Tompkins Financial Corp. reported diluted earnings per share of $1.65 for the third quarter of 2025, up 10.0% from the immediate prior quarter and up 26.9% from $1.30 in the third quarter of 2024. Net income for the quarter was $23.7 million, an increase of $2.2 million, or 10.3%, from the second quarter of 2025, and up $5.0 million, or 27.0%, from the third quarter of 2024. For the nine months ended September 30, 2025, diluted earnings per share were $4.52, up 25.9% from $3.59 in the same period of 2024, with year-to-date net income of $64.8 million, up 26.6% from $51.2 million.
President and CEO Stephen Romaine attributed the strong performance to the strength of the team and balance sheet, noting that net income rose 27.0% year-over-year. The results were driven by continued net interest margin expansion and loan and deposit growth of 7%. Romaine stated, “Our improved earnings reflected the results of investments in our business, as expenses for the 2025 year-to-date period were up over 4% compared to the prior year period. We believe we remain well positioned to continue to support growth, build quality customer relationships and support our local communities.”
Net interest margin improved to 3.20% in the third quarter of 2025, up 12 basis points from the prior quarter and up 41 basis points from 2.79% in the third quarter of 2024. Total loans at September 30, 2025 were $115.4 million higher than June 30, 2025, representing annualized growth of 7.5%, and up $406.8 million, or 6.9%, from September 30, 2024. Total deposits reached $7.1 billion, up $337.3 million, or 5.0%, from the prior quarter end, and up $475.2 million, or 7.2%, year-over-year. The total average cost of funds was 1.83%, down 1 basis point from the prior quarter and 18 basis points from the prior year.
Net interest income for the third quarter was $63.9 million, up $3.7 million, or 6.2%, from the second quarter of 2025, and up $10.7 million, or 20.1%, from the third quarter of 2024. For the nine-month period, net interest income was $180.7 million, up 16.7% from $154.9 million in the same period of 2024. The increase was driven by margin improvement and average loan growth. Average loans for the quarter rose $86.8 million, or 1.4%, from the prior quarter, and were up $385.5 million, or 6.6%, from a year ago, primarily in commercial real estate and commercial and industrial portfolios. The average yield on interest-earning assets was 4.90%, up 11 basis points from the prior quarter and 24 basis points year-over-year.
Noninterest income of $23.6 million was up 0.8% from the third quarter of 2024, mainly due to a 52.2% increase in gain on sale of loans. Year-to-date noninterest income was $71.1 million, up 5.7%, driven by a $1.9 million gain on sale of other real estate owned and increases in insurance commissions and wealth management fees. Noninterest expense for the third quarter was $53.8 million, up 8.0% from the prior year, reflecting higher personnel and other operating expenses. For the year-to-date, noninterest expense was $156.1 million, up 4.3%.
Asset quality metrics remained stable. The allowance for credit losses was 0.95% of total loans at September 30, 2025, unchanged from the prior quarter. Nonperforming assets totaled $53.0 million, or 0.63% of total assets, down from $62.7 million a year ago. Special Mention and Substandard loans increased to $144.2 million from $96.8 million at June 30, 2025, mainly due to two loans totaling $41.2 million downgraded to Special Mention. The Company believes collateral is sufficient to cover exposure.
Capital ratios remained well above regulatory minimums. The ratio of total capital to risk-weighted assets was 13.27%, and Tier 1 capital to average assets was 9.41%. Liquidity position was stable with ready access to $1.5 billion, or 17.8% of total assets. For more information, visit www.tompkinsfinancial.com.
