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
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