Expanding its advisory team, Tompkins Financial Advisors (Tompkins) in Western New York, announces the hire of Conner Simonetti as a wealth advisor. In his new role, Simonetti will be responsible for identifying and developing target segments while collaborating directly with clients, as well as sharing and implementing Tompkins’ comprehensive services to help clients build wealth and enjoy peace of mind.

“Conner has a proven track record of helping clients achieve their financial goals,” said James Sperry, senior vice president and managing director for Tompkins’ Western New York region. “Whether it be through personalized strategies or comprehensive wealth management solutions, he is committed to providing exceptional service and building long-lasting relationships with clients – things we deeply value at Tompkins. He will be an invaluable asset to our team.”

Simonetti comes to Tompkins with over 5 years of financial management experience. His experience is highlighted throughout his time as an operations and advisor for Worth Considering, Inc., and later, a portfolio manager with Brighton Securities Capital Management. In addition to his bachelor's degree in finance from Kent State University, Simonetti holds a Registered Investment Advisor license (Series 65) and is currently working toward his designation as a Certified Investment Management Analyst.

Before entering the financial industry in 2019, Simonetti played professional baseball with the Washington Nationals organization. Bringing that background full circle, he currently coaches baseball and softball students in the Monroe County, New York area.

Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.05 for the fourth quarter of 2023, down 22.8% compared to the fourth quarter of 2022. Net income for the fourth quarter of 2023 was $15.0 million, down $4.5 million or 23.3% compared to the $19.5 million reported for the fourth quarter of 2022.  Contributing to the lower quarterly results were increased funding costs and increased operating expenses, which included costs related to three branch closures during the fourth quarter of 2023 as well as personnel-related charges.

For the year ended December 31, 2023, diluted earnings per share of $0.66 were down 88.8% compared to the year ended December 31, 2022.   Net income for 2023 was $9.5 million, a decrease of $75.5 million compared to the year ended December 31, 2022.  Significant contributors to the year-over-year decrease in net income included a previously announced after-tax loss of $52.9 million, or $3.69 loss per diluted share, related to the sale of $510.5 million of available-for-sale debt securities, increased funding costs and an increase in operating expenses. The sale of securities and subsequent reinvestment in the second and third quarters of 2023 is favorably impacting securities revenue as the securities sold had an average yield of 0.86%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.09%.  Average yields on securities for the fourth quarter of 2023 were 2.33%, compared to 1.59% for the third quarter of 2023, and 1.44% for the fourth quarter of 2022.    

Tompkins President and CEO, Stephen Romaine, commented, "In the fourth quarter we continued to execute on strategic initiatives and are pleased to announce our expanded presence in Syracuse with the grand opening of our City Center office.  For the quarter we saw positive momentum with our net interest margin expanding, strong quarterly loan growth driving full-year loan growth of 6.4%, signs of stabilization in our deposit base, and growth in our noninterest-related revenue. During the quarter we also recognized non-recurring expenses relating to three branch closures and other personnel-related expenses intended to help offset future expense growth.  While the economic environment remains challenging for the industry we look forward to 2024 with our strong capital and liquidity position to continue to drive growth of quality customer relationships."

SELECTED HIGHLIGHTS FOR THE PERIOD:

Net interest margin for the fourth quarter of 2023 expanded to 2.82%, compared to 2.75% for the third quarter of 2023. 

Total loans at December 31, 2023, were up $171.1 million, or 3.2% (12.6% on an annualized basis), compared to the immediate prior quarter, and up $337.0 million, or 6.4%, from December 31, 2022.

Total deposits at December 31, 2023 were $6.4 billion, down $223.6 million, or 3.4% (13.5% on an annualized basis), from September 30, 2023, and down $202.5 million, or 3.1%, from December 31, 2022.

Loan to deposit ratio was 87.6%, compared to 82.1% for the immediate prior quarter.

Regulatory Tier 1 capital to average assets was 9.08% at December 31, 2023, compared to 9.01% at September 30, 2023 and 9.34% at December 31, 2022.

NET INTEREST INCOME

Net interest income was $52.4 million for the fourth quarter of 2023, up from $51.0 million for the third quarter of 2023 and down from $57.3 million for the fourth quarter of 2022. Net interest margin was 2.82% for the fourth quarter of 2023, compared to 2.75% reported for the third quarter of 2023 and 3.02% reported for the fourth quarter of 2022. The increase in net interest income and net interest margin during the fourth quarter of this year compared to the third quarter of 2023 was primarily due to securities purchased in the second and third quarters of 2023 yielding higher interest rates compared to securities sold during the same periods. The increase in securities yields was partially offset by the reversal of $1.0 million of accrued interest during the fourth quarter related to loans that moved to nonaccrual status during the quarter, as described further below under the heading Asset Quality.  The decreases in net interest income and net interest margin compared to the fourth quarter of last year were primarily attributable to increased interest costs on interest-bearing liabilities outpacing increased interest income on interest-earning assets due to the higher interest rate environment. 

For the year ended December 31, 2023, net interest income was $209.5 million, down $20.8 million, or 9.0%, when compared to the same period in 2022.  

Average loans for the quarter ended December 31, 2023, were up $101.5 million, or 1.9%, from the third quarter of 2023, and were up $277.0 million, or 5.3%, compared to the quarter ended December 31, 2022. The increase in average loans over both prior periods was mainly in the commercial real estate portfolio. The average yield on interest-earning assets for the quarter ended December 31, 2023, was 4.3%, which was up from 4.1% for the quarter ended September 30, 2023, and up from 3.6% for the quarter ended December 31, 2022.

Average total deposits for the fourth quarter of 2023 were up $58.4 million, or 0.9%, compared to the third quarter of 2023, while period-end balances were down $223.6 million compared to the third quarter of 2023 driven by seasonal deposit trends.  Average deposits for the quarter were down $227.8 million, or 3.4%, compared to the same period in 2022. The decrease compared to the prior year was largely driven by inflation and persistent rate competition for deposits due to the current interest rate environment and tightening monetary policy. The cost of interest-bearing deposits increased to 2.04% for the fourth quarter of 2023, compared to 1.74% for the third quarter of 2023, and 0.69% for the fourth quarter of 2022. The cost of interest-bearing deposits for the fourth quarter of 2023 increased 135 basis points compared to the fourth quarter of 2022, and 123 basis points for the year ended December 31, 2023 compared to the same period in 2022. The ratio of average noninterest bearing deposits to average total deposits for the fourth quarter of 2023 was 29.6% compared to 31.0% for the third quarter of 2023, and 30.8% for the year ended December 31, 2023.  The average cost of interest-bearing liabilities for the fourth quarter of 2023 of 2.25% represents an increase of 27 basis points over the third quarter of 2023, and an increase of 141 basis points over the same period in 2022.  

NONINTEREST INCOME

Noninterest income of $18.9 million for the fourth quarter of 2023 was up 2.7% compared to the same period in 2022.  The increase was mainly due to gains on securities transactions of $46,000 compared to losses on securities transactions of $455,000, and increases in fee-based revenues which include insurance commissions and fees, up $143,000, wealth management fees, up $181,000 and card services income, up $68,000.  

Noninterest income for the year ended December 31, 2023, was $10.2 million, which represents a decrease in noninterest income of $67.7 million compared to the same period in 2022.  The decrease in noninterest income was largely due to the previously noted sales of available-for-sale debt securities, mainly in the third quarter of 2023, which resulted in the recognition of a pre-tax loss of $70.0 million for the year ended December 31, 2023. Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts, and card services income, for the year ended December 31, 2023, were collectively up $1.0 million, or 1.4%, over the same period in 2022.  

NONINTEREST EXPENSE

Noninterest expense was $51.3 million for the fourth quarter of 2023, which was up $1.1 million, or 2.2%, over the fourth quarter of 2022.  The increases were mainly in premises and furniture and fixtures, up $799,000, and other operating expenses, up $1.7 million; partially offset by lower salaries and wages. The increase in premises and furniture and fixtures was mainly due to $720,000 of expenses related to branch closures. Contributing to the increase in other operating expenses were: FDIC expenses, up $723,000; technology, up $434,000; expenses related to the Company's retirement plans, up $428,000; charitable contributions and donations, up $315,000; and accrual for New York State minimum tax, up $207,000.  Salaries and wages included $638,000 of personnel-related charges, which were more than offset by lower incentive-related accruals.

For the year-to-date period, noninterest expense of $203.3 million was up $7.5 million, or 3.9%, from the same period in 2022. The increase in noninterest expense for the year ended December 31, 2023, over the same period in 2022 was mainly in employee benefits and other noninterest expenses. The increase in employee benefits was mainly in health insurance, which was up $1.8 million. Salaries and wages were down as annual merit increases were offset by lower incentive-related accruals. Contributing to the increases in other expenses were the following:  FDIC insurance, up $1.5 million; New York State minimum tax expense, up $830,000; professional fees, up $604,000; and charitable donations, up $317,000.  Premises and furniture and fixtures expenses were up over the prior year mainly as a result of expenses related to branch closures of $879,000.

INCOME TAX EXPENSE

The provision for income tax expense of $3.1 million for an effective rate of 17.2% for the fourth quarter of 2023, compared to tax expense of $4.5 million and an effective rate of 18.6% for the same quarter in 2022. The fourth quarter of 2023 included the impact of surrendering certain separate account BOLI policies, which added $1.8 million to tax expense for the quarter.  For the year-ended 2023, the provision for income tax expense of $2.5 million for an effective rate of 20.6% compared to tax expense of $24.6 million and an effective rate of 22.4% for the same period in 2022. The decrease in income tax expense between comparable periods reflects the decrease in pre-tax income, due primarily to the realized losses on the sale of certain available-for-sale securities.    

ASSET QUALITY

The allowance for credit losses represented 0.92% of total loans and leases at December 31, 2023, up from 0.91% at September 30, 2023, and up from 0.87% at December 31, 2022. The ratio of the allowance to total nonperforming loans and leases was 82.84% at December 31, 2023, compared to 156.96% at September 30, 2023, and 139.86% at December 31, 2022.  The decrease in the ratio compared to prior periods was due to the increase in nonperforming loans and leases discussed in more detail below.  

Provision for credit losses for the fourth quarter of 2023 was $1.8 million compared to $1.4 million for the same period in 2022. Provision for credit losses for the year ended December 31, 2023, was $4.3 million, compared to $2.8 million for the year ended December 31, 2022. The increase in provision expense for both the quarter and year-to-date periods was mainly driven by loan growth, economic forecasts, and changes in asset quality. Net charge-offs for the fourth quarter of 2023 were $410,000 compared to net charge-offs of $190,000 reported for the same period in 2022.

Nonperforming assets represented 0.80% of total assets at December 31, 2023, up from 0.41% reported at September 30, 2023, and 0.43% at December 31, 2022. At December 31, 2023, nonperforming loans and leases totaled $62.3 million, compared to $31.4 million at September 30, 2023, and $32.8 million at December 31, 2022. The increase in nonperforming loans at quarter-end December 31, 2023, was mainly due to the addition of one relationship with two commercial real estate properties in the hospitality portfolio totaling approximately $33.8 million. The Company believes that the existing collateral securing the loans is sufficient to cover the exposure as of December 31, 2023.  These loans were included in loans past due 30-89 days and accruing at the end of the third quarter of 2023.  Loans past due 30-89 days and accruing as a percentage of total loans decreased from 0.75% at the end of the third quarter of 2023 to 0.08% at the end of the fourth quarter of 2023.

Special Mention and Substandard loans and leases totaled $123.1 million at December 31, 2023, reflecting an increase from the $122.9 million reported at September 30, 2023, and $98.3 million reported at December 31, 2022.  

CAPITAL POSITION

Capital ratios at December 31, 2023, remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 13.36% at December 31, 2023, compared to 13.46% at September 30, 2023, and 14.42% at December 31, 2022. The ratio of Tier 1 capital to average assets was 9.08% at December 31, 2023, compared to 9.01% at September 30, 2023, and 9.34% at December 31, 2022.

LIQUIDITY POSITION

The Company's liquidity position at December 31, 2023, was stable and consistent with the immediately prior quarter. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and Federal Home Loan Banks (FHLB) advances. The Company maintains ready access liquidity of $1.4 billion, or 18.3% of total assets as of December 31, 2023.  As a member of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At December 31, 2023, the Company had an available borrowing capacity at the FHLB of $642 million. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At December 31, 2023, the available borrowing capacity with the Federal Reserve Bank was $92.6 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at December 31, 2023, the Company maintained $687.0 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.

Tompkins Financial Corporation (Tompkins) announced that Charles “Chuck” Guarino has been promoted to chief banking operations officer, a newly created position for the organization. Over the past five years with Tompkins, Guarino has effectively led mortgage sales and operations and small business lending, including a successful implementation of the Paycheck Protection Program (PPP) lending initiative, which generated over 3,000 loans.

Prior to joining Tompkins, Guarino spent more than two decades in banking and financial management, overseeing all aspects of consumer, home equity, residential, and small business lending, as well as analyzing risk in retail loan portfolios, recommending policy, procedure, and guideline adjustments.  

Guarino comes to this position as a final step in realigning the responsibilities of chief financial officer and chief operations officer of Tompkins Financial, Francis Fetsko, who will be retiring at the end of 2024. In his new role, Guarino will be responsible for overseeing Tompkins Financial Corp.'s technology and banking operations throughout the four markets it serves. He will report to Steve Romaine, president and CEO of Tompkins Financial.

“Chuck has led the retail and small business lending team at Tompkins Financial exceptionally well over the past five years and is ready for this expanded role,” said Romaine. “His strategic vision and ability to align resources and effectively execute are critical to his new role. I have had the pleasure of engaging with him on the Central New York leadership team and have watched him execute strategic plans to help our clients succeed. It is rewarding to know the Tompkins organization empowers our team and allows us to fill this position from within our current ranks. I look forward to Chuck’s contribution and collaboration as he joins our senior leadership team.”

Guarino is active in his community, previously holding positions as first vice chairperson on the board of directors of the Urban League of Rochester, past vice president of Resolve of Greater Rochester, and as a past campaign cabinet member of United Way of Wyoming County. He currently serves as a committee member for the marketing and fundraising committee of Hub585. Guarino is a member of the 1997 graduating class of SUNY Geneseo’s Jones School of Business, holding a bachelor of science in management. He also holds a master's degree in business administration from the University of Rochester Simon Business School and was inducted into the Beta Gamma Sigma Honor Society.  

Tompkins Financial Corporation ("Tompkins" or the "Company") reported a net loss of $33.4 million for the third quarter of 2023.  The quarterly results were negatively impacted by the sale of $429.6 million of available-for-sale debt securities, which resulted in an after-tax loss on the sale of securities of $47.5 million. Though this sale resulted in an operating loss in the third quarter of 2023, the transaction is expected to favorably impact securities revenue in future periods as the securities sold had an average yield of 0.93%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.12%. The weighted average life of the securities purchased and sold was approximately 4.3 years.

Tompkins President and CEO, Stephen Romaine, commented, "During the quarter we elected to proactively reposition the balance sheet which will improve securities revenue and we expect that the improved revenue will exceed the value of the loss recognized in the third quarter through time.  We estimate securities revenue to improve by approximately $15.4 million over the next twelve months.

While the economic environment remains challenging for the banking industry, our capital and liquidity levels remain healthy and well positioned to meet the needs of our customers.  We continued to see favorable growth trends, with annualized loan growth of 6.0% from the second to third quarter of this year and increased deposit balances over the same periods. We are also pleased to announce our cash dividend, which is reflective of our healthy capital position."

Diluted earnings per share for the third quarter of 2023 were a loss of $2.35, which reflects the impact of the after-tax losses of $3.34 per diluted share related to the sale of available-for-sale debt securities as noted above.  Diluted earnings per share for the third quarter of 2022 were $1.48.

For the year-to-date period ended September 30, 2023, net income was a loss of $5.5 million, or a loss of $0.39 per diluted share. Year-to-date results were also negatively impacted by after-tax losses on the sale of securities totaling $52.9 million, or $3.69 loss per diluted share. For the same year-to-date period in 2022, net income was $65.5 million, or $4.53 per diluted share.

SELECTED HIGHLIGHTS FOR THE PERIOD:

Total loans at September 30, 2023 were up $82.5 million, or 1.5% (6.1% on an annualized basis) compared to the immediate prior quarter, and up $226.4 million, or 4.3%, from September 30, 2022.
Total deposits at September 30, 2023 were $6.6 billion, up $168.8 million, or 2.5% (10.4% on an annualized basis) from June 30, 2023, and down $313.3 million, or 4.5%, from September 30, 2022. 
Loan to deposit ratio was stable at 82.1%, compared to 82.9% for the immediate prior quarter.
Regulatory Tier 1 capital to average assets was 9.01% at September 30, 2023, compared to 9.57% at June 30, 2023 and 9.14% at September 30, 2022.
Total nonperforming assets at September 30, 2023 represented 0.41% of total assets, which was flat compared to the immediate prior quarter and down from 0.45% at September 30, 2022.

NET INTEREST INCOME

Net interest income was $51.0 million for the third quarter of 2023, down from $51.9 million for the second quarter of 2023 and $58.1 million for the third quarter of 2022. Net interest margin was 2.75% for the third quarter of 2023, compared to 2.83% reported for the second quarter of 2023 and 3.04% reported for the third quarter of 2022. The decrease in net interest income and net interest margin during the third quarter, when compared to the second quarter of this year and the same quarter last year, was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment.  

For the year-to-date period ended September 30, 2023, net interest income was $157.2 million, down $15.8 million, or 9.2%, when compared to the same period in 2022.

Average loans for the quarter ended September 30, 2023 were up $80.5 million, or 1.5%, from the second quarter of 2023, and were up $200.0 million, or 3.9%, compared to the quarter ended September 30, 2022. The increase in average loans over both prior periods was mainly in the commercial real estate portfolio. The average yield on interest-earning assets for the quarter ended September 30, 2023 was 4.06%, which was up from 3.91% for the quarter ended June 30, 2023, and up from 3.32% for the quarter ended September 30, 2022.  

Average total deposits for the third quarter of 2023 were down $20.0 million, or 0.3%, compared to the second quarter of 2023, and down $394.4 million, or 5.8%, compared to the same period in 2022. The decrease as compared to the prior year was largely driven by a decline in stimulus funding and a tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve. The cost of interest-bearing deposits increased to 1.74% for the third quarter of 2023, compared to 1.41% for the second quarter of 2023, and 0.36% for the third quarter of 2022. The cost of interest-bearing deposits for the third quarter of 2023 increased 33 basis points from June 30, 2023. The ratio of average noninterest bearing deposits to average total deposits for the third quarter of 2023 was 31.0% compared to 31.1% for the second quarter of 2023.  The average cost of interest-bearing liabilities for the third quarter of 2023 of 1.98%, represents an increase of 34 basis points over the second quarter of 2023, and an increase of 153 basis points over the same period in 2022.

NONINTEREST INCOME

Noninterest income was a loss of $41.6 million for the third quarter of 2023, which represents a decrease in noninterest income of $62.3 million compared to the third quarter of 2022. Year-to-date noninterest income was a loss of $8.6 million, which represents a decrease in noninterest income of $68.2 million compared to the same nine month period in 2022.   The decrease in noninterest income in the third quarter of 2023 was largely due to the above noted sale of available-for-sale debt securities, which resulted in the recognition of a pre-tax loss of $62.9 million. Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts and card services income, for the third quarter of 2023 were collectively up $543,000, or 2.7%, over the same period in 2022.

NONINTEREST EXPENSE

Noninterest expense was $49.9 million for the third quarter of 2023, which was up $264,000, or 0.5%, over the third quarter of 2022.  For the year-to-date period, noninterest expense of $152.0 million was up $6.4 million, or 4.4%, from the same period in 2022. The increase in noninterest expense in the nine months ended September 30, 2023 over the same period in 2022 was mainly in other operating expenses which were up $4.1 million and higher personnel-related expenses, which were up $2.7 million.  Contributing to the growth in other expenses for the nine months ended September 30, 2023, compared to the same period in 2022 were the following: expenses related to the Company’s retirement plans, up $1.3 million; professional fees, up $699,000, New York State minimum tax, up $623,000; and FDIC insurance, up $777,000. The increase in personnel-related expenses was mainly in health insurance, which is up $1.5 million.  

INCOME TAX EXPENSE

The provision for income taxes was a credit of $8.3 million for an effective rate of 20.0% for the third quarter of 2023, compared to tax expense of $6.8 million and an effective rate of 24.1% for the same quarter in 2022. For the first nine months of 2023, the provision for income taxes was a credit of $619,000 for an effective rate of 10.3% compared to tax expense of $20.1 million and an effective rate of 23.4% for the same period in 2022.  The decrease in income tax expense between comparable periods reflects the decrease in pre-tax income, due primarily to the realized losses on the sale of certain available-for-sale securities and the anticipated retention of certain New York State tax benefits.  

ASSET QUALITY

The allowance for credit losses represented 0.91% of total loans and leases at September 30, 2023, flat as compared to June 30, 2023, and up from 0.86% at September 30, 2022. The ratio of the allowance to total nonperforming loans and leases was 156.96% at September 30, 2023, compared to 154.76% at June 30, 2023 and 128.27% at September 30, 2022.

Provision for credit losses for the third quarter of 2023 was $1.2 million compared to $1.1 million for the same period in 2022. Provision for credit losses for the nine months ended September 30, 2023 was $2.6 million, compared to $1.4 million for the nine months ended September 30, 2022. The increase in provision expense for both the quarter and year-to-date periods was mainly driven by economic forecasts, loan growth, and changes in asset quality. Net charge-offs for the quarter ended September 30, 2023 were $177,000 compared to net charge-offs of $122,000 reported for the same period in 2022.

Nonperforming assets represented 0.41% of total assets at September 30, 2023, down from 0.43% at December 31, 2022 and 0.45% reported at September 30, 2022. At September 30, 2023, nonperforming loans and leases totaled $31.4 million, compared to $32.8 million at December 31, 2022 and $34.9 million at September 30, 2022. The increase in loans past due 30-89 days at quarter-end September 30, 2023, was mainly due to the inclusion of two commercial real estate loans to one relationship totaling $18.6 million. The Company believes that the existing collateral securing the loans is sufficient to cover the exposure as of September 30, 2023.

Special Mention and Substandard loans and leases totaled $122.9 million at September 30, 2023, reflecting an increase from the $98.3 million reported at December 31, 2022, and $106.7 million at September 30, 2022. The increase as compared to year-end in Special Mention and Substandard was mainly a result of the downgrade of one commercial real estate loan added to Special Mention during the second quarter of 2023 and the downgrade of one commercial real estate loan previously reported as Special Mention in the second quarter of 2023.

CAPITAL POSITION

Capital ratios at September 30, 2023 remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 13.46% at September 30, 2023, compared to 14.42% at December 31, 2022 and 14.26% at September 30, 2022. The ratio of Tier 1 capital to average assets was 9.01% at September 30, 2023, compared to 9.34% at December 31, 2022 and 9.14% at September 30, 2022.

During the third quarter of 2023, the Company repurchased 41,781 common shares at an aggregate cost of $2.3 million. These shares were purchased under the Company's Stock Repurchase Program announced in the third quarter of 2021.

LIQUIDITY POSITION

The Company's liquidity position at September 30, 2023 was stable and consistent with the immediately prior quarter. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and Federal Home Loan Banks (FHLB) advances. The Company maintains ready access liquidity of $1.2 billion, or 15.1% of total assets at September 30, 2023.  As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At September 30, 2023 the Company had an available borrowing capacity at the FHLB of $969.4 million. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window.  At September 30, 2023 the available borrowing capacity with the Federal Reserve Bank was $91.8 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at September 30, 2023, the Company maintained $411.7 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity. 

On Friday, Dec. 15 at 5 p.m. Genesee Community College Foundation will welcome all guests to its annual Encore Celebration. This year's event theme, "White Christmas," inspired by the 1954 classic film, will capture the essence of the holiday season and features a special holiday concert program choreographed by the Genesee Symphony Orchestra.

Encore has a distinctive 30-year tradition and all proceeds from the event directly support student scholarships at Genesee Community College. The College is pleased to announce the return of our Presenting Sponsor, Tompkins Financial Corporation, to Encore 2023. 

"Tompkins' banking, insurance, and wealth teams are proud to once again partner with GCC in support of the people and community we serve here in western New York," said David Boyce, President & CEO, of Tompkins Insurance Agencies.

There are several opportunities remaining to sponsor the Encore event. These sponsorships are critically important to the scholarships GCC provides its students and are available at several levels this year:

• Table Sponsor: $1,500
• Conductor's Circle: $1,000
• Golden Baton Society: $600
• Inner Circle: $300
• Individual Platinum Patron Ticket: $100

Help make a difference and make your reservations today at www.gccfoundationinc.org/encore or contact the Foundation Office at (585) 345-6809.

For more information contact Justin Johnston, Vice President, Development and External Affairs at (585) 345-6809, or via email: foundation@genesee.edu.

“Tompkins is proud to grow alongside our clients as we see vast developments to their portfolios so that we can better assist them in every aspect,” said James Sperry, senior vice president and managing director for Tompkins’ Western New York region. 

“We could not have asked for a better appointment to this position and for someone to work so closely with our clients, than Cesar.” 

Vazquez comes to Tompkins Financial Advisors with 35 years of work experience, including 22 in the retirement plan industry (with extensive knowledge in retirement plan designs, compliance, and industry knowledge), 13 years in the financial and banking industry, having previously served as the retirement plan service manager and consultant for Wealth Enhancement Group’s QCI Team, EPIC Retirement Plan Services, Lifetime Benefits Solutions, and more. 

He holds an associate degree in Business administration from Monroe Community College, a bachelor's degree in Accounting from St. John Fisher College, and certification from Accredited Investments Fiduciary (AIF), Vazquez currently resides in Webster, with his wife Ivette, and daughters Marissa and Alicia.  

Furthering its expertise in the Western New York market, Tompkins Financial Advisors has promoted Serena Compitello and Aaron Rowe to assistant vice president, trust counsel. In this role, Compitello and Rowe are responsible for assisting clients in their estate planning by collaborating with clients' attorneys and other professionals, who need professional advisement in trusts, estate planning, and asset protection.  

“As we see the clientele of Tompkins continue to grow, it is necessary to expand our leadership team to help support our clients in the best way possible,” said James Sperry, Tompkins Financial Advisors senior vice president and managing director for the Western New York market. “Serena and Aaron both bring years of legal experience and we are confident they are the perfect people to help in assisting our clients.”

Compitello has held the position of trust counsel at Tompkins Financial Advisors for the past eight months. She holds a Bachelor of Arts in Political Science from St. Bonaventure University and a Juris Doctorate from Albany Law School and is licensed to practice law in New York. Compitello is a PathStone Housing Action Corporation and PathStone Development Corporation board member and serves on the Membership Committee of the Monroe County Bar Association. Serena has received several past awards: The Daily Record and Rochester Business Journal’s Legal Excellence Award – Up and Coming Attorney, 2022; Super Lawyers Rising Star, 2022 and Super Lawyers Rising Star, 2021.

Rowe joined Tompkins Financial Advisors six months ago from Piede Law, LLP, where he served as an associate attorney. He holds a Bachelor of Science in Mechanical Engineering from Brigham Young University and a Juris Doctorate from Penn State Dickinson Law School of the Pennsylvania State University. Rowe is licensed to practice law in New York and is a member of the Monroe County Bar Association. He currently resides in Fairport New York, where he lives with his wife and three young children. Outside of his professional work, Rowe enjoys training and organizing youth leaders in the community, even taking a two-year leave from his university studies to volunteer full-time. Rowe is bilingual and has earned the privileged Eagle Scout achievement from the Boy Scouts of America. 

Photos submitted by Michelle Obligado of Tompkins 

Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.35 for the first quarter of 2023, in line with the immediate prior quarter, and down 15.6% from diluted earnings per share of $1.60 reported in the first quarter of 2022. The first quarter results in the prior year included $2.0 million, pre-tax, ($0.10 per diluted share) in net fees related to the SBA's Paycheck Protection Program loans ("PPP"), compared to net fees of $2,000 in the current period.  

Net income for the first quarter of 2023 was $19.4 million, a decrease of 16.7% from the $23.3 million reported for the same period in 2022.  Increased funding costs coupled with increases in operating expense were the main drivers for the year-over-year decreases in net income.  

Tompkins President and CEO, Stephen Romaine, commented, "The first quarter of 2023 was a tumultuous quarter for the banking industry.  In times like these, our business model - built on strong customer relationships and sustainable financial performance - has helped differentiate Tompkins from companies with less tenable business models. Though we are not immune to certain headwinds facing our industry - as evident from reduced earnings in the first quarter - we are pleased to report an increase in our common equity for the second consecutive quarter, a strong liquidity position, while at the same time delivering an annualized return on equity of 12.45% in the first quarter of 2023." 

       

SELECTED HIGHLIGHTS FOR THE PERIOD: 

• Key profitability measures remained healthy in the first quarter, with a return on average assets of 1.03% (up from 1.00% last quarter); net interest margin of 2.99% (down from 3.02% last quarter); and return on equity of 12.45% (down from 13.36% last quarter). 
• Regulatory Tier 1 capital to average assets improved for the sixth consecutive quarter, ending the first quarter of 2023 at 9.63%. 
• Total loans at March 31 were $5.3 billion, in line with the immediate prior quarter, and up $210.2 million, or 4.2% from March 31, 2022.  Excluding PPP loans, total loans at March 31 were up 4.6% over the first quarter of 2022. 
• Total nonperforming assets at March 31 represented 0.37% of total assets and declined 13.7% from the most recent prior quarter.    

Total deposits at March 31 were $6.5 billion, reflecting a 1.4% decrease compared to year-end 2022 and a decline of 7.2% when compared to same period last year.   
  

NET INTEREST INCOME 

Net interest margin was 2.99% for the first quarter of 2023, compared to 3.02% reported for the fourth quarter of 2022, and 3.04% at March 31, 2022. The decrease in margin from the fourth quarter of 2022 was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment.   

Net interest income was $54.2 million for the first quarter of 2023, down from $57.3 million for the fourth quarter of 2022, and $56.6 million for the first quarter of 2022. Net interest income for the quarter ended  March 31 was impacted by increases in interest expense, which totaled $15.0 million for the first quarter of 2023 compared to $2.6 million for the same period in 2022, partially offset by increased interest and dividend income, which increased by $10.1 million when compared to March 31, 2022.    

Average loans for the quarter ended March 31, 2023 were up $41.6 million or 0.8% from the fourth quarter of 2022, and $195.3 million or 3.9% compared to the same period in 2022. The increase in average loans was mainly in the residential and commercial real estate portfolios compared to the quarter ended March 31, 2022.  Asset yields for the quarter ended March 31, 2023 were up 25 basis points compared to the quarter ended December 31, 2022, and up 63 basis points compared to the same period in 2022.    

Average total deposits for the first quarter of 2023 were down $144.9 million, or 2.2% compared to the fourth quarter of 2022, and down $328.2 million, or 4.8% compared to the same period in 2022.  The decrease was largely driven by a decline in stimulus funding and a tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve. Average deposit balances at March 31 are $1.3 billion or 23.9% higher than pre-pandemic levels reported at December 31, 2019.  The cost of interest-bearing deposits increased to 1.10% for the first quarter of 2023, compared to 0.69% for the fourth quarter of 2022, and 0.17% for the first quarter last year. The increase was mainly driven by higher market interest rates as a result of the target federal funds rate increasing 450 basis points over the prior twelve months.   

The total cost of interest-bearing liabilities of 1.26% for the first quarter of 2023 represented an increase of 42 basis points over the fourth quarter of 2022, and an increase of 105 basis points over the same period in 2022. At March 31, the Company estimates total uninsured deposits of $2.6 billion, which is unchanged from December 31, 2022.  The uninsured deposit balance of $2.6 billion at March 31 is made up of $1.1 billion of collateralized government deposits and $1.5 billion of uninsured customer deposits without liquid collateral pledged.  Total insured deposits and collateralized government deposits represent 76.9% of the Company's total deposits of $6.5 billion at March 31.   

NONINTEREST INCOME 

Noninterest income of $20.4 million for the first quarter of 2023 was up $2.0 million, or 11.2% compared to the most recent prior quarter, and up $415,000, or 2.1% compared to the prior year quarter in 2022. Noninterest income represented 27.3% of total revenue at March 31, compared to 24.3% at December 31, 2022, and 26.1% at March 31, 2022. Increases in insurance and card service fees in the first quarter of 2023 compared to the prior year quarter were partially offset by lower wealth management fees, primarily due to market conditions.  

NONINTEREST EXPENSE 

Noninterest expense was $50.2 million for the first quarter of 2023, which was in line with the fourth quarter of 2022, and up $3.3 million, or 7.1% over the first quarter of 2022, with the increase largely driven by higher personnel-related costs. Increases in FDIC insurance rates, as well as increased spending on marketing and technology also contributed to expense growth in the first quarter of 2023 compared to the first quarter of 2022.   

INCOME TAX EXPENSE 

The Company's effective tax rate was 23.3% for the first quarter of 2023, compared to 23.0% for the same period in 2022.   

ASSET QUALITY 

The allowance for credit losses represented 0.87% of total loans and leases at March 31, 2023, unchanged from the prior quarter, and up from 0.83% at March 31, 2022. The ratio of the allowance to total nonperforming loans and leases improved to 162.11% for the first quarter of 2023, compared to 139.86% at December 31, 2022 and 139.20% at March 31, 2022.  

Provision for credit losses for the first quarter of 2023 was a credit of $825,000 compared to a credit of $520,000 for the same period in 2022. Net recoveries for the quarter ended March 31 were $1.3 million compared to net recoveries of $17,000 reported for the same period in 2022.         

Nonperforming assets represented 0.37% of total assets at March 31, down from 0.43% at December 31, 2022 and 0.38% at March 31, 2022.  At March 31, nonperforming loans and leases totaled $28.4 million, compared to $32.8 million at December 31, 2022 and $30.3 million at March 31, 2022.   

Special Mention and substandard loans and leases totaled $85.6 million at March 31, reflecting improvement from the $98.3 million reported for December 31, 2022 and the $135.1 million at March 31, 2022.  The improvement over prior quarter was mainly a result of upgrades on two large commercial real estate loans previously reported as Special Mention. 

CAPITAL POSITION 

Capital ratios at March 31, remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 14.62% at March 31, compared to 14.42% at December 31, 2022 and 14.23% at March 31, 2022. The ratio of Tier 1 capital to average assets was 9.63% at March 31, compared to 9.34% at December 31, 2022 and 8.89% at March 31, 2022.  

LIQUIDITY POSITION 

The Company's liquidity is well positioned and remains stable from the fourth quarter of 2022.  Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and FHLB advances.  The Company maintains ready access liquidity of $1.7 billion or 22.5% of assets.  As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At March 31 the Company had an available borrowing capacity at the FHLB of $1.3 billion as compared to $1.3 billion in the fourth quarter of 2022.  Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window.  At March 31 the available borrowing capacity with the Federal Reserve Bank was $157.0 million, secured by investment securities.  In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at March 31, the Company maintained $265.3 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.