Tompkins Financial(TMP) - 2023 Q1 - Quarterly Report

Financial Performance - Net income attributable to Tompkins Financial Corporation was $19,381 thousand for the three months ended March 31, 2023, compared to $23,273 thousand for the same period in 2022, a decrease of 16.67%[14] - Basic earnings per share decreased to $1.35 for the three months ended March 31, 2023, from $1.61 for the same period in 2022, a decline of 16.13%[14] - The company reported total comprehensive income of $40,255,000 for Q1 2023, compared to a total comprehensive loss of $56,595,000 for Q1 2022[23] - Net income for Q1 2023 was $19.4 million, or $1.35 diluted earnings per share, down from $23.3 million, or $1.60 diluted earnings per share in Q1 2022, primarily due to increased interest expense and operating expenses[146] - The banking segment reported net income of $16.9 million for Q1 2023, a decrease of $3.4 million or 16.8% from Q1 2022, attributed to increased funding costs and operating expenses[149] Asset and Deposit Changes - Total assets decreased to $7,644,371 thousand as of March 31, 2023, from $7,670,686 thousand as of December 31, 2022, representing a decline of 0.34%[12] - Total deposits decreased to $6,509,009 thousand as of March 31, 2023, from $6,602,295 thousand as of December 31, 2022, a decline of 1.41%[12] - Cash and cash equivalents decreased to $70,537 thousand as of March 31, 2023, from $77,837 thousand as of December 31, 2022, a decline of 3.30%[12] - Total loans and leases as of March 31, 2023, were $5,278,772, slightly up from $5,273,658 as of December 31, 2022[45] - Total deposits as of March 31, 2023, were $6.5 billion, a decrease of $93.3 million or 1.4% from December 31, 2022, with total uninsured deposits remaining at $2.6 billion[145] Income and Expense Analysis - Net interest income after credit for credit loss expense was $55,071 thousand for the three months ended March 31, 2023, down from $57,134 thousand for the same period in 2022, a decrease of 3.63%[14] - Total noninterest income increased to $20,400 thousand for the three months ended March 31, 2023, from $19,985 thousand for the same period in 2022, an increase of 2.09%[14] - Total noninterest expenses rose to $50,158 thousand for the three months ended March 31, 2023, compared to $46,839 thousand for the same period in 2022, an increase of 6.63%[14] - Noninterest expenses totaled $50,158,000 for Q1 2023, up from $48,000,000 in Q1 2022, marking an increase of 4.51%[101] - Noninterest income for Q1 2023 was $6.7 million, an increase of $505,000 or 8.2% compared to Q1 2022, driven by earnings on bank-owned life insurance and debit card services[152] Credit Losses and Allowances - The allowance for credit losses increased to $46,099 thousand as of March 31, 2023, from $45,934 thousand as of December 31, 2022, an increase of 0.36%[12] - The provision for credit losses was a credit of $825,000 for Q1 2023, compared to a credit of $520,000 for the same period in 2022[151] - The allowance for credit losses at the end of Q1 2023 was $42,126,000, down from $42,843,000 at the beginning of the period, reflecting a decrease of approximately 1.7%[62] - The total charge-offs for the three months ended March 31, 2023, were $108,000, with recoveries amounting to $1,389,000[61] - The allowance for credit losses covered 162.11% of nonperforming loans and leases as of March 31, 2023, up from 139.86% at December 31, 2022[202] Securities and Investments - Total available-for-sale debt securities as of March 31, 2023, were valued at $1,585,854,000, down from $1,594,967,000 at December 31, 2022, indicating a decrease of approximately 0.6%[32] - The unrealized losses on available-for-sale debt securities increased to $209,594,000 as of March 31, 2023, compared to $236,844,000 at December 31, 2022, reflecting a reduction of about 11.5%[32] - The fair value of available-for-sale debt securities as of March 31, 2023, was $1,585,854,000, with no transfers between fair value levels during the period[106][109] - The company reported a net unrealized gain of $20,578,000 from available-for-sale debt securities for Q1 2023, a significant recovery from a net unrealized loss of $80,405,000 in Q1 2022[74][75] - The company maintains a policy of purchasing investment-grade securities with relatively short durations to mitigate interest rate risk[178] Regulatory and Compliance - The company is regulated under the Bank Holding Company Act and is subject to examination by various regulatory authorities, ensuring compliance with financial regulations[25] - The Company is subject to regulation by multiple authorities, including the Federal Reserve Board and the SEC, ensuring compliance with financial regulations[134] - The company adopted ASU 2022-02 effective January 1, 2023, which changes the evaluation of loan modifications and credit loss disclosures[65] Market Position and Strategy - Tompkins Financial Corporation operates as a community-based financial services organization, providing a full array of banking and insurance services[24] - The Company has a total of 60 banking offices, with 41 located in New York and 19 in Pennsylvania, focusing on organic growth and potential acquisitions[127] - The Company aims for responsible and sustainable growth, considering acquisitions of financial institutions and branches to enhance market presence[127] - The Company competes with various financial institutions, emphasizing personalized financial relationships and a strong suite of products and services[132] - The Company’s strategy includes a commitment to quality customer service and efficient lending decisions to maintain competitiveness in its primary market areas[133]