ITHACA, NY – Tompkins Financial Corporation (NYSEMKT:TMP)
Tompkins Financial Corporation reported record net income of $17.4 million for the second quarter of 2015, an increase of 33.1% from the $13.1 million reported for the same period in 2014. Diluted earnings per share were $1.15 for the quarter, up from $0.87 per share for the second quarter last year. Results for the current quarter were helped by a one-time curtailment gain of $3.6 million after tax ($0.24 per share) related to changes to the Company’s pension plan. If this gain were excluded from the current period results, diluted earnings per share would have been $0.91, which would still reflect the best second quarter in Company history. The impact of this non-recurring item on the Company’s financial statements is more fully detailed in the non-GAAP disclosure tables included with this press release.
For the year-to-date period ended June 30, 2015, net income was $30.1 million, an increase of 17.3% from the $25.6 million reported for the same period in 2014. Diluted earnings per share were $2.00 for the year-to-date period ended June 30, 2015, up 16.3% compared to the $1.72 per share reported for the same period last year. These results were also aided by the curtailment gain described above. If this gain were excluded from year to date results, net income for the period would have been $26.0 million for the first six months of 2015, and diluted earnings per share would have been $1.75. Refer to non-GAAP disclosures for additional details.
SELECTED HIGHLIGHTS FOR SECOND QUARTER:
Net interest income of $41.3 million was up 2.0% compared to the second quarter of 2014.
Total loans of $3.5 billion were up 9.1% over June 30, 2014.
Credit quality improved with non-performing assets representing 0.44% of total assets, which is the lowest this percentage has been over the past 25 quarters. The percentage is down from 0.66% one year ago and remains well below the most recent Federal Reserve peer average1 of 0.88%.
Annualized return on average equity was 13.79% for the second quarter of 2015, compared to 10.91% reported for the second quarter of 2014, the second quarter of 2015 included a $3.6 million (net of tax) gain on the pension plan curtailment.
Tangible book value per share is up 4.1% from the second quarter of 2014. Refer to Non-GAAP disclosure for additional details on tangible book value per share.
President and CEO, Stephen S. Romaine said “It is very exciting to report on another record quarter for earnings performance. When compared to the same period last year, positive trends that contributed to these results included: growth in loans, deposits, insurance revenue, and card related revenue, as well as continued excellent asset quality.”
NET INTEREST INCOME
Net interest income of $41.3 million for the second quarter of 2015 increased 2.0% compared to the same period in 2014, and was in line with the first quarter of 2015. For the year-to-date period, net interest income of $82.6 million was up 2.5% from the prior year. The net interest margin for the second quarter of 2015 was 3.37%, compared to 3.55% for the same period in 2014. For the year to date, net interest margin was 3.41% in 2015, compared to 3.58% in 2014.
NONINTEREST INCOME
Noninterest income represented 31.5% of total revenue for the second quarter of 2015, compared to 30.4% of total revenue in the second quarter of 2014. Noninterest income was $19.0 million for the second quarter of 2015, up 7.0% compared to the second quarter of 2014, and up 7.5% compared to first quarter 2015. The increase over the same quarter last year included improvements in insurance revenue and card services income. Growth during the quarter also benefited from $723,000 of gains on the sale of available-for-sale securities and $924,000 of gains on the sale of other real estate owned (OREO). For the first six months of 2015, noninterest income was up $1.5 million, or 4.1% over the same period in 2014.
NONINTEREST EXPENSE
Noninterest expense was $32.9 million for the second quarter of 2015, down 15.4% compared to the second quarter of 2014. For the year-to-date period, noninterest expense was down 5.9% from the same period in 2014. The decrease in noninterest expense for both the quarter-to-date and year-to-date periods was mainly due to a $6.0 million gain on a pension plan curtailment recorded in the second quarter of 2015. The curtailment gain is related to a freeze of the Company’s defined benefit pension plan which has been replaced with a more flexible defined contribution pension plan.
ASSET QUALITY
Asset quality remains strong. Substandard and Special Mention loans declined by $28.3 million from the same period last year, and by $10.1 million from the previous quarter.
Provision for loan and lease losses was $922,000 for the second quarter of 2015, up $855,000 compared to the second quarter of 2014. The increase over the second quarter of 2014 reflects increased provision expense primarily due to loan growth.
The Company’s allowance for originated loan and lease losses totaled $29.4 million at June 30, 2015, which represented 0.98% of total originated loans, compared to 1.02% at June 30, 2014 and 0.99% at year-end 2014. The allowance for loan and lease losses covered 139.36% of nonperforming loans and leases as of June 30, 2015, compared to 103.08% at June 30, 2014 and 128.43% at year-end 2014.
CAPITAL POSITION
Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets of 8.92% is up from 8.79% at June 30, 2014. The ratio of tangible common equity to tangible assets (refer to Non-GAAP disclosures) improved to 7.48%, up from 7.40% reported at December 31, 2014.
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.
NON-GAAP MEASURES
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. See “Tompkins Financial Corporation – Summary Financial Data (Unaudited)” tables for Non-GAAP related calculations.
“Safe Harbor” Statement under the Private Securities Litigation Reform of 1995:
This press release may include forward-looking statements with respect to revenue sources, growth, market risk, and corporate objectives. The Company assumes no duty, and specifically disclaims any obligation, to update forward-looking statements, and cautions that these statements are subject to numerous assumptions, risks, and uncertainties, all of which could change over time. Actual results could differ materially from forward-looking statements.
