Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Tompkins Financial Corporation Reports First Quarter Earnings By: Tompkins Financial Corporation via Business Wire April 28, 2023 at 09:00 AM EDT Tompkins Financial Corporation (NYSE American: TMP) Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.35 for the first quarter of 2023, in line with the immediate prior quarter, and down 15.6% from diluted earnings per share of $1.60 reported in the first quarter of 2022. The first quarter results in the prior year included $2.0 million, pre-tax, ($0.10 per diluted share) in net fees related to the SBA's Paycheck Protection Program loans ("PPP"), compared to net fees of $2,000 in the current period. Net income for the first quarter of 2023 was $19.4 million, a decrease of 16.7% from the $23.3 million reported for the same period in 2022. Increased funding costs coupled with increases in operating expense were the main drivers for the year-over-year decreases in net income. Tompkins President and CEO, Stephen Romaine, commented, "The first quarter of 2023 was a tumultuous quarter for the banking industry. In times like these, our business model - built on strong customer relationships and sustainable financial performance - has helped differentiate Tompkins from companies with less tenable business models. Though we are not immune to certain headwinds facing our industry - as evident from reduced earnings in the first quarter - we are pleased to report an increase in our common equity for the second consecutive quarter, a strong liquidity position, while at the same time delivering an annualized return on equity of 12.45% in the first quarter of 2023." SELECTED HIGHLIGHTS FOR THE PERIOD: Key profitability measures remained healthy in the first quarter, with a return on average assets of 1.03% (up from 1.00% last quarter); net interest margin of 2.99% (down from 3.02% last quarter); and return on equity of 12.45% (down from 13.36% last quarter). Regulatory Tier 1 capital to average assets improved for the sixth consecutive quarter, ending the first quarter of 2023 at 9.63%. Total loans at March 31, 2023 were $5.3 billion, in line with the immediate prior quarter, and up $210.2 million, or 4.2% from March 31, 2022. Excluding PPP loans, total loans at March 31, 2023 were up 4.6% over the first quarter of 2022. Total nonperforming assets at March 31, 2023 represented 0.37% of total assets and declined 13.7% from the most recent prior quarter. Total deposits at March 31, 2023 were $6.5 billion, reflecting a 1.4% decrease compared to year-end 2022 and a decline of 7.2% when compared to same period last year. NET INTEREST INCOME Net interest margin was 2.99% for the first quarter of 2023, compared to 3.02% reported for the fourth quarter of 2022, and 3.04% at March 31, 2022. The decrease in margin from the fourth quarter of 2022 was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment. Net interest income was $54.2 million for the first quarter of 2023, down from $57.3 million for the fourth quarter of 2022, and $56.6 million for the first quarter of 2022. Net interest income for the quarter ended March 31, 2023 was impacted by increases in interest expense, which totaled $15.0 million for the first quarter of 2023 compared to $2.6 million for the same period in 2022, partially offset by increased interest and dividend income, which increased by $10.1 million when compared to March 31, 2022. Average loans for the quarter ended March 31, 2023 were up $41.6 million or 0.8% from the fourth quarter of 2022, and $195.3 million or 3.9% compared to the same period in 2022. The increase in average loans was mainly in the residential and commercial real estate portfolios compared to the quarter ended March 31, 2022. Asset yields for the quarter ended March 31, 2023 were up 25 basis points compared to the quarter ended December 31, 2022, and up 63 basis points compared to the same period in 2022. Average total deposits for the first quarter of 2023 were down $144.9 million, or 2.2% compared to the fourth quarter of 2022, and down $328.2 million, or 4.8% compared to the same period in 2022. The decrease was largely driven by a decline in stimulus funding and a tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve. Average deposit balances at March 31, 2023 are $1.3 billion or 23.9% higher than pre-pandemic levels reported at December 31, 2019. The cost of interest-bearing deposits increased to 1.10% for the first quarter of 2023, compared to 0.69% for the fourth quarter of 2022, and 0.17% for the first quarter last year. The increase was mainly driven by higher market interest rates as a result of the target federal funds rate increasing 450 basis points over the prior twelve months. The total cost of interest-bearing liabilities of 1.26% for the first quarter of 2023 represented an increase of 42 basis points over the fourth quarter of 2022, and an increase of 105 basis points over the same period in 2022. At March 31, 2023, the Company estimates total uninsured deposits of $2.6 billion, which is unchanged from December 31, 2022. The uninsured deposit balance of $2.6 billion at March 31, 2023 is made up of $1.1 billion of collateralized government deposits and $1.5 billion of uninsured customer deposits without liquid collateral pledged. Total insured deposits and collateralized government deposits represent 76.9% of the Company's total deposits of $6.5 billion at March 31, 2023. NONINTEREST INCOME Noninterest income of $20.4 million for the first quarter of 2023 was up $2.0 million, or 11.2% compared to the most recent prior quarter, and up $415,000, or 2.1% compared to the prior year quarter in 2022. Noninterest income represented 27.3% of total revenue at March 31, 2023, compared to 24.3% at December 31, 2022, and 26.1% at March 31, 2022. Increases in insurance and card service fees in the first quarter of 2023 compared to the prior year quarter were partially offset by lower wealth management fees, primarily due to market conditions. NONINTEREST EXPENSE Noninterest expense was $50.2 million for the first quarter of 2023, which was in line with the fourth quarter of 2022, and up $3.3 million, or 7.1% over the first quarter of 2022, with the increase largely driven by higher personnel-related costs. Increases in FDIC insurance rates, as well as increased spending on marketing and technology also contributed to expense growth in the first quarter of 2023 compared to the first quarter of 2022. INCOME TAX EXPENSE The Company's effective tax rate was 23.3% for the first quarter of 2023, compared to 23.0% for the same period in 2022. ASSET QUALITY The allowance for credit losses represented 0.87% of total loans and leases at March 31, 2023, unchanged from the prior quarter, and up from 0.83% at March 31, 2022. The ratio of the allowance to total nonperforming loans and leases improved to 162.11% for the first quarter of 2023, compared to 139.86% at December 31, 2022 and 139.20% at March 31, 2022. Provision for credit losses for the first quarter of 2023 was a credit of $825,000 compared to a credit of $520,000 for the same period in 2022. Net recoveries for the quarter ended March 31, 2023 were $1.3 million compared to net recoveries of $17,000 reported for the same period in 2022. Nonperforming assets represented 0.37% of total assets at March 31, 2023, down from 0.43% at December 31, 2022 and 0.38% at March 31, 2022. At March 31, 2023, nonperforming loans and leases totaled $28.4 million, compared to $32.8 million at December 31, 2022 and $30.3 million at March 31, 2022. Special Mention and substandard loans and leases totaled $85.6 million at March 31, 2023, reflecting improvement from the $98.3 million reported for December 31, 2022 and the $135.1 million at March 31, 2022. The improvement over prior quarter was mainly a result of upgrades on two large commercial real estate loans previously reported as Special Mention. CAPITAL POSITION Capital ratios at March 31, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 14.62% at March 31, 2023, compared to 14.42% at December 31, 2022 and 14.23% at March 31, 2022. The ratio of Tier 1 capital to average assets was 9.63% at March 31, 2023, compared to 9.34% at December 31, 2022 and 8.89% at March 31, 2022. LIQUIDITY POSITION The Company's liquidity is well positioned and remains stable from the fourth quarter of 2022. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and FHLB advances. The Company maintains ready access liquidity of $1.7 billion or 22.5% of assets. As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At March 31, 2023 the Company had an available borrowing capacity at the FHLB of $1.3 billion as compared to $1.3 billion in the fourth quarter of 2022. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At March 31, 2023 the available borrowing capacity with the Federal Reserve Bank was $157.0 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at March 31, 2023, the Company maintained $265.3 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity. ABOUT TOMPKINS FINANCIAL CORPORATION Tompkins Financial Corporation is a banking and 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 Community 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 Act of 1995: This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this press release that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", the negative and other variations of these terms 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 and historical performance. The following factors, in addition to those listed as Risk Factors in Item 1A in 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; our ability to attract and retain deposits and access other sources of liquidity; GDP growth; the impact of the interest rate and inflationary environment on the Company's business, financial condition and results of operations; 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 state and local government mandates, SEC rule-making, the Dodd-Frank Act and Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; 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 war in Ukraine, as well as the potential impact of widespread protests, civil unrest, political uncertainty on the economy and the financial services industry, and pandemics or other public health crises, including the COVID-19 pandemic; and access to 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 CONSOLIDATED STATEMENTS OF CONDITION (In thousands, except share and per share data) As of As of ASSETS 03/31/2023 12/31/2022 (Audited) Cash and noninterest bearing balances due from banks $ 49,753 $ 18,572 Interest bearing balances due from banks 20,784 59,265 Cash and Cash Equivalents 70,537 77,837 Available-for-sale debt securities, at fair value (amortized cost of $1,795,423 at March 31, 2023 and $1,831,791 at December 31, 2022) 1,585,854 1,594,967 Held-to-maturity securities, at amortized cost (fair value of $258,755 at March 31, 2023 and $261,692 at December 31, 2022) 312,357 312,344 Equity securities, at fair value 790 777 Total loans and leases, net of unearned income and deferred costs and fees 5,273,671 5,268,911 Less: Allowance for credit losses 46,099 45,934 Net Loans and Leases 5,227,572 5,222,977 Federal Home Loan Bank and other stock 19,326 17,720 Bank premises and equipment, net 81,633 82,140 Corporate owned life insurance 86,175 85,556 Goodwill 92,602 92,602 Other intangible assets, net 2,605 2,708 Accrued interest and other assets 164,920 181,058 Total Assets $ 7,644,371 $ 7,670,686 LIABILITIES Deposits: Interest bearing: Checking, savings and money market 3,774,092 3,820,739 Time 725,338 631,411 Noninterest bearing 2,009,579 2,150,145 Total Deposits 6,509,009 6,602,295 Federal funds purchased and securities sold under agreements to repurchase 63,491 56,278 Other borrowings 327,000 291,300 Other liabilities 95,106 103,423 Total Liabilities $ 6,994,606 $ 7,053,296 EQUITY Tompkins Financial Corporation shareholders' equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,555,658 at March 31, 2023; and 14,555,741 at December 31, 2022 1,456 1,456 Additional paid-in capital 303,357 302,763 Retained earnings 537,331 526,727 Accumulated other comprehensive loss (187,846 ) (208,689 ) Treasury stock, at cost – 120,879 shares at March 31, 2023, and 128,749 shares at December 31, 2022 (5,976 ) (6,279 ) Total Tompkins Financial Corporation Shareholders’ Equity 648,322 615,978 Noncontrolling interests 1,443 1,412 Total Equity $ 649,765 $ 617,390 Total Liabilities and Equity $ 7,644,371 $ 7,670,686 TOMPKINS FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended 03/31/2023 03/31/2022 INTEREST AND DIVIDEND INCOME Loans $ 60,842 $ 51,131 Due from banks 139 41 Available-for-sale debt securities 6,743 6,770 Held-to-maturity securities 1,214 1,129 Federal Home Loan Bank and other stock 300 105 Total Interest and Dividend Income 69,238 $ 59,176 INTEREST EXPENSE Time certificates of deposits of $250,000 or more 1,788 426 Other deposits 10,394 1,620 Federal funds purchased and securities sold under agreements to repurchase 14 16 Other borrowings 2,796 500 Total Interest Expense 14,992 2,562 Net Interest Income 54,246 56,614 Less: (Credit) for credit loss expense (825 ) (520 ) Net Interest Income After Credit for Credit Loss Expense 55,071 57,134 NONINTEREST INCOME Insurance commissions and fees 9,509 9,317 Wealth management fees 4,509 4,917 Service charges on deposit accounts 1,746 1,779 Card services income 2,682 2,543 Other income 1,941 1,476 Net gain (loss) on securities transactions 13 (47 ) Total Noninterest Income 20,400 19,985 NONINTEREST EXPENSE Salaries and wages 24,512 23,272 Other employee benefits 6,741 5,797 Net occupancy expense of premises 3,299 3,541 Furniture and fixture expense 2,054 1,991 Amortization of intangible assets 83 218 Other operating expense 13,469 12,020 Total Noninterest Expenses 50,158 46,839 Income Before Income Tax Expense 25,313 30,280 Income Tax Expense 5,901 6,976 Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation 19,412 23,304 Less: Net Income Attributable to Noncontrolling Interests 31 31 Net Income Attributable to Tompkins Financial Corporation $ 19,381 23,273 Basic Earnings Per Share $ 1.35 $ 1.61 Diluted Earnings Per Share $ 1.35 $ 1.60 Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited) Quarter Ended Quarter Ended March 31, 2023 March 31, 2022 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 $ 12,733 $ 139 4.42 % $ 134,129 $ 41 0.12 % Securities (1) U.S. Government securities 2,033,307 7,424 1.48 % 2,293,611 7,362 1.30 % State and municipal (2) 93,201 599 2.60 % 101,746 649 2.59 % Other securities (2) 3,284 53 6.55 % 3,390 23 2.73 % Total securities 2,129,792 8,076 1.54 % 2,398,747 8,034 1.36 % FHLBNY and FRB stock 16,750 300 7.26 % 10,098 105 4.23 % Total loans and leases, net of unearned income (2)(3) 5,251,278 61,034 4.71 % 5,055,948 51,355 4.12 % Total interest-earning assets 7,410,553 69,549 3.81 % 7,598,922 59,535 3.18 % Other assets 223,240 311,125 Total assets $ 7,633,793 $ 7,910,047 LIABILITIES & EQUITY Deposits Interest-bearing deposits Interest bearing checking, savings, & money market $ 3,833,566 $ 8,641 0.91 % $ 4,160,946 $ 750 0.07 % Time deposits 673,871 3,541 2.13 % 631,594 1,296 0.83 % Total interest-bearing deposits 4,507,437 12,182 1.10 % 4,792,540 2,046 0.17 % Federal funds purchased & securities sold under agreements to repurchase 57,523 14 0.10 % 64,237 16 0.10 % Other borrowings 269,752 2,796 4.20 % 125,298 500 1.62 % Total interest-bearing liabilities 4,834,712 14,992 1.26 % 4,982,075 2,562 0.21 % Noninterest bearing deposits 2,065,701 2,108,825 Accrued expenses and other liabilities 102,172 106,120 Total liabilities 7,002,585 7,197,020 Tompkins Financial Corporation Shareholders’ equity 629,784 711,601 Noncontrolling interest 1,424 1,426 Total equity 631,208 713,027 Total liabilities and equity $ 7,633,793 $ 7,910,047 Interest rate spread 2.55 % 2.97 % Net interest income/margin on earning assets 54,557 2.99 % 56,973 3.04 % Tax Equivalent Adjustment (311 ) (359 ) Net interest income per consolidated financial statements $ 54,246 $ 56,614 Tompkins Financial Corporation - Summary Financial Data (Unaudited) (In thousands, except per share data) Quarter-Ended Year-Ended Period End Balance Sheet Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Securities $ 1,899,001 $ 1,908,088 $ 2,054,036 $ 2,204,851 $ 2,285,527 $ 1,908,088 Total Loans 5,273,671 5,268,911 5,208,436 5,162,503 5,063,451 5,268,911 Allowance for credit losses 46,099 45,934 44,772 43,793 42,126 45,934 Total assets 7,644,371 7,670,686 7,779,941 7,842,461 7,891,111 7,670,686 Total deposits 6,509,009 6,602,295 6,936,726 6,769,521 7,016,739 6,602,295 Federal funds purchased and securities sold under agreements to repurchase 63,491 56,278 55,340 50,075 57,115 56,278 Other borrowings 327,000 291,300 101,000 295,600 60,000 291,300 Total common equity 648,322 615,978 571,453 622,843 656,049 615,978 Total equity 649,765 617,390 572,959 624,318 657,492 617,390 Average Balance Sheet Average earning assets $ 7,410,553 $ 7,568,656 $ 7,639,123 $ 7,621,588 $ 7,598,922 $ 7,607,078 Average assets 7,633,793 7,721,335 7,853,847 7,830,645 7,910,047 7,828,520 Average interest-bearing liabilities 4,834,712 4,828,561 4,861,857 4,901,345 4,982,075 4,892,952 Average equity 631,208 580,720 635,324 639,354 713,027 641,726 Share data Weighted average shares outstanding (basic) 14,326,595 14,308,323 14,289,022 14,317,415 14,400,003 14,328,280 Weighted average shares outstanding (diluted) 14,389,673 14,385,884 14,367,149 14,387,601 14,478,183 14,404,294 Period-end shares outstanding 14,519,748 14,519,831 14,483,757 14,504,604 14,561,450 14,519,831 Common equity book value per share $ 44.65 $ 42.42 $ 39.45 $ 42.94 $ 45.05 $ 42.42 Tangible book value per share (Non-GAAP)** $ 38.16 $ 35.93 $ 32.93 $ 36.42 $ 38.54 $ 35.93 **See "Non-GAAP measures" below for a discussion of non-GAAP financial measures and a reconciliation of non-GAAP financial measures to the most directly comparable financial measures presented in accordance with GAAP. Income Statement Net interest income $ 54,246 $ 57,294 $ 58,111 $ 58,262 $ 56,614 $ 230,281 (Credit) provision for credit loss expense (5) (825 ) 1,397 1,056 856 (520 ) 2,789 Noninterest income 20,400 18,351 20,692 18,944 19,985 77,972 Noninterest expense (5) 50,158 50,190 49,602 49,120 46,839 195,751 Income tax expense 5,901 4,478 6,774 6,329 6,976 24,557 Net income attributable to Tompkins Financial Corporation 19,381 19,548 21,340 20,869 23,273 85,030 Noncontrolling interests 31 32 31 32 31 126 Basic earnings per share (4) 1.35 1.36 1.49 1.45 1.61 5.92 Diluted earnings per share (4) 1.35 1.36 1.48 1.45 1.60 5.89 Nonperforming Assets Nonaccrual loans and leases $ 28,424 $ 28,289 $ 30,013 $ 24,665 $ 25,200 $ 28,289 Loans and leases 90 days past due and accruing 13 25 161 62 0 25 Performing troubled debt restructuring* 0 4,530 4,730 4,872 5,064 4,530 Total nonperforming loans and leases 28,437 32,844 34,904 29,599 30,264 32,844 OREO 36 152 335 122 88 152 Total nonperforming assets $ 28,473 $ 32,996 $ 35,239 $ 29,721 $ 30,352 $ 32,996 *No amount shown for periods subsequent to the Company's adoption of ASU 2022-02 effective January 1, 2023. Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued Quarter-Ended Year-Ended Delinquency - Total loan and lease portfolio Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Loans and leases 30-89 days past due and accruing $ 5,894 $ 3,172 $ 3,160 $ 9,837 $ 1,735 $ 3,172 Loans and leases 90 days past due and accruing 13 25 161 62 0 25 Total loans and leases past due and accruing 5,907 3,197 3,321 9,899 1,735 3,197 Allowance for Credit Losses Balance at beginning of period $ 45,934 $ 44,772 $ 43,793 $ 42,126 $ 42,843 $ 42,843 Impact of adopting ASC 326 64 0 0 0 0 0 (Credit) provision for credit losses (1,180 ) 1,352 1,101 780 (734 ) $ 2,499 Net loan and lease charge-offs (recoveries) (1,281 ) 190 122 (887 ) (17 ) $ (592 ) Allowance for credit losses at end of period $ 46,099 $ 45,934 $ 44,772 $ 43,793 $ 42,126 $ 45,934 Allowance for Credit Losses - Off-Balance Sheet Exposure Balance at beginning of period $ 2,796 $ 2,751 $ 2,796 $ 2,720 $ 2,506 $ 2,506 Provision (credit) for credit losses 355 45 (45 ) 76 214 $ 290 Allowance for credit losses at end of period $ 3,151 $ 2,796 $ 2,751 $ 2,796 $ 2,720 $ 2,796 Loan Classification - Total Portfolio Special Mention $ 39,255 $ 49,752 $ 66,730 $ 72,270 $ 92,380 $ 49,752 Substandard 46,315 48,537 40,007 42,756 42,722 48,537 Ratio Analysis Credit Quality Nonperforming loans and leases/total loans and leases 0.54 % 0.62 % 0.67 % 0.57 % 0.60 % 0.62 % Nonperforming assets/total assets 0.37 % 0.43 % 0.45 % 0.38 % 0.38 % 0.43 % Allowance for credit losses/total loans and leases 0.87 % 0.87 % 0.86 % 0.85 % 0.83 % 0.87 % Allowance/nonperforming loans and leases 162.11 % 139.86 % 128.27 % 147.95 % 139.20 % 139.85 % Net loan and lease losses annualized/total average loans and leases (0.10 )% 0.01 % 0.01 % (0.07 )% 0.00 % (0.01 )% Capital Adequacy Tier 1 Capital (to average assets) 9.63 % 9.34 % 9.14 % 9.02 % 8.89 % 9.34 % Total Capital (to risk-weighted assets) 14.62 % 14.42 % 14.26 % 14.07 % 14.23 % 14.42 % Profitability (period-end) Return on average assets * 1.03 % 1.00 % 1.08 % 1.07 % 1.19 % 1.09 % Return on average equity * 12.45 % 13.36 % 13.33 % 13.09 % 13.24 % 13.25 % Net interest margin (TE) * 2.99 % 3.02 % 3.04 % 3.09 % 3.04 % 3.05 % * Quarterly ratios have been annualized Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued 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 below tables. The Company believes the non-GAAP measures provide meaningful comparisons of our underlying operational performance and facilitate management's and investors' assessments of business and performance trends in comparison to others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a measure of the Company's profitability or liquidity; they are in addition to, and are not a substitute for, financial measures under GAAP. The non-GAAP financial measures presented herein may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies. Further, the Company may utilize other measures to illustrate performance in the future. Non-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Reconciliation of Common Equity Book Value Per Share (GAAP) to Tangible Book Value Per Share (non-GAAP) Quarter-Ended Year-ended Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Total common equity $ 648,322 $ 615,978 $ 571,453 $ 622,843 $ 656,049 $ 615,978 Less: Goodwill and intangibles 94,253 94,336 94,554 94,617 94,836 94,336 Tangible common equity (Non-GAAP) 554,069 521,642 476,899 528,226 561,213 521,642 Ending shares outstanding 14,519,748 14,519,831 14,483,757 14,504,604 14,561,450 14,519,831 Tangible book value per share (Non-GAAP) $ 38.16 $ 35.93 $ 32.93 $ 36.42 $ 38.54 $ 35.93 (1) Average balances and yields on available-for-sale securities are based on historical amortized cost. (2) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2023 and 2022 to increase tax exempt interest income to taxable-equivalent basis. (3) 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, 2022. (4) 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. (5) Amounts in prior periods' financial statements are reclassified when necessary to conform to the current period's presentation. View source version on businesswire.com: https://www.businesswire.com/news/home/20230428005062/en/Contacts For more information: Stephen S. Romaine, President & CEO Francis M. 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Tompkins Financial Corporation Reports First Quarter Earnings By: Tompkins Financial Corporation via Business Wire April 28, 2023 at 09:00 AM EDT Tompkins Financial Corporation (NYSE American: TMP) Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.35 for the first quarter of 2023, in line with the immediate prior quarter, and down 15.6% from diluted earnings per share of $1.60 reported in the first quarter of 2022. The first quarter results in the prior year included $2.0 million, pre-tax, ($0.10 per diluted share) in net fees related to the SBA's Paycheck Protection Program loans ("PPP"), compared to net fees of $2,000 in the current period. Net income for the first quarter of 2023 was $19.4 million, a decrease of 16.7% from the $23.3 million reported for the same period in 2022. Increased funding costs coupled with increases in operating expense were the main drivers for the year-over-year decreases in net income. Tompkins President and CEO, Stephen Romaine, commented, "The first quarter of 2023 was a tumultuous quarter for the banking industry. In times like these, our business model - built on strong customer relationships and sustainable financial performance - has helped differentiate Tompkins from companies with less tenable business models. Though we are not immune to certain headwinds facing our industry - as evident from reduced earnings in the first quarter - we are pleased to report an increase in our common equity for the second consecutive quarter, a strong liquidity position, while at the same time delivering an annualized return on equity of 12.45% in the first quarter of 2023." SELECTED HIGHLIGHTS FOR THE PERIOD: Key profitability measures remained healthy in the first quarter, with a return on average assets of 1.03% (up from 1.00% last quarter); net interest margin of 2.99% (down from 3.02% last quarter); and return on equity of 12.45% (down from 13.36% last quarter). Regulatory Tier 1 capital to average assets improved for the sixth consecutive quarter, ending the first quarter of 2023 at 9.63%. Total loans at March 31, 2023 were $5.3 billion, in line with the immediate prior quarter, and up $210.2 million, or 4.2% from March 31, 2022. Excluding PPP loans, total loans at March 31, 2023 were up 4.6% over the first quarter of 2022. Total nonperforming assets at March 31, 2023 represented 0.37% of total assets and declined 13.7% from the most recent prior quarter. Total deposits at March 31, 2023 were $6.5 billion, reflecting a 1.4% decrease compared to year-end 2022 and a decline of 7.2% when compared to same period last year. NET INTEREST INCOME Net interest margin was 2.99% for the first quarter of 2023, compared to 3.02% reported for the fourth quarter of 2022, and 3.04% at March 31, 2022. The decrease in margin from the fourth quarter of 2022 was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment. Net interest income was $54.2 million for the first quarter of 2023, down from $57.3 million for the fourth quarter of 2022, and $56.6 million for the first quarter of 2022. Net interest income for the quarter ended March 31, 2023 was impacted by increases in interest expense, which totaled $15.0 million for the first quarter of 2023 compared to $2.6 million for the same period in 2022, partially offset by increased interest and dividend income, which increased by $10.1 million when compared to March 31, 2022. Average loans for the quarter ended March 31, 2023 were up $41.6 million or 0.8% from the fourth quarter of 2022, and $195.3 million or 3.9% compared to the same period in 2022. The increase in average loans was mainly in the residential and commercial real estate portfolios compared to the quarter ended March 31, 2022. Asset yields for the quarter ended March 31, 2023 were up 25 basis points compared to the quarter ended December 31, 2022, and up 63 basis points compared to the same period in 2022. Average total deposits for the first quarter of 2023 were down $144.9 million, or 2.2% compared to the fourth quarter of 2022, and down $328.2 million, or 4.8% compared to the same period in 2022. The decrease was largely driven by a decline in stimulus funding and a tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve. Average deposit balances at March 31, 2023 are $1.3 billion or 23.9% higher than pre-pandemic levels reported at December 31, 2019. The cost of interest-bearing deposits increased to 1.10% for the first quarter of 2023, compared to 0.69% for the fourth quarter of 2022, and 0.17% for the first quarter last year. The increase was mainly driven by higher market interest rates as a result of the target federal funds rate increasing 450 basis points over the prior twelve months. The total cost of interest-bearing liabilities of 1.26% for the first quarter of 2023 represented an increase of 42 basis points over the fourth quarter of 2022, and an increase of 105 basis points over the same period in 2022. At March 31, 2023, the Company estimates total uninsured deposits of $2.6 billion, which is unchanged from December 31, 2022. The uninsured deposit balance of $2.6 billion at March 31, 2023 is made up of $1.1 billion of collateralized government deposits and $1.5 billion of uninsured customer deposits without liquid collateral pledged. Total insured deposits and collateralized government deposits represent 76.9% of the Company's total deposits of $6.5 billion at March 31, 2023. NONINTEREST INCOME Noninterest income of $20.4 million for the first quarter of 2023 was up $2.0 million, or 11.2% compared to the most recent prior quarter, and up $415,000, or 2.1% compared to the prior year quarter in 2022. Noninterest income represented 27.3% of total revenue at March 31, 2023, compared to 24.3% at December 31, 2022, and 26.1% at March 31, 2022. Increases in insurance and card service fees in the first quarter of 2023 compared to the prior year quarter were partially offset by lower wealth management fees, primarily due to market conditions. NONINTEREST EXPENSE Noninterest expense was $50.2 million for the first quarter of 2023, which was in line with the fourth quarter of 2022, and up $3.3 million, or 7.1% over the first quarter of 2022, with the increase largely driven by higher personnel-related costs. Increases in FDIC insurance rates, as well as increased spending on marketing and technology also contributed to expense growth in the first quarter of 2023 compared to the first quarter of 2022. INCOME TAX EXPENSE The Company's effective tax rate was 23.3% for the first quarter of 2023, compared to 23.0% for the same period in 2022. ASSET QUALITY The allowance for credit losses represented 0.87% of total loans and leases at March 31, 2023, unchanged from the prior quarter, and up from 0.83% at March 31, 2022. The ratio of the allowance to total nonperforming loans and leases improved to 162.11% for the first quarter of 2023, compared to 139.86% at December 31, 2022 and 139.20% at March 31, 2022. Provision for credit losses for the first quarter of 2023 was a credit of $825,000 compared to a credit of $520,000 for the same period in 2022. Net recoveries for the quarter ended March 31, 2023 were $1.3 million compared to net recoveries of $17,000 reported for the same period in 2022. Nonperforming assets represented 0.37% of total assets at March 31, 2023, down from 0.43% at December 31, 2022 and 0.38% at March 31, 2022. At March 31, 2023, nonperforming loans and leases totaled $28.4 million, compared to $32.8 million at December 31, 2022 and $30.3 million at March 31, 2022. Special Mention and substandard loans and leases totaled $85.6 million at March 31, 2023, reflecting improvement from the $98.3 million reported for December 31, 2022 and the $135.1 million at March 31, 2022. The improvement over prior quarter was mainly a result of upgrades on two large commercial real estate loans previously reported as Special Mention. CAPITAL POSITION Capital ratios at March 31, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 14.62% at March 31, 2023, compared to 14.42% at December 31, 2022 and 14.23% at March 31, 2022. The ratio of Tier 1 capital to average assets was 9.63% at March 31, 2023, compared to 9.34% at December 31, 2022 and 8.89% at March 31, 2022. LIQUIDITY POSITION The Company's liquidity is well positioned and remains stable from the fourth quarter of 2022. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and FHLB advances. The Company maintains ready access liquidity of $1.7 billion or 22.5% of assets. As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At March 31, 2023 the Company had an available borrowing capacity at the FHLB of $1.3 billion as compared to $1.3 billion in the fourth quarter of 2022. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At March 31, 2023 the available borrowing capacity with the Federal Reserve Bank was $157.0 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at March 31, 2023, the Company maintained $265.3 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity. ABOUT TOMPKINS FINANCIAL CORPORATION Tompkins Financial Corporation is a banking and 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 Community 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 Act of 1995: This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this press release that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", the negative and other variations of these terms 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 and historical performance. The following factors, in addition to those listed as Risk Factors in Item 1A in 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; our ability to attract and retain deposits and access other sources of liquidity; GDP growth; the impact of the interest rate and inflationary environment on the Company's business, financial condition and results of operations; 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 state and local government mandates, SEC rule-making, the Dodd-Frank Act and Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; 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 war in Ukraine, as well as the potential impact of widespread protests, civil unrest, political uncertainty on the economy and the financial services industry, and pandemics or other public health crises, including the COVID-19 pandemic; and access to 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 CONSOLIDATED STATEMENTS OF CONDITION (In thousands, except share and per share data) As of As of ASSETS 03/31/2023 12/31/2022 (Audited) Cash and noninterest bearing balances due from banks $ 49,753 $ 18,572 Interest bearing balances due from banks 20,784 59,265 Cash and Cash Equivalents 70,537 77,837 Available-for-sale debt securities, at fair value (amortized cost of $1,795,423 at March 31, 2023 and $1,831,791 at December 31, 2022) 1,585,854 1,594,967 Held-to-maturity securities, at amortized cost (fair value of $258,755 at March 31, 2023 and $261,692 at December 31, 2022) 312,357 312,344 Equity securities, at fair value 790 777 Total loans and leases, net of unearned income and deferred costs and fees 5,273,671 5,268,911 Less: Allowance for credit losses 46,099 45,934 Net Loans and Leases 5,227,572 5,222,977 Federal Home Loan Bank and other stock 19,326 17,720 Bank premises and equipment, net 81,633 82,140 Corporate owned life insurance 86,175 85,556 Goodwill 92,602 92,602 Other intangible assets, net 2,605 2,708 Accrued interest and other assets 164,920 181,058 Total Assets $ 7,644,371 $ 7,670,686 LIABILITIES Deposits: Interest bearing: Checking, savings and money market 3,774,092 3,820,739 Time 725,338 631,411 Noninterest bearing 2,009,579 2,150,145 Total Deposits 6,509,009 6,602,295 Federal funds purchased and securities sold under agreements to repurchase 63,491 56,278 Other borrowings 327,000 291,300 Other liabilities 95,106 103,423 Total Liabilities $ 6,994,606 $ 7,053,296 EQUITY Tompkins Financial Corporation shareholders' equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,555,658 at March 31, 2023; and 14,555,741 at December 31, 2022 1,456 1,456 Additional paid-in capital 303,357 302,763 Retained earnings 537,331 526,727 Accumulated other comprehensive loss (187,846 ) (208,689 ) Treasury stock, at cost – 120,879 shares at March 31, 2023, and 128,749 shares at December 31, 2022 (5,976 ) (6,279 ) Total Tompkins Financial Corporation Shareholders’ Equity 648,322 615,978 Noncontrolling interests 1,443 1,412 Total Equity $ 649,765 $ 617,390 Total Liabilities and Equity $ 7,644,371 $ 7,670,686 TOMPKINS FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended 03/31/2023 03/31/2022 INTEREST AND DIVIDEND INCOME Loans $ 60,842 $ 51,131 Due from banks 139 41 Available-for-sale debt securities 6,743 6,770 Held-to-maturity securities 1,214 1,129 Federal Home Loan Bank and other stock 300 105 Total Interest and Dividend Income 69,238 $ 59,176 INTEREST EXPENSE Time certificates of deposits of $250,000 or more 1,788 426 Other deposits 10,394 1,620 Federal funds purchased and securities sold under agreements to repurchase 14 16 Other borrowings 2,796 500 Total Interest Expense 14,992 2,562 Net Interest Income 54,246 56,614 Less: (Credit) for credit loss expense (825 ) (520 ) Net Interest Income After Credit for Credit Loss Expense 55,071 57,134 NONINTEREST INCOME Insurance commissions and fees 9,509 9,317 Wealth management fees 4,509 4,917 Service charges on deposit accounts 1,746 1,779 Card services income 2,682 2,543 Other income 1,941 1,476 Net gain (loss) on securities transactions 13 (47 ) Total Noninterest Income 20,400 19,985 NONINTEREST EXPENSE Salaries and wages 24,512 23,272 Other employee benefits 6,741 5,797 Net occupancy expense of premises 3,299 3,541 Furniture and fixture expense 2,054 1,991 Amortization of intangible assets 83 218 Other operating expense 13,469 12,020 Total Noninterest Expenses 50,158 46,839 Income Before Income Tax Expense 25,313 30,280 Income Tax Expense 5,901 6,976 Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation 19,412 23,304 Less: Net Income Attributable to Noncontrolling Interests 31 31 Net Income Attributable to Tompkins Financial Corporation $ 19,381 23,273 Basic Earnings Per Share $ 1.35 $ 1.61 Diluted Earnings Per Share $ 1.35 $ 1.60 Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited) Quarter Ended Quarter Ended March 31, 2023 March 31, 2022 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 $ 12,733 $ 139 4.42 % $ 134,129 $ 41 0.12 % Securities (1) U.S. Government securities 2,033,307 7,424 1.48 % 2,293,611 7,362 1.30 % State and municipal (2) 93,201 599 2.60 % 101,746 649 2.59 % Other securities (2) 3,284 53 6.55 % 3,390 23 2.73 % Total securities 2,129,792 8,076 1.54 % 2,398,747 8,034 1.36 % FHLBNY and FRB stock 16,750 300 7.26 % 10,098 105 4.23 % Total loans and leases, net of unearned income (2)(3) 5,251,278 61,034 4.71 % 5,055,948 51,355 4.12 % Total interest-earning assets 7,410,553 69,549 3.81 % 7,598,922 59,535 3.18 % Other assets 223,240 311,125 Total assets $ 7,633,793 $ 7,910,047 LIABILITIES & EQUITY Deposits Interest-bearing deposits Interest bearing checking, savings, & money market $ 3,833,566 $ 8,641 0.91 % $ 4,160,946 $ 750 0.07 % Time deposits 673,871 3,541 2.13 % 631,594 1,296 0.83 % Total interest-bearing deposits 4,507,437 12,182 1.10 % 4,792,540 2,046 0.17 % Federal funds purchased & securities sold under agreements to repurchase 57,523 14 0.10 % 64,237 16 0.10 % Other borrowings 269,752 2,796 4.20 % 125,298 500 1.62 % Total interest-bearing liabilities 4,834,712 14,992 1.26 % 4,982,075 2,562 0.21 % Noninterest bearing deposits 2,065,701 2,108,825 Accrued expenses and other liabilities 102,172 106,120 Total liabilities 7,002,585 7,197,020 Tompkins Financial Corporation Shareholders’ equity 629,784 711,601 Noncontrolling interest 1,424 1,426 Total equity 631,208 713,027 Total liabilities and equity $ 7,633,793 $ 7,910,047 Interest rate spread 2.55 % 2.97 % Net interest income/margin on earning assets 54,557 2.99 % 56,973 3.04 % Tax Equivalent Adjustment (311 ) (359 ) Net interest income per consolidated financial statements $ 54,246 $ 56,614 Tompkins Financial Corporation - Summary Financial Data (Unaudited) (In thousands, except per share data) Quarter-Ended Year-Ended Period End Balance Sheet Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Securities $ 1,899,001 $ 1,908,088 $ 2,054,036 $ 2,204,851 $ 2,285,527 $ 1,908,088 Total Loans 5,273,671 5,268,911 5,208,436 5,162,503 5,063,451 5,268,911 Allowance for credit losses 46,099 45,934 44,772 43,793 42,126 45,934 Total assets 7,644,371 7,670,686 7,779,941 7,842,461 7,891,111 7,670,686 Total deposits 6,509,009 6,602,295 6,936,726 6,769,521 7,016,739 6,602,295 Federal funds purchased and securities sold under agreements to repurchase 63,491 56,278 55,340 50,075 57,115 56,278 Other borrowings 327,000 291,300 101,000 295,600 60,000 291,300 Total common equity 648,322 615,978 571,453 622,843 656,049 615,978 Total equity 649,765 617,390 572,959 624,318 657,492 617,390 Average Balance Sheet Average earning assets $ 7,410,553 $ 7,568,656 $ 7,639,123 $ 7,621,588 $ 7,598,922 $ 7,607,078 Average assets 7,633,793 7,721,335 7,853,847 7,830,645 7,910,047 7,828,520 Average interest-bearing liabilities 4,834,712 4,828,561 4,861,857 4,901,345 4,982,075 4,892,952 Average equity 631,208 580,720 635,324 639,354 713,027 641,726 Share data Weighted average shares outstanding (basic) 14,326,595 14,308,323 14,289,022 14,317,415 14,400,003 14,328,280 Weighted average shares outstanding (diluted) 14,389,673 14,385,884 14,367,149 14,387,601 14,478,183 14,404,294 Period-end shares outstanding 14,519,748 14,519,831 14,483,757 14,504,604 14,561,450 14,519,831 Common equity book value per share $ 44.65 $ 42.42 $ 39.45 $ 42.94 $ 45.05 $ 42.42 Tangible book value per share (Non-GAAP)** $ 38.16 $ 35.93 $ 32.93 $ 36.42 $ 38.54 $ 35.93 **See "Non-GAAP measures" below for a discussion of non-GAAP financial measures and a reconciliation of non-GAAP financial measures to the most directly comparable financial measures presented in accordance with GAAP. Income Statement Net interest income $ 54,246 $ 57,294 $ 58,111 $ 58,262 $ 56,614 $ 230,281 (Credit) provision for credit loss expense (5) (825 ) 1,397 1,056 856 (520 ) 2,789 Noninterest income 20,400 18,351 20,692 18,944 19,985 77,972 Noninterest expense (5) 50,158 50,190 49,602 49,120 46,839 195,751 Income tax expense 5,901 4,478 6,774 6,329 6,976 24,557 Net income attributable to Tompkins Financial Corporation 19,381 19,548 21,340 20,869 23,273 85,030 Noncontrolling interests 31 32 31 32 31 126 Basic earnings per share (4) 1.35 1.36 1.49 1.45 1.61 5.92 Diluted earnings per share (4) 1.35 1.36 1.48 1.45 1.60 5.89 Nonperforming Assets Nonaccrual loans and leases $ 28,424 $ 28,289 $ 30,013 $ 24,665 $ 25,200 $ 28,289 Loans and leases 90 days past due and accruing 13 25 161 62 0 25 Performing troubled debt restructuring* 0 4,530 4,730 4,872 5,064 4,530 Total nonperforming loans and leases 28,437 32,844 34,904 29,599 30,264 32,844 OREO 36 152 335 122 88 152 Total nonperforming assets $ 28,473 $ 32,996 $ 35,239 $ 29,721 $ 30,352 $ 32,996 *No amount shown for periods subsequent to the Company's adoption of ASU 2022-02 effective January 1, 2023. Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued Quarter-Ended Year-Ended Delinquency - Total loan and lease portfolio Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Loans and leases 30-89 days past due and accruing $ 5,894 $ 3,172 $ 3,160 $ 9,837 $ 1,735 $ 3,172 Loans and leases 90 days past due and accruing 13 25 161 62 0 25 Total loans and leases past due and accruing 5,907 3,197 3,321 9,899 1,735 3,197 Allowance for Credit Losses Balance at beginning of period $ 45,934 $ 44,772 $ 43,793 $ 42,126 $ 42,843 $ 42,843 Impact of adopting ASC 326 64 0 0 0 0 0 (Credit) provision for credit losses (1,180 ) 1,352 1,101 780 (734 ) $ 2,499 Net loan and lease charge-offs (recoveries) (1,281 ) 190 122 (887 ) (17 ) $ (592 ) Allowance for credit losses at end of period $ 46,099 $ 45,934 $ 44,772 $ 43,793 $ 42,126 $ 45,934 Allowance for Credit Losses - Off-Balance Sheet Exposure Balance at beginning of period $ 2,796 $ 2,751 $ 2,796 $ 2,720 $ 2,506 $ 2,506 Provision (credit) for credit losses 355 45 (45 ) 76 214 $ 290 Allowance for credit losses at end of period $ 3,151 $ 2,796 $ 2,751 $ 2,796 $ 2,720 $ 2,796 Loan Classification - Total Portfolio Special Mention $ 39,255 $ 49,752 $ 66,730 $ 72,270 $ 92,380 $ 49,752 Substandard 46,315 48,537 40,007 42,756 42,722 48,537 Ratio Analysis Credit Quality Nonperforming loans and leases/total loans and leases 0.54 % 0.62 % 0.67 % 0.57 % 0.60 % 0.62 % Nonperforming assets/total assets 0.37 % 0.43 % 0.45 % 0.38 % 0.38 % 0.43 % Allowance for credit losses/total loans and leases 0.87 % 0.87 % 0.86 % 0.85 % 0.83 % 0.87 % Allowance/nonperforming loans and leases 162.11 % 139.86 % 128.27 % 147.95 % 139.20 % 139.85 % Net loan and lease losses annualized/total average loans and leases (0.10 )% 0.01 % 0.01 % (0.07 )% 0.00 % (0.01 )% Capital Adequacy Tier 1 Capital (to average assets) 9.63 % 9.34 % 9.14 % 9.02 % 8.89 % 9.34 % Total Capital (to risk-weighted assets) 14.62 % 14.42 % 14.26 % 14.07 % 14.23 % 14.42 % Profitability (period-end) Return on average assets * 1.03 % 1.00 % 1.08 % 1.07 % 1.19 % 1.09 % Return on average equity * 12.45 % 13.36 % 13.33 % 13.09 % 13.24 % 13.25 % Net interest margin (TE) * 2.99 % 3.02 % 3.04 % 3.09 % 3.04 % 3.05 % * Quarterly ratios have been annualized Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued 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 below tables. The Company believes the non-GAAP measures provide meaningful comparisons of our underlying operational performance and facilitate management's and investors' assessments of business and performance trends in comparison to others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a measure of the Company's profitability or liquidity; they are in addition to, and are not a substitute for, financial measures under GAAP. The non-GAAP financial measures presented herein may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies. Further, the Company may utilize other measures to illustrate performance in the future. Non-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Reconciliation of Common Equity Book Value Per Share (GAAP) to Tangible Book Value Per Share (non-GAAP) Quarter-Ended Year-ended Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Total common equity $ 648,322 $ 615,978 $ 571,453 $ 622,843 $ 656,049 $ 615,978 Less: Goodwill and intangibles 94,253 94,336 94,554 94,617 94,836 94,336 Tangible common equity (Non-GAAP) 554,069 521,642 476,899 528,226 561,213 521,642 Ending shares outstanding 14,519,748 14,519,831 14,483,757 14,504,604 14,561,450 14,519,831 Tangible book value per share (Non-GAAP) $ 38.16 $ 35.93 $ 32.93 $ 36.42 $ 38.54 $ 35.93 (1) Average balances and yields on available-for-sale securities are based on historical amortized cost. (2) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2023 and 2022 to increase tax exempt interest income to taxable-equivalent basis. (3) 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, 2022. (4) 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. (5) Amounts in prior periods' financial statements are reclassified when necessary to conform to the current period's presentation. View source version on businesswire.com: https://www.businesswire.com/news/home/20230428005062/en/Contacts For more information: Stephen S. Romaine, President & CEO Francis M. Fetsko, Executive VP, CFO & COO Tompkins Financial Corporation (888) 503-5753
Tompkins Financial Corporation (NYSE American: TMP) Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.35 for the first quarter of 2023, in line with the immediate prior quarter, and down 15.6% from diluted earnings per share of $1.60 reported in the first quarter of 2022. The first quarter results in the prior year included $2.0 million, pre-tax, ($0.10 per diluted share) in net fees related to the SBA's Paycheck Protection Program loans ("PPP"), compared to net fees of $2,000 in the current period. Net income for the first quarter of 2023 was $19.4 million, a decrease of 16.7% from the $23.3 million reported for the same period in 2022. Increased funding costs coupled with increases in operating expense were the main drivers for the year-over-year decreases in net income. Tompkins President and CEO, Stephen Romaine, commented, "The first quarter of 2023 was a tumultuous quarter for the banking industry. In times like these, our business model - built on strong customer relationships and sustainable financial performance - has helped differentiate Tompkins from companies with less tenable business models. Though we are not immune to certain headwinds facing our industry - as evident from reduced earnings in the first quarter - we are pleased to report an increase in our common equity for the second consecutive quarter, a strong liquidity position, while at the same time delivering an annualized return on equity of 12.45% in the first quarter of 2023." SELECTED HIGHLIGHTS FOR THE PERIOD: Key profitability measures remained healthy in the first quarter, with a return on average assets of 1.03% (up from 1.00% last quarter); net interest margin of 2.99% (down from 3.02% last quarter); and return on equity of 12.45% (down from 13.36% last quarter). Regulatory Tier 1 capital to average assets improved for the sixth consecutive quarter, ending the first quarter of 2023 at 9.63%. Total loans at March 31, 2023 were $5.3 billion, in line with the immediate prior quarter, and up $210.2 million, or 4.2% from March 31, 2022. Excluding PPP loans, total loans at March 31, 2023 were up 4.6% over the first quarter of 2022. Total nonperforming assets at March 31, 2023 represented 0.37% of total assets and declined 13.7% from the most recent prior quarter. Total deposits at March 31, 2023 were $6.5 billion, reflecting a 1.4% decrease compared to year-end 2022 and a decline of 7.2% when compared to same period last year. NET INTEREST INCOME Net interest margin was 2.99% for the first quarter of 2023, compared to 3.02% reported for the fourth quarter of 2022, and 3.04% at March 31, 2022. The decrease in margin from the fourth quarter of 2022 was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment. Net interest income was $54.2 million for the first quarter of 2023, down from $57.3 million for the fourth quarter of 2022, and $56.6 million for the first quarter of 2022. Net interest income for the quarter ended March 31, 2023 was impacted by increases in interest expense, which totaled $15.0 million for the first quarter of 2023 compared to $2.6 million for the same period in 2022, partially offset by increased interest and dividend income, which increased by $10.1 million when compared to March 31, 2022. Average loans for the quarter ended March 31, 2023 were up $41.6 million or 0.8% from the fourth quarter of 2022, and $195.3 million or 3.9% compared to the same period in 2022. The increase in average loans was mainly in the residential and commercial real estate portfolios compared to the quarter ended March 31, 2022. Asset yields for the quarter ended March 31, 2023 were up 25 basis points compared to the quarter ended December 31, 2022, and up 63 basis points compared to the same period in 2022. Average total deposits for the first quarter of 2023 were down $144.9 million, or 2.2% compared to the fourth quarter of 2022, and down $328.2 million, or 4.8% compared to the same period in 2022. The decrease was largely driven by a decline in stimulus funding and a tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve. Average deposit balances at March 31, 2023 are $1.3 billion or 23.9% higher than pre-pandemic levels reported at December 31, 2019. The cost of interest-bearing deposits increased to 1.10% for the first quarter of 2023, compared to 0.69% for the fourth quarter of 2022, and 0.17% for the first quarter last year. The increase was mainly driven by higher market interest rates as a result of the target federal funds rate increasing 450 basis points over the prior twelve months. The total cost of interest-bearing liabilities of 1.26% for the first quarter of 2023 represented an increase of 42 basis points over the fourth quarter of 2022, and an increase of 105 basis points over the same period in 2022. At March 31, 2023, the Company estimates total uninsured deposits of $2.6 billion, which is unchanged from December 31, 2022. The uninsured deposit balance of $2.6 billion at March 31, 2023 is made up of $1.1 billion of collateralized government deposits and $1.5 billion of uninsured customer deposits without liquid collateral pledged. Total insured deposits and collateralized government deposits represent 76.9% of the Company's total deposits of $6.5 billion at March 31, 2023. NONINTEREST INCOME Noninterest income of $20.4 million for the first quarter of 2023 was up $2.0 million, or 11.2% compared to the most recent prior quarter, and up $415,000, or 2.1% compared to the prior year quarter in 2022. Noninterest income represented 27.3% of total revenue at March 31, 2023, compared to 24.3% at December 31, 2022, and 26.1% at March 31, 2022. Increases in insurance and card service fees in the first quarter of 2023 compared to the prior year quarter were partially offset by lower wealth management fees, primarily due to market conditions. NONINTEREST EXPENSE Noninterest expense was $50.2 million for the first quarter of 2023, which was in line with the fourth quarter of 2022, and up $3.3 million, or 7.1% over the first quarter of 2022, with the increase largely driven by higher personnel-related costs. Increases in FDIC insurance rates, as well as increased spending on marketing and technology also contributed to expense growth in the first quarter of 2023 compared to the first quarter of 2022. INCOME TAX EXPENSE The Company's effective tax rate was 23.3% for the first quarter of 2023, compared to 23.0% for the same period in 2022. ASSET QUALITY The allowance for credit losses represented 0.87% of total loans and leases at March 31, 2023, unchanged from the prior quarter, and up from 0.83% at March 31, 2022. The ratio of the allowance to total nonperforming loans and leases improved to 162.11% for the first quarter of 2023, compared to 139.86% at December 31, 2022 and 139.20% at March 31, 2022. Provision for credit losses for the first quarter of 2023 was a credit of $825,000 compared to a credit of $520,000 for the same period in 2022. Net recoveries for the quarter ended March 31, 2023 were $1.3 million compared to net recoveries of $17,000 reported for the same period in 2022. Nonperforming assets represented 0.37% of total assets at March 31, 2023, down from 0.43% at December 31, 2022 and 0.38% at March 31, 2022. At March 31, 2023, nonperforming loans and leases totaled $28.4 million, compared to $32.8 million at December 31, 2022 and $30.3 million at March 31, 2022. Special Mention and substandard loans and leases totaled $85.6 million at March 31, 2023, reflecting improvement from the $98.3 million reported for December 31, 2022 and the $135.1 million at March 31, 2022. The improvement over prior quarter was mainly a result of upgrades on two large commercial real estate loans previously reported as Special Mention. CAPITAL POSITION Capital ratios at March 31, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 14.62% at March 31, 2023, compared to 14.42% at December 31, 2022 and 14.23% at March 31, 2022. The ratio of Tier 1 capital to average assets was 9.63% at March 31, 2023, compared to 9.34% at December 31, 2022 and 8.89% at March 31, 2022. LIQUIDITY POSITION The Company's liquidity is well positioned and remains stable from the fourth quarter of 2022. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and FHLB advances. The Company maintains ready access liquidity of $1.7 billion or 22.5% of assets. As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At March 31, 2023 the Company had an available borrowing capacity at the FHLB of $1.3 billion as compared to $1.3 billion in the fourth quarter of 2022. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At March 31, 2023 the available borrowing capacity with the Federal Reserve Bank was $157.0 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at March 31, 2023, the Company maintained $265.3 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity. ABOUT TOMPKINS FINANCIAL CORPORATION Tompkins Financial Corporation is a banking and 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 Community 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 Act of 1995: This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this press release that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", the negative and other variations of these terms 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 and historical performance. The following factors, in addition to those listed as Risk Factors in Item 1A in 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; our ability to attract and retain deposits and access other sources of liquidity; GDP growth; the impact of the interest rate and inflationary environment on the Company's business, financial condition and results of operations; 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 state and local government mandates, SEC rule-making, the Dodd-Frank Act and Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; 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 war in Ukraine, as well as the potential impact of widespread protests, civil unrest, political uncertainty on the economy and the financial services industry, and pandemics or other public health crises, including the COVID-19 pandemic; and access to 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 CONSOLIDATED STATEMENTS OF CONDITION (In thousands, except share and per share data) As of As of ASSETS 03/31/2023 12/31/2022 (Audited) Cash and noninterest bearing balances due from banks $ 49,753 $ 18,572 Interest bearing balances due from banks 20,784 59,265 Cash and Cash Equivalents 70,537 77,837 Available-for-sale debt securities, at fair value (amortized cost of $1,795,423 at March 31, 2023 and $1,831,791 at December 31, 2022) 1,585,854 1,594,967 Held-to-maturity securities, at amortized cost (fair value of $258,755 at March 31, 2023 and $261,692 at December 31, 2022) 312,357 312,344 Equity securities, at fair value 790 777 Total loans and leases, net of unearned income and deferred costs and fees 5,273,671 5,268,911 Less: Allowance for credit losses 46,099 45,934 Net Loans and Leases 5,227,572 5,222,977 Federal Home Loan Bank and other stock 19,326 17,720 Bank premises and equipment, net 81,633 82,140 Corporate owned life insurance 86,175 85,556 Goodwill 92,602 92,602 Other intangible assets, net 2,605 2,708 Accrued interest and other assets 164,920 181,058 Total Assets $ 7,644,371 $ 7,670,686 LIABILITIES Deposits: Interest bearing: Checking, savings and money market 3,774,092 3,820,739 Time 725,338 631,411 Noninterest bearing 2,009,579 2,150,145 Total Deposits 6,509,009 6,602,295 Federal funds purchased and securities sold under agreements to repurchase 63,491 56,278 Other borrowings 327,000 291,300 Other liabilities 95,106 103,423 Total Liabilities $ 6,994,606 $ 7,053,296 EQUITY Tompkins Financial Corporation shareholders' equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,555,658 at March 31, 2023; and 14,555,741 at December 31, 2022 1,456 1,456 Additional paid-in capital 303,357 302,763 Retained earnings 537,331 526,727 Accumulated other comprehensive loss (187,846 ) (208,689 ) Treasury stock, at cost – 120,879 shares at March 31, 2023, and 128,749 shares at December 31, 2022 (5,976 ) (6,279 ) Total Tompkins Financial Corporation Shareholders’ Equity 648,322 615,978 Noncontrolling interests 1,443 1,412 Total Equity $ 649,765 $ 617,390 Total Liabilities and Equity $ 7,644,371 $ 7,670,686 TOMPKINS FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended 03/31/2023 03/31/2022 INTEREST AND DIVIDEND INCOME Loans $ 60,842 $ 51,131 Due from banks 139 41 Available-for-sale debt securities 6,743 6,770 Held-to-maturity securities 1,214 1,129 Federal Home Loan Bank and other stock 300 105 Total Interest and Dividend Income 69,238 $ 59,176 INTEREST EXPENSE Time certificates of deposits of $250,000 or more 1,788 426 Other deposits 10,394 1,620 Federal funds purchased and securities sold under agreements to repurchase 14 16 Other borrowings 2,796 500 Total Interest Expense 14,992 2,562 Net Interest Income 54,246 56,614 Less: (Credit) for credit loss expense (825 ) (520 ) Net Interest Income After Credit for Credit Loss Expense 55,071 57,134 NONINTEREST INCOME Insurance commissions and fees 9,509 9,317 Wealth management fees 4,509 4,917 Service charges on deposit accounts 1,746 1,779 Card services income 2,682 2,543 Other income 1,941 1,476 Net gain (loss) on securities transactions 13 (47 ) Total Noninterest Income 20,400 19,985 NONINTEREST EXPENSE Salaries and wages 24,512 23,272 Other employee benefits 6,741 5,797 Net occupancy expense of premises 3,299 3,541 Furniture and fixture expense 2,054 1,991 Amortization of intangible assets 83 218 Other operating expense 13,469 12,020 Total Noninterest Expenses 50,158 46,839 Income Before Income Tax Expense 25,313 30,280 Income Tax Expense 5,901 6,976 Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation 19,412 23,304 Less: Net Income Attributable to Noncontrolling Interests 31 31 Net Income Attributable to Tompkins Financial Corporation $ 19,381 23,273 Basic Earnings Per Share $ 1.35 $ 1.61 Diluted Earnings Per Share $ 1.35 $ 1.60 Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited) Quarter Ended Quarter Ended March 31, 2023 March 31, 2022 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 $ 12,733 $ 139 4.42 % $ 134,129 $ 41 0.12 % Securities (1) U.S. Government securities 2,033,307 7,424 1.48 % 2,293,611 7,362 1.30 % State and municipal (2) 93,201 599 2.60 % 101,746 649 2.59 % Other securities (2) 3,284 53 6.55 % 3,390 23 2.73 % Total securities 2,129,792 8,076 1.54 % 2,398,747 8,034 1.36 % FHLBNY and FRB stock 16,750 300 7.26 % 10,098 105 4.23 % Total loans and leases, net of unearned income (2)(3) 5,251,278 61,034 4.71 % 5,055,948 51,355 4.12 % Total interest-earning assets 7,410,553 69,549 3.81 % 7,598,922 59,535 3.18 % Other assets 223,240 311,125 Total assets $ 7,633,793 $ 7,910,047 LIABILITIES & EQUITY Deposits Interest-bearing deposits Interest bearing checking, savings, & money market $ 3,833,566 $ 8,641 0.91 % $ 4,160,946 $ 750 0.07 % Time deposits 673,871 3,541 2.13 % 631,594 1,296 0.83 % Total interest-bearing deposits 4,507,437 12,182 1.10 % 4,792,540 2,046 0.17 % Federal funds purchased & securities sold under agreements to repurchase 57,523 14 0.10 % 64,237 16 0.10 % Other borrowings 269,752 2,796 4.20 % 125,298 500 1.62 % Total interest-bearing liabilities 4,834,712 14,992 1.26 % 4,982,075 2,562 0.21 % Noninterest bearing deposits 2,065,701 2,108,825 Accrued expenses and other liabilities 102,172 106,120 Total liabilities 7,002,585 7,197,020 Tompkins Financial Corporation Shareholders’ equity 629,784 711,601 Noncontrolling interest 1,424 1,426 Total equity 631,208 713,027 Total liabilities and equity $ 7,633,793 $ 7,910,047 Interest rate spread 2.55 % 2.97 % Net interest income/margin on earning assets 54,557 2.99 % 56,973 3.04 % Tax Equivalent Adjustment (311 ) (359 ) Net interest income per consolidated financial statements $ 54,246 $ 56,614 Tompkins Financial Corporation - Summary Financial Data (Unaudited) (In thousands, except per share data) Quarter-Ended Year-Ended Period End Balance Sheet Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Securities $ 1,899,001 $ 1,908,088 $ 2,054,036 $ 2,204,851 $ 2,285,527 $ 1,908,088 Total Loans 5,273,671 5,268,911 5,208,436 5,162,503 5,063,451 5,268,911 Allowance for credit losses 46,099 45,934 44,772 43,793 42,126 45,934 Total assets 7,644,371 7,670,686 7,779,941 7,842,461 7,891,111 7,670,686 Total deposits 6,509,009 6,602,295 6,936,726 6,769,521 7,016,739 6,602,295 Federal funds purchased and securities sold under agreements to repurchase 63,491 56,278 55,340 50,075 57,115 56,278 Other borrowings 327,000 291,300 101,000 295,600 60,000 291,300 Total common equity 648,322 615,978 571,453 622,843 656,049 615,978 Total equity 649,765 617,390 572,959 624,318 657,492 617,390 Average Balance Sheet Average earning assets $ 7,410,553 $ 7,568,656 $ 7,639,123 $ 7,621,588 $ 7,598,922 $ 7,607,078 Average assets 7,633,793 7,721,335 7,853,847 7,830,645 7,910,047 7,828,520 Average interest-bearing liabilities 4,834,712 4,828,561 4,861,857 4,901,345 4,982,075 4,892,952 Average equity 631,208 580,720 635,324 639,354 713,027 641,726 Share data Weighted average shares outstanding (basic) 14,326,595 14,308,323 14,289,022 14,317,415 14,400,003 14,328,280 Weighted average shares outstanding (diluted) 14,389,673 14,385,884 14,367,149 14,387,601 14,478,183 14,404,294 Period-end shares outstanding 14,519,748 14,519,831 14,483,757 14,504,604 14,561,450 14,519,831 Common equity book value per share $ 44.65 $ 42.42 $ 39.45 $ 42.94 $ 45.05 $ 42.42 Tangible book value per share (Non-GAAP)** $ 38.16 $ 35.93 $ 32.93 $ 36.42 $ 38.54 $ 35.93 **See "Non-GAAP measures" below for a discussion of non-GAAP financial measures and a reconciliation of non-GAAP financial measures to the most directly comparable financial measures presented in accordance with GAAP. Income Statement Net interest income $ 54,246 $ 57,294 $ 58,111 $ 58,262 $ 56,614 $ 230,281 (Credit) provision for credit loss expense (5) (825 ) 1,397 1,056 856 (520 ) 2,789 Noninterest income 20,400 18,351 20,692 18,944 19,985 77,972 Noninterest expense (5) 50,158 50,190 49,602 49,120 46,839 195,751 Income tax expense 5,901 4,478 6,774 6,329 6,976 24,557 Net income attributable to Tompkins Financial Corporation 19,381 19,548 21,340 20,869 23,273 85,030 Noncontrolling interests 31 32 31 32 31 126 Basic earnings per share (4) 1.35 1.36 1.49 1.45 1.61 5.92 Diluted earnings per share (4) 1.35 1.36 1.48 1.45 1.60 5.89 Nonperforming Assets Nonaccrual loans and leases $ 28,424 $ 28,289 $ 30,013 $ 24,665 $ 25,200 $ 28,289 Loans and leases 90 days past due and accruing 13 25 161 62 0 25 Performing troubled debt restructuring* 0 4,530 4,730 4,872 5,064 4,530 Total nonperforming loans and leases 28,437 32,844 34,904 29,599 30,264 32,844 OREO 36 152 335 122 88 152 Total nonperforming assets $ 28,473 $ 32,996 $ 35,239 $ 29,721 $ 30,352 $ 32,996 *No amount shown for periods subsequent to the Company's adoption of ASU 2022-02 effective January 1, 2023. Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued Quarter-Ended Year-Ended Delinquency - Total loan and lease portfolio Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Loans and leases 30-89 days past due and accruing $ 5,894 $ 3,172 $ 3,160 $ 9,837 $ 1,735 $ 3,172 Loans and leases 90 days past due and accruing 13 25 161 62 0 25 Total loans and leases past due and accruing 5,907 3,197 3,321 9,899 1,735 3,197 Allowance for Credit Losses Balance at beginning of period $ 45,934 $ 44,772 $ 43,793 $ 42,126 $ 42,843 $ 42,843 Impact of adopting ASC 326 64 0 0 0 0 0 (Credit) provision for credit losses (1,180 ) 1,352 1,101 780 (734 ) $ 2,499 Net loan and lease charge-offs (recoveries) (1,281 ) 190 122 (887 ) (17 ) $ (592 ) Allowance for credit losses at end of period $ 46,099 $ 45,934 $ 44,772 $ 43,793 $ 42,126 $ 45,934 Allowance for Credit Losses - Off-Balance Sheet Exposure Balance at beginning of period $ 2,796 $ 2,751 $ 2,796 $ 2,720 $ 2,506 $ 2,506 Provision (credit) for credit losses 355 45 (45 ) 76 214 $ 290 Allowance for credit losses at end of period $ 3,151 $ 2,796 $ 2,751 $ 2,796 $ 2,720 $ 2,796 Loan Classification - Total Portfolio Special Mention $ 39,255 $ 49,752 $ 66,730 $ 72,270 $ 92,380 $ 49,752 Substandard 46,315 48,537 40,007 42,756 42,722 48,537 Ratio Analysis Credit Quality Nonperforming loans and leases/total loans and leases 0.54 % 0.62 % 0.67 % 0.57 % 0.60 % 0.62 % Nonperforming assets/total assets 0.37 % 0.43 % 0.45 % 0.38 % 0.38 % 0.43 % Allowance for credit losses/total loans and leases 0.87 % 0.87 % 0.86 % 0.85 % 0.83 % 0.87 % Allowance/nonperforming loans and leases 162.11 % 139.86 % 128.27 % 147.95 % 139.20 % 139.85 % Net loan and lease losses annualized/total average loans and leases (0.10 )% 0.01 % 0.01 % (0.07 )% 0.00 % (0.01 )% Capital Adequacy Tier 1 Capital (to average assets) 9.63 % 9.34 % 9.14 % 9.02 % 8.89 % 9.34 % Total Capital (to risk-weighted assets) 14.62 % 14.42 % 14.26 % 14.07 % 14.23 % 14.42 % Profitability (period-end) Return on average assets * 1.03 % 1.00 % 1.08 % 1.07 % 1.19 % 1.09 % Return on average equity * 12.45 % 13.36 % 13.33 % 13.09 % 13.24 % 13.25 % Net interest margin (TE) * 2.99 % 3.02 % 3.04 % 3.09 % 3.04 % 3.05 % * Quarterly ratios have been annualized Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued 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 below tables. The Company believes the non-GAAP measures provide meaningful comparisons of our underlying operational performance and facilitate management's and investors' assessments of business and performance trends in comparison to others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a measure of the Company's profitability or liquidity; they are in addition to, and are not a substitute for, financial measures under GAAP. The non-GAAP financial measures presented herein may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies. Further, the Company may utilize other measures to illustrate performance in the future. Non-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Reconciliation of Common Equity Book Value Per Share (GAAP) to Tangible Book Value Per Share (non-GAAP) Quarter-Ended Year-ended Mar-23 Dec-22 Sep-22 Jun-22 Mar-22 Dec-22 Total common equity $ 648,322 $ 615,978 $ 571,453 $ 622,843 $ 656,049 $ 615,978 Less: Goodwill and intangibles 94,253 94,336 94,554 94,617 94,836 94,336 Tangible common equity (Non-GAAP) 554,069 521,642 476,899 528,226 561,213 521,642 Ending shares outstanding 14,519,748 14,519,831 14,483,757 14,504,604 14,561,450 14,519,831 Tangible book value per share (Non-GAAP) $ 38.16 $ 35.93 $ 32.93 $ 36.42 $ 38.54 $ 35.93 (1) Average balances and yields on available-for-sale securities are based on historical amortized cost. (2) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2023 and 2022 to increase tax exempt interest income to taxable-equivalent basis. (3) 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, 2022. (4) 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. (5) Amounts in prior periods' financial statements are reclassified when necessary to conform to the current period's presentation. View source version on businesswire.com: https://www.businesswire.com/news/home/20230428005062/en/
For more information: Stephen S. Romaine, President & CEO Francis M. Fetsko, Executive VP, CFO & COO Tompkins Financial Corporation (888) 503-5753