ITHACA, N.Y.--(BUSINESS WIRE)-- 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 banks		$	22,441			$	21,245
Interest bearing balances due from banks		311,046				367,217
Cash and Cash Equivalents		333,487				388,462
Available-for-sale debt securities, at fair value (amortized cost of $2,072,498 at September 30, 2021 and $1,599,894 at December 31, 2020)		2,066,927				1,627,193
Held-to-maturity securities, at amortized cost (fair value of $268,283 at September 30, 2021 and $0 December 31, 2020)		269,268				0
Equity securities, at fair value (amortized cost $910 at September 30, 2021 and $929 at December 31, 2020)		910				929
Total loans and leases, net of unearned income and deferred costs and fees		5,096,778				5,260,327
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 under agreements to repurchase		72,490				65,845
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: 14,695,105 at September 30, 2021; and 14,964,389 at December 31, 2020		1,470				1,496
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 at September 30, 2021, and 124,849 shares at December 31, 2020		(5,634		)		(5,534		)
Total Tompkins Financial Corporation Shareholders’ Equity		720,851				716,277
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

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)
	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

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

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

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

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

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

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

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

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

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	%

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	%

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.

 

Source: Tompkins Financial Corporation