ITHACA, NY – Tompkins Financial Corporation (TMP–NYSE Amex)
Tompkins Financial Corporation reported diluted earnings per share of $0.76 (adjusted for 10% stock dividend approved on January 27, 2010; refer to footnote1) for the fourth quarter of 2009, an 11.8% increase over the $0.68 reported for the fourth quarter of 2008. Net income of $8.2 million for the fourth quarter of 2009, represented an increase of 12.9% over the $7.3 million reported for the same period in 2008.
Full year diluted earnings per share1 of $2.96 were at an all time high and represent a 6.5% increase over the $2.78 reported for the twelve months ended December 31, 2008. Full year net income was $31.8 million in 2009 up 6.7%, compared to $29.8 million in 2008.
Selected highlights for the fourth quarter and year-to-date period are included below:
- Fourth quarter 2009 diluted earnings per share1 up 11.8%, from same period in 2008
- Record full year diluted earnings per share1 of $2.96 in 2009
- Fourth quarter 2009 represented the 11th consecutive quarter of net interest income growth
- Full year return on equity of 13.66%, ranked in top 15% of similar sized bank holding in most recent Federal Reserve performance report 2
- Book value per share1 of $22.87, up 11.2% from December 31, 2008
- Full year dividends per share1 of $1.24, represented the 21st consecutive year of increased dividends per share1
Stephen S. Romaine, President and CEO stated, “We are obviously pleased to report record earnings in a year when the financial services industry has seen significant turmoil and when many in our industry have reported losses. As good as our 2009 results were, comparison of growth in diluted earnings per share between 2009 and 2008 would have been even stronger if certain non-recurring items were excluded from 2009 and 2008 year to date results.” These non-recurring items included: $1.4 million of expense ($0.07 per diluted share) related to the FDIC’s special deposit insurance assessment, which negatively impacted 2009 earnings; and $1.6 million ($0.09 per diluted share) of pre-tax revenue related to the VISA IPO in the first quarter of 2008, which had a favorable impact on 2008 year to date earnings. Please refer to the attached non-GAAP disclosure table for additional details on these items.
Further details on the Company’s performance are discussed below. For the year-to-date period, growth in average assets and average liabilities and growth in certain revenue and expense categories were impacted by the May 2008 acquisition of Sleepy Hollow Bancorp.
Net interest income for the fourth quarter of 2009 was $27.9 million, up 12.5% from the same quarter last year. Net interest income was also up 4.2% over the third quarter of 2009, representing our 11th consecutive quarter of increased net interest income. Net interest income for the year ended December 31, 2009 was $107.0 million, an increase of 18.4% over the prior year. Growth in average earning assets and deposits has contributed to the increase in net interest income in 2009. Total loans were $1.9 billion at December 31, 2009, up 5.4% from December 31, 2008; while total deposits were $2.4 billion at quarter end, up 14.3% from the same period in 2008. The net interest margin for the fourth quarter of 2009 was 3.89%, unchanged from the fourth quarter of 2008, and down slightly from the 3.91% reported for the third quarter of 2009.
The provision for loan and lease losses increased to $2.8 million in the fourth quarter of 2009, compared to $2.1 million in the fourth quarter of 2008. The full year provision for loan and lease losses totaled $9.3 million in 2009, up from $5.4 million in 2008. An increase in net charge-offs, nonperforming loans and general economic conditions all contributed to the increased provision expense this year. Mr. Romaine commented, “Like most banks, we have seen deteriorating trends in asset quality; however, our levels of nonperforming assets and net charge-offs remain well below national averages. It is also encouraging that approximately 57% of our nonperforming loans were less than 30 days past due as of year end 2009. We remain diligent in our monitoring of the credit portfolio, as we recognize that a continuation or worsening of the current economic situation may result in further stress on the portfolio.”
Annualized net charge-offs for the three months ended December 31, 2009, represented 0.25% of average loans compared to 0.17% for the three months ended December 31, 2008. The Company’s net charge-off ratio compares favorably to the most recent Federal Reserve Board peer group2 ratio of 1.46%. Nonperforming assets represented 1.12% of total assets as of December 31, 2009 (up from 0.56% at December 31, 2008), which compares to a Federal Reserve Board peer group1ratio of 3.30%. The Company’s allowance for loan and lease losses totaled $24.4 million at December 31, 2009, which represented 1.27% of total loans, an increase of 24 basis points from a ratio of 1.03% at year-end 2008.
Noninterest income for the fourth quarter of 2009 was $12.1 million, up 17.5% from the same period in 2008. Year-to-date 2009 noninterest income was $46.2 million, roughly flat in comparison to the same period in 2008. As previously mentioned, year-to-date 2008 noninterest income included nonrecurring income of $1.6 million related to the VISA IPO. Full year and quarterly results for 2009 were favorably impacted by net mark-to-market gains on assets and liabilities carried at fair value. Increased residential mortgage origination volumes in 2009 resulted in higher gains on sale of loans, both in the fourth quarter and full year periods in 2009.
Noninterest expenses for the fourth quarter 2009 were $24.9 million, up 9.7% from the same period last year. For the year to date period, noninterest expenses were $96.6 million, an increase of 11.0% over the same period in 2008. Higher FDIC insurance costs were the most significant contributor to the higher expense levels in 2009.FDIC insurance expense, included in other noninterest expense, totaled $1.6 million in the fourth quarter of 2009 compared to $378,000 in the fourth quarter of 2008. For the year to date period, FDIC expense was $5.0 million in 2009, versus $933,000 in 2008. FDIC insurance expense for the year to date period in 2009 includes a special assessment of $1.4 million in the second quarter. Salary and wages, pensions and employee benefits, and occupancy expenses were directly impacted by the May 2008 Sleepy Hollow acquisition with the addition of five staffed branches.
Mr. Romaine concluded, “The challenges facing our industry in this current economic climate are unprecedented. We recognize that maintaining a strong capital base is more important than ever to allow for future growth and the management of risk. We are pleased that we continue to grow equity through retained earnings, and in 2009, we were able to further supplement capital through a private placement offering of Trust Preferred Securities that added over $20 million in regulatory capital.” Capital levels at December 31, 2009, remain comfortably above the regulatory minimums to be considered “well capitalized”, with a ratio of Tier 1 capital to average assets of 7.4%; and a ratio of total capital to risk-weighted assets of 12.1%. These ratios are improved from 6.7% and 10.6%, respectively, at December 31, 2008.
Tompkins Financial Corporation operates 45 banking offices in the New York State markets served by the Company's subsidiary banks - Tompkins Trust Company, The Bank of Castile, and Mahopac National Bank. Through its community banking subsidiaries, the Company provides traditional banking services, and offers a full range of money management services through Tompkins Investment Services (a division of Tompkins Trust Company). The Company offers insurance services through its Tompkins Insurance Agencies, Inc. subsidiary, an independent agency serving individuals and business clients throughout New York State. The Company offers fee-based financial planning and wealth management services through its AM&M Financial Services, Inc. subsidiary. AM&M Financial Services, Inc. is also the parent company to Ensemble Financial Services, Inc., an independent broker dealer and leading outsourcing company for financial planners and investment advisors. Each Tompkins subsidiary operates with a community focus, meeting the unique needs of the communities served.
"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.
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 Share and per share data in this press release have been retroactively adjusted to reflect a 10% stock dividend approved on January 27, 2010 and payable on February 15, 2010, to shareholders of record on February 5, 2010.
2 Federal Reserve peer ratio as of September 30, 2009, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.