Tompkins Financial Corporation Reports Increase in Second Quarter Earnings

Tompkins Financial Corporation Reports Increase in Second Quarter Earnings

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

Tompkins Financial Corporation reported diluted earnings per share of $0.75 for the second quarter of 2013, an increase of 4.2% from the $0.72 reported for the same period in 2012. Net income of $11.0 million for the second quarter of 2013, represents a 24.7% increase from the same period in 2012. Year to date diluted earnings per share were $1.55 for the current period, up 9.2% over the first six months of 2012. Year to date net income of $22.5 million in 2013 is up 35.3% over the same period in 2012.


Comparisons of the Statement of Income and Statement of Condition to the same period last year are impacted by the acquisition of VIST Financial Corporation on August 1, 2012. As more fully disclosed in the non-GAAP disclosure section of this press release, net income and diluted earnings in the current and prior period were also impacted by merger related expenses. The second quarter of 2012 also included $243,000 in after tax income related to the reversal of an accrued liability resulting from the settlement of litigation between VISA Inc. and certain merchants. After adjusting for the after-tax impact of the above items, diluted earnings per share for the second quarter of 2013 would have been approximately flat compared to the prior year, and year to date diluted earnings per share would have been up by approximately 6.8% over the same period last year.

President and CEO, Stephen S. Romaine said "We saw positive trends during the quarter, with net interest income up $1.6 million from the first quarter of 2013, representing an annualized growth rate of 17.0%. The growth was fueled by increased loans and noninterest-bearing deposits, which reflected annualized growth of 8.2% and 14.7% respectively over the first quarter of 2013. The improvement in net interest income was tempered by higher provision expense during the quarter, and lower noninterest income as compared to the prior quarter. Overall performance remains strong, with annualized return on average equity of 10.20% for the quarter, which is ahead of the same period last year and compares favorably to the most recent Federal Reserve Board peer ratio of 8.43% 1."

NET INTEREST INCOME

Net interest income of $39.8 million for the second quarter of 2013 represents an increase of 41.7% over the same period last year. The addition of VIST Bank and steady loan growth contributed to the year-over-year increase. Net interest income for the quarter was up $1.6 million, or 4.24%, from the first quarter of 2013, primarily due to growth in average loans and noninterest-bearing deposits. The net interest margin for the second quarter of 2013 was 3.58% compared to 3.57% for the first quarter in 2013 and 3.52% for the second quarter of 2012. For the year to date period, net interest income of $78.0 million reflects an increase of 40.5% over the first six months of 2012.

NONINTEREST INCOME

Noninterest income was $16.5 million for the second quarter of 2013, up 29.6% over the same period in 2012, and down 4.9% from the first quarter of 2013. The increase from the same quarter last year is mainly a result of the VIST acquisition. The most significant contributors to the decline from the first quarter of 2013 were lower realized gains on available for sale securities and lower income related to our investment in a Small Business Investment Company. Insurance commissions, investment services income and card services income were also down modestly from the first quarter, while service charges on deposit accounts were up modestly. For the year to date period, noninterest income of $33.9 million was up 38.9% from the same six month period in 2012.

NONINTEREST EXPENSE

Noninterest expense was $37.8 million in the second quarter of 2013, up 40.7% from the same period in 2012, and up 0.7% from the first quarter of 2013. For the year to date period, noninterest income of $75.3 million was up 41.5% from the same six month period in 2012. The increase in noninterest expense over the same quarter and year to date periods of 2012 is mainly a result of the VIST acquisition.

ASSET QUALITY

The ratio of nonperforming assets to total assets of 0.89% reflects improvement from 1.17% for the same period last year, and is up from 0.83% at March 31, 2013. The nonperforming asset ratio continues to compare favorably to the most recent peer averages of 1.87% published as of March 31, 2013, by the Federal Reserve1.

Asset quality trends on originated loans continue to improve with loans classified as special mention or worse down 30.5% from a year ago, and down 7.5% from last quarter. Originated loans and leases exclude loans acquired in the VIST acquisition. In the acquired loan portfolio, loans classified special mention or worse increased by 13.6% from the first quarter of 2013, resulting in 2.0% increase in total loans classified as special mention or worse. The increase in loans classified as Substandard or Special Mention in the acquired loan portfolio 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 $2.5 million for the second quarter of 2013, up from $1.0 million in the same quarter last year, and $1.0 million in the first quarter of 2013. Net loan and lease (recoveries) charge-offs totaled $1.7 million in the second quarter of 2013, compared to $1.1 million in the second quarter last year, and $1.0 million in the first quarter of 2013. The current period included net recoveries of $1.2 million in the originated portfolio, while the acquired portfolio included net (recoveries) charge-offs of $2.9 million.

The Company's allowance for originated loan and lease losses totaled $24.9 million at June 30, 2013, which represented 1.08% of total originated loans, compared to 1.16% at December 31, 2012, reflecting improved quality of the originated portfolio. The allowance for loan and lease losses covered 64.99% of nonperforming loans and leases as of June 30, 2013, which compares to 62.34% as of December 31, 2012.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets improved for the second consecutive quarter, to 8.16% at June 30, 2013. Total risk based capital also improved during the quarter to 13.34%. The improvement in capital ratios was primarily driven by growth in retained earnings. Despite the increase in retained earnings during the quarter, tangible book value per share decline by 5.2% to $22.08, as the rise in market interest rates during the quarter negatively impacted accumulated other comprehensive income associated with unrealized gains available-for-sale securities. Refer to Non-GAAP disclosure for additional details on tangible book value per share.

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, 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 (Unaudited)" 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 ofAs of
ASSETS

 06/30/2013 

 12/31/2012 

 
Cash and noninterest bearing balances due from banks$65,064$117,448
Interest bearing balances due from banks    1,479    1,482 
Cash and Cash Equivalents66,543118,930
 
Trading securities, at fair value14,68816,450
Available-for-sale securities, at fair value (amortized cost of $1,434,359 at June 30,
2013 and $1,349,416 at December 31, 2012)1,434,4541,393,340
Held-to-maturity securities, fair value of $21,129 at June 30, 2013, and $25,163
at December 31, 201220,17324,062
Originated loans and leases, net of unearned income and deferred costs and fees2,309,2322,133,106
Acquired loans and leases, covered31,54837,600
Acquired loans and leases, non-covered714,403783,904
Less: Allowance for loan and lease losses    25,458    24,643 
Net Loans and Leases3,029,7252,929,967
 
FDIC Indemnification Asset4,2704,385
Federal Home Loan Bank stock and Federal Reserve Bank stock26,03919,388
Bank premises and equipment, net54,82454,581
Corporate owned life insurance66,14365,102
Goodwill92,14092,305
Other intangible assets, net17,40018,643
Accrued interest and other assets    105,484    100,044 
Total Assets   $4,931,883   $4,837,197 
 
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market2,174,9262,144,367
Time937,775973,883
Noninterest bearing    800,209    831,919 
Total Deposits3,912,9103,950,169
 
Federal funds purchased and securities sold under agreements to repurchase171,498213,973
Other borrowings, including certain amounts at fair value of $11,424 at June 30, 2013
and $11,847 at December 31, 2012299,098111,848
Trust preferred debentures43,70343,668
Other liabilities    72,780    76,179 
Total Liabilities   $4,499,989   $4,395,837 
 
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
14,635,468 at June 30, 2013; and 14,426,711 at December 31, 20121,4641,443
Additional paid-in capital339,233334,649
Retained earnings120,218108,709
Accumulated other comprehensive loss(27,667)(2,106)
Treasury stock, at cost - 101,055 shares at June 30, 2013, and 100,054 shares
at December 31, 2012(2,871)(2,787)
 
Total Tompkins Financial Corporation Shareholders' Equity430,377439,908
Noncontrolling interests    1,517    1,452 
Total Equity   $431,894   $441,360 
Total Liabilities and Equity   $4,931,883   $4,837,197 
 
See notes to unaudited condensed consolidated financial statements
 
 
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
   Three Months EndedSix Months Ended
(In thousands, except per share data) (Unaudited)

  06/30/2013

  06/30/2012

  06/30/2013

  06/30/2012

INTEREST AND DIVIDEND INCOME
Loans$37,550$25,403$73,979$50,706
Due from banks1588
Federal funds sold0002
Trading securities160189325387
Available-for-sale securities7,9127,52315,39214,699
Held-to-maturity securities177225368450
Federal Home Loan Bank stock and Federal Reserve Bank stock    160  196  345  417 
Total Interest and Dividend Income    45,960  33,541  90,417  66,669 
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more1,2397202,4431,454
Other deposits2,0161,7984,1983,825
Federal funds purchased and securities sold under agreements to repurchase9661,0741,9762,166
Trust preferred debentures6904021,377807
Other borrowings    1,223  1,437  2,391  2,866 
Total Interest Expense    6,134  5,431  12,385  11,118 
Net Interest Income    39,826  28,110  78,032  55,551 
Less: Provision for loan and lease losses    2,489  1,011  3,527  2,136 
Net Interest Income After Provision for Loan and Lease Losses    37,337  27,099   Read Full Story

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