Tompkins Financial Corporation Reports Second Quarter Earnings

Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation reported net income of $19.4 million for the second quarter of 2019, compared to the $22.1 million reported for the same period in 2018. Year-to-date net income was $40.4 million, a decrease of $2.1 million, or 4.9% from the same period in 2018.

Diluted earnings per share were $1.27 for the second quarter of 2019, compared to $1.43 reported in the second quarter of 2018. For the year-to-date period ended June 30, 2019, diluted earnings per share were $2.63, down 4.7% over the same period in 2018.

President and CEO, Stephen S. Romaine said “Though overall performance remains very good, we did see a decline in earnings for the quarter and year-to-date periods. The decline from recent prior periods was largely driven by the challenging interest rate environment that has resulted in funding costs increasing at a faster pace than asset yields. We are fortunate that our business model includes meaningful fee income contributions from business lines that are less impacted by the interest rate environment. Additionally, we have a number of continuous improvement initiatives underway that we expect will have a positive impact on performance later in 2019 and in future years.”

SELECTED HIGHLIGHTS FOR THE SECOND QUARTER AND YEAR-TO-DATE PERIODS:

• Total loans of $4.9 billion were up 1.4% over the same period in 2018
• Total deposits of $5.0 billion reflect an increase of 4.1% over the same period last year
• Total nonperforming loans were down $2.3 million or 8.8% compared to the same period last year, and down $2.8 million or 10.5% from December 31, 2018
• Tangible book value per share is up $4.75 or 14.8% from the second quarter of 2018 and reflects the sixth consecutive quarterly increase

NET INTEREST INCOME

Net interest income was $52.3 million for the second quarter of 2019, compared to $52.7 million reported for the second quarter of 2018. For the year-to-date period, net interest income was $104.2 million, a decrease of $1.2 million or 1.1% from the same six-month period in 2018.

Net interest income benefited from growth in average loans and higher yielding earning assets. Average loans were up $78.4 million, or 1.7% in the first six months of 2019, compared to the same six month period in 2018, while asset yields were up 26 basis points compared to the first six months of 2018. Average total deposits were up $101.3 million, or 2.1% in the first six months of 2019, versus the same period in 2018. Average noninterest deposits for the first six months of 2019 were in line with the same period in 2018. The average rate paid on interest bearing deposit products in the first six months of 2019 increased 42 basis points over the same period in 2018. The net interest margin for the second quarter of 2019 was 3.34%, compared to 3.36% reported for the same period in 2018, and unchanged compared to the prior quarter end. The decline in margin is largely due to the recent increases in market interest rates that have resulted in increased funding costs.

During the quarter, the Company sold $152.1 million in lower yielding securities and used the proceeds to pay down short term borrowings. Because the transaction was executed in June, it had little impact on net interest income during the quarter, but is expected to have a positive impact on net interest income during the remainder of 2019.

NONINTEREST INCOME

Noninterest income represented 26.7% of total revenues in the first six months of 2019, compared to 27.0% in the same period in 2018. The second quarter of 2018 included a gain on sale of two properties totaling $2.9 million. The sale of these properties was related to the completion of the new Company headquarters building in the second quarter of 2018. Fee income associated with insurance, wealth management, deposit services, and card services for the second quarter of 2019 were up a combined $323,000, or 2.0% over the same period in 2018.

NONINTEREST EXPENSE

Noninterest expense was $46.1 million for the second quarter of 2019, up $1.1 million, or 2.4%, over the second quarter of 2018. For the year-to-date period, noninterest expense was $90.3 million, up $1.6 million, or 1.8%, from the same period in 2018. The increase in noninterest expense for both the second quarter and year-to-date periods included normal annual increases in salaries and wages.

INCOME TAX EXPENSE

The Company's effective tax rate was 19.6% in the second quarter of 2019, compared to 20.7% for the same period in 2018.

ASSET QUALITY

Asset quality trends remained strong in the second quarter of 2019. Nonperforming assets represented 0.39% of total assets at June 30, 2019, compared to 0.42% at December 31, 2018, and at June 30, 2018. Nonperforming asset levels continue to be well below the most recent Federal Reserve Board Peer Group Average¹ of 0.60%.

Provision for loan and lease losses was $601,000 for the second quarter of 2019, compared to $1.0 million for the second quarter ended June 30, 2018. Net charge-offs for the second quarter of 2019 were $139,000 compared to $31,000 reported in the second quarter of 2018.

The Company’s allowance for originated loan and lease losses totaled $40.6 million at June 30, 2019, and represented 0.88% of total originated loans and leases at June 30, 2019, compared to 0.91% at June 30, 2018, and 0.89% for the most recent prior quarter. The total allowance represented 171.42% of total nonperforming loans and leases at June 30, 2019, compared to 163.25% at December 31, 2018, and 158.08% at June 30, 2018.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. The ratio of tangible common equity to tangible assets was 8.50% at June 30, 2019, improved from the 8.24% reported for the most recent prior quarter ended March 31, 2019, and the 7.36% reported for June 30, 2018. During the quarter, the Company repurchased 155,093 shares at a total cost of $12.3 million.

ABOUT TOMPKINS FINANCIAL CORPORATION

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

"Safe Harbor" Statement under the Private Securities Litigation Reform of 1995:

This press release may include forward-looking statements with respect to revenue sources, growth, market risk, and corporate objectives. The Company assumes no duty, and specifically disclaims any obligation, to update forward-looking statements, and cautions that these statements are subject to numerous assumptions, risks, and uncertainties, all of which could change over time. Actual results could differ materially from forward-looking statements.

The statements made herein shall not confer upon any person any rights or remedies of any nature, and shall not be construed to establish, amend, or modify any benefit plan, program, agreement, or arrangement, nor to alter any existing at-will employment relationship between the Company and its employees.

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except share and per share data)	As of			As of
ASSETS	06/30/2019			12/31/2018
Cash and noninterest bearing balances due from banks	$	79,032		$	78,524
Interest bearing balances due from banks	1,981			1,865
Cash and Cash Equivalents	81,013			80,389
Available-for-sale securities, at fair value (amortized cost of $1,190,869 at June 30, 2019 and $1,363,902 at December 31, 2018)	1,189,246			1,332,658
Held-to-maturity securities, at amortized cost (fair value of $143,548 June 30, 2019 and $139,377 at December 31, 2018)	140,561			140,579
Equity securities, at fair value (amortized cost $1,000 at June 30, 2019 and $1,000 at December 31, 2018)	912			887
Originated loans and leases, net of unearned income and deferred costs and fees	4,608,483			4,568,741
Acquired loans	247,319			265,198
Less: Allowance for loan and lease losses	40,790			43,410
Net Loans and Leases	4,815,012			4,790,529
Federal Home Loan Bank and other stock	40,770			52,262
Bank premises and equipment, net	96,053			97,202
Corporate owned life insurance	82,092			81,928
Goodwill	92,447			92,283
Other intangible assets, net	7,092			7,628
Accrued interest and other assets	109,192			82,091
Total Assets	$	6,654,390		$	6,758,436
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market	2,908,888			2,853,190
Time	684,962			637,295
Noninterest bearing	1,395,047			1,398,474
Total Deposits	4,988,897			4,888,959
Federal funds purchased and securities sold under agreements to repurchase	63,978			81,842
Other borrowings	824,562			1,076,075
Trust preferred debentures	16,949			16,863
Other liabilities	102,327			73,826
Total Liabilities	$	5,996,713		$	6,137,565
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 15,196,629 at June 30, 2019; and 15,348,287 at December 31, 2018	1,520			1,535
Additional paid-in capital	355,284			366,595
Retained earnings	344,513			319,396
Accumulated other comprehensive loss	(40,174		)	(63,165		)
Treasury stock, at cost – 119,784 shares at June 30, 2019, and 122,227 shares at December 31, 2018	(4,942		)	(4,902		)
Total Tompkins Financial Corporation Shareholders’ Equity	656,201			619,459
Noncontrolling interests	1,476			1,412
Total Equity	$	657,677		$	620,871
Total Liabilities and Equity	$	6,654,390		$	6,758,436

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data) (Unaudited)	Three Months Ended						Six Months Ended
	06/30/2019			06/30/2018			06/30/2019			06/30/2018
INTEREST AND DIVIDEND INCOME
Loans	$	56,740		$	52,757		$	112,064		$	103,651
Due from banks	10			7			20			13
Available-for-sale securities	7,686			7,729			15,544			15,373
Held-to-maturity securities	863			854			1,721			1,712
Federal Home Loan Bank and other stock	794			796			1,672			1,534
Total Interest and Dividend Income	66,093			62,143			131,021			122,283
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	774			540			1,360			525
Other deposits	6,816			3,087			12,827			5,870
Federal funds purchased and securities sold under agreements to repurchase	33			34			77			80
Trust preferred debentures	327			306			656			586
Other borrowings	5,825			5,462			11,869			9,821
Total Interest Expense	13,775			9,429			26,789			16,882
Net Interest Income	52,318			52,714			104,232			105,401
Less: Provision for loan and lease losses	601			1,045			1,046			1,612
Net Interest Income After Provision for Loan and Lease Losses	51,717			51,669			103,186			103,789
NONINTEREST INCOME
Insurance commissions and fees	7,752			7,387			15,797			14,781
Investment services income	3,907			4,022			7,991			8,268
Service charges on deposit accounts	2,021			2,080			4,019			4,212
Card services income	2,750			2,621			5,540			4,767
Other income	1,806			4,898			4,284			6,686
Net gain on securities transactions	284			150			296			274
Total Noninterest Income	18,520			21,158			37,927			38,988
NONINTEREST EXPENSE
Salaries and wages	22,088			21,377			43,189			42,375
Other employee benefits	5,662			5,183			11,273			10,559
Net occupancy expense of premises	3,258			3,170			6,859			6,816
Furniture and fixture expense	1,996			1,673			3,975			3,648
FDIC insurance	522			704			1,104			1,371
Amortization of intangible assets	418			443			830			894
Other operating expense	12,126			12,435			23,049			23,043
Total Noninterest Expenses	46,070			44,985			90,279			88,706
Income Before Income Tax Expense	24,167			27,842			50,834			54,071
Income Tax Expense	4,743			5,751			10,338			11,512
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	19,424			22,091			40,496			42,559
Less: Net Income Attributable to Noncontrolling Interests	32			32			64			64
Net Income Attributable to Tompkins Financial Corporation	$	19,392		$	22,059		$	40,432		$	42,495
Basic Earnings Per Share	$	1.27		$	1.44		$	2.64		$	2.78
Diluted Earnings Per Share	$	1.27		$	1.43		$	2.63		$	2.76

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Quarter Ended						YTD Period Ended						YTD Period Ended
		June 30, 2019						June 30, 2019						June 30, 2018
		Average						Average						Average
		Balance				Average		Balance				Average		Balance				Average
(Dollar amounts in thousands)		(QTD)		Interest		Yield/ Rate		(YTD)		Interest		Yield/ Rate		(YTD)		Interest		Yield/ Rate
ASSETS
Interest-earning assets
Interest-bearing balances due from banks	$	2,131		$	10	1.88%	$	2,232		$	20	1.81%	$	1,922		$	14	1.47%
Securities (4)
U.S. Government securities		1,389,887		7,996		2.31%		1,399,542		16,168		2.33%		1,448,274		15,997		2.23%
State and municipal (5)		93,142		638		2.75%		93,872		1,264		2.72%		98,470		1,271		2.60%
Other securities (5)		3,416		40		4.70%		3,416		81		4.78%		3,558		74		4.19%
Total securities		1,486,445		8,674		2.34%		1,496,830		17,513		2.36%		1,550,302		17,342		2.26%
FHLBNY and FRB stock		46,650		794		6.83%		47,349		1,672		7.12%		51,750		1,534		5.98%
Total loans and leases, net of unearned income (5)(6)		4,802,757		57,022		4.76%		4,797,709		112,636		4.73%		4,719,312		104,304		4.46%
Total interest-earning assets		6,337,983		66,500		4.21%		6,344,120		131,841		4.19%		6,323,286		123,194		3.93%
Other assets		404,426						398,762						348,024
Total assets	$	6,742,409					$	6,742,882					$	6,671,310
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings & money market	$	2,947,077		4,970		0.68%	$	2,943,765		9,441		0.65%	$	2,814,601		3,587		0.26%
Time deposits		671,197		2,620		1.57%		658,242		4,746		1.45%		689,404		2,808		0.82%
Total interest-bearing deposits		3,618,274		7,590		0.84%		3,602,007		14,187		0.79%		3,504,005		6,395		0.37%
Federal funds purchased & securities sold under
agreements to repurchase		54,340		33		0.24%		63,451		77		0.24%		64,649		80		0.25%
Other borrowings		948,714		5,825		2.46%		971,119		11,869		2.46%		1,098,818		9,821		1.80%
Trust preferred debentures		16,921		327		7.75%		16,900		656		7.83%		16,728		586		7.06%
Total interest-bearing liabilities		4,638,249		13,775		1.19%		4,653,477		26,789		1.16%		4,684,200		16,882		0.73%
Non-interest bearing deposits		1,356,354						1,347,538						1,344,270
Accrued expenses and other liabilities		97,727						101,409						62,856
Total liabilities		6,092,330						6,102,424						6,091,326
Tompkins Financial Corporation Shareholders’ equity		648,618						639,015						578,541
Noncontrolling interest		1,461						1,443						1,443
Total equity		650,079						640,458						579,984
Total liabilities and equity	$	6,742,409					$	6,742,882					$	6,671,310
Interest rate spread						3.02%						3.03%						3.20%
Net interest income/margin on earning assets				52,725		3.34%				105,052		3.34%				106,312		3.39%
Tax equivalent adjustments				(407)						(820)						(911)
Net interest income per consolidated financial statements				$	52,318					$	104,232					$	105,401

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)
	Quarter-Ended										Year-Ended
Period End Balance Sheet		Jun-19		Mar-19		Dec-18		Sep-18		Jun-18		Dec-18
Securities	$	1,330,719	$	1,484,151	$	1,474,124	$	1,452,788	$	1,483,991	$	1,474,124
Originated loans and leases, net of unearned income and deferred costs and fees (2)		4,608,483		4,532,803		4,568,741		4,531,241		4,507,006		4,568,741
Acquired loans and leases (3)		247,319		256,897		265,198		271,468		284,187		265,198
Allowance for loan and lease losses		40,790		40,328		43,410		41,358		41,225		43,410
Total assets		6,654,390		6,738,719		6,758,436		6,746,960		6,745,800		6,758,436
Total deposits		4,988,897		4,989,925		4,888,959		5,025,082		4,792,229		4,888,959
Federal funds purchased and securities sold under agreements to repurchase		63,978		66,918		81,842		52,875		52,042		81,842
Other borrowings		824,562		923,427		1,076,075		988,515		1,229,956		1,076,075
Trust preferred debentures		16,949		16,906		16,863		16,820		16,777		16,863
Total common equity		656,201		645,823		619,459		597,636		589,173		619,459
Total equity		657,677		647,267		620,871		599,144		590,649		620,871
Average Balance Sheet
Average earning assets	$	6,337,983	$	6,350,325	$	6,364,113	$	6,356,781	$	6,348,562	$	6,342,019
Average assets		6,742,409		6,743,360		6,710,944		6,716,452		6,689,649		6,692,678
Average interest-bearing liabilities		4,638,249		4,668,875		4,606,536		4,644,533		4,709,122		4,654,625
Average equity		650,079		630,731		606,238		597,211		584,951		590,944
Share data
Weighted average shares outstanding (basic)		15,019,710		15,060,175		15,057,673		15,047,405		15,038,061		15,039,229
Weighted average shares outstanding (diluted)		15,085,945		15,136,523		15,135,750		15,144,491		15,135,970		15,132,257
Period-end shares outstanding		15,160,719		15,314,078		15,312,377		15,277,915		15,278,430		15,312,377
Common equity book value per share	$	43.28	$	42.17	$	40.45	$	39.12	$	38.56	$	40.45
Tangible book value per share (Non-GAAP)	$	36.77	$	35.73	$	33.98	$	32.60	$	32.02	$	33.98
Income Statement
Net interest income	$	52,318	$	51,914	$	53,236	$	53,163	$	52,714	$	211,800
Provision for loan/lease losses		601		445		2,058		272		1,045		3,942
Noninterest income		18,520		19,407		19,858		18,603		21,158		77,449
Noninterest expense		46,070		44,209		47,228		45,133		44,985		181,067
Income tax expense		4,743		5,595		4,866		5,427		5,751		21,805
Net income attributable to Tompkins Financial Corporation		19,392		21,040		18,911		20,902		22,059		82,308
Noncontrolling interests		32		32		31		32		32		127
Basic earnings per share (8)	$	1.27	$	1.37	$	1.24	$	1.37	$	1.44	$	5.39
Diluted earnings per share (8)	$	1.27	$	1.37	$	1.23	$	1.36	$	1.43	$	5.35
Nonperforming Assets
Originated nonaccrual loans and leases	$	16,543	$	15,165	$	19,340	$	17,518	$	19,082	$	19,340
Acquired nonaccrual loans and leases		2,363		2,579		2,856		2,659		2,673		2,856
Originated loans and leases 90 days past due and accruing		0		0		0		0		0		0
Troubled debt restructurings not included above		4,889		5,234		4,395		4,295		4,324		4,395
Total nonperforming loans and leases		23,795		22,978		26,591		24,472		26,079		26,591
OREO		2,229		1,595		1,595		1,870		2,233		1,595
Total nonperforming assets	$	26,024	$	24,573	$	28,186	$	26,342	$	28,312	$	28,186

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

		Quarter-Ended									Year-Ended
Delinquency - Originated loan and lease portfolio		Jun-19		Mar-19		Dec-18		Sep-18		Jun-18		Dec-18
Loans and leases 30-89 days past due and
accruing (2)	$	3,883	$	4,193	$	7,838	$	6,454	$	5,875	$	7,838
Loans and leases 90 days past due and accruing (2)		0		0		0		0		0		0
Total originated loans and leases past due and accruing (2)		3,883		4,193		7,838		6,454		5,875		7,838
Delinquency - Acquired loan and lease portfolio
Loans 30-89 days past due and accruing (3)(7)	$	493	$	474	$	67	$	1,109	$	1,108	$	67
Loans 90 days or more past due		1,229		1,218		1,316		1,420		1,110		1,316
Total acquired loans and leases past due and accruing		1,722		1,692		1,383		2,529		2,218		1,383
Total loans and leases past due and accruing	$	5,605	$	5,885	$	9,221	$	8,983	$	8,093	$	9,221
Allowance for Loan Losses - Originated loan and lease portfolio
Balance at beginning of period	$	40,245	$	43,321	$	41,289	$	41,111	$	40,107	$	39,686
Provision for loan and lease losses		590		480		2,046		208		1,035		3,897
Net loan and lease (recoveries) charge-offs		146		3,556		14		30		31		262
Allowance for loan and lease losses (originated
loan portfolio) - balance at end of period	$	40,689	$	40,245	$	43,321	$	41,289	$	41,111	$	43,321
Allowance for Loan Losses - Acquired loan and lease portfolio
Balance at beginning of period	$	83	$	89	$	69	$	114	$	104	$	85
Provision (credit) for loan and lease losses		11		(35)		12		64		10		45
Net loan and lease (recoveries) charge-offs		(7)		(29)		(8)		109		—		41
Allowance for loan and lease losses (acquired
loan portfolio) - balance at end of period		101		83		89		69		114		89
Total allowance for loan and lease losses	$	40,791	$	40,328	$	43,410	$	41,358	$	41,225	$	43,410
Loan Classification - Originated Portfolio
Special Mention	$	36,619	$	33,689	$	28,074	$	34,245	$	44,068	$	28,074
Substandard		44,770		35,895		43,963		49,597		41,572		43,963
Loan Classification - Acquired Portfolio
Special Mention		265		270		452		465		469		452
Substandard		2,857		2,830		2,914		3,041		3,180		2,914
Loan Classifications - Total Portfolio
Special Mention		36,884		33,959		28,526		34,710		44,537		28,526
Substandard		47,627		38,725		46,877		52,638		44,752		46,877

Ratio Analysis

Credit Quality
Nonperforming loans and leases/total loans and leases (7)		0.49	%		0.48	%		0.55	%		0.51	%		0.54	%		0.55	%
Nonperforming assets/total assets		0.39	%		0.36	%		0.42	%		0.39	%		0.42	%		0.42	%
Allowance for originated loan and lease losses/total originated loans and leases		0.88	%		0.89	%		0.95	%		0.91	%		0.91	%		0.95	%
Allowance/nonperforming loans and leases		171.42	%		175.51	%		163.25	%		169.00	%		158.08	%		163.25	%
Net loan and lease losses annualized/total average loans and leases		0.01	%		0.30	%		0.00	%		0.01	%		0.00	%		0.01	%

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

																Year-Ended
Capital Adequacy (period-end)		Jun-19			Mar-19			Dec-18			Sep-18			Jun-18			Dec-18
Tangible common equity/tangible assets		8.50	%		8.24	%		7.81	%		7.49	%		7.36	%		7.81	%
Profitability
Return on average assets *		1.15	%		1.27	%		1.12	%		1.23	%		1.32	%		1.23	%
Return on average equity *		11.96	%		13.53	%		12.38	%		13.89	%		15.13	%		13.93	%
Net interest margin (TE) *		3.34	%		3.34	%		3.34	%		3.35	%		3.36	%		3.37	%
* Quarterly ratios have been annualized

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. See "Tompkins Financial Corporation - Summary Financial Data (Unaudited)" tables for Non-GAAP related calculations.

Non-GAAP Disclosure - Adjusted Diluted Earnings Per Share
		Quarter-Ended														Year-Ended
		Jun-19			Mar-19			Dec-18			Sep-18			Jun-18			Dec-18
Net income available to common shareholders	$	19,392		$	21,040		$	18,911		$	20,902		$	22,059		$	82,308
Income attributable to unvested stock-based compensation awards		306			349			291			318			359			1,315
Net earnings allocated to common shareholders		19,086			20,691			18,620			20,584			21,700			80,993
Gain on sale of real estate, net of tax		0			0			0			0			2,227			2,227
Write-down of impaired leases, net of tax		0			0			0			(388	)		(1,527	)		(1,915	)
Net income (Non-GAAP)		19,086			20,691			18,620			20,972			21,000			80,681
Weighted average shares outstanding (diluted)		15,085,945			15,136,523			15,135,750			15,144,491			15,135,970			15,132,257
Adjusted diluted earnings per share (Non-GAAP)	$	1.27		$	1.37		$	1.23		$	1.38		$	1.39		$	5.33
Non-GAAP Disclosure - Tangible Book Value Per Share
Total common equity	$	656,201		$	645,823		$	619,459		$	597,636		$	589,173		$	619,459
Less: Goodwill and intangibles (9)		98,698			98,694			99,106			99,543			99,983			99,106
Tangible common equity		557,503			547,129			520,353			498,093			489,190			520,353
Ending shares outstanding		15,160,719			15,314,078			15,312,377			15,277,915			15,278,430			15,312,377
Tangible book value per share (Non-GAAP)	$	36.77		$	35.73		$	33.98		$	32.60		$	32.02		$	33.98

(1) Federal Reserve peer ratio as of March 31, 2019, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.
(2) "Originated" equals loans and leases not included by definition in "acquired loans".
(3) "Acquired Loans and Leases" equals loans and leases acquired at fair value, accounted for in accordance with FASB ASC Topic 805.
(4) Average balances and yields on available-for-sale securities are based on historical amortized cost.
(5) Interest income includes the tax effects of taxable-equivalent basis.
(6) 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, 2018.
(7) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans. The risk of credit loss on these loans has been considered by virtue of the Corporation's estimate of acquisition-date fair value and these loans are considered accruing as the Corporation primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows.
(8) Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares
(9) "Goodwill and intangibles" equal Total Intangible Assets less Mortgage Servicing Rights in the above tables.

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