Tompkins Financial Corporation Reports Record Fourth Quarter Earnings

Company Release - 1/29/2021 9:00 AM ET

Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation reported diluted earnings per share of $1.61 for the fourth quarter of 2020, up 15.0% compared to $1.40 reported in the fourth quarter of 2019. Net income for the fourth quarter of 2020 was $24.0 million, a $2.9 million increase over net income reported for the same period in 2019.

For the fiscal year ended December 31, 2020, diluted earnings per share were $5.20, down 3.2% from 2019. 2020 net income was $77.6 million, down from $81.7 million, for 2019. Results for 2020 were negatively impacted by economic stress resulting from the COVID-19 pandemic, which contributed to the $16.3 million provision for credit losses recognized during the first quarter of 2020.

President and CEO, Mr. Stephen Romaine commented, "2020 was a challenging year on many fronts, which makes it particularly rewarding that earnings for the fourth quarter reflect the best fourth quarter results in our Company's history. Favorable results were largely driven by improved net interest income, insurance commissions and wealth management fees, all of which were up from the fourth quarter of 2019. Despite the positive earnings trends for the quarter, our results for the full year were negatively impacted by the pandemic and related economic restrictions, which have continued to negatively impact customers. We continue to support our customers through our loan payment deferral program and funding of loans under the Paycheck Protection Program. At year end, we believe that we had adequately reserved for potential credit losses in the loan portfolio, though a great deal of uncertainty remains.”

SELECTED HIGHLIGHTS FOR THE YEAR-END 2020:

  • Total loans of $5.3 billion at December 31, 2020 were up $342.8 million, or 7.0% over December 31, 2019. The increase over the prior year-end included an outstanding principle balance of $291.3 million of PPP loans that were funded during the second quarter of 2020.
  • Total deposits of $6.4 billion was an increase of $1.2 billion, or 23.5% over December 31, 2019.
  • The ratio of Total Capital to Risk-Weighted Assets improved to 14.39%, up from 14.26% at September 30, 2020, and 13.53% at December 31, 2019.

NET INTEREST INCOME

Net interest income was $57.8 million for the fourth quarter of 2020, compared to $53.2 million reported for the same period in 2019. For the full fiscal year, net interest income was $225.3 million, an increase of $14.7 million or 7.0% from 2019.

Average loans for the year ended December 31, 2020 were up $398.0 million, or 8.2% compared to 2019. The increase in average loans includes $465.6 million in loans originated under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") in the second quarter of 2020. Asset yields for the year ended December 31, 2020, were down 47 basis points compared to 2019, which reflects the impact of reductions in market interest rates in 2020, and the addition of the lower yielding PPP loans originated in the second quarter. While PPP loans were a significant contributor to average loan growth for the year, increases in residential real estate loans (up 5.7% from 2019) and commercial real estate (up 5.6% from 2019), also contributed to the growth in 2020 average loan balances.

Average total deposits for 2020 were up $1.0 billion, or 20.1% versus 2019. Average noninterest bearing deposits were up $349.9 million or 24.9% compared to 2019. Average deposit balances benefited from $465.6 million of PPP loan originations during the second quarter of 2020, the majority of which were deposited in Tompkins checking accounts. For 2020, the average rate paid on interest-bearing deposit products decreased by 38 basis points from 2019. The total cost of interest-bearing liabilities for 2020 declined by 52 basis points to 0.60% from 2019.

Net interest margin was 3.12% for the fourth quarter of 2020, down compared to the 3.44% reported for the fourth quarter of 2019, and 3.26% for the third quarter of 2020. The decline in net interest margin during the fourth quarter, when compared to the third quarter of 2020, was mainly due to a decrease in overall asset yields. The decrease in average asset yields was due to lower securities yields, as well as a slight shift in the composition of average earning assets, with a greater mix of lower yielding securities and interest bearing balances, and a decrease in average loan balances reflecting lower PPP loan balances. The decrease in net interest margin was partially offset by lower average funding costs.

As a result of its participation in the SBA's PPP, in the fourth quarter of 2020, the Company recorded net deferred loan fees of $4.5 million, which are included in interest income. For the fiscal year, net deferred loan fees from PPP loan originations were $9.2 million.

NONINTEREST INCOME

Noninterest income represented 24.6% of total revenues in the fourth quarter of 2020, compared to 25.2% in the same period in 2019. Noninterest income of $18.8 million for the fourth quarter of 2020 was up 4.8% compared to the same period in 2019. For the full fiscal year, noninterest income of $73.9 million was down 2.1% from 2019. Total fee based services for the year ended December 31, 2020 were $64.6 million, a decrease of 2.7% compared to 2019. The reduction in fee based income in 2020, when compared to 2019, is largely related to the pandemic-related travel and business restrictions, which reduced card services fees and service charges on deposit accounts.

NONINTEREST EXPENSE

Noninterest expense was $46.4 million for the fourth quarter of 2020, up $505,000, or 1.1%, over the fourth quarter of 2019. For the full fiscal year, noninterest expense was $185.4 million, up $3.5 million, or 2.0%, over 2019. The increase in noninterest expense for the year ended December 31, 2020 was primarily attributable to normal annual increases in salaries and wages, which were up $4.4 million or 3.9% over 2019.

INCOME TAX EXPENSE

The Company's effective tax rate was 20.4% for the fourth quarter of 2020, compared to 19.8% for the same period in 2019. The effective tax rate for the year ended December 31, 2020 was 20.4%, compared to 20.5% reported for 2019.

ASSET QUALITY

Provision for credit losses for the fourth quarter of 2020 was $6,000 compared to a negative $1.0 million for the same period in 2019. Provision expense for the year ended December 31, 2020 was $16.2 million, compared to $1.4 million for 2019. The first quarter of 2020 included provision expense of $16.3 million related to the impact of the economic conditions related to COVID-19 on economic forecasts and other model assumptions relied upon by management in determining the allowance. Net charge-offs for the fourth quarter of 2020 were $630,000 compared to net charge-offs of $479,000 reported in the fourth quarter of 2019.

The allowance for credit losses represented 0.98% of total loans and leases at December 31, 2020, up from 0.97% at September 30, 2020, and 0.81% at December 31, 2019. Nonperforming loans and leases totaled $45.8 million at December 31, 2020, compared to $33.8 million at September 30, 2020 and $31.4 million at December 31, 2019. The ratio of the allowance to total nonperforming loans and leases was 112.87% at December 31, 2020, down compared to 154.68% at September 30, 2020 and 126.90% at December 31, 2019. Nonperforming assets represented 0.60% of total assets at December 31, 2020, up from 0.44% at September 30, 2020, and up from 0.47% at December 31, 2019.

Special Mention loans totaled $121.3 million at the end of the fourth quarter of 2020, in line with the quarter ended September 30, 2020, and up compared to the $29.8 million reported for the fourth quarter of 2019. Total Substandard loans increased during the quarter to $68.6 million at December 31, 2020, compared to $45.4 million at September 30, 2020, and $60.5 million at December 31, 2019. The increases in nonperforming loans and leases and Substandard loans were mainly related to the downgrades of credit in the loan portfolio related to the hospitality industry. Included in the nonperforming and Substandard loans and leases are 17 loans totaling $17.8 million, that are currently in deferral status.

During 2020, overall credit quality was supported by several plans initiated by the Company in response to the COVID-19 pandemic. As previously announced, Tompkins initiated and participated in a number of credit initiatives to support customers who have been impacted by the economic conditions associated with the COVID-19 pandemic. The Company implemented a payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. Weekly deferral requests for the month of December were down 98.5% from peak levels the Company experienced in late March. As of December 31, 2020, total loans that continued in a deferral status amounted to approximately $212.2 million, representing 4.0% of total loans. Of loans that had come out of the deferral program as of December 31, 2020, about 94.4% had made at least one payment and only 0.13% were more than 30 days delinquent.

As previously noted, the Company participated in the PPP, which provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related expenses and certain other eligible business operating costs, all in accordance with the rules and regulations established by the SBA. The Company began accepting applications for PPP loans on April 3, 2020, and had funded approximately 2,998 loans totaling about $465.6 million when the initial program ended. As of December 31, 2020, approximately 1,484 PPP loans originated by the Company, totaling $244.0 million, had been submitted to the SBA for forgiveness under the terms of the PPP program, of which approximately 1,212 loans totaling $171.1 million had been forgiven by the SBA as of December 31, 2020.

Mr. Romaine added, "Our deferral program and our participation in the PPP program are examples of how Tompkins has remained committed to supporting our clients and communities during these challenging times. Through year end, we had supported approximately 6,800 customers with these programs. We are also pleased to be participating in the latest round of PPP financing and as of January 28, 2021 had submitted 1,007 PPP loan applications totaling $143.9 million to the SBA for approval."

CAPITAL POSITION

Capital ratios remained well above the regulatory minimums for well capitalized institutions. The ratio of Total Capital to Risk-Weighted Assets improved to 14.39% at December 31, 2020, up from 14.26% at September 30, 2020, and 13.53% at December 31, 2019. The ratio of Tier 1 capital to average assets was 8.75% at December 31, 2020, compared to 8.85% at September 30, 2020, and 9.61% at December 31, 2019. The December 31, 2020 Tier 1 capital to average assets ratio was negatively impacted by balance sheet growth associated with the PPP loans originated in the second quarter of 2020.

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, Tompkins Bank of Castile, Tompkins Mahopac Bank, Tompkins VIST Bank, Tompkins Insurance Agencies, Inc., and offers wealth management services through Tompkins Financial Advisors. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.

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

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Examples of forward-looking statements in this press release include, without limitation, those regarding the novel coronavirus (COVID-19) and our plans in response to the coronavirus. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", and other similar words. Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting the Company and are subject to certain uncertainties and factors relating to the Company’s operations and economic environment, all of which are difficult to predict and many of which are beyond the control of the Company, that could cause actual results of the Company to differ materially from those expressed and/or implied by forward-looking statements. The following factors, in addition to those listed as Risk Factors in Item 1A of our Annual Reports on Form 10-K and our Quarterly Reports on form 10-Q as filed with the Securities and Exchange Commission, are among those that could cause actual results to differ materially from the forward-looking statements: changes in general economic, market and regulatory conditions; the severity and duration of the coronavirus outbreak and the impact of the outbreak (including the government’s response to the outbreak) on economic and financial markets, potential regulatory actions, and modifications to our operations, products, and services relating thereto; disruptions in our and our customers’ operations and loss of revenue due to pandemics, epidemics, widespread health emergencies, government-imposed travel/business restrictions, or outbreaks of infectious diseases such as the coronavirus, and the associated adverse impact on our financial position, liquidity, and our customers’ abilities to repay their obligations to us or willingness to obtain financial services products from the Company; the development of an interest rate environment that may adversely affect the Company’s interest rate spread, other income or cash flow anticipated from the Company’s operations, investment and/or lending activities; changes in laws and regulations affecting banks, bank holding companies and/or financial holding companies, such as the Dodd-Frank Act, Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; legislative and regulatory changes in response to COVID-19 with which we and our subsidiaries must comply, including the CARES Act and the Consolidated Appropriations Act, 2021 and the rules and regulations promulgated thereunder, and state and local government mandates; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; governmental and public policy changes, including environmental regulation; reliance on large customers; uncertainties arising from national and global events, including the potential impact of widespread protests, civil unrest, and political uncertainty on the economy and the financial services industry; and financial resources in the amounts, at the times and on the terms required to support the Company’s future businesses. The Company does not undertake any obligation to update its forward-looking statements.

 

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data)

As of

As of

ASSETS

12/31/2020

12/31/2019

 

 

 

Cash and noninterest bearing balances due from banks

$

21,245

 

$

136,010

 

Interest bearing balances due from banks

367,217

 

1,972

 

Cash and Cash Equivalents

388,462

 

137,982

 

 

 

 

Available-for-sale debt securities, at fair value (amortized cost of $1,599,894 at December 31, 2020 and $1,293,239 at December 31, 2019)

1,627,193

 

1,298,587

 

Equity securities, at fair value (amortized cost $929 at December 31, 2020 and $915 at December 31, 2019)

929

 

915

 

Total loans and leases, net of unearned income and deferred costs and fees

5,260,327

 

4,917,550

 

Less: Allowance for credit losses

51,669

 

39,892

 

Net Loans and Leases

5,208,658

 

4,877,658

 

 

 

 

Federal Home Loan Bank and other stock

16,382

 

33,695

 

Bank premises and equipment, net

88,709

 

94,355

 

Corporate owned life insurance

84,736

 

82,961

 

Goodwill

92,447

 

92,447

 

Other intangible assets, net

4,905

 

6,223

 

Accrued interest and other assets

109,750

 

100,800

 

Total Assets

$

7,622,171

 

$

6,725,623

 

LIABILITIES

 

 

Deposits:

 

 

Interest bearing:

 

 

Checking, savings and money market

3,761,933

 

3,080,686

 

Time

746,234

 

675,014

 

Noninterest bearing

1,929,585

 

1,457,221

 

Total Deposits

6,437,752

 

5,212,921

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

65,845

 

60,346

 

Other borrowings

265,000

 

658,100

 

Trust preferred debentures

13,220

 

17,035

 

Other liabilities

122,665

 

114,167

 

Total Liabilities

$

6,904,482

 

$

6,062,569

 

EQUITY

 

 

Tompkins Financial Corporation shareholders' equity:

 

 

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,964,389 at December 31, 2020; and 15,014,499 at December 31, 2019

1,496

 

1,501

 

Additional paid-in capital

333,976

 

338,507

 

Retained earnings

418,413

 

370,477

 

Accumulated other comprehensive loss

(32,074)

 

(43,564)

 

Treasury stock, at cost – 124,849 shares at December 31, 2020, and 123,956 shares at December 31, 2019

(5,534)

 

(5,279)

 

Total Tompkins Financial Corporation Shareholders’ Equity

716,277

 

661,642

 

 

 

 

Noncontrolling interests

1,412

 

1,412

 

Total Equity

$

717,689

 

$

663,054

 

Total Liabilities and Equity

$

7,622,171

 

$

6,725,623

 

 

 

 

TOMPKINS FINANCIAL CORPORATION

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

(In thousands, except per share data) (Unaudited)

Three Months Ended

Twelve Months Ended

 

12/31/2020

12/31/2019

12/31/2020

12/31/2019

INTEREST AND DIVIDEND INCOME

 

 

 

 

Loans

$

57,674

 

$

57,039

 

$

227,313

 

$

226,723

 

Due from banks

104

 

9

 

194

 

41

 

Available-for-sale debt securities

5,349

 

6,406

 

25,450

 

28,460

 

Held-to-maturity securities

0

 

568

 

0

 

3,151

 

Federal Home Loan Bank and other stock

243

 

561

 

1,373

 

3,003

 

Total Interest and Dividend Income

63,370

 

$

64,583

 

254,330

 

$

261,378

 

INTEREST EXPENSE

 

 

 

 

Time certificates of deposits of $250,000 or more

717

 

912

 

3,175

 

3,095

 

Other deposits

3,066

 

7,399

 

16,789

 

27,809

 

Federal funds purchased and securities sold under agreements to repurchase

19

 

33

 

95

 

143

 

Trust preferred debentures

375

 

303

 

1,133

 

1,276

 

Other borrowings

1,442

 

2,696

 

7,799

 

18,427

 

Total Interest Expense

5,619

 

11,343

 

28,991

 

50,750

 

Net Interest Income

57,751

 

53,240

 

225,339

 

210,628

 

Less: Provision (credit) for credit loss expense

6

 

(1,000)

 

16,151

 

1,366

 

Net Interest Income After Provision for Credit Loss Expense

57,745

 

54,240

 

209,188

 

209,262

 

NONINTEREST INCOME

 

 

 

 

Insurance commissions and fees

7,289

 

6,777

 

31,505

 

31,091

 

Investment services income

5,106

 

4,268

 

17,520

 

16,434

 

Service charges on deposit accounts

1,637

 

2,110

 

6,312

 

8,321

 

Card services income

2,378

 

2,436

 

9,263

 

10,526

 

Other income

2,429

 

2,171

 

8,817

 

8,416

 

Net (loss) gain on securities transactions

(3)

 

210

 

443

 

645

 

Total Noninterest Income

18,836

 

17,972

 

73,860

 

$

75,433

 

NONINTEREST EXPENSE

 

 

 

 

Salaries and wages

23,037

 

23,250

 

92,519

 

89,399

 

Other employee benefits

6,552

 

6,394

 

24,812

 

23,488

 

Net occupancy expense of premises

3,400

 

3,115

 

12,930

 

13,210

 

Furniture and fixture expense

2,087

 

1,921

 

7,846

 

7,815

 

Amortization of intangible assets

364

 

421

 

1,484

 

1,673

 

Other operating expense

10,965

 

10,799

 

45,791

 

46,249

 

Total Noninterest Expenses

46,405

 

45,900

 

185,382

 

181,834

 

Income Before Income Tax Expense

30,176

 

26,312

 

97,666

 

102,861

 

Income Tax Expense

6,145

 

5,200

 

19,924

 

21,016

 

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

24,031

 

21,112

 

77,742

 

81,845

 

Less: Net Income Attributable to Noncontrolling Interests

53

 

32

 

154

 

127

 

Net Income Attributable to Tompkins Financial Corporation

$

23,978

 

21,080

 

$

77,588

 

81,718

 

Basic Earnings Per Share

$

1.61

 

$

1.41

 

$

5.22

 

$

5.39

 

Diluted Earnings Per Share

$

1.61

 

$

1.40

 

$

5.20

 

$

5.37

 

 

 

 

 

 

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)

 

Quarter Ended

Quarter Ended

 

December 31, 2020

December 31, 2019

 

Average

 

 

Average

 

 

 

Balance

 

Average

Balance

 

Average

(Dollar amounts in thousands)

(QTD)

Interest

Yield/Rate

(QTD)

Interest

Yield/Rate

ASSETS

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

Interest-bearing balances due from banks

$

439,726

 

$

104

 

0.09

%

$

2,763

 

$

9

 

1.29

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

1,502,226

 

4,671

 

1.24

%

1,192,035

 

6,421

 

2.14

%

State and municipal (2)

127,580

 

823

 

2.57

%

93,275

 

643

 

2.73

%

Other securities (2)

3,430

 

24

 

2.78

%

3,417

 

37

 

4.30

%

Total securities

1,633,236

 

5,518

 

1.34

%

1,288,727

 

7,101

 

2.19

%

FHLBNY and FRB stock

16,766

 

244

 

5.80

%

25,469

 

561

 

8.74

%

Total loans and leases, net of unearned income (2)(3)

5,318,607

 

57,949

 

4.33

%

4,871,483

 

57,332

 

4.67

%

Total interest-earning assets

7,408,335

 

63,815

 

3.43

%

6,188,442

 

65,003

 

4.17

%

Other assets

349,824

 

 

 

424,760

 

 

 

Total assets

$

7,758,159

 

 

 

$

6,613,202

 

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

3,927,433

 

1,457

 

0.15

%

3,140,707

 

5,234

 

0.66

%

Time deposits

734,009

 

2,326

 

1.26

%

692,541

 

3,077

 

1.76

%

Total interest-bearing deposits

4,661,442

 

3,783

 

0.32

%

3,833,248

 

8,311

 

0.86

%

Federal funds purchased & securities sold under agreements to repurchase

60,417

 

19

 

0.12

%

54,907

 

33

 

0.24

%

Other borrowings

271,087

 

1,442

 

2.12

%

469,410

 

2,696

 

2.28

%

Trust preferred debentures

17,091

 

375

 

8.73

%

17,007

 

303

 

7.07

%

Total interest-bearing liabilities

5,010,037

 

5,619

 

0.45

%

4,374,572

 

11,343

 

1.03

%

Noninterest bearing deposits

1,913,781

 

 

 

1,471,377

 

 

 

Accrued expenses and other liabilities

115,227

 

 

 

102,812

 

 

 

Total liabilities

7,039,045

 

 

 

5,948,761

 

 

 

Tompkins Financial Corporation Shareholders’ equity

717,618

 

 

 

662,940

 

 

 

Noncontrolling interest

1,496

 

 

 

1,501

 

 

 

Total equity

719,114

 

 

 

664,441

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,758,159

 

 

 

$

6,613,202

 

 

 

Interest rate spread

 

 

2.98

%

 

 

3.14

%

Net interest income/margin on earning assets

 

58,196

 

3.12

%

 

53,660

 

3.44

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

(445)

 

 

 

(420)

 

 

Net interest income per consolidated financial statements

 

$

57,751

 

 

 

$

53,240

 

 

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)

 

Fiscal Year Ended

Fiscal Year Ended

 

December 31, 2020

December 31, 2019

 

Average

 

 

Average

 

 

 

Balance

 

Average

Balance

 

Average

(Dollar amounts in thousands)

(YTD)

Interest

Yield/Rate

(YTD)

Interest

Yield/Rate

ASSETS

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

Interest-bearing balances due from banks

$

194,211

 

$

194

 

0.10

%

$

1,647

 

$

41

 

2.49

%

Securities (1)

 

 

 

 

 

 

U.S. Government securities

1,307,905

 

22,906

 

1.75

%

1,301,813

 

29,411

 

2.26

%

State and municipal (2)

114,462

 

3,048

 

2.66

%

93,168

 

2,547

 

2.73

%

Other securities (2)

3,430

 

117

 

3.40

%

3,417

 

158

 

4.62

%

Total securities

1,425,797

 

26,071

 

1.83

%

1,398,398

 

32,116

 

2.30

%

FHLBNY and FRB stock

20,815

 

1,374

 

6.60

%

38,308

 

3,003

 

7.84

%

Total loans and leases, net of unearned income (2)(3)

5,228,135

 

228,805

 

4.38

%

4,830,089

 

227,869

 

4.72

%

Total interest-earning assets

6,868,958

 

256,444

 

3.73

%

6,268,442

 

263,029

 

4.20

%

Other assets

489,520

 

 

 

411,136

 

 

 

Total assets

$

7,358,478

 

 

 

$

6,679,578

 

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

Interest bearing checking, savings, & money market

3,650,358

 

9,430

 

0.26

%

3,007,221

 

20,099

 

0.67

%

Time deposits

703,999

 

10,534

 

1.50

%

676,106

 

10,805

 

1.60

%

Total interest-bearing deposits

4,354,357

 

19,964

 

0.46

%

3,683,327

 

30,904

 

0.84

%

Federal funds purchased & securities sold under agreements to repurchase

55,973

 

95

 

0.17

%

59,825

 

143

 

0.24

%

Other borrowings

365,732

 

7,799

 

2.13

%

762,993

 

18,427

 

2.42

%

Trust preferred debentures

17,092

 

1,133

 

6.63

%

16,943

 

1,276

 

7.53

%

Total interest-bearing liabilities

4,793,154

 

28,991

 

0.60

%

4,523,088

 

50,750

 

1.12

%

Noninterest bearing deposits

1,753,226

 

 

 

1,403,330

 

 

 

Accrued expenses and other liabilities

112,544

 

 

 

101,819

 

 

 

Total liabilities

6,658,924

 

 

 

6,028,237

 

 

 

Tompkins Financial Corporation Shareholders’ equity

698,088

 

 

 

649,871

 

 

 

Noncontrolling interest

1,466

 

 

 

1,470

 

 

 

Total equity

699,554

 

 

 

651,341

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

7,358,478

 

 

 

$

6,679,578

 

 

 

Interest rate spread

 

 

3.13

%

 

 

3.07

%

Net interest income/margin on earning assets

 

227,453

 

3.31

%

 

212,279

 

3.39

%

 

 

 

 

 

 

 

Tax Equivalent Adjustment

 

(2,114)

 

 

 

(1,651)

 

 

Net interest income per consolidated financial statements

 

$

225,339

 

 

 

$

210,628

 

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter-Ended

Year-Ended

Period End Balance Sheet

 

Dec-20

 

Sep-20

 

Jun-20

 

Mar-20

 

Dec-19

 

Dec-20

Securities

$

1,628,122

 

$

1,667,698

 

$

1,336,087

 

$

1,353,567

 

$

1,299,502

 

$

1,628,122

 

Total Loans

 

5,260,327

 

 

5,398,297

 

 

5,424,285

 

 

4,937,822

 

 

4,917,550

 

 

5,260,327

 

Allowance for credit losses

 

51,669

 

 

52,293

 

 

52,082

 

 

52,404

 

 

39,892

 

 

51,669

 

Total assets

 

7,622,171

 

 

7,794,502

 

 

7,582,056

 

 

6,743,114

 

 

6,725,623

 

 

7,622,171

 

Total deposits

 

6,437,752

 

 

6,601,238

 

 

6,377,521

 

 

5,409,363

 

 

5,212,921

 

 

6,437,752

 

Federal funds purchased and securities sold under agreements to repurchase

 

65,845

 

 

63,573

 

 

50,889

 

 

68,993

 

 

60,346

 

 

65,845

 

Other borrowings

 

265,000

 

 

285,000

 

 

325,000

 

 

457,983

 

 

658,100

 

 

265,000

 

Trust preferred debentures

 

13,220

 

 

17,163

 

 

17,120

 

 

17,078

 

 

17,035

 

 

13,220

 

Total common equity

 

716,277

 

 

712,104

 

 

696,553

 

 

681,153

 

 

661,642

 

 

716,277

 

Total equity

 

717,689

 

 

713,611

 

 

698,029

 

 

682,597

 

 

663,054

 

 

717,689

 

 

Average Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

Average earning assets

$

7,408,335

 

$

7,204,049

 

$

6,616,079

 

$

6,237,773

 

$

6,188,442

 

$

6,868,958

 

Average assets

 

7,758,159

 

 

7,582,009

 

 

7,413,945

 

 

6,672,948

 

 

6,613,202

 

 

7,358,478

 

Average interest-bearing liabilities

 

5,010,037

 

 

4,861,890

 

 

4,825,753

 

 

4,471,797

 

 

4,374,572

 

 

4,793,154

 

Average equity

 

719,114

 

 

709,484

 

 

690,475

 

 

678,817

 

 

664,441

 

 

699,554

 

 

Share data

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (basic)

14,715,124

 

14,697,532

 

14,681,956

 

14,718,948

 

14,726,023

 

14,703,390

 

Weighted average shares outstanding (diluted)

14,751,303

 

14,727,741

 

14,714,848

 

14,774,269

 

14,790,503

 

14,742,040

 

Period-end shares outstanding

14,928,479

 

14,926,252

 

14,914,458

 

14,907,947

 

14,978,589

 

14,928,479

 

Common equity book value per share

$

47.98

 

$

47.71

 

$

46.70

 

$

45.69

 

$

44.17

 

$

47.98

 

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

57,751

 

$

58,253

 

$

56,366

 

$

52,969

 

$

53,240

 

$

225,339

 

Provision (credit) for credit loss expense

 

6

 

 

199

 

 

(348)

 

 

16,294

 

 

(1,000)

 

 

16,151

 

Noninterest income

 

18,836

 

 

18,887

 

 

17,177

 

 

18,960

 

 

17,972

 

 

73,860

 

Noninterest expense

 

46,405

 

 

46,349

 

 

46,888

 

 

45,740

 

 

45,900

 

 

185,382

 

Income tax expense

 

6,145

 

 

6,330

 

 

5,540

 

 

1,909

 

 

5,200

 

 

19,924

 

Net income attributable to Tompkins Financial Corporation

 

23,978

 

 

24,230

 

 

21,431

 

 

7,949

 

 

21,080

 

 

77,588

 

Noncontrolling interests

 

53

 

 

32

 

 

32

 

 

37

 

 

32,000

 

 

154

 

Basic earnings per share (5)

$

1.61

 

$

1.63

 

$

1.44

 

$

0.53

 

$

1.41

 

$

5.22

 

Diluted earnings per share (5)

$

1.61

 

$

1.63

 

$

1.44

 

$

0.53

 

$

1.40

 

$

5.20

 

 

Nonperforming Assets

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans and leases

$

38,976

 

$

26,944

 

$

23,183

 

$

23,556

 

$

24,281

 

$

38,976

 

Loans and leases 90 days past due and accruing

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

Troubled debt restructuring not included above

 

6,803

 

 

6,864

 

 

6,988

 

 

7,137

 

 

7,154

 

 

6,803

 

Total nonperforming loans and leases

 

45,779

 

 

33,808

 

 

30,171

 

 

30,693

 

 

31,435

 

 

45,779

 

OREO

 

88

 

 

196

 

 

274

 

 

466

 

 

428

 

 

88

 

Total nonperforming assets

$

45,867

 

$

34,004

 

$

30,445

 

$

31,159

 

$

31,863

 

$

45,867

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued

 

Quarter-Ended

Year-Ended

Delinquency - Total loan and lease portfolio

 

Dec-20

 

Sep-20

 

Jun-20

 

Mar-20

 

Dec-19

 

Dec-20

Loans and leases 30-89 days past due and accruing

$

3,012

 

$

6,875

 

$

8,352

 

$

9,328

 

$

3,724

 

$

3,012

 

Loans and leases 90 days past due and accruing

 

0

 

 

0

 

 

0

 

 

0

 

 

794

 

 

0

 

Total loans and leases past due and accruing

 

3,012

 

 

6,875

 

 

8,352

 

 

9,328

 

 

4,518

 

 

3,012

 

 

Allowance for Credit Losses*

 

Balance at beginning of period

$

52,293

 

$

52,082

 

$

52,404

 

$

39,892

 

$

41,371

 

$

39,892

 

 

Impact of adopting ASC 326

 

0

 

 

0

 

 

0

 

 

(2,534)

 

 

0

 

 

(2,534)

 

 

Provision (credit) for credit losses

 

6

 

 

199

 

 

(348)

 

 

16,294

 

 

(1,000)

 

 

16,151

 

 

Net loan and lease charge-offs (recoveries)

 

630

 

 

(12)

 

 

(26)

 

 

1,248

 

 

479

 

 

1,840

 

 

Allowance for credit losses at end of period

$

51,669

 

$

52,293

 

$

52,082

 

$

52,404

 

$

39,892

 

$

51,669

 

 

*CECL was adopted January 1, 2020. Prior periods reflect the allowance for credit losses for loans under the incurred loss methodology.

 

Loan Classification - Total Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Mention

$

121,253

 

$

122,652

 

$

44,741

 

$

37,121

 

 

29,800

 

$

121,253

 

 

Substandard

 

68,645

 

 

45,384

 

 

48,046

 

 

52,894

 

 

60,499

 

 

68,645

 

 

Ratio Analysis

Credit Quality

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans and leases/total loans and leases (6)

 

0.87

%

 

0.63

%

 

0.56

%

 

0.62

%

 

0.64

%

 

0.87

%

Nonperforming assets/total assets

 

0.60

%

 

0.44

%

 

0.40

%

 

0.46

%

 

0.47

%

 

0.60

%

Allowance for credit losses/total loans and leases

 

0.98

%

 

0.97

%

 

0.96

%

 

1.06

%

 

0.81

%

 

0.98

%

Allowance/nonperforming loans and leases

 

112.87

%

 

154.68

%

 

172.62

%

 

170.74

%

 

126.90

%

 

112.87

%

Net loan and lease losses annualized/total average loans and leases

 

0.05

%

 

0.00

%

 

0.00

%

 

0.10

%

 

0.04

%

 

0.04

%

 

Capital Adequacy

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to average assets)

 

8.75

%

 

8.85

%

 

8.79

%

 

9.53

%

 

9.61

%

 

8.75

%

Total Capital (to risk-weighted assets)

 

14.39

%

 

14.26

%

 

13.95

%

 

13.62

%

 

13.53

%

 

14.39

%

 

Profitability (period-end)

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets *

 

1.23

%

 

1.27

%

 

1.16

%

 

0.48

%

 

1.26

%

 

1.05

%

Return on average equity *

 

13.26

%

 

13.59

%

 

12.48

%

 

4.71

%

 

12.59

%

 

11.09

%

Net interest margin (TE) *

 

3.12

%

 

3.26

%

 

3.45

%

 

3.44

%

 

3.44

%

 

3.31

%

** Quarterly ratios have been annualized

 

 

 

 

 

 

 

 

 

 

 

 

(1) Federal Reserve peer ratio as of September 30, 2020 the most recent data available, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.

(2) Average balances and yields on available-for-sale securities are based on historical amortized cost.

(3) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2020 and 2019 to increase tax exempt interest income to taxable-equivalent basis..

(4) 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, 2019.

(5) Earnings per share for the full fiscal year may not equal the sum of the quarterly earnings per share as a result of rounding of average shares

(6) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans and leases. The risk of credit loss on these loans has been considered by virtue of the Company's estimate of acquisition-date fair value and these loans are considered accruing as the Company primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows.

 

Stephen S. Romaine, President & CEO
Francis M. Fetsko, Executive VP, CFO & COO
Tompkins Financial Corporation (888) 503-5753

Source: Tompkins Financial Corporation