• Net Income: Q4 net income decreased by 23.3% to $15.0 million compared to Q4 of the previous year.

• Diluted EPS: Q4 diluted earnings per share fell 22.8% to $1.05.

• Net Interest Margin: Expanded to 2.82% in Q4 from 2.75% in the previous quarter.

• Loan Growth: Total loans increased by 6.4% year-over-year.

• Deposits: Total deposits decreased by 3.1% compared to the previous year.

• Asset Quality: Nonperforming assets increased to 0.80% of total assets.

• Capital and Liquidity: Capital ratios remained above regulatory minimums for well-capitalized institutions.

On January 26, 2024, Tompkins Financial Corp (TMP) released its 8-K filing, detailing the financial results for the fourth quarter of 2023. The report highlighted a decrease in net income and diluted earnings per share (EPS) compared to the same quarter in the previous year. The company, which operates in banking, insurance, and wealth management, faced challenges including increased funding costs and operating expenses, partly due to branch closures and personnel-related charges.

Despite the downturn in net income and EPS, Tompkins Financial Corp saw an expansion in its net interest margin and a significant growth in loans over the year. However, total deposits saw a decline, reflecting the impact of inflation and competitive rates in the current interest rate environment. The company's President and CEO, Stephen Romaine, noted the execution of strategic initiatives and the opening of a new office in Syracuse, which is expected to contribute to future growth.

Financial Performance Overview

The company reported a net interest income of $52.4 million for the fourth quarter, an increase from the previous quarter but a decrease from the same quarter last year. The net interest margin for the fourth quarter was 2.82%, up from 2.75% in the third quarter. The increase in net interest income and margin was primarily due to higher yielding securities purchased in the second and third quarters of 2023.

Noninterest income for the fourth quarter was $18.9 million, a slight increase from the same period in 2022. The year ended with a decrease in noninterest income, largely due to losses from the sale of available-for-sale debt securities. Noninterest expenses for the fourth quarter increased to $51.3 million, with notable increases in premises and furniture and fixtures expenses, as well as other operating expenses.

The provision for income tax expense for the fourth quarter was $3.1 million, reflecting an effective tax rate of 17.2%. The decrease in income tax expense compared to the previous year is attributed to the decrease in pre-tax income.