Reports Growth in Fourth Quarter Financial Results, Tompkins Financial Corporation
Tompkins Financial Corporation (“Tompkins” or the “Company”) reports impressive financial results for both the fourth quarter and full year of 2024, showcasing strong growth in net interest income, fee-based services, and disciplined expense management.
For the fourth quarter of 2024, diluted earnings per share (EPS) reported at $1.37, marking an increase of 5.4% from the prior quarter and 30.5% from the same period in 2023. Net income for the quarter reported at $19.7 million, up 5.5% from the third quarter of 2024 and 31.0% from the fourth quarter of 2023. This growth reports solid performance across various business segments, including loans, deposits, and fee-based services.
For the full year 2024, Tompkins reports a dramatic turnaround in performance. Diluted EPS for 2024 reported at $4.97, a remarkable 653.0% increase compared to 2023. Net income for 2024 reported at $70.9 million, an increase of $61.3 million over the prior year. The 2023 results were significantly impacted by a $52.9 million after-tax loss related to the sale of $510.5 million in available-for-sale debt securities. Earnings for 2024 were bolstered by higher net interest income, growth in fee-based businesses, and reduced operating expenses, the details of which the Company reports in this announcement.
Stephen Romaine, President and CEO of Tompkins, commented, “We are pleased to report increased earnings for both the year and the fourth quarter of 2024. Our improved results report strong revenue growth across multiple business areas, supported by solid loan and deposit growth as well as expansion in our fee-based services. As we head into the new year, we remain well-positioned to continue driving growth through our established customer relationships.”
SELECTED HIGHLIGHTS
- Net Interest Margin: For the fourth quarter of 2024, Tompkins reports net interest margin at 2.93%, an improvement from 2.79% in the third quarter and 2.82% in the same period of 2023. The increase was largely due to lower funding costs, resulting from a more favorable deposit mix and lower market interest rates.
- Fee-Based Services: Revenue from fee-based services, which include insurance, wealth management, service charges on deposit accounts, and card fees, reported at $18.0 million for the fourth quarter, up 7.7% from the previous year. This growth was driven by higher insurance commissions, wealth management fees, and service charges.
- Noninterest Expenses: Tompkins reports noninterest expenses for the fourth quarter of 2024 at $50.0 million, down $1.3 million (or 2.6%) compared to the same period in 2023. The decrease in expenses was driven by reductions in technology, marketing, and professional fees.
- Loan and Deposit Growth: Total loans reported at December 31, 2024, were $5.9 billion, reflecting an increase of $138.7 million (or 2.4%) from the previous quarter and a 7.4% increase compared to the same period in 2023. Total deposits reported at year-end were $6.5 billion, which was down slightly (1.6%) from the prior quarter but up 1.1% from the previous year.
- Regulatory Capital: Tompkins’ Tier 1 capital ratio at December 31, 2024, reported at 9.27%, up from 9.19% at the end of the third quarter and 9.08% at the same time last year. This healthy capital ratio reports the Company’s strong financial foundation.
NET INTEREST INCOME
Net interest income for the fourth quarter of 2024 reported at $56.3 million, an increase of $3.1 million (or 5.8%) from the third quarter of 2024 and $3.9 million (or 7.5%) from the fourth quarter of 2023. The growth was primarily due to an improved net interest margin and increased loan balances. For the full year 2024, net interest income reported at $211.1 million, marking a 0.8% increase compared to the prior year.
The net interest margin for the fourth quarter of 2024 reports at 2.93%, up 14 basis points from the third quarter of 2024 and up 11 basis points from the fourth quarter of 2023. The improvement was driven by lower funding costs due to growth in average deposits and a favorable interest rate environment.
Average loans for the fourth quarter were up $100.9 million (or 1.7%) from the prior quarter, and $445.1 million (or 8.1%) compared to the same period in 2023. Commercial real estate and commercial and industrial loans contributed significantly to the increase, as Tompkins reports continued strength in lending.
NONINTEREST INCOME
Noninterest income for the fourth quarter of 2024 reported at $20.8 million, up 10.5% from the same period in 2023. The increase was primarily driven by a $698,000 (or 9.0%) rise in insurance commissions, a $456,000 (or 10.3%) increase in wealth management fees, and a $763,000 (or 38.6%) gain in other income, which includes gains on loan sales and derivative swap fee income.
For the year ended December 31, 2024, noninterest income reported at $88.1 million, an impressive increase of 760.5% compared to 2023. This surge was largely due to the $70.0 million pre-tax loss incurred in 2023 from the sale of available-for-sale debt securities.
NONINTEREST EXPENSE
Tompkins’ noninterest expenses totaled $50.0 million for the fourth quarter of 2024, down from the previous year. The decline was driven by reductions in technology and marketing expenses, as well as lower professional fees. For the full year, noninterest expenses reported at $199.6 million, a 1.8% decrease from 2023. This reduction is a result of disciplined cost management, including a $5.1 million (or 9.1%) decrease in other operating expenses, as the Company reports success in its efficiency efforts.
ASSET QUALITY
Tompkins’ asset quality reports solid performance throughout 2024. The allowance for credit losses stood at 0.94% of total loans as of December 31, 2024, up slightly from 0.92% at the end of the previous year. The ratio of the allowance to nonperforming loans improved to 111.06%, compared to 88.51% at the end of the third quarter.
Nonperforming assets at December 31, 2024, reported at 0.80% of total assets, unchanged from the previous year. Nonperforming loans decreased by $11.4 million compared to the third quarter of 2024, reflecting improvements in loan quality, as Tompkins reports steady progress in credit risk management.
CAPITAL AND LIQUIDITY POSITION
Tompkins’ capital ratios remained strong, with a total capital ratio of 13.08% as of December 31, 2024, and a Tier 1 capital ratio of 9.27%. These ratios are well above the regulatory minimums for well-capitalized institutions, underscoring the Company’s solid financial position. The Company reports these ratios as a key indicator of its stability.
Tompkins also maintained a strong liquidity position, with ready access to liquidity totaling $1.3 billion, or 16.4% of total assets as of December 31, 2024, ensuring the Company’s continued operational flexibility.
ABOUT TOMPKINS FINANCIAL CORPORATION
Tompkins Financial Corporation is a diversified financial services company serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania. The Company is the parent of Tompkins Community Bank, Tompkins Insurance Agencies, Inc., and Tompkins Financial Advisors, providing a full range of banking, wealth management, and insurance services.
In summary, Tompkins Financial Corporation reports a strong and consistent recovery in 2024, with growth across key areas, robust capital, and solid asset quality. The Company reports being well-positioned to continue its success into 2025 and beyond.
