Business Wire | Apr 30, 2021 09:01AM EDT

Tompkins Financial Corporation Reports Record First Quarter Earnings

Apr. 30, 2021

ITHACA, N.Y.--(BUSINESS WIRE)--Apr. 30, 2021--Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation reported diluted earnings per share of $1.72 for the first quarter of 2021, 224.5% over the first quarter of 2020. Net income was $25.6 million for the first quarter of 2021, an increase of 222.4% from the $7.9 million reported for the same period in 2020.

President and CEO, Mr. Stephen Romaine commented, "We are extremely pleased to start off 2021 with record quarterly earnings. Results for the quarter, when compared to the same period last year, reflected favorable revenue trends for all three business lines, including increased net interest income, increased insurance commissions, and increased investment services fees. At the same time, expenses for the quarter were down from the same quarter last year. Growth comparisons to the previous year are significantly impacted by the change in provision for credit losses from a $16.3 million expense in the first quarter of 2020, compared to a $2.5 million credit in the first quarter of 2021. The provision for the first quarter of 2020 reflected the highly uncertain economic conditions related to the onset of the COVID-19 pandemic and economic forecasts and other model assumptions relied upon by management in determining the allowance."

SELECTED HIGHLIGHTS FOR THE FIRST QUARTER:

* Diluted earnings per share of $1.72 represents the best quarter in the Company's history, and is up 224.5% over the same period in 2020. * Provision for credit losses was a $2.5 million credit for the first quarter of 2021, compared to an expense of $16.3 million for the same period last year. * Total loans of $5.3 billion at March 31, 2021 were up $355.0 million, or 7.2% over March 31, 2020. Loan growth over the prior period includes a $370.0 million increase related to loans originated under the Small Business Association (SBA) Paycheck Protection Program (PPP). * Total deposits of $6.9 billion at March 31, 2021, an increase of $1.5 billion, or 28.4% over March 31, 2020.

NET INTEREST INCOME Net interest income was $55.0 million for the first quarter of 2021, up from $53.0 million for the same period in 2020, and down from $57.8 million for the most recent prior quarter. Net interest income for the current quarter included $2.8 million of net deferred loan fees associated with PPP loans, compared to net deferred loan fees of $4.5 million in the fourth quarter of 2020. There were no net deferred loan fees related to PPP loans in the first quarter of 2020. Net interest income in the first quarter of 2021 also benefited from lower rates paid on deposit products due to lower market interest rates.

Average loans for the quarter ended March 31, 2021 were up $377.3 million, or 7.7% compared to the same period in 2020. The increase in average loans was mainly in commercial loans, driven largely by PPP loans and commercial real estate loans. Asset yields for the quarter ended March 31, 2021, were down 84 basis points compared to the quarter ended March 31, 2020, which reflects the impact of reductions in market interest rates over the past twelve months as well as the increase in average securities and average interest bearing balances due from banks. While PPP loans were a significant contributor to average loan growth, increases in commercial real estate and residential loans were up 5.6% and 1.7%, respectively, over the same period in the prior year.

Average total deposits for the first quarter of 2021 were up $1.3 billion, or 25.4% compared to the same period in 2020. Average noninterest bearing deposits for the three months ended March 31, 2021 were up $540.0 million or 38.3% compared to the three months ended March 31, 2020. Average deposit balances during the first quarter of 2021 benefited from PPP loan originations, the majority of which were deposited in Tompkins checking accounts. For the first quarter of 2021, the average rate paid on interest-bearing deposit products decreased by 47 basis points from the same period in 2020 due to the overall decline in market interest rates. The total cost of interest-bearing liabilities was 0.38% at March 31, 2021, a decline of 54 basis points from March 31, 2020.

Net interest margin was 3.01% for the first quarter of 2021, compared to 3.44% reported for the same period in 2020, and 3.12% for the fourth quarter of 2020.

NONINTEREST INCOME Noninterest income of $20.0 million was up 5.4% compared to the same period in 2020. Growth over the same quarter last year was supported by a 13.9% increase in insurance commissions and fees, an 11.2% increase in investment services income, and a 9.2% increase in card services income. These increases were partially offset by lower deposit fees and lower gains on securities transactions. Noninterest income represented 26.6% of total revenues for the first quarter of 2021.

NONINTEREST EXPENSE Noninterest expense was $45.2 million for the first quarter of 2021, down $549,000, or 1.2%, from the first quarter of 2020. Salaries and employee benefits were relatively flat when compared to the same quarter last year. The decrease in noninterest expense for the first quarter of 2021 was primarily attributable to lower marketing expenses, which were down $447,000 from the first quarter of 2020.

INCOME TAX EXPENSE The Company's effective tax rate was 20.7% for the first quarter of 2021, compared to 19.4% for the same period in 2020.

ASSET QUALITY Provision for credit losses for the first quarter of 2021 was a credit of $2.5 million compared to an expense of $16.3 million for the same period in 2020. Net recoveries for the quarter ended March 31, 2021 were $180,000 compared to charge-offs of $1.2 million reported for the same period in 2020.

The allowance for credit losses represented 0.93% of total loans and leases at March 31, 2021, down from 1.06% at March 31, 2020, and 0.98% at December 31, 2020. Nonperforming loans and leases totaled $47.7 million at March 31, 2021, compared to $30.7 million at March 31, 2020, and $45.8 million at December 31, 2020. The ratio of the allowance to total nonperforming loans and leases was 103.38% at March 31, 2021, down compared to 170.74% at March 31, 2020, and 112.87% at December 31, 2020. Nonperforming assets represented 0.59% of total assets at March 31, 2021, up from 0.46% at March 31, 2020, and down from 0.60% at December 31, 2020.

Special Mention and Substandard loans and leases totaled $185.2 million at March 31, 2021, up compared to the $90.0 million at March 31, 2020, and down compared to the $189.9 million reported at December 31, 2020. Total Substandard loans and leases of $68.5 million at March 31, 2021, were in line with December 31, 2020, and up compared to the $52.9 million reported at March 31, 2020. The increases in nonperforming loans and leases and Substandard loans compared to prior year, were mainly related to the downgrades of credits in the loan portfolio related to the hospitality industry, which was significantly impacted by the COVID-19 pandemic. Included in the nonperforming loans and leases and Substandard loans and leases are 12 loans totaling $35.5 million that are currently in deferral status.

During 2020 and 2021, overall credit quality has been supported by several plans initiated by the Company in response to the COVID-19 pandemic. As previously announced, Tompkins initiated and participated in a number of credit initiatives to support customers who have been impacted by the economic conditions associated with the COVID-19 pandemic. The Company implemented a payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. As of March 31, 2021, total loans that continued in a deferral status amounted to approximately $195.6 million, representing 3.7% of total loans.

As previously noted, the Company participated in the PPP, which provides SBA borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related expenses and certain other eligible business operating costs, all in accordance with the rules and regulations established by the SBA. The Company began accepting applications for PPP loans on April 3, 2020, and had funded 2,998 loans totaling approximately $465.6 million when the initial program ended. As of April 10, 2021, approximately 2,314 of these PPP loans totaling $300.8 million had been forgiven by the SBA under the terms of the PPP program.

In addition, on January 19, 2021, the Company began accepting both first draw and second draw applications for the reopening of the PPP program. As of April 10, 2021, the Company had submitted 2,013 applications totaling $223.4 million to the SBA, of which 1,919 applications totaling $215.9 million had been approved by the SBA and disbursed to customers.

CAPITAL POSITION Capital ratios at March 31, 2021 remained well above the regulatory minimums for well-capitalized institutions. The ratio of Total Capital to Risk-Weighted Assets improved to 14.62% at March 31, 2021, up from 13.62% at March 31, 2020, and 14.39% at December 31, 2020. The ratio of Tier 1 capital to average assets was 8.89% at March 31, 2021, compared to 9.53% at March 31, 2020, and 8.75% at December 31, 2020.

ABOUT TOMPKINS FINANCIAL CORPORATION Tompkins Financial Corporation is a financial services company serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania. Headquartered in Ithaca, NY, Tompkins Financial is parent to Tompkins Trust Company, Tompkins Bank of Castile, Tompkins Mahopac Bank, Tompkins VIST Bank, and Tompkins Insurance Agencies, Inc., and offers wealth management services through Tompkins Financial Advisors. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform of 1995:This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Examples of forward-looking statements in this press release include, without limitation, those regarding the novel coronavirus (COVID-19) and our plans in response to the coronavirus. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", and other similar words. Forward-looking statements are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to certain uncertainties and factors relating to the Company's operations and economic environment, all of which are difficult to predict and many of which are beyond the control of the Company, that could cause actual results of the Company to differ materially from those expressed and/or implied by forward-looking statements. The following factors, in addition to those listed as Risk Factors in Item 1A of our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission, are among those that could cause actual results to differ materially from the forward-looking statements: changes in general economic, market and regulatory conditions; the severity and duration of the COVID-19 pandemic and the impact of COVID-19 (including the government's response thereto) on economic and financial markets, potential regulatory actions, and modifications to our operations, products, and services relating thereto; disruptions in our and our customers' operations and loss of revenue due to pandemics, epidemics, widespread health emergencies, government-imposed travel/business restrictions, or outbreaks of infectious diseases such as the coronavirus, and the associated adverse impact on our financial position, liquidity, and our customers' abilities to repay their obligations to us or willingness to obtain financial services products from the Company; the development of an interest rate environment that may adversely affect the Company's interest rate spread, other income or cash flow anticipated from the Company's operations, investment and/or lending activities; changes in laws and regulations affecting banks, bank holding companies and/or financial holding companies, such as the Dodd-Frank Act, Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; legislative and regulatory changes in response to COVID-19 with which we and our subsidiaries must comply, including the CARES Act and the Consolidated Appropriations Act, 2021 and the rules and regulations promulgated thereunder, and state and local government mandates; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; governmental and public policy changes, including environmental regulation; reliance on large customers; uncertainties arising from national and global events, including the potential impact of widespread protests, civil unrest, and political uncertainty on the economy and the financial services industry; and financial resources in the amounts, at the times and on the terms required to support the Company's future businesses. The Company does not undertake any obligation to update its forward-looking statements.

TOMPKINS FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data) As of As of

ASSETS 03/31/2021 12/31/2020



Cash and noninterest bearing balances due from $ 20,482 $ 21,245 banks

Interest bearing balances due from banks 497,943 367,217

Cash and Cash Equivalents 518,425 388,462



Available-for-sale debt securities, at fair value(amortized cost of $1,941,284 at March 31, 2021 1,934,815 1,627,193 and $1,599,894 at December 31, 2020)

Equity securities, at fair value (amortized cost$916 at March 31, 2021 and $929 at December 31, 916 929 2020)

Total loans and leases, net of unearned income 5,292,793 5,260,327 and deferred costs and fees

Less: Allowance for credit losses 49,339 51,669

Net Loans and Leases 5,243,454 5,208,658



Federal Home Loan Bank and other stock 16,382 16,382

Bank premises and equipment, net 87,518 88,709

Corporate owned life insurance 85,157 84,736

Goodwill 92,447 92,447

Other intangible assets, net 4,601 4,905

Accrued interest and other assets 111,627 109,750

Total Assets $ 8,095,342 $ 7,622,171

LIABILITIES

Deposits:

Interest bearing:

Checking, savings and money market 4,135,067 3,761,933

Time 749,792 746,234

Noninterest bearing 2,061,682 1,929,585

Total Deposits 6,946,541 6,437,752



Federal funds purchased and securities sold under 47,496 65,845 agreements to repurchase

Other borrowings 265,000 265,000

Trust preferred debentures 13,260 13,220

Other liabilities 113,109 122,665

Total Liabilities $ 7,385,406 $ 6,904,482

EQUITY

Tompkins Financial Corporation shareholders' equity:

Common Stock - par value $.10 per share:Authorized 25,000,000 shares; Issued: 14,942,695 1,494 1,496 at March 31, 2021; and 14,964,389 at December 31,2020

Additional paid-in capital 333,247 333,976

Retained earnings 435,990 418,413

Accumulated other comprehensive loss (56,950) (32,074)

Treasury stock, at cost - 118,454 shares at March (5,288) (5,534) 31, 2021, and 124,849 shares at December 31, 2020

Total Tompkins Financial Corporation 708,493 716,277 Shareholders' Equity

Noncontrolling interests 1,443 1,412

Total Equity $ 709,936 $ 717,689

Total Liabilities and Equity $ 8,095,342 $ 7,622,171

TOMPKINS FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data) (Unaudited)

Three Months Ended

03/31/2021

03/31/2020

INTEREST AND DIVIDEND INCOME

Loans

$

54,206

$

55,614

Due from banks

85

6

Available-for-sale debt securities

5,250

7,144

Federal Home Loan Bank and other stock

213

435

Total Interest and Dividend Income

59,754

$

63,199

INTEREST EXPENSE

Time certificates of deposits of $250,000 or more

639

843

Other deposits

2,511

6,356

Federal funds purchased and securities sold under agreements to repurchase

16

36

Trust preferred debentures

175

289

Other borrowings

1,376

2,706

Total Interest Expense

4,717

10,230

Net Interest Income

55,037

52,969

Less: (Credit) provision for credit loss expense

(2,510)

16,294

Net Interest Income After Provision for Credit Loss Expense

57,547

36,675

NONINTEREST INCOME

Insurance commissions and fees

9,166

8,045

Investment services income

4,673

4,202

Service charges on deposit accounts

1,470

1,983

Card services income

2,383

2,183

Other income

1,974

2,104

Net gain on securities transactions

317

443

Total Noninterest Income

19,983

18,960

NONINTEREST EXPENSE

Salaries and wages

22,660

22,494

Other employee benefits

5,484

5,684

Net occupancy expense of premises

3,462

3,328

Furniture and fixture expense

1,950

1,985

Amortization of intangible assets

330

374

Other operating expense

11,305

11,875

Total Noninterest Expenses

45,191

45,740

Income Before Income Tax Expense

32,339

9,895

Income Tax Expense

6,680

1,909

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

25,659

7,986

Less: Net Income Attributable to Noncontrolling Interests

33

37

Net Income Attributable to Tompkins Financial Corporation

$

25,626

7,949

Basic Earnings Per Share

$

1.73

$

0.53

Diluted Earnings Per Share

$

1.72

$

0.53

TOMPKINS FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data) (Unaudited) Three Months Ended

03/31/2021 03/31/2020

INTEREST AND DIVIDEND INCOME

Loans $ 54,206 $ 55,614

Due from banks 85 6

Available-for-sale debt securities 5,250 7,144

Federal Home Loan Bank and other stock 213 435

Total Interest and Dividend Income 59,754 $ 63,199

INTEREST EXPENSE

Time certificates of deposits of $250,000 or more 639 843

Other deposits 2,511 6,356

Federal funds purchased and securities sold under 16 36 agreements to repurchase

Trust preferred debentures 175 289

Other borrowings 1,376 2,706

Total Interest Expense 4,717 10,230

Net Interest Income 55,037 52,969

Less: (Credit) provision for credit loss expense (2,510) 16,294

Net Interest Income After Provision for Credit Loss 57,547 36,675 Expense

NONINTEREST INCOME

Insurance commissions and fees 9,166 8,045

Investment services income 4,673 4,202

Service charges on deposit accounts 1,470 1,983

Card services income 2,383 2,183

Other income 1,974 2,104

Net gain on securities transactions 317 443

Total Noninterest Income 19,983 18,960

NONINTEREST EXPENSE

Salaries and wages 22,660 22,494

Other employee benefits 5,484 5,684

Net occupancy expense of premises 3,462 3,328

Furniture and fixture expense 1,950 1,985

Amortization of intangible assets 330 374

Other operating expense 11,305 11,875

Total Noninterest Expenses 45,191 45,740

Income Before Income Tax Expense 32,339 9,895

Income Tax Expense 6,680 1,909

Net Income Attributable to Noncontrolling Interests and 25,659 7,986 Tompkins Financial Corporation

Less: Net Income Attributable to Noncontrolling Interests 33 37

Net Income Attributable to Tompkins Financial Corporation $ 25,626 7,949

Basic Earnings Per Share $ 1.73 $ 0.53

Diluted Earnings Per Share $ 1.72 $ 0.53

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)

Quarter EndedMarch 31, 2021

Quarter EndedMarch 31, 2020

(Dollar amounts in thousands)

Average Balance (QTD)

Interest

Average Yield/Rate

Average Balance (QTD)

Interest

Average Yield/Rate

ASSETS

Interest-earning assets

Interest-bearing balances due from banks

$

408,642

$

85

0.08

%

$

1,525

$

6

1.58

%

Securities (1)

U.S. Government securities

1,635,143

4,612

1.14

%

1,194,754

6,576

2.21

%

State and municipal (2)

120,959

775

2.60

%

97,480

666

2.75

%

Other securities (2)

3,425

23

2.75

%

3,422

36

4.23

%

Total securities

1,759,527

5,410

1.25

%

1,295,656

7,278

2.26

%

FHLBNY and FRB stock

16,382

213

5.27

%

26,558

435

6.59

%

Total loans and leases, net of unearned income (2)(3)

5,291,295

54,454

4.17

%

4,914,034

55,906

4.58

%

Total interest-earning assets

7,475,846

60,162

3.26

%

6,237,773

63,625

4.10

%

Other assets

350,826

435,175

Total assets

$

7,826,672

$

6,672,948

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearing checking, savings, & money market

3,949,304

1,093

0.11

%

3,212,543

4,366

0.55

%

Time deposits

749,328

2,057

1.11

%

680,248

2,833

1.68

%

Total interest-bearing deposits

4,698,632

3,150

0.27

%

3,892,791

7,199

0.74

%

Federal funds purchased & securities sold under agreements to repurchase

59,584

16

0.11

%

63,528

36

0.23

%

Other borrowings

265,001

1,376

2.11

%

498,428

2,706

2.18

%

Trust preferred debentures

13,234

175

5.35

%

17,050

289

6.82

%

Total interest-bearing liabilities

5,036,451

4,717

0.38

%

4,471,797

10,230

0.92

%

Noninterest bearing deposits

1,949,643

1,409,661

Accrued expenses and other liabilities

119,860

112,673

Total liabilities

7,105,954

5,994,131

Tompkins Financial Corporation Shareholders' equity

719,290

677,394

Noncontrolling interest

1,428

1,423

Total equity

720,718

678,817

Total liabilities and equity

$

7,826,672

$

6,672,948

Interest rate spread

2.88

%

3.18

%

Net interest income/margin on earning assets

55,445

3.01

%

53,395

3.44

%

Tax Equivalent Adjustment

(408)

(426)

Net interest income per consolidated financial statements

$

55,037

$

52,969

Average Consolidated Statements of Condition and Net Interest Analysis(Unaudited)

Quarter Ended Quarter Ended March 31, 2021 March 31, 2020

(Dollar amounts Average Average Average Averagein thousands) Balance Interest Yield/ Balance Interest Yield/ (QTD) Rate (QTD) Rate

ASSETS

Interest-earning assets

Interest-bearingbalances due $ 408,642 $ 85 0.08 % $ 1,525 $ 6 1.58 %from banks

Securities (1)

U.S. Government 1,635,143 4,612 1.14 % 1,194,754 6,576 2.21 %securities

State and 120,959 775 2.60 % 97,480 666 2.75 %municipal (2)

Other securities 3,425 23 2.75 % 3,422 36 4.23 %(2)

Total securities 1,759,527 5,410 1.25 % 1,295,656 7,278 2.26 %

FHLBNY and FRB 16,382 213 5.27 % 26,558 435 6.59 %stock

Total loans andleases, net of 5,291,295 54,454 4.17 % 4,914,034 55,906 4.58 %unearned income(2)(3)

Totalinterest-earning 7,475,846 60,162 3.26 % 6,237,773 63,625 4.10 %assets

Other assets 350,826 435,175

Total assets $ 7,826,672 $ 6,672,948

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearingchecking, 3,949,304 1,093 0.11 % 3,212,543 4,366 0.55 %savings, & moneymarket

Time deposits 749,328 2,057 1.11 % 680,248 2,833 1.68 %

Totalinterest-bearing 4,698,632 3,150 0.27 % 3,892,791 7,199 0.74 %deposits

Federal fundspurchased &securities sold 59,584 16 0.11 % 63,528 36 0.23 %under agreementsto repurchase

Other borrowings 265,001 1,376 2.11 % 498,428 2,706 2.18 %

Trust preferred 13,234 175 5.35 % 17,050 289 6.82 %debentures

Totalinterest-bearing 5,036,451 4,717 0.38 % 4,471,797 10,230 0.92 %liabilities

Noninterest 1,949,643 1,409,661 bearing deposits

Accrued expensesand other 119,860 112,673 liabilities

Total 7,105,954 5,994,131 liabilities

TompkinsFinancialCorporation 719,290 677,394 Shareholders'equity

Noncontrolling 1,428 1,423 interest

Total equity 720,718 678,817



Totalliabilities and $ 7,826,672 $ 6,672,948 equity

Interest rate 2.88 % 3.18 %spread

Net interestincome/margin on 55,445 3.01 % 53,395 3.44 %earning assets



Tax Equivalent (408) (426) Adjustment

Net interestincome perconsolidated $ 55,037 $ 52,969 financialstatements

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

Quarter-Ended

Year-Ended

Period End Balance Sheet

Mar-21

Dec-20

Sep-20

Jun-20

Mar-20

Dec-20

Securities

$

1,935,731

$

1,628,122

$

1,667,698

$

1,336,087

$

1,353,567

$

1,628,122

Total Loans

5,292,793

5,260,327

5,398,297

5,424,285

4,937,822

5,260,327

Allowance for credit losses

49,339

51,669

52,293

52,082

52,404

51,669

Total assets

8,095,342

7,622,171

7,794,502

7,582,056

6,743,114

7,622,171

Total deposits

6,946,541

6,437,752

6,601,238

6,377,521

5,409,363

6,437,752

Federal funds purchased and securities sold under agreements to repurchase

47,496

65,845

63,573

50,889

68,993

65,845

Other borrowings

265,000

265,000

285,000

325,000

457,983

265,000

Trust preferred debentures

13,260

13,220

17,163

17,120

17,078

13,220

Total common equity

708,493

716,277

712,104

696,553

681,153

716,277

Total equity

709,936

717,689

713,611

698,029

682,597

717,689

Average Balance Sheet

Average earning assets

$

7,475,846

$

7,408,335

$

7,204,049

$

6,616,079

$

6,237,773

$

6,868,958

Average assets

7,826,672

7,758,159

7,582,009

7,413,945

6,672,948

7,358,478

Average interest-bearing liabilities

5,036,451

5,010,037

4,861,890

4,825,753

4,471,797

4,793,154

Average equity

720,718

719,114

709,484

690,475

678,817

699,554

Share data

Weighted average shares outstanding (basic)

14,676,410

14,715.124

14,697.532

14,681.956

14,718.948

14,703,390

Weighted average shares outstanding (diluted)

14,757.558

14,751.303

14,727.741

14,714.848

14,774.269

14,742,040

Period-end shares outstanding

14,906.785

14,928.479

14,926.252

14,914.458

14,907.947

14,928,479

Common equity book value per share

$

47.53

$

47.98

$

47.71

$

46.70

$

45.69

$

47.98

Income Statement

Net interest income

$

55,037

$

57,751

$

58,253

$

56,366

$

52,969

$

225,339

(Credit) provision for credit loss expense

(2,510)

6

199

(348)

16,294

16,151

Noninterest income

19,983

18,836

18,887

17,177

18,960

73,860

Noninterest expense

45,191

46,405

46,349

46,888

45,740

185,382

Income tax expense

6,680

6,145

6,330

5,540

1,909

19,924

Net income attributable to Tompkins Financial Corporation

25,626

23,978

24,230

21,431

7,949

77,588

Noncontrolling interests

33

53

32

32

37

154

Basic earnings per share (4)

1.73

1.61

1.63

1.44

0.53

5.22

Diluted earnings per share (4)

1.72

1.61

1.63

1.44

0.53

5.20

Nonperforming Assets

Nonaccrual loans and leases

$

41,656

$

38,976

$

26,944

$

23,183

$

23,556

$

38,976

Loans and leases 90 days past due and accruing

0

0

0

0

0

0

Troubled debt restructuring not included above

6,069

6,803

6,864

6,988

7,137

6,803

Total nonperforming loans and leases

47,725

45,779

33,808

30,171

30,693

45,779

OREO

88

88

196

274

466

88

Total nonperforming assets

$

47,813

$

45,867

$

34,004

$

30,445

$

31,159

$

45,867

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands,except per share data)

Quarter-Ended Year-Ended

Period End Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 Dec-20Balance Sheet

Securities $ 1,935,731 $ 1,628,122 $ 1,667,698 $ 1,336,087 $ 1,353,567 $ 1,628,122

Total Loans 5,292,793 5,260,327 5,398,297 5,424,285 4,937,822 5,260,327

Allowance for 49,339 51,669 52,293 52,082 52,404 51,669 credit losses

Total assets 8,095,342 7,622,171 7,794,502 7,582,056 6,743,114 7,622,171

Total deposits 6,946,541 6,437,752 6,601,238 6,377,521 5,409,363 6,437,752

Federal fundspurchased andsecurities sold 47,496 65,845 63,573 50,889 68,993 65,845 under agreementsto repurchase

Other borrowings 265,000 265,000 285,000 325,000 457,983 265,000

Trust preferred 13,260 13,220 17,163 17,120 17,078 13,220 debentures

Total common 708,493 716,277 712,104 696,553 681,153 716,277 equity

Total equity 709,936 717,689 713,611 698,029 682,597 717,689

Average Balance Sheet

Average earning $ 7,475,846 $ 7,408,335 $ 7,204,049 $ 6,616,079 $ 6,237,773 $ 6,868,958 assets

Average assets 7,826,672 7,758,159 7,582,009 7,413,945 6,672,948 7,358,478

Averageinterest-bearing 5,036,451 5,010,037 4,861,890 4,825,753 4,471,797 4,793,154 liabilities

Average equity 720,718 719,114 709,484 690,475 678,817 699,554

Share data

Weighted averageshares 14,676,410 14,715.124 14,697.532 14,681.956 14,718.948 14,703,390 outstanding(basic)

Weighted averageshares 14,757.558 14,751.303 14,727.741 14,714.848 14,774.269 14,742,040 outstanding(diluted)

Period-endshares 14,906.785 14,928.479 14,926.252 14,914.458 14,907.947 14,928,479 outstanding

Common equitybook value per $ 47.53 $ 47.98 $ 47.71 $ 46.70 $ 45.69 $ 47.98 share

Income Statement

Net interest $ 55,037 $ 57,751 $ 58,253 $ 56,366 $ 52,969 $ 225,339 income

(Credit)provision for (2,510) 6 199 (348) 16,294 16,151 credit lossexpense

Noninterest 19,983 18,836 18,887 17,177 18,960 73,860 income

Noninterest 45,191 46,405 46,349 46,888 45,740 185,382 expense

Income tax 6,680 6,145 6,330 5,540 1,909 19,924 expense

Net incomeattributable toTompkins 25,626 23,978 24,230 21,431 7,949 77,588 FinancialCorporation

Noncontrolling 33 53 32 32 37 154 interests

Basic earnings 1.73 1.61 1.63 1.44 0.53 5.22 per share (4)

Diluted earnings 1.72 1.61 1.63 1.44 0.53 5.20 per share (4)

Nonperforming Assets

Nonaccrual loans $ 41,656 $ 38,976 $ 26,944 $ 23,183 $ 23,556 $ 38,976 and leases

Loans and leases90 days past due 0 0 0 0 0 0 and accruing

Troubled debtrestructuring 6,069 6,803 6,864 6,988 7,137 6,803 not includedabove

Totalnonperforming 47,725 45,779 33,808 30,171 30,693 45,779 loans and leases

OREO 88 88 196 274 466 88

Totalnonperforming $ 47,813 $ 45,867 $ 34,004 $ 30,445 $ 31,159 $ 45,867 assets

Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued

Quarter-Ended

Year-Ended

Delinquency - Total loan and lease portfolio

Mar-21

Dec-20

Sep-20

Jun-20

Mar-20

Dec-20

Loans and leases 30-89 days past due and accruing

$

1,790

$

3,012

$

6,875

$

8,352

$

9,328

$

3,012

Loans and leases 90 days past due and accruing

0

0

0

0

0

0

Total loans and leases past due and accruing

1,790

3,012

6,875

8,352

9,328

3,012

Allowance for Credit Losses

Balance at beginning of period

$

51,669

$

52,293

$

52,082

$

52,404

$

39,892

$

39,892

Impact of adopting ASC 326

0

0

0

0

(2,534

)

(2,534

)

(Credit) provision for credit losses

(2,510

)

6

199

(348

)

16,294

16,151

Net loan and lease (recoveries) charge-offs

(180

)

630

(12

)

(26

)

1,248

1,840

Allowance for credit losses at end of period

$

49,339

$

51,669

$

52,293

$

52,082

$

52,404

$

51,669

Loan Classification - Total Portfolio

Special Mention

$

116,689

$

121,253

$

122,652

$

44,741

$

37,121

$

121,253

Substandard

68,487

68,645

45,384

48,046

52,894

68,645

Ratio Analysis

Credit Quality

Nonperforming loans and leases/total loans and leases (5)

0.90

%

0.87

%

0.63

%

0.56

%

0.62

%

0.87

%

Nonperforming assets/total assets

0.59

%

0.60

%

0.44

%

0.40

%

0.46

%

0.60

%

Allowance for credit losses/total loans and leases

0.93

%

0.98

%

0.97

%

0.96

%

1.06

%

0.98

%

Allowance/nonperforming loans and leases

103.38

%

112.87

%

154.68

%

172.62

%

170.74

%

112.87

%

Net loan and lease losses annualized/total average loans and leases

(0.01

)%

0.05

%

0.00

%

0.00

%

0.10

%

0.04

%

Capital Adequacy

Tier 1 Capital (to average assets)

8.89

%

8.75

%

8.85

%

8.79

%

9.53

%

8.75

%

Total Capital (to risk-weighted assets)

14.62

%

14.39

%

14.26

%

13.95

%

13.62

%

14.39

%

Profitability (period-end)

Return on average assets *

1.33

%

1.23

%

1.27

%

1.16

%

0.48

%

1.05

%

Return on average equity *

14.42

%

13.26

%

13.59

%

12.48

%

4.71

%

11.09

%

Net interest margin (TE) *

3.01

%

3.12

%

3.26

%

3.45

%

3.44

%

3.31

%

* Quarterly ratios have been annualized

(1) Average balances and yields on available-for-sale securities are based on historical amortized cost. (2) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2021 and 2020 to increase tax exempt interest income to taxable-equivalent basis. (3) Nonaccrual loans are included in the average asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company's consolidated financial statements included in Part I of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2020. (4) Earnings per share for the full fiscal year may not equal the sum of the quarterly earnings per share as a result of rounding of average shares. (5) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans and leases. The risk of credit loss on these loans has been considered by virtue of the Company's estimate of acquisition-date fair value and these loans are considered accruing as the Company primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows.

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CONTACT: Stephen S. Romaine, President & CEO Francis M. Fetsko, Executive VP, CFO & COO Tompkins Financial Corporation (888) 503-5753