Tompkins Financial Corporation Reports Increase In Second Quarter Earnings

Tompkins Financial Corporation (TMP–NYSE MKT LLC)

Tompkins Financial Corporation reported diluted earnings per share of $0.75 for the second quarter of 2013, an increase of 4.2% from the $0.72 reported for the same period in 2012. Net income of $11.0 million for the second quarter of 2013, represents a 24.7% increase from the same period in 2012. Year to date diluted earnings per share were $1.55 for the current period, up 9.2% over the first six months of 2012. Year to date net income of $22.5 million in 2013 is up 35.3% over the same period in 2012.

Comparisons of the Statement of Income and Statement of Condition to the same period last year are impacted by the acquisition of VIST Financial Corporation on August 1, 2012. As more fully disclosed in the non-GAAP disclosure section of this press release, net income and diluted earnings in the current and prior period were also impacted by merger related expenses. The second quarter of 2012 also included $243,000 in after tax income related to the reversal of an accrued liability resulting from the settlement of litigation between VISA Inc. and certain merchants. After adjusting for the after-tax impact of the above items, diluted earnings per share for the second quarter of 2013 would have been approximately flat compared to the prior year, and year to date diluted earnings per share would have been up by approximately 6.8% over the same period last year.

President and CEO, Stephen S. Romaine said "We saw positive trends during the quarter, with net interest income up $1.6 million from the first quarter of 2013, representing an annualized growth rate of 17.0%. The growth was fueled by increased loans and noninterest-bearing deposits, which reflected annualized growth of 8.2% and 14.7% respectively over the first quarter of 2013. The improvement in net interest income was tempered by higher provision expense during the quarter, and lower noninterest income as compared to the prior quarter. Overall performance remains strong, with annualized return on average equity of 10.20% for the quarter, which is ahead of the same period last year and compares favorably to the most recent Federal Reserve Board peer ratio of 8.43% 1.”

NET INTEREST INCOME

Net interest income of $39.8 million for the second quarter of 2013 represents an increase of 41.7% over the same period last year. The addition of VIST Bank and steady loan growth contributed to the year-over-year increase. Net interest income for the quarter was up $1.6 million, or 4.24%, from the first quarter of 2013, primarily due to growth in average loans and noninterest-bearing deposits. The net interest margin for the second quarter of 2013 was 3.58% compared to 3.57% for the first quarter in 2013 and 3.52% for the second quarter of 2012. For the year to date period, net interest income of $78.0 million reflects an increase of 40.5% over the first six months of 2012.

NONINTEREST INCOME

Noninterest income was $16.5 million for the second quarter of 2013, up 29.6% over the same period in 2012, and down 4.9% from the first quarter of 2013. The increase from the same quarter last year is mainly a result of the VIST acquisition. The most significant contributors to the decline from the first quarter of 2013 were lower realized gains on available for sale securities and lower income related to our investment in a Small Business Investment Company. Insurance commissions, investment services income and card services income were also down modestly from the first quarter, while service charges on deposit accounts were up modestly. For the year to date period, noninterest income of $33.9 million was up 38.9% from the same six month period in 2012.

NONINTEREST EXPENSE

Noninterest expense was $37.8 million in the second quarter of 2013, up 40.7% from the same period in 2012, and up 0.7% from the first quarter of 2013. For the year to date period, noninterest income of $75.3 million was up 41.5% from the same six month period in 2012. The increase in noninterest expense over the same quarter and year to date periods of 2012 is mainly a result of the VIST acquisition.

ASSET QUALITY

The ratio of nonperforming assets to total assets of 0.89% reflects improvement from 1.17% for the same period last year, and is up from 0.83% at March 31, 2013. The nonperforming asset ratio continues to compare favorably to the most recent peer averages of 1.87% published as of March 31, 2013, by the Federal Reserve 1.

Asset quality trends on originated loans continue to improve with loans classified as special mention or worse down 30.5% from a year ago, and down 7.5% from last quarter. Originated loans and leases exclude loans acquired in the VIST acquisition. In the acquired loan portfolio, loans classified special mention or worse increased by 13.6% from the first quarter of 2013, resulting in 2.0% increase in total loans classified as special mention or worse. The increase in loans classified as Substandard or Special Mention in the acquired loan portfolio did not have a meaningful impact to the credit marks that were recorded at the time of the acquisition.

Provision for loan and lease losses was $2.5 million for the second quarter of 2013, up from $1.0 million in the same quarter last year, and $1.0 million in the first quarter of 2013. Net loan and lease (recoveries) charge-offs totaled $1.7 million in the second quarter of 2013, compared to $1.1 million in the second quarter last year, and $1.0 million in the first quarter of 2013. The current period included net recoveries of $1.2 million in the originated portfolio, while the acquired portfolio included net (recoveries) charge-offs of $2.9 million.

The Company’s allowance for originated loan and lease losses totaled $24.9 million at June 30, 2013, which represented 1.08% of total originated loans, compared to 1.16% at December 31, 2012, reflecting improved quality of the originated portfolio. The allowance for loan and lease losses covered 64.99% of nonperforming loans and leases as of June 30, 2013, which compares to 62.34% as of December 31, 2012.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets improved for the second consecutive quarter, to 8.16% at June 30, 2013. Total risk based capital also improved during the quarter to 13.34%. The improvement in capital ratios was primarily driven by growth in retained earnings. Despite the increase in retained earnings during the quarter, tangible book value per share decline by 5.2% to $22.08, as the rise in market interest rates during the quarter negatively impacted accumulated other comprehensive income associated with unrealized gains available-for-sale securities. Refer to Non-GAAP disclosure for additional details on tangible book value per share.

ABOUT TOMPKINS FINANCIAL CORPORATION

Tompkins Financial Corporation is a 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 Trust Company, The Bank of Castile, Mahopac National Bank, VIST Bank, Tompkins Insurance Agencies, Inc., and Tompkins Financial Advisors. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.

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 accompanying tables. Management believes that these non-GAAP measures provide useful information. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. See “Tompkins Financial Corporation - Summary Financial Data (Unaudited)” tables for Non-GAAP related calculations.

"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.
         
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
 
(In thousands, except share and per share data) (Unaudited) As of As of
ASSETS

 06/30/2013 

 12/31/2012 
 
Cash and noninterest bearing balances due from banks $ 65,064 $ 117,448
Interest bearing balances due from banks         1,479         1,482  
Cash and Cash Equivalents 66,543 118,930
 
Trading securities, at fair value 14,688 16,450
Available-for-sale securities, at fair value (amortized cost of $1,434,359 at June 30,
2013 and $1,349,416 at December 31, 2012) 1,434,454 1,393,340
Held-to-maturity securities, fair value of $21,129 at June 30, 2013, and $25,163
at December 31, 2012 20,173 24,062
Originated loans and leases, net of unearned income and deferred costs and fees 2,309,232 2,133,106
Acquired loans and leases, covered 31,548 37,600
Acquired loans and leases, non-covered 714,403 783,904
Less: Allowance for loan and lease losses         25,458         24,643  
Net Loans and Leases 3,029,725 2,929,967
 
FDIC Indemnification Asset 4,270 4,385
Federal Home Loan Bank stock and Federal Reserve Bank stock 26,039 19,388
Bank premises and equipment, net 54,824 54,581
Corporate owned life insurance 66,143 65,102
Goodwill 92,140 92,305
Other intangible assets, net 17,400 18,643
Accrued interest and other assets         105,484         100,044  
Total Assets       $ 4,931,883       $ 4,837,197  
 
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market 2,174,926 2,144,367
Time 937,775 973,883
Noninterest bearing         800,209         831,919  
Total Deposits 3,912,910 3,950,169
 
Federal funds purchased and securities sold under agreements to repurchase 171,498 213,973
Other borrowings, including certain amounts at fair value of $11,424 at June 30, 2013
and $11,847 at December 31, 2012 299,098 111,848
Trust preferred debentures 43,703 43,668
Other liabilities         72,780         76,179  
Total Liabilities       $ 4,499,989       $ 4,395,837  
 
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
14,635,468 at June 30, 2013; and 14,426,711 at December 31, 2012 1,464 1,443
Additional paid-in capital 339,233 334,649
Retained earnings 120,218 108,709
Accumulated other comprehensive loss (27,667 ) (2,106 )
Treasury stock, at cost – 101,055 shares at June 30, 2013, and 100,054 shares
at December 31, 2012 (2,871 ) (2,787 )
 
Total Tompkins Financial Corporation Shareholders’ Equity 430,377 439,908
Noncontrolling interests         1,517         1,452  
Total Equity       $ 431,894       $ 441,360  
Total Liabilities and Equity       $ 4,931,883       $ 4,837,197  
 
See notes to unaudited condensed consolidated financial statements
 
 
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
      Three Months Ended Six Months Ended
(In thousands, except per share data) (Unaudited)

  06/30/2013

  06/30/2012

  06/30/2013

  06/30/2012
INTEREST AND DIVIDEND INCOME
Loans $ 37,550 $ 25,403 $ 73,979 $ 50,706
Due from banks 1 5 8 8
Federal funds sold 0 0 0 2
Trading securities 160 189 325 387
Available-for-sale securities 7,912 7,523 15,392 14,699
Held-to-maturity securities 177 225 368 450
Federal Home Loan Bank stock and Federal Reserve Bank stock         160     196     345     417  
Total Interest and Dividend Income         45,960     33,541     90,417     66,669  
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more 1,239 720 2,443 1,454
Other deposits 2,016 1,798 4,198 3,825
Federal funds purchased and securities sold under agreements to repurchase 966 1,074 1,976 2,166
Trust preferred debentures 690 402 1,377 807
Other borrowings         1,223     1,437     2,391     2,866  
Total Interest Expense         6,134     5,431     12,385     11,118  
Net Interest Income         39,826     28,110     78,032     55,551  
Less: Provision for loan and lease losses         2,489     1,011     3,527     2,136  
Net Interest Income After Provision for Loan and Lease Losses         37,337     27,099     74,505     53,415  
NONINTEREST INCOME
Insurance commissions and fees 7,167 3,493 14,428 6,890
Investment services income 3,698 3,760 7,486 7,398
Service charges on deposit accounts 2,024 1,593 3,932 3,378
Card services income 1,690 1,280 3,428 2,849
Mark-to-market loss on trading securities (270 ) (75 ) (385 ) (157 )
Mark-to-market gain on liabilities held at fair value 347 77 424 166
Net other-than-temporary impairment losses 0 (65 ) 0 (65 )
Other income 1,810 1,770 4,176 3,034
Gain on securities transactions         75     933     442     935  
Total Noninterest Income         16,541     12,766     33,931     24,428  
NONINTEREST EXPENSES
Salaries and wages 16,291 11,081 31,863 22,381
Pension and other employee benefits 5,338 4,123 11,408 8,422
Net occupancy expense of premises 2,954 1,793 6,015 3,598
Furniture and fixture expense 1,462 1,116 2,919 2,216
FDIC insurance 821 554 1,593 1,082
Amortization of intangible assets 547 124 1,104 257
Merger related expenses 37 879 233 972
Other operating expense         10,327     7,185     20,163     14,298  
Total Noninterest Expenses         37,777     26,855     75,298     53,226  
Income Before Income Tax Expense         16,101     13,010     33,138     24,617  
Income Tax Expense         5,061     4,151     10,557     7,912  
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation         11,040     8,859     22,581     16,705  
Less: Net income attributable to noncontrolling interests         33     33     65     65  
Net Income Attributable to Tompkins Financial Corporation       $ 11,007   $ 8,826   $ 22,516   $ 16,640  
Basic Earnings Per Share $ 0.76 $ 0.72 $ 1.55 $ 1.43
Diluted Earnings Per Share       $ 0.75   $ 0.72   $ 1.55   $ 1.42  
 
See notes to unaudited condensed consolidated financial statements
 
 
Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
   
Quarter Ended Year to Date Period Ended Year to Date Period Ended
        June 30, 2013   June 30, 2013   June 30, 2012
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 $ 1,623 $ 1 0.25 % $ 2,760 $ 8 0.58 % $ 20,269 $ 8 0.08 %
Money market funds - - 0.00 % - - 0.00 % 36 - 0.00 %
Securities (1)
U.S. Government securities 1,386,975 7,266 2.10 % 1,342,524 14,060 2.11 % 1,107,730 13,504 2.45 %
Trading securities 15,342 159 4.16 % 15,732 325 4.17 % 18,917 387 4.11 %
State and municipal (2) 98,279 1,259 5.14 % 99,179 2,558 5.20 % 84,785 2,270 5.38 %
Other securities (2) 7,441   60   3.23 %   8,295   150   3.65 %   11,787   268   4.57 %
Total securities 1,508,037 8,744 2.33 % 1,465,730 17,093 2.35 % 1,223,219 16,429 2.70 %
Federal Funds Sold - - 0.00 % - - 0.00 % 3,693 2 0.11 %
FHLBNY and FRB stock 23,002 160 2.79 % 20,942 345 3.32 % 17,134 415 4.87 %
 
Total loans and leases, net of unearned income (3) 3,038,766   38,048   5.02 %   3,001,458   74,906   5.03 %   1,980,673   50,980   5.18 %
Total interest-earning assets 4,571,428   46,953   4.12 %   4,490,890   92,352   4.15 %   3,245,024   67,834   4.20 %
 
Other assets 394,467 442,103 257,020
 
Total assets 4,965,895 4,932,993 3,502,044
                                   
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market 2,240,518 1,264 0.23 % 2,255,128 2,682 0.24 % 1,466,424 1,872 0.26 %
Time deposits 960,722   1,991   0.84 %   970,239   3,959   1.24 %   709,586   3,407   1.45 %
Total interest-bearing deposits 3,201,240 3,255 0.41 % 3,225,367 6,641 0.42 % 2,176,010 5,279 0.49 %
 
Federal funds purchased & securities sold under agreements
to repurchase 175,997 966 2.20 % 187,289 1,976 2.13 % 169,103 2,166 2.58 %
Other borrowings 242,301 1,223 2.03 % 181,292 2,391 2.66 % 144,037 2,866 4.00 %
Trust preferred debentures 43,692   690   6.33 %   43,683   1,377   6.36 %   25,066   807   6.47 %
Total interest-bearing liabilities 3,663,230 6,134 0.67 % 3,637,631 12,385 0.69 % 2,514,216 11,118 0.89 %
 
Noninterest bearing deposits 784,570 778,201 604,866
Accrued expenses and other liabilities 71,007 71,969 56,679
Total liabilities 4,518,807 4,487,801 3,175,761
 
Tompkins Financial Corporation Shareholders’ equity 445,586 443,708 324,798
Noncontrolling interest 1,502 1,484 1,485
Total equity 447,088 445,192 326,283
 
Total liabilities and equity $ 4,965,895 $ 4,932,993 $ 3,502,044
Interest rate spread   3.45 %   3.46 %   3.31 %
Net interest income/margin on earning assets 40,819 3.58 % 79,967 3.59 % 56,716 3.51 %
 
Tax Equivalent Adjustment (993 ) (1,935 ) (1,165 )
 
Net interest income per consolidated financial statements         $ 39,826         $ 78,032         $ 55,551    
(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 rat 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 statement included in Part I of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2012.

 
Tompkins Financial Corporation - Summary Financial Data (Unaudited)
                                     
(In thousands, except per share data)   Quarter-Ended   Year-Ended
  Jun-13     Mar-13     Dec-12     Sep-12     Jun-12     Dec-12
         
Period End Balance Sheet                                      
Securities     $ 1,469,315   $ 1,566,510   $ 1,433,852   $ 1,516,913   $ 1,228,143   $ 1,433,852
Originated loans and leases, net of unearned income and deferred costs and fees (2)       2,309,232     2,208,346     2,133,106     2,060,539     2,019,681     2,133,106
Acquired loans and leases (3)       745,951     785,449     821,504     869,211     0     821,504
Allowance for loan and lease losses       25,458     24,661     24,643     26,632     26,865     24,643
Total assets       4,931,883     4,987,280     4,837,197     4,924,786     3,482,669     4,837,197
Total deposits       3,912,910     4,072,352     3,950,169     4,037,644     2,765,093     3,950,169
Federal funds purchased and securities sold under agreements to repurchase       171,498     194,091     213,973     206,996     161,662     213,973
Other borrowings       299,098     156,649     111,848     125,461     121,934     111,848
Trust preferred debentures       43,703     43,687     43,668     43,651     25,067     43,668
Shareholders' equity       431,894     446,812     441,360     440,950     353,700     441,360
 
Average Balance Sheet                                      
Average earning assets     $ 4,571,428   $ 4,409,455   $ 4,431,698   $ 4,087,264   $ 3,278,519   $ 3,754,667
Average assets       4,965,895     4,899,727     4,901,374     4,450,013     3,539,170     4,092,473
Average interest-bearing liabilities       3,663,230     3,611,748     3,563,731     3,248,839     2,521,285     2,963,097
Average equity       447,088     443,277     443,592     410,300     349,021     376,890
 
Share data                                      
Weighted average shares outstanding (basic)       14,427,838     14,374,265     14,332,672     13,580,771     12,146,622     12,797,173
Weighted average shares outstanding (diluted)       14,500,429     14,436,757     14,374,368     13,630,464     12,166,417     12,836,043
Period-end shares outstanding       14,599,558     14,447,017     14,390,801     14,358,230     12,223,790     14,390,801
Book value per share       29.58     30.93     30.67     30.71     28.94     30.67
Tangible book value per share (Non-GAAP)       23.09     23.29     22.96     22.71     24.96     22.96
 
Income Statement                            
Net interest income     $ 39,826   $ 38,206   $ 41,849   $ 36,743   $ 28,110   $ 134,143
Provision for loan/lease losses       2,489     1,038     5,659     1,042     1,011     8,837
Noninterest income       16,541     17,390     15,608     14,773     12,766     54,808
Noninterest expense       37,777     37,520     38,188     46,194     26,855     137,608
Income tax expense       5,061     5,495     2,416     761     4,151     11,090
Net income attributable to Tompkins Financial Corporation       11,007     11,510     11,161     3,487     8,826     31,286
Noncontrolling interests       33     33     33     32     33     131
Basic earnings per share (9)     $ 0.76   $ 0.80   $ 0.78   $ 0.26   $ 0.72   $ 2.44
Diluted earnings per share (9)     $ 0.75   $ 0.79   $ 0.77   $ 0.25   $ 0.72   $ 2.43
 
Nonperforming Assets                                      
Originated nonaccrual loans and leases     $ 32,100   $ 32,554   $ 33,388   $ 36,996   $ 36,749   $ 33,388
Acquired nonaccrual loans and leases       6,916     4,561     4,352     -     -     4,352
Originated loans and leases 90 days past due and accruing       155     157     257     126     321     257
Troubled debt restructurings not included above       -     -     1,532     1,468     1,507     1,532
Total nonperforming loans and leases       39,171     37,272     39,529     38,590     38,577     39,529
OREO (8)       4,918     3,950     4,862     4,675     2,161     4,862
Total nonperforming assets       44,089     41,222     44,391     43,265     40,738     44,391
 
 
 
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
        Quarter-Ended   Year-Ended
Delinquency - Originated loan and lease portfolio       Jun-13     Mar-13     Dec-12     Sep-12     Jun-12     Dec-12

Loans and leases 30-89 days past due and accruing (2)
    $ 9,597   $ 10,888   $ 7,990   $ 9,412   $ 10,149   $ 7,990
Loans and leases 90 days past due and accruing (2)       156     157     257     126     321     257
Total originated loans and leases past due and accruing (2)       9,753     11,045     8,247     9,538     10,470     8,247
 
Delinquency - Acquired loan and lease portfolio      
Covered loans and leases 30-89 days past due and accruing (3)(7)       1,613     3,503     1,014     669     0     1,014
Covered loans and leases 90 days or more past
due and accruing (3)(7)       3,091     3,809     4,272     2,837     0     4,272
Non-covered loans and leases 30-89 days past
due and accruing (3)(7)       5,591     5,738     4,249     5,848     0     4,249
Non-Covered loans and leases 90 days past
due and accruing (3)(7)       13,324     14,026     14,438     19,339     0     14,438
Total acquired loans and leases past due and accruing       23,619     27,076     23,973     28,693     0     23,973
                                       
Total loans and leases past due and accruing     $ 33,372   $ 38,121   $ 32,220   $ 38,231   $ 10,470   $ 32,220
 
Allowance for Loan Losses - Originated loan and lease portfolio      
Balance at beginning of period     $ 24,598   $ 24,643   $ 26,632   $ 26,865   $ 26,948   $ 27,593
Provision for loan and lease losses       (993)     820     5,659     1,042     1,011     8,837
Net loan and lease (recoveries) charge-offs       (1,248)     864     7,648     1,275     1,094     11,787
Allowance for loan and lease losses (originated 24,853 24,598 24,643 26,632 26,865 24,643
loan portfolio) - balance at end of period                          
 
Allowance for Loan Losses - Acquired loan and lease portfolio      
Balance at beginning of period     $ 63   $ 0   $ 0   $ 0   $ 0   $ 0
Provision for loan and lease losses       3,483     218     0     0     0     0
Net loan and lease (recoveries) charge-offs       2,941     155     0     0     0     0
Allowance for loan and lease losses (acquired
loan portfolio) - balance at end of period       605     63     0     0     0     0
                                       
Total allowance for loan and lease losses       25,458     24,661     24,643     26,632     26,865     24,643
 
Loan Classification - Originated Portfolio                                      
Special Mention     $ 43,099   $ 48,468   $ 56,342   $ 58,598   $ 63,652   $ 56,342
Substandard       41,969     43,449     45,083     54,383     58,185     45,083
Doubtful       0     0     0     494     588     0
Loan Classification - Acquired Portfolio                                      
Special Mention       29,300     26,568     25,381     14,723     0     25,381
Substandard       55,079     47,698     45,207     31,087     0     45,207
Loan Classifications - Total Portfolio                                      
Special Mention       72,399     75,036     81,723     73,321     63,652     81,723
Substandard       97,048     91,147     90,290     85,470     58,185     90,290
Doubtful       0     0     0     494     588     0
 
 
 
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
                                 
RATIO ANALYSIS   Quarter-Ended   Year-Ended
Credit Quality       Jun-13     Mar-13     Dec-12     Sep-12     Jun-12     Dec-12
Nonperforming loans and leases/total loans and leases (7)       1.28%     1.24%     1.34%     1.32%     1.91%     1.34%
Nonperforming assets/total assets       0.89%     0.83%     0.92%     0.88%     1.17%     0.92%
Allowance for originated loan and lease losses/total originated loans and leases       1.08%     1.11%     1.16%     1.29%     1.33%     1.16%
Allowance/nonperforming loans and leases       64.99%     66.16%     62.34%     69.01%     69.64%     62.34%
Net loan and lease losses (annualized)/total average loans and leases       0.22%     0.14%     1.04%     0.20%     0.22%     0.49%
                                 
Capital Adequacy (period-end)                                      
Tier 1 capital / average assets       8.16%     8.11%     7.95%     8.50%     9.53%     7.95%
Total capital / risk-weighted assets       13.34%     12.93%     12.94%     12.87%     16.22%     12.94%
Tangible common equity / tangible assets       6.99%     6.90%     6.99%     6.78%     8.88%     6.99%
 
Profitability                                      
Return on average assets *       0.92%     0.95%     0.91%     0.31%     1.00%     0.76%
Return on average equity *       10.20%     10.53%     10.01%     3.38%     10.17%     8.30%
Net interest margin (TE) *       3.58%     3.57%     3.83%     3.66%     3.52%     3.65%
* Quarterly ratios have been annualized
 
Non-GAAP Disclosure                                      
Reported net income (GAAP)     $ 11,007   $ 11,510   $ 11,161   $ 3,487   $ 8,826   $ 31,285
Adjustments (net of tax):                                      
Accrual adjustment VISA       0     0     0     0     -243     -243
Merger related expenses       22     118     462     8,424     703     9,664
Subtotal adjustments       22     118     462     8,424     460     9,421
Net operating income (Non-GAAP)       11,029     11,628     11,623     11,911     9,286     40,706
Weighted average shares outstanding (diluted)       14,500,429     14,436,757     14,374,368     13,630,464     12,166,417     12,836,043
Adjusted diluted earnings per share (Non-GAAP) (9)     $ 0.76   $ 0.81   $ 0.81   $ 0.87   $ 0.76   $ 3.17
 
Non-GAAP Disclosure                                      
Reported net income (GAAP)     $ 11,007   $ 11,510   $ 11,161   $ 3,487   $ 8,826   $ 31,285
Merger related expenses (net of tax)       22     118     462     8,424     703     9,664
Net operating income (Non-GAAP)     $ 11,029   $ 11,628   $ 11,623   $ 11,911   $ 9,529   $ 40,949
Amortization of intangibles, (net of tax)       328     334     348     256     74     758
Adjusted net operating income (Non-GAAP)       11,357     11,962     11,971     12,167     9,603     41,707
                                       
Average total shareholders' equity       447,088     443,277     443,592     410,300     349,021     376,890
Less: Average goodwill and intangibles       110,037     110,687     114,644     92,748     48,665     76,149
Average tangible shareholders' equity (Non-GAAP)       337,051     332,590     328,948     317,552     300,356     300,741
                                       
Adjusted operating return on shareholders' tangible equity (annualized) (Non-GAAP)       13.48%     14.59%     14.56%     15.24%     12.86%     13.87%
 
Non-GAAP Disclosure                                      
Total shareholders' equity (GAAP)     $ 431,894   $ 446,812   $ 441,360   $ 440,950   $ 353,700   $ 441,360
Less: goodwill and intangibles       109,540     110,314     110,947     114,859     48,652     110,947
Tangible shareholders' equity       322,354     336,498     330,413     326,030     305,048     330,413
                                       
Ending shares outstanding       14,599,558     14,447,017     14,390,801     14,358,230     12,223,790     14,390,801
Tangible book value per share (Non-GAAP)       22.08     23.29     22.96     22.71     24.96     22.96
 
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
               
Non-GAAP Disclosure     Year-to-date period ended
      Jun-13   Jun-12
Reported net income (GAAP)       22,516   $ 16,640
Adjustments (net of tax):              
Accrual adjustment VISA       0     (243)
Merger related expenses       155     778
Subtotal adjustments       155     535
Net operating income (Non-GAAP)       22,671     17,175
Weighted average shares outstanding (diluted)       14,500,429     11,656,771
Adjusted diluted earnings per share     $ 1.56   $ 1.47
(1) Federal Reserve peer ratio as of March 31, 2013, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.
(2) "Originated" equals loans and leases not included by definition in "acquired loans"

(3) "Acquired Loans and Leases" equals loans and leases acquired at fair value, accounted for in accordance with FASB ASC Topic 805. "Covered Loans" are loans for which the Company will share losses with the FDIC and consist of loans VIST Bank acquired as part of an FDIC-assisted transaction during the fourth quarter of 2010.
(4) Average balances and yields on available-for-sale securities are based on historical amortized cost.
(5) Interest income includes the tax effects of taxable-equivalent basis.
(6) 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, 2012.
(7) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans. The risk of credit loss on these loans has been considered by virtue of the Corporation's estimate of acquisition-date fair value and these loans are considered accruing as the Corporation primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows. There have been no significant changes in expected cash flows since acquisition.
(8) Includes all other real estate owned, including those balances acquired through business combinations.

(9) Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares.

Copyright Business Wire 2010

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