Tompkins Financial Corporation (NYSE American: TMP)
As reported by many financial institutions, Tompkins Financial Corporation’s earnings for the quarter and year-to-date periods ended December 31, 2017, were impacted by the Tax Cut and Jobs Act of 2017, which reduced the Federal statutory tax rate from 35% in 2017, to 21% in 2018. The change in the tax law created a one-time, fourth quarter, non-cash write-down of net deferred tax assets in the amount of $14.9 million due to the required remeasurement of the net deferred tax assets using the new lower tax rate.
President and CEO Stephen Romaine commented, “I am extremely proud of our Company’s results in 2017. Though our reported earnings are down for the year, had it not been for the non-cash write-down related to the tax law change, our earnings would have been at a record level. Coupled with the general positive trends we have seen in business growth, the lower marginal tax rate will have a meaningful positive impact on future earnings.”
A summary of the impact of the tax law changes on 2017 full year earnings per share is as follows:
- Diluted earnings per share for year ended December 31, 2017, (including the one-time charge related to tax reform) were $3.43, down 12.3% over full year 2016
- Adjusted diluted earnings per share for year ended December 31, 2017 (excluding the one-time charge related to tax reform) were $4.42, up 13.0% over full year 2016 (refer to table of “Non GAAP Measures” included in this press release)
GAAP net income for the year ended December 31, 2017, was $52.5 million, down from $59.3 million reported in 2016. Diluted earnings per share were $3.43 for the year ended December 31, 2017, down from the $3.91 per share reported in 2016. Excluding the impact of the one-time charge related to changes in the tax law, diluted earnings per share for 2017 would have been $4.42, reflecting an increase of 13.0% over diluted earnings per share for 2016. Refer to the table of “Non-GAAP Measures” included in this press release for additional details.
GAAP net income for the fourth quarter of 2017 was $2.5 million, down from the $15.1 million reported for the same period in 2016. Diluted earnings per share of $0.16 for the fourth quarter of 2017 were down 83.8% from the $0.99 reported in the fourth quarter of 2016. Removing the impact of the one-time charge related to tax reform from fourth quarter earnings would have resulted in diluted earnings per share of $1.15 for the fourth quarter of 2017, representing a 16.2% increase over the same period in 2016. Refer to the table of “Non-GAAP Measures” included in this press release for additional details.
Mr. Romaine further commented, “Tompkins has a history of being a high performing Company with a long-term focus. In keeping with this approach, we plan to leverage the benefits of reduced taxes from the Tax Cut and Jobs Act of 2017 in a way that is consistent with our strategy of creating long-term value for our clients, shareholders, communities and employees. This includes planned investments to modernize our facilities, improve customer-facing technology and expand staff in support of these initiatives. We have always given generously to the communities we serve and expect to continue to increase that level going forward. We have a long history of paying profit sharing to our employees and we have raised the profit sharing payout that will be paid in 2018 to 9.0% of employee annual pay. We also plan to raise the minimum wage paid by our Company to $14.00 - $15.00 per hour based on geography and we are committed to increasing compensation for all employees earning less than $18.00 per hour. We are investing just in excess of $1.0 million to increase our wages to these levels.”
SELECTED HIGHLIGHTS FOR YEAR AND FOURTH QUARTER:
- Net interest income for the full year of $201.3 million, is up 11.4% over 2016; while net interest income for the fourth quarter of $52.0 million is up 12.1% over the same quarter last year.
- Total loans of $4.7 billion at year end 2017 were up 9.7% over year end 2016
- Noninterest bearing deposit balances of $1.4 billion at year end 2017 are up 16.3% over year end 2016
- Nonperforming assets remain at historically low levels and compare favorably to our industry peers, with nonperforming assets representing 0.38% of total assets at year end 2017, compared to 0.36% at year end 2016.
NET INTEREST INCOME
For the full year ended December 31, 2017, net interest income was $201.3 million, up $20.7 million, or 11.4% from the same period in 2016. Net interest income of $52.0 million for the fourth quarter of 2017 increased by $5.6 million, or 12.1% compared to the same period in 2016.
Growth in net interest income was largely driven by an 11.2% increase in average total loans during 2017, up $444.0 million over average loans in 2016. The loan growth was supported, in part, by a $249.4 million increase in average total deposits over the same period. The net interest margin was 3.42% in the fourth quarter of 2017, up from 3.40% for the most recent prior quarter, and 3.30% for the same quarter last year.
NONINTEREST INCOME
For the full year, noninterest income of $69.2 million is up slightly from $68.8 million reported for 2016. Noninterest income was $17.3 million for the fourth quarter of 2017, and was up $996,000 compared to the same period in 2016. Fee income business related to cards services and investment and management services contributed to the improvement. Insurance revenue and services charges on deposit accounts were down, partially offsetting those improvements. Results for 2017 included realized losses on available-for-sale securities in the amount of $407,000, compared to realized gains of $926,000 in 2016.
NONINTEREST EXPENSE
For the full year, noninterest expenses were $171.1 million in 2017, up 7.9% over 2016. Noninterest expense was $46.3 million for the fourth quarter of 2017, up 17.5% when compared to that same quarter in 2016. During 2017, the Company invested $2.7 million in a historic preservation tax credit which yielded Federal and NYS tax credits. The project was placed in service in the fourth quarter, and accordingly, the fourth quarter results include the required write-off of this investment as operating expense and recognition of the related $3.3 million of tax credits generated from the investment as a reduction of income tax expense. 2017 expenses also included $731,000 of deconversion expenses related to system conversions (including a core system conversion completed in the second quarter of 2017); compared to deconversion expenses of $546,000 recognized in 2016.
INCOME TAX EXPENSE
During 2017, the Company’s effective tax rate was 44.8%, compared to 31.3% in 2016. The increase is mainly due to the $14.9 million one-time write-down of net deferred tax assets discussed above. Tax expense for 2017 benefited from the $3.3 million historic tax credit described above, which was recognized in the fourth quarter of 2017. As previously mentioned, the Tax Cut and Jobs Act of 2017 will reduce the federal statutory tax rate from 35% in 2017, to 21% in 2018.
ASSET QUALITY
Asset quality trends remained strong in the fourth quarter of 2017. Nonperforming assets represented 0.38% of total assets at December 31, 2017, up slightly from 0.36% at December 31, 2016. Nonperforming asset levels continue to be below the most recent Federal Reserve Board Peer Group Average1 of 0.64%.
Full year provision for loan and lease losses was $4.2 million in 2017, down from $4.3 million in 2016. Net loan and lease charge-offs for 2017 were $145,000 compared to net charge-offs of $570,000 reported in 2016. The provision for loan and lease losses was $2.0 million for the fourth quarter of 2017, up from $1.7 million in the fourth quarter of 2016.
The Company’s allowance for originated loan and lease losses totaled $39.7 million at December 31, 2017, and represented 0.91% of total originated loans and leases at December 31, 2017, compared to 0.92% at December 31, 2016. The total allowance represented 172.84% of total nonperforming loans and leases at December 31, 2017, up from 164.98% at December 31, 2016.
CAPITAL POSITION
Capital ratios remain well above the regulatory well capitalized minimums. The ratio of tangible common equity to tangible assets was 7.24% at December 31, 2017, a decline from the 7.58% reported for the most recent prior quarter, and 7.25% at December 31, 2016. Contributing to the decline in capital levels in the fourth quarter of 2017 was the impact of Tax Cut and Jobs Act of 2017. The change in the tax law created a one-time non-cash write-down of net deferred tax assets in the amount of $14.9 million due to the remeasurement of the assets using the new lower tax rate.
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.
"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.
The statements made herein shall not confer upon any person any rights or remedies of any nature, and shall not be construed to establish, amend, or modify any benefit plan, program, agreement, or arrangement, nor to alter any existing at-will employment relationship between the Company and its employees.
| TOMPKINS FINANCIAL CORPORATION | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CONDITION | |||||||||||
| (In thousands, except share and per share data) (Unaudited) | As of | As of | |||||||||
| ASSETS | 12/31/2017 | 12/31/2016 | |||||||||
| Cash and noninterest bearing balances due from banks | $ | 77,688 | $ | 62,074 | |||||||
| Interest bearing balances due from banks | 6,615 | 1,880 | |||||||||
| Cash and Cash Equivalents | 84,303 | 63,954 | |||||||||
| Available-for-sale securities, at fair value (amortized cost of $1,409,996 at December 31, | |||||||||||
| 2017 and $1,442,724 at December 31, 2016) | 1,392,775 | 1,429,538 | |||||||||
| Held-to-maturity securities, at amortized cost (fair value of $140,315 at December 31, 2017 | |||||||||||
| and $142,832 at December 31, 2016) | 139,216 | 142,119 | |||||||||
| Originated loans and leases, net of unearned income and deferred costs and fees (2) | 4,361,482 | 3,863,922 | |||||||||
| Acquired loans (3) | 310,577 | 394,111 | |||||||||
| Less: Allowance for loan and lease losses | 39,771 | 35,755 | |||||||||
| Net Loans and Leases | 4,632,288 | 4,222,278 | |||||||||
| Federal Home Loan Bank and other stock | 50,498 | 43,133 | |||||||||
| Bank premises and equipment, net | 86,995 | 70,016 | |||||||||
| Corporate owned life insurance | 80,106 | 77,905 | |||||||||
| Goodwill | 92,291 | 92,623 | |||||||||
| Other intangible assets, net | 9,263 | 11,349 | |||||||||
| Accrued interest and other assets | 80,555 | 83,841 | |||||||||
| Total Assets | $ | 6,648,290 | $ | 6,236,756 | |||||||
| LIABILITIES | |||||||||||
| Deposits: | |||||||||||
| Interest bearing: | |||||||||||
| Checking, savings and money market | 2,651,632 | 2,518,318 | |||||||||
| Time | 748,250 | 870,788 | |||||||||
| Noninterest bearing | 1,437,925 | 1,236,033 | |||||||||
| Total Deposits | 4,837,807 | 4,625,139 | |||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 75,177 | 69,062 | |||||||||
| Other borrowings | 1,071,742 | 884,815 | |||||||||
| Trust preferred debentures | 16,691 | 37,681 | |||||||||
| Other liabilities | 70,671 | 70,654 | |||||||||
| Total Liabilities | $ | 6,072,088 | $ | 5,687,351 | |||||||
| EQUITY | |||||||||||
| Tompkins Financial Corporation shareholders' equity: | |||||||||||
| Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: | |||||||||||
| 15,301,524 at December 31, 2017; and 15,171,816 at December 31, 2016 | 1,530 | 1,517 | |||||||||
| Additional paid-in capital | 364,031 | 357,414 | |||||||||
| Retained earnings and accumulated other comprehensive loss | 213,711 | 193,073 | |||||||||
| Treasury stock, at cost – 120,805 shares at December 31, 2017, and 117,997 shares | |||||||||||
| at December 31, 2016 | (4,492) | (4,051) | |||||||||
| Total Tompkins Financial Corporation Shareholders’ Equity | 574,780 | 547,953 | |||||||||
| Noncontrolling interests | 1,422 | 1,452 | |||||||||
| Total Equity | $ | 576,202 | $ | 549,405 | |||||||
| Total Liabilities and Equity | $ | 6,648,290 | $ | 6,236,756 | |||||||
| TOMPKINS FINANCIAL CORPORATION | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| (In thousands, except per share data) (Unaudited) | 12/31/2017 | 12/31/2016 | 12/31/2017 | 12/31/2016 | |||||||||||||
| INTEREST AND DIVIDEND INCOME | |||||||||||||||||
| Loans | $ | 50,153 | $ | 44,252 | $ | 191,410 | $ | 169,630 | |||||||||
| Due from banks | 22 | 1 | 37 | 6 | |||||||||||||
| Trading securities | 0 | 0 | 0 | 220 | |||||||||||||
| Available-for-sale securities | 7,337 | 6,348 | 29,721 | 27,846 | |||||||||||||
| Held-to-maturity securities | 862 | 891 | 3,475 | 3,603 | |||||||||||||
| Federal Home Loan Bank and other stock | 655 | 444 | 2,121 | 1,434 | |||||||||||||
| Total Interest and Dividend Income | 59,029 | 51,936 | 226,764 | 202,739 | |||||||||||||
| INTEREST EXPENSE | |||||||||||||||||
| Time certificates of deposits of $250,000 or more | 516 | 440 | 1,880 | 1,654 | |||||||||||||
| Other deposits | 2,745 | 2,295 | 10,253 | 9,059 | |||||||||||||
| Federal funds purchased and securities sold under agreements to | |||||||||||||||||
| repurchase | 40 | 288 | 235 | 2,228 | |||||||||||||
| Trust preferred debentures | 270 | 607 | 1,158 | 2,390 | |||||||||||||
| Other borrowings | 3,489 | 1,932 | 11,934 | 6,772 | |||||||||||||
| Total Interest Expense | 7,060 | 5,562 | 25,460 | 22,103 | |||||||||||||
| Net Interest Income | 51,969 | 46,374 | 201,304 | 180,636 | |||||||||||||
| Less: Provision for loan and lease losses | 2,014 | 1,706 | 4,161 | 4,321 | |||||||||||||
| Net Interest Income After Provision for Loan and Lease Losses | 49,955 | 44,668 | 197,143 | 176,315 | |||||||||||||
| NONINTEREST INCOME | |||||||||||||||||
| Insurance commissions and fees | 6,886 | 6,684 | 28,778 | 29,492 | |||||||||||||
| Investment services income | 4,121 | 3,848 | 15,665 | 15,203 | |||||||||||||
| Service charges on deposit accounts | 2,100 | 2,234 | 8,437 | 8,793 | |||||||||||||
| Card services income | 2,225 | 2,078 | 9,100 | 8,058 | |||||||||||||
| Mark-to-market loss on trading securities | 0 | 0 | 0 | (182) | |||||||||||||
| Mark-to-market gain on liabilities held at fair value | 0 | 0 | 0 | 227 | |||||||||||||
| Other income | 1,964 | 1,472 | 7,631 | 6,291 | |||||||||||||
| (Loss)/gain on sale of available-for-sale securities | 16 | 0 | (407) | 926 | |||||||||||||
| Total Noninterest Income | 17,312 | 16,316 | 69,204 | 68,808 | |||||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||
| Salaries and wages | 20,722 | 18,827 | 81,590 | 76,950 | |||||||||||||
| Pension and other employee benefits | 5,675 | 5,061 | 21,870 | 20,496 | |||||||||||||
| Net occupancy expense of premises | 3,249 | 3,328 | 13,214 | 12,521 | |||||||||||||
| Furniture and fixture expense | 2,209 | 1,477 | 7,028 | 6,450 | |||||||||||||
| FDIC insurance | 752 | 636 | 2,527 | 3,024 | |||||||||||||
| Amortization of intangible assets | 473 | 518 | 1,932 | 2,090 | |||||||||||||
| Other operating expense | 13,206 | 9,542 | 42,944 | 37,076 | |||||||||||||
| Total Noninterest Expenses | 46,286 | 39,389 | 171,105 | 158,607 | |||||||||||||
| Income Before Income Tax Expense | 20,981 | 21,595 | 95,242 | 86,516 | |||||||||||||
| Income Tax Expense | 18,493 | 6,444 | 42,620 | 27,045 | |||||||||||||
| Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation | 2,488 | 15,151 | 52,622 | 59,471 | |||||||||||||
| Less: Net income attributable to noncontrolling interests | 31 | 33 | 128 | 131 | |||||||||||||
| Net Income Attributable to Tompkins Financial Corporation | $ | 2,457 | $ | 15,118 | $ | 52,494 | $ | 59,340 | |||||||||
| Basic Earnings Per Share | $ | 0.16 | $ | 1.00 | $ | 3.46 | $ | 3.94 | |||||||||
| Diluted Earnings Per Share | $ | 0.16 | $ | 0.99 | $ | 3.43 | $ | 3.91 | |||||||||
| Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited) | ||||||||||||||||||||||||||||||||||||
| Quarter Ended | Year to Date Period Ended | Year to Date Period Ended | ||||||||||||||||||||||||||||||||||
| December 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||||||
| Average | Average | Average | ||||||||||||||||||||||||||||||||||
| Balance | Average | Balance | Average | Balance | 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 | $ | 7,720 | $ | 22 | 1.13% | $ | 4,599 | $ | 37 | 0.80% | $ | 2,019 | $ | 6 | 0.30% | |||||||||||||||||||||
| Securities (4) | ||||||||||||||||||||||||||||||||||||
| U.S. Government securities | 1,457,646 | 7,655 | 2.08% | 1,471,717 | 31,006 | 2.11% | 1,443,894 | 29,318 | 2.03% | |||||||||||||||||||||||||||
| Trading securities | 0 | 0 | 0.00% | 0 | 0 | 0.00% | 4,893 | 220 | 4.50% | |||||||||||||||||||||||||||
| State and municipal (5) | 99,155 | 841 | 3.36% | 100,595 | 3,393 | 3.37% | 97,937 | 3,309 | 3.38% | |||||||||||||||||||||||||||
| Other securities (5) | 3,581 | 33 | 3.66% | 3,597 | 129 | 3.59% | 3,645 | 123 | 3.37% | |||||||||||||||||||||||||||
| Total securities | 1,560,382 | 8,529 | 2.17% | 1,575,909 | 34,528 | 2.19% | 1,550,369 | 32,970 | 2.13% | |||||||||||||||||||||||||||
| FHLBNY and FRB stock | 44,915 | 655 | 5.79% | 42,465 | 2,121 | 4.99% | 32,528 | 1,434 | 4.41% | |||||||||||||||||||||||||||
| Total loans and leases, net of unearned income (5)(6) | 4,546,379 | 50,933 | 4.44% | 4,401,213 | 194,433 | 4.42% | 3,957,221 | 172,443 | 4.36% | |||||||||||||||||||||||||||
| Total interest-earning assets | 6,159,396 | 60,139 | 3.87% | 6,024,186 | 231,119 | 3.84% | 5,542,137 | 206,853 | 3.73% | |||||||||||||||||||||||||||
| Other assets | 393,018 | 365,318 | 355,943 | |||||||||||||||||||||||||||||||||
| Total assets | 6,552,414 | 6,389,504 | 5,898,080 | |||||||||||||||||||||||||||||||||
| LIABILITIES & EQUITY | ||||||||||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||||||
| Interest bearing checking, savings, & money market | 2,703,281 | 1,522 | 0.22% | 2,674,204 | 5,141 | 0.19% | 2,529,009 | 4,008 | 0.16% | |||||||||||||||||||||||||||
| Time deposits | 774,130 | 1,739 | 0.89% | 827,181 | 6,992 | 0.85% | 871,595 | 6,705 | 0.77% | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 3,477,411 | 3,261 | 0.37% | 3,501,385 | 12,133 | 0.35% | 3,400,604 | 10,713 | 0.32% | |||||||||||||||||||||||||||
| Federal funds purchased & securities sold under | ||||||||||||||||||||||||||||||||||||
| agreements to repurchase | 62,185 | 40 | 0.26% | 64,888 | 235 | 0.36% | 99,622 | 2,228 | 2.24% | |||||||||||||||||||||||||||
| Other borrowings | 944,390 | 3,489 | 1.47% | 882,235 | 11,934 | 1.35% | 616,560 | 6,772 | 1.10% | |||||||||||||||||||||||||||
| Trust preferred debentures | 16,663 | 270 | 6.43% | 18,338 | 1,158 | 6.31% | 37,588 | 2,390 | 6.36% | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 4,500,649 | 7,060 | 0.62% | 4,466,846 | 25,460 | 0.57% | 4,154,374 | 22,103 | 0.53% | |||||||||||||||||||||||||||
| Noninterest bearing deposits | 1,391,354 | 1,279,027 | 1,130,406 | |||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 66,455 | 66,185 | 66,243 | |||||||||||||||||||||||||||||||||
| Total liabilities | 5,958,458 | 5,812,058 | 5,351,023 | |||||||||||||||||||||||||||||||||
| Tompkins Financial Corporation Shareholders’ equity | 592,444 | 575,958 | 545,545 | |||||||||||||||||||||||||||||||||
| Noncontrolling interest | 1,512 | 1,488 | 1,512 | |||||||||||||||||||||||||||||||||
| Total equity | 593,956 | 577,446 | 547,057 | |||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 6,552,414 | $ | 6,389,504 | $ | 5,898,080 | ||||||||||||||||||||||||||||||
| Interest rate spread | 3.25% | 3.27% | 3.20% | |||||||||||||||||||||||||||||||||
| Net interest income/margin on earning assets | 53,079 | 3.42% | 205,659 | 3.41% | 184,750 | 3.33% | ||||||||||||||||||||||||||||||
| Tax Equivalent Adjustment | (1,110) | (4,355) | (4,114) | |||||||||||||||||||||||||||||||||
| Net interest income per consolidated financial statements | $ | 51,969 | $ | 201,304 | $ | 180,636 | ||||||||||||||||||||||||||||||
| Tompkins Financial Corporation - Summary Financial Data (Unaudited) | |||||||||||||||||||||||||
| (In thousands, except per share data) | Quarter-Ended | Year-Ended | |||||||||||||||||||||||
| Dec-17 | Sep-17 | Jun-17 | Mar-17 | Dec-16 | Dec-17 | ||||||||||||||||||||
| Period End Balance Sheet | |||||||||||||||||||||||||
| Securities | $ | 1,531,991 | $ | 1,546,199 | $ | 1,564,865 | $ | 1,569,068 | $ | 1,571,657 | $ | 1,531,991 | |||||||||||||
| Originated loans and leases, net of unearned income and deferred costs and fees (2) | 4,361,482 | 4,167,254 | 4,070,755 | 3,922,413 | 3,863,922 | 4,361,482 | |||||||||||||||||||
| Acquired loans and leases (3) | 310,577 | 323,259 | 347,841 | 375,380 | 394,111 | 310,577 | |||||||||||||||||||
| Allowance for loan and lease losses | 39,771 | 38,038 | 37,157 | 36,166 | 35,755 | 39,771 | |||||||||||||||||||
| Total assets | 6,648,290 | 6,524,060 | 6,415,012 | 6,280,047 | 6,236,756 | 6,648,290 | |||||||||||||||||||
| Total deposits | 4,837,807 | 4,943,944 | 4,750,722 | 4,850,585 | 4,625,139 | 4,837,807 | |||||||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 75,177 | 73,874 | 50,360 | 70,716 | 69,062 | 75,177 | |||||||||||||||||||
| Other borrowings | 1,071,742 | 834,574 | 952,035 | 717,285 | 884,815 | 1,071,742 | |||||||||||||||||||
| Trust preferred debentures | 16,691 | 16,648 | 16,605 | 16,562 | 37,681 | 16,691 | |||||||||||||||||||
| Total common equity | 574,780 | 588,349 | 575,428 | 562,064 | 547,953 | 574,780 | |||||||||||||||||||
| Total equity | 576,202 | 589,868 | 576,915 | 563,518 | 549,405 | 576,202 | |||||||||||||||||||
| Average Balance Sheet | |||||||||||||||||||||||||
| Average earning assets | $ | 6,159,396 | $ | 6,072,269 | $ | 5,970,653 | $ | 5,890,945 | $ | 5,707,121 | $ | 6,024,186 | |||||||||||||
| Average assets | 6,552,414 | 6,430,497 | 6,329,847 | 6,241,388 | 6,074,973 | 6,389,504 | |||||||||||||||||||
| Average interest-bearing liabilities | 4,500,649 | 4,463,606 | 4,474,860 | 4,427,501 | 4,237,126 | 4,466,846 | |||||||||||||||||||
| Average equity | 593,956 | 586,671 | 572,741 | 555,893 | 559,106 | 577,446 | |||||||||||||||||||
| Share data | |||||||||||||||||||||||||
| Weighted average shares outstanding (basic) | 14,988,542 | 14,966,231 | 14,944,934 | 14,900,938 | 14,862,189 | 14,950,432 | |||||||||||||||||||
| Weighted average shares outstanding (diluted) | 15,103,906 | 15,078,555 | 15,066,861 | 15,042,614 | 15,014,221 | 15,073,255 | |||||||||||||||||||
| Period-end shares outstanding | 15,265,614 | 15,202,444 | 15,189,453 | 15,181,198 | 15,135,906 | 15,265,614 | |||||||||||||||||||
| Common equity book value per share | $ | 37.65 | $ | 38.70 | $ | 37.88 | $ | 37.02 | $ | 36.20 | $ | 37.65 | |||||||||||||
| Tangible book value per share (Non-GAAP) | $ | 31.04 | $ | 32.03 | $ | 31.18 | $ | 30.28 | $ | 29.38 | $ | 31.04 | |||||||||||||
| Income Statement | |||||||||||||||||||||||||
| Net interest income | $ | 51,969 | $ | 51,000 | $ | 50,301 | $ | 48,034 | $ | 46,374 | $ | 201,304 | |||||||||||||
| Provision for loan/lease losses | 2,014 | 402 | 976 | 769 | 1,706 | 4,161 | |||||||||||||||||||
| Noninterest income | 17,312 | 17,202 | 17,450 | 17,240 | 16,316 | 69,204 | |||||||||||||||||||
| Noninterest expense | 46,286 | 41,883 | 41,568 | 41,368 | 39,389 | 171,105 | |||||||||||||||||||
| Income tax expense | 18,493 | 8,491 | 8,248 | 7,388 | 6,444 | 42,620 | |||||||||||||||||||
| Net income attributable to Tompkins Financial Corporation | 2,457 | 17,394 | 16,926 | 15,717 | 15,118 | 52,494 | |||||||||||||||||||
| Noncontrolling interests | 31 | 32 | 33 | 32 | 33 | 128 | |||||||||||||||||||
| Basic earnings per share (8) | $ | 0.16 | $ | 1.14 | $ | 1.11 | $ | 1.04 | $ | 1.00 | $ | 3.46 | |||||||||||||
| Diluted earnings per share (8) | $ | 0.16 | $ | 1.14 | $ | 1.11 | $ | 1.03 | $ | 0.99 | $ | 3.43 | |||||||||||||
| Nonperforming Assets | |||||||||||||||||||||||||
| Originated nonaccrual loans and leases | $ | 16,253 | $ | 15,667 | $ | 14,284 | $ | 13,786 | $ | 14,300 | $ | 16,253 | |||||||||||||
| Acquired nonaccrual loans and leases | 3,264 | 3,152 | 2,903 | 3,356 | 4,741 | 3,264 | |||||||||||||||||||
| Originated loans and leases 90 days past due and accruing | 44 | 0 | 639 | 0 | 0 | 44 | |||||||||||||||||||
| Troubled debt restructurings not included above | 3,449 | 3,541 | 2,980 | 2,948 | 2,631 | 3,449 | |||||||||||||||||||
| Total nonperforming loans and leases | 23,010 | 22,360 | 20,806 | 20,090 | 21,672 | 23,010 | |||||||||||||||||||
| OREO | 2,047 | 2,030 | 2,331 | 2,520 | 908 | 2,047 | |||||||||||||||||||
| Total nonperforming assets | $ | 25,057 | $ | 24,390 | $ | 23,137 | $ | 22,610 | $ | 22,580 | $ | 25,057 | |||||||||||||
| Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued | |||||||||||||||||||||||||
| Quarter-Ended | Year-Ended | ||||||||||||||||||||||||
| Delinquency - Originated loan and lease portfolio | Dec-17 | Sep-17 | Jun-17 | Mar-17 | Dec-16 | Dec-17 | |||||||||||||||||||
| Loans and leases 30-89 days past due and | |||||||||||||||||||||||||
| accruing (2) | $ | 6,791 | $ | 5,567 | $ | 6,188 | $ | 5,462 | $ | 6,694 | $ | 6,791 | |||||||||||||
| Loans and leases 90 days past due and accruing (2) | 44 | 0 | 639 | 0 | 0 | 44 | |||||||||||||||||||
| Total originated loans and leases past due and accruing (2) | 6,835 | 5,567 | 6,827 | 5,462 | 6,694 | 6,835 | |||||||||||||||||||
| Delinquency - Acquired loan and lease portfolio | |||||||||||||||||||||||||
| Loans 30-89 days past due and accruing (3)(7) | $ | 1,256 | $ | 2,857 | $ | 751 | $ | 907 | $ | 2,553 | $ | 1,256 | |||||||||||||
| Loans 90 days or more past due | 1,146 | 1,306 | 2,581 | 2,701 | 2,557 | 1,146 | |||||||||||||||||||
| Total acquired loans and leases past due and accruing | 2,402 | 4,163 | 3,332 | 3,608 | 5,110 | 2,402 | |||||||||||||||||||
| Total loans and leases past due and accruing | $ | 9,237 | $ | 9,730 | $ | 10,159 | $ | 9,070 | $ | 11,804 | $ | 9,237 | |||||||||||||
| Allowance for Loan Losses - Originated loan and lease portfolio | |||||||||||||||||||||||||
| Balance at beginning of period | $ | 37,903 | $ | 36,960 | $ | 35,915 | $ | 35,598 | $ | 33,956 | $ | 35,598 | |||||||||||||
| Provision for loan and lease losses | 1,849 | 931 | 846 | 602 | 1,419 | 4,428 | |||||||||||||||||||
| Net loan and lease (recoveries) charge-offs | 66 | (12) | (199) | 285 | (223) | 140 | |||||||||||||||||||
| Allowance for loan and lease losses (originated | 39,686 | 37,903 | 36,960 | 35,915 | 35,598 | 39,686 | |||||||||||||||||||
| loan portfolio) - balance at end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Allowance for Loan Losses - Acquired loan and lease portfolio | |||||||||||||||||||||||||
| Balance at beginning of period | $ | 135 | $ | 197 | $ | 251 | $ | 157 | $ | 156 | $ | 157 | |||||||||||||
| Provision (credit) for loan and lease losses | 165 | (529) | 130 | 167 | 287 | (67) | |||||||||||||||||||
| Net loan and lease (recoveries) charge-offs | 215 | (467) | 184 | 73 | 286 | 5 | |||||||||||||||||||
| Allowance for loan and lease losses (acquired | |||||||||||||||||||||||||
| loan portfolio) - balance at end of period | 85 | 135 | 197 | 251 | 157 | 85 | |||||||||||||||||||
| Total allowance for loan and lease losses | $ | 39,771 | $ | 38,038 | $ | 37,157 | $ | 36,166 | $ | 35,755 | $ | 39,771 | |||||||||||||
| Loan Classification - Originated Portfolio | |||||||||||||||||||||||||
| Special Mention | $ | 46,074 | $ | 50,423 | $ | 38,488 | $ | 18,861 | $ | 20,485 | $ | 46,074 | |||||||||||||
| Substandard | 20,584 | 20,532 | 19,532 | 20,909 | 20,316 | 20,584 | |||||||||||||||||||
| Loan Classification - Acquired Portfolio | |||||||||||||||||||||||||
| Special Mention | 525 | 539 | 547 | 519 | 526 | 525 | |||||||||||||||||||
| Substandard | 5,355 | 8,193 | 8,796 | 9,628 | 13,141 | 5,355 | |||||||||||||||||||
| Loan Classifications - Total Portfolio | |||||||||||||||||||||||||
| Special Mention | 46,599 | 50,962 | 39,035 | 19,380 | 21,011 | 46,599 | |||||||||||||||||||
| Substandard | 25,939 | 28,725 | 28,328 | 30,537 | 33,457 | 25,939 | |||||||||||||||||||
| Ratio Analysis | |||||||||||||||||||||||||
| Credit Quality | Dec-17 | Sep-17 | Jun-17 | Mar-17 | Dec-16 | Dec-17 | |||||||||||||||||||
| Nonperforming loans and leases/total loans and leases (7) | 0.49% | 0.50% | 0.47% | 0.47% | 0.51% | 0.49% | |||||||||||||||||||
| Nonperforming assets/total assets | 0.38% | 0.37% | 0.36% | 0.36% | 0.36% | 0.38% | |||||||||||||||||||
| Allowance for originated loan and lease losses/total originated loans and leases | 0.91% | 0.91% | 0.91% | 0.92% | 0.92% | 0.91% | |||||||||||||||||||
| Allowance/nonperforming loans and leases | 172.84% | 170.12% | 178.59% | 180.02% | 164.98% | 172.84% | |||||||||||||||||||
| Net loan and lease losses (recoveries) annualized/total average loans and leases | 0.02% | (0.04%) | 0.00% | 0.03% | 0.01% | 0.00% | |||||||||||||||||||
| Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued | |||||||||||||||||||
| Quarter-Ended | Year-Ended | ||||||||||||||||||
| Capital Adequacy (period-end) | Dec-17 | Sep-17 | Jun-17 | Mar-17 | Dec-16 | Dec-17 | |||||||||||||
| Tangible common equity/tangible assets | 7.24% | 7.58% | 7.50% | 7.44% | 7.25% | 7.24% | |||||||||||||
| Profitability | |||||||||||||||||||
| Return on average assets * | 0.15% | 1.07% | 1.07% | 1.02% | 0.99% | 0.82% | |||||||||||||
| Return on average equity * | 1.64% | 11.77% | 11.85% | 11.47% | 10.76% | 9.09% | |||||||||||||
| Net interest margin (TE) * | 3.42% | 3.40% | 3.45% | 3.38% | 3.30% | 3.41% | |||||||||||||
| * 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 accompanying tables. Management believes that these non-GAAP measures provide useful information. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. See "Tompkins Financial Corporation - Summary Financial Data (Unaudited)" tables for Non-GAAP related calculations.
| Non-GAAP Disclosure - Adjusted Diluted Earnings Per Share | |||||||||||||||||||||||||
| Quarter-Ended | Year-Ended | ||||||||||||||||||||||||
| Dec-17 | Sep-17 | Jun-17 | Mar-17 | Dec-16 | Dec-17 | ||||||||||||||||||||
| Net income available to common shareholders | $ | 2,457 | $ | 17,394 | $ | 16,926 | $ | 15,717 | $ | 15,118 | $ | 52,494 | |||||||||||||
Less: Income attributable to unvested stock-based | 26 | 266 | 266 | 260 | 235 | 818 | |||||||||||||||||||
| Adjusted net income available to common shareholders | 2,431 | 17,128 | 16,660 | 15,457 | 14,883 | 51,676 | |||||||||||||||||||
| Remeasurement of net deferred taxes | 14,944 | 0 | 0 | 0 | 0 | 14,944 | |||||||||||||||||||
| Net income (Non-GAAP) | 17,375 | 17,128 | 16,660 | 15,457 | 14,883 | 66,620 | |||||||||||||||||||
| Weighted average shares outstanding (diluted) | 15,103,906 | 15,078,555 | 15,066,861 | 15,042,614 | 15,014,221 | 15,073,255 | |||||||||||||||||||
| Adjusted diluted earnings per share (Non-GAAP) | $ | 1.15 | $ | 1.14 | $ | 1.11 | $ | 1.03 | $ | 0.99 | $ | 4.42 | |||||||||||||
| Non-GAAP Disclosure - Tangible Book Value Per Share | |||||||||||||||||||||||||
| Quarter-Ended | Year-Ended | ||||||||||||||||||||||||
| Dec-17 | Sep-17 | Jun-17 | Mar-17 | Dec-16 | Dec-17 | ||||||||||||||||||||
| Total common equity | $ | 574,780 | $ | 588,349 | $ | 575,428 | $ | 562,064 | $ | 547,953 | $ | 574,780 | |||||||||||||
| Less: Goodwill and intangibles (9) | 100,887 | 101,360 | 101,840 | 102,326 | 103,214 | 100,887 | |||||||||||||||||||
| Tangible common equity | 473,893 | 486,989 | 473,588 | 459,738 | 444,739 | 473,893 | |||||||||||||||||||
| Ending shares outstanding | 15,265,614 | 15,202,444 | 15,189,453 | 15,181,198 | 15,135,906 | 15,265,614 | |||||||||||||||||||
| Tangible book value per share (Non-GAAP) | $ | 31.04 | $ | 32.03 | $ | 31.18 | $ | 30.28 | $ | 29.38 | $ | 31.04 | |||||||||||||
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued | |||||||||
| Non-GAAP Disclosure - YTD adjusted diluted earnings per share | |||||||||
| Dec-17 | Dec-16 | ||||||||
| Net income available to common shareholders | $ | 52,494 | $ | 59,340 | |||||
| Income attributable to unvested stock-based compensation awards | 818 | 912 | |||||||
| Adjusted net income available to common shareholders | 51,676 | 58,428 | |||||||
| Remeasurement of net deferred taxes | 14,944 | 0 | |||||||
| Net operating income (Non-GAAP) | 66,620 | 58,428 | |||||||
| Weighted average shares outstanding (diluted) | 15,073,255 | 14,936,231 | |||||||
| Adjusted diluted earnings per share (Non-GAAP) | $ | 4.42 | $ | 3.91 | |||||
| (1) Federal Reserve peer ratio as of September 30, 2017, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion. |
| (2) "Originated" equals loans and leases not included by definition in "acquired loans". |
| (3)"Acquired Loans and Leases" equals loans and leases acquired at fair value, accounted for in accordance with FASB ASC Topic 805. |
| (4) Average balances and yields on available-for-sale securities are based on historical amortized cost. |
| (5) Interest income includes the tax effects of taxable-equivalent basis. |
| (6) 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, 2016. |
| (7) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans. The risk of credit loss on these loans has been considered by virtue of the Corporation's estimate of acquisition-date fair value and these loans are considered accruing as the Corporation primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows. |
| (8)Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares. |
| (9) "Goodwill and intangibles" equal Total Intangible Assets less Mortgage Servicing Rights in the above tables. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180126005125/en/
Contacts:
Stephen S. Romaine, 888-503-5753
President
& CEO
or
Francis M. Fetsko, 888-503-5753
Executive
VP, CFO & COO
