Tompkins Financial Corporation 8-K

 

EXHIBIT 99.1

 

 

For more information contact:

Stephen S. Romaine, President & CEO

Francis M. Fetsko, Executive VP, CFO & COO

Tompkins Financial Corporation (888) 503-5753

 

For Immediate Release

Friday, January 25, 2019

 

Tompkins Financial Corporation Reports Record Full Year and Fourth Quarter Earnings

 

ITHACA, NY - Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation reported record 2018 full year diluted earnings per share of $5.35, an increase of 56.0% compared to the $3.43 per share reported for the period ending December 31, 2017. For the fourth quarter of 2018, diluted earnings per share of $1.23 were up from the $0.16 per share reported in the same quarter last year.

As more fully disclosed in the Non-GAAP disclosure tables included in this press release, it is helpful to view comparisons to prior periods on an adjusted basis to exclude the impact of certain significant non-recurring items. Most notably, earnings per share and net income in the fourth quarter and year-to-date periods of 2017 were impacted by a one-time non-cash write-down of net deferred tax assets in the amount of $14.9 million as a result of the Tax Cuts and Jobs Act of 2017. On an adjusted basis, year-to-date diluted earnings per share for 2018 would have been $5.33, an increase of 20.6% over the adjusted diluted earnings per share of $4.42 reported for the year ending December 31, 2017. For the fourth quarter of 2018, adjusted diluted earnings per share of $1.23 reflected an increase of 7.0% over the $1.15 adjusted diluted earnings per share reported in same quarter last year. Refer to Non-GAAP Disclosure tables for additional details.

Due to changes in the Federal tax rates between periods, it is also helpful to view current period and prior period earnings performance on a pre-tax basis. Income before tax expense was $104.2 million for the year ended December 31, 2018, and $23.8 million in the fourth quarter of 2018, reflecting an increase of 9.4% and 13.5%, respectively, over the same periods in 2017.

President and CEO, Stephen S. Romaine said “We are pleased to once again report record earnings for both the full year and quarterly periods. The results are especially rewarding in today’s environment of uncertain economic conditions. During the quarter, our net interest margin remained relatively stable as growth in average noninterest bearing deposits helped soften the impact of rising market interest rates. Our diversified revenue sources have served us well in volatile markets, as fees from insurance, wealth management, and banking related services provide a revenue mix that is less dependent on interest rates. During 2018, each of these fee based business lines reflected growth over the prior year."

SELECTED HIGHLIGHTS FOR YEAR AND FOURTH QUARTER:

•

Return on equity was 13.93% for the year ended December 31, 2018, compared to 9.09% for the full year ended December 31, 2017.

•

Net interest income for the fourth quarter of 2018 increased over the third quarter of 2018, which represents the 15th consecutive quarterly increase in net interest income.

•

Net interest income for the full year was up 5.2% over 2017.

•

Total loans of $4.8 billion at December 31, 2018, were up 3.5% over December 31, 2017, while total deposits of $4.9 billion were up 1.1% from the prior year end.

•

Nonperforming assets remain near historically low levels and compare favorably to our industry peers, with nonperforming assets representing 0.42% of total assets at year-end 2018, compared to 0.38% at year-end 2017.

NET INTEREST INCOME

Net interest income of $53.2 million for the fourth quarter of 2018 was up 2.4% over the same period in 2017. For the full year, net interest income was $211.8 million, up $10.5 million, or 5.2% from the same period in 2017.

Growth in net interest income for the year ended December 31, 2018, was largely driven by $356.4 million of growth in average loans during the year, an increase of 8.1% over the prior period. Average deposits for the year ended December 31, 2018, increased $89.7 million, or 1.9% compared to the same period in 2017. Included in the growth of average deposits during 2018 was a $103.5 million increase in average noninterest bearing deposits, up 8.1% from the prior year average.

Net interest margin for 2018 was 3.37%, down slightly from the 3.41% reported for 2017. The decline in margin during the year was largely due to increases in market interest rates, which has resulted in funding costs rising at a faster pace than asset yields.

NONINTEREST INCOME

Noninterest income represented 26.8% of total revenues in 2018, compared to 25.6% in 2017. For the full year, noninterest income of $77.4 million was up $8.2 million, or 11.9%, when compared to 2017. Noninterest income was $19.9 million for the fourth quarter of 2018, and was up $2.5 million or 14.7% compared to the same period in 2017. Fee income business related to investment services, service charges on deposit accounts, and card services income all contributed to the increase over the fourth quarter of 2017. Declines in the stock market during the fourth quarter of 2018 resulted in lower investment services fees tied to assets under management, though the impact was offset by higher than normal fees associated with trust and estate activities.

Other income in the fourth quarter of 2018 included $2.5 million related to the collection of fees and nonaccrual interest for a credit that was charged off in 2010. Other income for the full year included a $2.9 million gain on the sale of two properties. The sale of these properties was related to the move of the Company’s headquarters in the second quarter of 2018.

NONINTEREST EXPENSE

Noninterest expense was $47.2 million for the fourth quarter of 2018, up $0.9 million, or 2.0%, over the fourth quarter of 2017. For the full year of 2018, noninterest expense was $181.1 million, up $10.0 million, or 5.8%, from the same period in 2017. Noninterest expense increases for both the full year and fourth quarter of 2018 included normal annual increases in salaries and wages. The higher noninterest expense in 2018 included lease write-downs of $2.0 million in the second quarter and $514,000 in the third quarter related to leases on recently vacated space. Results for the quarter and full year periods also include an increase of $1.5 million and $2.8 million, respectively, in professional fees, primarily related to investments in strengthening the Company’s compliance and information security infrastructure.

INCOME TAX EXPENSE

The Company's effective tax rate was 20.9% for the year ended December 31, 2018, compared to 44.8% for the same period in 2017. The decrease is a direct result of the $14.9 million non-cash write-down of net deferred tax assets recorded in the fourth quarter of 2017, which was caused by the decline in the Federal statutory tax rate from 35% in 2017, to 21% in 2018 as a result of the Tax Cuts and Jobs Act of 2017.

ASSET QUALITY

Asset quality trends remained strong in the fourth quarter of 2018. Nonperforming assets represented 0.42% of total assets at December 31, 2018, compared to 0.38% at December 31, 2017. Nonperforming asset levels continue to compare favorably to the most recent Federal Reserve Board Peer Group Average¹ of 0.61%.

Provision for loan and lease losses was $2.1 million for the fourth quarter of 2018, compared to $2.0 million for the fourth quarter of 2017. Net charge-offs for the fourth quarter of 2018 were $6,000 compared to net charge-offs of $281,000 in the fourth quarter of 2017.

The Company’s allowance for originated loan and lease losses totaled $43.3 million at December 31, 2018, and represented 0.95% of total originated loans and leases at December 31, 2018. At December 31, 2017, the allowance was $39.7 million and represented 0.91% of total originated loans and leases. Contributing to the $2.1 million increase in the allowance over the level reported at September 30, 2018, was an impairment reserve related to a single credit that was downgraded during the fourth quarter of 2018. The total allowance represented 163.25% of total nonperforming loans and leases at December 31, 2018, compared to 172.84% at December 31, 2017.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. The ratio of tangible common equity to tangible assets was 7.81% at December 31, 2018, improved from the 7.49% reported at September 30, 2018, and the 7.24% reported at December 31, 2017.

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	12/31/2018			12/31/2017
Cash and noninterest bearing balances due from banks	$	78,524		$	77,688
Interest bearing balances due from banks	1,865			6,615
Cash and Cash Equivalents	80,389			84,303
Available-for-sale securities, at fair value (amortized cost of $1,363,902 at December 31, 2018 and $1,408,996 at December 31, 2017)	1,332,658			1,391,862
Held-to-maturity securities, at amortized cost (fair value of $139,377 at December 31, 2018 and $140,315 at December 31, 2017)	140,579			139,216
Equity securities, at fair value (amortized cost $1,000 at December 31, 2018 and $1,000 at December 31, 2017)	887			913
Originated loans and leases, net of unearned income and deferred costs and fees (2)	4,568,741			4,358,543
Acquired loans (3)	265,198			310,577
Less:  Allowance for loan and lease losses	43,410			39,771
Net Loans and Leases	4,790,529			4,629,349
Federal Home Loan Bank and other stock	52,262			50,498
Bank premises and equipment, net	97,202			86,995
Corporate owned life insurance	81,928			80,106
Goodwill	92,283			92,291
Other intangible assets, net	7,628			9,263
Accrued interest and other assets	82,091			83,494
Total Assets	$	6,758,436		$	6,648,290
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market	2,853,190			2,651,632
Time	637,295			748,250
Noninterest bearing	1,398,474			1,437,925
Total Deposits	4,888,959			4,837,807
Federal funds purchased and securities sold under agreements to repurchase	81,842			75,177
Other borrowings	1,076,075			1,071,742
Trust preferred debentures	16,863			16,691
Other liabilities	73,826			70,671
Total Liabilities	$	6,137,565		$	6,072,088
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 15,363,255 at December 31, 2018; and 15,316,492 at December 31, 2017	1,535			1,530
Additional paid-in capital	366,595			364,031
Retained earnings	319,396			265,007
Accumulated other comprehensive loss	(63,165		)	(51,296		)
Treasury stock, at cost – 137,195 shares at December 31,2018, and 135,773 shares at December 31, 2017	(4,902		)	(4,492		)
Total Tompkins Financial Corporation Shareholders’ Equity	619,459			574,780
Noncontrolling interests	1,412			1,422
Total Equity	$	620,871		$	576,202
Total Liabilities and Equity	$	6,758,436		$	6,648,290

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except per share data) (Unaudited)	Three Months Ended						Twelve Months Ended
	12/31/2018			12/31/2017			12/31/2018			12/31/2017
INTEREST AND DIVIDEND INCOME
Loans	$	55,951		$	50,153		$	214,370		$	191,410
Due from banks	9			22			31			37
Available-for-sale securities	7,556			7,337			30,377			29,721
Held-to-maturity securities	865			862			3,437			3,475
Federal Home Loan Bank and other stock	944			655			3,377			2,121
Total Interest and Dividend Income	65,325			59,029			251,592			226,764
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	624			516			1,712			1,880
Other deposits	5,184			2,745			14,883			10,253
Federal funds purchased and securities sold under agreements to repurchase	37			40			152			235
Trust preferred debentures	323			270			1,227			1,158
Other borrowings	5,921			3,489			21,818			11,934
Total Interest Expense	12,089			7,060			39,792			25,460
Net Interest Income	53,236			51,969			211,800			201,304
Less:  Provision for loan and lease losses	2,058			2,014			3,942			4,161
Net Interest Income After Provision for Loan and Lease Losses	51,178			49,955			207,858			197,143
NONINTEREST INCOME
Insurance commissions and fees	6,685			6,886			29,369			28,778
Investment services income	4,923			4,121			17,288			15,665
Service charges on deposit accounts	2,135			2,100			8,435			8,437
Card services income	2,484			2,225			9,693			9,100
Other income	4,387			1,964			13,130			7,631
(Loss) gain on securities transactions	(756		)	16			(466		)	(407		)
Total Noninterest Income	19,858			17,312			77,449			69,204
NONINTEREST EXPENSE
Salaries and wages	21,221			20,722			85,625			81,590
Other employee benefits	6,231			5,675			22,090			21,870
Net occupancy expense of premises	3,436			3,249			13,309			13,214
Furniture and fixture expense	1,890			2,209			7,351			7,028
FDIC insurance	535			752			2,618			2,527
Amortization of intangible assets	437			473			1,771			1,932
Other operating expense	13,478			13,206			48,303			42,944
Total Noninterest Expenses	47,228			46,286			181,067			171,105
Income Before Income Tax Expense	23,808			20,981			104,240			95,242
Income Tax Expense	4,866			18,493			21,805			42,620
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	18,942			2,488			82,435			52,622
Less:  Net Income Attributable to Noncontrolling Interests	31			31			127			128
Net Income Attributable to Tompkins Financial Corporation	$	18,911		$	2,457		$	82,308		$	52,494
Basic Earnings Per Share	$	1.24		$	0.16		$	5.39		$	3.46
Diluted Earnings Per Share	$	1.23		$	0.16		$	5.35		$	3.43

 

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
			Quarter Ended								YTD Period Ended								YTD Period Ended
				December 31, 2018								December 31, 2018								December 31, 2017
				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		$	2,193		$	9		1.63	%	$	2,139		$	31		1.45	%	$	4,599		$	37		0.80	%
	Securities (4)
		U.S. Government securities		1,404,813		7,883			2.23	%		1,429,875		31,645			2.21	%		1,471,717		31,006			2.11	%
		State and municipal (5)		95,809		622			2.58	%		97,116		2,520			2.59	%		100,595		3,393			3.37	%
		Other securities (5)		3,414		40			4.65	%		3,491		153			4.38	%		3,597		129			3.59	%
		Total securities		1,504,036		8,545			2.25	%		1,530,482		34,318			2.24	%		1,575,909		34,528			2.19	%
	FHLBNY and FRB stock			48,888		944			7.66	%		51,815		3,377			6.52	%		42,465		2,121			4.99	%
	Total loans and leases, net of unearned income (5)(6)			4,808,996		56,253			4.64	%		4,757,583		215,648			4.53	%		4,401,205		194,433			4.42	%
	Total interest-earning assets			6,364,113		65,751			4.10	%		6,342,019		253,374			4.00	%		6,024,178		231,119			3.84	%
Other assets				346,831								350,659								365,326
	Total assets		$	6,710,944							$	6,692,678							$	6,389,504
LIABILITIES & EQUITY
Deposits
	Interest-bearing deposits
		Interest bearing checking, savings & money market	$	2,872,090		3,728			0.51	%	$	2,822,747		9,847			0.35	%	$	2,674,204		5,141			0.19	%
		Time deposits		643,720		2,080			1.28	%		664,788		6,748			1.02	%		827,181		6,992			0.85	%
		Total interest-bearing deposits		3,515,810		5,808			0.66	%		3,487,535		16,595			0.48	%		3,501,385		12,133			0.35	%
Federal funds purchased & securities sold under
		agreements to repurchase		65,004		37			0.23	%		63,472		152			0.24	%		64,888		235			0.36	%
Other borrowings				1,008,887		5,921			2.33	%		1,086,847		21,818			2.01	%		882,235		11,934			1.35	%
Trust preferred debentures				16,835		323			7.61	%		16,771		1,227			7.32	%		18,338		1,158			6.31	%
	Total interest-bearing liabilities			4,606,536		12,089			1.04	%		4,654,625		39,792			0.85	%		4,466,846		25,460			0.57	%
Non-interest bearing deposits				1,431,009								1,382,550								1,279,027
Accrued expenses and other liabilities				67,161								64,559								66,185
	Total liabilities			6,104,706								6,101,734								5,812,058
Tompkins Financial Corporation Shareholders’ equity				604,740								589,475								575,958
Noncontrolling interest				1,498								1,469								1,488
	Total equity			606,238								590,944								577,446
	Total liabilities and equity		$	6,710,944							$	6,692,678							$	6,389,504
Interest rate spread									3.06	%							3.14	%							3.27	%
	Net interest income/margin on earning assets					53,662			3.34	%				213,582			3.37	%				205,659			3.41	%
Tax equivalent adjustments						(426)								(1,782)								(4,355)
	Net interest income per consolidated financial statements					$	53,236							$	211,800							$	201,304

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)
	Quarter-Ended															Year-Ended
Period End Balance Sheet		Dec-18			Sep-18			Jun-18			Mar-18			Dec-17			Dec-18
Securities	$	1,474,124		$	1,452,788		$	1,483,991		$	1,510,795		$	1,531,991		$	1,474,124
Originated loans and leases, net of unearned income and deferred costs and fees (2)		4,568,741			4,531,241			4,507,006			4,408,081			4,358,543			4,568,741
Acquired loans and leases (3)		265,198			271,468			284,187			296,765			310,577			265,198
Allowance for  loan and lease losses		43,410			41,358			41,225			40,211			39,771			43,410
Total assets		6,758,436			6,746,960			6,745,800			6,648,128			6,648,290			6,758,436
Total deposits		4,888,959			5,025,082			4,792,229			4,929,903			4,837,807			4,888,959
Federal funds purchased and securities sold under agreements to repurchase		81,842			52,875			52,042			69,131			75,177			81,842
Other borrowings		1,076,075			988,515			1,229,956			995,074			1,071,742			1,076,075
Trust preferred debentures		16,863			16,820			16,777			16,734			16,691			16,863
Total common equity		619,459			597,636			589,173			577,967			574,780			619,459
Total equity		620,871			599,144			590,649			579,411			576,202			620,871

 

 

Average Balance Sheet
Average earning assets	$	6,364,113		$	6,356,781		$	6,348,562		$	6,297,727		$	6,159,396		$	6,342,019
Average assets		6,710,944			6,716,452			6,689,649			6,652,763			6,552,414			6,692,678
Average interest-bearing liabilities		4,606,536			4,644,533			4,709,122			4,658,998			4,500,649			4,654,625
Average equity		606,238			597,211			584,951			574,963			593,956			590,944

 

Share data
Weighted average shares outstanding (basic)	15,057,673			15,047,405			15,038,061			15,013,478			14,988,542			15,039,229
Weighted average shares outstanding (diluted)	15,135,750			15,144,491			15,135,970			15,112,518			15,103,906			15,132,257
Period-end shares outstanding	15,312,377			15,277,915			15,278,430			15,285,335			15,265,614			15,312,377
Common equity book value per share	$	40.45		$	39.12		$	38.56		$	37.81		$	37.65		$	40.45
Tangible book value per share (Non-GAAP)	$	33.98		$	32.60		$	32.02		$	31.24		$	31.04		$	33.98

 

Income Statement
Net interest income	$	53,236		$	53,163		$	52,714		$	52,687		$	51,969		$	211,800
Provision for loan/lease losses		2,058			272			1,045			567			2,014			3,942
Noninterest income		19,858			18,603			21,158			17,830			17,312			77,449
Noninterest expense		47,228			45,133			44,985			43,721			46,286			181,067
Income tax expense		4,866			5,427			5,751			5,761			18,493			21,805
Net income attributable to Tompkins Financial Corporation		18,911			20,902			22,059			20,436			2,457			82,308
Noncontrolling interests		31			32			32			32			31			127
Basic earnings per share (8)	$	1.24		$	1.37		$	1.44		$	1.34		$	0.16		$	5.39
Diluted earnings per share (8)	$	1.23		$	1.36		$	1.43		$	1.33		$	0.16		$	5.35

 

 

Nonperforming Assets
Originated nonaccrual loans and leases	$	19,340		$	17,518		$	19,082		$	18,429		$	16,253		$	19,340
Acquired nonaccrual loans and leases		2,856			2,659			2,673			3,352			3,264			2,856
Originated loans and leases 90 days past due and accruing		0			0			0			0			44			0
Troubled debt restructurings not included above		4,395			4,295			4,324			3,455			3,449			4,395
Total nonperforming loans and leases		26,591			24,472			26,079			25,236			23,010			26,591
OREO		1,595			1,870			2,233			2,047			2,047			1,595
Total nonperforming assets	$	28,186		$	26,342		$	28,312		$	27,283		$	25,057		$	28,186

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued

		Quarter-Ended														Year-Ended
Delinquency - Originated loan and lease portfolio		Dec-18			Sep-18			Jun-18			Mar-18			Dec-17			Dec-18
Loans and leases 30-89 days past due and
accruing (2)	$	7,796		$	6,454		$	5,875		$	6,513		$	6,791		$	7,796
Loans and leases 90 days past due and accruing (2)		0			0			0			0			44			0
Total originated loans and leases past due and accruing (2)		7,796			6,454			5,875			6,513			6,835			7,796

 

Delinquency - Acquired loan and lease portfolio
Loans 30-89 days past due and accruing (3)(7)	$	67		$	1,109		$	1,108		$	823		$	1,256		$	67
Loans 90 days or more past due		1,316			1,420			1,110			1,077			1,146			1,316
Total acquired loans and leases past due and accruing		1,383			2,529			2,218			1,900			2,402			1,383
Total loans and leases past due and accruing	$	9,179		$	8,983		$	8,093		$	8,413		$	9,237		$	9,179

 

Allowance for Loan Losses - Originated loan and lease portfolio
Balance at beginning of period	$	41,289		$	41,111		$	40,107		$	39,686		$	37,903		$	39,686
Provision for loan and lease losses		2,046			208			1,035			608			1,849			3,897
Net loan and lease (recoveries) charge-offs		14			30			31			187			66			262
Allowance for loan and lease losses (originated loan portfolio) - balance at end of period	$	43,321		$	41,289		$	41,111		$	40,107		$	39,686		$	43,321

 

Allowance for Loan Losses - Acquired loan and lease portfolio
Balance at beginning of period	$	69		$	114		$	104		$	85		$	135		$	85
Provision (credit) for loan and lease losses		12			64			10			(41	)		165			45
Net loan and lease (recoveries) charge-offs Allowance for loan and lease losses (acquired		(8	)		109			0			(60	)		215			41
loan portfolio) - balance at end of period		89			69			114			104			85			89
Total allowance for loan and lease losses	$	43,410		$	41,358		$	41,225		$	40,211		$	39,771		$	43,410

 

 

 

 

Loan Classification - Originated Portfolio
Special Mention	$	28,074		$	34,245		$	44,068		$	34,546		$	44,334		$	28,074
Substandard		43,963			49,597			41,572			35,746			20,584			43,963
Loan Classification - Acquired Portfolio
Special Mention		452			465			469			476			525			452
Substandard		2,914			3,041			3,180			3,468			5,355			2,914
Loan Classifications - Total Portfolio
Special Mention		28,526			34,710			44,537			35,022			46,599			28,526
Substandard		46,877			52,638			44,752			39,214			25,939			46,877

 

Ratio Analysis

Credit Quality
Nonperforming loans and leases/total loans and leases (7)		0.55	%		0.51	%		0.54	%		0.54	%		0.49	%		0.55	%
Nonperforming assets/total assets		0.42	%		0.39	%		0.42	%		0.41	%		0.38	%		0.42	%
Allowance for originated loan and lease losses/total originated loans and leases		0.95	%		0.91	%		0.91	%		0.91	%		0.91	%		0.95	%
Allowance/nonperforming loans and leases		163.25	%		169.00	%		158.11	%		159.34	%		172.84	%		163.25	%
Net loan and lease losses (recoveries) annualized/total average loans and leases		0.00	%		0.01	%		0.00	%		0.01	%		0.02	%		0.01	%

 

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued

																Year-Ended
Capital Adequacy (period-end)		Dec-18			Sep-18			Jun-18			Mar-18			Dec-17			Dec-18
Tangible common equity/tangible assets		7.81	%		7.49	%		7.36	%		7.29	%		7.24	%		7.81	%

 

Profitability
Return on average assets *		1.12	%		1.23	%		1.32	%		1.25	%		0.15	%		1.23	%
Return on average equity *		12.38	%		13.89	%		15.13	%		14.41	%		1.64	%		13.93	%
Net interest margin (TE) *		3.34	%		3.35	%		3.36	%		3.42	%		3.42	%		3.37	%
* 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-18			Sep-18			Jun-18			Mar-18			Dec-17			Dec-18
Net income available to common shareholders	$	18,911		$	20,902		$	22,059		$	20,436		$	2,457		$	82,308
Income attributable to unvested stock-based compensation awards		291			318			359			347			26			1,315
Net earnings allocated to common shareholders		18,620			20,584			21,700			20,089			2,431			80,993
Remeasurement of net deferred taxes		0			0			0			0			14,944			0
Gain on sale of real estate, net of tax		0			0			2,227			0			0			2,227
Write-down of impaired leases, net of tax		0			(388	)		(1,527	)		0			0			(1,915	)
Net income (Non-GAAP)		18,620			20,972			21,000			20,089			17,375			80,681
Weighted average shares outstanding (diluted)	15,135,750			15,144,491			15,135,970			15,112,518			15,103,906			15,132,257
Adjusted diluted earnings per share (Non-GAAP)	$	1.23		$	1.38		$	1.39		$	1.33		$	1.15		$	5.33

 

Non-GAAP Disclosure - Tangible Book Value Per Share
Total common equity	$	619,459		$	597,636		$	589,173		$	577,967		$	574,780		$	619,459
Less:  Goodwill and intangibles (9)		99,106			99,543			99,983			100,436			100,887			99,106
Tangible common equity		520,353			498,093			489,190			477,531			473,893			520,353
Ending shares outstanding	15,312,377			15,277,915			15,278,430			15,285,335			15,265,614			15,312,377
Tangible book value per share (Non-GAAP)	$	33.98		$	32.60		$	32.02		$	31.24		$	31.04		$	33.98

 

 

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued

Non-GAAP Disclosure - Year to date adjusted diluted earnings per share
		Dec-18			Dec-17
Net income available to common shareholders	$	82,308		$	52,494
Income attributable to unvested stock-based compensation awards		1,315			818
Net earnings allocated to common shareholders		80,993			51,676
Remeasurement of net deferred taxes		0			14,944
Gain on sale of real estate, net of tax		2,227			0
Write-down of impaired leases, net of tax		(1,915)			0
Net income (Non-GAAP)		80,681			66,620
Weighted average shares outstanding (diluted)		15,132,257			15,073,255
Adjusted diluted earnings per share (Non-GAAP)	$	5.33		$	4.42

 

(1) Federal Reserve peer ratio as of September 30, 2018, 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, 2017.

(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.