8-K
TOMPKINS FINANCIAL CORP (TMP)
UNITED STATES
SECURITIES AND EXCHANGECOMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13OR 15(d) of The Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported) | May 1, 2020 |
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Tompkins Financial Corporation
(Exact name of registrant as specified in its charter)
| New York | 1-12709 | 16-1482357 |
|---|---|---|
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
| 118 E. Seneca Street, PO Box 460, Ithaca, New York | 14851 | |
| --- | --- | |
| (Address of Principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code | (607) 273-3210 | |
| --- | --- |
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.10 par value | TMP | NYSE American, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On May 1, 2020, Tompkins Financial Corporation, (the “Company”) issued a press release announcing its earnings for the calendar quarter ended March 31, 2020. A copy of the press release is attached to this Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Item 8.01 Other Events
On May 1, 2020, the Company issued a press release announcing that its Board of Directors approved payment of a regular quarterly cash dividend of $0.52 per share, payable on May 18, 2020, to common shareholders of record on May 11, 2020. A copy of the press release is attached to this Report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
| (a) | Not applicable. |
|---|---|
| (b) | Not applicable. |
| --- | --- |
| (c) | Not applicable. |
| --- | --- |
| (d) | Exhibits. |
| --- | --- |
EXHIBIT INDEX
Exhibit No.
Description
| 99.1 | Press Release of Tompkins Financial Corporation dated May 1, 2020 |
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| 99.2 | Press Release of Tompkins Financial Corporation dated May 1, 2020 |
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL<br> document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TOMPKINS FINANCIAL CORPORATION | |
|---|---|
| Date: May 1, 2020 | /S/ Stephen S. Romaine |
| Stephen S. Romaine | |
| President and CEO |
Tompkins Financial Corporation 8-K
EXHIBIT 99.1
For more information contact:
Stephen S. Romaine, President & CEO
Francis M. Fetsko, Executive VP, CFO & COO
Tompkins Financial Corporation (888) 503-5753
For Immediate Release
Friday, May 1, 2020
Tompkins Financial Corporation Reports First Quarter Earnings
ITHACA, NY - Tompkins FinancialCorporation (NYSE American: TMP)
Tompkins Financial Corporation announced net income attributable to common shareholders of $7.9 million, or $0.53 per diluted common share for the first quarter of 2020, compared to $21.0 million, or $1.37 per diluted common share, for the first quarter of 2019. Results for the first quarter of 2020 were negatively impacted by current economic stress resulting from the COVID-19 pandemic, which contributed to the $16.3 million provision for credit losses recognized during the quarter under the new current expected credit losses (CECL) accounting standard. Refer to "Asset Quality" section for further discussion of the impact on the Company's financial statements upon adoption of this new accounting guidance.
"These are clearly unprecedented times for our country and our communities. I am extremely proud of the exceptional way the Tompkins team has stepped up to the current environment by addressing the specific challenges of our clients and communities who are facing hardships due to the COVID-19 pandemic. Though these are unprecedented times, Tompkins enters this environment well prepared to face the many challenges and difficulties we are all dealing with as a result of the pandemic. Over recent years, we have invested significantly in digital technologies to improve capabilities that allow our customers to bank remotely. We have also invested significantly in our internal systems, which allowed nearly 100% of our non-retail employees to transition quickly and securely to remote working environments with limited disruption to our business. Furthermore, we entered 2020 with a strong financial position, coming off a year of record earnings per share in 2019, and with our 2019 Risk Based Capital Ratio at its highest level since 2014."
SELECTED HIGHLIGHTS FOR THE FIRST QUARTER:
Despite the decline in earnings from the prior year, there were several favorable trends noted during the first quarter of 2020, including:
| • | Total loans of $4.9 billion were up 3.1% over March 31, 2019 |
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| • | Total deposits of $5.4 billion increased by 8.4% over March 31, 2019 |
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| • | Noninterest bearing deposits of $1.4 billion increased by 5.6% over March 31, 2019 |
| --- | --- |
| • | Net interest margin was 3.44% for the first quarter of 2020, up from 3.34% for the first quarter<br>of 2019, and 3.43% for the fourth quarter of 2019 |
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NET INTEREST INCOME
Net interest margin was 3.44% for the first quarter of 2020, up compared to the 3.34% reported for the first quarter of 2019, and 3.43% for the trailing quarter ended December 31, 2019. The improved net interest margin year-over-year was largely driven by lower other borrowing balances and funding costs, primarily in other borrowings. Net interest income of $53.0 million for the first quarter of 2020 was up 2.0% compared to the first quarter of 2019.
NONINTEREST INCOME
Noninterest income represented 26.4% of total revenues in the first quarter of 2020, compared to 27.2% in the first quarter of 2019. Noninterest income of $19.0 million was down 2.3% compared to the same period in 2019. Noninterest income in the first quarter of 2019 included a one-time incentive payment of $500,000 (pre-tax) related to our card services business.
NONINTEREST EXPENSE
Noninterest expense was $45.7 million for the first quarter of 2020, which was up 3.5% from the same period in 2019, and in line with the fourth quarter of 2019. The increase in noninterest expense from the same period last year was mainly related to higher salaries and wages in the first quarter of 2020, largely reflective of merit increases awarded in 2019.
INCOME TAX EXPENSE
The Company's effective tax rate was 19.4% in the first quarter of 2020, compared to 21.0% for the same period in 2019.
ASSET QUALITY
Asset quality trends remained strong in the first quarter of 2020. Nonperforming assets represented 0.46% of total assets at March 31, 2020, down slightly from 0.47% at December 31, 2019. Nonperforming asset levels continue to be below the most recent Federal Reserve Board Peer Group Average^1^ of 0.56%.
Net charge-offs for the first quarter of 2020 were $1.2 million compared to $3.5 million reported in the first quarter of 2019. Net charge-offs of $1.2 million in the first quarter of 2020 was largely related to a single credit, while the first quarter of 2019 included a $3.1 million write-down of one credit, both in the commercial real estate portfolio.
The Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”), effective January 1, 2020. The Company recorded a net increase to retained earnings of $1.7 million upon adoption of the new standard. The transition adjustment at January 1, 2020 included a $2.5 million decrease in the allowance for credit losses on loans, and a $0.4 million increase in the allowance for credit losses on off-balance sheet credit exposures, net of the corresponding $0.4 million decrease in deferred tax assets. The provision for credit losses for the first quarter of 2020 was $16.3 million, increasing the allowance for credit losses to $52.4 million at March 31, 2020. The increase in the first quarter of 2020 was not a direct result of specific credit risks currently identified in the loan portfolio; rather, the increase was largely a result of the impact of the current economic shutdown related to COVID-19 on economic forecasts and other model assumptions relied upon by management in determining the allowance.
The allowance for credit losses represented 1.06% of total loans and leases at March 31, 2020, compared to 0.81% at December 31, 2019, and 0.84% at March 31, 2019. The ratio of the allowance to total nonperforming loans and leases was 170.74% at March 31, 2020, compared to 126.90% at December 31, 2019, and 175.51% at March 31, 2019.
CAPITAL POSITION
Capital ratios remained well above the regulatory minimums for well capitalized institutions. The ratio of Tier 1 capital to average assets was 9.53% at March 31, 2020, down slightly from 9.61% at December 31, 2019, and improved from 9.24% at March 31, 2019. Consistent with the Company's capital planning practices, during the quarter ended March 31, 2020, the Company repurchased 71,288 shares of common stock at an average price of $78.83 per share. On March 19, 2020, following the announcement of the national emergency related to the COVID-19 pandemic, the Company suspended the purchase of shares under the Company’s share repurchase program. During the quarter ended December 31, 2019, the Company repurchased 35,821 shares of common stock at an average price of $80.25 per share. There were no shares repurchased during the first quarter of 2019.
IMPACTOF, AND RESPONSE TO, COVID-19 PANDEMIC
Economic Environment
The COVID-19 outbreak has led to government-mandated closures and stay at home orders across the nation, which have resulted in deteriorating economic conditions throughout the U.S. The various government orders issued in response to the pandemic are significantly impacting the U.S. labor market, consumer spending and business investments. During March 2020, in response to the deteriorating economic conditions, the Federal Reserve reduced the federal funds rate 1.5 percentage points, to .00 to .25 percent. The Federal Reserve also provided a pandemic-related stimulus package estimated at $4.0 trillion, in order to ease the stress on financial markets. In addition, the United States Congress passed the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), which would provide approximately $2.5 trillion of support to U.S. citizens and businesses affected by COVID-19.
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Company Response
During the first quarter of 2020, the Company designated a Pandemic Planning Committee, made up of members of Senior Management, to oversee the Company’s response to COVID-19. The Company implemented a number of risk mitigation measures designed to protect our employees and customers, while maintaining services for our customers and community. These measures included restrictions on business travel and establishment of a remote work environment for all non-customer facing employees. The Company also implemented drive-up only or by appointment only operations across its branch network.
Currently, over 85% of our workforce is working remotely and we have imposed social distancing restrictions and provided premium pay for those employees who are required to be on premise to complete essential on-site functions. Due to the significant uncertainty of the current economic climate, and the Company's ongoing response to the pandemic and related shutdowns, annual pay increases for our Company's executive officers (which is comprised of our Senior Leadership Team members) have been deferred indefinitely.
As previously announced, Tompkins has initiated and participated in a number of credit initiatives to support employees and customers who have been impacted by the shutdown associated with the COVID-19 pandemic. For non-executive employees affected by COVID-19, the Company implemented a low interest loan program. The Company also implemented a payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. The current standard program allows for the deferral of loan payments for up to 90 days and customers will be able to request a payment deferral until the middle of May 2020. As of April 20, 2020, the Company had granted payment deferral requests for approximately 2,800 loans to individuals and businesses.
The Company is participating in the U.S. Small Business Administration (SBA) Paycheck Protection Program (“PPP”). This program provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related expenses and certain other eligible business operating costs, all in accordance with the rules and regulations established by the SBA. The Company began accepting applications for PPP loans on April 3, 2020, and has approved approximately 2,900 loans totaling about $500 million.
Mr. Romaine added, “We enter the second quarter of 2020 in a period of significant uncertainty surrounding the COVID-19 pandemic and related economic shut-downs. Our long held philosophy of maintaining Tompkins as a sustainable high performing company, supported with prudent risk management practices, is now more important than ever. We believe our healthy capital and liquidity positions will provide flexibility to respond to current challenges. The overall impact of COVID-19 on our consolidated results of operations for the three months ended March 31, 2020 was limited, with the exception of our provision for credit losses. We did see some slowdown toward the end of the first quarter in other areas of our business, including reduced transaction volumes in our card services business, a decrease in wealth management fees due to the decline in financial markets, and decreases in certain other fee related income. However, the extent to which the COVID-19 pandemic will affect our business, results of operation and financial condition going forward is difficult to predict and depends on numerous evolving factors.”
There is currently a great deal of uncertainty regarding the length of the COVID-19 pandemic and the efficacy of the extraordinary measures being put in place to address it. If efforts to contain COVID-19 are not as successful as anticipated, if restrictions on movement last into the third quarter or beyond, or if the federal government's economic stimulus packages are ineffective or delayed, the current economic downturn will likely be much longer and much more severe. The deeper the economic downturn is, and the longer it lasts, the more it will damage consumer fundamentals and sentiment. Similarly, an extended global recession due to COVID-19 would weaken the U.S. recovery and damage business fundamentals. As a result, the pandemic and its consequences, including responsive measures to manage it, have negatively impacted, and may continue to negatively impact, demand for and profitability of our products and services, the valuation of our assets, the ability of borrowers to satisfy obligations, and our ability to meet the needs of our customers, all of which could have a material adverse effect on our business and financial performance.
ABOUT TOMPKINS FINANCIAL CORPORATION
Tompkins Financial Corporation is a financial services company serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania. Headquartered in Ithaca, NY, Tompkins Financial is parent to Tompkins Trust Company, Tompkins Bank of Castile, Tompkins Mahopac Bank, Tompkins VIST Bank, Tompkins Insurance Agencies, Inc., and offers wealth management services through Tompkins Financial Advisors. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.
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"Safe Harbor" Statementunder the Private Securities Litigation Reform of 1995:
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Examples of forward-looking statements in this press release include, without limitation, those regarding the novel coronavirus (COVID-19) and our plans in response to the coronavirus. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", 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. The following factors, in addition to those listed as Risk Factors in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, are among those that could cause actual results to differ materially from the forward-looking statements: changes in general economic, market and regulatory conditions; the severity and duration of the coronavirus outbreak and the impact of the outbreak (including the government’s response to the outbreak) on economic and financial markets, potential regulatory actions, and modifications to our operations, products, and services relating thereto; disruptions in our and our customers’ operations and loss of revenue due to pandemics, epidemics, widespread health emergencies, government-imposed travel/business restrictions, or outbreaks of infectious diseases such as the coronavirus, and the associated adverse impact on our financial position, liquidity, and our customers’ abilities to repay their obligations to us or willingness to obtain financial services products from the Company; the development of an interest rate environment that may adversely affect the Company’s interest rate spread, 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 the Dodd-Frank Act, Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; legislative and regulatory changes in response to COVID-19 with which we and our subsidiaries must comply, including the CARES Act and the rules and regulations promulgated thereunder, and state and local government mandates; 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; and 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.
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| CONDENSED CONSOLIDATED STATEMENTS OF CONDITION | ||||||
| (In thousands, except share and per share data) | As of | As of | ||||
| ASSETS | 03/31/2020 | 12/31/2019 | ||||
| Cash and noninterest bearing balances due from banks | $ | 110,998 | $ | 136,010 | ||
| Interest bearing balances due from banks | 4,265 | 1,972 | ||||
| Cash and Cash Equivalents | 115,263 | 137,982 | ||||
| Available-for-sale securities, at fair value (amortized cost of $1,318,416 at March 31, 2020 and $1,293,239 at December 31, 2019) | 1,352,637 | 1,298,587 | ||||
| Equity securities, at fair value (amortized cost $930 at March 31, 2020 and $915 at December 31, 2019) | 930 | 915 | ||||
| Originated loans and leases, net of unearned income and deferred costs and fees | 4,724,277 | 4,697,401 | ||||
| Acquired loans | 213,545 | 220,149 | ||||
| Less: Allowance for credit losses | 52,404 | 39,892 | ||||
| Net Loans and Leases | 4,885,418 | 4,877,658 | ||||
| Federal Home Loan Bank and other stock | 24,212 | 33,695 | ||||
| Bank premises and equipment, net | 93,604 | 94,355 | ||||
| Corporate owned life insurance | 82,872 | 82,961 | ||||
| Goodwill | 92,447 | 92,447 | ||||
| Other intangible assets, net | 5,847 | 6,223 | ||||
| Accrued interest and other assets | 89,884 | 100,800 | ||||
| Total Assets | $ | 6,743,114 | $ | 6,725,623 | ||
| LIABILITIES | ||||||
| Deposits: | ||||||
| Interest bearing: | ||||||
| Checking, savings and money market | 3,273,813 | 3,080,686 | ||||
| Time | 708,933 | 675,014 | ||||
| Noninterest bearing | 1,426,617 | 1,457,221 | ||||
| Total Deposits | 5,409,363 | 5,212,921 | ||||
| Federal funds purchased and securities sold under agreements to repurchase | 68,993 | 60,346 | ||||
| Other borrowings | 457,983 | 658,100 | ||||
| Trust preferred debentures | 17,078 | 17,035 | ||||
| Other liabilities | 107,100 | 114,167 | ||||
| Total Liabilities | $ | 6,060,517 | $ | 6,062,569 | ||
| EQUITY | ||||||
| Tompkins Financial Corporation shareholders' equity: | ||||||
| Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,943,857 at March 31, 2020; and 15,014,499 at December 31, 2019 | 1,494 | 1,501 | ||||
| Additional paid-in capital | 333,662 | 338,507 | ||||
| Retained earnings | 372,344 | 370,477 | ||||
| Accumulated other comprehensive loss | (21,271 | ) | (43,564 | ) | ||
| Treasury stock, at cost – 117,940 shares at March 31, 2020, and 123,956 shares at December 31, 2019 | (5,076 | ) | (5,279 | ) | ||
| Total Tompkins Financial Corporation Shareholders’ Equity | 681,153 | 661,642 | ||||
| Noncontrolling interests | 1,444 | 1,412 | ||||
| Total Equity | $ | 682,597 | $ | 663,054 | ||
| Total Liabilities and Equity | $ | 6,743,114 | $ | 6,725,623 |
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| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
| (In thousands, except per share data) (Unaudited) | Three Months Ended | |||
| 03/31/2020 | 03/31/2019 | |||
| INTEREST AND DIVIDEND INCOME | ||||
| Loans | $ | 55,614 | $ | 55,324 |
| Due from banks | 6 | 10 | ||
| Available-for-sale securities | 7,144 | 7,858 | ||
| Held-to-maturity securities | 0 | 858 | ||
| Federal Home Loan Bank and other stock | 435 | 878 | ||
| Total Interest and Dividend Income | 63,199 | 64,928 | ||
| INTEREST EXPENSE | ||||
| Time certificates of deposits of $250,000 or more | 843 | 586 | ||
| Other deposits | 6,356 | 6,011 | ||
| Federal funds purchased and securities sold under agreements to repurchase | 36 | 44 | ||
| Trust preferred debentures | 289 | 329 | ||
| Other borrowings | 2,706 | 6,044 | ||
| Total Interest Expense | 10,230 | 13,014 | ||
| Net Interest Income | 52,969 | 51,914 | ||
| Less: Provision for credit loss expense | 16,294 | 445 | ||
| Net Interest Income After Provision for Credit Loss Expense | 36,675 | 51,469 | ||
| NONINTEREST INCOME | ||||
| Insurance commissions and fees | 8,045 | 8,045 | ||
| Investment services income | 4,202 | 4,084 | ||
| Service charges on deposit accounts | 1,983 | 1,998 | ||
| Card services income | 2,183 | 2,790 | ||
| Other income | 2,104 | 2,478 | ||
| Net gain on securities transactions | 443 | 12 | ||
| Total Noninterest Income | 18,960 | 19,407 | ||
| NONINTEREST EXPENSE | ||||
| Salaries and wages | 22,494 | 21,101 | ||
| Other employee benefits | 5,684 | 5,611 | ||
| Net occupancy expense of premises | 3,328 | 3,601 | ||
| Furniture and fixture expense | 1,985 | 1,979 | ||
| Amortization of intangible assets | 374 | 412 | ||
| Other operating expense | 11,875 | 11,505 | ||
| Total Noninterest Expenses | 45,740 | 44,209 | ||
| Income Before Income Tax Expense | 9,895 | 26,667 | ||
| Income Tax Expense | 1,909 | 5,595 | ||
| Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation | 7,986 | 21,072 | ||
| Less: Net Income Attributable to Noncontrolling Interests | 37 | 32 | ||
| Net Income Attributable to Tompkins Financial Corporation | $ | 7,949 | $ | 21,040 |
| Basic Earnings Per Share | $ | 0.53 | $ | 1.37 |
| Diluted Earnings Per Share | $ | 0.53 | $ | 1.37 |
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| Quarter Ended | Quarter Ended | |||||||||||||
| March 31, 2020 | March 31, 2019 | |||||||||||||
| Average | Average | |||||||||||||
| Balance | Average | Balance | Average | |||||||||||
| (Dollar amounts in thousands) | Quarter Ended | Interest | Yield/ Rate | Year Ended | Interest | Yield/ Rate | ||||||||
| ASSETS | ||||||||||||||
| Interest-earning assets | ||||||||||||||
| Interest-bearing balances due from banks | $ | 1,525 | $ | 6 | 1.58 | % | $ | 2,334 | $ | 10 | 1.74 | % | ||
| Securities (2) | ||||||||||||||
| U.S. Government securities | 1,194,754 | 6,576 | 2.21 | % | 1,409,305 | 8,172 | 2.35 | % | ||||||
| State and municipal (3) | 97,480 | 666 | 2.75 | % | 94,609 | 626 | 2.68 | % | ||||||
| Other securities (3) | 3,422 | 36 | 4.23 | % | 3,415 | 41 | 4.87 | % | ||||||
| Total securities | 1,295,656 | 7,278 | 2.26 | % | 1,507,329 | 8,839 | 2.38 | % | ||||||
| FHLBNY and other stock | 26,558 | 435 | 6.59 | % | 48,055 | 878 | 7.41 | % | ||||||
| Total loans and leases, net of unearned income (3)(4) | 4,914,034 | 55,906 | 4.58 | % | 4,792,607 | 55,614 | 4.71 | % | ||||||
| Total interest-earning assets | 6,237,773 | 63,625 | 4.10 | % | 6,350,325 | 65,341 | 4.17 | % | ||||||
| Other assets | 435,175 | 393,035 | ||||||||||||
| Total assets | $ | 6,672,948 | $ | 6,743,360 | ||||||||||
| LIABILITIES & EQUITY | ||||||||||||||
| Deposits | ||||||||||||||
| Interest-bearing deposits | ||||||||||||||
| Interest bearing checking, savings & money market | $ | 3,212,543 | 4,366 | 0.55 | % | $ | 2,940,416 | 4,470 | 0.62 | % | ||||
| Time deposits | 680,248 | 2,833 | 1.68 | % | 645,144 | 2,127 | 1.34 | % | ||||||
| Total interest-bearing deposits | 3,892,791 | 7,199 | 0.74 | % | 3,585,560 | 6,597 | 0.75 | % | ||||||
| Federal funds purchased & securities sold under | ||||||||||||||
| agreements to repurchase | 63,528 | 36 | 0.23 | % | 72,664 | 44 | 0.25 | % | ||||||
| Other borrowings | 498,428 | 2,706 | 2.18 | % | 993,773 | 6,044 | 2.47 | % | ||||||
| Trust preferred debentures | 17,050 | 289 | 6.82 | % | 16,878 | 329 | 7.90 | % | ||||||
| Total interest-bearing liabilities | 4,471,797 | 10,230 | 0.92 | % | 4,668,875 | 13,014 | 1.13 | % | ||||||
| Non-interest bearing deposits | 1,409,661 | 1,338,623 | ||||||||||||
| Accrued expenses and other liabilities | 112,673 | 105,131 | ||||||||||||
| Total liabilities | 5,994,131 | 6,112,629 | ||||||||||||
| Tompkins Financial Corporation Shareholders’ equity | 677,394 | 629,305 | ||||||||||||
| Noncontrolling interest | 1,423 | 1,426 | ||||||||||||
| Total equity | 678,817 | 630,731 | ||||||||||||
| Total liabilities and equity | $ | 6,672,948 | $ | 6,743,360 | ||||||||||
| Interest rate spread | 3.18 | % | 3.04 | % | ||||||||||
| Net interest income/margin on earning assets | 53,395 | 3.44 | % | 52,327 | 3.34 | % | ||||||||
| Tax equivalent adjustments | (426 | ) | (413 | ) | ||||||||||
| Net interest income per consolidated financial statements | $ | 52,969 | $ | 51,914 |
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Tompkins Financial Corporation - Summary Financial Data(Unaudited)
| (In thousands, except per share data) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter-Ended | Year-Ended | ||||||||||||
| Period End Balance Sheet | Mar-20 | Dec-19 | Sep-19 | Jun-19 | Mar-19 | Dec-19 | |||||||
| Securities | $ | 1,353,567 | $ | 1,299,502 | $ | 1,282,026 | $ | 1,330,719 | $ | 1,484,151 | $ | 1,299,502 | |
| Total Loans | 4,937,822 | 4,917,550 | 4,857,073 | 4,855,802 | 4,789,700 | 4,917,550 | |||||||
| Allowance for credit losses | 52,404 | 39,892 | 41,371 | 40,790 | 40,328 | 39,892 | |||||||
| Total assets | 6,743,114 | 6,725,623 | 6,627,982 | 6,654,390 | 6,738,719 | 6,725,623 | |||||||
| Total deposits | 5,409,363 | 5,212,921 | 5,369,990 | 4,988,897 | 4,989,925 | 5,212,921 | |||||||
| Federal funds purchased and securities sold under agreements to repurchase | 68,993 | 60,346 | 50,541 | 63,978 | 66,918 | 60,346 | |||||||
| Other borrowings | 457,983 | 658,100 | 429,000 | 824,562 | 923,427 | 658,100 | |||||||
| Trust preferred debentures | 17,078 | 17,035 | 16,992 | 16,949 | 16,906 | 17,035 | |||||||
| Total common equity | 681,153 | 661,642 | 658,358 | 656,201 | 645,823 | 661,642 | |||||||
| Total equity | 682,597 | 663,054 | 659,865 | 657,677 | 647,267 | 663,054 | |||||||
| Average Balance Sheet | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Average earning assets | $ | 6,237,773 | $ | 6,188,442 | $ | 6,203,078 | $ | 6,337,983 | $ | 6,350,325 | $ | 6,268,440 | |
| Average assets | 6,672,948 | 6,613,202 | 6,621,412 | 6,742,409 | 6,743,360 | 6,679,578 | |||||||
| Average interest-bearing liabilities | 4,471,797 | 4,374,572 | 4,415,079 | 4,638,249 | 4,668,875 | 4,523,088 | |||||||
| Average equity | 678,817 | 664,441 | 659,650 | 650,079 | 630,731 | 651,341 | |||||||
| Share data | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Weighted average shares outstanding (basic) | 14,718,948 | 14,726,023 | 14,827,114 | 15,019,710 | 15,060,175 | 14,907,057 | |||||||
| Weighted average shares outstanding (diluted) | 14,774,269 | 14,790,503 | 14,887,626 | 15,085,945 | 15,136,523 | 14,973,951 | |||||||
| Period-end shares outstanding | 14,907,947 | 14,978,589 | 14,975,750 | 15,160,719 | 15,314,078 | 14,978,589 | |||||||
| Common equity book value per share | $ | 45.69 | $ | 44.17 | $ | 43.96 | $ | 43.28 | $ | 42.17 | $ | 44.17 | |
| Tangible book value per share (Non-GAAP)** | $ | 39.15 | $ | 37.64 | $ | 37.40 | $ | 36.77 | $ | 35.73 | $ | 37.64 | |
| ** 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 | $ | 52,969 | $ | 53,240 | $ | 53,156 | $ | 52,318 | $ | 51,914 | $ | 210,628 | |
| Provision for credit loss expense | 16,294 | (1,000 | ) | 1,320 | 601 | 445 | 1,366 | ||||||
| Noninterest income | 18,960 | 17,972 | 19,534 | 18,520 | 19,407 | 75,433 | |||||||
| Noninterest expense | 45,740 | 45,900 | 45,655 | 46,070 | 44,209 | 181,834 | |||||||
| Income tax expense | 1,909 | 5,200 | 5,478 | 4,743 | 5,595 | 21,016 | |||||||
| Net income attributable to Tompkins Financial Corporation | 7,949 | 21,080 | 20,206 | 19,392 | 21,040 | 81,718 | |||||||
| Noncontrolling interests | 37 | 32 | 31 | 32 | 32 | 127 | |||||||
| Basic earnings per share (5) | $ | 0.53 | $ | 1.41 | $ | 1.34 | $ | 1.27 | $ | 1.37 | $ | 5.39 | |
| Diluted earnings per share (5) | $ | 0.53 | $ | 1.40 | $ | 1.34 | $ | 1.27 | $ | 1.37 | $ | 5.37 |
| 8 |
| --- | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Originated nonaccrual loans and leases | $ | 21,472 | $ | 22,485 | $ | 21,404 | $ | 16,543 | $ | 15,165 | $ | 22,485 |
| Acquired nonaccrual loans and leases | 2,084 | 1,796 | 2,164 | 2,363 | 2,579 | 1,796 | ||||||
| Originated loans and leases 90 days past due and accruing | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
| Troubled debt restructuring not included above | 7,137 | 7,154 | 6,528 | 4,889 | 5,234 | 7,154 | ||||||
| Total nonperforming loans and leases | 30,693 | 31,435 | 30,096 | 23,795 | 22,978 | 31,435 | ||||||
| OREO | 466 | 428 | 888 | 2,229 | 1,595 | 428 | ||||||
| Total nonperforming assets | $ | 31,159 | $ | 31,863 | $ | 30,984 | $ | 26,024 | $ | 24,573 | $ | 31,863 |
Tompkins Financial Corporation - Summary Financial Data(Unaudited) - continued
| Quarter-Ended | Year-Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Delinquency - Originated loan and lease portfolio | Mar-20 | Dec-19 | Sep-19 | Jun-19 | Mar-19 | Dec-19 | ||||||||
| Loans and leases 30-89 days past due and | ||||||||||||||
| accruing | $ | 8,953 | $ | 3,559 | $ | 3,287 | $ | 3,883 | $ | 4,193 | $ | 3,559 | ||
| Loans and leases 90 days past due and accruing | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| Total originated loans and leases past due and accruing | 8,953 | 3,559 | 3,287 | 3,883 | 4,193 | 3,559 | ||||||||
| Delinquency - Acquired loan and lease portfolio | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Loans 30-89 days past due and accruing (6) | $ | 375 | $ | 165 | $ | 232 | $ | 493 | $ | 474 | $ | 165 | ||
| Loans 90 days or more past due | 0 | 794 | 1,219 | 1,229 | 1,218 | 794 | ||||||||
| Total acquired loans and leases past due and accruing | 375 | 959 | 1,451 | 1,722 | 1,692 | 959 | ||||||||
| Total loans and leases past due and accruing | $ | 9,328 | $ | 4,518 | $ | 4,738 | $ | 5,605 | $ | 5,885 | $ | 4,518 | ||
| Allowance for Credit Losses | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Balance at beginning of period | $ | 39,892 | $ | 41,371 | $ | 40,790 | $ | 40,328 | $ | 43,410 | $ | 43,410 | ||
| Impact of adopting ASC 326 | (2,534 | ) | 0 | 0 | 0 | 0 | 0 | |||||||
| Provision (credit) for credit losses | 16,294 | (1,000 | ) | 1,320 | 601 | 445 | 1,366 | |||||||
| Net loan and lease charge-offs | 1,248 | 479 | 739 | 139 | 3,527 | 4,884 | ||||||||
| Allowance for credit losses at end of period | $ | 52,404 | $ | 39,892 | $ | 41,371 | $ | 40,790 | $ | 40,328 | $ | 39,892 | ||
| Loan Classification - Originated Portfolio | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Special Mention | $ | 37,121 | $ | 29,800 | $ | 41,314 | $ | 36,619 | $ | 33,689 | $ | 29,800 | ||
| Substandard | 51,951 | 58,092 | 58,873 | 44,770 | 35,895 | 58,092 | ||||||||
| Loan Classification - Acquired Portfolio | ||||||||||||||
| Special Mention | 0 | 0 | 261 | 265 | 270 | 0 | ||||||||
| Substandard | 943 | 2,407 | 2,809 | 2,857 | 2,830 | 2,407 | ||||||||
| Loan Classifications - Total Portfolio | ||||||||||||||
| Special Mention | 37,121 | 29,800 | 41,575 | 36,884 | 33,959 | 29,800 | ||||||||
| Substandard | 52,894 | 60,499 | 61,682 | 47,627 | 38,725 | 60,499 |
| 9 |
| --- |
Ratio Analysis
| Credit Quality | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nonperforming loans and leases/total loans and leases (6) | 0.62 | % | 0.64 | % | 0.62 | % | 0.49 | % | 0.48 | % | 0.64 | % |
| Nonperforming assets/total assets | 0.46 | % | 0.47 | % | 0.47 | % | 0.39 | % | 0.36 | % | 0.47 | % |
| Allowance for credit losses/total loans and leases | 1.06 | % | 0.81 | % | 0.85 | % | 0.84 | % | 0.84 | % | 0.81 | % |
| Allowance/nonperforming loans and leases | 170.74 | % | 126.90 | % | 137.46 | % | 171.42 | % | 175.51 | % | 126.90 | % |
| Net loan and lease losses annualized/total average loans and leases | 0.10 | % | 0.04 | % | 0.06 | % | 0.01 | % | 0.30 | % | 0.10 | % |
| Capital Adequacy | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Tier 1 Capital (to average assets) | 9.53 | % | 9.61 | % | 9.43 | % | 9.25 | % | 9.24 | % | 9.61 | % |
| Common Equity Tier 1 Capital (to risk-weighted assets) | 12.20 | % | 12.33 | % | 12.14 | % | 12.13 | % | 12.19 | % | 12.33 | % |
Tompkins Financial Corporation - Summary Financial Data(Unaudited) - continued
| Quarter Ended | Year-Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Profitability (period-end) | Mar-20 | Dec-19 | Sep-19 | Jun-19 | Mar-19 | Dec-19 | ||||||||
| Return on average assets * | 0.48 | % | 1.26 | % | 1.21 | % | 1.15 | % | 1.27 | % | 1.22 | % | ||
| Return on average equity * | 4.71 | % | 12.59 | % | 12.15 | % | 11.96 | % | 13.53 | % | 12.55 | % | ||
| Net interest margin (TE) * | 3.44 | % | 3.44 | % | 3.43 | % | 3.34 | % | 3.34 | % | 3.39 | % | ||
| * Quarterly ratios have been annualized |
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) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total common equity | $ | 681,153 | $ | 661,642 | $ | 658,358 | $ | 656,201 | $ | 645,823 | $ | 661,642 |
| Less: Goodwill and intangibles (7) | 97,481 | 97,855 | 98,277 | 98,698 | 98,694 | 97,855 | ||||||
| Tangible common equity (Non-GAAP) | 583,672 | 563,787 | 560,081 | 557,503 | 547,129 | 563,787 | ||||||
| Ending shares outstanding | 14,907,947 | 14,978,589 | 14,975,750 | 15,160,719 | 15,314,078 | 14,978,589 | ||||||
| Tangible book value per share (Non-GAAP) | $ | 39.15 | $ | 37.64 | $ | 37.40 | $ | 36.77 | $ | 35.73 | $ | 37.64 |
(1) Federal Reserve peer ratio as of December31, 2019, the most recent data available, includes banks and bank holding companies with consolidated assets between $3 billionand $10 billion.
(2) Average balances and yields on available-for-salesecurities are based on historical amortized cost.
(3) Interest income includes the tax effectsof taxable-equivalent basis.
(4) Nonaccrual loans are included in theaverage asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of theCompany's consolidated financial statements included in Part I of the Company's annual report on Form 10-K for the fiscal yearended December 31, 2019.
(5) Earnings per share year-to-date maynot equal the sum of the quarterly earnings per share as a result of rounding of average shares.
(6) Certain acquired loans and leases thatare past due are not on nonaccrual and are not included in nonperforming loans. The risk of credit loss on these loans has beenconsidered by virtue of the Company's estimate of acquisition-date fair value and these loans are considered accruing as the Companyprimarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expectedcash flows.
(7) "Goodwill and intangibles"as shown in the above tables, equal total intangible assets less mortgage servicing rights.
| 10 |
| --- |
Tompkins Financial Corporation 8-K
EXHIBIT 99.2
For more information contact:
Stephen S. Romaine, President & CEO
Francis M. Fetsko, Executive VP, CFO & COO
Tompkins Financial Corporation (888) 503-5753
For Immediate Release
Friday, May 1, 2020
Tompkins Financial Corporation Reports Cash Dividend
ITHACA, NY - Tompkins Financial Corporation (NYSE American:TMP)
Tompkins Financial Corporation announced today that its Board of Directors approved payment of a regular quarterly cash dividend of $0.52 per share, payable on May 18, 2020, to common shareholders of record on May 11, 2020.
Tompkins Financial Corporation is a financial services company serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania. Headquartered in Ithaca, NY, Tompkins Financial is parent to Tompkins Trust Company, Tompkins Bank of Castile, Tompkins Mahopac Bank, Tompkins VIST Bank, Tompkins Insurance Agencies, Inc., and offers wealth management services through Tompkins Financial Advisors. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.