United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number 1-12709 Tompkins Financial Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of incor ...

Core Viewpoint - Artelo Biosciences has received positive feedback from the UK's MHRA regarding its clinical study plans for ART12.11, a novel cocrystal of Cannabidiol (CBD) and Tetramethylpyrazine (TMP), which may accelerate its development and market access [1][2][3][4]. Group 1: Regulatory Feedback - The MHRA has agreed that existing nonclinical and clinical evidence for CBD and TMP supports a streamlined clinical trial application for ART12.11 [2]. - The agency confirmed that the proposed first-in-human study design is methodologically sound for characterizing ART12.11's pharmacokinetic profile [2]. - Specific guidance was provided by the MHRA for completing the data package for the Phase 1 trial [2]. Group 2: Innovative Licensing and Access Pathway (ILAP) - ART12.11 may qualify for the ILAP, which aims to accelerate the development and patient access of new therapies through collaboration with regulatory and health bodies [3]. - Artelo plans to evaluate a formal application for ILAP in the coming months, aligning with the program's criteria due to ART12.11's potential to address unmet needs in anxiety and depression [3]. Group 3: Clinical Efficacy and Comparison - Nonclinical studies have shown ART12.11's promising profile compared to traditional antidepressants and CBD alone [4]. - In a depression model, ART12.11 demonstrated efficacy comparable to sertraline (Zoloft) and superior cognitive restoration [4]. - In a rodent model of stress-induced anxiety and depression, ART12.11 outperformed CBD alone, even at a higher dosage of CBD [4]. Group 4: Financial and Market Implications - The regulatory assurance from the MHRA is expected to reduce expenses for the ART12.11 program [5]. - An accelerated development strategy could lead to a longer period of market exclusivity, with patents valid in 20 countries until the end of 2038 [5]. - Artelo aims to finalize preparations to initiate clinical studies for ART12.11 early next year [5]. Group 5: Product Overview - ART12.11 is a proprietary cocrystal composition of CBD and TMP, exhibiting better pharmacokinetics and improved efficacy compared to other CBD forms [6]. - Enhanced pharmaceutical properties of ART12.11 may lead to increased safety and efficacy in humans, making it a preferred CBD pharmaceutical composition [6]. - The U.S. patent for ART12.11 is enforceable until December 10, 2038, with additional patents granted in 19 countries [6].

Core Insights - Tompkins Financial reported strong Q2 2025 results, with both GAAP earnings per share and revenue exceeding Wall Street forecasts, driven by growth in core banking activities and improved net interest margin [1][5][12] Financial Performance - Diluted earnings per share (GAAP) for Q2 2025 reached $1.50, surpassing analyst expectations of $1.43 and the previous year's $1.10, marking a 36.4% year-over-year increase [2][5] - Revenue for Q2 2025 was $82.6 million, exceeding the anticipated $81.1 million and up 13.7% from $72.7 million in Q2 2024 [2][5] - Net interest margin improved to 3.08% in Q2 2025 from 2.73% in Q2 2024, reflecting better loan yields and modest balance sheet growth [2][5] - Total loans increased to $6.17 billion, up $410.8 million or 7.1% year-over-year, with significant growth in commercial real estate and business lending [6][12] - Total deposits reached $6.7 billion, with a loan-to-deposit ratio of 91.9% as of Q2 2025 [6] Asset Quality - Nonperforming assets decreased to 0.63% of total assets from 0.79% a year earlier, indicating improved asset quality [2][7] - A provision for credit loss expense of $2.8 million was recorded, influenced by a $4.7 million charge-off from a single commercial real estate loan [7][14] - Despite the charge-off, the ratio of loan loss reserves to total loans was 0.95%, and the ratio of loan loss reserves to nonperforming loans rose to 111.55% [7][14] Strategic Focus - Tompkins Financial emphasizes a community-focused banking model, maintaining close ties with local customers to support stable deposit bases and quick lending decisions [3][10] - Recent strategic efforts include investing in digital banking technology, managing competition from larger banks and fintechs, and recruiting skilled teams [4][11] - The company has a robust capital position, with Tier 1 capital at 9.36% of average assets and liquidity at $1.5 billion, representing 18.0% of total assets [9][15] Future Outlook - Management expressed confidence in the bank's growth potential and capital flexibility, supported by a solid balance sheet and a recently authorized share repurchase program [16] - Investors are advised to monitor asset quality, particularly in commercial real estate loans, and the impact of rising personnel and operating expenses on margins [17]

Tompkins Financial Corporation Reports Improved Second Quarter Financial Results [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Tompkins Financial Corporation reported strong financial results for the second quarter of 2025, with significant year-over-year and sequential growth in net income and earnings per share, primarily driven by net interest margin expansion and solid growth in average loans, deposits, and fee-based services revenue Q2 2025 Earnings Summary | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change (QoQ) | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Diluted EPS | $1.50 | $1.37 | $1.10 | +9.5% | +36.4% | | Net Income | $21.5M | $19.7M | $15.7M | +9.1% | +36.9% | Year-to-Date 2025 Earnings Summary | Metric | H1 2025 | H1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Diluted EPS | $2.87 | $2.29 | +25.3% | | Net Income | $41.2M | $32.6M | +26.4% | - CEO Stephen Romaine attributed the positive results to net interest margin expansion and broad-based business growth, highlighting year-to-date average loan growth of **7.5%**, average deposit growth of **5.2%**, and fee-based services revenue growth of **4.5%**[3](index=3&type=chunk) Key Performance Indicators - Q2 2025 | Indicator | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 3.08% | 2.98% | 2.73% | | Total Loans (Period End) | $6.17B | $6.07B | $5.76B | | Total Deposits (Period End) | $6.7B | $6.7B | $6.3B | | Loan to Deposit Ratio | 91.9% | 89.8% | 91.7% | [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) The company's detailed financial performance for Q2 2025 shows robust growth in net interest income, driven by margin expansion and loan growth, with noninterest income increasing from fees, noninterest expenses rising moderately due to personnel costs, and a stable effective tax rate [Net Interest Income](index=2&type=section&id=NET%20INTEREST%20INCOME) Net interest income for Q2 2025 reached $60.1 million, increasing 18.0% year-over-year and 6.1% quarter-over-quarter, driven by a 35 basis point net interest margin expansion to 3.08% and a 7.8% increase in average loans Net Interest Income Performance | Period | Net Interest Income | Change (vs. prior period) | | :--- | :--- | :--- | | Q2 2025 | $60.1M | +6.1% vs Q1 2025 | | Q2 2025 | $60.1M | +18.0% vs Q2 2024 | | H1 2025 | $116.8M | +14.9% vs H1 2024 | - The net interest margin improved to **3.08%** in Q2 2025, up **10 basis points** from Q1 2025 and **35 basis points** from Q2 2024, driven by higher yields on earning assets, increased average loan balances, and an improved funding mix[7](index=7&type=chunk) - Average loans for Q2 2025 grew by **$442.0 million** (**7.8%**) compared to Q2 2024, with the average yield on interest-earning assets rising to **4.79%**[8](index=8&type=chunk) [Noninterest Income](index=3&type=section&id=NONINTEREST%20INCOME) Noninterest income for Q2 2025 reached $22.5 million, a 3.4% increase from Q2 2024, primarily driven by a 5.7% rise in insurance commissions and a 2.4% increase in wealth management fees, despite a 3.9% decline in card services income Noninterest Income Breakdown (Q2 2025 vs Q2 2024) | Category | Q2 2025 | Change (YoY) | | :--- | :--- | :--- | | **Total Noninterest Income** | **$22.5M** | **+3.4%** | | Insurance commissions and fees | $9.6M | +5.7% | | Wealth management fees | $5.0M | +2.4% | | Card services income | $3.2M | -3.9% | - Year-to-date noninterest income of **$47.5 million** was up **8.3%** from the prior year, largely due to a **$1.8 million** increase in other income, which included a **$1.9 million** gain on the sale of other real estate owned[11](index=11&type=chunk) [Noninterest Expense](index=3&type=section&id=NONINTEREST%20EXPENSE) Noninterest expense increased by 3.4% to $51.6 million in Q2 2025 compared to the same period in 2024, primarily driven by a 6.6% increase in personnel-related expenses, with year-to-date expenses rising by 2.4% Noninterest Expense Summary | Period | Noninterest Expense | Change (YoY) | Key Driver | | :--- | :--- | :--- | :--- | | Q2 2025 | $51.6M | +3.4% | Personnel expenses (+6.6%) | | H1 2025 | $102.2M | +2.4% | Personnel expenses (+4.9%) | [Income Tax Expense](index=3&type=section&id=INCOME%20TAX%20EXPENSE) The provision for income tax was $6.8 million for Q2 2025, resulting in an effective tax rate of 24.0%, slightly higher than the 23.8% rate in Q2 2024, with the year-to-date rate at 23.9% Income Tax Provision and Effective Rate | Period | Tax Expense | Effective Tax Rate | | :--- | :--- | :--- | | Q2 2025 | $6.8M | 24.0% | | Q2 2024 | $4.9M | 23.8% | | H1 2025 | $12.9M | 23.9% | | H1 2024 | $10.1M | 23.6% | [Financial Condition](index=4&type=section&id=Financial%20Condition) The company's financial condition as of June 30, 2025, remains strong, characterized by improving asset quality, robust capital, and a stable liquidity profile with ample funding access [Asset Quality](index=4&type=section&id=ASSET%20QUALITY) Asset quality improved, with nonperforming assets decreasing to 0.63% of total assets, largely due to a reclassification, and the allowance for credit losses to nonperforming loans ratio strengthening to 111.55% Key Asset Quality Ratios | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Allowance for credit losses / Total loans | 0.95% | 1.01% | 0.92% | | Nonperforming assets / Total assets | 0.63% | 0.87% | 0.79% | | Allowance / Nonperforming loans | 111.55% | 85.85% | 84.94% | - The company recorded a **$4.7 million** partial charge-off on one commercial real estate relationship, which was the main driver for the increase in net charge-offs to **$5.3 million** in Q2 2025[15](index=15&type=chunk) - Special Mention and Substandard loans decreased to **$96.8 million** at June 30, 2025, down from **$110.8 million** at March 31, 2025, and **$116.2 million** at June 30, 2024[17](index=17&type=chunk) [Capital Position](index=5&type=section&id=CAPITAL%20POSITION) The company's capital position remains well above regulatory minimums, with the Tier 1 capital to average assets ratio improving to 9.36% at June 30, 2025, and a new stock repurchase program authorized for up to 400,000 shares Regulatory Capital Ratios | Ratio | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Total capital to risk-weighted assets | 13.15% | 13.28% | 13.26% | | Tier 1 capital to average assets | 9.36% | 9.31% | 9.15% | - A new Stock Repurchase Program was approved, authorizing the repurchase of up to **400,000 shares** of common stock over the next 24 months[19](index=19&type=chunk) [Liquidity Position](index=5&type=section&id=LIQUIDITY%20POSITION) The company's liquidity position was stable and robust as of June 30, 2025, maintaining ready access to $1.5 billion in liquidity, equivalent to 18.0% of total assets, through various wholesale funding sources - The company had available liquidity of **$1.5 billion**, or **18.0%** of total assets, at the end of Q2 2025[20](index=20&type=chunk) - Liquidity sources include Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank's Discount Window, and Federal Home Loan Bank (FHLB) advances[20](index=20&type=chunk) [Consolidated Financial Statements and Other Data](index=7&type=section&id=Consolidated%20Financial%20Statements%20and%20Other%20Data) The appended financial statements provide a detailed view of the company's financial health, showing asset growth, drivers of net income, net interest margin analysis, multi-quarter trends, and non-GAAP measure reconciliation [Consolidated Statements of Condition](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CONDITION) As of June 30, 2025, total assets stood at $8.37 billion, an increase from year-end 2024, supported by a rise in net loans to $6.11 billion and total deposits to $6.72 billion, with total shareholders' equity increasing to $761.8 million Selected Balance Sheet Data (in thousands) | Account | Jun 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,373,818 | $8,109,080 | | Net Loans and Leases | $6,114,099 | $5,963,426 | | Total Deposits | $6,715,795 | $6,471,805 | | Total Liabilities | $7,612,025 | $7,395,636 | | Total Equity | $761,793 | $713,444 | [Consolidated Statements of Income](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For Q2 2025, the company generated $60.1 million in net interest income and $22.5 million in noninterest income, resulting in $21.5 million in net income, or $1.50 per diluted share, after a $2.8 million provision for credit losses and $51.6 million in noninterest expenses Income Statement Summary (in thousands, except per share data) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $60,130 | $50,953 | | Provision for credit loss | $2,780 | $2,172 | | Noninterest Income | $22,512 | $21,776 | | Noninterest Expenses | $51,623 | $49,942 | | Net Income | $21,471 | $15,682 | | Diluted EPS | $1.50 | $1.10 | [Average Consolidated Statements of Condition and Net Interest Analysis](index=9&type=section&id=Average%20Consolidated%20Statements%20of%20Condition%20and%20Net%20Interest%20Analysis) This analysis details the net interest margin components, showing an average yield on interest-earning assets of 4.79% and an average rate on interest-bearing liabilities of 2.44% for Q2 2025, resulting in a 2.34% interest rate spread and a 3.08% tax-equivalent net interest margin Quarterly Net Interest Margin Analysis | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Avg. Yield on Interest-Earning Assets | 4.79% | 4.69% | 4.56% | | Avg. Rate on Interest-Bearing Liabilities | 2.44% | 2.44% | 2.64% | | Interest Rate Spread | 2.34% | 2.25% | 1.91% | | Net Interest Margin (Tax-Equivalent) | 3.08% | 2.98% | 2.73% | [Summary Financial Data](index=11&type=section&id=Summary%20Financial%20Data) The summary data provides a five-quarter trend view of key financial metrics, highlighting steady increases in loans, assets, and equity, with profitability ratios like ROA at 1.05% and ROE at 11.48% for Q2 2025, and a significant decrease in nonperforming assets Quarterly Profitability Ratios (Annualized) | Ratio | Jun-25 | Mar-25 | Dec-24 | Sep-24 | Jun-24 | | :--- | :--- | :--- | :--- | :--- | :--- | | Return on average assets | 1.05% | 0.99% | 0.98% | 0.94% | 0.81% | | Return on average equity | 11.48% | 10.96% | 10.91% | 10.65% | 9.51% | | Net interest margin (TE) | 3.08% | 2.98% | 2.93% | 2.79% | 2.73% | Quarterly Nonperforming Assets (in thousands) | Period | Jun-25 | Mar-25 | Dec-24 | Sep-24 | Jun-24 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total nonperforming assets | $52,572 | $71,159 | $65,185 | $62,655 | $62,548 | [Non-GAAP Measures](index=13&type=section&id=Non-GAAP%20Measures) The company presents a reconciliation for the non-GAAP measure of Tangible Book Value Per Share, which was $46.31 as of June 30, 2025, demonstrating growth from $44.88 in the prior quarter and $40.35 in the prior year Reconciliation of Book Value Per Share | Per Share Value | Jun-25 | Mar-25 | Jun-24 | | :--- | :--- | :--- | :--- | | Common equity book value (GAAP) | $52.79 | $51.36 | $46.86 | | Tangible book value (Non-GAAP) | $46.31 | $44.88 | $40.35 |

Core Viewpoint - Tompkins Financial Corporation is prioritizing dividend maintenance over the quality of its earnings, resulting in a decline in stock price over the past four and a half years [1] Company Analysis - The company's focus on maintaining dividends has led to compromises in earnings quality [1] - This strategy has negatively impacted the stock price, indicating potential underlying issues within the company's financial health [1]

Financial Performance - Net income attributable to Tompkins Financial Corporation was $19,679 thousand for Q1 2025, compared to $16,872 thousand in Q1 2024, indicating a year-over-year increase of 16.5%[17]. - Basic earnings per share increased to $1.38 for the three months ended March 31, 2025, up from $1.19 in the same period last year, representing a growth of 16.1%[17]. - The company reported a total comprehensive income of $35,961 thousand for the three months ended March 31, 2025, compared to $7,061 thousand in the same period last year, indicating a significant improvement in overall financial performance[19]. - For the three months ended March 31, 2025, the consolidated net income attributable to Tompkins Financial Corporation was $19,679,000, compared to $16,872,000 for the same period in 2024, representing an increase of approximately 16.5%[113][114]. - Net interest income for the three months ended March 31, 2025, was $56,662,000, compared to $50,675,000 for the same period in 2024, reflecting an increase of approximately 11.7%[113][114]. - Noninterest income for the three months ended March 31, 2025, totaled $25,032,000, compared to $22,137,000 in the prior year, marking an increase of about 13.0%[113][114]. - Noninterest income for Q1 2025 was $8.6 million, up $1.5 million or 21.6% compared to Q1 2024, including a gain on the sale of other real estate owned of $1.9 million[175]. - Noninterest expense for Q1 2025 was $39.7 million, an increase of $330,000 or 0.8% from Q1 2024, primarily due to higher salaries and employee benefits[176]. Asset and Deposit Growth - Total assets increased to $8,199,653 thousand as of March 31, 2025, up from $8,109,080 thousand as of December 31, 2024, representing a growth of 1.1%[15]. - Total deposits grew to $6,753,502 thousand, an increase of 4.4% from $6,471,805 thousand at the end of 2024[15]. - Total assets as of March 31, 2025, were $8.2 billion, an increase of $90.6 million or 1.1% from December 31, 2024[199]. - The company reported total deposits of $6,753,502,000 as of March 31, 2025, compared to $6,449,616,000 as of March 31, 2024, reflecting a growth of about 4.7%[113][114]. Loan and Lease Performance - Net loans and leases rose to $6,005,622 thousand, an increase of 0.7% from $5,963,426 thousand at the end of 2024[15]. - Total loans and leases increased to $6,071,523 thousand as of March 31, 2025, up from $6,025,108 thousand on December 31, 2024, representing a growth of 0.77%[55]. - The total past due loans as of March 31, 2025, amounted to $71,113 thousand, compared to $52,907 thousand on December 31, 2024, reflecting an increase of 34.6%[57][59]. - The commercial real estate segment showed a total of $3,426,172 thousand in loans as of March 31, 2025, up from $3,379,817 thousand at the end of 2024, marking a growth of 1.37%[55]. - The residential real estate loans remained stable with a total of $1,571,953 thousand as of March 31, 2025, slightly increasing from $1,570,840 thousand at the end of 2024[55]. - Total loans and leases at the end of Q1 2025 were $6.07 billion, up from $6.02 billion at the end of 2024[207]. Credit Loss Provisions and Allowances - The provision for credit loss expense was $5,287 thousand for Q1 2025, significantly higher than $854 thousand in Q1 2024, reflecting increased caution in credit risk management[17]. - The allowance for credit losses (ACL) methodology is based on SEC guidance and is critical for evaluating credit loss exposure in the loan portfolio[62]. - The allowance for credit losses on loans and leases increased to $61,023,000 as of March 31, 2025, up from $51,704,000 as of March 31, 2024, representing a 17.9% increase[71][72]. - The provision for credit loss expense for the three months ended March 31, 2025, was $5,260,000, compared to $348,000 for the same period in 2024, indicating a significant increase in provisions[71][72]. - The total gross write-offs for the current period in Commercial and Industrial loans were $0, maintaining a stable performance compared to previous years[82]. Regulatory Compliance and Risk Management - Tompkins Financial Corporation is subject to comprehensive regulation by the Federal Reserve Board and other regulatory authorities, ensuring compliance with various financial regulations[27][28]. - The company manages economic risks, including interest rate, liquidity, and credit risk, primarily through the management of its assets and liabilities[136]. - Regulatory compliance is critical, with oversight from multiple agencies including the Federal Reserve Board and the SEC[159]. Market and Competitive Landscape - The Company faces strong competition from various financial institutions, including banks, credit unions, and online financial services[157][158]. - Tompkins Financial Corporation aims for responsible and sustainable growth, focusing on organic growth and potential acquisitions of financial institutions[152]. Other Financial Metrics - Return on average assets (ROA) for Q1 2025 was 0.99%, compared to 0.87% in Q1 2024, while return on average shareholders' equity (ROE) increased to 10.96% from 10.18%[170]. - The banking segment reported net income of $15.7 million for Q1 2025, a 15.7% increase from $13.6 million in Q1 2024, primarily due to higher net interest margin and other income[172]. - Net interest margin improved to 2.98% in Q1 2025 from 2.73% in Q1 2024, primarily due to lower funding costs and higher yields on interest-earning assets[185].

Company Overview - Tompkins Financial (TMP) is headquartered in Ithaca and has experienced a price change of -12.13% this year [3] - The company currently pays a dividend of $0.62 per share, resulting in a dividend yield of 4.16%, which is significantly higher than the Banks - Northeast industry's yield of 2.87% and the S&P 500's yield of 1.63% [3] Dividend Performance - The annualized dividend of Tompkins Financial is $2.48, reflecting a 1.6% increase from the previous year [4] - Over the past five years, the company has increased its dividend four times, achieving an average annual increase of 3.89% [4] - The current payout ratio stands at 48%, indicating that the company distributes 48% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Tompkins Financial's earnings per share for 2025 is $5.58, representing a year-over-year growth rate of 12.27% [5] Investment Appeal - Tompkins Financial is characterized as an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 2 (Buy) [7]

Group 1: Earnings Performance - Tompkins Financial reported quarterly earnings of $1.37 per share, exceeding the Zacks Consensus Estimate of $1.30 per share, and up from $1.18 per share a year ago, representing an earnings surprise of 5.38% [1] - The company posted revenues of $81.69 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.07%, compared to $72.81 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - Tompkins shares have declined approximately 12.1% since the beginning of the year, while the S&P 500 has decreased by 6.8% [3] - The current consensus EPS estimate for the upcoming quarter is $1.27 on revenues of $79.49 million, and for the current fiscal year, it is $5.46 on revenues of $326.57 million [7] Group 3: Industry Context - The Banks - Northeast industry, to which Tompkins belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Tompkins' stock performance [5]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Tompkins Financial Corporation reported strong Q1 2025 results, with diluted EPS of **$1.37** and net income of **$19.7 million**, driven by net interest income growth despite higher credit loss provisions Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Diluted EPS | $1.37 | $1.18 | +16.1% | | Net Income | $19.7 million | $16.9 million | +16.6% | | Net Interest Margin | 2.98% | 2.73% | +25 bps | | Total Loans | $6.07 billion | $5.64 billion | +7.6% | | Total Deposits | $6.75 billion | $6.45 billion | +4.7% | - The increase in net income was primarily driven by higher net interest income from loan growth and stabilized funding costs, along with growth in fee-based revenues, partially offset by a significantly higher provision for credit loss expense[2](index=2&type=chunk) - Provision for credit loss expense was **$5.3 million**, a substantial increase from **$854,000** in Q1 2024 and **$1.4 million** in Q4 2024[4](index=4&type=chunk)[14](index=14&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) Q1 2025 performance featured strong net interest income and margin expansion, boosted by a one-time gain, but asset quality weakened due to increased credit loss provisions [Net Interest Income](index=3&type=section&id=NET%20INTEREST%20INCOME) Net interest income increased **11.8%** year-over-year to **$56.7 million**, driven by a **25 bps** net interest margin expansion to **2.98%** and **7.2%** average loan growth Net Interest Income and Margin Analysis | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $56.7M | $56.3M | $50.7M | | Net Interest Margin | 2.98% | 2.93% | 2.73% | | Average Loans | $6.03B | $5.93B | $5.62B | - The increase in NIM compared to the prior year was mainly due to higher yields on average interest-earning assets (**4.69%** in Q1 2025 vs **4.47%** in Q1 2024) and lower funding costs from an improved funding mix[6](index=6&type=chunk)[7](index=7&type=chunk) - Average total deposits grew by **4.0%** year-over-year to **$6.6 billion**[8](index=8&type=chunk) [Noninterest Income and Expense](index=4&type=section&id=NONINTEREST%20INCOME%20AND%20EXPENSE) Noninterest income rose **13.1%** to **$25.0 million** due to a real estate sale gain, while noninterest expense increased modestly by **1.5%** to **$50.6 million** from employee costs Noninterest Income & Expense (Q1 2025 vs Q1 2024) | Category | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Noninterest Income | $25.0M | $22.1M | +13.1% | | Total Noninterest Expense | $50.6M | $49.9M | +1.5% | - A **$1.9 million** gain on the sale of other real estate owned was the primary driver of the increase in noninterest income[10](index=10&type=chunk) - The increase in noninterest expense was mainly due to a **$969,000** (**3.1%**) rise in salaries and wages and other employee benefits[11](index=11&type=chunk) [Asset Quality](index=4&type=section&id=ASSET%20QUALITY) Asset quality weakened in Q1 2025, with provision for credit losses surging to **$5.3 million** due to a **$4.2 million** specific reserve on a commercial real estate loan Asset Quality Indicators | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $5.3M | $1.4M | $0.85M | | Allowance for Credit Losses / Total Loans | 1.01% | 0.94% | 0.92% | | Nonperforming Assets / Total Assets | 0.87% | 0.80% | 0.81% | | Nonperforming Loans | $71.1M | $50.9M | $62.7M | - A specific reserve of **$4.2 million** was added for one commercial real estate relationship totaling **$18.1 million**, which was a major driver for the increased provision expense[13](index=13&type=chunk)[14](index=14&type=chunk) - The increase in nonperforming assets was largely due to moving one **$17.3 million** commercial real estate loan into nonperforming status[15](index=15&type=chunk) [Balance Sheet, Capital, and Liquidity](index=5&type=section&id=Balance%20Sheet,%20Capital,%20and%20Liquidity) The company maintained strong capital ratios well above regulatory minimums and a stable liquidity position with **$1.5 billion** in accessible funding sources as of March 31, 2025 [Capital Position](index=5&type=section&id=CAPITAL%20POSITION) Capital ratios remained robust and exceeded regulatory requirements, with Tier 1 capital to average assets improving to **9.31%** at Q1 2025 Key Capital Ratios | Ratio | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Tier 1 Capital to Average Assets | 9.31% | 9.27% | 9.08% | | Total Capital to Risk-Weighted Assets | 13.28% | 13.07% | 13.43% | - Capital ratios at March 31, 2025 remained well above the regulatory minimums for well-capitalized institutions[17](index=17&type=chunk) [Liquidity Position](index=5&type=section&id=LIQUIDITY%20POSITION) The company maintained a stable liquidity position with ready access to **$1.5 billion**, representing **18.6%** of total assets, through various wholesale funding sources - The company maintained ready access to liquidity of **$1.5 billion**, or **18.6%** of total assets, at March 31, 2025[18](index=18&type=chunk) - Liquidity is enhanced by access to Federal funds, repurchase agreements, brokered deposits, Federal Reserve Bank's Discount Window, and FHLB advances[18](index=18&type=chunk) [Financial Statements and Supplementary Data](index=8&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) This section presents detailed unaudited financial statements for Q1 2025, including Consolidated Statements of Condition and Income, along with supplementary data and non-GAAP measure reconciliations [Consolidated Statements of Condition](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CONDITION) The Consolidated Statement of Condition as of March 31, 2025, shows total assets of **$8.20 billion**, supported by increased deposits to **$6.75 billion** and total equity to **$741.4 million** Balance Sheet Highlights (in thousands) | Account | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,199,653 | $8,109,080 | | Net Loans and Leases | $6,005,622 | $5,963,426 | | Total Deposits | $6,753,502 | $6,471,805 | | Total Equity | $741,377 | $713,444 | [Consolidated Statements of Income](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For Q1 2025, the company reported Net Interest Income of **$56.7 million** and Net Income of **$19.7 million**, compared to **$50.7 million** and **$16.9 million** respectively in Q1 2024 Income Statement Summary (in thousands) | Account | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $56,662 | $56,281 | $50,675 | | Provision for credit loss | $5,287 | $1,411 | $854 | | Noninterest Income | $25,032 | $20,829 | $22,137 | | Noninterest Expense | $50,607 | $49,966 | $49,857 | | Net Income | $19,679 | $19,658 | $16,872 | [Non-GAAP Measures](index=13&type=section&id=Non-GAAP%20Measures) This section provides a reconciliation for the non-GAAP measure of Tangible Book Value Per Share, which increased to **$44.88** in Q1 2025 Tangible Book Value Per Share (Non-GAAP) | Metric | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Common equity book value per share (GAAP) | $51.36 | $49.42 | $46.37 | | Tangible book value per share (Non-GAAP) | $44.88 | $42.93 | $39.85 |

Company Overview - Tompkins Financial (TMP) is based in Ithaca and operates in the Finance sector, with a year-to-date share price change of -16.29% [3] - The company currently pays a dividend of $0.62 per share, resulting in a dividend yield of 4.37%, which is higher than the Banks - Northeast industry's yield of 3.2% and the S&P 500's yield of 1.64% [3] Dividend Performance - The current annualized dividend of Tompkins Financial is $2.48, reflecting a 1.6% increase from the previous year [4] - Over the past five years, the company has increased its dividend four times, achieving an average annual increase of 3.89% [4] - The company's payout ratio stands at 50%, indicating that it distributes 50% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Tompkins Financial's earnings per share for 2025 is $5.46, which represents a year-over-year earnings growth rate of 9.86% [5] Investment Considerations - Tompkins Financial is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]