Tompkins Financial Reports Strong Q3 Earnings Growth Driven by Margin Expansion
Tompkins Financial Corporation reported significant third-quarter earnings growth with net income up 27% year-over-year, driven by net interest margin expansion and solid loan and deposit growth, positioning the company for continued strength in the banking sector.
Tompkins Financial Corporation reported diluted earnings per share of $1.65 for the third quarter of 2025, representing a 10.0% increase from the previous quarter and a substantial 26.9% improvement from the $1.30 reported for the same period in 2024. Net income reached $23.7 million for the quarter, up $2.2 million from the second quarter of 2025 and $5.0 million higher than the third quarter of 2024, demonstrating consistent financial momentum across multiple periods.
The company's performance was primarily driven by significant net interest margin expansion, which improved to 3.20% in the third quarter of 2025. This represents a 12 basis point increase from the immediate prior quarter and a substantial 41 basis point improvement from the 2.79% reported for the third quarter of 2024. Stephen Romaine, Tompkins President and CEO, attributed the strong results to "continued net interest margin expansion along with loan and deposit growth of 7%," highlighting the strategic investments in the business that have yielded positive returns.
Loan growth remained robust, with total loans reaching $6.3 billion at September 30, 2025, representing a $406.8 million increase from the same period in 2024. The commercial real estate and commercial and industrial portfolios showed particular strength, contributing to the overall growth. Deposit performance was equally impressive, with total deposits climbing to $7.1 billion, up $475.2 million or 7.2% from September 30, 2024. The loan to deposit ratio improved to 89.2% at quarter-end, down from 91.9% at June 30, 2025, indicating improved liquidity management.
Net interest income showed substantial improvement, reaching $63.9 million for the third quarter of 2025, up $3.7 million from the previous quarter and $10.7 million higher than the same period in 2024. For the nine-month period ended September 30, 2025, net interest income totaled $180.7 million, representing a $25.8 million or 16.7% increase compared to the same period in 2024. The average yield on interest-earning assets climbed to 4.90% for the quarter, up 11 basis points from the previous quarter and 24 basis points from the third quarter of 2024.
Noninterest income showed modest growth, reaching $23.6 million for the third quarter of 2025, up $179,000 from the same period in 2024. Year-to-date noninterest income of $71.1 million represented a $3.8 million increase, driven primarily by gains in other income categories including a $1.9 million gain on the sale of other real estate owned. Wealth management fees also contributed to the growth, increasing by $351,000 or 2.4% for the year-to-date period.
The company maintained strong capital ratios, with total capital to risk-weighted assets at 13.27% and Tier 1 capital to average assets at 9.41% at September 30, 2025, both well above regulatory minimums for well-capitalized institutions. Asset quality metrics showed improvement, with nonperforming assets declining to $53.0 million or 0.63% of total assets, down from $62.7 million or 0.78% at September 30, 2024. The company maintained ready access to liquidity of $1.5 billion, representing 17.8% of total assets, providing substantial financial flexibility.
For more information about the company's performance and strategic direction, investors can visit https://www.tompkinsfinancial.com. The improved financial metrics across multiple categories suggest Tompkins Financial is well-positioned to continue its growth trajectory while maintaining strong capital and liquidity positions in the evolving banking environment.