On July 26, 2024, Tompkins Financial Corp (TMP, Financial) released its 8-K filing reporting its second-quarter financial results. Tompkins Financial Corp is a Financial Holding Company with three business segments: banking, insurance, and wealth management. The company offers a variety of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, and insurance. The majority of its revenue is generated from the Banking segment.
Performance Overview
Tompkins Financial Corp reported diluted earnings per share (EPS) of $1.10 for Q2 2024, surpassing the analyst estimate of $0.90. This represents a 6.8% decrease from the previous quarter but an impressive 86.4% increase from the $0.59 EPS reported in Q2 2023. Net income for the quarter was $15.7 million, down 7.1% from the prior quarter but up 84.7% from the $8.5 million reported in the same period last year.
Key Financial Achievements
For the six months ended June 30, 2024, diluted EPS was $2.29, up 18.0% from $1.94 for the same period in 2023. Year-to-date net income was $32.6 million, a 16.9% increase compared to $27.9 million for the same period in 2023. The growth in EPS and net income is largely attributable to the company's sale of $80.9 million of available-for-sale securities, which resulted in a $7.1 million loss on securities transactions in Q2 2023.
Income Statement Highlights
Net interest income for Q2 2024 was $51.0 million, slightly up from $50.7 million in Q1 2024 but down from $51.9 million in Q2 2023. The net interest margin remained stable at 2.73% compared to the previous quarter but decreased from 2.83% in Q2 2023. The decrease in net interest margin was mainly driven by higher funding costs, partially offset by higher yields on interest-earning assets.
Balance Sheet and Cash Flow
Total loans at June 30, 2024, were up $121.3 million, or 2.2%, compared to the previous quarter, and up $409.5 million, or 7.7%, from June 30, 2023. Total deposits were $6.3 billion, down 2.5% from March 31, 2024, and 2.6% from June 30, 2023. The loan-to-deposit ratio increased to 91.7% from 87.5% in the previous quarter.
Noninterest Income and Expenses
Noninterest income for Q2 2024 was $21.8 million, up 72.6% from Q2 2023. Year-to-date noninterest income was $43.9 million, a 33.0% increase compared to the same period in 2023. Noninterest expense for Q2 2024 was $49.9 million, down 3.9% from Q2 2023. Year-to-date noninterest expense was $99.8 million, a 2.3% decrease compared to the same period in 2023.
Commentary from Management
"Our year-to-date and second-quarter results have been positively impacted by a stabilizing net interest margin and growth throughout our business. Year-over-year loans are up 7.7% and year-to-date noninterest income was up 33%, or 10% excluding the impact from the loss on the sale of securities in the second quarter of 2023. We have remained focused on expenses with noninterest expenses year-to-date lower by 2.3%," said Stephen Romaine, President and CEO.
Asset Quality and Capital Position
The allowance for credit losses represented 0.92% of total loans and leases at June 30, 2024, unchanged from the previous quarter. Nonperforming assets were 0.79% of total assets, down from 0.81% in the previous quarter but up from 0.41% in Q2 2023. The ratio of total capital to risk-weighted assets was 13.26%, compared to 13.43% in the previous quarter and 14.48% in Q2 2023.
Liquidity Position
Tompkins Financial Corp's liquidity position remained stable, with ready access to $1.4 billion in national and regional wholesale funding sources. The company had an available borrowing capacity of $661.8 million at the Federal Home Loan Bank and $137.7 million at the Federal Reserve Bank.
For more detailed financial information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Tompkins Financial Corp for further details.
