ITHACA, N.Y.--(BUSINESS WIRE)--
Tompkins Financial Corporation (NYSE American: TMP)
Tompkins Financial Corporation reported net income of $22.1 million for the second quarter of 2018, an increase of 30.3% from the $16.9 million reported for the same period in 2017. Year-to-date net income was $42.5 million, an increase of $9.9 million, or 30.2% over the same period in 2017.
Diluted earnings per share were $1.43 for the second quarter of 2018, up 28.8% over the second quarter of 2017. For the year-to-date period ended June 30, 2018, diluted earnings per share were $2.76, up 29.6% over the same period in 2017.
President and CEO, Stephen S. Romaine said “We are extremely pleased with our excellent results through the first half of 2018. The second quarter also marked a significant milestone for our Company. In May of this year, we moved our Corporate headquarters to a new building located across the street from our former headquarters location in downtown Ithaca. The move has allowed us to consolidate staff, which were previously located in seven different locations, into a new, modern, and more efficient space. The move has been extremely well received by our employees, clients, and the local community."
SELECTED HIGHLIGHTS FOR THE SECOND QUARTER AND YEAR-TO-DATE PERIODS:
- Diluted earnings per share for the quarter and year-to-date periods reflect the highest earnings in Company history for the respective periods.
- Quarterly results included certain unusual items that were primarily related to the move of our Corporate headquarters. These included approximately $2.9 million of gains related to sales of real estate and approximately $2.0 million of write downs associated with two leased properties that were recently vacated.
- Return on Average Equity was 15.13% for the second quarter and 14.78% for the year-to-date period, which reflect the highest returns in more than 10 years.
- Total loans of $4.8 billion were up 8.4% over the same period in 2017, and up 2.6% over December 31, 2017.
NET INTEREST INCOME
Net interest income of $52.7 million for the second quarter of 2018 increased by $2.4 million, or 4.8% compared to the same period in 2017. For the year-to-date period, net interest income was $105.4 million, up $7.1 million, or 7.2% from the same six-month period in 2017.
Net interest income benefited from growth in average loans and noninterest bearing deposits. Average loans were up $414.0 million, or 9.6% in the first six months of 2018, compared to the same six month period in 2017. Average noninterest bearing deposits were up $140.0 million, or 11.6% in the first six months of 2018, versus the same period in 2017. The net interest margin for the second quarter of 2018 was 3.36%, compared to 3.45% reported for the same period in 2017, and 3.42% for the quarter ended March 31, 2018. The decline in margin is largely due to loan growth out-pacing deposit growth, and the recent increases in market interest rates that have resulted in increased funding costs.
Noninterest income represented 28.6% of total revenues in the second quarter of 2018, compared to 25.8% in the same period in 2017, and 27.0% for the first six months of 2018. Noninterest income of $21.2 million was up 21.2% compared to the same period last year. Fee income associated with insurance, wealth management, deposit services, and card services for the second quarter of 2018 were up a combined $406,000 or 2.6% over the same period in 2017. The second quarter of 2018 also included a gain on sale of two properties totaling $2.9 million. The sale of these properties is related to the completion of the new Company headquarters building in the second quarter of 2018.
Noninterest expense was $45.0 million for the second quarter of 2018, up $3.4 million, or 8.2%, over the second quarter of 2017. For the year-to-date period, noninterest expense was $88.7 million, up $5.8 million, or 7.0%, from the same period in 2017. The increase in noninterest expense for both the second quarter and year-to-date periods included normal annual increases in salaries and wages. Noninterest expense for the second quarter of 2018 also included a $2.0 million write-down related to two leases on recently vacated space.
INCOME TAX EXPENSE
The Company's effective tax rate was 20.7% in the second quarter of 2018, compared to 32.7% 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 second quarter of 2018. Nonperforming assets represented 0.42% of total assets at June 30, 2018, compared to 0.38% at December 31, 2017, and 0.36% at June 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 $1.0 million for the second quarter of 2018 and 2017. Net charge-offs for the second quarter of 2018 were $31,000 compared to net recoveries of $15,000 reported in the second quarter of 2017.
The Company’s allowance for originated loan and lease losses totaled $41.2 million at June 30, 2018, and represented 0.91% of total originated loans and leases at June 30, 2018, unchanged from both the most recent prior quarter, and June 30, 2017. The total allowance represented 158.08% of total nonperforming loans and leases at June 30, 2018, compared to 172.84% at December 31, 2017, and 178.59% at June 30, 2017.
Capital ratios remain well above the regulatory well capitalized minimums. The ratio of tangible common equity to tangible assets was 7.36% at June 30, 2018, improved from the 7.29% reported for the most recent prior quarter ended March 31, 2018, and down from 7.50% at June 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||$||80,702||$||77,688|
|Interest bearing balances due from banks||1,971||6,615|
|Cash and Cash Equivalents||82,673||84,303|
|Available-for-sale securities, at fair value (amortized cost of $1,385,805 at June 30,|
|2018 and $1,408,996 at December 31, 2017)||1,343,690||1,391,863|
|Held-to-maturity securities, at amortized cost (fair value of $137,221 at June 30, 2018|
|and $140,315 at December 31, 2017)||139,413||139,216|
|Equity securities, at fair value (amortized cost $1,000,000 at June 30, 2018|
|and $1,000,000 at December 31, 2017)||888||913|
|Originated loans and leases, net of unearned income and deferred costs and fees (2)||4,507,006||4,358,543|
|Acquired loans (3)||284,187||310,577|
|Less: Allowance for loan and lease losses||41,225||39,771|
|Net Loans and Leases||4,749,968||4,629,349|
|Federal Home Loan Bank and other stock||58,770||50,498|
|Bank premises and equipment, net||93,994||86,995|
|Corporate owned life insurance||81,126||80,106|
|Other intangible assets, net||8,342||9,263|
|Accrued interest and other assets||94,653||83,494|
|Checking, savings and money market||2,749,782||2,651,632|
|Federal funds purchased and securities sold under agreements to repurchase||52,042||75,177|
|Trust preferred debentures||16,777||16,691|
|Tompkins Financial Corporation shareholders' equity:|
|Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:|
|15,314,340 at June 30, 2018; and 15,301,524 at December 31, 2017||1,532||1,530|
|Additional paid-in capital||367,121||364,031|
|Accumulated other comprehensive loss||(69,436||)||(51,296||)|
|Treasury stock, at cost – 118,554 shares at June 30,2018, and 120,805 shares|
|at December 31, 2017||(4,597||)||(4,492||)|
|Total Tompkins Financial Corporation Shareholders’ Equity||589,173||574,780|
|Total Liabilities and Equity||$||6,745,800||$||6,648,290|
|TOMPKINS FINANCIAL CORPORATION|
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME|
|Three Months Ended||Six Months Ended|
|(In thousands, except per share data) (Unaudited)||06/30/2018||06/30/2017||06/30/2018||06/30/2017|
|INTEREST AND DIVIDEND INCOME|
|Due from banks||7||4||13||6|
|Federal Home Loan Bank and other stock||796||464||1,534||932|
|Total Interest and Dividend Income||62,143||56,342||122,283||109,963|
|Time certificates of deposits of $250,000 or more||540||466||525||907|
|Federal funds purchased and securities sold under agreements to|
|Trust preferred debentures||306||256||586||623|
|Total Interest Expense||9,429||6,041||16,882||11,628|
|Net Interest Income||52,714||50,301||105,401||98,335|
|Less: Provision for loan and lease losses||1,045||976||1,612||1,745|
|Net Interest Income After Provision for Loan and Lease Losses||51,669||49,325||103,789||96,590|
|Insurance commissions and fees||7,387||7,092||14,781||14,210|
|Investment services income||4,022||3,891||8,268||7,682|
|Service charges on deposit accounts||2,080||2,045||4,212||4,212|
|Card services income||2,621||2,676||4,767||4,685|
|Gain on sale of available-for-sale securities||150||0||274||0|
|Total Noninterest Income||21,158||17,450||38,988||34,690|
|Salaries and wages||21,377||20,480||42,375||40,116|
|Pension and other employee benefits||5,183||4,989||10,559||10,624|
|Net occupancy expense of premises||3,170||3,390||6,816||6,901|
|Furniture and fixture expense||1,673||1,637||3,648||3,234|
|Amortization of intangible assets||443||485||894||978|
|Other operating expense||12,435||9,970||23,043||19,928|
|Total Noninterest Expenses||44,985||41,568||88,706||82,936|
|Income Before Income Tax Expense||27,842||25,207||54,071||48,344|
|Income Tax Expense||5,751||8,248||11,512||15,637|
|Net Income attributable to noncontrolling interests and Tompkins Financial Corporation||22,091||16,959||42,559||32,707|
|Less: Net income attributable to noncontrolling interests||32||33||64||65|
|Net Income Attributable to Tompkins Financial Corporation||$||22,059||$||16,926||$||42,495||$||32,642|
|Basic Earnings Per Share||$||1.44||$||1.11||$||2.78||$||2.15|
|Diluted Earnings Per Share||$||1.43||$||1.11||$||2.76||$||2.13|
|Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)|
|Quarter Ended||YTD Period Ended||YTD Period Ended|
|June 30, 2018||June 30, 2018||June 30, 2017|
|(Dollar amounts in thousands)||(QTD)||Interest||Yield/ Rate||(YTD)||Interest||Yield/ Rate||(YTD)||Interest||Yield/ Rate|
|Interest-bearing balances due from banks||$||1,286||$||7||2.18||%||$||1,922||$||14||1.47||%||$||3,572|| |
|U.S. Government securities||1,442,384||8,042||2.24||%||1,448,274||15,997||2.23||%||1,477,512||15,621||2.13||%|
|State and municipal (5)||97,189||628||2.59||%||98,470||1,271||2.60||%||101,598||1,701||3.38||%|
|Other securities (5)||3,544||39||4.41||%||3,558||74||4.19||%||3,608||64||3.58||%|
|FHLBNY and FRB stock||53,967||796||5.92||%||51,750||1,534||5.98||%||39,426||932||4.77||%|
|Total loans and leases, net of unearned income (5)(6)||4,750,192||53,076||4.48||%||4,719,312||104,304||4.46||%||4,305,304||93,772||4.39||%|
|Total interest-earning assets||6,348,562||62,588||3.95||%||6,323,286||123,194||3.93||%||5,931,020||112,096||3.81||%|
|LIABILITIES & EQUITY|
|Interest bearing checking, savings & money market||$||2,832,800||1,940||0.27||%||$||2,814,601||3,587||0.26||%||$||2,680,639||2,265||0.17||%|
|Total interest-bearing deposits||3,494,302||3,627||0.42||%||3,504,005||6,395||0.37||%||3,548,210||5,736||0.33||%|
|Federal funds purchased & securities sold under|
|agreements to repurchase||54,246||34||0.25||%||64,649||80||0.25||%||69,560||151||0.44||%|
|Trust preferred debentures||16,749||306||7.33||%||16,728||586||7.06||%||20,063||623||6.26||%|
| Total interest-bearing liabilities |
|Non-interest bearing deposits||1,337,311||1,344,270||1,204,272|
|Accrued expenses and other liabilities||58,265||62,856||65,915|
| Total liabilities |
|Tompkins Financial Corporation Shareholders’ equity||583,492||578,541||562,896|
|Total liabilities and equity|| |
|Interest rate spread||3.15||%||3.20||%||3.28||%|
|Net interest income/margin on earning assets||53,159||3.36||%||106,312||3.39||%||100,468||3.42||%|
|Tax equivalent adjustments||(445)||(911)||(2,133)|
|Net interest income per consolidated financial statements||$||52,714||$||105,401||$||98,335|
|Tompkins Financial Corporation - Summary Financial Data (Unaudited)|
|(In thousands, except per share data)|
|Period End Balance Sheet|| |
Originated loans and leases, net of unearned
|Acquired loans and leases (3)||284,187||296,765||310,577||323,259||347,841||310,577|
|Allowance for loan and lease losses||41,225||40,211||39,771||38,038||37,157||39,771|
Federal funds purchased and securities sold under
|Trust preferred debentures||16,777||null|