Tompkins Financial Corporation (TMP): BCG Matrix [11-2024 Updated]
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Tompkins Financial Corporation (TMP) Bundle
In the dynamic world of finance, understanding where a company stands can be pivotal for investors. Tompkins Financial Corporation (TMP) is currently navigating a landscape filled with opportunities and challenges. In this analysis, we will explore the Boston Consulting Group Matrix to categorize TMP's business units into Stars, Cash Cows, Dogs, and Question Marks. Discover how strong net income recovery, stable cash flow generation, and areas needing strategic focus define TMP's position as of 2024.
Background of Tompkins Financial Corporation (TMP)
Tompkins Financial Corporation ('Tompkins' or the 'Company') is headquartered in Ithaca, New York, and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company operates as a community-based financial services organization offering a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning, wealth management, and insurance services.
As of September 30, 2024, Tompkins had one wholly-owned banking subsidiary, Tompkins Community Bank, which provides a full suite of wealth management services under the Tompkins Financial Advisors brand. These services include investment management, trust and estate planning, financial and tax planning, as well as life, disability, and long-term care insurance services. Additionally, the Company operates Tompkins Insurance Agencies, Inc., a wholly-owned insurance agency subsidiary.
The Company’s principal offices are located at 118 E. Seneca Street, Ithaca, NY 14850, and its common stock is traded on the NYSE American under the symbol 'TMP.' As of September 30, 2024, Tompkins Financial Corporation had total assets of approximately $8 billion, with net loans and leases amounting to approximately $5.9 billion.
Tompkins’ strategic focus is centered on responsible and sustainable growth, with initiatives aimed at organic growth through existing businesses and potential acquisitions of financial institutions and services. The Company has a network of 55 banking offices across New York and Pennsylvania, providing a strong local presence to attract deposits and service customers in its market areas.
The Company is subject to comprehensive regulation by various authorities, including the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the New York State Department of Financial Services, ensuring compliance with banking regulations and consumer protection laws.
Tompkins Financial Corporation (TMP) - BCG Matrix: Stars
Strong Recovery in Net Income
Net income for the third quarter of 2024 reached $18.6 million, equating to $1.30 diluted earnings per share. This marks a significant recovery from a net loss of $33.4 million or $(2.35) diluted loss per share in the same quarter of 2023 .
Significant Improvement in Return on Equity (ROE)
The return on average equity (ROE) for the third quarter of 2024 improved to 10.65%, up from (20.84)% in the third quarter of 2023 .
Increased Total Loans
Total loans and leases increased by $275.3 million, or 4.9%, from December 31, 2023, bringing the total to $5.9 billion as of September 30, 2024.
Net Interest Income Rise
Net interest income for the third quarter of 2024 was $53.2 million, reflecting an increase of $2.2 million, or 4.3%, compared to the same period in 2023.
Successful Sale of Debt Securities
In 2023, Tompkins Financial successfully sold $510.5 million in available-for-sale debt securities, which contributed to the recovery in net income.
Solid Banking Segment Performance
The banking segment reported a net income of $14.8 million for the third quarter of 2024, a remarkable increase of 139.9% from a net loss of $37.1 million in the third quarter of 2023. For the nine months ended September 30, 2024, net income reached $41.3 million, up 405.7% year-over-year .
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $18.6 million | $(33.4 million) | Recovery of $52 million |
| Return on Equity (ROE) | 10.65% | (20.84%) | Improvement of 31.49% |
| Total Loans | $5.9 billion | $5.6 billion | Increase of $275.3 million |
| Net Interest Income | $53.2 million | $51 million | Increase of $2.2 million |
| Sale of Debt Securities | $510.5 million | N/A | N/A |
| Banking Segment Net Income | $14.8 million | $(37.1 million) | Recovery of $51.9 million |
Tompkins Financial Corporation (TMP) - BCG Matrix: Cash Cows
Consistent cash flow generation from banking operations.
Net interest income for the third quarter of 2024 was $53.2 million, an increase of $2.2 million, or 4.3%, compared to the same period in 2023. For the first nine months of 2024, net interest income totaled $154.8 million, a decrease of $2.3 million, or 1.5%, compared to the same period in 2023.
Established market presence with 55 banking offices across New York and Pennsylvania.
As of September 30, 2024, Tompkins Financial Corporation operated 55 banking offices, which have been integral in maintaining its market share in the mature banking sector.
Stable deposits totaling $6.6 billion, up 2.8% from the previous year.
Total deposits at September 30, 2024, were $6.6 billion, reflecting an increase of $178.0 million, or 2.8%, from December 31, 2023. The growth was primarily driven by increases in checking, money market, and savings accounts.
Insurance services showing steady demand with successful consolidation of smaller agencies.
Insurance commissions and fees for the third quarter of 2024 were $11.3 million, a decrease of 1.0% from the same period in 2023. However, for the nine months ended September 30, 2024, insurance commissions and fees were up $1.1 million, or 3.6%, compared to the same period in 2023.
Wealth management segment contributing positively to overall income.
Wealth management fees in the third quarter of 2024 totaled $4.9 million, an increase of $583,000, or 13.4%, compared to the same quarter in 2023. The fair value of assets managed by Tompkins was $3.2 billion at September 30, 2024, up $281.0 million, or 9.6%, from the previous year.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Interest Income | $53.2 million | $51.0 million | $154.8 million | $157.1 million |
| Total Deposits | $6.6 billion | $6.4 billion | $6.6 billion | $6.7 billion |
| Insurance Commissions | $11.3 million | $11.4 million | $31.7 million | $30.6 million |
| Wealth Management Fees | $4.9 million | $4.3 million | $14.9 million | $13.7 million |
Tompkins Financial Corporation (TMP) - BCG Matrix: Dogs
Noninterest Income Showing Volatility
Noninterest income for the three months ended September 30, 2024, was $23.4 million, a significant increase from a noninterest loss of $57.0 million in the same period for 2023. For the nine months ended September 30, 2024, noninterest income totaled $67.3 million, compared to a noninterest income loss of $50.7 million for the same period in 2023. The fluctuating performance was primarily driven by pre-tax losses of $62.9 million and $70.0 million on the sale of available-for-sale debt securities during the respective periods in 2023.
High Provision for Credit Losses
The provision for credit losses for the three months ended September 30, 2024, was $2.2 million, compared to $1.2 million in the same period for 2023. For the nine months ended September 30, 2024, the provision increased to $5.2 million from $2.6 million in 2023. This increase was mainly attributed to loan growth and the rise in net charge-offs, which were $912,000 for the three months and $1.6 million for the nine months ended September 30, 2024.
Declining Performance in Some Non-Core Business Segments
The insurance segment reported net income of $3.1 million for the three months ended September 30, 2024, down $141,000, or 4.4%, compared to the same quarter in 2023. Noninterest revenue for the insurance segment decreased by $115,000, or 1.0%, primarily due to lower insurance commissions and fees. Additionally, the wealth management segment's net income was $755,000, which, despite being a 34.3% increase year-over-year, reflects the challenges faced in maintaining consistent performance across segments.
Challenges in Maintaining Noninterest-Bearing Deposits
Noninterest-bearing deposits decreased by 7.6% year-over-year as of September 30, 2024. The average noninterest-bearing deposits were down $151.6 million for the three months ended September 30, 2024, and down $184.1 million, or 9.1%, for the nine months ended September 30, 2024.
| Metrics | 3 Months Ended September 30, 2024 | 3 Months Ended September 30, 2023 | 9 Months Ended September 30, 2024 | 9 Months Ended September 30, 2023 |
|---|---|---|---|---|
| Noninterest Income | $23.4 million | $(57.0 million) | $67.3 million | $(50.7 million) |
| Provision for Credit Losses | $2.2 million | $1.2 million | $5.2 million | $2.6 million |
| Net Charge-Offs | $912,000 | $177,000 | $1.6 million | Net Recoveries of $1.1 million |
| Noninterest-Bearing Deposits Change | -7.6% | - | -9.1% | - |
Tompkins Financial Corporation (TMP) - BCG Matrix: Question Marks
Wealth management segment needs strategic focus to enhance profitability.
Wealth management fees of $4.9 million in the third quarter of 2024 were up $583,000, or 13.4%, compared to the third quarter of 2023. For the first nine months of 2024, wealth management fees were up $1.2 million, or 8.7%, compared to the same period in 2023. The fair value of assets managed by or in custody of Tompkins was $3.2 billion at September 30, 2024, up $281.0 million, or 9.6%, from September 30, 2023.
Potential for growth in insurance services, but requires targeted marketing efforts.
The insurance segment reported net income of $3.1 million for the three months ended September 30, 2024, which was down $141,000, or 4.4%, compared to the same quarter in 2023. Total noninterest revenue was down $115,000, or 1.0%, for the third quarter of 2024 compared to the same quarter in the prior year.
Emerging competitive pressures from larger financial institutions.
As of September 30, 2024, total assets were $8.0 billion, up $186.7 million, or 2.4%, from December 31, 2023. The competitive landscape poses challenges for market share, particularly against larger institutions with greater resources.
Need for innovation in digital banking services to attract younger demographics.
Increased demand for digital banking services is evident, with noninterest income of $23.4 million for the three months ended September 30, 2024, which was up significantly compared to the same period in 2023.
Consideration of acquisitions to expand market reach and service offerings.
Tompkins Financial is exploring acquisitions as a strategy to enhance its market presence. The need for growth is highlighted by total loans of $5.9 billion at September 30, 2024, up $275.3 million, or 4.9%, from December 31, 2023.
| Segment | Net Income (Q3 2024) | Growth in Revenue (2024 vs 2023) | Assets Managed ($ billion) | Total Loans ($ billion) |
|---|---|---|---|---|
| Wealth Management | $0.755 million | 13.7% | $3.2 | $5.9 |
| Insurance | $3.1 million | -1.0% | N/A | N/A |
In summary, Tompkins Financial Corporation (TMP) demonstrates a robust performance landscape as assessed through the BCG Matrix. The company's Stars are characterized by a strong recovery in net income and substantial growth in loans, while the Cash Cows reflect consistent cash flow and a solid market presence. However, the Dogs indicate challenges with volatility in noninterest income and credit losses, and the Question Marks highlight opportunities for improvement in wealth management and digital services. To capitalize on these insights, strategic focus and innovation will be key as TMP navigates its market position in 2024.
Updated on 16 Nov 2024
Resources:
- Tompkins Financial Corporation (TMP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Tompkins Financial Corporation (TMP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Tompkins Financial Corporation (TMP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.