Business Wire | Jan 28, 2022 09:00AM EST

Tompkins Financial Corporation Reports Record Full Year Earnings

Jan. 28, 2022

ITHACA, N.Y.--(BUSINESS WIRE)--Jan. 28, 2022--Tompkins Financial Corporation (NYSE American: TMP)

For the year ended December 31, 2021 Tompkins Financial Corporation (the "Company") reported record diluted earnings per share of $6.05, up 16.4% from December 31, 2020. Net income for 2021 was $89.3 million, an increase of $11.7 million compared to the same period in 2020. Results for 2020 included a $16.8 million provision for credit losses recognized in the first quarter reflecting economic stress due to the COVID-19 pandemic.

The Company reported diluted earnings per share of $1.33 for the fourth quarter of 2021, down 17.4% compared to $1.61 reported in the fourth quarter of 2020. Net income for the fourth quarter of 2021 was $19.5 million, a $4.5 million decrease when compared to the same period in 2020.

Tompkins President and CEO, Stephen Romaine, commented, "We are pleased to report record earnings for the year ended December 31, 2021. Earnings per share for the quarter were down from the same period last year largely due to higher provision for credit losses in the current period, which included the charge-off of a commercial real estate relationship that was heavily impacted by pandemic related economic shut downs. Despite the loss recognized during the quarter, other credit quality metrics showed improvement from the most recent prior quarter, including reductions in nonperforming loans and loans in deferral status."

SELECTED HIGHLIGHTS FOR THE PERIOD:

* Total loans at December 31, 2021 were $5.1 billion compared to $5.3 billion at year-end 2020, which was driven by a decline of $220.0 million in loans under the U.S. Small Business Administration's Paycheck Protection Program ("PPP") at year-end 2021 compared to year-end 2020. Total loans, exclusive of PPP loan balances, were up for the second consecutive quarter. * Total nonperforming loans at December 31, 2021, declined by $14.6 million compared to December 31, 2020, while the ratio of total nonperforming loans and leases to total loans and leases dropped to 0.61% at year-end 2021 compared to 0.87% at year-end 2020. * Total noninterest-bearing deposits at December 31, 2021, were up 10.7% compared to December 31, 2020 and represented 31.5% of total deposits as of December 31, 2021. * Total revenue of $302.6 million for the year ended December 31, 2021, was up 1.2% over the same period last year, benefiting from growth in fee income business lines including insurance, wealth management, and card services.

NET INTEREST INCOME

Net interest income was $57.8 million for both the fourth quarter of 2021 and 2020. Net interest income was $223.8 million for year-to-date 2021, down from $225.3 million reported for the same period in 2020. Net interest income in 2021 included a $1.9 million purchase accounting charge related to the redemption of $15.2 million in trust preferred securities.

Average loans for the year ended December 31, 2021 were in line with average loans for the year ended December 31, 2020. Average loan yields for the year ended December 31, 2021, were down 22 basis points compared to 2020, which reflects the impact of reductions in market interest rates in 2021 and 2020.

Average total deposits for 2021 were up $735.3 million, or 12.0% compared to 2020. Average noninterest bearing deposits for 2021 were up $343.3 million or 19.6% compared to 2020. Average deposit balances benefited from PPP loan originations, the proceeds of which were primarily deposited in Tompkins checking accounts. For 2021, the average rate paid on interest-bearing deposit products decreased by 23 basis points from 2020. The total cost of interest-bearing liabilities for 2021 declined by 25 basis points to 0.35% from 2020.

Net interest margin was 3.01% for the fourth quarter of 2021, up compared to the 2.89% reported for the third quarter of 2021, and down compared to the 3.12% reported for the fourth quarter of 2020. The improvement in fourth quarter 2021 net interest margin compared to the third quarter of 2021 was mainly due to a $1.9 million decrease in wholesale funding costs, driven largely by the redemption of $10.0 million of trust preferred securities and the prepayment of $135.0 million of FHLB borrowings in the third quarter of 2021. The redemption of the trust preferred securities resulted in a $1.2 million purchase accounting charge in the third quarter of 2021. The decline in fourth quarter net interest margin, when compared to the fourth quarter of 2020, was mainly due to a 27 basis point decrease in overall asset yields. The decrease in average asset yields was due to lower securities yields as well as a slight shift in the composition of average earning assets, with a greater mix of lower yielding securities and interest bearing balances, and a decrease in average loan balances reflecting lower PPP loan balances. The decrease in average asset yields was partially offset by lower average funding costs.

NONINTEREST INCOME

Noninterest income represented 24.9% of total revenues in the fourth quarter of 2021, compared to 24.6% in the same period in 2020. Noninterest income of $19.2 million for the fourth quarter of 2021 was up 1.7% compared to the same period in 2020. For the full year, noninterest income of $78.8 million was up 6.8% from 2020. When compared to prior year, 2021 insurance revenue was up $3.3 million, or 10.6%, and benefited from new business growth and rising premium rates for commercial and personal lines policies. Investment services experienced revenue growth of $1.9 million, or 10.7%, benefiting from successful business development efforts as well as increased fees tied to asset values in existing accounts. Card services income was up $1.6 million, or 16.9%, and is largely driven by customer spending activities that have increased with improved economic conditions as pandemic restrictions have eased.

NONINTEREST EXPENSE

Noninterest expense was $48.2 million for the fourth quarter of 2021, up $1.5 million, or 3.3%, over the fourth quarter of 2020. For the full fiscal year, noninterest expense was $190.3 million, up $6.0 million, or 3.2%, over 2020. The year-to-date period in 2021 includes $2.9 million in penalties related to the prepayment of $135.0 million in FHLB fixed rate advances. Also contributing to the increase in noninterest expense for the year ended December 31, 2021 were normal annual increases in salaries and wages, which were up $3.5 million or 3.8% over 2020.

INCOME TAX EXPENSE

The Company's effective tax rate was 21.7% for the fourth quarter of 2021, compared to 20.4% for the same period in 2020. The effective tax rate for the year ended December 31, 2021 was 22.0%, compared to 20.4% reported for 2020. The increase in the effective tax rate for the three months and year ended December 31, 2021 over the same periods in 2020 was due to a higher level of taxable income to total income.

ASSET QUALITY

Improved credit quality and improving macroeconomic trends contributed to a lower allowance for credit losses at December 31, 2021 when compared to December 31, 2020. The allowance for credit losses represented 0.84% of total loans and leases at December 31, 2021, down from 0.91% at September 30, 2021, and 0.98% at December 31, 2020. The ratio of the allowance to total nonperforming loans and leases was 137.49% at December 31, 2021, up compared to 76.15% at September 30, 2021 and 112.87% at December 31, 2020.

The provision for credit loss expense for the fourth quarter of 2021 was $3.9 million compared to a credit of $205,000 for the same period in 2020. Provision expense for the year ended December 31, 2021 was a credit of $2.2 million, compared to an expense of $17.2 million for 2020. The provision for credit losses in 2020 included a provision expense of $16.8 million in the first quarter related to the impact of the economic condition related to COVID-19. Net charge-offs for the fourth quarter of 2021 were $7.0 million compared to net charge-offs of $630,000 reported in the fourth quarter of 2020. The fourth quarter of 2021 included a $7.0 million charge-off of a commercial real estate relationship that had previously been reported in nonperforming loans.

Nonperforming assets represented 0.40% as of December 31, 2021, down from 0.75% at September 30, 2021, and 0.60% at December 31, 2020. At December 31, 2021 nonperforming loans and leases totaled $31.2 million, compared to $60.7 million at September 30, 2021, and $45.8 million at December 31, 2020.

Special Mention and Substandard loans and leases totaled $137.6 million at December 31, 2021, reflecting improvement from $168.5 million at September 30, 2021, and $189.9 million 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 December 31, 2021, total loans that continued in a deferral status amounted to approximately $4.5 million, representing 0.09% of total loans. At December 31, 2020 total loans in deferral status totaled $212.2 million.

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 aggregate $694.1 million of PPP loans that the Company funded, approximately $620.2 million have been forgiven by the SBA under the terms of the program as of December 31, 2021. Total net deferred fees on the remaining balance of PPP loans amounted to $3.0 million at December 31, 2021.

CAPITAL POSITION

Capital ratios at December 31, 2021 remained well above the regulatory minimums for well-capitalized institutions. The ratio of Total Capital to Risk-Weighted Assets was 14.23% at December 31, 2021, compared to 14.21% at September 30, 2021, and 14.39% at December 31, 2020. The ratio of Tier 1 capital to average assets was 8.72% at December 31, 2021, compared to 8.54% at September 30, 2021, and 8.75% at December 31, 2020.

During the fourth quarter of 2021, the Company repurchased 32,203 common shares at an aggregate cost of $2.6 million. These shares were purchased under the Company's Stock Repurchase Program announced in the third quarter of 2021. During 2021, the Company repurchased 304,513 shares at an aggregate cost of $23.8 million.

Mr. Romaine added, "We are excited to report that effective January 1, 2022, our four community banks were combined into a single charter. Though we expect the change to be largely transparent to our customers, it will allow us to better leverage the Tompkins brand in all of our markets. We also anticipate some operating efficiencies from the change and we will be better able to leverage product and technology enhancements for the benefit of customers across our footprint. The combined bank will conduct business under the "Tompkins" brand name, with a legal name of "Tompkins Community Bank."

ABOUT TOMPKINS FINANCIAL CORPORATION

Tompkins Financial Corporation is a banking and 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 Community Bank, 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 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 ongoing dynamic nature of the COVID-19 pandemic and the impact of COVID-19 (including governments' responses thereto), including the development and proliferation of variants such as Delta and Omicron, 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 12/31/2021 12/31/2020

(Audited)



Cash and noninterest bearing balances due from $ 23,078 $ 21,245 banks

Interest bearing balances due from banks 40,029 367,217

Cash and Cash Equivalents 63,107 388,462



Available-for-sale debt securities, at fair value(amortized cost of $2,063,790 at December 31, 2,044,513 1,627,193 2021 and $1,599,894 at December 31, 2020)

Held-to-maturity securities, at amortized cost(fair value of $282,288 at December 31, 2021 and 284,009 0 $0 December 31, 2020)

Equity securities, at fair value (amortized cost$902 at December 31, 2021 and $929 at December 902 929 31, 2020)

Total loans and leases, net of unearned income 5,075,467 5,260,327 and deferred costs and fees

Less: Allowance for credit losses 42,843 51,669

Net Loans and Leases 5,032,624 5,208,658



Federal Home Loan Bank and other stock 10,996 16,382

Bank premises and equipment, net 85,416 88,709

Corporate owned life insurance 86,495 84,736

Goodwill 92,447 92,447

Other intangible assets, net 3,643 4,905

Accrued interest and other assets 115,830 109,750

Total Assets $ 7,819,982 $ 7,622,171

LIABILITIES

Deposits:

Interest bearing:

Checking, savings and money market 4,016,025 3,761,933

Time 639,674 746,234

Noninterest bearing 2,135,736 1,929,585

Total Deposits 6,791,435 6,437,752



Federal funds purchased and securities sold under 66,787 65,845 agreements to repurchase

Other borrowings 124,000 265,000

Trust preferred debentures 0 13,220

Other liabilities 108,819 122,665

Total Liabilities $ 7,091,041 $ 6,904,482

EQUITY

Tompkins Financial Corporation shareholders' equity:

Common Stock - par value $.10 per share:Authorized 25,000,000 shares; Issued: 14,696,911 1,470 1,496 at December 31, 2021; and 14,964,389 at December31, 2020

Additional paid-in capital 312,538 333,976

Retained earnings 475,262 418,413

Accumulated other comprehensive loss (55,950 ) (32,074 )

Treasury stock, at cost - 124,709 shares atDecember 31, 2021, and 124,849 shares at December (5,791 ) (5,534 )31, 2020

Total Tompkins Financial Corporation 727,529 716,277 Shareholders' Equity

Noncontrolling interests 1,412 1,412

Total Equity $ 728,941 $ 717,689

Total Liabilities and Equity $ 7,819,982 $ 7,622,171

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

Three Months Ended

Year Ended

12/31/2021

12/31/2020

12/31/2021

12/31/2020

INTEREST AND DIVIDEND INCOME

Loans

$

53,086

$

57,674

$

214,684

$

227,313

Due from banks

77

104

343

194

Available-for-sale debt securities

6,252

5,349

23,440

25,450

Held-to-maturity securities

1,031

0

2,075

0

Federal Home Loan Bank and other stock

168

243

776

1,373

Total Interest and Dividend Income

60,614

$

63,370

$

241,318

$

254,330

INTEREST EXPENSE

Time certificates of deposits of $250,000 or more

478

717

2,202

3,175

Other deposits

1,810

3,066

8,645

16,789

Federal funds purchased and securities sold under agreements to repurchase

16

19

64

95

Trust preferred debentures

0

375

2,233

1,133

Other borrowings

499

1,442

4,382

7,799

Total Interest Expense

2,803

5,619

17,526

28,991

Net Interest Income

57,811

57,751

223,792

225,339

Less: Provision (credit) for credit loss expense

3,914

(205

)

(2,219

)

17,213

Net Interest Income After Provision for Credit Loss Expense

53,897

57,956

226,011

208,126

NONINTEREST INCOME

Insurance commissions and fees

7,783

7,289

34,836

31,505

Investment services income

5,041

5,106

19,388

17,520

Service charges on deposit accounts

1,768

1,637

6,347

6,312

Card services income

2,775

2,378

10,826

9,263

Other income

1,795

2,429

7,203

8,817

Net (loss) gain on securities transactions

(8

)

(3

)

249

443

Total Noninterest Income

19,154

18,836

78,849

73,860

NONINTEREST EXPENSE

Salaries and wages

24,561

23,037

96,038

92,519

Other employee benefits

6,285

6,552

24,172

24,812

Net occupancy expense of premises

3,137

3,400

13,179

12,930

Furniture and fixture expense

2,108

2,087

8,328

7,846

Amortization of intangible assets

329

364

1,317

1,484

Other operating expense

11,734

11,176

47,253

44,729

Total Noninterest Expenses

48,154

46,616

190,287

184,320

Income Before Income Tax Expense

24,897

30,176

114,573

97,666

Income Tax Expense

5,401

6,145

25,182

19,924

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation

19,496

24,031

89,391

77,742

Less: Net Income Attributable to Noncontrolling Interests

31

53

127

154

Net Income Attributable to Tompkins Financial Corporation

$

19,465

23,978

89,264

77,588

Basic Earnings Per Share

$

1.34

$

1.61

$

6.08

$

5.22

Diluted Earnings Per Share

$

1.33

$

1.61

$

6.05

$

5.20

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

12/31/2021 12/31/2020 12/31/2021 12/31/ 2020

INTEREST AND DIVIDEND INCOME

Loans $ 53,086 $ 57,674 $ 214,684 $ 227,313

Due from banks 77 104 343 194

Available-for-sale debt 6,252 5,349 23,440 25,450securities

Held-to-maturity securities 1,031 0 2,075 0

Federal Home Loan Bank and 168 243 776 1,373other stock

Total Interest and Dividend 60,614 $ 63,370 $ 241,318 $ 254,330Income

INTEREST EXPENSE

Time certificates of deposits 478 717 2,202 3,175of $250,000 or more

Other deposits 1,810 3,066 8,645 16,789

Federal funds purchased andsecurities sold under 16 19 64 95agreements to repurchase

Trust preferred debentures 0 375 2,233 1,133

Other borrowings 499 1,442 4,382 7,799

Total Interest Expense 2,803 5,619 17,526 28,991

Net Interest Income 57,811 57,751 223,792 225,339

Less: Provision (credit) for 3,914 (205 ) (2,219 ) 17,213credit loss expense

Net Interest Income AfterProvision for Credit Loss 53,897 57,956 226,011 208,126Expense

NONINTEREST INCOME

Insurance commissions and fees 7,783 7,289 34,836 31,505

Investment services income 5,041 5,106 19,388 17,520

Service charges on deposit 1,768 1,637 6,347 6,312accounts

Card services income 2,775 2,378 10,826 9,263

Other income 1,795 2,429 7,203 8,817

Net (loss) gain on securities (8 ) (3 ) 249 443transactions

Total Noninterest Income 19,154 18,836 78,849 73,860

NONINTEREST EXPENSE

Salaries and wages 24,561 23,037 96,038 92,519

Other employee benefits 6,285 6,552 24,172 24,812

Net occupancy expense of 3,137 3,400 13,179 12,930premises

Furniture and fixture expense 2,108 2,087 8,328 7,846

Amortization of intangible 329 364 1,317 1,484assets

Other operating expense 11,734 11,176 47,253 44,729

Total Noninterest Expenses 48,154 46,616 190,287 184,320

Income Before Income Tax 24,897 30,176 114,573 97,666Expense

Income Tax Expense 5,401 6,145 25,182 19,924

Net Income Attributable toNoncontrolling Interests and 19,496 24,031 89,391 77,742Tompkins Financial Corporation

Less: Net Income Attributable 31 53 127 154to Noncontrolling Interests

Net Income Attributable to $ 19,465 23,978 89,264 77,588Tompkins Financial Corporation

Basic Earnings Per Share $ 1.34 $ 1.61 $ 6.08 $ 5.22

Diluted Earnings Per Share $ 1.33 $ 1.61 $ 6.05 $ 5.20

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

Quarter Ended

Quarter Ended

December 31, 2021

December 31, 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

$

228,570

$

77

0.13

%

$

439,726

$

104

0.09

%

Securities (1)

U.S. Government securities

2,248,954

6,728

1.19

%

1,502,226

4,671

1.24

%

State and municipal (2)

105,215

672

2.53

%

127,580

823

2.57

%

Other securities (2)

3,407

23

2.64

%

3,430

24

2.78

%

Total securities

2,357,576

7,423

1.25

%

1,633,236

5,518

1.34

%

FHLBNY and FRB stock

10,382

168

6.42

%

16,766

244

5.80

%

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

5,064,028

53,354

4.18

%

5,318,607

57,949

4.33

%

Total interest-earning assets

7,660,556

61,022

3.16

%

7,408,335

63,815

3.43

%

Other assets

333,260

349,824

Total assets

$

7,993,816

$

7,758,159

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearing checking, savings, & money market

$

4,130,652

$

793

0.08

%

$

3,927,433

$

1,457

0.15

%

Time deposits

663,713

1,495

0.89

%

734,009

2,326

1.26

%

Total interest-bearing deposits

4,794,365

2,288

0.19

%

4,661,442

3,783

0.32

%

Federal funds purchased & securities sold under agreements to repurchase

61,976

16

0.11

%

60,417

19

0.12

%

Other borrowings

110,370

499

1.79

%

271,087

1,442

2.12

%

Trust preferred debentures

0

0

0.00

%

17,091

375

8.73

%

Total interest-bearing liabilities

4,966,711

2,803

0.22

%

5,010,037

5,619

0.45

%

Noninterest bearing deposits

2,185,489

1,913,781

Accrued expenses and other liabilities

118,997

115,227

Total liabilities

7,271,197

7,039,045

Tompkins Financial Corporation Shareholders' equity

721,123

717,618

Noncontrolling interest

1,496

1,496

Total equity

722,619

719,114

Total liabilities and equity

$

7,993,816

$

7,758,159

Interest rate spread

2.94

%

2.98

%

Net interest income/margin on earning assets

58,219

3.01

%

58,196

3.12

%

Tax Equivalent Adjustment

(408

)

(445

)

Net interest income per consolidated financial statements

$

57,811

$

57,751

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

Quarter Ended Quarter Ended

December 31, 2021 December 31, 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 $ 228,570 $ 77 0.13 % $ 439,726 $ 104 0.09 %from banks

Securities (1)

U.S. Government 2,248,954 6,728 1.19 % 1,502,226 4,671 1.24 %securities

State and 105,215 672 2.53 % 127,580 823 2.57 %municipal (2)

Other securities 3,407 23 2.64 % 3,430 24 2.78 %(2)

Total securities 2,357,576 7,423 1.25 % 1,633,236 5,518 1.34 %

FHLBNY and FRB 10,382 168 6.42 % 16,766 244 5.80 %stock

Total loans andleases, net of 5,064,028 53,354 4.18 % 5,318,607 57,949 4.33 %unearned income(2)(3)

Totalinterest-earning 7,660,556 61,022 3.16 % 7,408,335 63,815 3.43 %assets

Other assets 333,260 349,824

Total assets $ 7,993,816 $ 7,758,159

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearingchecking, $ 4,130,652 $ 793 0.08 % $ 3,927,433 $ 1,457 0.15 %savings, & moneymarket

Time deposits 663,713 1,495 0.89 % 734,009 2,326 1.26 %

Totalinterest-bearing 4,794,365 2,288 0.19 % 4,661,442 3,783 0.32 %deposits

Federal fundspurchased &securities sold 61,976 16 0.11 % 60,417 19 0.12 %under agreementsto repurchase

Other borrowings 110,370 499 1.79 % 271,087 1,442 2.12 %

Trust preferred 0 0 0.00 % 17,091 375 8.73 %debentures

Totalinterest-bearing 4,966,711 2,803 0.22 % 5,010,037 5,619 0.45 %liabilities

Noninterest 2,185,489 1,913,781 bearing deposits

Accrued expensesand other 118,997 115,227 liabilities

Total 7,271,197 7,039,045 liabilities

TompkinsFinancialCorporation 721,123 717,618 Shareholders'equity

Noncontrolling 1,496 1,496 interest

Total equity 722,619 719,114



Totalliabilities and $ 7,993,816 $ 7,758,159 equity

Interest rate 2.94 % 2.98 %spread

Net interestincome/margin on 58,219 3.01 % 58,196 3.12 %earning assets



Tax Equivalent (408 ) (445 ) Adjustment

Net interestincome perconsolidated $ 57,811 $ 57,751 financialstatements

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

Year to Date Period Ended

Year to Date Period Ended

December 31, 2021

December 31, 2020

Average

Average

Balance

Average

Balance

Average

(Dollar amounts in thousands)

(YTD)

Interest

Yield/Rate

(YTD)

Interest

Yield/Rate

ASSETS

Interest-earning assets

Interest-bearing balances due from banks

$

307,253

$

343

0.11

%

$

194,211

$

194

0.10

%

Securities (1)

U.S. Government securities

2,003,450

23,145

1.16

%

1,307,905

22,906

1.75

%

State and municipal (2)

112,391

2,871

2.55

%

114,462

3,048

2.66

%

Other securities (2)

3,417

92

2.68

%

3,430

117

3.40

%

Total securities

2,119,258

26,108

1.23

%

1,425,797

26,071

1.83

%

FHLBNY and FRB stock

14,830

776

5.24

%

20,815

1,374

6.60

%

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

5,184,491

215,709

4.16

%

5,228,135

228,805

4.38

%

Total interest-earning assets

7,625,832

242,936

3.19

%

6,868,958

256,444

3.73

%

Other assets

343,119

489,520

Total assets

$

7,968,951

$

7,358,478

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearing checking, savings, & money market

$

4,034,969

$

3,736

0.09

%

$

3,650,358

$

9,430

0.26

%

Time deposits

711,381

7,111

1.00

%

703,999

10,534

1.50

%

Total interest-bearing deposits

4,746,350

10,847

0.23

%

4,354,357

19,964

0.46

%

Federal funds purchased & securities sold under agreements to repurchase

58,627

64

0.11

%

55,973

95

0.17

%

Other borrowings

217,799

4,382

2.01

%

365,732

7,799

2.13

%

Trust preferred debentures

7,367

2,233

30.32

%

17,092

1,133

6.63

%

Total interest-bearing liabilities

5,030,143

17,526

0.35

%

4,793,154

28,991

0.60

%

Noninterest bearing deposits

2,096,542

1,753,226

Accrued expenses and other liabilities

117,790

112,544

Total liabilities

7,244,475

6,658,924

Tompkins Financial Corporation Shareholders' equity

723,009

698,087

Noncontrolling interest

1,467

1,466

Total equity

724,476

699,554

Total liabilities and equity

$

7,968,951

$

7,358,478

Interest rate spread

2.84

%

3.13

%

Net interest income/margin on earning assets

225,410

2.96

%

227,453

3.31

%

Tax Equivalent Adjustment

(1,618

)

(2,114

)

Net interest income per consolidated financial statements

$

223,792

$

225,339

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

Year to Date Period Ended Year to Date Period Ended

December 31, 2021 December 31, 2020

Average Average

Balance Average Balance Average

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

ASSETS

Interest-earning assets

Interest-bearingbalances due $ 307,253 $ 343 0.11 % $ 194,211 $ 194 0.10 %from banks

Securities (1)

U.S. Government 2,003,450 23,145 1.16 % 1,307,905 22,906 1.75 %securities

State and 112,391 2,871 2.55 % 114,462 3,048 2.66 %municipal (2)

Other securities 3,417 92 2.68 % 3,430 117 3.40 %(2)

Total securities 2,119,258 26,108 1.23 % 1,425,797 26,071 1.83 %

FHLBNY and FRB 14,830 776 5.24 % 20,815 1,374 6.60 %stock

Total loans andleases, net of 5,184,491 215,709 4.16 % 5,228,135 228,805 4.38 %unearned income(2)(3)

Totalinterest-earning 7,625,832 242,936 3.19 % 6,868,958 256,444 3.73 %assets

Other assets 343,119 489,520

Total assets $ 7,968,951 $ 7,358,478

LIABILITIES & EQUITY

Deposits

Interest-bearing deposits

Interest bearingchecking, $ 4,034,969 $ 3,736 0.09 % $ 3,650,358 $ 9,430 0.26 %savings, & moneymarket

Time deposits 711,381 7,111 1.00 % 703,999 10,534 1.50 %

Totalinterest-bearing 4,746,350 10,847 0.23 % 4,354,357 19,964 0.46 %deposits

Federal fundspurchased &securities sold 58,627 64 0.11 % 55,973 95 0.17 %under agreementsto repurchase

Other borrowings 217,799 4,382 2.01 % 365,732 7,799 2.13 %

Trust preferred 7,367 2,233 30.32 % 17,092 1,133 6.63 %debentures

Totalinterest-bearing 5,030,143 17,526 0.35 % 4,793,154 28,991 0.60 %liabilities

Noninterest 2,096,542 1,753,226 bearing deposits

Accrued expensesand other 117,790 112,544 liabilities

Total 7,244,475 6,658,924 liabilities

TompkinsFinancialCorporation 723,009 698,087 Shareholders'equity

Noncontrolling 1,467 1,466 interest

Total equity 724,476 699,554



Totalliabilities and $ 7,968,951 $ 7,358,478 equity

Interest rate 2.84 % 3.13 %spread

Net interestincome/margin on 225,410 2.96 % 227,453 3.31 %earning assets



Tax Equivalent (1,618 ) (2,114 ) Adjustment

Net interestincome perconsolidated $ 223,792 $ 225,339 financialstatements

Tompkins Financial Corporation - Summary Financial Data (Unaudited)(In thousands, except per share data)

Quarter-Ended

Year-Ended

Period End Balance Sheet

Dec-21

Sep-21

Jun-21

Mar-21

Dec-20

Dec-21

Securities

$

2,329,424

$

2,337,105

$

2,166,853

$

1,935,731

$

1,628,122

$

2,329,424

Total Loans

5,075,467

5,096,778

5,175,129

5,292,793

5,260,327

5,075,467

Allowance for credit losses

42,843

46,259

47,505

49,339

51,669

42,843

Total assets

7,819,982

8,113,110

7,988,208

8,095,342

7,622,171

7,819,982

Total deposits

6,791,435

7,090,898

6,837,000

6,946,541

6,437,752

6,791,435

Federal funds purchased and securities sold under agreements to repurchase

66,787

72,490

52,134

47,496

65,845

66,787

Other borrowings

124,000

110,000

245,000

265,000

265,000

124,000

Trust preferred debentures

0

0

8,799

13,260

13,220

0

Total common equity

727,529

720,851

726,779

708,493

716,277

727,529

Total equity

728,941

722,357

728,253

709,936

717,689

728,941

Tompkins Financial Corporation - Summary Financial Data (Unaudited)(Inthousands,except pershare data)

Quarter-Ended Year-Ended

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

Securities $ 2,329,424 $ 2,337,105 $ 2,166,853 $ 1,935,731 $ 1,628,122 $ 2,329,424

Total Loans 5,075,467 5,096,778 5,175,129 5,292,793 5,260,327 5,075,467

Allowancefor credit 42,843 46,259 47,505 49,339 51,669 42,843losses

Total assets 7,819,982 8,113,110 7,988,208 8,095,342 7,622,171 7,819,982

Total 6,791,435 7,090,898 6,837,000 6,946,541 6,437,752 6,791,435deposits

Federalfundspurchasedandsecurities 66,787 72,490 52,134 47,496 65,845 66,787sold underagreementstorepurchase

Other 124,000 110,000 245,000 265,000 265,000 124,000borrowings

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

Total common 727,529 720,851 726,779 708,493 716,277 727,529equity

Total equity 728,941 722,357 728,253 709,936 717,689 728,941

Average Balance Sheet

Average earning assets

$

7,660,556

$

7,753,700

$

7,609,792

$

7,475,846

$

7,408,335

$

7,625,832

Average assets

7,993,816

8,102,070

7,949,946

7,826,672

7,758,159

7,968,951

Average interest-bearing liabilities

4,966,711

5,086,753

5,030,800

5,036,451

5,010,037

5,030,143

Average equity

722,619

733,117

721,336

720,718

719,114

724,476

Average Balance Sheet

Average earning $ 7,660,556 $ 7,753,700 $ 7,609,792 $ 7,475,846 $ 7,408,335 $ 7,625,832assets

Average assets 7,993,816 8,102,070 7,949,946 7,826,672 7,758,159 7,968,951

Averageinterest-bearing 4,966,711 5,086,753 5,030,800 5,036,451 5,010,037 5,030,143 liabilities

Average equity 722,619 733,117 721,336 720,718 719,114 724,476

Share data

Weighted average shares outstanding (basic)

14,452,775

14,494,533

14,654,774

14,676,410

14,715,124

14,568,763

Weighted average shares outstanding (diluted)

14,532,480

14,568,334

14,737,735

14,757,558

14,751,303

14,648,167

Period-end shares outstanding

14,661,001

14,659,195

14,829,873

14,906,785

14,928,479

14,661,001

Common equity book value per share

$

49.62

$

49.17

$

49.01

$

47.53

$

47.98

$

49.62

Share data

Weightedaverageshares 14,452,775 14,494,533 14,654,774 14,676,410 14,715,124 14,568,763 outstanding(basic)

Weightedaverageshares 14,532,480 14,568,334 14,737,735 14,757,558 14,751,303 14,648,167 outstanding(diluted)

Period-endshares 14,661,001 14,659,195 14,829,873 14,906,785 14,928,479 14,661,001 outstanding

Commonequity book $ 49.62 $ 49.17 $ 49.01 $ 47.53 $ 47.98 $ 49.62value per share

Income Statement

Net interest income

$

57,811

$

56,098

$

54,846

$

55,037

$

57,751

$

223,792

Provision (credit) for credit loss expense (5)

3,914

(1,232

)

(3,071

)

(1,830

)

(205

)

(2,219

)

Noninterest income

19,154

20,854

18,858

19,983

18,836

78,849

Noninterest expense (5)

48,154

50,180

47,442

44,511

46,616

190,287

Income tax expense

5,401

6,630

6,471

6,680

6,145

25,182

Net income attributable to Tompkins Financial Corporation

19,465

21,342

22,831

25,626

23,978

89,264

Noncontrolling interests

31

32

31

33

53

127

Basic earnings per share (4)

1.34

1.46

1.55

1.73

1.61

6.08

Diluted earnings per share (4)

1.33

1.45

1.54

1.72

1.61

6.05

Income Statement

Net interest $ 57,811 $ 56,098 $ 54,846 $ 55,037 $ 57,751 $ 223,792 income

Provision(credit) for 3,914 (1,232 ) (3,071 ) (1,830 ) (205 ) (2,219 )credit loss expense (5)

Noninterest 19,154 20,854 18,858 19,983 18,836 78,849 income

Noninterest 48,154 50,180 47,442 44,511 46,616 190,287 expense (5)

Income tax 5,401 6,630 6,471 6,680 6,145 25,182 expense

Net incomeattributableto Tompkins 19,465 21,342 22,831 25,626 23,978 89,264 FinancialCorporation

Noncontrolling 31 32 31 33 53 127 interests

Basic earnings 1.34 1.46 1.55 1.73 1.61 6.08 per share (4)

Dilutedearnings per 1.33 1.45 1.54 1.72 1.61 6.05 share (4)

Nonperforming Assets

Nonaccrual loans and leases

$

26,033

$

47,941

$

48,019

$

41,656

$

38,976

$

26,033

Loans and leases 90 days past due and accruing

0

7,463

0

0

0

0

Troubled debt restructuring not included above

5,124

5,343

5,776

6,069

6,803

5,126

Total nonperforming loans and leases

31,157

60,747

53,795

47,725

45,779

31,159

OREO

135

135

88

88

88

135

Total nonperforming assets

$

31,292

$

60,882

$

53,883

$

47,813

$

45,867

$

31,294

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

Nonperforming Assets

Nonaccrualloans and $ 26,033 $ 47,941 $ 48,019 $ 41,656 $ 38,976 $ 26,033 leases

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

Troubled debtrestructuring 5,124 5,343 5,776 6,069 6,803 5,126not included above

Totalnonperforming 31,157 60,747 53,795 47,725 45,779 31,159loans and leases

OREO 135 135 88 88 88 135

Totalnonperforming $ 31,292 $ 60,882 $ 53,883 $ 47,813 $ 45,867 $ 31,294 assets

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

Quarter-Ended Year-Ended

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

Loans and leases30-89 days past $ 3,072 $ 1,436 $ 1,692 $ 1,790 $ 3,012 $ 3,072 due and accruing

Loans and leases90 days past due 0 7,463 0 0 0 0 and accruing

Total loans andleases past due 3,072 8,899 1,692 1,790 3,012 3,072 and accruing

Allowance for Credit Losses

Balance at beginning of period

$

46,259

$

47,505

$

49,339

$

51,669

$

52,293

$

51,669

Provision (credit) for credit losses

3,600

(1,177

)

(2,718

)

(2,510

)

6

$

(2,805

)

Net loan and lease charge-offs (recoveries)

7,016

69

(884

)

(180

)

630

$

6,021

Allowance for credit losses at end of period

$

42,843

$

46,259

$

47,505

$

49,339

$

51,669

$

42,843

Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance at beginning of period

$

2,192

$

2,247

$

2,600

$

1,920

$

2,131

$

1,920

(Credit) provision for credit losses

314

(55

)

(353

)

680

(211

)

$

586

Allowance for credit losses at end of period

$

2,506

$

2,192

$

2,247

$

2,600

$

1,920

$

2,506

Allowance for Credit Losses

Balance atbeginning of $ 46,259 $ 47,505 $ 49,339 $ 51,669 $ 52,293 $ 51,669 period

Provision(credit) for 3,600 (1,177 ) (2,718 ) (2,510 ) 6 $ (2,805 )credit losses

Net loan andlease 7,016 69 (884 ) (180 ) 630 $ 6,021 charge-offs (recoveries)

Allowance forcredit losses $ 42,843 $ 46,259 $ 47,505 $ 49,339 $ 51,669 $ 42,843 at end of period



Allowance for Credit Losses - Off-Balance Sheet Exposure

Balance atbeginning of $ 2,192 $ 2,247 $ 2,600 $ 1,920 $ 2,131 $ 1,920 period

(Credit)provision for 314 (55 ) (353 ) 680 (211 ) $ 586 credit losses

Allowance forcredit losses $ 2,506 $ 2,192 $ 2,247 $ 2,600 $ 1,920 $ 2,506 at end of period

Loan Classification - Total Portfolio

Special Mention

$

85,530

$

98,253

$

108,269

$

116,689

$

121,253

$

85,530

Substandard

52,047

70,213

62,992

68,487

68,645

52,047

Ratio Analysis

LoanClassification - Total Portfolio

Special $ 85,530 $ 98,253 $ 108,269 $ 116,689 $ 121,253 $ 85,530Mention

Substandard 52,047 70,213 62,992 68,487 68,645 52,047

Ratio Analysis

Credit Quality

Nonperformingloans andleases/total 0.61 % 1.19 % 1.04 % 0.90 % 0.87 % 0.61 % loans andleases

Nonperformingassets/total 0.40 % 0.75 % 0.67 % 0.59 % 0.60 % 0.40 % assets

Allowance forcredit losses/ 0.84 % 0.91 % 0.92 % 0.93 % 0.98 % 0.84 %total loans and leases

Allowance/nonperforming 137.51 % 76.15 % 88.31 % 103.38 % 112.87 % 137.49 %loans and leases

Net loan andlease lossesannualized/ 0.55 % 0.01 % (0.07 ) (0.01 ) 0.05 % 0.12 %total average % % loans andleases

Capital Adequacy

Tier 1 Capital (to average assets)

8.72

%

8.54

%

8.79

%

8.89

%

8.75

%

8.75

%

Total Capital (to risk-weighted assets)

14.23

%

14.21

%

14.62

%

14.62

%

14.39

%

14.39

%

Capital Adequacy

Tier 1 Capital (to 8.72 % 8.54 % 8.79 % 8.89 % 8.75 % 8.75 %average assets)

Total Capital (torisk-weighted 14.23 % 14.21 % 14.62 % 14.62 % 14.39 % 14.39 % assets)

Profitability (period-end)

Return on average assets *

0.97

%

1.05

%

1.15

%

1.33

%

1.23

%

1.12

%

Return on average equity *

10.69

%

11.55

%

12.70

%

14.42

%

13.26

%

12.32

%

Net interest margin (TE) *

3.01

%

2.89

%

2.91

%

3.01

%

3.12

%

2.96

%

* Quarterly ratios have been annualized

Profitability (period-end)

Return on average 0.97 % 1.05 % 1.15 % 1.33 % 1.23 % 1.12 %assets *

Return on average 10.69 % 11.55 % 12.70 % 14.42 % 13.26 % 12.32 %equity *

Net interest margin 3.01 % 2.89 % 2.91 % 3.01 % 3.12 % 2.96 %(TE) *

* 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, 2021.

(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/20220128005041/en/

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