ITHACA — Tompkins Financial Corp. (NYSE Amex: TMP) has some specific qualities it looks for in acquisitions, President and CEO Stephen Romaine says. “Things that are five or 10 years, short-lived, or things that are white hot,” Romaine explains. “Those are things that are not really on our radar screen.” Instead, the Ithaca–based banking company […]
ITHACA — Tompkins Financial Corp. (NYSE Amex: TMP) has some specific qualities it looks for in acquisitions, President and CEO Stephen Romaine says.
“Things that are five or 10 years, short-lived, or things that are white hot,” Romaine explains. “Those are things that are not really on our radar screen.”
Instead, the Ithaca–based banking company looks for institutions that will provide generations’ worth of business and markets with long-term growth potential. Tompkins Financial’s latest acquisition fits that bill on both fronts, Romaine says.
The company announced plans Jan. 26 to acquire VIST Financial Corp. (NASDAQ: VIST) of Wyomissing, Pa. in an all-stock deal worth about $86 million. Shareholders must still approve the acquisition, which is expected to close in the third quarter.
VIST Financial has $1.4 billion in total assets, $1.2 billion in deposits, and $960 million in loans. It is parent of VIST Bank, VIST Insurance, and VIST Capital Management.
VIST Bank operates as a community bank with 21 branch offices in southeastern Pennsylvania, serving Berks, Montgomery, Philadelphia, Chester, Delaware, and Schuylkill counties.
Tompkins Financial operates 46 offices in the Central, Western, and Hudson Valley regions of New York through three subsidiary banks: Tompkins Trust Co., The Bank of Castile, and Mahopac National Bank. The company also owns insurance and wealth-management subsidiaries and has total assets of more than $3.4 billion.
When the acquisition of VIST Financial is complete, Tompkins Financial will have $4.8 billion in assets, $3.8 billion in deposits,
$2.9 billion in loans, and 67 branches.
Southeast Pennsylvania has been on Tompkins’ radar screen for several years, Romaine says.
“We’ve been educating ourselves on the opportunities that exist down there,” he says. “[VIST is] focused on long-term results.”
VIST has about 300 employees. The “vast majority” will be retained and added to Tompkins Financial’s 750 employees, Romaine says. The entire VIST management team will remain on board and Tompkins is not planning any branch closures in Pennsylvania.
VIST has about $25 million in outstanding Series A preferred stock and related warrants held by the U.S. Treasury under the TARP Capital Purchase Program. The debt will all be retired prior to closing, Romaine says.
Tompkins Financial won’t have to raise capital to retire the TARP debt, he adds.
The distance from Tompkins Financial’s headquarters in Ithaca to Pennsylvania shouldn’t be an issue either, Romaine says. It’s about as far to Mahopac National Bank’s market area in the Hudson Valley.
The acquisition will speed up growth at VIST, President and CEO Robert Davis says. The company had been planning a $30 million stock offering last summer with an eye toward expansion, but capital markets remain challenging, Davis notes.
Paralysis in the nation’s capital, the European debt crisis, and the continued economic slump also prompted VIST to start looking at potential acquirers, Davis says. Tompkins was at the top of list.
The companies first came together in 2010 during an earlier round of capital-raising for VIST. Davis says Tompkins Financial began courting VIST then.
“Frankly, we saw the same set of management practices and the same moral compass,” Davis says. “They’re honest, straight-forward people and we like to think of ourselves the same way. It was a strategic fit from the get-go.”
Product lines at the two companies are already similar, he adds, but joining with Tompkins will allow VIST to bring a trusts and estates business to its markets. Davis also says the acquisition will allow VIST to continue its expansion into the Philadelphia area.
Berks and Schuylkill counties have been the center of most of the bank’s history, but the institution began expanding toward Philadelphia in the last few years. It’s a more competitive market, but one with attractive growth prospects, Davis says.
VIST has not yet released its fourth-quarter results as of press time. Through the first nine months of 2011, the company earned
$3.2 million, or 30 cents a share, up from $2.6 million, or 22 cents a share, for the same period in 2010.
For the full year in 2011, Tompkins Financial earned $35.4 million, or $3.20 per share, up 4.7 percent from 2010.