Tompkins Financial Corp. – Value Analysis (NYSE MKT:TMP) : August 1, 2017

Capitalcube gives Tompkins Financial Corp. a score of 50.

Our analysis is based on comparing Tompkins Financial Corp. with the following peers – Signature Bank, Arrow Financial Corporation, Community Bank System, Inc., Berkshire Bancorp Inc., NBT Bancorp Inc., First of Long Island Corporation, Evans Bancorp, Inc., Chemung Financial Corporation and Bridge Bancorp, Inc. (SBNY-US, AROW-US, CBU-US, BERK-US, NBTB-US, FLIC-US, EVBN-US, CHMG-US and BDGE-US).

Fundamental Overview

Tompkins Financial Corp. has a fundamental score of 50 and has a relative valuation of NEUTRAL.

Fundamental Score

Company Overview

  • It currently trades at a Price/Book ratio of (2.08).
  • TMP-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • TMP-US‘s relative capital efficiency and net profit margins are both around the median level.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • Over the last five years, TMP-US‘s return on equity has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.
  • While TMP-US‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a P/E ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company’s level of equity capital investment suggests it might be under-investing in a business with above median returns.
  • TMP-US might have enough interest coverage to take-on additional debt prudently.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 73.39% is around peer median suggesting that TMP-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, TMP-US‘s pre-tax margin of 35.55% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 26.61% is around peer median. In addition, TMP-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 62.81x is also around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Tompkins Financial Corp. is a financial holding company, which provides financial services. It operates through the following segments: Banking, Insurance, and Wealth Management. The Insurance segment is comprised of property and casualty insurance services and employee benefit consulting operated under the Tompkins Insurance Agencies, Inc. subsidiary. The Wealth management activities include the rest of the Company’s trust, financial planning, and wealth management services conducted under the trust department of the Trust Company. The Banking segment is considered as all its other activities. The company was founded in 1995 and is headquartered in Ithaca, NY.