Business Wire | Jul 23, 2021 09:00AM EDT

Tompkins Financial Corporation Reports Record Second Quarter Earnings

Jul. 23, 2021

ITHACA, N.Y.--(BUSINESS WIRE)--Jul. 23, 2021--Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation reported diluted earnings per share of $1.54 for the second quarter of 2021, up 6.9% from $1.44 per share in the second quarter of 2020. Net income for the second quarter of 2021 was $22.8 million, compared to $21.4 million for the same period in 2020.

For the year-to-date period ended June 30, 2021, diluted earnings per share were $3.26, up 65.5% from $1.97 for the same year-to-date period in 2020. Year-to-date net income was $48.5 million for the six month period ended June 30, 2021, up 64.9% compared to $29.4 million for the same period in 2020.

President and CEO, Mr. Stephen Romaine commented, "We are pleased to continue our favorable earnings trends in 2021 with another strong quarter of earnings. Though the current interest rate environment resulted in a narrowing of our net interest margin, our revenue for the first half of 2021 compared favorably to the prior year in all three of our primary business lines of banking, insurance, and wealth management."

SELECTED HIGHLIGHTS FOR THE SECOND QUARTER:

* Diluted earnings per share of $1.54 represents the best second quarter in the Company's history, and is up 6.9% over the same period in 2020. * Provision for credit losses was a $3.1 million credit for the second quarter of 2021, compared to an $877,000 expense in the same period last year. * Total deposits amounted to $6.8 billion at June 30, 2021, an increase of $459.5 million, or 7.2% over June 30, 2020.

NET INTEREST INCOME

Net interest income was $54.8 million for the second quarter of 2021, compared to $56.4 million reported for the second quarter of 2020. Interest income for the second quarter of 2021 included $1.9 million of net deferred loan fees associated with PPP loans, compared to net deferred loan fees of $2.3 million in the second quarter of 2020. Interest expense for the second quarter of 2021 was negatively impacted by an accelerated non-cash purchase accounting discount of $650,000 related to the redemption of $5.2 million of trust preferred securities. The net interest margin was 2.91% for the second quarter of 2021, compared to 3.45% reported for the same period in 2020, and 3.01% for the first quarter of 2021.

For the year-to-date period ended June 30, 2021, net interest income of $109.9 million was in line with the comparable six month period in 2020. For the year to date period in 2021, net deferred loan fees associated with PPP loans were approximately $4.7 million as compared to $2.3 million in the same period of 2020.

Average loans for the quarter ended June 30, 2021 were in line with the same period in 2020. Asset yields for the quarter ended June 30, 2021 were down 71 basis points compared to the quarter ended June 30, 2020, which reflects the impact of reductions in market interest rates over the trailing twelve month period as well as a greater percentage of earning assets being comprised of lower yielding securities and interest bearing balances due from banks, when compared to the same period in 2020.

Average total deposits for the second quarter of 2021 were up $622.1 million, or 10.1% compared to the same period in 2020. Average noninterest bearing deposits for the three months ended June 30, 2021 were up $294.0 million or 16.4% compared to the three months ended June 30, 2020. Average deposit balances continue to benefit from the PPP loan program, as the majority of the proceeds of the PPP loans we funded were deposited in Tompkins checking accounts. For the second quarter of 2021, the average rate paid on interest-bearing deposit products decreased by 20 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 0.40% at June 30, 2021, a decline of 19 basis points from June 30, 2020.

NONINTEREST INCOME

Noninterest income of $18.9 million for the second quarter of 2021, was up 9.8% compared to the same period in 2020. For the year-to-date period, noninterest income of $38.8 million was up 7.5% from the same period in 2020. Growth over the same quarter last year was supported by increases in all fee income categories (insurance commissions and fees were up 11.0%, while investment services income was up 20.3%, service charges on deposit accounts increased 17.9%, and card services income was up 29.3%). Noninterest income represented 25.6% of total revenues for the second quarter of 2021, as compared to 23.4% of total revenues for the second quarter of 2020.

NONINTEREST EXPENSE

Noninterest expense was $47.4 million for the second quarter of 2021, up $1.8 million, or 3.9%, from the second quarter of 2020. For the year-to-date period, noninterest expense was $92.0 million, up $1.0 million or 1.1% from the same period in 2020. Salaries and employee benefits for the second quarter of 2021 were up 5.9% when compared to the same quarter last year. The increase in noninterest expense for both the second quarter and year-to-date periods was primarily attributable to normal annual increases in salaries and wages, and increases in health insurance expense.

INCOME TAX EXPENSE

The Company's effective tax rate was 22.1% for the second quarter of 2021, compared to 20.5% for the same period in 2020. The effective tax rate for the six months ended June 30, 2021 was 21.3%, compared to 20.2% reported for the same period in 2020.

ASSET QUALITY

The allowance for credit losses represented 0.92% of total loans and leases at June 30, 2021, down from 0.93% at March 31, 2021, and 0.98% at December 31, 2020. The ratio of the allowance to total nonperforming loans and leases was 88.3% at June 30, 2021, down compared to 103.4% at March 31, 2021, and 112.9% at December 31, 2020.

The provision for credit losses for the second quarter of 2021 was a credit of $3.1 million compared to an expense of $877,000 for the same period in 2020. Net recoveries for the quarter ended June 30, 2021 were $884,000 compared to net recoveries of $26,000 reported for the same period in 2020. Provision expense for the six months ended June 30, 2021 was a credit of $4.9 million, compared to an expense of $17.6 million for the same period in 2020.

Nonperforming loans and leases totaled $53.8 million at June 30, 2021, compared to $47.7 million at March 31, 2021, and $45.8 million at December 31, 2020. The increase in nonperforming loans and leases compared to prior year were mainly related to one commercial real estate relationship totaling $9.1 million, which was previously reported as Substandard, and downgrades of credits in the loan portfolio related to the hospitality industry, which was significantly impacted by the COVID-19 pandemic. Nonperforming assets represented 0.67% of total assets at June 30, 2021, up from 0.59% at March 31, 2021, and 0.60% at December 31, 2020.

Special Mention and Substandard loans and leases totaled $171.3 million at June 30, 2021, reflecting improvement from $185.2 million at March 31, 2021, and $189.9 million reported at December 31, 2020.

As previously announced, the Company implemented a payment deferral program in 2020 to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. As of June 30, 2021, total loans that continued in a deferral status amounted to approximately $129.4 million, representing 2.5% of total loans. At March 31, 2021 loans in deferral status totaled $195.6 million, and at December 31, 2020 loans in deferral status totaled $212.2 million. Included in nonperforming loans and leases and Substandard loans and leases at June 30, 2021, were 9 loans totaling $22.1 million that remained in deferral status.

The Company began accepting applications for the PPP loans on April 3, 2020, and had funded 2,998 loans totaling approximately $465.6 million when the initial program ended. On January 19, 2021, the Company began accepting both first draw and second draw applications for the reopening of the PPP program and as of July 19, 2021, the Company had funded an additional 2,481 applications totaling $261.2 million.

Out of the total $695.2 million of PPP loans that the Company had funded through July 19, 2021, approximately $471.4 million had been forgiven by the SBA under the terms of the program.

CAPITAL POSITION

Capital ratios at June 30, 2021 remained well above the regulatory minimums for well-capitalized institutions. The ratio of Total Capital to Risk-Weighted Assets was 14.62% at June 30, 2021, unchanged from March 31, 2021, and up from 14.39% at December 31, 2020. The ratio of Tier 1 capital to average assets was 8.79% at June 30, 2021, compared to 8.89% at March 31, 2021, and 8.75% at December 31, 2020.

During the second quarter of 2021, the Company repurchased 80,004 common shares at an aggregate cost of $6.5 million. These shares were purchased under the Company's previously announced 2020 Stock Repurchase Program. During the first six months of 2021, the Company repurchased 101,535 shares at an aggregate cost of $8.0 million.

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. The Company's banks have announced plans for a rebranding effort, pursuant to which the Company's four wholly-owned banking subsidiaries will be combined into one bank, with The Bank of Castile, Mahopac Bank, and VIST Bank merging with and into Tompkins Trust Company, subject to regulatory approval. The combined bank will conduct business under the "Tompkins" brand name, with a legal name of "Tompkins Community Bank." 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. 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 CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

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

ASSETS 06/30/2021 12/31/2020



Cash and noninterest bearing balances due from $ 20,302 $ 21,245 banks

Interest bearing balances due from banks 270,712 367,217

Cash and Cash Equivalents 291,014 388,462



Available-for-sale debt securities, at fair value(amortized cost of $2,009,317at June 30, 2021 and 2,014,089 1,627,193 $1,599,894 at December 31, 2020)

Held-to-maturity securities, at amortized cost(fair value of $154,299 at June 30, 2021 and $0 151,848 0 December 31, 2020)

Equity securities, at fair value (amortized cost$916 at June 30, 2021 and $929 at December 31, 916 929 2020)

Total loans and leases, net of unearned income and 5,175,129 5,260,327 deferred costs and fees

Less: Allowance for credit losses 47,505 51,669

Net Loans and Leases 5,127,624 5,208,658



Federal Home Loan Bank and other stock 15,991 16,382

Bank premises and equipment, net 86,596 88,709

Corporate owned life insurance 85,726 84,736

Goodwill 92,447 92,447

Other intangible assets, net 4,274 4,905

Accrued interest and other assets 117,683 109,750

Total Assets $ 7,988,208 $ 7,622,171

LIABILITIES

Deposits:

Interest bearing:

Checking, savings and money market 4,016,052 3,761,933

Time 710,170 746,234

Noninterest bearing 2,110,778 1,929,585

Total Deposits 6,837,000 6,437,752



Federal funds purchased and securities sold under 52,134 65,845 agreements to repurchase

Other borrowings 245,000 265,000

Trust preferred debentures 8,799 13,220

Other liabilities 117,022 122,665

Total Liabilities $ 7,259,955 $ 6,904,482

EQUITY

Tompkins Financial Corporation shareholders' equity:

Common Stock - par value $.10 per share: Authorized25,000,000 shares; Issued: 14,865,783 at 1,487 1,496 June 30, 2021; and 14,964,389 at December 31, 2020

Additional paid-in capital 327,881 333,976

Retained earnings 450,773 418,413

Accumulated other comprehensive loss (47,882) (32,074)

Treasury stock, at cost - 120,848 shares at June (5,480) (5,534) 30, 2021, and 124,849 shares at December 31, 2020

Total Tompkins Financial Corporation Shareholders' 726,779 716,277 Equity

Noncontrolling interests 1,474 1,412

Total Equity $ 728,253 $ 717,689

Total Liabilities and Equity $ 7,988,208 $ 7,622,171



TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

Three Months Ended

Six Months Ended

06/30/2021

06/30/2020

06/30/2021

06/30/2020

INTEREST AND DIVIDEND INCOME

Loans

$

53,653

$

56,133

$

107,860

$

111,747

Due from banks

45

1

130

7

Available-for-sale debt securities

5,626

6,922

10,876

14,066

Held-to-maturity securities

312

0

312

0

Federal Home Loan Bank and other stock

199

389

412

824

Total Interest and Dividend Income

59,835

$

63,445

$

119,590

$

126,644

INTEREST EXPENSE

Time certificates of deposits of $250,000 or more

567

860

1,206

1,703

Other deposits

2,235

3,917

4,747

10,272

Federal funds purchased and securities sold under agreements to repurchase

15

21

31

57

Trust preferred debentures

821

253

996

542

Other borrowings

1,351

2,028

2,727

4,735

Total Interest Expense

4,989

7,079

9,707

17,309

Net Interest Income

54,846

56,366

109,883

109,335

Less: (Credit) provision for credit loss expense

(3,071)

877

(4,901)

17,636

Net Interest Income After Provision for Credit Loss Expense

57,917

55,489

114,784

91,699

NONINTEREST INCOME

Insurance commissions and fees

8,054

7,255

17,220

15,300

Investment services income

4,717

3,920

9,390

8,122

Service charges on deposit accounts

1,471

1,248

2,941

3,231

Card services income

2,951

2,283

5,334

4,466

Other income

1,665

2,466

3,639

4,570

Net gain on securities transactions

0

5

317

448

Total Noninterest Income

18,858

17,177

38,841

36,137

NONINTEREST EXPENSE

Salaries and wages

23,992

23,037

46,652

45,531

Other employee benefits

6,626

5,886

12,110

11,570

Net occupancy expense of premises

3,561

3,040

7,023

6,368

Furniture and fixture expense

2,204

1,888

4,154

3,873

Amortization of intangible assets

329

375

659

749

Other operating expense

10,730

11,437

21,355

22,847

Total Noninterest Expenses

47,442

45,663

91,953

90,938

Income Before Income Tax Expense

29,333

27,003

61,672

36,898

Income Tax Expense

6,471

5,540

13,151

7,449

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

22,862

21,463

48,521

29,449

Less: Net Income Attributable to Noncontrolling Interests

31

32

64

69

Net Income Attributable to Tompkins Financial Corporation

$

22,831

21,431

48,457

29,380

Basic Earnings Per Share

$

1.55

$

1.44

$

3.28

$

1.97

Diluted Earnings Per Share

$

1.54

$

1.44

$

3.26

$

1.97

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

06/30/2021 06/30/2020 06/30/2021 06/30/2020

INTEREST AND DIVIDEND INCOME

Loans $ 53,653 $ 56,133 $ 107,860 $ 111,747

Due from banks 45 1 130 7

Available-for-sale debt 5,626 6,922 10,876 14,066 securities

Held-to-maturity securities 312 0 312 0

Federal Home Loan Bank and other 199 389 412 824 stock

Total Interest and Dividend 59,835 $ 63,445 $ 119,590 $ 126,644 Income

INTEREST EXPENSE

Time certificates of deposits of 567 860 1,206 1,703 $250,000 or more

Other deposits 2,235 3,917 4,747 10,272

Federal funds purchased andsecurities sold under agreements 15 21 31 57 to repurchase

Trust preferred debentures 821 253 996 542

Other borrowings 1,351 2,028 2,727 4,735

Total Interest Expense 4,989 7,079 9,707 17,309

Net Interest Income 54,846 56,366 109,883 109,335

Less: (Credit) provision for (3,071) 877 (4,901) 17,636 credit loss expense

Net Interest Income After 57,917 55,489 114,784 91,699 Provision for Credit Loss Expense

NONINTEREST INCOME

Insurance commissions and fees 8,054 7,255 17,220 15,300

Investment services income 4,717 3,920 9,390 8,122

Service charges on deposit 1,471 1,248 2,941 3,231 accounts

Card services income 2,951 2,283 5,334 4,466

Other income 1,665 2,466 3,639 4,570

Net gain on securities 0 5 317 448 transactions

Total Noninterest Income 18,858 17,177 38,841 36,137

NONINTEREST EXPENSE

Salaries and wages 23,992 23,037 46,652 45,531

Other employee benefits 6,626 5,886 12,110 11,570

Net occupancy expense of premises 3,561 3,040 7,023 6,368

Furniture and fixture expense 2,204 1,888 4,154 3,873

Amortization of intangible assets 329 375 659 749

Other operating expense 10,730 11,437 21,355 22,847

Total Noninterest Expenses 47,442 45,663 91,953 90,938

Income Before Income Tax Expense 29,333 27,003 61,672 36,898

Income Tax Expense 6,471 5,540 13,151 7,449

Net Income Attributable toNoncontrolling Interests and 22,862 21,463 48,521 29,449 Tompkins Financial Corporation

Less: Net Income Attributable to 31 32 64 69 Noncontrolling Interests

Net Income Attributable to $ 22,831 21,431 48,457 29,380 Tompkins Financial Corporation

Basic Earnings Per Share $ 1.55 $ 1.44 $ 3.28 $ 1.97

Diluted Earnings Per Share $ 1.54 $ 1.44 $ 3.26 $ 1.97





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

Quarter Ended

Quarter Ended

June 30, 2021

June 30, 2020

Average

Average

Balance

Average

Balance

Average

(Dollar amounts in thousands)

(QTD)

Interest

Yield/Rate

(QTD)

Interest

Yield/Rate

ASSETS

Interest-earning assets

Interest-bearing balances due from banks

$

216,679

$

45

0.08

%

$

4,541

$

1

0.09

%

Securities (1)

U.S. Government securities

1,987,541

5,338

1.08

%

1,199,999

6,298

2.11

%

State and municipal (2)

114,221

727

2.55

%

109,621

743

2.73

%

Other securities (2)

3,418

23

2.70

%

3,433

32

3.75

%

Total securities

2,105,180

6,088

1.16

%

1,313,053

7,073

2.17

%

FHLBNY and FRB stock

17,285

199

4.62

%

21,691

389

7.21

%

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

5,270,648

53,909

4.10

%

5,276,794

56,441

4.30

%

Total interest-earning assets

7,609,792

60,241

3.18

%

6,616,079

63,904

3.89

%

Other assets

340,154

797,866

Total assets

$

7,949,946

$

7,413,945

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearing checking, savings, & money market

$

3,966,472

$

943

0.10

%

$

3,660,190

$

1,935

0.21

%

Time deposits

726,258

1,859

1.03

%

704,460

2,842

1.62

%

Total interest-bearing deposits

4,692,730

2,802

0.24

%

4,364,650

4,777

0.44

%

Federal funds purchased & securities sold under agreements to repurchase

52,099

15

0.11

%

52,464

21

0.16

%

Other borrowings

272,993

1,351

1.98

%

391,547

2,028

2.08

%

Trust preferred debentures

12,978

821

25.39

%

17,092

253

5.95

%

Total interest-bearing liabilities

5,030,800

4,989

0.40

%

4,825,753

7,079

0.59

%

Noninterest bearing deposits

2,082,149

1,788,108

Accrued expenses and other liabilities

115,661

109,609

Total liabilities

7,228,610

6,723,470

Tompkins Financial Corporation Shareholders' equity

719,880

689,018

Noncontrolling interest

1,456

1,457

Total equity

721,336

690,475

Total liabilities and equity

$

7,949,946

$

7,413,945

Interest rate spread

2.78

%

3.30

%

Net interest income/margin on earning assets

55,252

2.91

%

56,825

3.45

%

Tax Equivalent Adjustment

(406)

(459)

Net interest income per consolidated financial statements

$

54,846

$

56,366

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

Quarter Ended Quarter Ended

June 30, 2021 June 30, 2020

Average Average

Balance Average Balance Average

(Dollar amounts (QTD) Interest Yield/ (QTD) Interest Yield/in thousands) Rate Rate

ASSETS

Interest-earning assets

Interest-bearingbalances due $ 216,679 $ 45 0.08 % $ 4,541 $ 1 0.09 %from banks

Securities (1)

U.S. Government 1,987,541 5,338 1.08 % 1,199,999 6,298 2.11 %securities

State and 114,221 727 2.55 % 109,621 743 2.73 %municipal (2)

Other securities 3,418 23 2.70 % 3,433 32 3.75 %(2)

Total securities 2,105,180 6,088 1.16 % 1,313,053 7,073 2.17 %

FHLBNY and FRB 17,285 199 4.62 % 21,691 389 7.21 %stock

Total loans andleases, net of 5,270,648 53,909 4.10 % 5,276,794 56,441 4.30 %unearned income(2)(3)

Totalinterest-earning 7,609,792 60,241 3.18 % 6,616,079 63,904 3.89 %assets

Other assets 340,154 797,866

Total assets $ 7,949,946 $ 7,413,945

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearingchecking, $ 3,966,472 $ 943 0.10 % $ 3,660,190 $ 1,935 0.21 %savings, & moneymarket

Time deposits 726,258 1,859 1.03 % 704,460 2,842 1.62 %

Totalinterest-bearing 4,692,730 2,802 0.24 % 4,364,650 4,777 0.44 %deposits

Federal fundspurchased &securities sold 52,099 15 0.11 % 52,464 21 0.16 %under agreementsto repurchase

Other borrowings 272,993 1,351 1.98 % 391,547 2,028 2.08 %

Trust preferred 12,978 821 25.39 % 17,092 253 5.95 %debentures

Totalinterest-bearing 5,030,800 4,989 0.40 % 4,825,753 7,079 0.59 %liabilities

Noninterest 2,082,149 1,788,108 bearing deposits

Accrued expensesand other 115,661 109,609 liabilities

Total 7,228,610 6,723,470 liabilities

TompkinsFinancialCorporation 719,880 689,018 Shareholders'equity

Noncontrolling 1,456 1,457 interest

Total equity 721,336 690,475



Totalliabilities and $ 7,949,946 $ 7,413,945 equity

Interest rate 2.78 % 3.30 %spread

Net interestincome/margin on 55,252 2.91 % 56,825 3.45 %earning assets



Tax Equivalent (406) (459) Adjustment

Net interestincome perconsolidated $ 54,846 $ 56,366 financialstatements

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

Year to Date Period Ended

Year to Date Period Ended

June 30, 2021

June 30, 2020

Average

Average

Balance

Balance

Average

(Dollar amounts in thousands)

(YTD)

Interest

(YTD)

Interest

Yield/Rate

ASSETS

Interest-earning assets

Interest-bearing balances due from banks

$

312,130

$

130

0.08

%

$

3,033

$

7

0.46

%

Securities (1)

U.S. Government securities

1,812,315

9,950

1.11

%

1,197,376

12,874

2.16

%

State and municipal (2)

117,571

1,502

2.58

%

103,550

1,409

2.74

%

Other securities (2)

3,422

46

2.72

%

3,428

68

3.99

%

Total securities

1,933,308

11,498

1.20

%

1,304,354

14,351

2.21

%

FHLBNY and FRB stock

16,836

412

4.93

%

24,124

824

6.87

%

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

5,280,914

108,365

4.14

%

5,095,414

112,348

4.43

%

Total interest-earning assets

7,543,188

120,405

3.22

%

6,426,925

127,530

3.99

%

Other assets

345,461

616,521

Total assets

$

7,888,649

$

7,043,446

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearing checking, savings, & money market

$

3,957,936

$

2,036

0.10

%

$

3,436,366

$

6,301

0.37

%

Time deposits

737,729

3,917

1.07

%

692,354

5,674

1.65

%

Total interest-bearing deposits

4,695,665

5,953

0.26

%

4,128,720

11,975

0.58

%

Federal funds purchased & securities sold under agreements to repurchase

55,821

31

0.11

%

57,996

57

0.20

%

Other borrowings

269,019

2,727

2.04

%

444,988

4,735

2.14

%

Trust preferred debentures

13,105

996

15.33

%

17,071

542

6.38

%

Total interest-bearing liabilities

5,033,610

9,707

0.39

%

4,648,775

17,309

0.75

%

Noninterest bearing deposits

2,016,262

1,598,884

Accrued expenses and other liabilities

117,749

111,141

Total liabilities

7,167,621

6,358,800

Tompkins Financial Corporation Shareholders' equity

719,586

683,206

Noncontrolling interest

1,442

1,440

Total equity

721,028

684,646

Total liabilities and equity

$

7,888,649

$

7,043,446

Interest rate spread

2.83

%

3.24

%

Net interest income/margin on earning assets

110,698

2.96

%

110,221

3.45

%

Tax Equivalent Adjustment

(815)

(886)

Net interest income per consolidated financial statements

$

109,883

$

109,335

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

Year to Date Period Ended Year to Date Period Ended

June 30, 2021 June 30, 2020

Average Average

Balance Balance Average

(Dollar amounts (YTD) Interest (YTD) Interest Yield/in thousands) Rate

ASSETS

Interest-earning assets

Interest-bearingbalances due $ 312,130 $ 130 0.08 % $ 3,033 $ 7 0.46 %from banks

Securities (1)

U.S. Government 1,812,315 9,950 1.11 % 1,197,376 12,874 2.16 %securities

State and 117,571 1,502 2.58 % 103,550 1,409 2.74 %municipal (2)

Other securities 3,422 46 2.72 % 3,428 68 3.99 %(2)

Total securities 1,933,308 11,498 1.20 % 1,304,354 14,351 2.21 %

FHLBNY and FRB 16,836 412 4.93 % 24,124 824 6.87 %stock

Total loans andleases, net of 5,280,914 108,365 4.14 % 5,095,414 112,348 4.43 %unearned income(2)(3)

Totalinterest-earning 7,543,188 120,405 3.22 % 6,426,925 127,530 3.99 %assets

Other assets 345,461 616,521

Total assets $ 7,888,649 $ 7,043,446

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearingchecking, $ 3,957,936 $ 2,036 0.10 % $ 3,436,366 $ 6,301 0.37 %savings, & moneymarket

Time deposits 737,729 3,917 1.07 % 692,354 5,674 1.65 %

Totalinterest-bearing 4,695,665 5,953 0.26 % 4,128,720 11,975 0.58 %deposits

Federal fundspurchased &securities sold 55,821 31 0.11 % 57,996 57 0.20 %under agreementsto repurchase

Other borrowings 269,019 2,727 2.04 % 444,988 4,735 2.14 %

Trust preferred 13,105 996 15.33 % 17,071 542 6.38 %debentures

Totalinterest-bearing 5,033,610 9,707 0.39 % 4,648,775 17,309 0.75 %liabilities

Noninterest 2,016,262 1,598,884 bearing deposits

Accrued expensesand other 117,749 111,141 liabilities

Total 7,167,621 6,358,800 liabilities

TompkinsFinancialCorporation 719,586 683,206 Shareholders'equity

Noncontrolling 1,442 1,440 interest

Total equity 721,028 684,646



Totalliabilities and $ 7,888,649 $ 7,043,446 equity

Interest rate 2.83 % 3.24 %spread

Net interestincome/margin on 110,698 2.96 % 110,221 3.45 %earning assets



Tax Equivalent (815) (886) Adjustment

Net interestincome perconsolidated $ 109,883 $ 109,335 financialstatements

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

Quarter-Ended

Year-Ended

Period End Balance Sheet

Jun-21

Mar-21

Dec-20

Sep-20

Jun-20

Dec-20

Securities

$

2,166,853

$

1,935,731

$

1,628,122

$

1,667,698

$

1,336,087

$

1,628,122

Total Loans

5,175,129

5,292,793

5,260,327

5,398,297

5,424,285

5,260,327

Allowance for credit losses

47,505

49,339

51,669

52,293

52,082

51,669

Total assets

7,988,208

8,095,342

7,622,171

7,794,502

7,582,056

7,622,171

Total deposits

6,837,000

6,946,541

6,437,752

6,601,238

6,377,521

6,437,752

Federal funds purchased and securities sold under agreements to repurchase

52,134

47,496

65,845

63,573

50,889

65,845

Other borrowings

245,000

265,000

265,000

285,000

325,000

265,000

Trust preferred debentures

8,799

13,260

13,220

17,163

17,120

13,220

Total common equity

726,779

708,493

716,277

712,104

696,553

716,277

Total equity

728,253

709,936

717,689

713,611

698,029

717,689

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(Inthousands, except pershare data)

Quarter-Ended Year-Ended

Period EndBalance Jun-21 Mar-21 Dec-20 Sep-20 Jun-20 Dec-20Sheet

Securities $ 2,166,853 $ 1,935,731 $ 1,628,122 $ 1,667,698 $ 1,336,087 $ 1,628,122

Total Loans 5,175,129 5,292,793 5,260,327 5,398,297 5,424,285 5,260,327

Allowancefor credit 47,505 49,339 51,669 52,293 52,082 51,669 losses

Total 7,988,208 8,095,342 7,622,171 7,794,502 7,582,056 7,622,171 assets

Total 6,837,000 6,946,541 6,437,752 6,601,238 6,377,521 6,437,752 deposits

Federalfundspurchasedandsecurities 52,134 47,496 65,845 63,573 50,889 65,845 sold underagreementstorepurchase

Other 245,000 265,000 265,000 285,000 325,000 265,000 borrowings

Trustpreferred 8,799 13,260 13,220 17,163 17,120 13,220 debentures

Totalcommon 726,779 708,493 716,277 712,104 696,553 716,277 equity

Total 728,253 709,936 717,689 713,611 698,029 717,689 equity

Average Balance Sheet

Average earning assets

$

7,609,792

$

7,475,846

$

7,408,335

$

7,204,049

$

6,616,079

$

6,868,958

Average assets

7,949,946

7,826,672

7,758,159

7,582,009

7,413,945

7,358,478

Average interest-bearing liabilities

5,030,800

5,036,451

5,010,037

4,861,890

4,825,753

4,793,154

Average equity

721,336

720,718

719,114

709,484

690,475

699,554

Average Balance Sheet

Average earning $ 7,609,792 $ 7,475,846 $ 7,408,335 $ 7,204,049 $ 6,616,079 $ 6,868,958 assets

Average assets 7,949,946 7,826,672 7,758,159 7,582,009 7,413,945 7,358,478

Averageinterest-bearing 5,030,800 5,036,451 5,010,037 4,861,890 4,825,753 4,793,154 liabilities

Average equity 721,336 720,718 719,114 709,484 690,475 699,554

Share data

Weighted average shares outstanding (basic)

14,654,774

14,676,410

14,715,124

14,697,532

14,681,956

14,703,390

Weighted average shares outstanding (diluted)

14,737,735

14,757,558

14,751,303

14,727,741

14,714,848

14,742,040

Period-end shares outstanding

14,829,873

14,906,785

14,928,479

14,926,252

14,914,458

14,928,479

Common equity book value per share

$

49.01

$

47.53

$

47.98

$

47.71

$

46.70

$

47.98

Share data

Weightedaverageshares 14,654,774 14,676,410 14,715,124 14,697,532 14,681,956 14,703,390 outstanding(basic)

Weightedaverageshares 14,737,735 14,757,558 14,751,303 14,727,741 14,714,848 14,742,040 outstanding(diluted)

Period-endshares 14,829,873 14,906,785 14,928,479 14,926,252 14,914,458 14,928,479 outstanding

Commonequity book $ 49.01 $ 47.53 $ 47.98 $ 47.71 $ 46.70 $ 47.98 value pershare

Income Statement

Net interest income

$

54,846

$

55,037

$

57,751

$

58,253

$

56,366

$

225,339

(Credit) provision for credit loss expense (5)

(3,071)

(1,830)

(205)

(218)

877

17,213

Noninterest income

18,858

19,983

18,836

18,887

17,177

73,860

Noninterest expense (5)

47,442

44,511

46,616

46,766

45,663

184,320

Income tax expense

6,471

6,680

6,145

6,330

5,540

19,924

Net income attributable to Tompkins Financial Corporation

22,831

25,626

23,978

24,230

21,431

77,588

Noncontrolling interests

31

33

53

32

32

154

Basic earnings per share (4)

1.55

1.73

1.61

1.63

1.44

5.22

Diluted earnings per share (4)

1.54

1.72

1.61

1.63

1.44

5.20

Income Statement

Net interest $ 54,846 $ 55,037 $ 57,751 $ 58,253 $ 56,366 $ 225,339 income

(Credit)provision for (3,071) (1,830) (205) (218) 877 17,213 credit lossexpense (5)

Noninterest 18,858 19,983 18,836 18,887 17,177 73,860 income

Noninterest 47,442 44,511 46,616 46,766 45,663 184,320 expense (5)

Income tax 6,471 6,680 6,145 6,330 5,540 19,924 expense

Net incomeattributableto Tompkins 22,831 25,626 23,978 24,230 21,431 77,588 FinancialCorporation

Noncontrolling 31 33 53 32 32 154 interests

Basic earnings 1.55 1.73 1.61 1.63 1.44 5.22 per share (4)

Dilutedearnings per 1.54 1.72 1.61 1.63 1.44 5.20 share (4)

Nonperforming Assets

Nonaccrual loans and leases

$

48,019

$

41,656

$

38,976

$

26,944

$

23,183

$

38,976

Loans and leases 90 days past due and accruing

0

0

0

0

0

0

Troubled debt restructuring not included above

5,776

6,069

6,803

6,864

6,988

6,803

Total nonperforming loans and leases

53,795

47,725

45,779

33,808

30,171

45,779

OREO

88

88

88

196

274

88

Total nonperforming assets

$

53,883

$

47,813

$

45,867

$

34,004

$

30,445

$

45,867

Nonperforming Assets

Nonaccrualloans and $ 48,019 $ 41,656 $ 38,976 $ 26,944 $ 23,183 $ 38,976 leases

Loans andleases 90 0 0 0 0 0 0 days past dueand accruing

Troubled debtrestructuring 5,776 6,069 6,803 6,864 6,988 6,803 not includedabove

Totalnonperforming 53,795 47,725 45,779 33,808 30,171 45,779 loans andleases

OREO 88 88 88 196 274 88

Totalnonperforming $ 53,883 $ 47,813 $ 45,867 $ 34,004 $ 30,445 $ 45,867 assets

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

Quarter-Ended

Year-Ended

Delinquency - Total loan and lease portfolio

Jun-21

Mar-21

Dec-20

Sep-20

Jun-20

Dec-20

Loans and leases 30-89 days past due and

accruing

$

1,692

$

1,790

$

3,012

$

6,875

$

8,352

$

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

1,692

1,790

3,012

6,875

8,352

3,012

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

Quarter-Ended Year-Ended

Delinquency - Totalloan and lease Jun-21 Mar-21 Dec-20 Sep-20 Jun-20 Dec-20portfolio

Loans and leases30-89 days past due and

accruing $ 1,692 $ 1,790 $ 3,012 $ 6,875 $ 8,352 $ 3,012

Loans and leases 90days past due and 0 0 0 0 0 0 accruing

Total loans andleases past due and 1,692 1,790 3,012 6,875 8,352 3,012 accruing

Allowance for Credit Losses

Balance at beginning of period

$

49,339

$

51,669

$

52,293

$

52,082

$

52,404

$

39,892

Impact of adopting ASC 326

0

0

0

0

0

(2,534)

(Credit) provision for credit losses

(2,718)

(2,510)

6

199

(348)

16,151

Net loan and lease (recoveries) charge-offs

(884)

(180)

630

(12)

(26)

1,840

Allowance for credit losses at end of period

$

47,505

$

49,339

$

51,669

$

52,293

$

52,082

$

51,669

Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance at beginning of period

$

2,600

$

1,920

$

2,131

$

2,548

$

1,323

$

477

Impact of adopting ASC 326

0

0

0

0

0

381

(Credit) provision for credit losses

(353)

680

(211)

(417)

1,225

1,062

Allowance for credit losses at end of period

$

2,247

$

2,600

$

1,920

$

2,131

$

2,548

$

1,920

Allowance for Credit Losses

Balance atbeginning of $ 49,339 $ 51,669 $ 52,293 $ 52,082 $ 52,404 $ 39,892 period

Impact ofadopting ASC 0 0 0 0 0 (2,534) 326

(Credit)provision for (2,718) (2,510) 6 199 (348) 16,151 credit losses

Net loan andlease (884) (180) 630 (12) (26) 1,840 (recoveries)charge-offs

Allowance forcredit losses $ 47,505 $ 49,339 $ 51,669 $ 52,293 $ 52,082 $ 51,669 at end ofperiod



Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance atbeginning of $ 2,600 $ 1,920 $ 2,131 $ 2,548 $ 1,323 $ 477 period

Impact ofadopting ASC 0 0 0 0 0 381 326

(Credit)provision for (353) 680 (211) (417) 1,225 1,062 credit losses

Allowance forcredit losses $ 2,247 $ 2,600 $ 1,920 $ 2,131 $ 2,548 $ 1,920 at end ofperiod

Loan Classification - Total Portfolio

Special Mention

$

108,269

$

116,689

$

121,253

$

122,652

$

44,741

$

121,253

Substandard

62,992

68,487

68,645

45,384

48,046

68,645

LoanClassification - TotalPortfolio

Special $ 108,269 $ 116,689 $ 121,253 $ 122,652 $ 44,741 $ 121,253 Mention

Substandard 62,992 68,487 68,645 45,384 48,046 68,645

Ratio Analysis

Credit Quality

Nonperforming loans and leases/total loans and leases

1.04

%

0.90

%

0.87

%

0.63

%

0.56

%

0.87

%

Nonperforming assets/total assets

0.67

%

0.59

%

0.60

%

0.44

%

0.40

%

0.60

%

Allowance for credit losses/total loans and leases

0.92

%

0.93

%

0.98

%

0.97

%

0.96

%

0.98

%

Allowance/nonperforming loans and leases

88.31

%

103.38

%

112.87

%

154.68

%

172.62

%

112.87

%

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

(0.07)

%

(0.01)

%

0.05

%

0.00

%

0.00

%

0.04

%

Ratio Analysis

Credit Quality

Nonperforming loans andleases/total loans and 1.04 % 0.90 % 0.87 % 0.63 % 0.56 % 0.87 %leases

Nonperforming assets/ 0.67 % 0.59 % 0.60 % 0.44 % 0.40 % 0.60 %total assets

Allowance for creditlosses/total loans and 0.92 % 0.93 % 0.98 % 0.97 % 0.96 % 0.98 %leases

Allowance/nonperforming 88.31 % 103.38 % 112.87 % 154.68 % 172.62 % 112.87 %loans and leases

Net loan and lease lossesannualized/total average (0.07) % (0.01) % 0.05 % 0.00 % 0.00 % 0.04 %loans and leases

Capital Adequacy

Tier 1 Capital (to average assets)

8.79

%

8.89

%

8.75

%

8.85

%

8.79

%

8.75

%

Total Capital (to risk-weighted assets)

14.62

%

14.62

%

14.39

%

14.26

%

13.95

%

14.39

%

Capital Adequacy

Tier 1 Capital (to average 8.79 % 8.89 % 8.75 % 8.85 % 8.79 % 8.75 %assets)

Total Capital (to risk-weighted 14.62 % 14.62 % 14.39 % 14.26 % 13.95 % 14.39 %assets)

Profitability (period-end)

Return on average assets *

1.15

%

1.33

%

1.23

%

1.27

%

1.16

%

1.05

%

Return on average equity *

12.70

%

14.42

%

13.26

%

13.59

%

12.48

%

11.09

%

Net interest margin (TE) *

2.91

%

3.01

%

3.12

%

3.26

%

3.45

%

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) Amounts in prior periods' financial statements are reclassified when necessary to conform to the current period's presentation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210723005043/en/

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