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Tompkins Financial (TMP) 4Q Earnings Rise 18.9 Pct, Yet Miss Estimates

 January 25, 2013 12:29 PM

(By Balaseshan) Tompkins Financial Corp. (TMP) reported a 18.9% increase in quarterly earnings on higher net interest income and non-interest income backed by the purchase of VIST Bank. Despite revenue exceeding consensus, earnings missed Street's expectations.

Profit for the fourth quarter were $11.16 million, up from $9.39 million last year. Earnings per share declined 8.3% to $0.77 due to the greater number shares outstanding in 2012 as a result of shares issued to complete the VIST acquisition.

Operating earnings per share decreased 5.8% to $0.81, due to higher provision expense primarily related to loan charge-offs in the Hudson Valley Region.

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Net interest income rose to $41.8 million from $28.0 million, reflecting the addition of VIST Bank, which was acquired on August 1, 2012. Non-interest income jumped 39.4% to $15.6 million, due to insurance commissions and fees, which nearly doubled as a result of the VIST acquisition.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.88 per share on revenue of $56.72 million for the fourth quarter.

The net interest margin was 3.83%, an improvement from 3.66% in the third quarter of 2012, and from 3.62% last year. Higher margin benefited from the inclusion of VIST Bank into the company's combined results. The paydown of certain higher cost borrowings and non-core time deposits also helped the margin in the latest quarter.

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Non-interest expense was $38.2 million, up 57.8% from last year, mainly as a result of the VIST acquisition and additional expenses related to the integration of VIST into the company's operations beginning in the third quarter of this year.

Provision for loan and lease losses was $5.7 million, up from $1.0 million for the third quarter of 2012 and $1.2 million in the fourth quarter of 2011. The increased provision was largely due to $7.6 million in net charge-offs during the quarter, which is up from $1.3 million in the third quarter of 2012 and $1.4 million last year.

Tier 1 capital as a percentage of average assets at December 31, 2012 was 7.95% and the ratio of total capital to risk-weighted assets was 12.94%.

TMP is trading down 0.87% at $40.89 on Friday. The stock has been trading between $35.82 and $43.13 for the past 52 weeks.



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