,833 6,357
Service charges on deposit accounts 2,107 2,430 4,091 4,487
Card services income 1,269 1,067 2,514 2,041
Mark-to-market gain on trading securities 165 291 115 381
Mark-to-market (loss) on liabilities held at fair value (202) (490) (27) (618)
Other income 1,390 1,180 3,219 2,486
Net gain on securities transactions         0         58         95         176
Total Noninterest Income         12,013         11,331         24,505         22,651
NONINTEREST EXPENSES
Salaries and wages 11,211 10,669 22,036 21,008
Pension and other employee benefits 3,657 3,442 7,688 7,354
Net occupancy expense of premises 1,706 1,725 3,601 3,606
Furniture and fixture expense 1,199 1,143 2,237 2,326
FDIC insurance 531 857 1,582 1,769
Amortization of intangible assets 146 199 316 401
Other operating expense         6,713         6,481         12,920         12,547
Total Noninterest Expenses         25,163         24,516         50,380         49,011
Income Before Income Tax Expense         13,797         13,513         26,704         26,099
Income Tax Expense         4,364         4,447         8,466         8,585

Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation
        9,433         9,066         18,238         17,514
Less: Net income attributable to noncontrolling interests         33         33         65         65
Net Income Attributable to Tompkins Financial Corporation       $ 9,400       $ 9,033       $ 18,173       $ 17,449

Basic Earnings Per Share
$ 0.86 $ 0.84 $ 1.66 $ 1.62
Diluted Earnings Per Share       $ 0.85       $ 0.83       $ 1.65       $ 1.61
 
 
Average Consolidated Balance Sheet and Net Interest Analysis
          Quarter Ended     Year to Date Period Ended     Year to Date Period Ended
              June 30, 2011       June 30, 2011       June 30, 2010
Average         Average         Average        
Balance Average Balance Average Balance Average
(Dollar amounts in thousands)         (QTD)       Interest     Yield/Rate       (YTD)       Interest     Yield/Rate       (YTD)       Interest     Yield/Rate
ASSETS
Interest-earning assets
Interest-bearing balances due from banks $ 10,352 $ 4 0.15% $ 13,235 $ 9 0.14% $ 36,979 $ 22 0.12%
Money market funds 100 - 0.00% 100 - 0.00% 100 - 0.00%
Securities (1)
U.S. Government securities 963,145 7,227 3.01% 945,956 14,215 3.03% 835,570 16,248 3.92%
Trading securities 21,569 220 4.09% 22,053 455 4.16% 30,218 588 3.92%
State and municipal (2) 103,066 1,364 5.31% 107,672 2,811 5.26% 105,181 3,109 5.96%
Other securities (2) 14,348       168     4.70%       14,790       348     4.74%       18,171       442     4.91%
Total securities 1,102,128 8,979 3.27% 1,090,471 17,829 3.30% 989,140 20,387 4.16%
Federal Funds Sold 4,111 1 0.10% 6,426 5 0.16% 11,256 9 0.16%
FHLBNY and FRB stock 18,092 219 4.86% 18,505 509 5.55% 19,514 501 5.18%
Loans, net of unearned income (3)
Real estate 1,384,792 18,550 5.37% 1,376,735 36,978 5.42% 1,332,798 37,856 5.73%
Commercial loans (2) 451,648 6,153 5.46% 454,155 12,176 5.41% 465,834 12,544 5.43%
Consumer loans 68,382 1,189 6.97% 70,446 2,443 6.99% 82,809 2,862 6.97%
Direct lease financing 7,889       115     5.85%       8,318       246     5.96%       11,404       342     6.05%
Total loans, net of unearned income 1,912,711       26,007     5.45%       1,909,654       51,843     5.47%       1,892,845       53,604     5.71%
Total interest-earning assets 3,047,494       35,210     4.63%       3,038,391       70,195     4.66%       2,949,834       74,523     5.09%
 
Other assets 224,401 223,893 227,459
 
 

Total assets
        3,271,895                     3,262,284                     3,177,293              

LIABILITIES & EQUITY

 
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market 1,355,790 1,284 0.38% 1,332,585 2,455 0.37% 1,229,835 3,395 0.56%
Time deposits > $100,000 323,435 868 1.08% 316,628 1,717 1.09% 338,998 2,324 1.38%
Time deposits < $100,000 402,329 1,280 1.28% 413,119 2,714 1.32% 430,141 3,657 1.71%
Brokered time deposits < $100,000 699       1     0.57%       3,372       21     1.26%       32,326       277     1.73%
Total interest-bearing deposits 2,082,253 3,433 0.66% 2,065,704 6,907 0.67% 2,031,300 9,653 0.96%

Federal funds purchased & securities sold underagreements
to repurchase 171,341 1,248 2.92% 178,359 2,540 2.87% 182,502 2,733 3.02%
Other borrowings 153,900 1,533 4.00% 162,731 3,108 3.85% 194,784 3,845 3.98%
Trust preferred debentures 25,062       388     6.21%       25,061       792     6.37%       25,057       803     6.46%
Total interest-bearing liabilities 2,432,556 6,602 1.09% 2,431,855 13,347 1.11% 2,433,643 17,034 1.41%

Noninterest bearing deposits
514,977 511,345 448,232

Accrued expenses and other liabilities
36,021 36,242 40,498
 

Total liabilities
2,983,554 2,979,442 2,922,373
 
Tompkins Financial Corporation Shareholders’ equity 286,839 281,357 253,436

Noncontrolling interest
1,502

 
1,485 1,484
 
Total equity 288,341 282,842 254,920
 
Total liabilities and equity $ 3,271,895 $ 3,262,284 $ 3,177,293
Interest rate spread       3.54%       3.55%       3.68%
Net interest income/margin on earning assets 28,608 3.77% 56,848 3.77% 57,489 3.93%
 
Tax Equivalent Adjustment (656) (1,354) (1,439)
 
  Net interest income per consolidated financial statements               $ 27,952                   $ 55,494                   $ 56,050      
(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
  Jun-11       Mar-11       Dec-10       Sep-10       Jun-10       Dec-10
                   
Period End Balance Sheet                                                  
Securities       $ 1,138,563     $ 1,121,443     $ 1,117,418     $ 1,053,038     $ 1,023,220     $ 1,117,418

Loans and leases, net of unearned income anddeferred costs and fees
        1,920,716       1,914,344       1,910,358       1,914,064       1,900,303       1,910,358
Allowance for loan and lease losses         28,361       28,035       27,832       28,684       26,530       27,832
Total assets         3,287,598       3,278,894       3,260,343       3,247,111       3,161,648       3,260,343
                                                   
Total deposits         2,572,008       2,612,517       2,495,873       2,528,528       2,460,223       2,495,873

Federal funds purchased and securities sold underagreements to repurchase
        178,545       182,009       183,609       191,596       175,336       183,609
Other borrowings         172,643       140,353       244,193       182,779       189,561       244,193
Trust preferred debentures         25,062       25,061       25,060       25,059       25,058       25,060
Shareholders' equity         300,060       282,237       273,408       276,495       268,683       273,408
 
Average Balance Sheet                                                  
Average earning assets       $ 3,047,494     $ 3,029,188     $ 3,010,361     $ 2,937,795     $ 2,953,673     $ 2,962,056
Average assets         3,271,895       3,252,549       3,243,822       3,168,478       3,181,476       3,191,840
Average interest-bearing liabilities         2,432,556       2,431,145       2,424,998       2,372,630       2,424,245       2,416,085
Average equity         288,341       277,283       280,051       273,517       260,197       265,943
 
Share data                                                  
Weighted average shares outstanding (basic)         10,974,616       10,905,197       10,888,138       10,845,106       10,818,218       10,812,502
Weighted average shares outstanding (diluted)         11,016,515       10,955,430       10,936,042       10,893,642       10,876,421       10,864,450
Period-end shares outstanding         11,051,894       10,952,410       10,898,475       10,878,813       10,830,001       10,898,475
Book value per share         27.15       25.77       25.09       25.42       24.81       25.09
 
Income Statement                                                  
Net interest income       $ 27,952     $ 27,542     $ 27,861     $ 27,864     $ 28,106     $ 111,775
Provision for loan/lease losses         1,005       1,910       1,433       3,483       1,408       8,507
Noninterest income         12,013       12,492       12,281       11,227       11,331       46,159
Noninterest expense         25,163       25,216       25,183       24,852       24,516       99,045
Income tax expense         4,364       4,102       4,602       3,233       4,447       16,420

Net income attributable to Tompkins FinancialCorporation
        9,400       8,773       8,892       7,490       9,033       33,831
Noncontrolling interests         33       33       32       33       33       131
Basic earnings per share       $ 0.86     $ 0.80     $ 0.82     $ 0.69     $ 0.84     $ 3.13
Diluted earnings per share       $ 0.85     $ 0.80     $ 0.81     $ 0.69     $ 0.83     $ 3.11
 
Asset Quality                                                  
Net charge-offs         679       1,707       2,285       1,329       244       5,025
Nonaccrual loans and leases         38,457       39,902       41,501       48,966       33,645       41,501
Loans and leases 90 days past due and accruing         2,512       1,266       1,217       1,737       1,758       1,217
Troubled debt restructurings not included above         0       2,411       2,564       3,264       3,264       2,564
Total nonperforming loans and leases         40,969       43,579       45,282       53,967       38,667       45,282
OREO         1,742       2,270       1,255       1,845       1,638       1,255
Nonperforming assets         42,711       45,849       46,537       55,812       40,305       46,537
 
RATIO ANALYSIS   Quarter-Ended     Year-Ended
Credit Quality         Jun-11       Mar-11       Dec-10       Sep-10       Jun-10       Dec-10
Net loan and lease losses/ average loans                                            
and leases *   0.14%       0.36%       0.48%       0.28%       0.05%       0.26%
Nonperforming loans and leases/loans and leases         2.13%       2.28%       2.37%       2.82%       2.03%       2.37%
Nonperforming assets/assets         1.30%       1.40%       1.43%       1.72%       1.27%       1.43%
Allowance/nonperforming loans and leases         69.23%       64.33%       61.46%       53.15%       68.61%       61.46%
Allowance/loans and leases         1.48%       1.46%       1.46%       1.50%       1.40%       1.46%
 
Capital Adequacy (period-end)                                                  
Tier I capital / average assets         8.39%       8.22%       8.02%       8.01%       7.77%       8.02%
Total capital / risk-weighted assets         13.98%       13.66%       13.42%       13.14%       13.10%       13.42%
 
Profitability                                                  
Return on average assets *         1.15%       1.09%       1.09%       0.94%       1.14%       1.06%
Return on average equity *         13.08%       12.83%       12.60%       10.86%       13.92%       12.72%
Net interest margin (TE) *         3.77%       3.78%       3.75%       3.85%       3.91%       3.86%
* Quarterly ratios have been annualized
 

Copyright Business Wire 2010

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