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TOMPKINS FINANCIAL CORP (TMP)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 diluted EPS was $1.37, flat sequentially and up 16.1% YoY; net interest margin expanded to 2.98% and net interest income rose 11.8% YoY as funding costs eased and average loans grew .
  • TMP beat Wall Street EPS consensus by $0.06 ($1.37 vs $1.31), while S&P-defined revenue was below consensus ($76.41M vs $79.38M*) — driven by higher provision ($5.3M) tied to a specific CRE reserve and rising nonperformers .
  • Asset quality was mixed: allowance coverage increased to 1.01% of loans, but nonperforming loans and leases rose to $71.1M due to one CRE credit and allowance/NPL coverage fell to 85.85% from 111.06% in Q4 .
  • Deposits increased $282M QoQ to $6.75B and loan-to-deposit ratio improved to 89.8%, underscoring funding stability; Tier 1 capital was 9.31% .
  • Dividend was maintained at $0.62/share (declared April 24), and the bank advanced digital engagement via a Spiral partnership to boost savings and community giving — potential catalysts include further NIM expansion and clarity on CRE exposures .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded 5 bps QoQ (2.98% vs 2.93%) and 25 bps YoY (vs 2.73%); net interest income rose to $56.7M (+11.8% YoY) as average loans grew and funding costs declined .
  • Fee-based services revenues increased 6.1% YoY; noninterest income benefited from a $1.9M gain on sale of OREO, and insurance commissions rose $1.3M YoY .
  • Management emphasized momentum and positioning: “Our improved results were driven by growth in net interest income, noninterest income, and increased loan and deposit balances… we remain well positioned with a strong balance sheet” — Stephen S. Romaine, President & CEO .

What Went Wrong

  • Provision for credit losses spiked to $5.3M (vs $1.4M in Q4 and $0.854M in Q1 2024) due mainly to a $4.2M specific reserve on one $18.1M CRE relationship and updated macro forecasts .
  • Nonperforming loans and leases increased to $71.1M (from $50.9M in Q4), and allowance/NPL coverage fell to 85.85% (from 111.06% in Q4), highlighting credit concentration risks in CRE .
  • Card services income fell 10.6% YoY partly due to a prior-year sign-on bonus, and noninterest expense was up 1.5% YoY on higher compensation costs .

Financial Results

Core P&L and Margin Comparison

MetricQ1 2024Q4 2024Q1 2025
Net Interest Income ($USD Millions)$50.675 $56.281 $56.662
Noninterest Income ($USD Millions)$22.137 $20.829 $25.032
Provision for Credit Losses ($USD Millions)$0.854 $1.411 $5.287
Noninterest Expense ($USD Millions)$49.857 $49.966 $50.607
Net Income ($USD Millions)$16.872 $19.658 $19.679
Diluted EPS ($USD)$1.18 $1.37 $1.37
Net Interest Margin (TE) (%)2.73% 2.93% 2.98%

Balance Sheet and Credit KPIs

KPIQ1 2024Q4 2024Q1 2025
Total Loans ($USD Billions)$5.641B $6.020B $6.067B
Total Deposits ($USD Billions)$6.450B $6.472B $6.754B
Loan-to-Deposit Ratio (%)87.5% 93.0% 89.8%
Tier 1 Capital to Average Assets (%)9.08% 9.27% 9.31%
Nonperforming Assets ($USD Millions)$62.695M $65.185M $71.159M
NPA / Total Assets (%)0.81% 0.80% 0.87%
Allowance / Total Loans (%)0.92% 0.94% 1.01%
Allowance / NPL (%)82.47% 111.06% 85.85%
Net Charge-offs ($USD Millions)$0.228M $0.857M $0.733M

Noninterest Income Breakdown

Component ($USD Millions)Q1 2024Q4 2024Q1 2025
Insurance Commissions & Fees$10.259 $8.471 $11.599
Wealth Management Fees$4.937 $4.878 $5.119
Service Charges on Deposit Accounts$1.796 $1.854 $1.805
Card Services Income$2.939 $2.919 $2.626
Other Income$2.220 $2.740 $3.869

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ1 2025$0.62 (declared Jan 31, payable Feb 21) $0.62 (declared Apr 24, payable May 16) Maintained
RevenueFY 2025None provided None provided N/A
Margins / OpEx / Tax RateFY 2025None provided None provided N/A

Earnings Call Themes & Trends

Note: An earnings-call transcript for Q1 2025 was not available in our document catalog.

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Net interest margin & funding costsNIM 2.79%; cost of funds +5 bps QoQ NIM 2.93%; cost of funds -13 bps QoQ NIM 2.98%; cost of funds -4 bps QoQ Improving NIM; easing funding costs
Loan growth+$119.4M QoQ; +8.2% YoY +$138.7M QoQ +$46.7M QoQ Positive, moderating
Deposits+$292.0M QoQ; -0.7% YoY -$106.1M QoQ +$281.7M QoQ Volatile; strong Q1
Asset quality (CRE)NPLs up driven by one CRE relationship NPLs down (one CRE moved to OREO) NPLs up (one CRE added; $4.2M specific reserve) Mixed; CRE exposure remains focal
Fee-based revenueGrowth across categories Up YoY; stronger gains/derivatives +6.1% YoY; OREO gain $1.9M Steady growth
Digital/technology——Spiral partnership to boost savings & giving New initiative

Management Commentary

  • “Our first quarter earnings continued the positive momentum from 2024… growth in net interest income, noninterest income, and increased loan and deposit balances… we remain well positioned with a strong balance sheet.” — Stephen S. Romaine, President & CEO .
  • Funding mix and lower rates supported margin expansion, while fee-based revenues and OREO sales drove noninterest income; management highlighted stable liquidity with $1.5B available (18.6% of assets) .

Q&A Highlights

  • No Q1 2025 earnings-call transcript was available; no Q&A highlights to report.

Estimates Context

MetricConsensus*ActualSurprise
EPS ($)1.31*1.37 +$0.06 (Beat)
Revenue ($USD Millions)79.38*76.41*-$2.97 (Miss)

Values marked with an asterisk (*) were retrieved from S&P Global.

Interpretation: EPS beat reflects margin expansion and higher fee income, partially offset by a larger provision; S&P-defined revenue miss aligns with elevated provision and category mix within noninterest income .

Key Takeaways for Investors

  • Margin trajectory remains favorable: NIM increased to 2.98% with lower funding costs; continued deposit mix improvements could sustain NIM gains .
  • Credit remains the swing factor: a $4.2M specific CRE reserve and higher NPLs warrant monitoring; resolution of identified CRE exposures is a near-term stock narrative driver .
  • Diversification helps: fee-based businesses (insurance, wealth management) and OREO gains supported noninterest income growth; watch for recurring fee momentum versus one-time items .
  • Funding stability improved: deposits rose $282M QoQ and L/D ratio eased to 89.8%; this supports balance-sheet resilience into rate normalization .
  • Capital adequate: Tier 1 at 9.31% and total capital ratio at 13.28% provide buffer to absorb credit normalization while maintaining the dividend .
  • EPS beat vs consensus; revenue below S&P consensus: analysts may reassess assumptions for provision and noninterest income cadence; a clearer view on CRE could reduce estimate dispersion .
  • Near-term trading: positive margin/delivery and deposit strength support the bull case; watch headlines on CRE credit outcomes and any incremental funding cost trends as catalysts .

Additional Documents Reviewed

  • Q1 2025 earnings press release and 8-K (Item 2.02) with full financials .
  • Dividend press release ($0.62/share) on Apr 25, 2025 .
  • Q4 2024 earnings press release and 8-K for sequential comparison .
  • Q3 2024 earnings press release for two-quarter trend analysis .
  • Spiral partnership press release (digital initiatives) .