Tompkins Financial Corporation Reports Record Fourth Quarter Earnings

Tompkins Financial Corporation (NYSE American: TMP)

Tompkins Financial Corporation reported diluted earnings per share of $1.61 for the fourth quarter of 2020, up 15.0% compared to $1.40 reported in the fourth quarter of 2019. Net income for the fourth quarter of 2020 was $24.0 million, a $2.9 million increase over net income reported for the same period in 2019.

For the fiscal year ended December 31, 2020, diluted earnings per share were $5.20, down 3.2% from 2019. 2020 net income was $77.6 million, down from $81.7 million, for 2019. Results for 2020 were negatively impacted by economic stress resulting from the COVID-19 pandemic, which contributed to the $16.3 million provision for credit losses recognized during the first quarter of 2020.

President and CEO, Mr. Stephen Romaine commented, "2020 was a challenging year on many fronts, which makes it particularly rewarding that earnings for the fourth quarter reflect the best fourth quarter results in our Company's history. Favorable results were largely driven by improved net interest income, insurance commissions and wealth management fees, all of which were up from the fourth quarter of 2019. Despite the positive earnings trends for the quarter, our results for the full year were negatively impacted by the pandemic and related economic restrictions, which have continued to negatively impact customers. We continue to support our customers through our loan payment deferral program and funding of loans under the Paycheck Protection Program. At year end, we believe that we had adequately reserved for potential credit losses in the loan portfolio, though a great deal of uncertainty remains.”

SELECTED HIGHLIGHTS FOR THE YEAR-END 2020:

• Total loans of $5.3 billion at December 31, 2020 were up $342.8 million, or 7.0% over December 31, 2019. The increase over the prior year-end included an outstanding principle balance of $291.3 million of PPP loans that were funded during the second quarter of 2020.
• Total deposits of $6.4 billion was an increase of $1.2 billion, or 23.5% over December 31, 2019.
• The ratio of Total Capital to Risk-Weighted Assets improved to 14.39%, up from 14.26% at September 30, 2020, and 13.53% at December 31, 2019.

NET INTEREST INCOME

Net interest income was $57.8 million for the fourth quarter of 2020, compared to $53.2 million reported for the same period in 2019. For the full fiscal year, net interest income was $225.3 million, an increase of $14.7 million or 7.0% from 2019.

Average loans for the year ended December 31, 2020 were up $398.0 million, or 8.2% compared to 2019. The increase in average loans includes $465.6 million in loans originated under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") in the second quarter of 2020. Asset yields for the year ended December 31, 2020, were down 47 basis points compared to 2019, which reflects the impact of reductions in market interest rates in 2020, and the addition of the lower yielding PPP loans originated in the second quarter. While PPP loans were a significant contributor to average loan growth for the year, increases in residential real estate loans (up 5.7% from 2019) and commercial real estate (up 5.6% from 2019), also contributed to the growth in 2020 average loan balances.

Average total deposits for 2020 were up $1.0 billion, or 20.1% versus 2019. Average noninterest bearing deposits were up $349.9 million or 24.9% compared to 2019. Average deposit balances benefited from $465.6 million of PPP loan originations during the second quarter of 2020, the majority of which were deposited in Tompkins checking accounts. For 2020, the average rate paid on interest-bearing deposit products decreased by 38 basis points from 2019. The total cost of interest-bearing liabilities for 2020 declined by 52 basis points to 0.60% from 2019.

Net interest margin was 3.12% for the fourth quarter of 2020, down compared to the 3.44% reported for the fourth quarter of 2019, and 3.26% for the third quarter of 2020. The decline in net interest margin during the fourth quarter, when compared to the third quarter of 2020, was mainly due to a 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 net interest margin was partially offset by lower average funding costs.

As a result of its participation in the SBA's PPP, in the fourth quarter of 2020, the Company recorded net deferred loan fees of $4.5 million, which are included in interest income. For the fiscal year, net deferred loan fees from PPP loan originations were $9.2 million.

NONINTEREST INCOME

Noninterest income represented 24.6% of total revenues in the fourth quarter of 2020, compared to 25.2% in the same period in 2019. Noninterest income of $18.8 million for the fourth quarter of 2020 was up 4.8% compared to the same period in 2019. For the full fiscal year, noninterest income of $73.9 million was down 2.1% from 2019. Total fee based services for the year ended December 31, 2020 were $64.6 million, a decrease of 2.7% compared to 2019. The reduction in fee based income in 2020, when compared to 2019, is largely related to the pandemic-related travel and business restrictions, which reduced card services fees and service charges on deposit accounts.

NONINTEREST EXPENSE

Noninterest expense was $46.4 million for the fourth quarter of 2020, up $505,000, or 1.1%, over the fourth quarter of 2019. For the full fiscal year, noninterest expense was $185.4 million, up $3.5 million, or 2.0%, over 2019. The increase in noninterest expense for the year ended December 31, 2020 was primarily attributable to normal annual increases in salaries and wages, which were up $4.4 million or 3.9% over 2019.

INCOME TAX EXPENSE

The Company's effective tax rate was 20.4% for the fourth quarter of 2020, compared to 19.8% for the same period in 2019. The effective tax rate for the year ended December 31, 2020 was 20.4%, compared to 20.5% reported for 2019.

ASSET QUALITY

Provision for credit losses for the fourth quarter of 2020 was $6,000 compared to a negative $1.0 million for the same period in 2019. Provision expense for the year ended December 31, 2020 was $16.2 million, compared to $1.4 million for 2019. The first quarter of 2020 included provision expense of $16.3 million related to the impact of the economic conditions related to COVID-19 on economic forecasts and other model assumptions relied upon by management in determining the allowance. Net charge-offs for the fourth quarter of 2020 were $630,000 compared to net charge-offs of $479,000 reported in the fourth quarter of 2019.

The allowance for credit losses represented 0.98% of total loans and leases at December 31, 2020, up from 0.97% at September 30, 2020, and 0.81% at December 31, 2019. Nonperforming loans and leases totaled $45.8 million at December 31, 2020, compared to $33.8 million at September 30, 2020 and $31.4 million at December 31, 2019. The ratio of the allowance to total nonperforming loans and leases was 112.87% at December 31, 2020, down compared to 154.68% at September 30, 2020 and 126.90% at December 31, 2019. Nonperforming assets represented 0.60% of total assets at December 31, 2020, up from 0.44% at September 30, 2020, and up from 0.47% at December 31, 2019.

Special Mention loans totaled $121.3 million at the end of the fourth quarter of 2020, in line with the quarter ended September 30, 2020, and up compared to the $29.8 million reported for the fourth quarter of 2019. Total Substandard loans increased during the quarter to $68.6 million at December 31, 2020, compared to $45.4 million at September 30, 2020, and $60.5 million at December 31, 2019. The increases in nonperforming loans and leases and Substandard loans were mainly related to the downgrades of credit in the loan portfolio related to the hospitality industry. Included in the nonperforming and Substandard loans and leases are 17 loans totaling $17.8 million, that are currently in deferral status.

During 2020, overall credit quality was supported by several plans initiated by the Company in response to the COVID-19 pandemic. As previously announced, Tompkins initiated and participated in a number of credit initiatives to support customers who have been impacted by the economic conditions associated with the COVID-19 pandemic. The Company implemented a payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. Weekly deferral requests for the month of December were down 98.5% from peak levels the Company experienced in late March. As of December 31, 2020, total loans that continued in a deferral status amounted to approximately $212.2 million, representing 4.0% of total loans. Of loans that had come out of the deferral program as of December 31, 2020, about 94.4% had made at least one payment and only 0.13% were more than 30 days delinquent.

As previously noted, the Company participated in the PPP, which provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related expenses and certain other eligible business operating costs, all in accordance with the rules and regulations established by the SBA. The Company began accepting applications for PPP loans on April 3, 2020, and had funded approximately 2,998 loans totaling about $465.6 million when the initial program ended. As of December 31, 2020, approximately 1,484 PPP loans originated by the Company, totaling $244.0 million, had been submitted to the SBA for forgiveness under the terms of the PPP program, of which approximately 1,212 loans totaling $171.1 million had been forgiven by the SBA as of December 31, 2020.

Mr. Romaine added, "Our deferral program and our participation in the PPP program are examples of how Tompkins has remained committed to supporting our clients and communities during these challenging times. Through year end, we had supported approximately 6,800 customers with these programs. We are also pleased to be participating in the latest round of PPP financing and as of January 28, 2021 had submitted 1,007 PPP loan applications totaling $143.9 million to the SBA for approval."

CAPITAL POSITION

Capital ratios remained well above the regulatory minimums for well capitalized institutions. The ratio of Total Capital to Risk-Weighted Assets improved to 14.39% at December 31, 2020, up from 14.26% at September 30, 2020, and 13.53% at December 31, 2019. The ratio of Tier 1 capital to average assets was 8.75% at December 31, 2020, compared to 8.85% at September 30, 2020, and 9.61% at December 31, 2019. The December 31, 2020 Tier 1 capital to average assets ratio was negatively impacted by balance sheet growth associated with the PPP loans originated in the second quarter of 2020.

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 contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Examples of forward-looking statements in this press release include, without limitation, those regarding the novel coronavirus (COVID-19) and our plans in response to the coronavirus. 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 coronavirus outbreak and the impact of the outbreak (including the government’s response to the outbreak) 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
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share and per share data)		As of				As of
ASSETS		12/31/2020				12/31/2019
Cash and noninterest bearing balances due from banks		$	21,245			$	136,010
Interest bearing balances due from banks		367,217				1,972
Cash and Cash Equivalents		388,462				137,982
Available-for-sale debt securities, at fair value (amortized cost of $1,599,894 at December 31, 2020 and $1,293,239 at December 31, 2019)		1,627,193				1,298,587
Equity securities, at fair value (amortized cost $929 at December 31, 2020 and $915 at December 31, 2019)		929				915
Total loans and leases, net of unearned income and deferred costs and fees		5,260,327				4,917,550
Less: Allowance for credit losses		51,669				39,892
Net Loans and Leases		5,208,658				4,877,658
Federal Home Loan Bank and other stock		16,382				33,695
Bank premises and equipment, net		88,709				94,355
Corporate owned life insurance		84,736				82,961
Goodwill		92,447				92,447
Other intangible assets, net		4,905				6,223
Accrued interest and other assets		109,750				100,800
Total Assets		$	7,622,171			$	6,725,623
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market		3,761,933				3,080,686
Time		746,234				675,014
Noninterest bearing		1,929,585				1,457,221
Total Deposits		6,437,752				5,212,921
Federal funds purchased and securities sold under agreements to repurchase		65,845				60,346
Other borrowings		265,000				658,100
Trust preferred debentures		13,220				17,035
Other liabilities		122,665				114,167
Total Liabilities		$	6,904,482			$	6,062,569
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,964,389 at December 31, 2020; and 15,014,499 at December 31, 2019		1,496				1,501
Additional paid-in capital		333,976				338,507
Retained earnings		418,413				370,477
Accumulated other comprehensive loss		(32,074)				(43,564)
Treasury stock, at cost – 124,849 shares at December 31, 2020, and 123,956 shares at December 31, 2019		(5,534)				(5,279)
Total Tompkins Financial Corporation Shareholders’ Equity		716,277				661,642
Noncontrolling interests		1,412				1,412
Total Equity		$	717,689			$	663,054
Total Liabilities and Equity		$	7,622,171			$	6,725,623

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data) (Unaudited)		Three Months Ended								Twelve Months Ended
		12/31/2020				12/31/2019				12/31/2020				12/31/2019
INTEREST AND DIVIDEND INCOME
Loans		$	57,674			$	57,039			$	227,313			$	226,723
Due from banks		104				9				194				41
Available-for-sale debt securities		5,349				6,406				25,450				28,460
Held-to-maturity securities		0				568				0				3,151
Federal Home Loan Bank and other stock		243				561				1,373				3,003
Total Interest and Dividend Income		63,370				$	64,583			254,330				$	261,378
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more		717				912				3,175				3,095
Other deposits		3,066				7,399				16,789				27,809
Federal funds purchased and securities sold under agreements to repurchase		19				33				95				143
Trust preferred debentures		375				303				1,133				1,276
Other borrowings		1,442				2,696				7,799				18,427
Total Interest Expense		5,619				11,343				28,991				50,750
Net Interest Income		57,751				53,240				225,339				210,628
Less: Provision (credit) for credit loss expense		6				(1,000)				16,151				1,366
Net Interest Income After Provision for Credit Loss Expense		57,745				54,240				209,188				209,262
NONINTEREST INCOME
Insurance commissions and fees		7,289				6,777				31,505				31,091
Investment services income		5,106				4,268				17,520				16,434
Service charges on deposit accounts		1,637				2,110				6,312				8,321
Card services income		2,378				2,436				9,263				10,526
Other income		2,429				2,171				8,817				8,416
Net (loss) gain on securities transactions		(3)				210				443				645
Total Noninterest Income		18,836				17,972				73,860				$	75,433
NONINTEREST EXPENSE
Salaries and wages		23,037				23,250				92,519				89,399
Other employee benefits		6,552				6,394				24,812				23,488
Net occupancy expense of premises		3,400				3,115				12,930				13,210
Furniture and fixture expense		2,087				1,921				7,846				7,815
Amortization of intangible assets		364				421				1,484				1,673
Other operating expense		10,965				10,799				45,791				46,249
Total Noninterest Expenses		46,405				45,900				185,382				181,834
Income Before Income Tax Expense		30,176				26,312				97,666				102,861
Income Tax Expense		6,145				5,200				19,924				21,016
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation		24,031				21,112				77,742				81,845
Less: Net Income Attributable to Noncontrolling Interests		53				32				154				127
Net Income Attributable to Tompkins Financial Corporation		$	23,978			21,080				$	77,588			81,718
Basic Earnings Per Share		$	1.61			$	1.41			$	5.22			$	5.39
Diluted Earnings Per Share		$	1.61			$	1.40			$	5.20			$	5.37

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Quarter Ended								Quarter Ended
	December 31, 2020								December 31, 2019
	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	$	439,726		$	104		0.09	%	$	2,763		$	9		1.29	%
Securities (1)
U.S. Government securities	1,502,226			4,671			1.24	%	1,192,035			6,421			2.14	%
State and municipal (2)	127,580			823			2.57	%	93,275			643			2.73	%
Other securities (2)	3,430			24			2.78	%	3,417			37			4.30	%
Total securities	1,633,236			5,518			1.34	%	1,288,727			7,101			2.19	%
FHLBNY and FRB stock	16,766			244			5.80	%	25,469			561			8.74	%
Total loans and leases, net of unearned income (2)(3)	5,318,607			57,949			4.33	%	4,871,483			57,332			4.67	%
Total interest-earning assets	7,408,335			63,815			3.43	%	6,188,442			65,003			4.17	%
Other assets	349,824								424,760
Total assets	$	7,758,159							$	6,613,202
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market	3,927,433			1,457			0.15	%	3,140,707			5,234			0.66	%
Time deposits	734,009			2,326			1.26	%	692,541			3,077			1.76	%
Total interest-bearing deposits	4,661,442			3,783			0.32	%	3,833,248			8,311			0.86	%
Federal funds purchased & securities sold under agreements to repurchase	60,417			19			0.12	%	54,907			33			0.24	%
Other borrowings	271,087			1,442			2.12	%	469,410			2,696			2.28	%
Trust preferred debentures	17,091			375			8.73	%	17,007			303			7.07	%
Total interest-bearing liabilities	5,010,037			5,619			0.45	%	4,374,572			11,343			1.03	%
Noninterest bearing deposits	1,913,781								1,471,377
Accrued expenses and other liabilities	115,227								102,812
Total liabilities	7,039,045								5,948,761
Tompkins Financial Corporation Shareholders’ equity	717,618								662,940
Noncontrolling interest	1,496								1,501
Total equity	719,114								664,441
Total liabilities and equity	$	7,758,159							$	6,613,202
Interest rate spread							2.98	%							3.14	%
Net interest income/margin on earning assets				58,196			3.12	%				53,660			3.44	%
Tax Equivalent Adjustment				(445)								(420)
Net interest income per consolidated financial statements				$	57,751							$	53,240

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Fiscal Year Ended								Fiscal Year Ended
	December 31, 2020								December 31, 2019
	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	$	194,211		$	194		0.10	%	$	1,647		$	41		2.49	%
Securities (1)
U.S. Government securities	1,307,905			22,906			1.75	%	1,301,813			29,411			2.26	%
State and municipal (2)	114,462			3,048			2.66	%	93,168			2,547			2.73	%
Other securities (2)	3,430			117			3.40	%	3,417			158			4.62	%
Total securities	1,425,797			26,071			1.83	%	1,398,398			32,116			2.30	%
FHLBNY and FRB stock	20,815			1,374			6.60	%	38,308			3,003			7.84	%
Total loans and leases, net of unearned income (2)(3)	5,228,135			228,805			4.38	%	4,830,089			227,869			4.72	%
Total interest-earning assets	6,868,958			256,444			3.73	%	6,268,442			263,029			4.20	%
Other assets	489,520								411,136
Total assets	$	7,358,478							$	6,679,578
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market	3,650,358			9,430			0.26	%	3,007,221			20,099			0.67	%
Time deposits	703,999			10,534			1.50	%	676,106			10,805			1.60	%
Total interest-bearing deposits	4,354,357			19,964			0.46	%	3,683,327			30,904			0.84	%
Federal funds purchased & securities sold under agreements to repurchase	55,973			95			0.17	%	59,825			143			0.24	%
Other borrowings	365,732			7,799			2.13	%	762,993			18,427			2.42	%
Trust preferred debentures	17,092			1,133			6.63	%	16,943			1,276			7.53	%
Total interest-bearing liabilities	4,793,154			28,991			0.60	%	4,523,088			50,750			1.12	%
Noninterest bearing deposits	1,753,226								1,403,330
Accrued expenses and other liabilities	112,544								101,819
Total liabilities	6,658,924								6,028,237
Tompkins Financial Corporation Shareholders’ equity	698,088								649,871
Noncontrolling interest	1,466								1,470
Total equity	699,554								651,341
Total liabilities and equity	$	7,358,478							$	6,679,578
Interest rate spread							3.13	%							3.07	%
Net interest income/margin on earning assets				227,453			3.31	%				212,279			3.39	%
Tax Equivalent Adjustment				(2,114)								(1,651)
Net interest income per consolidated financial statements				$	225,339							$	210,628

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)
	Quarter-Ended															Year-Ended
Period End Balance Sheet		Dec-20			Sep-20			Jun-20			Mar-20			Dec-19			Dec-20
Securities	$	1,628,122		$	1,667,698		$	1,336,087		$	1,353,567		$	1,299,502		$	1,628,122
Total Loans		5,260,327			5,398,297			5,424,285			4,937,822			4,917,550			5,260,327
Allowance for credit losses		51,669			52,293			52,082			52,404			39,892			51,669
Total assets		7,622,171			7,794,502			7,582,056			6,743,114			6,725,623			7,622,171
Total deposits		6,437,752			6,601,238			6,377,521			5,409,363			5,212,921			6,437,752
Federal funds purchased and securities sold under agreements to repurchase		65,845			63,573			50,889			68,993			60,346			65,845
Other borrowings		265,000			285,000			325,000			457,983			658,100			265,000
Trust preferred debentures		13,220			17,163			17,120			17,078			17,035			13,220
Total common equity		716,277			712,104			696,553			681,153			661,642			716,277
Total equity		717,689			713,611			698,029			682,597			663,054			717,689
Average Balance Sheet
Average earning assets	$	7,408,335		$	7,204,049		$	6,616,079		$	6,237,773		$	6,188,442		$	6,868,958
Average assets		7,758,159			7,582,009			7,413,945			6,672,948			6,613,202			7,358,478
Average interest-bearing liabilities		5,010,037			4,861,890			4,825,753			4,471,797			4,374,572			4,793,154
Average equity		719,114			709,484			690,475			678,817			664,441			699,554
Share data
Weighted average shares outstanding (basic)	14,715,124			14,697,532			14,681,956			14,718,948			14,726,023			14,703,390
Weighted average shares outstanding (diluted)	14,751,303			14,727,741			14,714,848			14,774,269			14,790,503			14,742,040
Period-end shares outstanding	14,928,479			14,926,252			14,914,458			14,907,947			14,978,589			14,928,479
Common equity book value per share	$	47.98		$	47.71		$	46.70		$	45.69		$	44.17		$	47.98
Income Statement
Net interest income	$	57,751		$	58,253		$	56,366		$	52,969		$	53,240		$	225,339
Provision (credit) for credit loss expense		6			199			(348)			16,294			(1,000)			16,151
Noninterest income		18,836			18,887			17,177			18,960			17,972			73,860
Noninterest expense		46,405			46,349			46,888			45,740			45,900			185,382
Income tax expense		6,145			6,330			5,540			1,909			5,200			19,924
Net income attributable to Tompkins Financial Corporation		23,978			24,230			21,431			7,949			21,080			77,588
Noncontrolling interests		53			32			32			37			32,000			154
Basic earnings per share (5)	$	1.61		$	1.63		$	1.44		$	0.53		$	1.41		$	5.22
Diluted earnings per share (5)	$	1.61		$	1.63		$	1.44		$	0.53		$	1.40		$	5.20
Nonperforming Assets
Nonaccrual loans and leases	$	38,976		$	26,944		$	23,183		$	23,556		$	24,281		$	38,976
Loans and leases 90 days past due and accruing		0			0			0			0			0			0
Troubled debt restructuring not included above		6,803			6,864			6,988			7,137			7,154			6,803
Total nonperforming loans and leases		45,779			33,808			30,171			30,693			31,435			45,779
OREO		88			196			274			466			428			88
Total nonperforming assets	$	45,867		$	34,004		$	30,445		$	31,159		$	31,863		$	45,867

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

			Quarter-Ended																																									Year-Ended
Delinquency - Total loan and lease portfolio						Dec-20									Sep-20									Jun-20								Mar-20								Dec-19						Dec-20
Loans and leases 30-89 days past due and accruing			$			3,012						$			6,875						$			8,352					$			9,328						$		3,724				$		3,012
Loans and leases 90 days past due and accruing						0									0									0								0								794						0
Total loans and leases past due and accruing						3,012									6,875									8,352								9,328								4,518						3,012
Allowance for Credit Losses*
Balance at beginning of period	$			52,293					$				52,082					$				52,404					$			39,892						$			41,371				$		39,892
Impact of adopting ASC 326				0									0									0								(2,534)									0						(2,534)
Provision (credit) for credit losses				6									199									(348)								16,294									(1,000)						16,151
Net loan and lease charge-offs (recoveries)				630									(12)									(26)								1,248									479						1,840
Allowance for credit losses at end of period	$			51,669					$				52,293					$				52,082					$			52,404						$			39,892				$		51,669
*CECL was adopted January 1, 2020. Prior periods reflect the allowance for credit losses for loans under the incurred loss methodology.
Loan Classification - Total Portfolio
Special Mention		$			121,253					$				122,652						$			44,741					$			37,121								29,800				$		121,253
Substandard					68,645									45,384									48,046								52,894								60,499						68,645

Ratio Analysis

Credit Quality
Nonperforming loans and leases/total loans and leases (6)						0.87			%						0.63		%				0.56		%				0.62		%			0.64	%		0.87	%
Nonperforming assets/total assets						0.60			%						0.44		%				0.40		%				0.46		%			0.47	%		0.60	%
Allowance for credit losses/total loans and leases						0.98			%						0.97		%				0.96		%				1.06		%			0.81	%		0.98	%
Allowance/nonperforming loans and leases						112.87			%						154.68		%				172.62		%				170.74		%			126.90	%		112.87	%
Net loan and lease losses annualized/total average loans and leases						0.05			%						0.00		%				0.00		%				0.10		%			0.04	%		0.04	%
Capital Adequacy
Tier 1 Capital (to average assets)				8.75			%						8.85			%				8.79		%				9.53		%				9.61	%		8.75	%
Total Capital (to risk-weighted assets)				14.39			%						14.26			%				13.95		%				13.62		%				13.53	%		14.39	%
Profitability (period-end)
Return on average assets *					1.23			%						1.27			%				1.16		%				0.48		%			1.26	%		1.05	%
Return on average equity *					13.26			%						13.59			%				12.48		%				4.71		%			12.59	%		11.09	%
Net interest margin (TE) *					3.12			%						3.26			%				3.45		%				3.44		%			3.44	%		3.31	%
** Quarterly ratios have been annualized

(1) Federal Reserve peer ratio as of September 30, 2020 the most recent data available, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.

(2) Average balances and yields on available-for-sale securities are based on historical amortized cost.

(3) Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2020 and 2019 to increase tax exempt interest income to taxable-equivalent basis..

(4) 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, 2019.

(5) 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

(6) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans and leases. The risk of credit loss on these loans has been considered by virtue of the Company's estimate of acquisition-date fair value and these loans are considered accruing as the Company primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows.

 

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