Investment Thesis
Tompkins Financial faces severe operational deterioration with an 80.2% revenue collapse and critically low returns (ROE 2.8%, ROA 0.3%), indicating the bank is not generating adequate shareholder value despite a $8.7B asset base. The alarming 0.3x interest coverage ratio suggests operating income cannot adequately service debt obligations, signaling structural profitability challenges. While free cash flow generation remains strong, it masks fundamental business weakness that requires immediate resolution.
Strengths
- Strong free cash flow generation of $71.1M with 69.3% FCF margin demonstrates cash conversion capability
- Minimal leverage with 0.00x debt-to-equity ratio provides financial flexibility and safety buffer
- Substantial asset base of $8.7B and solid operating margins of 33.6% provide foundational stability
Risks
- Catastrophic 80.2% year-over-year revenue decline indicates severe business deterioration or potential asset quality issues
- Critically low returns: ROE of 2.8% and ROA of 0.3% far below banking sector standards, failing to generate adequate shareholder value
- Concerning interest coverage ratio of 0.3x suggests operating income cannot cover interest expense, indicating structural profitability crisis
Key Metrics to Watch
- Net interest margin trend and deposit cost evolution driving revenue decline
- Asset quality metrics: non-performing loan ratios and loan loss provisions
- Return on equity trajectory toward 8%+ recovery threshold for banking sector viability
Financial Metrics
Revenue
102.7M
Net Income
26.1M
EPS (Diluted)
$1.82
Free Cash Flow
71.1M
Total Assets
8.7B
Cash
171.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
33.6%
Net Margin
25.4%
ROE
2.8%
ROA
0.3%
FCF Margin
69.3%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.00x
Debt/Assets
89.1%
Interest Coverage
0.34x
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T12:14:37.250081 |
Data as of: 2026-03-31 |
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