Tompkins Financial Corporation (TMP) Stock: Rallies After Record Q2 Profit and Loan Growth

TLDR

• Tompkins reports record Q2 earnings as EPS jumps 36% year over year.
• TMP shares rally 6.51% after stronger profits and loan growth results.
• Net interest margin expands to 3.58% with higher lending income.
• Company raises dividend 13% after strengthening capital position.
• Stable asset quality and $1.7 billion liquidity support financial outlook.

Tompkins Financial Corporation reported record second-quarter 2026 earnings, supporting a sharp gain in its share price. TMP stock climbed 6.51% to $98.68 after the company posted stronger profitability and continued balance sheet growth. The results also reflected higher lending activity, improved margins, and stronger capital levels.

Tompkins Financial Corporation, TMP

Record earnings lift profitability and dividend outlook

Tompkins reported diluted earnings per share of $2.04 during the second quarter of 2026. The figure increased 36.0% from the same period last year. It also rose 12.1% from the first quarter of 2026.

Net income reached $29.3 million during the quarter. That result increased 36.5% year over year and 12.4% from the previous quarter. Meanwhile, six-month net income climbed to $55.4 million from $41.2 million.

The company also raised its quarterly dividend following stronger earnings and capital growth. Management approved a 13% higher dividend than the third-quarter 2025 payment. The increase followed three consecutive quarters of record earnings.

Net interest income reached $74.0 million during the quarter. That total increased 23.0% from the second quarter of 2025. It also improved 3.0% from the previous quarter.

Net interest margin held steady at 3.58% from the prior quarter. However, it expanded 50 basis points from one year earlier. Higher loan yields and lower funding costs supported the annual improvement.

Average loans increased 6.5% year over year during the quarter. Commercial real estate and commercial lending produced most of the expansion. Average earning asset yields also improved compared with last year.

Loan growth offsets lower insurance income

Total loans reached higher levels at the end of June. Period-end loans increased 6.9% from June 2025 and 1.8% from March 2026. Annualized quarterly loan growth reached 7.4%.

Average deposits also strengthened compared with last year. Total average deposits increased 4.4% year over year despite seasonal municipal deposit outflows. Period-end deposits reached approximately $7.0 billion.

Funding costs remained stable during the quarter. The average cost of funds stayed at 1.68%, while interest-bearing deposit costs declined from last year. Noninterest-bearing deposits continued representing 26.9% of average deposits.

Noninterest income declined because of the insurance business sale completed during late 2025. Quarterly noninterest income totaled $13.1 million, down 41.7% from last year. Wealth management, card services, and deposit fees posted moderate gains.

Operating expenses also declined after the insurance unit divestiture. Noninterest expense fell 8.8% year over year to $47.1 million. Lower salary and operating costs offset higher employee benefit expenses.

Income tax expense totaled $9.2 million during the quarter. The effective tax rate remained stable at 24.0%. Six-month tax expense increased alongside stronger earnings.

Capital strengthens as asset quality remains stable

Tompkins maintained solid credit quality during the quarter. The allowance for credit losses equaled 0.89% of total loans. Improved economic forecasts reduced reserve coverage compared with last year.

Provision for credit losses remained unchanged from the previous quarter at $1.5 million. Net charge-offs totaled $1.6 million during the period. Earlier commercial real estate losses created a tougher annual comparison.

Nonperforming assets represented 0.60% of total assets at quarter-end. Meanwhile, loans past due between 30 and 89 days declined from the previous quarter. Several performing loans moved into Special Mention classification during the period.

Capital ratios remained well above regulatory requirements throughout the quarter. Tier 1 capital to average assets increased to 10.69% from 9.36% one year earlier. Total capital to risk-weighted assets also improved to 14.89%.

The company also continued returning capital through share repurchases. Tompkins bought back 11,787 shares during the second quarter. It repurchased 35,518 shares during the first six months of 2026.

Liquidity remained stable at quarter-end despite seasonal funding changes. Available liquidity totaled $1.7 billion, representing 19.4% of total assets. Management maintained access to multiple wholesale funding sources to support future operations.

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