Tompkins Financial Corporation Reports Increase In Third Quarter Earnings

Tompkins Financial Corporation (TMP–NYSE Amex)

Tompkins Financial Corporation reported net income of $7.9 million for the third quarter of 2011, an increase of 4.9% over the $7.5 million reported for the same period in 2010. Diluted earnings per share were $0.71 for the third quarter of 2011, a 2.9% increase over the $0.69 reported for the third quarter of 2010.

For the nine months ended September 30, 2011, net income was $26.0 million, compared to $24.9 million for the same period last year. Diluted earnings per share totaled $2.36 for the first nine months of 2011, an increase of 2.6% over the $2.30 reported for the first nine months of 2010.

Stephen S. Romaine, President and CEO stated, “Growth has been challenging in the current economic climate, which makes our results through the first nine months of the year especially rewarding. Net income, revenue, loans, and deposits all showed increases when compared to the prior year, and our year to date earnings reflected the best performance through the first nine months of the year in the Company’s history.”

Selected highlights for the third quarter and year-to-date period included:
  • Diluted earnings per share for the quarter and year to date periods remain ahead of prior year.
  • Total revenue was $40.2 million for the third quarter of 2011 and $120.2 million for the first nine months of 2011, up 2.9% and 2.1%, respectively, over the same periods in 2010.
  • Total loans were $2.0 billion at September 30, 2011, up $37.5 million or 2.0% from September 30, 2010.
  • Total deposits were $2.7 billion at quarter end, up 5.8% from the same period in 2010. Noninterest-bearing deposits totaled $570.4 million at September 30, 2011, an increase of 13.9% over the same period in 2010.
  • The net interest margin for the third quarter of 2011 was 3.71%, compared to 3.77% for the second quarter of 2011, and 3.85% for the third quarter of 2010. Despite the decline in net interest margin over the past 12 months, net interest income of $27.9 million for the third quarter of 2011 was comparable to the same quarter last year. Growth in interest earning assets, primarily in the securities portfolio, helped mitigate the earnings impact of the decline in margin.
  • Noninterest income was up 9.7% for the quarter and up 8.7% for the year-to-date period. Card services income, insurance commissions and fees, and investment services income were all up from the prior year for both the quarter and year to date periods. Similarly, other income was up for the quarter and year to date periods, and benefited from approximately $600,000 in nonrecurring gains on the sale of real estate and other assets in the third quarter of 2011.
  • Noninterest expense for the third quarter of 2011 was $24.0 million, down 3.5% over the same period prior year. Noninterest expense for the year-to-date period was $74.4 million, comparable to the nine months ended September 30, 2010. A reduction in FDIC insurance costs contributed to the reduction in noninterest expense, when compared to the third quarter of 2010.
  • Provision for loan and lease losses was $4.9 million for the third quarter of 2011, up from $1.0 million in the second quarter of 2011, and $3.5 million in the third quarter of 2010. The increase in the provision for loan and lease losses during the quarter 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 quarter.
  • Nonperforming assets were generally flat when compared to the most recent prior quarter, and are down 23.2% when compared to the same quarter last year. The ratio of nonperforming assets to total assets of 1.28% at September 30, 2011, has improved for four consecutive quarters and remains well below the most recent peer averages of 3.24% published as of June 30, 2011, by the Federal Reserve1. The Company continues to receive regular payments on over 60% of loan balances that we categorize as nonperforming.
  • The Company’s allowance for loan and lease losses totaled $27.9 million at September 30, 2011, which represented 1.43% of total loans, compared to $27.8 million and 1.46% at December 31, 2010 and $28.7 million and 1.50% at September 30, 2010. The allowance for loan and lease losses coverage of nonperforming loans was 67.60% as of September 30, 2011, reflecting improvement from 61.46% at December 31, 2010, and 53.15% at September 30, 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 8.55%; and the ratio of total capital to risk-weighted assets was 14.11%. Both of these regulatory capital ratios have improved for the last seven consecutive quarters.

Mr. Romaine, added, “Our strategy of balancing reasonable growth expectations with prudent management of risk has continued to serve us well in these challenging times. Despite an increase in net charge-offs during the quarter, the general trend in credit quality, as evidenced by a continued decline in classified loans, has continued to improve over the last several quarters. Although the interest rate and economic environment will remain a challenge for our business, we are extremely pleased to see continued growth in a majority of our key business lines.”

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 June 30, 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 09/30/2011 12/31/2010
 
Cash and noninterest bearing balances due from banks $ 57,496 $ 47,339
Interest bearing balances due from banks 51,173 2,226
Money market funds   100     100
Cash and Cash Equivalents 108,769 49,665
 
Trading securities, at fair value 20,432 22,837
Available-for-sale securities, at fair value 1,082,970 1,039,608
Held-to-maturity securities, fair value of $28,053 at September 30, 2011, and $56,064
at December 31, 2010 27,367 54,973
Loans and leases, net of unearned income and deferred costs and fees 1,951,598 1,910,358
Less: Allowance for loan and lease losses   27,878     27,832
Net Loans and Leases 1,923,720 1,882,526
 
Federal Home Loan Bank stock and Federal Reserve Bank stock 16,906 21,985
Bank premises and equipment, net 44,991 46,103
Corporate owned life insurance 42,656 40,024
Goodwill 43,958 41,649
Other intangible assets, net 4,318 4,207
Accrued interest and other assets   42,930     56,766
  Total Assets $ 3,359,017   $ 3,260,343
 
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market 1,402,542 1,230,815
Time 702,716 741,829
  Noninterest bearing   570,416     523,229
Total Deposits 2,675,674 2,495,873
 
Federal funds purchased and securities sold under agreements to repurchase 171,943 183,609
Other borrowings, including certain amounts at fair value of $12,117 at September 30, 2011
and $11,629 at December 31, 2010 138,001 244,193
Trust preferred debentures 25,063 25,060
Other liabilities   39,001     38,200
  Total Liabilities $ 3,049,682   $ 2,986,935
 
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
11,158,796 at September 30, 2011; and 10,934,385 at December 31, 2010 1,116 1,093
Additional paid-in capital 206,010 198,114
Retained earnings 91,063 76,446
Accumulated other comprehensive income (loss) 12,097 (1,260)
Treasury stock, at cost – 92,800 shares at September 30, 2011, and 92,025 shares
at December 31, 2010 (2,501) (2,437)
 
Total Tompkins Financial Corporation Shareholders’ Equity 307,785 271,956
Noncontrolling interests   1,550     1,452
  Total Equity $ 309,335   $ 273,408
  Total Liabilities and Equity $ 3,359,017   $ 3,260,343
 
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
(In thousands, except per share data) (Unaudited) 09/30/2011 09/30/2010 09/30/2011 09/30/2010
INTEREST AND DIVIDEND INCOME
Loans $ 26,134 $ 26,675 $ 77,718 $ 80,044
Due from banks 1 5 10 27
Federal funds sold 1 5 6 14
Trading securities 213 255 668 843
Available-for-sale securities 7,524 8,215 23,110 26,009
Held-to-maturity securities 249 359 944 1,160
Federal Home Loan Bank stock and Federal Reserve Bank stock   212   230   719   731
Total Interest and Dividend Income   34,334   35,744   103,175   108,828
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more 817 1,035 2,534 3,360
Other deposits 2,449 3,178 7,639 10,506
Federal funds purchased and securities sold under agreements to repurchase 1,204 1,336 3,743 4,069
Trust preferred debentures 405 407 1,197 1,210
Other borrowings   1,546   1,924   4,655   5,770
Total Interest Expense   6,421   7,880   19,768   24,915
Net Interest Income   27,913   27,864   83,407   83,913
Less: Provision for loan and lease losses   4,870   3,483   7,785   7,074
Net Interest Income After Provision for Loan and Lease Losses   23,043   24,381   75,622   76,839
NONINTEREST INCOME
Investment services income 3,425 3,423 11,090 10,764
Insurance commissions and fees 3,573 3,365 10,406 9,722
Service charges on deposit accounts 2,165 2,115 6,256 6,602
Card services income 1,271 1,105 3,785 3,147
Mark-to-market gain on trading securities 55 177 170 558
Mark-to-market loss on liabilities held at fair value (461) (323) (488) (940)
Other income 1,998 1,401 5,217 3,887
Net other-than-temporary impairment losses 0 (34) 0 (34)
Net gain (loss) on securities transactions   286   (2)   381   173
Total Noninterest Income   12,312   11,227   36,817   33,879
NONINTEREST EXPENSES
Salaries and wages 11,190 10,611 33,225 31,618
Pension and other employee benefits 3,374 3,616 11,063 10,970
Net occupancy expense of premises 1,721 1,820 5,321 5,427
Furniture and fixture expense 1,088 986 3,325 3,312
FDIC insurance 475 978 2,057 2,747
Amortization of intangible assets 137 186 453 586
Other operating expense   5,988   6,655   18,908   19,202
Total Noninterest Expenses   23,973   24,852   74,352   73,862
Income Before Income Tax Expense   11,382   10,756   38,087   36,856
Income Tax Expense   3,490   3,233   11,956   11,818
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation   7,892   7,523   26,131   25,038
Less: Net income attributable to noncontrolling interests   33   33   98   98
Net Income Attributable to Tompkins Financial Corporation $ 7,859 $ 7,490 $ 26,033 $ 24,940
Basic Earnings Per Share $ 0.71 $ 0.69 $ 2.37 $ 2.31
Diluted Earnings Per Share $ 0.71 $ 0.69 $ 2.36 $ 2.30
Average Consolidated Balance Sheet and Net Interest Analysis
    Quarter Ended Year to Date Period Ended Year to Date Period Ended
        September 30, 2011   September 30, 2011   September 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 $ 3,597 $ 1 0.11% $ 9,987 $ 10 0.13% $ 30,112 $ 27 0.12%
Money market funds 100 - 0.00% 100 - 0.00% 100 - 0.00%
Securities (1)
U.S. Government securities 972,856 6,903 2.81% 955,022 21,119 2.96% 837,883 23,710 3.78%
Trading securities 20,856 213 4.05% 21,650 668 4.13% 28,569 843 3.95%
State and municipal (2) 82,592 1,175 5.64% 99,220 3,987 5.37% 105,441 4,581 5.81%
Other securities (2) 13,541   155 4.54%   14,369   503 4.68%   17,855   654 4.90%
Total securities 1,089,845 8,446 3.07% 1,090,261 26,277 3.22% 989,748 29,788 4.02%
Federal Funds Sold 5,868 1 0.07% 6,238 6 0.13% 10,956 14 0.17%
FHLBNY and FRB stock 17,907 211 4.67% 18,303 719 5.25% 19,526 731 5.01%
Loans, net of unearned income (3)
Real estate 1,404,516 18,759 5.30% 1,386,097 55,738 5.38% 1,340,032 56,878 5.67%
Commercial loans (2) 454,602 6,266 5.47% 454,306 18,440 5.43% 462,442 18,749 5.42%
Consumer loans 66,884 1,150 6.82% 69,245 3,593 6.94% 81,818 4,271 6.98%
Direct lease financing 7,027   103 5.81%   7,883   348 5.90%   11,044   498 6.46%
Total loans, net of unearned income 1,933,029   26,278 5.39%   1,917,531   78,119 5.45%   1,895,336   80,396 5.67%
Total interest-earning assets 3,050,346   34,937 4.54%   3,042,420   105,131 4.62%   2,945,778   110,956 5.04%
 
Other assets 235,813 227,910 228,545
 
Total assets 3,286,159 3,270,330 3,174,323
                                   
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market 1,336,593 1,239 0.37% 1,333,934 3,694 0.37% 1,217,756 4,776 0.52%
Time deposits > $100,000 312,583 817 1.04% 315,265 2,534 1.07% 333,814 3,360 1.35%
Time deposits < $100,000 393,637 1,210 1.22% 406,554 3,924 1.29% 432,415 5,382 1.66%
Brokered time deposits < $100,000 219   0 0.00%   2,309   21 1.22%   27,968   348 1.66%
Total interest-bearing deposits 2,043,032 3,266 0.63% 2,058,062 10,173 0.66% 2,011,953 13,866 0.92%
Federal funds purchased & securities sold under agreements
to repurchase 167,845 1,204 2.85% 174,816 3,743 2.86% 183,521 4,069 2.96%
Other borrowings 155,636 1,546 3.94% 160,340 4,655 3.88% 192,551 5,770 4.01%
Trust preferred debentures 25,063   405 6.41%   25,062   1,197 6.39%   25,057   1,210 6.46%
Total interest-bearing liabilities 2,391,576 6,421 1.06% 2,418,280 19,768 1.09% 2,413,082 24,915 1.38%
 
Noninterest bearing deposits 551,532 524,888 458,931
Accrued expenses and other liabilities 39,190 37,236 41,122
Total liabilities 2,982,298 2,980,404 2,913,135
 
Tompkins Financial Corporation Shareholders’ equity 302,786 288,579 259,687
Noncontrolling interest 1,075 1,347 1,501
Total equity 303,861 289,926 261,188
 
Total liabilities and equity $ 3,286,159 $ 3,270,330 $ 3,174,323
Interest rate spread   3.47%   3.53%   3.66%
Net interest income/margin on earning assets 28,516 3.71% 85,363 3.75% 86,041 3.91%
 
Tax Equivalent Adjustment (603) (1,956) (2,128)
 
  Net interest income per consolidated financial statements     $ 27,913       $ 83,407       $ 83,913  
(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 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
    Sep-11     Jun-11     Mar-11     Dec-10     Sep-10     Dec-10
           
Period End Balance Sheet                                    
Securities   $ 1,130,769   $ 1,138,563   $ 1,121,443   $ 1,117,418   $ 1,053,038   $ 1,117,418
Loans and leases, net of unearned income and deferred costs and fees     1,951,598     1,920,716     1,914,344     1,910,358     1,914,064     1,910,358
Allowance for loan and lease losses     27,878     28,361     28,035     27,832     28,684     27,832
Total assets     3,359,017     3,287,598     3,278,894     3,260,343     3,247,111     3,260,343
                                     
Total deposits     2,675,674     2,572,008     2,612,517     2,495,873     2,528,528     2,495,873
Federal funds purchased and securities sold under agreements to repurchase     171,943     178,545     182,009     183,609     191,596     183,609
Other borrowings     138,001     172,643     140,353     244,193     182,779     244,193
Trust preferred debentures     25,063     25,062     25,061     25,060     25,059     25,060
Shareholders' equity     309,335     300,060     282,237     273,408     276,495     273,408
 
Average Balance Sheet                                    
Average earning assets   $ 3,050,346   $ 3,047,494   $ 3,029,188   $ 3,010,361   $ 2,937,795   $ 2,962,056
Average assets     3,286,159     3,271,895     3,252,549     3,243,822     3,168,478     3,191,840
Average interest-bearing liabilities     2,391,576     2,432,556     2,431,145     2,424,998     2,372,630     2,416,085
Average equity     303,861     288,341     277,283     280,051     273,517     265,943
 
Share data                                    
Weighted average shares outstanding (basic)     11,049,831     10,974,616     10,905,197     10,888,138     10,845,106     10,812,502
Weighted average shares outstanding (diluted)     11,124,331     11,016,515     10,955,430     10,936,042     10,893,642     10,864,450
Period-end shares outstanding     11,122,886     11,051,894     10,952,410     10,898,475     10,878,813     10,898,475
Book value per share     27.81     27.15     25.77     25.09     25.42     25.09
 
Income Statement                                    
Net interest income   $ 27,913   $ 27,952   $ 27,542   $ 27,861   $ 27,864   $ 111,775
Provision for loan/lease losses     4,870     1,005     1,910     1,433     3,483     8,507
Noninterest income     12,312     12,013     12,492     12,281     11,227     46,159
Noninterest expense     23,973     25,163     25,216     25,183     24,852     99,045
Income tax expense     3,490     4,364     4,102     4,602     3,233     16,420
Net income attributable to Tompkins Financial Corporation     7,859     9,400     8,773     8,892     7,490     33,831
Noncontrolling interests     33     33     33     32     33     131
Basic earnings per share   $ 0.71   $ 0.86   $ 0.80   $ 0.82   $ 0.69   $ 3.13
Diluted earnings per share   $ 0.71   $ 0.85   $ 0.80   $ 0.81   $ 0.69   $ 3.11
 
Asset Quality                                    
Net charge-offs     5,353     679     1,707     2,285     1,329     5,025
Nonaccrual loans and leases     40,419     38,457     39,902     41,501     48,966     41,501
Loans and leases 90 days past due and accruing     379     2,512     1,266     1,217     1,737     1,217
Troubled debt restructurings not included above     441     0     2,411     2,564     3,264     2,564
Total nonperforming loans and leases     41,239     40,969     43,579     45,282     53,967     45,282
OREO     1,632     1,742     2,270     1,255     1,845     1,255
Nonperforming assets     42,871     42,711     45,849     46,537     55,812     46,537
Loan Classifications                                    
Special Mention     66,697     80,470     70,765     80,920     72,135     80,920
Substandard     73,313     80,003     85,973     91,645     105,519     91,645
Doubtful     509     2,450     2,468     0     806     0
 
 
 
 
 
 
                                   
RATIO ANALYSIS     Quarter-Ended   Year-Ended
Credit Quality     Sep-11     Jun-11     Mar-11     Dec-10     Sep-10     Dec-10
Net loan and lease losses/ average loans                                    
and leases *     1.10%     0.14%     0.36%     0.48%     0.28%     0.26%
Nonperforming loans and leases/loans and leases     2.11%     2.13%     2.28%     2.37%     2.82%     2.37%
Nonperforming assets/assets     1.28%     1.30%     1.40%     1.43%     1.72%     1.43%
Allowance/nonperforming loans and leases     67.60%     69.23%     64.33%     61.46%     53.15%     61.46%
Allowance/loans and leases     1.43%     1.48%     1.46%     1.46%     1.50%     1.46%
 
Capital Adequacy (period-end)                                    
Tier I capital / average assets     8.55%     8.39%     8.22%     8.02%     8.01%     8.02%
Total capital / risk-weighted assets     14.11%     13.98%     13.66%     13.42%     13.14%     13.42%
 
Profitability                                    
Return on average assets *     0.95%     1.15%     1.09%     1.09%     0.94%     1.06%
Return on average equity *     10.29%     13.08%     12.83%     12.60%     10.86%     12.72%
Net interest margin (TE) *     3.71%     3.77%     3.78%     3.75%     3.85%     3.86%
* Quarterly ratios have been annualized

Copyright Business Wire 2010

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