Business Wire | Oct 22, 2021 09:00AM EDT

Tompkins Financial Corporation Reports Third Quarter Earnings

Oct. 22, 2021

ITHACA, N.Y.--(BUSINESS WIRE)--Oct. 22, 2021--Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation reported diluted earnings per share of $1.45 for the third quarter of 2021, compared to $1.63 reported for the third quarter of 2020. Net income for the third quarter of 2021 was $21.3 million, compared to $24.2 million for the same period in 2020. Results for the third quarter of 2021 were negatively impacted by approximately $4.1 million ($0.21 per share) of nonrecurring expenses related to the prepayment of borrowings and the redemption of trust preferred securities. Though these transactions had a negative impact on current period earnings, they are expected to have a favorable impact on future earnings by way of reduced interest expense. Additional details on these nonrecurring transactions are described below.

For the year-to-date period ended September 30, 2021, diluted earnings per share were $4.72, up 31.5% from $3.59 for the same year-to-date period in 2020. Year-to-date net income was $69.8 million for the nine month period ended September 30, 2021, up 30.2% compared to $53.6 million for the same period in 2020.

Tompkins President and CEO, Stephen Romaine, commented, "We are pleased to report record earnings performance through the first nine months of 2021. The third quarter of 2021 was down from the same quarter last year due to some nonrecurring expenses related to discretionary debt restructuring transactions. Despite higher expenses related to these transactions, several positive revenue trends were noted during the quarter, including growth in both net interest income and noninterest income when compared to the second quarter this year."

SELECTED HIGHLIGHTS FOR THE THIRD QUARTER:

* Net interest income was $56.1 million for the third quarter of 2021, up from $54.8 million reported in the second quarter of 2021, and down from $58.3 million reported in the same quarter of 2020. Net interest income in the third quarter of 2021 included a $1.2 million purchase accounting charge related to the redemption of $10.0 million in trust preferred securities. Net interest income for the second quarter of 2021 included a $650,000 purchase accounting charge related to the redemption of $5.2 million in trust preferred securities. * Total loans at September 30, 2021 were $5.1 billion compared to $5.4 billion at September 30, 2020, and $5.3 billion at year end 2020. The $301.5 million change in total loans compared to September 30, 2020, reflected a decline of $322.1 million in loans under the U.S. Small Business Administration's Paycheck Protection Program ("PPP") at the end of the third quarter of 2021 compared to the end of the third quarter of 2020. * Largely stable credit conditions and improving macroeconomic trends contributed to a lower allowance for credit losses at September 30, 2021 when compared to September 30, 2020. The provision for credit losses for the quarter and year-to-date periods ended September 30, 2021 were credits of $1.2 million and $6.1 million, respectively, compared to a credit of $218,000 and an expense of $17.4 million, respectively, for the same periods in 2020. * Noninterest income for the quarter was $20.9 million, reflecting an increase of 10.6% over the second quarter of 2021, and 10.4% over the third quarter of 2020. * Noninterest expense for the quarter was $50.2 million, an increase of 5.8% over the second quarter of 2021, and 7.3% over the same quarter last year. The increase in the third quarter of 2021 was largely related to $2.9 million of penalties related to prepayment of $135.0 million of FHLB borrowings.

NET INTEREST INCOME

The net interest margin was 2.89% for the third quarter of 2021, compared to 2.91% for the second quarter of 2021, and 3.26% for the third quarter of 2020. Net interest income was $56.1 million for the third quarter of 2021, compared to $58.3 million for the third quarter of 2020. Interest income for the third quarter of 2021 included $3.3 million of net deferred loan fees associated with PPP loans, compared to net deferred PPP loan fees of $2.4 million in the third quarter of 2020. Interest expense for the third quarter of 2021 was negatively impacted by an accelerated non-cash purchase accounting discount of $1.2 million related to the redemption of $10.0 million in trust preferred securities.

For the year-to-date period ended September 30, 2021, net interest income of $166.0 million was down 1.0% when compared to the nine month period ended September 30, 2020. For the year-to-date period in 2021, net deferred loan fees associated with PPP loans were approximately $8.0 million as compared to $4.8 million in the same period of 2020. Interest expense for the nine months ended September 30, 2021, was negatively impacted by an accelerated non-cash purchase accounting discount of $1.9 million related to the redemption of $15.2 million in trust preferred securities. The $15.2 million in redeemed trust preferred securities carried a weighted average interest rate of 5.26% at the time they were redeemed and had a weighted average final maturity of slightly more than 11 years.

Average loans for the quarter ended September 30, 2021 were $5.1 billion compared to $5.4 billion in the same period in 2020. The $285.0 million change in average loan balances was primarily due to a decline in average PPP loans from the third quarter of 2020 to the third quarter of 2021.

Average securities for the quarter ended September 30, 2021, were up $788.2 million or 54.0% when compared to the same period in 2020. The increase is mainly a result of investing excess cash, driven by deposit growth and PPP loan forgiveness.

Asset yields for the quarter ended September 30, 2021 were down 44 basis points compared to the quarter ended September 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 third quarter of 2021 were up $571.9 million, or 9.0% compared to the same period in 2020. Average noninterest bearing deposits for the three months ended September 30, 2021 were up $267.5 million or 14.1% compared to the three months ended September 30, 2020. Average deposit balances continue to benefit from the PPP loan program, as the majority of the proceeds of the PPP loans funded by Tompkins during 2020 and the first half of 2021 were deposited in Tompkins checking accounts. The total cost of interest-bearing liabilities was 0.39% for the quarter ended September 30, 2021, a decline of 11 basis points from the quarter ended September 30, 2020.

NONINTEREST INCOME

Noninterest income of $20.9 million for the third quarter of 2021, was up 10.4% compared to the same period in 2020. For the year-to-date period, noninterest income of $59.7 million was up 8.5% from the same period in 2020. Growth over the same quarter and nine-month periods in the prior year was supported by increases in nearly all fee income categories, including: Insurance commissions and fees (up 10.3% for the quarter, 11.7% for the year-to-date period), Investment services income (up 15.5% for the quarter, 15.6% for the year-to-date period), Service charges on deposit accounts up (13.4% for the quarter, down 2.0% for the year-to-date period), and Card services income (up 12.3% for the quarter, 16.9% for the year-to-date period). Noninterest income represented 27.1% of total revenues for the third quarter of 2021, as compared to 24.5% of total revenues for the third quarter of 2020.

NONINTEREST EXPENSE

Noninterest expense was $50.2 million for the third quarter of 2021, up $3.4 million, or 7.3%, from the third quarter of 2020. For the year-to-date period, noninterest expense was $142.1 million, up $4.4 million or 3.2% from the same period in 2020. Included in the quarter and year-to-date periods of 2021 were penalties of $2.9 million related to the prepayment of $135.0 million in FHLB fixed rate advances. The advances, which were paid off in September 2021, carried a weighted average interest rate of 2.26% and had a weighted average maturity of 1.25 years.

INCOME TAX EXPENSE

The Company's effective tax rate was 23.7% for the third quarter of 2021, compared to 20.7% for the same period in 2020. The effective tax rate for the nine months ended September 30, 2021 was 22.1%, compared to 20.4% reported for the same period in 2020.

ASSET QUALITY

The allowance for credit losses represented 0.91% of total loans and leases at September 30, 2021, down from 0.92% at June 30, 2021, and 0.98% at December 31, 2020. The ratio of the allowance to total nonperforming loans and leases declined to 76.2% at September 30, 2021, compared to 88.3% at June 30, 2021, and 112.9% at December 31, 2020.

The provision for credit loss expense for the third quarter of 2021 was a credit of $1.2 million compared to a credit of $218,000 for the same period in 2020. Net charge-offs for the quarter ended September 30, 2021 were $69,000 compared to net recoveries of $12,000 reported for the same period in 2020. Provision expense for the nine months ended September 30, 2021 was a credit of $6.1 million, compared to an expense of $17.4 million for the same period in 2020.

Nonperforming loans and leases totaled $60.7 million at September 30, 2021, compared to $53.8 million at June 30, 2021, and $45.8 million at December 31, 2020. The increase in nonperforming loans and leases compared to prior quarter end and year end 2020 was related to two commercial real estate relationships that moved into nonperforming status, totaling $9.1 million in the second quarter of 2021 and $7.5 million in the third quarter of 2021, which continue to accrue interest. Nonperforming assets represented 0.75% of total assets at September 30, 2021, up from 0.67% at June 30, 2021, and 0.60% at December 31, 2020.

Special Mention and Substandard loans and leases totaled $168.5 million at September 30, 2021, reflecting improvement from $171.3 million at June 30, 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 September 30, 2021, total loans that continued in a deferral status amounted to approximately $12.8 million, representing 0.25% of total loans. At June 30, 2021 total loans in deferral status totaled $129.4 million, and at December 31, 2020 total loans in deferral status totaled $212.2 million. Included in nonperforming loans and leases and Substandard loans and leases at September 30, 2021, were 2 loans totaling $3.0 million that remained in deferral status.

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. On January 19, 2021, the Company began accepting both first draw and second draw applications for the reopening of the PPP program. The 2021 PPP program funding closed for new applications on May 12, 2021. The Company funded 2,142 applications totaling $228.5 million in 2021.

Out of the total $694.1 million of PPP loans that the Company had funded through October 12, 2021, approximately $552.0 million had been forgiven by the SBA under the terms of the program. Total net deferred fees on the remaining balance of PPP loans amounted to $6.2 million at September 30, 2021.

CAPITAL POSITION

Capital ratios at September 30, 2021 remained well above the regulatory minimums for well-capitalized institutions. The ratio of Total Capital to Risk-Weighted Assets was 14.21% at September 30, 2021, down from 14.62% reported at June 30, 2021, and 14.39% at December 31, 2020. The ratio of Tier 1 capital to average assets was 8.54% at September 30, 2021, compared to 8.79% at June 30, 2021, and 8.75% at December 31, 2020.

During the third quarter of 2021, the Company repurchased 170,775 common shares at an aggregate cost of $13.2 million. These shares were purchased under the Company's previously announced 2020 Stock Repurchase Program. During the first nine months of 2021, the Company repurchased 272,310 shares at an aggregate cost of $21.2 million.

The Company announced today that its Board of Directors has authorized a new stock repurchase program of up to 400,000 shares of the Company's outstanding common stock, par value $0.10 per share, over the next 24 months. This program replaces the Company's existing 400,000 stock repurchase program announced on January 30, 2020.

The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities laws. The actual timing, number and value of shares repurchased under the program will be determined by management at its discretion and will depend on a number of factors, including the market price of the Company's stock and general market and economic conditions, and applicable legal requirements.

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. 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 Act of 1995:

This press release contains "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 governments' responses 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 9/30/2021 12/31/2020



Cash and noninterest bearing balances due from $ 22,441 $ 21,245 banks

Interest bearing balances due from banks 311,046 367,217

Cash and Cash Equivalents 333,487 388,462



Available-for-sale debt securities, at fairvalue (amortized cost of $2,072,498 at 2,066,927 1,627,193 September 30, 2021 and $1,599,894 at December 31, 2020)

Held-to-maturity securities, at amortized cost(fair value of $268,283 at September 30, 2021 269,268 0 and $0 December 31, 2020)

Equity securities, at fair value (amortizedcost $910 at September 30, 2021 and $929 at 910 929 December 31, 2020)

Total loans and leases, net of unearned income 5,096,778 5,260,327 and deferred costs and fees

Less: Allowance for credit losses 46,259 51,669

Net Loans and Leases 5,050,519 5,208,658



Federal Home Loan Bank and other stock 10,366 16,382

Bank premises and equipment, net 85,955 88,709

Corporate owned life insurance 86,094 84,736

Goodwill 92,447 92,447

Other intangible assets, net 3,989 4,905

Accrued interest and other assets 113,148 109,750

Total Assets $ 8,113,110 $ 7,622,171

LIABILITIES

Deposits:

Interest bearing:

Checking, savings and money market 4,211,732 3,761,933

Time 675,499 746,234

Noninterest bearing 2,203,667 1,929,585

Total Deposits 7,090,898 6,437,752



Federal funds purchased and securities sold 72,490 65,845 under agreements to repurchase

Other borrowings 110,000 265,000

Trust preferred debentures 0 13,220

Other liabilities 117,365 122,665

Total Liabilities $ 7,390,753 $ 6,904,482

EQUITY

Tompkins Financial Corporation shareholders' equity:

Common Stock - par value $.10 per share:Authorized 25,000,000 shares; Issued: 1,470 1,496 14,695,105 at September 30, 2021; and 14,964,389 at December 31, 2020

Additional paid-in capital 315,957 333,976

Retained earnings 464,152 418,413

Accumulated other comprehensive loss (55,094 ) (32,074 )

Treasury stock, at cost - 122,824 shares atSeptember 30, 2021, and 124,849 shares at (5,634 ) (5,534 )December 31, 2020

Total Tompkins Financial Corporation 720,851 716,277 Shareholders' Equity

Noncontrolling interests 1,506 1,412

Total Equity $ 722,357 $ 717,689

Total Liabilities and Equity $ 8,113,110 $ 7,622,171

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

Three Months Ended

Nine Months Ended

9/30/2021

9/30/2020

9/30/2021

9/30/2020

INTEREST AND DIVIDEND INCOME

Loans

$

53,738

$

57,892

$

161,598

$

169,639

Due from banks

136

83

266

90

Available-for-sale debt securities

6,312

6,035

17,188

20,101

Held-to-maturity securities

732

0

1,044

0

Federal Home Loan Bank and other stock

196

306

608

1,130

Total Interest and Dividend Income

61,114

$

64,316

$

180,704

$

190,960

INTEREST EXPENSE

Time certificates of deposits of $250,000 or more

518

755

1,724

2,458

Other deposits

2,088

3,450

6,835

13,723

Federal funds purchased and securities sold under agreements to repurchase

17

19

48

76

Trust preferred debentures

1,237

216

2,233

758

Other borrowings

1,156

1,623

3,883

6,357

Total Interest Expense

5,016

6,063

14,723

23,372

Net Interest Income

56,098

58,253

165,981

167,588

Less: (Credit) provision for credit loss expense

(1,232

)

(218

)

(6,133

)

17,418

Net Interest Income After Provision for Credit Loss Expense

57,330

58,471

172,114

150,170

NONINTEREST INCOME

Insurance commissions and fees

9,833

8,916

27,053

24,216

Investment services income

4,957

4,292

14,347

12,414

Service charges on deposit accounts

1,638

1,444

4,579

4,675

Card services income

2,717

2,419

8,051

6,885

Other income

1,769

1,818

5,408

6,388

Net (loss) gain on securities transactions

(60

)

(2

)

257

446

Total Noninterest Income

20,854

18,887

59,695

55,024

NONINTEREST EXPENSE

Salaries and wages

24,825

23,951

71,477

69,482

Other employee benefits

5,777

6,690

17,887

18,260

Net occupancy expense of premises

3,019

3,162

10,042

9,530

Furniture and fixture expense

2,066

1,886

6,220

5,759

Amortization of intangible assets

329

371

988

1,120

Other operating expense

14,164

10,706

35,519

33,553

Total Noninterest Expenses

50,180

46,766

142,133

137,704

Income Before Income Tax Expense

28,004

30,592

89,676

67,490

Income Tax Expense

6,630

6,330

19,781

13,779

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

21,374

24,262

69,895

53,711

Less: Net Income Attributable to Noncontrolling Interests

32

32

96

101

Net Income Attributable to Tompkins Financial Corporation

$

21,342

24,230

69,799

53,610

Basic Earnings Per Share

$

1.46

$

1.63

$

4.74

$

3.60

Diluted Earnings Per Share

$

1.45

$

1.63

$

4.72

$

3.59

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

9/30/2021 9/30/2020 9/30/2021 9/30/2020

INTEREST AND DIVIDEND INCOME

Loans $ 53,738 $ 57,892 $ 161,598 $ 169,639

Due from banks 136 83 266 90

Available-for-sale debt 6,312 6,035 17,188 20,101 securities

Held-to-maturity 732 0 1,044 0 securities

Federal Home Loan Bank 196 306 608 1,130 and other stock

Total Interest and 61,114 $ 64,316 $ 180,704 $ 190,960 Dividend Income

INTEREST EXPENSE

Time certificates ofdeposits of $250,000 or 518 755 1,724 2,458 more

Other deposits 2,088 3,450 6,835 13,723

Federal funds purchasedand securities sold under 17 19 48 76 agreements to repurchase

Trust preferred 1,237 216 2,233 758 debentures

Other borrowings 1,156 1,623 3,883 6,357

Total Interest Expense 5,016 6,063 14,723 23,372

Net Interest Income 56,098 58,253 165,981 167,588

Less: (Credit) provision (1,232 ) (218 ) (6,133 ) 17,418 for credit loss expense

Net Interest Income AfterProvision for Credit Loss 57,330 58,471 172,114 150,170 Expense

NONINTEREST INCOME

Insurance commissions and 9,833 8,916 27,053 24,216 fees

Investment services 4,957 4,292 14,347 12,414 income

Service charges on 1,638 1,444 4,579 4,675 deposit accounts

Card services income 2,717 2,419 8,051 6,885

Other income 1,769 1,818 5,408 6,388

Net (loss) gain on (60 ) (2 ) 257 446 securities transactions

Total Noninterest Income 20,854 18,887 59,695 55,024

NONINTEREST EXPENSE

Salaries and wages 24,825 23,951 71,477 69,482

Other employee benefits 5,777 6,690 17,887 18,260

Net occupancy expense of 3,019 3,162 10,042 9,530 premises

Furniture and fixture 2,066 1,886 6,220 5,759 expense

Amortization of 329 371 988 1,120 intangible assets

Other operating expense 14,164 10,706 35,519 33,553

Total Noninterest 50,180 46,766 142,133 137,704 Expenses

Income Before Income Tax 28,004 30,592 89,676 67,490 Expense

Income Tax Expense 6,630 6,330 19,781 13,779

Net Income Attributableto Noncontrolling 21,374 24,262 69,895 53,711 Interests and Tompkins Financial Corporation

Less: Net IncomeAttributable to 32 32 96 101 Noncontrolling Interests

Net Income Attributableto Tompkins Financial $ 21,342 24,230 69,799 53,610 Corporation

Basic Earnings Per Share $ 1.46 $ 1.63 $ 4.74 $ 3.60

Diluted Earnings Per $ 1.45 $ 1.63 $ 4.72 $ 3.59 Share

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

Quarter Ended

Quarter Ended

September 30, 2021

September 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

$

376,341

$

136

0.14

%

$

326,908

$

83

0.10

%

Securities (1)

U.S. Government securities

2,133,984

6,467

1.20

%

1,332,240

5,362

1.60

%

State and municipal (2)

109,375

697

2.53

%

122,932

816

2.64

%

Other securities (2)

3,417

23

2.64

%

3,433

25

2.88

%

Total securities

2,246,776

7,187

1.27

%

1,458,605

6,203

1.69

%

FHLBNY and FRB stock

15,330

196

5.07

%

18,319

307

6.66

%

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

5,115,253

53,989

4.19

%

5,400,217

58,507

4.31

%

Total interest-earning assets

7,753,700

61,508

3.15

%

7,204,049

65,100

3.59

%

Other assets

348,370

377,960

Total assets

$

8,102,070

$

7,582,009

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearing checking, savings, & money market

$

4,090,840

$

906

0.09

%

$

3,796,615

$

1,671

0.18

%

Time deposits

707,212

1,700

0.95

%

697,026

2,534

1.45

%

Total interest-bearing deposits

4,798,052

2,606

0.22

%

4,493,641

4,205

0.37

%

Federal funds purchased & securities sold under agreements to repurchase

60,798

17

0.11

%

47,527

19

0.16

%

Other borrowings

224,459

1,156

2.04

%

303,587

1,623

2.13

%

Trust preferred debentures

3,444

1,237

142.50

%

17,135

216

5.02

%

Total interest-bearing liabilities

5,086,753

5,016

0.39

%

4,861,890

6,063

0.50

%

Noninterest bearing deposits

2,165,537

1,897,999

Accrued expenses and other liabilities

116,663

112,636

Total liabilities

7,368,953

6,872,525

Tompkins Financial Corporation Shareholders' equity

731,629

707,996

Noncontrolling interest

1,488

1,488

Total equity

733,117

709,484

Total liabilities and equity

$

8,102,070

$

7,582,009

Interest rate spread

2.76

%

3.10

%

Net interest income/margin on earning assets

56,492

2.89

%

59,037

3.26

%

Tax Equivalent Adjustment

(394

)

(784

)

Net interest income per consolidated financial statements

$

56,098

$

58,253

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

Quarter Ended Quarter Ended

September 30, 2021 September 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 $ 376,341 $ 136 0.14 % $ 326,908 $ 83 0.10 %from banks

Securities (1)

U.S. Government 2,133,984 6,467 1.20 % 1,332,240 5,362 1.60 %securities

State and 109,375 697 2.53 % 122,932 816 2.64 %municipal (2)

Other securities 3,417 23 2.64 % 3,433 25 2.88 %(2)

Total securities 2,246,776 7,187 1.27 % 1,458,605 6,203 1.69 %

FHLBNY and FRB 15,330 196 5.07 % 18,319 307 6.66 %stock

Total loans andleases, net of 5,115,253 53,989 4.19 % 5,400,217 58,507 4.31 %unearned income (2)(3)

Totalinterest-earning 7,753,700 61,508 3.15 % 7,204,049 65,100 3.59 %assets

Other assets 348,370 377,960

Total assets $ 8,102,070 $ 7,582,009

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearingchecking, $ 4,090,840 $ 906 0.09 % $ 3,796,615 $ 1,671 0.18 %savings, & money market

Time deposits 707,212 1,700 0.95 % 697,026 2,534 1.45 %

Totalinterest-bearing 4,798,052 2,606 0.22 % 4,493,641 4,205 0.37 %deposits

Federal fundspurchased &securities sold 60,798 17 0.11 % 47,527 19 0.16 %under agreementsto repurchase

Other borrowings 224,459 1,156 2.04 % 303,587 1,623 2.13 %

Trust preferred 3,444 1,237 142.50 % 17,135 216 5.02 %debentures

Totalinterest-bearing 5,086,753 5,016 0.39 % 4,861,890 6,063 0.50 %liabilities

Noninterest 2,165,537 1,897,999 bearing deposits

Accrued expensesand other 116,663 112,636 liabilities

Total 7,368,953 6,872,525 liabilities

TompkinsFinancialCorporation 731,629 707,996 Shareholders'equity

Noncontrolling 1,488 1,488 interest

Total equity 733,117 709,484



Totalliabilities and $ 8,102,070 $ 7,582,009 equity

Interest rate 2.76 % 3.10 %spread

Net interestincome/margin on 56,492 2.89 % 59,037 3.26 %earning assets



Tax Equivalent (394 ) (784 ) Adjustment

Net interestincome perconsolidated $ 56,098 $ 58,253 financialstatements

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

Year to Date Period Ended

Year to Date Period Ended

September 30, 2021

September 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

$

333,769

$

266

0.11

%

$

111,775

$

90

0.11

%

Securities (1)

U.S. Government securities

1,920,717

16,417

1.14

%

1,242,659

18,236

1.96

%

State and municipal (2)

114,809

2,200

2.56

%

110,058

2,225

2.70

%

Other securities (2)

3,420

69

2.70

%

3,429

93

3.61

%

Total securities

2,038,946

18,686

1.23

%

1,356,146

20,554

2.02

%

FHLBNY and FRB stock

16,328

608

4.98

%

22,175

1,130

6.81

%

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

5,225,087

162,355

4.15

%

5,197,757

170,853

4.40

%

Total interest-earning assets

7,614,130

181,915

3.19

%

6,687,853

192,627

3.85

%

Other assets

346,441

536,424

Total assets

$

7,960,571

$

7,224,278

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearing checking, savings, & money market

$

4,002,724

$

2,943

0.10

%

$

3,557,326

$

7,973

0.30

%

Time deposits

727,445

5,616

1.03

%

693,922

8,208

1.58

%

Total interest-bearing deposits

4,730,169

8,559

0.24

%

4,251,248

16,181

0.51

%

Federal funds purchased & securities sold under agreements to repurchase

57,498

48

0.11

%

54,481

76

0.19

%

Other borrowings

254,002

3,883

2.04

%

397,511

6,357

2.14

%

Trust preferred debentures

9,849

2,233

30.32

%

17,093

758

5.93

%

Total interest-bearing liabilities

5,051,518

14,723

0.39

%

4,720,332

23,372

0.66

%

Noninterest bearing deposits

2,066,567

1,699,317

Accrued expenses and other liabilities

117,383

111,643

Total liabilities

7,235,468

6,531,292

Tompkins Financial Corporation Shareholders' equity

723,645

691,530

Noncontrolling interest

1,458

1,456

Total equity

725,103

692,986

Total liabilities and equity

$

7,960,571

$

7,224,278

Interest rate spread

2.80

%

3.19

%

Net interest income/margin on earning assets

167,192

2.94

%

169,255

3.38

%

Tax Equivalent Adjustment

(1,211

)

(1,667

)

Net interest income per consolidated financial statements

$

165,981

$

167,588

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

Year to Date Period Ended Year to Date Period Ended

September 30, 2021 September 30, 2020

Average Average

Balance Balance Average

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

ASSETS

Interest-earning assets

Interest-bearingbalances due $ 333,769 $ 266 0.11 % $ 111,775 $ 90 0.11 %from banks

Securities (1)

U.S. Government 1,920,717 16,417 1.14 % 1,242,659 18,236 1.96 %securities

State and 114,809 2,200 2.56 % 110,058 2,225 2.70 %municipal (2)

Other securities 3,420 69 2.70 % 3,429 93 3.61 %(2)

Total securities 2,038,946 18,686 1.23 % 1,356,146 20,554 2.02 %

FHLBNY and FRB 16,328 608 4.98 % 22,175 1,130 6.81 %stock

Total loans andleases, net of 5,225,087 162,355 4.15 % 5,197,757 170,853 4.40 %unearned income (2)(3)

Totalinterest-earning 7,614,130 181,915 3.19 % 6,687,853 192,627 3.85 %assets

Other assets 346,441 536,424

Total assets $ 7,960,571 $ 7,224,278

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearingchecking, $ 4,002,724 $ 2,943 0.10 % $ 3,557,326 $ 7,973 0.30 %savings, & money market

Time deposits 727,445 5,616 1.03 % 693,922 8,208 1.58 %

Totalinterest-bearing 4,730,169 8,559 0.24 % 4,251,248 16,181 0.51 %deposits

Federal fundspurchased &securities sold 57,498 48 0.11 % 54,481 76 0.19 %under agreementsto repurchase

Other borrowings 254,002 3,883 2.04 % 397,511 6,357 2.14 %

Trust preferred 9,849 2,233 30.32 % 17,093 758 5.93 %debentures

Totalinterest-bearing 5,051,518 14,723 0.39 % 4,720,332 23,372 0.66 %liabilities

Noninterest 2,066,567 1,699,317 bearing deposits

Accrued expensesand other 117,383 111,643 liabilities

Total 7,235,468 6,531,292 liabilities

TompkinsFinancialCorporation 723,645 691,530 Shareholders'equity

Noncontrolling 1,458 1,456 interest

Total equity 725,103 692,986



Totalliabilities and $ 7,960,571 $ 7,224,278 equity

Interest rate 2.80 % 3.19 %spread

Net interestincome/margin on 167,192 2.94 % 169,255 3.38 %earning assets



Tax Equivalent (1,211 ) (1,667 ) Adjustment

Net interestincome perconsolidated $ 165,981 $ 167,588 financialstatements

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)

Quarter-Ended

Year-Ended

Period End Balance Sheet

Sep-21

Jun-21

Mar-21

Dec-20

Sep-20

Dec-20

Securities

$

2,337,105

$

2,166,853

$

1,935,731

$

1,628,122

$

1,667,698

$

1,628,122

Total Loans

5,096,778

5,175,129

5,292,793

5,260,327

5,398,297

5,260,327

Allowance for credit losses

46,259

47,505

49,339

51,669

52,293

51,669

Total assets

8,113,110

7,988,208

8,095,342

7,622,171

7,794,502

7,622,171

Total deposits

7,090,898

6,837,000

6,946,541

6,437,752

6,601,238

6,437,752

Federal funds purchased and securities sold under agreements to repurchase

72,490

52,134

47,496

65,845

63,573

65,845

Other borrowings

110,000

245,000

265,000

265,000

285,000

265,000

Trust preferred debentures

0

8,799

13,260

13,220

17,163

13,220

Total common equity

720,851

726,779

708,493

716,277

712,104

716,277

Total equity

722,357

728,253

709,936

717,689

713,611

717,689

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(Inthousands,except per sharedata)

Quarter-Ended Year-Ended

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

Securities $ 2,337,105 $ 2,166,853 $ 1,935,731 $ 1,628,122 $ 1,667,698 $ 1,628,122

Total 5,096,778 5,175,129 5,292,793 5,260,327 5,398,297 5,260,327 Loans

Allowancefor credit 46,259 47,505 49,339 51,669 52,293 51,669 losses

Total 8,113,110 7,988,208 8,095,342 7,622,171 7,794,502 7,622,171 assets

Total 7,090,898 6,837,000 6,946,541 6,437,752 6,601,238 6,437,752 deposits

Federalfundspurchasedandsecurities 72,490 52,134 47,496 65,845 63,573 65,845 sold underagreementstorepurchase

Other 110,000 245,000 265,000 265,000 285,000 265,000 borrowings

Trustpreferred 0 8,799 13,260 13,220 17,163 13,220 debentures

Totalcommon 720,851 726,779 708,493 716,277 712,104 716,277 equity

Total 722,357 728,253 709,936 717,689 713,611 717,689 equity

Average Balance Sheet

Average earning assets

$

7,753,700

$

7,609,792

$

7,475,846

$

7,408,335

$

7,204,049

$

6,868,958

Average assets

8,102,070

7,949,946

7,826,672

7,758,159

7,582,009

7,358,478

Average interest-bearing liabilities

5,086,753

5,030,800

5,036,451

5,010,037

4,861,890

4,793,154

Average equity

733,117

721,336

720,718

719,114

709,484

699,554

Average Balance Sheet

Average earning $ 7,753,700 $ 7,609,792 $ 7,475,846 $ 7,408,335 $ 7,204,049 $ 6,868,958 assets

Average assets 8,102,070 7,949,946 7,826,672 7,758,159 7,582,009 7,358,478

Averageinterest-bearing 5,086,753 5,030,800 5,036,451 5,010,037 4,861,890 4,793,154 liabilities

Average equity 733,117 721,336 720,718 719,114 709,484 699,554

Share data

Weighted average shares outstanding (basic)

14,494,533

14,654,774

14,676,410

14,715,124

14,697,532

14,703,390

Weighted average shares outstanding (diluted)

14,568,334

14,737,735

14,757,558

14,751,303

14,727,741

14,742,040

Period-end shares outstanding

14,659,195

14,829,873

14,906,785

14,928,479

14,926,252

14,928,479

Common equity book value per share

$

49.17

$

49.01

$

47.53

$

47.98

$

47.71

$

47.98

Share data

Weightedaverageshares 14,494,533 14,654,774 14,676,410 14,715,124 14,697,532 14,703,390 outstanding(basic)

Weightedaverageshares 14,568,334 14,737,735 14,757,558 14,751,303 14,727,741 14,742,040 outstanding(diluted)

Period-endshares 14,659,195 14,829,873 14,906,785 14,928,479 14,926,252 14,928,479 outstanding

Commonequity book $ 49.17 $ 49.01 $ 47.53 $ 47.98 $ 47.71 $ 47.98 value pershare

Income Statement

Net interest income

$

56,098

$

54,846

$

55,037

$

57,751

$

58,253

$

225,339

(Credit) provision for credit loss expense (5)

(1,232

)

(3,071

)

(1,830

)

(205

)

(218

)

17,213

Noninterest income

20,854

18,858

19,983

18,836

18,887

73,860

Noninterest expense (5)

50,180

47,442

44,511

46,616

46,766

184,320

Income tax expense

6,630

6,471

6,680

6,145

6,330

19,924

Net income attributable to Tompkins Financial Corporation

21,342

22,831

25,626

23,978

24,230

77,588

Noncontrolling interests

32

31

33

53

32

154

Basic earnings per share (4)

1.46

1.55

1.73

1.61

1.63

5.22

Diluted earnings per share (4)

1.45

1.54

1.72

1.61

1.63

5.20

Income Statement

Net interest $ 56,098 $ 54,846 $ 55,037 $ 57,751 $ 58,253 $ 225,339 income

(Credit)provision for (1,232 ) (3,071 ) (1,830 ) (205 ) (218 ) 17,213 credit lossexpense (5)

Noninterest 20,854 18,858 19,983 18,836 18,887 73,860 income

Noninterest 50,180 47,442 44,511 46,616 46,766 184,320 expense (5)

Income tax 6,630 6,471 6,680 6,145 6,330 19,924 expense

Net incomeattributableto Tompkins 21,342 22,831 25,626 23,978 24,230 77,588 FinancialCorporation

Noncontrolling 32 31 33 53 32 154 interests

Basic earnings 1.46 1.55 1.73 1.61 1.63 5.22 per share (4)

Dilutedearnings per 1.45 1.54 1.72 1.61 1.63 5.20 share (4)

Nonperforming Assets

Nonaccrual loans and leases

$

47,941

$

48,019

$

41,656

$

38,976

$

26,944

$

38,976

Loans and leases 90 days past due and accruing

7,463

0

0

0

0

0

Troubled debt restructuring not included above

5,343

5,776

6,069

6,803

6,864

6,803

Total nonperforming loans and leases

60,747

53,795

47,725

45,779

33,808

45,779

OREO

135

88

88

88

196

88

Total nonperforming assets

$

60,882

$

53,883

$

47,813

$

45,867

$

34,004

$

45,867

Nonperforming Assets

Nonaccrualloans and $ 47,941 $ 48,019 $ 41,656 $ 38,976 $ 26,944 $ 38,976 leases

Loans andleases 90 7,463 0 0 0 0 0 days past dueand accruing

Troubled debtrestructuring 5,343 5,776 6,069 6,803 6,864 6,803 not includedabove

Totalnonperforming 60,747 53,795 47,725 45,779 33,808 45,779 loans andleases

OREO 135 88 88 88 196 88

Totalnonperforming $ 60,882 $ 53,883 $ 47,813 $ 45,867 $ 34,004 $ 45,867 assets

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

Quarter-Ended

Year-Ended

Delinquency - Total loan and lease portfolio

Sep-21

Jun-21

Mar-21

Dec-20

Sep-20

Dec-20

Loans and leases 30-89 days past due and accruing

$

1,436

$

1,692

$

1,790

$

3,012

$

6,875

$

3,012

Loans and leases 90 days past due and accruing

7,463

0

0

0

0

0

Total loans and leases past due and accruing

8,899

1,692

1,790

3,012

6,875

3,012

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

Quarter-Ended Year-Ended

Delinquency - Total loan Sep-21 Jun-21 Mar-21 Dec-20 Sep-20 Dec-20and lease portfolio

Loans and leases 30-89days past due and $ 1,436 $ 1,692 $ 1,790 $ 3,012 $ 6,875 $ 3,012 accruing

Loans and leases 90 days 7,463 0 0 0 0 0 past due and accruing

Total loans and leases 8,899 1,692 1,790 3,012 6,875 3,012 past due and accruing

Allowance for Credit Losses

Balance at beginning of period

$

47,505

$

49,339

$

51,669

$

52,293

$

52,082

$

39,892

Impact of adopting ASC 326

0

0

0

0

0

(2,534

)

(Credit) provision for credit losses

(1,177

)

(2,718

)

(2,510

)

6

199

16,151

Net loan and lease charge-offs (recoveries)

69

(884

)

(180

)

630

(12

)

1,840

Allowance for credit losses at end of period

$

46,259

$

47,505

$

49,339

$

51,669

$

52,293

$

51,669

Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance at beginning of period

$

2,247

$

2,600

$

1,920

$

2,131

$

2,548

$

477

Impact of adopting ASC 326

0

0

0

0

0

381

(Credit) provision for credit losses

(55

)

(353

)

680

(211

)

(417

)

1,062

Allowance for credit losses at end of period

$

2,192

$

2,247

$

2,600

$

1,920

$

2,131

$

1,920

Allowance for Credit Losses

Balance atbeginning of $ 47,505 $ 49,339 $ 51,669 $ 52,293 $ 52,082 $ 39,892 period

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

(Credit)provision (1,177 ) (2,718 ) (2,510 ) 6 199 16,151 for creditlosses

Net loan andlease 69 (884 ) (180 ) 630 (12 ) 1,840 charge-offs(recoveries)

Allowancefor creditlosses at $ 46,259 $ 47,505 $ 49,339 $ 51,669 $ 52,293 $ 51,669 end ofperiod



Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance atbeginning of $ 2,247 $ 2,600 $ 1,920 $ 2,131 $ 2,548 $ 477 period

Impact ofadopting ASC 0 0 0 0 0 381 326

(Credit)provision (55 ) (353 ) 680 (211 ) (417 ) 1,062 for creditlosses

Allowancefor creditlosses at $ 2,192 $ 2,247 $ 2,600 $ 1,920 $ 2,131 $ 1,920 end ofperiod

Loan Classification - Total Portfolio

Special Mention

$

98,253

$

108,269

$

116,689

$

121,253

$

122,652

$

121,253

Substandard

70,213

62,992

68,487

68,645

45,384

68,645

LoanClassification - TotalPortfolio

Special $ 98,253 $ 108,269 $ 116,689 $ 121,253 $ 122,652 $ 121,253 Mention

Substandard 70,213 62,992 68,487 68,645 45,384 68,645

Ratio Analysis

Credit Quality

Nonperforming loans and leases/total loans and leases

1.19

%

1.04

%

0.90

%

0.87

%

0.63

%

0.87

%

Nonperforming assets/total assets

0.75

%

0.67

%

0.59

%

0.60

%

0.44

%

0.60

%

Allowance for credit losses/total loans and leases

0.91

%

0.92

%

0.93

%

0.98

%

0.97

%

0.98

%

Allowance/nonperforming loans and leases

76.15

%

88.31

%

103.38

%

112.87

%

154.68

%

112.87

%

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

0.01

%

(0.07

)%

(0.01

)%

0.05

%

0.00

%

0.04

%

Ratio Analysis

Credit Quality

Nonperforming loans andleases/total loans and 1.19 % 1.04 % 0.90 % 0.87 % 0.63 % 0.87 %leases

Nonperforming assets/total 0.75 % 0.67 % 0.59 % 0.60 % 0.44 % 0.60 %assets

Allowance for credit losses 0.91 % 0.92 % 0.93 % 0.98 % 0.97 % 0.98 %/total loans and leases

Allowance/nonperforming 76.15 % 88.31 % 103.38 % 112.87 % 154.68 % 112.87 %loans and leases

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

Capital Adequacy

Tier 1 Capital (to average assets)

8.54

%

8.79

%

8.89

%

8.75

%

8.85

%

8.75

%

Total Capital (to risk-weighted assets)

14.21

%

14.62

%

14.62

%

14.39

%

14.26

%

14.39

%

Capital Adequacy

Tier 1 Capital (to average 8.54 % 8.79 % 8.89 % 8.75 % 8.85 % 8.75 %assets)

Total Capital (to risk-weighted 14.21 % 14.62 % 14.62 % 14.39 % 14.26 % 14.39 %assets)

Profitability (period-end)

Return on average assets *

1.05

%

1.15

%

1.33

%

1.23

%

1.27

%

1.05

%

Return on average equity *

11.55

%

12.70

%

14.42

%

13.26

%

13.59

%

11.09

%

Net interest margin (TE) *

2.89

%

2.91

%

3.01

%

3.12

%

3.26

%

3.31

%

* Quarterly ratios have been annualized

Profitability (period-end)

Return on average assets * 1.05 % 1.15 % 1.33 % 1.23 % 1.27 % 1.05 %

Return on average equity * 11.55 % 12.70 % 14.42 % 13.26 % 13.59 % 11.09 %

Net interest margin (TE) * 2.89 % 2.91 % 3.01 % 3.12 % 3.26 % 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/20211022005048/en/

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