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Tompkins Financial profit declines in 2nd quarter

By Adam Rombel

Date:

The branch office of Tompkins Trust Company, Tompkins Financial Advisors, and Tompkins Insurance Agencies at Lyndon Corners in the town of DeWitt. (RAVIV NESHER/BJNN FILE PHOTO)

ITHACA — Tompkins Financial Corp. (NYSE: TMP) recently reported that its net income in the second quarter fell 12 percent to $19.4 million, or $1.27 per share, from $22.1 million, or $1.43 a share, in the year-ago period as a difficult interest-rate landscape squeezed its margins.

“Though overall performance remains very good, we did see a decline in earnings for the quarter and year-to-date periods. The decline from recent prior periods was largely driven by the challenging interest rate environment that has resulted in funding costs increasing at a faster pace than asset yields,” Stephen S. Romaine, Tompkins Financial’s president and CEO, said in the Ithaca–based banking company’s earnings report issued on July 19. “We are fortunate that our business model includes meaningful fee income contributions from business lines that are less impacted by the interest rate environment. Additionally, we have a number of continuous improvement initiatives underway that we expect will have a positive impact on performance later in 2019 and in future years.”

Tompkins Financial’s total loans of $4.9 billion at the end of the second quarter, were up 1.4 percent over the same period in 2018. Its total deposits of just under $5 billion were up 4.1 percent over the year-ago quarter.

Total nonperforming loans fell by 8.8 percent from the same period last year, and declined 10.5 percent from the end of 2018.

Tompkins Financial reported net interest income of $52.3 million in the second quarter, down slightly from $52.7 million in the second quarter of 2018, according to the earnings report. 

Net interest margin at Tompkins Financial in the second quarter was 3.34 percent, off from 3.36 percent in the same period in 2018. The decline in margin was largely due to the recent increases in market interest rates that have resulted in increased funding costs, the banking company stated.

The banking company’s total noninterest income fell to $18.5 million in the second quarter from nearly $21.2 million in the year-ago period, but that was attributable to a gain on sale of two properties totaling $2.9 million that it took last year. The sale of those properties was related to the completion of the new Tompkins Financial headquarters building in the second quarter of 2018. Fee income from insurance, wealth management, deposit services, and card services for this year’s second quarter were up a combined $323,000, or 2 percent, over the same period in 2018, per the earnings report.

Tompkins Financial’s noninterest expense was $46.1 million in the second quarter, up $1.1 million, or 2.4 percent, over the year-prior quarter. The increase in noninterest expense included normal annual increases in salaries and wages, the banking company said.

Tompkins Financial’s effective tax rate was 19.6 percent in the second quarter of 2019, compared to 20.7 percent for the same period in 2018.

The banking company said its asset-quality trends “remained strong” in the second quarter. Nonperforming assets represented 0.39 percent of total assets as of June 30, compared to 0.42 percent at the end of 2018 and at last year’s midway point.

Tompkins Financial took a provision for loan and lease losses of $601,000 in the second quarter of 2019, down from $1.05 million in the year-earlier quarter. 

Net charge-offs for the second quarter were $139,000, up from $31,000 reported in the second quarter of 2018.

Tompkins Financial serves the Central, Western, and Hudson Valley regions of New York, as well as Southeastern Pennsylvania. 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. 

Tompkins Trust ranked 5th in deposit market share in the 16-county Central New York region with a 5.12 percent share of all market deposits, according to June 30, 2018 FDIC data, the latest available.  

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