Tompkins Financial Corporation Reports Record First Quarter
ITHACA, NY - Tompkins Financial Corporation (NYSE American: TMP) Tompkins Financial Corporation reported diluted earnings per share of $1.72 for the first quarter of 2021, 224.5% over the first quarter of 2020. Net income was $25.6 million for the first quarter of 2021, an increase of 222.4% from the $7.9 million reported for the same period in 2020.
President and CEO, Mr. Stephen Romaine commented, "We are extremely pleased to start off 2021 with record
quarterly earnings. Results for the quarter, when compared to the same period last year, reflected favorable
revenue trends for all three business lines, including increased net interest income, increased insurance
commissions, and increased investment services fees. At the same time, expenses for the quarter were down
from the same quarter last year. Growth comparisons to the previous year are significantly impacted by the
change in provision for credit losses from a $16.3 million expense in the first quarter of 2020, compared to a
$2.5 million credit in the first quarter of 2021. The provision for the first quarter of 2020 reflected the highly
uncertain economic conditions related to the onset of the COVID-19 pandemic and economic forecasts and
other model assumptions relied upon by management in determining the allowance.”
SELECTED HIGHLIGHTS FOR THE FIRST QUARTER:
• Diluted earnings per share of $1.72 represents the best quarter in the Company's history, and is up
224.5% over the same period in 2020.
• Provision for credit losses was a $2.5 million credit for the first quarter of 2021, compared to an expense
of $16.3 million for the same period last year.
• Total loans of $5.3 billion at March 31, 2021 were up $355.0 million, or 7.2% over March 31, 2020.
Loan growth over the prior period includes a $370.0 million increase related to loans originated under
the Small Business Association (SBA) Paycheck Protection Program (PPP).
• Total deposits of $6.9 billion at March 31, 2021, an increase of $1.5 billion, or 28.4% over March 31,
NET INTEREST INCOME
Net interest income was $55.0 million for the first quarter of 2021, up from $53.0 million for the same period in
2020, and down from $57.8 million for the most recent prior quarter. Net interest income for the current quarter
included $2.8 million of net deferred loan fees associated with PPP loans, compared to net deferred loan fees of
$4.5 million in the fourth quarter of 2020. There were no net deferred loan fees related to PPP loans in the first
quarter of 2020. Net interest income in the first quarter of 2021 also benefited from lower rates paid on deposit
products due to lower market interest rates.
Average loans for the quarter ended March 31, 2021 were up $377.3 million, or 7.7% compared to the same
period in 2020. The increase in average loans was mainly in commercial loans, driven largely by PPP loans and
commercial real estate loans. Asset yields for the quarter ended March 31, 2021, were down 84 basis points
compared to the quarter ended March 31, 2020, which reflects the impact of reductions in market interest rates
over the past twelve months as well as the increase in average securities and average interest bearing balances
due from banks. While PPP loans were a significant contributor to average loan growth, increases in
commercial real estate and residential loans were up 5.6% and 1.7%, respectively, over the same period in the
Average total deposits for the first quarter of 2021 were up $1.3 billion, or 25.4% compared to the same period
in 2020. Average noninterest bearing deposits for the three months ended March 31, 2021 were up $540.0
million or 38.3% compared to the three months ended March 31, 2020. Average deposit balances during the
first quarter of 2021 benefited from PPP loan originations, the majority of which were deposited in Tompkins
checking accounts. For the first quarter of 2021, the average rate paid on interest-bearing deposit products
decreased by 47 basis points from the same period in 2020 due to the overall decline in market interest rates.
The total cost of interest-bearing liabilities was 0.38% at March 31, 2021, a decline of 54 basis points from
March 31, 2020.
Net interest margin was 3.01% for the first quarter of 2021, compared to 3.44% reported for the same period in
2020, and 3.12% for the fourth quarter of 2020.
Noninterest income of $20.0 million was up 5.4% compared to the same period in 2020. Growth over the same
quarter last year was supported by a 13.9% increase in insurance commissions and fees, an 11.2% increase in
investment services income, and a 9.2% increase in card services income. These increases were partially offset
by lower deposit fees and lower gains on securities transactions. Noninterest income represented 26.6% of total
revenues for the first quarter of 2021.
Noninterest expense was $45.2 million for the first quarter of 2021, down $549,000, or 1.2%, from the first
quarter of 2020. Salaries and employee benefits were relatively flat when compared to the same quarter last
year. The decrease in noninterest expense for the first quarter of 2021 was primarily attributable to lower
marketing expenses, which were down $447,000 from the first quarter of 2020.
INCOME TAX EXPENSE
The Company's effective tax rate was 20.7% for the first quarter of 2021, compared to 19.4% for the same
period in 2020.
Provision for credit losses for the first quarter of 2021 was a credit of $2.5 million compared to an expense of
$16.3 million for the same period in 2020. Net recoveries for the quarter ended March 31, 2021 were $180,000
compared to charge-offs of $1.2 million reported for the same period in 2020.
The allowance for credit losses represented 0.93% of total loans and leases at March 31, 2021, down from
1.06% at March 31, 2020, and 0.98% at December 31, 2020. Nonperforming loans and leases totaled $47.7
million at March 31, 2021, compared to $30.7 million at March 31, 2020, and $45.8 million at December 31,
2020. The ratio of the allowance to total nonperforming loans and leases was 103.38% at March 31, 2021,
down compared to 170.74% at March 31, 2020, and 112.87% at December 31, 2020. Nonperforming assets
represented 0.59% of total assets at March 31, 2021, up from 0.46% at March 31, 2020, and down from 0.60%
at December 31, 2020.
Special Mention and Substandard loans and leases totaled $185.2 million at March 31, 2021, up compared to
the $90.0 million at March 31, 2020, and down compared to the $189.9 million reported at December 31, 2020.
Total Substandard loans and leases of $68.5 million at March 31, 2021, were in line with December 31, 2020,
and up compared to the $52.9 million reported at March 31, 2020. The increases in nonperforming loans and
leases and Substandard loans compared to prior year, were mainly related to the downgrades of credits in the
loan portfolio related to the hospitality industry, which was significantly impacted by the COVID-19 pandemic.
Included in the nonperforming loans and leases and Substandard loans and leases are 12 loans totaling $35.5
million that are currently in deferral status.
During 2020 and 2021, overall credit quality has been supported by several plans initiated by the Company in
response to the COVID-19 pandemic. As previously announced, Tompkins initiated and participated in a
number of credit initiatives to support customers who have been impacted by the economic conditions
associated with the COVID-19 pandemic. The Company implemented a payment deferral program to assist
both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. As of
March 31, 2021, total loans that continued in a deferral status amounted to approximately $195.6 million,
representing 3.7% of total loans.
As previously noted, the Company participated in the PPP, which provides SBA borrower guarantees for
lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee
compensation-related expenses and certain other eligible business operating costs, all in accordance with the
rules and regulations established by the SBA. The Company began accepting applications for PPP loans on
April 3, 2020, and had funded 2,998 loans totaling approximately $465.6 million when the initial program
ended. As of April 10, 2021, approximately 2,314 of these PPP loans totaling $300.8 million had been forgiven
by the SBA under the terms of the PPP program.
In addition, on January 19, 2021, the Company began accepting both first draw and second draw applications
for the reopening of the PPP program. As of April 10, 2021, the Company had submitted 2,013 applications
totaling $223.4 million to the SBA, of which 1,919 applications totaling $215.9 million had been approved by
the SBA and disbursed to customers.
Capital ratios at March 31, 2021 remained well above the regulatory minimums for well-capitalized institutions.
The ratio of Total Capital to Risk-Weighted Assets improved to 14.62% at March 31, 2021, up from 13.62% at
March 31, 2020, and 14.39% at December 31, 2020. The ratio of Tier 1 capital to average assets was 8.89% at
March 31, 2021, compared to 9.53% at March 31, 2020, and 8.75% at December 31, 2020.
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, and Tompkins Insurance Agencies, Inc., and offers wealth management services
through Tompkins Financial Advisors. For more information on Tompkins Financial, visit
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are difficult to predict and many of which are beyond the control of the Company, that could cause actual
results of the Company to differ materially from those expressed and/or implied by forward-looking statements.
The following factors, in addition to those listed as Risk Factors in Item 1A of our Annual Reports on Form 10-
K and our Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission, are among
those that could cause actual results to differ materially from the forward-looking statements: changes in general
economic, market and regulatory conditions; the severity and duration of the COVID-19 pandemic and the
impact of COVID-19 (including the government’s response thereto) on economic and financial markets,
potential regulatory actions, and modifications to our operations, products, and services relating thereto;
disruptions in our and our customers’ operations and loss of revenue due to pandemics, epidemics, widespread
health emergencies, government-imposed travel/business restrictions, or outbreaks of infectious diseases such as
the coronavirus, and the associated adverse impact on our financial position, liquidity, and our customers’
abilities to repay their obligations to us or willingness to obtain financial services products from the Company;
the development of an interest rate environment that may adversely affect the Company’s interest rate spread,
other income or cash flow anticipated from the Company’s operations, investment and/or lending activities;
changes in laws and regulations affecting banks, bank holding companies and/or financial holding companies,
such as the Dodd-Frank Act, Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection
Act; legislative and regulatory changes in response to COVID-19 with which we and our subsidiaries must
comply, including the CARES Act and the Consolidated Appropriations Act, 2021 and the rules and regulations
promulgated thereunder, and state and local government mandates; technological developments and changes;
the ability to continue to introduce competitive new products and services on a timely, cost-effective basis;
governmental and public policy changes, including environmental regulation; reliance on large customers;
uncertainties arising from national and global events, including the potential impact of widespread protests, civil
unrest, and political uncertainty on the economy and the financial services industry; and financial resources in
the amounts, at the times and on the terms required to support the Company’s future businesses. The Company
does not undertake any obligation to update its forward-looking statements.