10-K: Tompkins Financial Corporation Reports Strong 2024 Earnings, Fueled by Increased Net Interest Income and Fee-Based Growth

Sentiment:

Annual Results 28 February 2025 3:39 PM

📋All filings for Tompkins Financial CORP

Tompkins Financial Corporation announces a significant increase in 2024 net income and diluted earnings per share, driven by higher net interest income, growth in fee-based businesses, and lower operating expenses.

Better than expectedNet income increased significantly to $70.9 million in 2024, compared to $9.5 million in 2023.Diluted earnings per share rose to $4.97 in 2024, a substantial increase from $0.66 in the previous year.ROE improved to 10.33% in 2024, compared to 1.50% in 2023.ROA increased to 0.90% in 2024, up from 0.12% in the previous year.

Summary

Tompkins Financial Corporation reported a net income of $70.9 million for 2024, a substantial increase from $9.5 million in 2023.
Diluted earnings per share rose to $4.97 in 2024, compared to $0.66 in the previous year.
The 2023 results were impacted by an after-tax loss of $52.9 million from the sale of available-for-sale debt securities.
Excluding the impact of realized losses on the sales of investment securities, adjusted net income was $70.8 million for 2024, up $8.4 million, or 13.5%, when compared to the prior year.
Return on average equity (ROE) was 10.33% in 2024, a significant increase from 1.50% in 2023.
Return on average assets (ROA) also improved to 0.90% in 2024, compared to 0.12% in the previous year.
Net interest income increased slightly to $211.1 million in 2024, driven by higher average loan balances and yields.
Noninterest income increased significantly to $88.1 million in 2024, primarily due to the absence of losses on securities transactions that affected 2023.
Noninterest expense decreased to $199.6 million in 2024, reflecting lower technology, marketing, and nonrecurring expenses.
Total assets reached $8.1 billion at the end of 2024, up from $7.8 billion at the end of 2023.
Total loans increased to $6.0 billion, while total securities decreased to $1.5 billion.
Total deposits increased to $6.5 billion, and total borrowings increased to $790.2 million.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with significant improvements in key financial metrics. While there are some challenges and risks, the overall tone is optimistic.

Positives

Significant increase in net income and diluted earnings per share.
Improved ROE and ROA.
Slight increase in net interest income.
Significant increase in noninterest income.
Decrease in noninterest expense.
Increase in total assets and loans.
Increase in the ratio of allowance to total loans and leases.

Negatives

The 2023 results were negatively impacted by an after-tax loss of $52.9 million from the sale of available-for-sale debt securities.
Net interest margin decreased for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Noninterest bearing deposit balances in 2024 decreased $156.8 million or 7.9% versus 2023.
Net loan charge-offs totaled $2.5 million in 2024, compared to net recoveries of $721,000 in 2023.
Loans past due 30-89 days and accruing interest totaled $28.8 million at year-end 2024 compared to $4.2 million at year-end 2023.

Risks

Credit risk associated with commercial real estate and commercial business loans.
Market risk due to fluctuations in interest rates.
Liquidity risk related to funding sources and the soundness of other financial institutions.
Operational risks, including fraud and cybersecurity threats.
Legal, compliance, and regulatory risks in a highly regulated environment.
Strategic risks associated with acquisitions and the development of new financial products and services.
Climate change could have a material negative impact on the Company and clients.

Future Outlook

The simulation model reflects a net interest margin that is increasing over the next 12 to 18 months, assuming interest rates remain unchanged.

Industry Context

The document mentions peer group data from the FRB's "Bank Holding Company Performance Report", which covers banks and bank holding companies with assets between $3.0 billion and $10.0 billion. Tompkins 2024 ROE compared favorably with a peer ratio of 9.67%, while ROA trailed by 3 basis points when compared to peer ROA of 0.93%.

Comparison to Industry Standards

Tompkins' 2024 ROE compared favorably with a peer ratio of 9.67%, while ROA trailed by 3 basis points when compared to peer ROA of 0.93%.
The peer group data is derived from the FRB's "Bank Holding Company Performance Report", which covers banks and bank holding companies with assets between $3.0 billion and $10.0 billion as of September 30, 2024.
The Company's total nonperforming assets as a percentage of total assets was 0.80% at both December 31, 2024 and December 31, 2023, compared to its peer group's most recent ratio of 0.49% at September 30, 2024.

Legal Proceedings

The Company is subject to various claims and legal actions that arise in the ordinary course of conducting business.
As of December 31, 2024, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against the Company or its subsidiaries would be material to the Companys consolidated financial position.

Stakeholder Impact

The company's performance directly impacts shareholders through increased earnings and potential dividend payments.
Employees benefit from profit-sharing plans and incentive compensation programs.
Customers are served through the banking, insurance, and wealth management segments.
The company's lending activities support businesses and communities in its market areas.

Key Dates

Date	Description
1836	Tompkins Trust Company (later Tompkins Community Bank) began operating in Ithaca, New York.
1956	Bank Holding Company Act of 1956.
1970	Bank Secrecy Act of 1970.
1974	Employee Retirement Income Security Act of 1974.
1986	Money Laundering Control Act of 1986.
1995	Tompkins Financial Corporation was organized as a bank holding company.
1995	Private Securities Litigation Reform Act of 1995.
1999	Gramm-Leach-Bliley Act of 1999.
2001	Tompkins Insurance Agencies, Inc. was established.
2001	Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act).
2002	Sarbanes-Oxley Act of 2002.
January 1, 2008	Dodd-Frank Act permanently increased the maximum amount of deposit insurance to $250,000 per deposit category, per depositor, per institution retroactive to this date.
2009	2009 Equity Plan.
2010	Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
January 2021	Tompkins combined its four wholly-owned banking subsidiaries into one bank, Tompkins Community Bank.
January 2021	Anti-Money Laundering Act of 2020 (AMLA).
October 21, 2021	The Financial Stability Oversight Council published a report identifying climate-related financial risks as an emerging threat to financial stability.
October 22, 2021	The Companys Board of Directors authorized a share repurchase plan (the 2021 Repurchase Plan).
June 21, 2022	The FDIC adopted an Amended Restoration Plan and a notice of proposed rulemaking to increase the likelihood that the reserve ratio would be restored to at least 1.35% by September 30, 2028.
October 2022	The SEC adopted a final rule pursuant to the Dodd-Frank Act directing the national securities exchanges and associations to implement listing standards that require listed companies to adopt policies mandating the recovery or clawback of incentive-based, executive compensation in connection with accounting restatements.
January 1, 2023	The FDIC's Board of Directors also increased initial base deposit insurance assessment rate schedules uniformly by 2 basis points, effective in the first quarterly assessment period of 2023.
July 20, 2023	The Companys Board of Directors authorized a share repurchase plan (the 2023 Repurchase Plan).
October 24, 2023	The Federal Reserve Board, FDIC, and OCC issued a joint final rule that amends the regulations implementing the Community Reinvestment Act to better achieve the purposes of the law.
October 2023	The NYSE American's listing standards pursuant to the SEC's rule became effective.
November 16, 2023	The FDIC issued a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
March 2024	The SEC issued a final rule which would require public issuers to significantly expand the scope of climate-related disclosures in their SEC filings.
April 4, 2024	The SEC issued a stay of the final rule pending the completion of judicial review of petitions seeking review of the final rules.
May 2024	The agencies reproposed the text of the 2016 proposed regulations.
May 13, 2025	Date of the 2025 Annual Meeting of stockholders.

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