Tompkins Financial Corporation (TMP–NYSE Amex)
Tompkins Financial Corporation reported record net income of
$9.0 million for the second quarter of 2010, an increase of 21.3%
over the $7.4 million reported for the same period in 2009. Diluted
earnings per share were $0.83 for the second quarter of 2010, a
20.3% increase over the $0.69 reported for the second quarter of
2009 (adjusted for 10% stock dividend approved on January 27, 2010;
refer to footnote1).
For the six months ended June 30, 2010, net income was $17.4
million compared to $15.2 million for the same period prior year.
Diluted earnings per share totaled $1.61 for the first six months
of 2010, an increase of 14.2% over the $1.41 reported for the first
six months of 2009.
Selected highlights for the second quarter included:
- Second quarter 2010 diluted
earnings per share up 20.3% from same period in 2009 (2010 results
would reflect an increase of 7.8% if second quarter 2009 results
are adjusted for special FDIC assessment accrued in June
2009);
- Net interest income up 6.0% from
the same quarter last year, representing the 13th consecutive
quarter of increased net interest income;
- Lower net charge-offs,
contributed to a 40.5% decrease in provision expense from $2.4
million in the second quarter of 2009, to $1.4 million in the
second quarter of 2010.
- Second quarter Return on Equity
of 13.92%. This is up from a 2009 full year Return on Equity of
13.66%, which ranked in top 11% of similar sized bank holding
companies in the most recent Federal Reserve performance
report2;
- The Company increased it cash
dividend to $0.34 per share in the second quarter of 2010, a 10%
increase from the immediately preceding quarter (when adjusted for
the 10% stock dividend paid on February 15, 2010). The increase is
consistent with the 21 consecutive years of annual dividend
increases paid to shareholders through year end 2009.
- According to the most recent
Federal Reserve performance report2 the Company’s ratio of Net
Losses to Average Loans for the calendar year ended December 31,
2009, and for the quarter ended March 31, 2010, was better than 90%
of all banks with total assets between $3 billion and $10
billion.
- Capital levels at June 30, 2010,
remain well above the regulatory minimums to be considered well
capitalized, and improving trends have continued in the current
quarter.
Stephen S. Romaine, President and CEO stated, “As the uncertain
economic conditions continue to pose challenges for our customers
and our industry, we are obviously pleased to report on record
earnings both for the quarter and year-to-date periods. We are
especially pleased to note continued growth in revenue during the
quarter. In addition to the continued growth in net interest
income, we saw improving trends in each of our key fee based
business activities.”
Growth in average earning assets and deposits has contributed to
the increase in net interest income in 2010. When comparing the
second quarter of 2010 to the second quarter of 2009, average loans
were up 3.5% and average deposits were up 7.8%. Net interest income
of $28.1 million in the second quarter of 2010 was up 6.0% over the
same period in 2009. Net interest margin has remained relatively
stable over the last 12 months. The 3.91% margin reported for the
second quarter of 2010 compares to 3.89% in the fourth quarter of
2009, and 3.93% in the second quarter of 2009. Mr. Romaine
commented, “The current economic climate has resulted in slower
loan demand over the last several quarters, making loan growth more
challenging. We remain committed to making loans that support
economic activity in the communities we serve and feel that the
growth we have experienced over the last twelve months is evidence
of that commitment.”
The Company’s allowance for loan and lease losses totaled $26.5
million at June 30, 2010, which represented 1.40% of total loans.
Annualized net charge-offs for the first six months of 2010
represented 0.15% of average loans and leases, which is down from
0.19% for the same period in 2009. Net charge-offs for the second
quarter of 2010 were $244,000, which benefited from $560,000 in
recoveries of loans previously charged off.
Nonperforming assets represented 1.28% of total assets as of
June 30, 2010, up from 1.12% at December 31, 2009, and up from
0.87% at June 30, 2009. Approximately, 57% of the Company’s
nonperforming loans were less than 30 days past due as of June 30,
2010. Mr. Romaine added, “Although nonperforming assets increased
somewhat from the previous quarter, we are encouraged that during
the quarter we noted improving financial conditions for certain
credits within the portfolio. Additionally, our nonperforming asset
ratios and loss experience remain significantly better than
national averages. We remain diligent in monitoring the credit
portfolio, as we recognize that many of our customers continue to
be challenged by the prolonged economic downturn.”
Despite increases in all major fee income categories,
noninterest income for the second quarter of 2010 of $11.3 million
reflects a decline of 1.8% from the same period in 2009.
Year-to-date 2010 noninterest income was $22.7 million, which is in
line with the same period in 2009. Investment services revenue, the
largest category of noninterest income, was $3.6 million for the
second quarter of 2010, an increase of 8.0% from the second quarter
of 2009. Other significant fee income categories include insurance
revenue of $3.2 million (up 2.3%); service charges on deposit
accounts of $2.4 million (up 7.0%); and cards services income of
$1.1 million (up 14.4%). The decline in noninterest income relates
primarily to net mark-to-market losses on liabilities held at fair
value, which were $490,000 for the second quarter of 2010, compared
to net mark-to-market gains of $432,000 as of June 30, 2009. The
market-to-market gains and losses are the result of interest rate
movements that may positively or negatively impact the carrying
amount of certain assets and liabilities carried at fair value.
Noninterest expenses for the second quarter 2010 were $24.5
million, relatively flat compared to the same quarter last year.
Noninterest expenses for the six months ended June 30, 2010 totaled
$49.0 million, an increase of 2.2% over the same period in 2009.
FDIC insurance of $857,000 for the second quarter of 2010 is down
from $2.2 million reported in the second quarter of 2009. The large
variance is due to the FDIC special assessment expensed in the
second quarter of 2009. The largest category of noninterest expense
is Salary and Wages, which totaled $10.7 million in the second
quarter of 2010, an increase of 6.0% from second quarter of
2009.
Tompkins Financial Corporation operates 45 banking offices in
the New York State markets served by the Company's subsidiary banks
- Tompkins Trust Company, The Bank of Castile, and Mahopac National
Bank. Through its community banking subsidiaries, the Company
provides traditional banking services, and offers a full range of
money management services through Tompkins Investment Services (a
division of Tompkins Trust Company). The Company offers insurance
services through its Tompkins Insurance Agencies, Inc. subsidiary,
an independent agency serving individuals and business clients
throughout New York State. The Company offers fee-based financial
planning and wealth management services through its AM&M
Financial Services, Inc. subsidiary. AM&M Financial Services,
Inc. is also the parent company to Ensemble Financial Services,
Inc., an independent broker dealer and leading outsourcing company
for financial planners and investment advisors. Each Tompkins
subsidiary operates with a community focus, meeting the unique
needs of the communities served.
"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.
1 Share and per share data in this press release have been
retroactively adjusted to reflect a 10% stock dividend paid on
February 15, 2010.
2 Federal Reserve peer ratio as of March 31, 2010, includes
banks and bank holding companies with consolidated assets between
$3 billion and $10 billion.
PART I - FINANCIAL INFORMATION Item 1. Financial
Statements TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (In
thousands, except share and per share data) (Unaudited)
As
of As of ASSETS 06/30/2010
12/31/2009 Cash and noninterest bearing balances due
from banks $ 47,839 $ 43,686 Interest bearing balances due from
banks 1,615 1,676 Federal funds sold 15,000 0 Money market funds
100 100
Cash and Cash
Equivalents 64,554 45,462 Trading
securities, at fair value 26,895 31,718 Available-for-sale
securities, at fair value 955,090 928,770
Held-to-maturity securities, fair
value of $42,567 at June 30, 2010, and $46,340 at
December 31, 2009 41,235 44,825 Loans and leases, net of unearned
income and deferred costs and fees 1,900,303 1,914,818 Less:
Allowance for loan and lease losses 26,530
24,350
Net Loans and Leases 1,873,773
1,890,468 FHLB and FRB stock 19,330 20,041 Bank
premises and equipment, net 46,818 46,650 Corporate owned life
insurance 36,680 35,953 Goodwill 41,589 41,589 Other intangible
assets, net 4,486 4,864 Accrued interest and other assets
51,198 62,920
Total
Assets $ 3,161,648 $
3,153,260 LIABILITIES Deposits:
Interest bearing: Checking, savings and money market 1,198,065
1,183,145 Time 787,923 794,738 Noninterest bearing
474,235 461,981
Total Deposits
2,460,223 2,439,864 Federal funds purchased
and securities sold under agreements to repurchase, including
certain amounts at fair value of $5,628 at June 30, 2010, and
$5,500 at December 31, 2009 175,336 192,784 Other borrowings,
including certain amounts at fair value of $11,825 at June 30,
2010, and $11,335 at December 31, 2009 189,561 208,965 Trust
preferred debentures 25,058 25,056 Other liabilities
42,787 41,583
Total Liabilities
$ 2,892,965 $ 2,908,252
EQUITY Tompkins Financial Corporation
shareholders' equity: Common Stock - par value $.10 per share:
Authorized 25,000,000 shares; Issued and outstanding: 10,865,911 at
June 30, 2010; and 9,785,265 at December 31, 2009 1,087 978
Additional paid-in capital 195,025 155,589 Retained earnings 67,456
92,402 Accumulated other comprehensive income (loss) 5,965 (3,087 )
Treasury stock, at cost – 88,784 shares at June 30, 2010, and
81,723 shares at December 31, 2009 (2,367 ) (2,326 )
Total Tompkins Financial Corporation Shareholders’ Equity
267,166 243,556 Noncontrolling interests
1,517 1,452
Total Equity
$ 268,683 $ 245,008
Total Liabilities and Equity $
3,161,648 $ 3,153,260 See
accompanying notes to unaudited condensed consolidated financial
statements.
TOMPKINS FINANCIAL CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF INCOME Three Months
Ended Six Months Ended (In thousands, except per
share data) (Unaudited)
06/30/2010 06/30/2009
06/30/2010 06/30/2009 INTEREST AND DIVIDEND
INCOME Loans $26,750 $26,499 $53,369 $53,176 Due from banks 10
4 22 12 Federal funds sold 6 4 9 8 Money market funds 0 10 0 28
Trading securities 278 345 588 707 Available-for-sale securities
8,794 8,927 17,793 17,570 Held-to-maturity securities 394 483 802
986 FHLB and FRB stock 218 287 501 322
Total Interest and Dividend Income 36,450
36,559 73,084 72,809
INTEREST EXPENSE Time certificates of deposits of $100,000
or more 1,146 1,314 2,324 2,805 Other deposits 3,502 4,827 7,329
9,960 Federal funds purchased and repurchase agreements 1,308 1,564
2,733 3,129 Trust preferred securities 436 325 803 378 Other
borrowings 1,952 2,020 3,845 4,178
Total Interest Expense 8,344
10,050 17,034 20,450 Net
Interest Income 28,106 26,509
56,050 52,359 Less: Provision for
loan/lease losses 1,408 2,367 3,591
4,403
Net Interest Income After Provision for Loan/Lease
Losses 26,698 24,142
52,459 47,956 NONINTEREST INCOME
Investment services income 3,604 3,337 7,341 6,539 Insurance
commissions and fees 3,191 3,120 6,357 6,239 Service charges on
deposit accounts 2,430 2,271 4,487 4,491 Card services income 1,067
933 2,041 1,723 Mark-to-market gain on trading securities 291 40
381 98 Mark-to-market (loss) gain on liabilities held at fair value
(490) 432 (618) 688 Other income 1,180 1,386 2,486 2,667 Net gain
on security transactions 58 19 176 26
Total Noninterest Income 11,331
11,538 22,651 22,471
NONINTEREST EXPENSES Salaries and wages 10,669 10,069 21,008
19,597 Pension and other employee benefits 3,442 3,360 7,354 6,746
Net occupancy expense of premises 1,725 1,774 3,606 3,788 Furniture
and fixture expense 1,143 1,128 2,326 2,244 FDIC insurance 857
2,164 1,769 2,518 Amortization of intangible assets 199 235 401 484
Other operating expense 6,481 5,944 12,547
12,586
Total Noninterest Expenses
24,516 24,674 49,011
47,963 Income Before Income Tax Expense
13,513 11,006 26,099
22,464 Income Tax Expense 4,447 3,526
8,585 7,242
Net Income attributable to
Noncontrolling Interests and Tompkins Financial Corporation
9,066 7,480 17,514
15,222 Less: Net income attributable to noncontrolling
interests 33 33 65 65
Net Income
Attributable to Tompkins Financial Corporation
$ 9,033
$ 7,447 $ 17,449 $ 15,157
Basic Earnings Per Share $0.84 $0.70
$1.62 $1.42 Diluted Earnings Per Share
$0.83 $0.69 $1.61
$1.41 Per share data has been retroactively adjusted to
reflect 10% stock dividend paid on February 15, 2010 See
accompanying notes to unaudited condensed consolidated financial
statements.
Average Consolidated Balance Sheet and Net Interest
Analysis Quarter Ended
Year to Date Period Ended Year to Date Period
Ended June 30, 2010
June 30, 2010 June 30,
2009
AverageBalance
Average
AverageBalance
Average
AverageBalance
Average (Dollar amounts in thousands) (QTD)
Interest Yield/Rate (YTD)
Interest Yield/Rate (YTD)
Interest Yield/Rate
ASSETS Interest-earning assets
Interest-bearing balances due from banks $ 36,083 $ 10 0.11 % $
36,979 $ 22 0.12 % $ 8,993 $ 12 0.27 % Money market funds 100 0
0.00 % 100 0 0.00 % 16,841 28 0.34 % Securities (1) U.S. Government
securities 843,247 8,029 3.82 % 835,570 16,248 3.92 % 699,503
15,847 4.57 % Trading securities 29,168 278 3.82 % 30,218 588 3.92
% 36,725 707 3.88 % State and municipal (2) 105,222 1,536 5.86 %
105,181 3,109 5.96 % 115,703 3,500 6.10 % Other securities (2)
17,784 218 4.92 % 18,171
442 4.91 % 21,307
551 5.21 % Total securities 995,421 10,061 4.05 %
989,140 20,387 4.16 % 873,238 20,605 4.76 % Federal Funds Sold
13,409 6 0.18 % 11,256 9 0.16 % 8,727 8 0.18 % FHLB and FRB stock
19,395 218 4.51 % 19,514 501 5.18 % 20,464 322 3.17 % Loans, net of
unearned income (3) Real estate loans 1,337,693 19,016 5.70 %
1,332,798 37,856 5.73 % 1,264,018 37,583 6.00 % Commercial loans
(2) 458,845 6,283 5.49 % 465,834 12,545 5.43 % 453,652 12,335 5.48
% Consumer loans 81,550 1,402 6.90 % 82,809 2,862 6.97 % 87,184
2,993 6.92 % Direct lease financing (2) 11,177 167
5.99 % 11,404 342
6.05 % 13,453 408 6.12 %
Total loans, net of unearned income 1,889,265 26,868
5.70 % 1,892,845 53,605
5.71 % 1,818,307 53,319
5.91 %
Total interest-earning assets 2,953,673
37,163 5.05 %
2,949,834 74,523
5.09 % 2,746,570
74,294 5.45 % Other
assets 227,803 227,459 204,214
Total assets
3,181,476 3,177,293 2,950,784
LIABILITIES &
EQUITY Deposits Interest-bearing deposits Interest bearing
checking, savings, & money market 1,230,496 1,605 0.52 %
1,229,835 3,395 0.56 % 1,108,743 4,573 0.83 % Time deposits >
$100,000 342,695 1,146 1.34 % 338,998 2,324 1.38 % 283,789 2,805
1.99 % Time deposits < $100,000 430,810 1,784 1.66 % 430,141
3,657 1.71 % 420,595 4,943 2.37 % Brokered time deposits <
$100,000 27,464 113 1.65 %
32,326 277 1.73 %
42,982 444 2.08 % Total interest-bearing
deposits 2,031,465 4,648 0.92 % 2,031,300 9,653 0.96 % 1,856,109
12,765 1.39 % Federal funds purchased & securities sold under
agreements to repurchase Repurchase 177,309 1,308 2.96 % 182,502
2,733 3.02 % 186,516 3,129 3.38 % Other borrowings 190,414 1,952
4.11 % 194,784 3,845 3.98 % 213,780 4,178 3.94 % Trust preferred
debentures 25,057 436 6.98 %
25,057 803 6.46 %
11,318 378 6.73 %
Total interest-bearing
liabilities 2,424,245 8,344 1.38 %
2,433,643 17,034 1.41 %
2,267,723 20,450 1.82 %
Noninterest bearing deposits 456,261 448,232 418,110 Accrued
expenses and other liabilities 40,773 40,498 38,394
Total
liabilities 2,921,279 2,922,373 2,724,227 Tompkins
Financial Corporation Shareholders’ equity 258,695 253,436 225,073
Noncontrolling interest 1,502 1,484 1,484
Total equity
260,197 254,920 226,557 Total
liabilities and equity $ 3,181,476 $
3,177,293 $ 2,950,784 Interest rate spread
3.67 % 3.68
% 3.63 % Net interest income/margin on
earning assets
28,819 3.91 % 57,489
3.93 % 53,844 3.95 %
Tax Equivalent Adjustment
(713 ) (1,439
) (1,485 ) Net interest income
per consolidated financial statements
$ 28,106
$ 56,050
$ 52,359 (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 a combined New York
State and Federal effective income tax rate of 40% 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 condensed consolidated
financial statements included in Part I of the Company's annual
report on Form 10-K for the fiscal year ended December 31, 2009.
Tompkins Financial Corporation - Summary Financial Data
(Unaudited)
(In thousands, except per share data
Quarter-Ended Year-Ended Jun-10
Mar-10 Dec-09 Sep-09
Jun-09 Dec-09
Period End Balance Sheet
Securities $ 1,023,220 $ 1,026,301 $ 1,005,313
$ 908,765 $ 903,559 $ 1,005,313 Loans
and leases, net of unearned income and deferred costs and fees
1,900,303 1,887,038
1,914,818 1,882,321 1,841,198
1,914,818 Allowance for loan and lease losses
26,530 25,366 24,350
22,800 21,319 24,350
Total assets 3,161,648 3,206,763
3,153,260 3,088,039 2,968,057
3,153,260
Total deposits
2,460,223 2,512,201 2,439,864
2,397,431 2,288,809
2,439,864 Federal funds purchased and securities sold under
agreements to repurchase 175,336
181,255 192,784 192,099
189,993 192,784 Other borrowings
189,561 190,545 208,965
194,795 194,754 208,965 Trust
preferred debentures 25,058 25,057
25,056 23,018 23,017
25,056 Total equity 268,683
254,444 245,008 241,647
229,308 245,008
Average Balance Sheet
Average earning assets $
2,953,673 $ 2,945,953 $ 2,920,269 $ 2,792,319
$ 2,778,425 $ 2,801,884 Average assets
3,181,476 3,173,064 3,132,599
2,999,961 2,982,077
3,009,007 Average interest-bearing liabilities
2,424,245 2,443,145 2,408,997
2,289,144 2,295,454
2,308,731 Average equity 260,197
249,586 245,176 233,535
230,117 233,009
Share data
Weighted average shares outstanding (basic) [1]
10,818,218 10,724,644 10,702,447
10,693,698 10,679,719
10,686,989 Weighted average shares outstanding (diluted) [1]
10,876,421 10,776,934
10,752,737 10,763,374 10,763,784
10,759,302 Period-end shares outstanding
10,830,001 10,793,573 9,752,619
9,722,834 9,720,440
9,752,619 Book value per share [1] 24.81
23.57 22.84 22.59
21.45 22.84
Income
Statement
Net interest income $ 28,106 $
27,944 $ 27,897 $ 26,780 $ 26,509
$ 107,037 Provision for loan/lease losses
1,408 2,183 2,758 2,127
2,367 9,288 Noninterest income
11,331 11,320 12,142
11,600 11,538
46,213 Noninterest expense 24,516
24,494 24,931 23,723
24,674 96,617 Income tax expense
4,447 4,138 4,104 4,037
3,526 15,383 Net income
attributable to Tompkins Financial 9,033
8,416 8,214 8,460
7,447 31,831 Noncontrolling interests
33 33 32 33
33 131 Basic earnings per share [1]
$ 0.84 $ 0.78 $ 0.77 $ 0.79 $
0.70 $ 2.98 Diluted earnings per share [1] $
0.83 $ 0.78 $ 0.76 $ 0.79 $ 0.69
$ 2.96
Asset Quality
Net charge-offs
244 1,167 1,208
646 1,028 3,610
Nonaccrual loans and leases 33,645
29,521 31,289 25,837
24,662 31,289 Loans and leases 90 days past
due and accruing 1,758 51
369 579 1,073 369
Troubled debt restructurings not included above 3,264
3,703 3,265 0
0 3,265 Total nonperforming loans and
leases 38,667 33,275
34,923 26,416 25,735
34,923 OREO 1,638 558
299 440 68
299 Nonperforming assets 40,305 33,833
35,222 26,856 25,803
35,222
RATIO ANALYSIS
Quarter-Ended Year-Ended Credit
Quality Jun-10 Mar-10
Dec-09 Sep-09 Jun-09
Dec-09 Net loan and lease losses/ average loans and leases *
0.15% 0.25% 0.25% 0.14% 0.23% 0.20%
Nonperforming loans and leases/loans and leases 2.03%
1.76% 1.82% 1.40%
1.40% 1.82% Nonperforming assets/assets
1.28% 1.06% 1.12%
0.87% 0.87% 1.12%
Allowance/nonperforming loans and leases 68.61%
76.23% 69.72% 86.31%
82.84% 69.72% Allowance/loans
and leases 1.40% 1.34%
1.27% 1.21% 1.16%
1.27%
Capital Adequacy (period-end)
Tier I
capital / average assets 7.77% 7.56%
7.44% 7.44% 7.37%
7.44% Total capital / risk-weighted assets
13.10% 12.56% 12.14%
11.89% 11.74% 12.14%
Profitability
Return on average assets *
1.14% 1.08% 1.04%
1.12% 1.00% 1.06% Return
on average equity * 13.92% 13.68%
13.29% 14.37% 12.98%
13.66% Net interest margin (TE) *
3.91% 3.95% 3.89%
3.91% 3.93% 3.92% * Quarterly
ratios have been annualized
Quarter-Ended Year-Ended
Non-GAAP Disclosure Jun-10
Mar-10 Dec-09 Sep-09
Jun-09 Dec-09 Reported net income $
9,033 $ 8,416 $ 8,214 $ 8,460 $ 7,447
$ 31,831 Adjustments:
FDIC special insurance
assessment (after-tax) 0 0
0 0 822 822
Subtotal adjustments 0 0
0 0 822 822
Adjusted net income 9,033 8,416
8,214 8,460 8,269
32,653 Weighted average shares outstanding (diluted)
10,876,421 10,776,934 10,752,737
10,763,374 10,763,794
10,759,520 Adjusted diluted earnings per share $ 0.83
$ 0.78 $ 0.76 $ 0.79 $ 0.77
$ 3.03
Year-to-date period ended Non-GAAP
Disclosure Jun-10 Jun-09 Reported
net income $ 17,449 $ 15,157 Adjustments:
FDIC special insurance
assessment (after-tax) 0 822 Subtotal
adjustments 0 822 Adjusted net income
17,449 15,979 Weighted average shares
outstanding (diluted)[1] 10,819,898
10,760,371 Adjusted diluted earnings per share $ 1.61
$ 1.48
[1] Weighted average shares and per share data
in this press release have been retroactively adjusted to reflect a
10% stock dividend paid on February 15, 2010.
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