ITHACA, N.Y.--(BUSINESS WIRE)--
Tompkins Financial Corporation (NYSE American:TMP):
Tompkins Financial Corporation reported diluted earnings per share of $1.36 for the third quarter of 2018, which represents an increase of 19.3% over the $1.14 reported in the third quarter of 2017. Net income for the third quarter of 2018 was $20.9 million, an increase of 20.2% over the $17.4 million reported for the same period in 2017.
Year-to-date diluted earnings per share of $4.12 for the first nine months of 2018 represents an increase of 26.0% over the same period in 2017. Year-to-date net income was $63.4 million, an increase of $13.4 million, or 26.7% over the same period in 2017.
President and CEO, Stephen S. Romaine said, “We are pleased to once again report record earnings for both the year-to-date and quarterly results. Current period net income growth rates have benefited from lower tax rates, though our year-to-date income before tax also reflected strong growth, with an increase of 8.3% over the same period in 2017. The current interest rate environment is challenging as we, along with most in our industry, have seen narrowing of our net interest margin. Despite the pressure on margins, our ability to grow loans and deposits has allowed us to see continued growth in net interest income, with the third quarter of 2018 representing our fourteenth consecutive quarterly increase in net interest income."
SELECTED HIGHLIGHTS FOR THE THIRD QUARTER AND YEAR-TO-DATE PERIODS:
- Year-to-date diluted earnings per share reflect the best performance for the first nine months of any year in the Company's history. Quarterly diluted earnings per share also reflect the best third quarter performance in the Company's history.
- Year-to-date profitability indicators remain strong with return on average assets of 1.27%; and a return on average shareholders' equity of 14.47% for 2018, which are improved from 1.06% and 11.70%, respectively, for the same period in 2017.
- Total loans of $4.8 billion at September 30, 2018, were up 7.0% over September 30, 2017, and up 2.9% over December 31, 2017.
- Total deposits of $5.0 billion at September 30, 2018, were up $81.1 million, or 1.6% compared to September 30, 2017, and up $187.3 million, or 3.9% over December 31, 2017. Total non-interest bearing deposits were up $26.9 million over prior quarter.
NET INTEREST INCOME
Net interest income of $53.2 million for the third quarter of 2018 increased by $2.2 million, or 4.2% compared to the same period in 2017. For the year-to-date period, net interest income was $158.6 million, up $9.2 million, or 6.2% from the same nine-month period in 2017.
Growth in net interest income for the nine months ended September 30, 2018 was largely driven by $388.0 million of growth in average loans over the same period in 2017, an increase of 8.9%. Average deposits for the nine months ended September 30, 2018, increased $93.6 million, or 2.0% compared to the same period in 2017. Included in the increase in average deposits was a $125.0 million or 10.1% increase in average noninterest bearing deposits. The net interest margin for the third quarter of 2018 was 3.35%, compared to 3.40% reported for the same period in 2017, and 3.36% for the quarter ended June 30, 2018. The decline in margin from the same period last year is largely due to changes in the interest rate environment, which has resulted in funding costs rising at a faster rate than asset yields.
Noninterest income represented 25.9% of total revenues in the third quarter of 2018, compared to 25.2% in the same period in 2017, and 26.6% for the first nine months of 2018, compared to 25.8% in the same period in 2017. Noninterest income of $18.6 million for the third quarter of 2018 was up 8.1% compared to the same period last year. Fee income in the third quarter of 2018 associated with insurance, wealth management, deposit services, and card services were up a combined $671,000 or 4.2% over the same period in 2017.
Noninterest expense was $45.1 million for the third quarter of 2018, up $3.3 million, or 7.8%, over the third quarter of 2017. For the year-to-date period, noninterest expense was $133.8 million, up $9.0 million, or 7.2%, from the same period in 2017. The higher noninterest expense in 2018 included lease write-downs of $2.0 million (pre-tax) in the second quarter and $514,000 (pre-tax) in the third quarter related to leases on recently vacated space. Noninterest expense increases for both the third quarter and year-to-date periods of 2018 also included normal annual increases in salaries and wages.
INCOME TAX EXPENSE
The Company's effective tax rate was 20.6% in the third quarter of 2018, compared to 32.8% for the same period in 2017. The decrease is a direct result of The Tax Cuts and Jobs Act of 2017, which reduced the Federal statutory tax rate from 35% in 2017, to 21% in 2018.
Asset quality trends remained strong in the third quarter of 2018. Nonperforming assets represented 0.39% of total assets at September 30, 2018, compared to 0.38% at December 31, 2017, and 0.37% at September 30, 2017. Nonperforming asset levels continue to be well below the most recent Federal Reserve Board Peer Group Average1 of 0.61%.
Provision for loan and lease losses was $272,000 for the third quarter of 2018, compared to $402,000 for the third quarter of 2017. Net charge-offs for the third quarter of 2018 were $138,000 compared to net recoveries of $479,000 in the third quarter of 2017.
The Company’s allowance for originated loan and lease losses totaled $41.3 million at September 30, 2018, and represented 0.91% of total originated loans and leases at September 30, 2018, unchanged from both December 31, 2017, and September 30, 2017. The total allowance represented 169.00% of total nonperforming loans and leases at September 30, 2018, compared to 172.84% at December 31, 2017, and 170.12% at September 30, 2017.
Capital ratios remain well above the regulatory well capitalized minimums. The ratio of tangible common equity to tangible assets was 7.49% at September 30, 2018, improved from the 7.36% reported for the most recent prior quarter ended June 30, 2018, and down from 7.58% at September 30, 2017.
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 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.
The statements made herein shall not confer upon any person any rights or remedies of any nature, and shall not be construed to establish, amend, or modify any benefit plan, program, agreement, or arrangement, nor to alter any existing at-will employment relationship between the Company and its employees.
|TOMPKINS FINANCIAL CORPORATION|
|CONDENSED CONSOLIDATED STATEMENTS OF CONDITION|
|(In thousands, except share and per share data) (Unaudited)||As of||As of|
|Cash and noninterest bearing balances due from banks||$||111,245||$||77,688|
|Interest bearing balances due from banks||1,917||6,615|
|Cash and Cash Equivalents||113,162||84,303|
|Available-for-sale securities, at fair value (amortized cost of $1,360,508 at September 30, 2018 and $1,408,996 at December 31, 2017)||1,310,672||1,391,863|
|Held-to-maturity securities, at amortized cost (fair value of $138,232 at September 30, 2018 and $140,315 at December 31, 2017)||141,236||139,216|
|Equity securities, at fair value (amortized cost $1,000,000 at September 30, 2018 and $1,000,000 at December 31, 2017)||880||913|
|Originated loans and leases, net of unearned income and deferred costs and fees (2)||4,531,241||4,358,543|
|Acquired loans (3)||271,468||310,577|
|Less: Allowance for loan and lease losses||41,358||39,771|
|Net Loans and Leases||4,761,351||4,629,349|
|Federal Home Loan Bank and other stock||48,456||50,498|
|Bank premises and equipment, net||95,638||86,995|
|Corporate owned life insurance||81,625||80,106|
|Other intangible assets, net||7,989||9,263|
|Accrued interest and other assets||93,668||83,494|
|Checking, savings and money market||2,950,616||2,651,632|
|Federal funds purchased and securities sold under agreements to repurchase||52,875||75,177|
|Trust preferred debentures||16,820||16,691|
|Tompkins Financial Corporation shareholders' equity:|
|Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 15,313,825 at September 30, 2018; and 15,301,524 at December 31, 2017||1,531||1,530|
|Additional paid-in capital||367,669||364,031|
|Accumulated other comprehensive loss||(74,937||)||(51,296||)|
|Treasury stock, at cost – 120,278 shares at September 30,2018, and 120,805 shares at December 31, 2017||(4,748||)||(4,492||)|
|Total Tompkins Financial Corporation Shareholders’ Equity||597,636||574,780|
|Total Liabilities and Equity||$||6,746,960||$||6,648,290|
|Three Months Ended||Nine Months Ended|
|(In thousands, except per share data) (Unaudited)||09/30/2018||09/30/2017||09/30/2018||09/30/2017|
|INTEREST AND DIVIDEND INCOME|
|Due from banks||8||9||22||15|
|Federal Home Loan Bank and other stock||899||534||2,433||1,466|
|Total Interest and Dividend Income||63,984||57,772||186,267||167,735|
|Time certificates of deposits of $250,000 or more||563||457||1,088||1,364|
|Federal funds purchased and securities sold under agreements to|
|Trust preferred debentures||318||265||904||888|
|Total Interest Expense||10,821||6,772||27,703||18,400|
|Net Interest Income||53,163||51,000||158,564||149,335|
|Less: Provision for loan and lease losses||272||402||1,884||2,147|
|Net Interest Income After Provision for Loan and Lease Losses||52,891||50,598||156,680||147,188|
|Insurance commissions and fees||7,903||7,682||22,684||21,892|
|Investment services income||4,097||3,862||12,365||11,544|
|Service charges on deposit accounts||2,088||2,125||6,300||6,337|
|Card services income||2,442||2,190||7,209||6,875|
|Gain (loss) on securities transactions||16||(423||)||290||(423||)|
|Total Noninterest Income||18,603||17,202||57,591||51,892|
|Salaries and wages||22,029||20,931||64,404||60,868|
|Pension and other employee benefits||5,300||5,344||15,859||16,195|
|Net occupancy expense of premises||3,057||3,064||9,873||9,965|
|Furniture and fixture expense||1,814||1,585||5,461||4,819|
|Amortization of intangible assets||440||481||1,334||1,459|
|Other operating expense||11,781||9,858||34,825||29,738|
|Total Noninterest Expenses||45,133||41,883||133,839||124,819|
|Income Before Income Tax Expense||26,361||25,917||80,432||74,261|
|Income Tax Expense||5,427||8,491||16,939||24,127|
|Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation||20,934||17,426||63,493||50,134|
|Less: Net Income Attributable to Noncontrolling Interests||32||32||96||97|
|Net Income Attributable to Tompkins Financial Corporation||$||20,902||$||17,394||$||63,397||$||50,037|
|Basic Earnings Per Share||$||1.37||$||1.14||$||4.15||$||3.30|
|Diluted Earnings Per Share||$||1.36||$||1.14||$||4.12||$||3.27|
|Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)|
|Quarter Ended||YTD Period Ended||YTD Period Ended|
|September 30, 2018||September 30, 2018||September 30, 2017|
|(Dollar amounts in thousands)||(QTD)||Interest||Yield/ Rate||(YTD)||Interest||Yield/ Rate||(YTD)||Interest||Yield/ Rate|
|Interest-bearing balances due from banks||$||2,513||$||8||1.26||%||$||2,121||$||22||1.39||%||$||3,547||$||15||0.57||%|
|U.S. Government securities||1,418,742||7,766||2.17||%||1,438,322||23,763||2.21||%||1,476,459||23,352||2.11||%|
|State and municipal (5)||95,758||627||2.60||%||97,556||1,898||2.60||%||101,080||2,552||3.38||%|
|Other securities (5)||3,435||39||4.50||%||3,516||113||4.30||%||3,602||96||3.56||%|
|FHLBNY and FRB stock||54,871||899||6.50||%||52,802||2,433||6.16||%||41,639||1,466||4.71||%|
|Total loans and leases, net of unearned income (5)(6)||4,781,462||55,095||4.57||%||4,740,257||159,398||4.50||%||4,352,292||143,497||4.41||%|
|Total interest-earning assets||6,356,781||64,434||4.02||%||6,334,574||187,627||3.96||%||5,978,619||170,978||3.82||%|
|LIABILITIES & EQUITY|
|Interest bearing checking, savings & money market||$||2,789,432||2,532||0.36||%||$||2,806,119||6,118||0.29||%||$||2,664,405||3,620||0.18||%|
|Total interest-bearing deposits||3,426,858||4,393||0.51||%||3,478,007||10,787||0.41||%||3,509,463||8,872||0.34||%|
|Federal funds purchased & securities sold under|
|agreements to repurchase||59,626||35||0.23||%||62,956||115||0.24||%||65,798||195||0.40||%|
|Trust preferred debentures||16,792||318||7.51||%||16,749||904||7.22||%||18,903||888||6.28||%|
|Total interest-bearing liabilities||4,644,533||10,821||0.92||%||4,670,832||27,703||0.79||%||4,455,453||18,400||0.55||%|
|Non-interest bearing deposits||1,409,401||1,366,219||1,241,173|
|Accrued expenses and other liabilities||65,307||63,682||66,094|
|Tompkins Financial Corporation Shareholders’ equity||595,721||584,331||570,403|
|Total liabilities and equity||$||6,716,452||$||6,686,523||$||6,334,602|
|Interest rate spread||3.10||%||3.17||%||3.27||%|
|Net interest income/margin on earning assets||53,613||3.35||%||159,924||3.38||%||152,578||3.41||%|
|Tax equivalent adjustments||(450)||(1,360)||(3,243)|
|Net interest income per consolidated financial statements||$||53,163||$||158,564||$||149,335|
Tompkins Financial Corporation - Summary Financial Data (Unaudited)
|(In thousands, except per share data)|
|Period End Balance Sheet||Sep-18||Jun-18||Mar-18|| |
|Originated loans and leases, net of unearned income and deferred costs and fees (2)||4,531,241||4,507,006||4,408,081||4,358,543||4,167,254||4,358,543|
|Acquired loans and leases (3)||271,468||284,187||296,765||310,577||323,259||310,577|
|Allowance for loan and lease losses||41,358||41,225||40,211||39,771||38,038||39,771|
|Federal funds purchased and securities sold under agreements to repurchase||52,875||52,042||69,131||75,177||73,874||75,177|
|Trust preferred debentures||16,820||16,777||16,734||16,691||16,648||16,691|
|Total common equity||597,636||589,173||577,967||574,780||588,349||574,780|