ITHACA — Tompkins Financial Corp. (NYSE: TMP) reported net income of $16.9 million in the second quarter, up 14 percent from $14.8 million in the year-ago quarter. The rise was led by loan growth and increases in net interest income. The Ithaca–based banking company posted net income of $32.6 million through the first six months of […]
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ITHACA — Tompkins Financial Corp. (NYSE: TMP) reported net income of $16.9 million in the second quarter, up 14 percent from $14.8 million in the year-ago quarter. The rise was led by loan growth and increases in net interest income.
The Ithaca–based banking company posted net income of $32.6 million through the first six months of this year, up more than 12 percent over the same period in 2016.
Tompkins Financial’s earnings per share totaled $1.11 in the second quarter, up 13 percent over the second quarter of 2016.
For the year-to-date period ended June 30, Tompkins Financial’s earnings per share totaled $2.13, up 11.5 percent over the same six months in 2016. The year-to-date earnings-per-share figure reflects “the best earnings through the first six months of any year in our company’s history,” the banking company said in the earnings report.
“It is especially rewarding to show strong performance through the first half of 2017, while our team was also focused on a conversion of our core banking system, which was successfully completed in May of this year,” Stephen Romaine, president and CEO of Tompkins Financial, said in the report. “Improved net interest income, which was supported by solid loan growth over the prior year, has been the primary driver of improved earnings performance in 2017.”
Tompkins Financial issued its earnings report before the open of regular trading on July 21. Its stock price fell 1 percent that day and slightly the next trading day, before rebounding strongly the following two days.
Income growth
Tompkins Financial posted net interest income of $50.3 million in the second quarter of this year, up 12 percent from the same period in 2016. For the first six months of the year, its net interest income was
$98.3 million, up nearly 11 percent from the same period in 2016.
Net interest income benefited from growth in average loans and deposits, Tompkins Financial said. Average loans were up $467.1 million, or 12 percent in the first six months of this year, versus the same period in 2016. Average deposits were up $260.3 million, or almost 6 percent in the first six months of 2017, compared to the same period last year. Certain loans benefited from higher short-term interest rates in 2017, resulting in an improved net interest margin in 2017. For the second quarter of the year, net interest margin improved to 3.45 percent, compared to 3.38 percent in the first quarter of 2017, and 3.36 percent in the second quarter of 2016.
Tompkins Financial’s noninterest income of $17.5 million in the second quarter was up 2 percent compared to the same period last year. Declines in insurance commissions and fees, and gains on the sale of available-for-sale securities during the quarter were offset by improved card-services income, which included about $500,000 of volume-based incentives related to the bank's branding agreement with MasterCard, Tompkins Financial said.
Asset quality
The banking company said its asset-quality trends “remained strong” in the second quarter. Nonperforming assets represented 0.36 percent of total assets as of June 30, unchanged from the end of 2016, and up slightly from 0.32 percent a year ago. Nonperforming asset levels continue to be “well below” the most recent Federal Reserve Board peer group average of 0.55 percent, Tompkins Financial said.
Tompkins Financial’s provision for loan and lease losses was $976,000 for the second quarter of 2017, which was “in line” with the second quarter of 2016.
The banking company’s allowance for originated loan and lease losses totaled $37 million as of June 30, and represented 0.91 percent of total originated loans and leases, compared to 0.92 percent last quarter, and 0.93 percent one year ago.
Though most credit-quality metrics remained “relatively stable” for the quarter, the level of special-mention loans at Tompkins Financial increased during the quarter to $39 million from $21.2 million a year ago, and up from $19.4 million last quarter. “The increase is largely related to the Company’s agricultural portfolio that has been negatively impacted by lower milk prices over the past 12 months. Though lower prices have negatively impacted cash flow for this group of borrowers, payments on all of the loans in this portfolio were current as of June 30, 2017,” the banking company explained in the earnings report.
Tompkins Financial is the parent company of 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.
