Tompkins Financial Corporation Reports Record Earnings Per Share for the Fourth Quarter of 2025
Tompkins Financial Corporation (NYSE:TMP)Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share (GAAP) of $6.70 for the fourth quarter of 2025, up $5.33 or 389.1% compared to the fourth quarter of 2024. The Company had record operating diluted earnings per share (non-GAAP) for the fourth quarter of 2025 of $1.78. A reconciliation of these amounts can be found on page 14 of this press release. Net income for the fourth quarter of 2025 was $96.2 million, up $76.6 million, or 389.6%, compared to the $19.7 million reported for the fourth quarter of 2024.For the year ended December 31, 2025, diluted earnings per share (GAAP) was $11.24, up $6.27 or 126.2% from the $4.97 reported for the year ended December 31, 2024. The Company had record operating diluted earnings per share (non-GAAP) for year ended December 31, 2025 of $6.31. A reconciliation of these amounts can be found on page 14 of this press release. Net income was $161.1 million for the year ended December 31, 2025, up $90.2 million or 127.3%, compared to $70.9 million reported for 2024.The increase in diluted earnings per share and net income for both the fourth quarter and full year periods included the sale of all of the issued and outstanding shares of capital stock of the Company's wholly-owned subsidiary, Tompkins Insurance Agencies, Inc. ("TIA") to Arthur J. Gallagher & Co. ("Gallagher") (NYSE:AJG) for approximately $223.0 million in cash, subject to customary purchase price adjustments. The transaction generated a pre-tax gain of $188.2 million, recognized in non-interest income. The Company also incurred $4.3 million in expenses related to the sale of TIA, which are reported in noninterest expense. Partially offsetting the increase for both the fourth quarter and full year periods was the sale of $564.2 million of available-for-sale debt securities during the fourth quarter of 2025, which resulted in a pre-tax loss of $78.7 million. The Company expects this sale to favorably impact securities revenue in future periods as the securities sold had an average yield of 1.56%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 4.52%. The weighted average life of the securities purchased and sold was approximately 5.5 years.Tompkins President and CEO, Stephen Romaine, commented, "We are pleased to report record quarterly net income and operating earnings for the fourth quarter of 2025. Our improved results were driven by strong loan and deposit growth, both of which were up over 7% for the year, and by an expanding net interest margin which was up 49 basis points over the fourth quarter of 2024. During the fourth quarter of 2025, we announced the sale of Tompkins Insurance Agencies, Inc. and restructured our balance sheet, which we believe leaves us with continued momentum heading into 2026 and provides us with capital to support strategic investments for the future."SELECTED HIGHLIGHTS FOR THE PERIOD:Net interest margin improved to 3.42% in the fourth quarter of 2025, up 22 basis points from the immediate prior quarter, and up 49 basis points from the fourth quarter of 2024.Total loans at December 31, 2025 were up $158.2 million, or 2.5% compared to September 30, 2025 (10.1% on an annualized basis), and up $426.3 million, or 7.1%, from December 31, 2024.Total deposits at December 31, 2025 were $6.9 billion, down $115.3 million, or 1.6% compared to the most recent prior quarter end, and up $466.0 million, or 7.2%, from December 31, 2024.Total average cost of funds of 1.71% for the fourth quarter of 2025 was down 12 basis points compared to the most recent prior quarter, and down 17 basis points compared to the same period of the prior year.Loan to deposit ratio at December 31, 2025 was 92.9%, compared to 89.2% at September 30, 2025, and 93.0% at December 31, 2024.Regulatory Tier 1 capital to average assets was 10.62% at December 31, 2025, up compared to 9.41% at September 30, 2025, and 9.27% at December 31, 2024.Common equity book value per share (GAAP) increased 19.1% and tangible book value per share (Non-GAAP) increased 24.6% over the most recent prior quarter. A reconciliation of these amounts can be found on page 14 of this press release.NET INTEREST INCOMENet interest income was $69.1 million for the fourth quarter of 2025, up $5.2 million or 8.1% compared to the third quarter of 2025, and up $12.8 million or 22.7% compared to the fourth quarter of 2024. For the year ended December 31, 2025, net interest income was $249.7 million, up $38.6 million or 18.3% when compared to 2024. The increase in net interest income in the fourth quarter of 2025 and the full year period compared to the most recent prior quarter and the same periods in 2024 was due to improvement in net interest margin, which is discussed below, and growth in average loans.Net interest margin was 3.42% for the fourth quarter of 2025, compared to 3.20% reported for the third quarter of 2025, and 2.93% reported for the fourth quarter of 2024. Net interest margin of 3.17% for the twelve months ended December 31, 2025 was up 38 basis points over 2024. The increases in net interest margin reflect growth in average loan balances, improved yields on average earnings assets, and lower funding costs as a result of lower rates and improved funding mix. Average yield on securities for the fourth quarter of 2025 was up 45 basis points over the third quarter of 2025 and up 68 basis points over the fourth quarter of 2024, mainly a result of the reinvestment within the portfolio at higher yields.Average loans for the quarter ended December 31, 2025 were up $120.2 million, or 1.9%, over the most recent prior quarter, and were up $404.8 million, or 6.8%, compared to the same prior year period. The increase in average loans over both prior periods was mainly in the commercial real estate and commercial and industrial portfolios. The average yield on interest-earning assets for the quarter ended December 31, 2025 was 4.98%, an increase of 8 basis points from 4.90% for the quarter ended September 30, 2025, and up 31 basis points from 4.67% for the quarter ended December 31, 2024.Average total deposits of $7.0 billion for the fourth quarter of 2025 were up $126.3 million, or 1.8%, compared to the third quarter of 2025, and up $390.8 million, or 5.9%, compared to the fourth quarter of 2024. The cost of interest-bearing deposits of 2.18% for the fourth quarter of 2025 was down 8 basis points compared to the most recent prior quarter, and down 13 basis points from 2.31% for the fourth quarter of 2024. The ratio of average noninterest bearing deposits to average total deposits for the fourth quarter of 2025 was 27.4% compared to 27.6% for the third quarter of 2025, and 28.0% for the fourth quarter of 2024. The average cost of interest-bearing liabilities for the fourth quarter of 2025 was 2.30%, down 15 basis points when compared to the most recent prior quarter, and down 23 basis points from the same period in 2024.NONINTEREST INCOMENoninterest income of $125.8 million for the fourth quarter of 2025 was up $104.9 million or 503.8% compared to the fourth quarter of 2024. Year-end noninterest income of $196.9 million was up $108.7 million or 123.4% compared to the same period in 2024. The increase in noninterest income is mainly due to the above-mentioned sale of TIA to Gallagher during the fourth quarter of 2025 resulting in a pre-tax gain of $188.2 million in other income, which was partially offset by the above-mentioned sale of available-for-sale securities at a pre-tax loss of $78.7 million. For the three and twelve months ended December 31, 2025, investment services income was up 3.6% and 2.7%, respectively over the same periods prior year, while card services income was down 2.9% and 4.6%, respectively over the same periods. Insurance revenue for the three and twelve months ended December 31, 2025 was down 63.7% and 9.0%, respectively, compared to the same periods in 2024, as a result of the sale of TIA during the fourth quarter of 2025.NONINTEREST EXPENSENoninterest expense was $54.1 million for the fourth quarter of 2025, up $4.2 million or 8.3% compared to the same period in 2024. Noninterest expense for the full year ended December 31, 2025 was $210.2 million, an increase of $10.6 million or 5.3% compared to the $199.6 million reported for 2024. As previously stated, noninterest expense included $4.3 million of expenses related to the sale of TIA in the fourth quarter of 2025. Increases for both periods over the prior year periods were mainly in salaries and employee benefits, which were up $3.0 million or 8.9% for the fourth quarter of 2025, and up $7.7 million or 6.0% for the year ended December 31, 2025, compared to the same periods in 2024. The increases were a result of the expenses related to the sale of TIA and annual merit adjustments. In addition, professional fees were up $1.1 million or 69.6% and up $2.9 million or 45.0% for the fourth quarter and year ended December 31, 2025, compared to the same periods in 2024. The increase in professional fees reflects initiatives to support future growth.INCOME TAX EXPENSEProvision for income tax expense was $43.5 million for an effective rate of 31.1% for the fourth quarter of 2025, compared to $6.0 million for an effective rate of 23.5% for the fourth quarter of 2024. For the year ended December 31, 2025, the provision for income tax expense was $63.8 million for an effective rate of 28.4% compared to provision of $22.0 million for an effective rate of 23.7% for 2024. The fourth quarter and full year periods in 2025 were impacted by the sale of TIA, which added approximately $54.4 million to the provision for income tax expense for 2025. Also impacting both the quarter and full-year periods was a decrease in pre-tax income, due primarily to the above-mentioned realized losses on the sale of certain available-for-sale securities.ASSET QUALITYThe allowance for credit losses was 0.89% of total loans and leases at December 31, 2025, down from 0.95% at September 30, 2025, and from 0.94% at December 31, 2024. The decrease in the allowance for credit losses compared to December 31, 2024 was mainly due to updated economic forecasts for unemployment and gross domestic product for the quarter, as well as improved asset quality. The ratio of the allowance to total nonperforming loans and leases was 120.30% at December 31, 2025, compared to 113.06% at September 30, 2025, and 111.06% at December 31, 2024. The increase in the ratio compared to the fourth quarter of 2024 was due to the decrease in nonperforming loans and leases, discussed in more detail below.Provision for credit losses for the fourth quarter of 2025 was $1.0 million compared to $1.4 million for the fourth quarter of 2024. Provision for credit losses for the year-ended December 31, 2025 was $11.5 million compared to $6.6 million for the same period in 2024. The increase in provision expense for the full year period compared to 2024 was mainly driven by a charge-off of $4.7 million in the second quarter of 2025 on a commercial real estate relationship totaling $18.1 million, and a charge-off of $2.4 million in the fourth quarter of 2025 on a commercial real estate relationship totaling $7.4 million. At the time of the charge-offs, the two commercial real estate relationships had specific reserves of $4.2 million and $1.6 million, respectively. Net charge-offs for the three months ended December 31, 2025 were $3.3 million, compared to $1.1 million for the third quarter of 2025, and $857,000 for the fourth quarter of 2024.Nonperforming assets of $48.2 million represented 0.56% of total assets at December 31, 2025, down from $53.0 million or 0.63% of total assets at September 30, 2025, and down from $65.2 million or 0.80% of total assets at December 31, 2024. The decrease in nonperforming assets at December 31, 2025 compared to prior year end was largely due to one nonperforming commercial real estate loan totaling $14.2 million moving into other real estate owned during the fourth quarter of 2024, and subsequently being sold in the first quarter of 2025. In addition, during the fourth quarter of 2025, a $7.4 million commercial real estate loan was removed from nonaccrual loans, reflecting a payoff of $5.0 million, with a partial charge-off of $2.4 million. Loans past due 30-89 days totaled $8.8 million at December 31, 2025, $7.8 million at September 30, 2025, and $28.8 million at December 31, 2024. The decrease in loans past due 30-89 days when compared to December 31, 2024 was mainly due to one commercial real estate loan totaling $17.3 million being moved to nonaccrual loans and leases in the first quarter of 2025.Special Mention and Substandard loans and leases totaled $134.5 million at December 31, 2025, compared to $144.2 million reported at September 30, 2025, and $111.1 million reported at December 31, 2024.CAPITAL POSITIONCapital ratios at December 31, 2025 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 14.55% at December 31, 2025, compared to 13.27% at September 30, 2025, and 13.07% at December 31, 2024. The ratio of Tier 1 capital to average assets was 10.62% at December 31, 2025, compared to 9.41% at September 30, 2025, and 9.27% at December 31, 2024. Capital ratios at December 31, 2025 were positively impacted by the proceeds of the sale of TIA.During the fourth quarter of 2025, the Company repurchased 22,339 shares of common stock at an aggregate cost of $1.6 million. These shares were purchased under the Company's 2025 Stock Repurchase Plan announced in the third quarter of 2025.LIQUIDITY POSITIONThe Company's liquidity position at December 31, 2025 was consistent with its position at September 30, 2025. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank's Discount Window advances and Federal Home Loan Bank (FHLB) advances. The Company maintained ready access to liquidity of $1.7 billion, or 19.1% of total assets, at December 31, 2025.ABOUT TOMPKINS FINANCIAL CORPORATIONTompkins Financial Corporation is a banking and 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 Community Bank, which offers a full array of products and services, including commercial and consumer banking. Tompkins Community Bank provides wealth management services under the Tompkins Financial Advisors brand, including investment management, trust and estate, financial and tax planning services. For more information on Tompkins Financial, visit www.tompkinsfinancial.com."Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this press release that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", "commit", or "anticipate", as well as the negative and other variations of these terms and other similar words. Examples of forward-looking statements may include statements regarding revenue expectations, growth, and the sufficiency of collateral to cover exposure related to Special Mention and Substandard loans. Forward-looking statements are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company's operations and economic environment, all of which 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 and historical performance. The following factors, in addition to those listed as Risk Factors in Item 1A in our Annual Report 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 and historical performance: changes in general economic, market and regulatory conditions; our ability to attract and retain deposits and other sources of liquidity; gross domestic product growth and inflation trends; the impact of the interest rate and inflationary environment on the Company's business, financial condition and results of operations; other income or cash flow anticipated from the Company's operations, investment and/or lending activities; changes in laws and regulations affecting public companies, banks, bank holding companies and/or financial holding companies, including the Dodd-Frank Act, and other federal, state and local government mandates; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; changing supervisory and regulatory scrutiny of financial institutions; technological developments and changes; cybersecurity incidents and threats; 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; the geographic concentration of our business; the ability to access financial resources in the amounts, at the times, and on the terms required to support the Company's future businesses; and the economic impact, including market volatility, of national and global events, including the response to bank failures, war and geopolitical matters (including the war in Ukraine and the impacts of continued or escalating hostilities in the Middle East), tariffs and trade wars, widespread protests, civil unrest, political uncertainty, and pandemics or other public health crises, and the related changes to customer behavior or credit risk resulting from any of the foregoing. The Company does not undertake any obligation to update its forward-looking statements.TOMPKINS FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF CONDITION(In thousands, except share and per share data) (Unaudited)As ofAs ofASSETS12/31/202512/31/2024 (Audited) Cash and noninterest bearing balances due from banks$50,717 $53,635 Interest bearing balances due from banks 82,100 80,763 Cash and Cash Equivalents 132,817 134,398 Available-for-sale debt securities, at fair value (amortized cost of $1,391,379 at December 31, 2025 and $1,367,123 at December 31, 2024) 1,382,068 1,231,532 Held-to-maturity debt securities, at amortized cost (fair value of $283,860 at December 31, 2025 and $267,295 at December 31, 2024) 312,528 312,462 Equity securities, at fair value 800 768 Loans held for sale 43,440 0 Total loans and leases, net of unearned income and deferred costs and fees 6,446,245 6,019,922 Less: Allowance for credit losses 57,671 56,496 Net Loans and Leases 6,388,574 5,963,426 Federal Home Loan Bank and other stock 32,307 42,255 Bank premises and equipment, net 72,418 76,627 Corporate owned life insurance 77,843 76,448 Goodwill 72,736 92,602 Other intangible assets, net 1,687 2,203 Accrued interest and other assets 151,050 176,359 Total Assets$8,668,268 $8,109,080 LIABILITIES Deposits: Interest bearing: Checking, savings and money market 3,742,402 3,558,946 Time 1,298,393 1,068,375 Noninterest bearing 1,896,967 1,844,484 Total Deposits 6,937,762 6,471,805 Federal funds purchased and securities sold under agreements to repurchase 95,569 37,036 Other borrowings 564,446 790,247 Other liabilities 132,114 96,548 Total Liabilities$7,729,891 $7,395,636 EQUITY Tompkins Financial Corporation shareholders' equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,449,845 at December 31, 2025; and 14,468,013 at December 31, 2024 1,446 1,447 Additional paid-in capital 299,206 300,073 Retained earnings 662,161 537,157 Accumulated other comprehensive loss (19,054) (118,492)Treasury stock, at cost – 104,492 shares at December 31, 2025, and 131,497 shares at December 31, 2024 (5,382) (6,741)Total Equity$938,377 $713,444 Total Liabilities and Equity$8,668,268 $8,109,080 TOMPKINS FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share data) (Unaudited)Three Months EndedYear Ended 12/31/202509/30/202512/31/202412/31/202512/31/2024INTEREST AND DIVIDEND INCOME Loans$87,372 $86,309$78,911 $334,604 $301,970Due from banks 211 187 235 760 741Available-for-sale debt securities 11,509 9,738 8,760 39,287 36,779Held-to-maturity debt securities 1,225 1,224 1,222 4,886 4,881Federal Home Loan Bank and other stock 593 598 894 2,537 3,203Total Interest and Dividend Income 100,910 $98,056$90,022 $382,074 $347,574INTEREST EXPENSE Time certificates of deposits of $250,000 or more 4,527 4,063 4,698 17,237 16,914Other deposits 23,318 24,210 22,856 93,010 87,069Federal funds purchased and securities sold under agreements to repurchase 21 23 11 146 46Other borrowings 3,983 5,882 6,176 21,950 32,443Total Interest Expense 31,849 34,178 33,741 132,343 136,472Net Interest Income 69,061 63,878 56,281 249,731 211,102Less: Provision for credit loss expense 977 2,490 1,411 11,534 6,611Net Interest Income After Provision for Credit Loss Expense 68,084 61,388 54,870 238,197 204,491NONINTEREST INCOME Insurance commissions and fees 3,079 11,282 8,471 35,569 39,100Wealth management fees 5,053 4,979 4,878 20,115 19,589Service charges on deposit accounts 1,819 1,844 1,854 7,258 7,288Card services income 2,835 2,891 2,919 11,502 12,057Gain on sale of TIA 188,241 0 0 188,241 0Other income 3,451 2,557 2,740 12,875 10,061Net gain (loss) on securities transactions (78,715) 11 (33) (78,689) 32Total Noninterest Income 125,763 23,564 20,829 196,871 88,127NONINTEREST EXPENSE Salaries and wages 29,630 27,581 25,870 108,556 101,150Other employee benefits 6,642 6,073 7,429 26,977 26,661Net occupancy expense of premises 3,102 3,173 2,873 12,953 12,634Furniture and fixture expense 1,795 1,825 1,834 7,476 7,666Amortization of intangible assets 27 97 90 292 332Other operating expense 12,939 15,098 11,870 53,958 51,199Total Noninterest Expenses 54,135 53,847 49,966 210,212 199,642Income Before Income Tax Expense 139,712 31,105 25,733 224,856 92,976Income Tax Expense 43,464 7,432 6,045 63,785 22,003Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation 96,248 23,673 19,688 161,071 70,973Less: Net Income Attributable to Noncontrolling Interests 0 0 30 0 123Net Income Attributable to Tompkins Financial Corporation$96,248 23,673 19,658 161,071 70,850Basic Earnings Per Share$6.74 $1.66$1.38 $11.30 $4.98Diluted Earnings Per Share$6.70 $1.65$1.37 $11.24 $4.97Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited) Quarter EndedFull story available on Benzinga.com
