Tompkins Financial Corporation Reports Strong First Quarter Operating Results

Tompkins Financial Corporation Reports Strong First Quarter Operating Results

ITHACA, N.Y.--(BUSINESS WIRE)-- Tompkins Financial Corporation (TMP-NYSE MKT LLC)


Tompkins Financial Corporation reported net income of $11.5 million for the first quarter of 2013, an increase of 47.4% from the $7.8 million reported for the same period in 2012. Diluted earnings per share were $0.79 for the first quarter of 2013, a 12.9% increase from $0.70 reported for the first quarter of 2012. Income Statement and Statement of Condition comparisons to the same period last year are impacted by the acquisition of VIST Financial Corporation on August 1, 2012.

President and CEO, Stephen S. Romaine said "We are pleased to start 2013 with some positive trends. Earnings per share for the quarter reflect double digit growth over the same period last year; loan and deposit balances are both up from year end; and noninterest income was up during the quarter, driven largely by growth in insurance revenues. With the integration of VIST largely behind us, we look forward to strengthening our customer relationships and welcoming new customers in the Southeastern, Pennsylvania market."

FIRST QUARTER SELECTED HIGHLIGHTS:

  • Merger related expenses had a relatively modest impact on earnings in the first quarter of 2013; and it is not expected that additional merger expenses related to the VIST acquisition will affect future periods. Adjusting out the after tax impact of merger related expenses, the diluted earnings per share for the quarters ended March 13, 2013, December 31, 2012, and March 31, 2012, were $0.81, $0.81, and $0.71, respectively. Refer to Non-GAAP disclosure for additional details on adjusted diluted earnings per share.

  • Annualized return on average equity was 10.53% for the quarter ended March 31, 2013, compared to 10.35% for the same period in 2012. Tangible book value per share has increased for the second consecutive quarter, and is up 1.3% from the first quarter 2012. Refer to Non-GAAP disclosure for additional details on tangible book value per share.

  • Credit quality improved with non-performing assets representing 0.83% of assets, compared to 0.92% at December 31, 2012, and 1.19% at March 31, 2012.

  • Total loans of $3.0 billion were up 51.4% over the same period in 2012, and were up 1.3% from year end 2012. Total deposits were $4.1 billion at March 31, 2013, up $1.2 billion or 42.4% compared to March 31, 2012, and up 3.1% from year end 2012.

NET INTEREST INCOME

Net interest income of $38.2 million for the first quarter of 2013 increased 39.2% or $10.8 million, compared to $27.4 million for the same period in 2012. The addition of VIST Bank and steady loan growth contributed to the year-over-year increase. Net interest income was down $3.6 million from the fourth quarter of 2012, primarily due to less accretion of purchase accounting loan marks in the first quarter of 2013 compared to the fourth quarter of 2012. The net interest margin for the first quarter of 2013 was 3.57% compared to 3.51% for the first quarter of 2012 and 3.83% for the fourth quarter of 2012.

NONINTEREST INCOME

Noninterest income was $17.4 million for the first quarter of 2013, up 49.1% over the same period in 2012, and up 11.4% from the fourth quarter of 2012. Insurance commissions and fees, corporate owned life insurance and other income were up from the most recent prior quarter and from the same quarter last year. Investment services income of $3.8 million for the first quarter of 2013 was up 11.5% from the same quarter last year, but was down modestly from the most recent prior quarter, primarily due to lower estate settlement fees in the current period.

NONINTEREST EXPENSE

Noninterest expense was $37.5 million for the first quarter of 2013, up 42.3% compared to March 31, 2012, and down 1.7% from the fourth quarter of 2012. The increase from the same quarter last year is mainly a result of the VIST acquisition. The decline from the fourth quarter of 2012 was mainly due to a decline in merger related expenses from $770,000 in the fourth quarter of 2012, to $196,000 in the first quarter of 2013. In addition, the fourth quarter of 2012 included amortization of $1.6 million related to an investment in a historical tax credit, with an offsetting reduction to income tax expense.

ASSET QUALITY

Asset quality trends on originated loans continue to show improvement when compared to the same period prior year. Originated loans and leases exclude loans acquired in the VIST acquisition. The ratio of nonperforming assets to total assets improved to 0.83% at March 31, 2013, compared to 1.19% reported at March 31, 2012, and remains well below the most recent peer averages of 1.97% published as of December 31, 2012, by the Federal Reserve1. Loans classified as either Substandard or Special Mention were down compared to year end 2012. The balances of originated loans classified as either Substandard or Special Mention were down for the third consecutive quarter. There was an increase in loans classified as Substandard or Special Mention in the acquired VIST Bank loan portfolio; however, the changes in risk ratings 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 $1.0 million for the first quarter of 2013, which was an improvement of 7.7% compared to the first quarter of 2012. Net loan and lease charge-offs totaled $1.0 million in the first quarter of 2013, down from $7.6 million in the fourth quarter of 2012 and down from $1.8 million in the first quarter of 2012.

The Company's allowance for originated loan and lease losses totaled $24.6 million at March 31, 2013, which represented 1.11% of total originated loans, and was in line with December 31, 2012. The allowance for loan and lease losses covered 66.17% of nonperforming loans and leases as of March 31, 2013, compared to 62.34% of nonperforming loans and leases as of December 31, 2012.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital as a percentage of average assets at March 31, 2013, was 8.11%; and the ratio of total capital to risk-weighted assets was 12.93%.

ABOUT TOMPKINS FINANCIAL CORPORATION

Tompkins Financial Corporation is a financial services company with $5.0 billion in assets 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" 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

03/31/2013

12/31/2012

Cash and noninterest bearing balances due from banks

$

97,670

$

117,448

Interest bearing balances due from banks

1,483

1,482

Cash and Cash Equivalents

99,153

118,930

Trading securities, at fair value

15,631

16,450

Available-for-sale securities, at fair value (amortized cost of $1,489,386 at March 31,

2013 and $1,349,416 at December 31, 2012)

1,527,575

1,393,340

Held-to-maturity securities, fair value of $24,355 at March 31, 2013, and $25,163

at December 31, 2012

23,304

24,062

Originated loans and leases, net of unearned income and deferred costs and fees (2)

2,208,346

2,133,106

Acquired loans and leases, covered (3)

35,304

37,600

Acquired loans and leases, non-covered (3)

750,145

783,904

Less: Allowance for originated loan and lease losses

24,661

24,643

Net Loans and Leases

2,969,134

2,929,967

FDIC Indemnification Asset

4,465

4,385

Federal Home Loan Bank stock and Federal Reserve Bank stock

19,646

19,388

Bank premises and equipment, net

54,901

54,581

Corporate owned life insurance

65,657

65,102

Goodwill

92,305

92,305

Other intangible assets, net

18,009

18,643

Accrued interest and other assets

97,500

100,044

Total Assets

$

4,987,280

$

4,837,197

LIABILITIES

Deposits:

Interest bearing:

Checking, savings and money market

2,322,233

2,144,367

Time

978,351

973,883

Noninterest bearing

771,768

831,919

Total Deposits

4,072,352

3,950,169

Federal funds purchased and securities sold under agreements to repurchase

194,091

213,973

Other borrowings, including certain amounts at fair value of $11,770 at March 31, 2013

and $11,847 at December 31, 2012

156,649

111,848

Trust preferred debentures

43,687

43,668

Other liabilities

73,689

76,179

Total Liabilities

$

4,540,468

$

4,395,837

EQUITY

Tompkins Financial Corporation shareholders' equity:

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:

14,482,927 at March 31, 2013; and 14,426,711 at December 31, 2012

1,448

1,443

Additional paid-in capital

337,097

334,649

Retained earnings

114,747

108,709

Accumulated other comprehensive loss

(5,195)

(2,106)

Treasury stock, at cost - 98,610 shares at March 31, 2013, and 100,054 shares

at December 31, 2012

(2,770)

(2,787)

Total Tompkins Financial Corporation Shareholders' Equity

445,327

439,908

Noncontrolling interests

1,485

1,452

Total Equity

$

446,812

$

441,360

Total Liabilities and Equity

$

4,987,280

$

4,837,197

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

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

03/31/2013

03/31/2012

INTEREST AND DIVIDEND INCOME

Loans

$

36,429

$

25,303

Due from banks

7

3

Federal funds sold

0

2

Trading securities

165

198

Available-for-sale securities

7,480

7,176

Held-to-maturity securities

191

225

Federal Home Loan Bank stock and Federal Reserve Bank stock

185

221

Total Interest and Dividend Income

44,457

33,128

INTEREST EXPENSE

Time certificates of deposits of $100,000 or more

1,204

734

Other deposits

2,182

2,027

Federal funds purchased and securities sold under agreements to repurchase

1,010

1,092

Trust preferred debentures

687

405

Other borrowings

1,168

1,429

Total Interest Expense

6,251

5,687

Net Interest Income

38,206

27,441

Less: Provision for loan and lease losses

1,038

1,125

Net Interest Income After Provision for Loan and Lease Losses

37,168

26,316

NONINTEREST INCOME

Insurance commissions and fees

7,261

3,638

Investment services income

3,788

3,397

Service charges on deposit accounts

1,908

1,785

Card services income

1,738

1,569

Mark-to-market loss on trading securities

(115)

(82)

Mark-to-market gain on liabilities held at fair value

77

88

Other income

2,366

1,264

Net gain on securities transactions

367

2

Total Noninterest Income

17,390

11,661

NONINTEREST EXPENSES

Salaries and wages

15,572

11,300

Pension and other employee benefits

6,070

4,299

Net occupancy expense of premises

3,061

1,805

Furniture and fixture expense

1,457

1,100

FDIC insurance

772

528

Amortization of intangible assets

557

133

Merger related expenses

196

94

Other operating expense

9,835

7,112

Total Noninterest Expenses

37,520

26,371

Income Before Income Tax Expense

17,038

11,606

Income Tax Expense

5,495

3,762

Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation

11,543

7,844

Less: Net income attributable to noncontrolling interests

33

33

Net Income Attributable to Tompkins Financial Corporation

$

11,510

$

7,811

Basic Earnings Per Share

$

0.80

$

0.70

Diluted Earnings Per Share

$

0.79