HomeMarket NewsTompkins Financial Reports Q3 Loss Following Sale of AFS Securities

Tompkins Financial Reports Q3 Loss Following Sale of AFS Securities

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Tompkins Financial, listed on the NYSE under the ticker symbol TMP, announced on Friday that it has experienced an after-tax loss of approximately $47.5 million as a result of the sale of approximately $429.6 million worth of available-for-sale (AFS) securities. This transaction was undertaken as part of Tompkins Financial’s ongoing balance sheet repositioning strategy, which will ultimately lead to a net loss in the third quarter of 2023.

The proceeds from the sale were reinvested in other available-for-sale securities that are expected to have an average book yield of 5.12%. The average remaining life of both the sold and purchased securities was measured at 4.3 years, while the average yield of the securities sold stood at approximately 0.93%.

Tompkins Financial anticipates that this balance sheet repositioning will ultimately improve its earnings and revenue in future periods, primarily due to the improved yield offered by the newly acquired securities.

As of June 30, 2023, Tompkins Financial boasted a Tier 1 Capital to risk-weighted assets ratio of 13.51%, which is significantly higher than the 8% regulatory threshold required for it to be considered β€œwell capitalized.” Despite this transaction, the company’s Tier 1 Capital ratio is projected to experience a reduction of less than 100 basis points, ensuring that it remains comfortably above the well capitalized level.

This transaction will not have any impact on shareholders’ equity or book value per share as of the sale date. This is because unrealized losses on AFS securities are already accounted for as a deduction to shareholder equity, according to Tompkins Financial.

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