Tompkins Financial Corporation (“Tompkins” or “the Company”) reported a strong third quarter in 2024, with diluted earnings per share (EPS) reaching $1.30. This marks an 18.2% increase from the previous quarter and a notable turnaround from the $(2.35) EPS loss in Q3 2023. The company’s net income rose to $18.6 million, a substantial 155.9% increase over last year’s Q3 loss of $(33.4) million. The gains in EPS and net income were largely influenced by the absence of significant securities sales losses, which had impacted results in the previous year.
For the nine months ending September 30, 2024, Tompkins reported diluted EPS of $3.59, compared to a $(0.39) loss in the same period of 2023. Year-to-date net income was $51.2 million, marking a $56.7 million improvement from the $(5.5) million loss reported the prior year.
CEO Commentary and Key Highlights
Tompkins’ President and CEO, Stephen Romaine, highlighted the company’s growth, noting an 18% quarterly increase in net income, driven by a strengthening net interest margin, loan growth, and strong revenue from fee-based services. Noninterest income comprised 31% of the company’s total revenue, reflecting growth in diversified revenue streams. Noninterest expenses for the year-to-date were down 1.5% compared to last year, as lower operational costs supported profitability.
Selected Financial Highlights:
- Net Interest Margin: Improved to 2.79% in Q3 2024, compared to 2.73% in Q2 2024.
- Fee-Based Service Revenue: Increased by 3.2% year-over-year in Q3, driven by insurance, wealth management, and service charges.
- Loan Growth: Total loans grew by 8.2% year-over-year, reaching $6.6 billion.
- Capital Ratios: Tier 1 capital ratio rose slightly to 9.19% from 9.15% in Q2 2024.
Detailed Segment Performance
- Net Interest Income: Tompkins’ net interest income was $53.2 million, a 4.4% increase from Q2 2024, due to higher average loan balances and loan yield. For the nine months, net interest income totaled $154.8 million, down slightly (1.5%) from 2023.
- Noninterest Income: Q3 2024 saw noninterest income rise to $23.4 million, a 156.2% increase over Q3 2023. Year-to-date, noninterest income reached $67.3 million, up by 881.7% from last year, primarily due to the absence of large securities losses reported in 2023.
- Noninterest Expense: In Q3, noninterest expenses were stable year-over-year at $49.9 million. Year-to-date expenses totaled $149.7 million, a 1.5% decrease from 2023, reflecting reductions in legal, marketing, and travel costs, partially offset by a rise in FDIC insurance expenses.
Asset Quality and Credit Loss Provision
Tompkins increased its allowance for credit losses to 0.94% of total loans by the end of Q3 2024. The provision for credit losses was $2.2 million, reflecting loan growth and updated economic forecasts. Nonperforming loans were stable from Q2 2024 but higher year-over-year due to increased commercial real estate loan activity.
Capital and Liquidity Position
Tompkins maintained robust capital levels, with a total capital-to-risk-weighted asset ratio of 13.21% at the end of Q3 2024. Liquidity remained strong, with $1.4 billion available through various funding sources.