TMP Tompkins Financial Corporation

Tompkins Financial Corporation (TMP–NYSE MKT LLC)

Tompkins Financial Corporation reported diluted earnings per share of $0.75 for the second quarter of 2013, an increase of 4.2% from the $0.72 reported for the same period in 2012. Net income of $11.0 million for the second quarter of 2013, represents a 24.7% increase from the same period in 2012. Year to date diluted earnings per share were $1.55 for the current period, up 9.2% over the first six months of 2012. Year to date net income of $22.5 million in 2013 is up 35.3% over the same period in 2012.

Comparisons of the Statement of Income and Statement of Condition to the same period last year are impacted by the acquisition of VIST Financial Corporation on August 1, 2012. As more fully disclosed in the non-GAAP disclosure section of this press release, net income and diluted earnings in the current and prior period were also impacted by merger related expenses. The second quarter of 2012 also included $243,000 in after tax income related to the reversal of an accrued liability resulting from the settlement of litigation between VISA Inc. and certain merchants. After adjusting for the after-tax impact of the above items, diluted earnings per share for the second quarter of 2013 would have been approximately flat compared to the prior year, and year to date diluted earnings per share would have been up by approximately 6.8% over the same period last year.

President and CEO, Stephen S. Romaine said "We saw positive trends during the quarter, with net interest income up $1.6 million from the first quarter of 2013, representing an annualized growth rate of 17.0%. The growth was fueled by increased loans and noninterest-bearing deposits, which reflected annualized growth of 8.2% and 14.7% respectively over the first quarter of 2013. The improvement in net interest income was tempered by higher provision expense during the quarter, and lower noninterest income as compared to the prior quarter. Overall performance remains strong, with annualized return on average equity of 10.20% for the quarter, which is ahead of the same period last year and compares favorably to the most recent Federal Reserve Board peer ratio of 8.43% 1.”

NET INTEREST INCOME

Net interest income of $39.8 million for the second quarter of 2013 represents an increase of 41.7% over the same period last year. The addition of VIST Bank and steady loan growth contributed to the year-over-year increase. Net interest income for the quarter was up $1.6 million, or 4.24%, from the first quarter of 2013, primarily due to growth in average loans and noninterest-bearing deposits. The net interest margin for the second quarter of 2013 was 3.58% compared to 3.57% for the first quarter in 2013 and 3.52% for the second quarter of 2012. For the year to date period, net interest income of $78.0 million reflects an increase of 40.5% over the first six months of 2012.

NONINTEREST INCOME

Noninterest income was $16.5 million for the second quarter of 2013, up 29.6% over the same period in 2012, and down 4.9% from the first quarter of 2013. The increase from the same quarter last year is mainly a result of the VIST acquisition. The most significant contributors to the decline from the first quarter of 2013 were lower realized gains on available for sale securities and lower income related to our investment in a Small Business Investment Company. Insurance commissions, investment services income and card services income were also down modestly from the first quarter, while service charges on deposit accounts were up modestly. For the year to date period, noninterest income of $33.9 million was up 38.9% from the same six month period in 2012.

NONINTEREST EXPENSE

Noninterest expense was $37.8 million in the second quarter of 2013, up 40.7% from the same period in 2012, and up 0.7% from the first quarter of 2013. For the year to date period, noninterest income of $75.3 million was up 41.5% from the same six month period in 2012. The increase in noninterest expense over the same quarter and year to date periods of 2012 is mainly a result of the VIST acquisition.

ASSET QUALITY

The ratio of nonperforming assets to total assets of 0.89% reflects improvement from 1.17% for the same period last year, and is up from 0.83% at March 31, 2013. The nonperforming asset ratio continues to compare favorably to the most recent peer averages of 1.87% published as of March 31, 2013, by the Federal Reserve1.

Asset quality trends on originated loans continue to improve with loans classified as special mention or worse down 30.5% from a year ago, and down 7.5% from last quarter. Originated loans and leases exclude loans acquired in the VIST acquisition. In the acquired loan portfolio, loans classified special mention or worse increased by 13.6% from the first quarter of 2013, resulting in 2.0% increase in total loans classified as special mention or worse. The increase in loans classified as Substandard or Special Mention in the acquired loan portfolio did not have a meaningful impact to the credit marks that were recorded at the time of the acquisition.

Provision for loan and lease losses was $2.5 million for the second quarter of 2013, up from $1.0 million in the same quarter last year, and $1.0 million in the first quarter of 2013. Net loan and lease (recoveries) charge-offs totaled $1.7 million in the second quarter of 2013, compared to $1.1 million in the second quarter last year, and $1.0 million in the first quarter of 2013. The current period included net recoveries of $1.2 million in the originated portfolio, while the acquired portfolio included net (recoveries) charge-offs of $2.9 million.

The Company’s allowance for originated loan and lease losses totaled $24.9 million at June 30, 2013, which represented 1.08% of total originated loans, compared to 1.16% at December 31, 2012, reflecting improved quality of the originated portfolio. The allowance for loan and lease losses covered 64.99% of nonperforming loans and leases as of June 30, 2013, which compares to 62.34% as of December 31, 2012.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets improved for the second consecutive quarter, to 8.16% at June 30, 2013. Total risk based capital also improved during the quarter to 13.34%. The improvement in capital ratios was primarily driven by growth in retained earnings. Despite the increase in retained earnings during the quarter, tangible book value per share decline by 5.2% to $22.08, as the rise in market interest rates during the quarter negatively impacted accumulated other comprehensive income associated with unrealized gains available-for-sale securities. Refer to Non-GAAP disclosure for additional details on tangible book value per share.

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, The Bank of Castile, Mahopac National Bank, VIST Bank, Tompkins Insurance Agencies, Inc., and Tompkins Financial Advisors. For more information on Tompkins Financial, visit www.tompkinsfinancial.com.

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.

"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.

          TOMPKINS FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CONDITION   (In thousands, except share and per share data) (Unaudited) As of As of ASSETS

 06/30/2013 

 12/31/2012 

  Cash and noninterest bearing balances due from banks $ 65,064 $ 117,448 Interest bearing balances due from banks         1,479         1,482   Cash and Cash Equivalents 66,543 118,930   Trading securities, at fair value 14,688 16,450 Available-for-sale securities, at fair value (amortized cost of $1,434,359 at June 30, 2013 and $1,349,416 at December 31, 2012) 1,434,454 1,393,340 Held-to-maturity securities, fair value of $21,129 at June 30, 2013, and $25,163 at December 31, 2012 20,173 24,062 Originated loans and leases, net of unearned income and deferred costs and fees 2,309,232 2,133,106 Acquired loans and leases, covered 31,548 37,600 Acquired loans and leases, non-covered 714,403 783,904 Less: Allowance for loan and lease losses         25,458         24,643   Net Loans and Leases 3,029,725 2,929,967   FDIC Indemnification Asset 4,270 4,385 Federal Home Loan Bank stock and Federal Reserve Bank stock 26,039 19,388 Bank premises and equipment, net 54,824 54,581 Corporate owned life insurance 66,143 65,102 Goodwill 92,140 92,305 Other intangible assets, net 17,400 18,643 Accrued interest and other assets         105,484         100,044   Total Assets       $ 4,931,883       $ 4,837,197     LIABILITIES Deposits: Interest bearing: Checking, savings and money market 2,174,926 2,144,367 Time 937,775 973,883 Noninterest bearing         800,209         831,919   Total Deposits 3,912,910 3,950,169   Federal funds purchased and securities sold under agreements to repurchase 171,498 213,973 Other borrowings, including certain amounts at fair value of $11,424 at June 30, 2013 and $11,847 at December 31, 2012 299,098 111,848 Trust preferred debentures 43,703 43,668 Other liabilities         72,780         76,179   Total Liabilities       $ 4,499,989       $ 4,395,837     EQUITY Tompkins Financial Corporation shareholders' equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,635,468 at June 30, 2013; and 14,426,711 at December 31, 2012 1,464 1,443 Additional paid-in capital 339,233 334,649 Retained earnings 120,218 108,709 Accumulated other comprehensive loss (27,667 ) (2,106 ) Treasury stock, at cost – 101,055 shares at June 30, 2013, and 100,054 shares at December 31, 2012 (2,871 ) (2,787 )   Total Tompkins Financial Corporation Shareholders’ Equity 430,377 439,908 Noncontrolling interests         1,517         1,452   Total Equity       $ 431,894       $ 441,360   Total Liabilities and Equity       $ 4,931,883       $ 4,837,197     See notes to unaudited condensed consolidated financial statements     TOMPKINS FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME       Three Months Ended Six Months Ended (In thousands, except per share data) (Unaudited)

  06/30/2013

  06/30/2012

  06/30/2013

  06/30/2012

INTEREST AND DIVIDEND INCOME Loans $ 37,550 $ 25,403 $ 73,979 $ 50,706 Due from banks 1 5 8 8 Federal funds sold 0 0 0 2 Trading securities 160 189 325 387 Available-for-sale securities 7,912 7,523 15,392 14,699 Held-to-maturity securities 177 225 368 450 Federal Home Loan Bank stock and Federal Reserve Bank stock         160     196     345     417   Total Interest and Dividend Income         45,960     33,541     90,417     66,669   INTEREST EXPENSE Time certificates of deposits of $100,000 or more 1,239 720 2,443 1,454 Other deposits 2,016 1,798 4,198 3,825 Federal funds purchased and securities sold under agreements to repurchase 966 1,074 1,976 2,166 Trust preferred debentures 690 402 1,377 807 Other borrowings         1,223     1,437     2,391     2,866   Total Interest Expense         6,134     5,431     12,385     11,118   Net Interest Income         39,826     28,110     78,032     55,551   Less: Provision for loan and lease losses         2,489     1,011     3,527     2,136   Net Interest Income After Provision for Loan and Lease Losses         37,337     27,099     74,505     53,415   NONINTEREST INCOME Insurance commissions and fees 7,167 3,493 14,428 6,890 Investment services income 3,698 3,760 7,486 7,398 Service charges on deposit accounts 2,024 1,593 3,932 3,378 Card services income 1,690 1,280 3,428 2,849 Mark-to-market loss on trading securities (270 ) (75 ) (385 ) (157 ) Mark-to-market gain on liabilities held at fair value 347 77 424 166 Net other-than-temporary impairment losses 0 (65 ) 0 (65 ) Other income 1,810 1,770 4,176 3,034 Gain on securities transactions         75     933     442     935   Total Noninterest Income         16,541     12,766     33,931     24,428   NONINTEREST EXPENSES Salaries and wages 16,291 11,081 31,863 22,381 Pension and other employee benefits 5,338 4,123 11,408 8,422 Net occupancy expense of premises 2,954 1,793 6,015 3,598 Furniture and fixture expense 1,462 1,116 2,919 2,216 FDIC insurance 821 554 1,593 1,082 Amortization of intangible assets 547 124 1,104 257 Merger related expenses 37 879 233 972 Other operating expense         10,327     7,185     20,163     14,298   Total Noninterest Expenses         37,777     26,855     75,298     53,226   Income Before Income Tax Expense         16,101     13,010     33,138     24,617   Income Tax Expense         5,061     4,151     10,557     7,912   Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation         11,040     8,859     22,581     16,705   Less: Net income attributable to noncontrolling interests         33     33     65     65   Net Income Attributable to Tompkins Financial Corporation       $ 11,007   $ 8,826   $ 22,516   $ 16,640   Basic Earnings Per Share $ 0.76 $ 0.72 $ 1.55 $ 1.43 Diluted Earnings Per Share       $ 0.75   $ 0.72   $ 1.55   $ 1.42     See notes to unaudited condensed consolidated financial statements     Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)     Quarter Ended Year to Date Period Ended Year to Date Period Ended         June 30, 2013   June 30, 2013   June 30, 2012 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 $ 1,623 $ 1 0.25 % $ 2,760 $ 8 0.58 % $ 20,269 $ 8 0.08 % Money market funds - - 0.00 % - - 0.00 % 36 - 0.00 % Securities (1) U.S. Government securities 1,386,975 7,266 2.10 % 1,342,524 14,060 2.11 % 1,107,730 13,504 2.45 % Trading securities 15,342 159 4.16 % 15,732 325 4.17 % 18,917 387 4.11 % State and municipal (2) 98,279 1,259 5.14 % 99,179 2,558 5.20 % 84,785 2,270 5.38 % Other securities (2) 7,441   60   3.23 %   8,295   150   3.65 %   11,787   268   4.57 % Total securities 1,508,037 8,744 2.33 % 1,465,730 17,093 2.35 % 1,223,219 16,429 2.70 % Federal Funds Sold - - 0.00 % - - 0.00 % 3,693 2 0.11 % FHLBNY and FRB stock 23,002 160 2.79 % 20,942 345 3.32 % 17,134 415 4.87 %   Total loans and leases, net of unearned income (3) 3,038,766   38,048   5.02 %   3,001,458   74,906   5.03 %   1,980,673   50,980   5.18 % Total interest-earning assets 4,571,428   46,953   4.12 %   4,490,890   92,352   4.15 %   3,245,024   67,834   4.20 %   Other assets 394,467 442,103 257,020   Total assets 4,965,895 4,932,993 3,502,044                                     LIABILITIES & EQUITY Deposits Interest-bearing deposits Interest bearing checking, savings, & money market 2,240,518 1,264 0.23 % 2,255,128 2,682 0.24 % 1,466,424 1,872 0.26 % Time deposits 960,722   1,991   0.84 %   970,239   3,959   1.24 %   709,586   3,407   1.45 % Total interest-bearing deposits 3,201,240 3,255 0.41 % 3,225,367 6,641 0.42 % 2,176,010 5,279 0.49 %   Federal funds purchased & securities sold under agreements to repurchase 175,997 966 2.20 % 187,289 1,976 2.13 % 169,103 2,166 2.58 % Other borrowings 242,301 1,223 2.03 % 181,292 2,391 2.66 % 144,037 2,866 4.00 % Trust preferred debentures 43,692   690   6.33 %   43,683   1,377   6.36 %   25,066   807   6.47 % Total interest-bearing liabilities 3,663,230 6,134 0.67 % 3,637,631 12,385 0.69 % 2,514,216 11,118 0.89 %   Noninterest bearing deposits 784,570 778,201 604,866 Accrued expenses and other liabilities 71,007 71,969 56,679 Total liabilities 4,518,807 4,487,801 3,175,761   Tompkins Financial Corporation Shareholders’ equity 445,586 443,708 324,798 Noncontrolling interest 1,502 1,484 1,485 Total equity 447,088 445,192 326,283   Total liabilities and equity $ 4,965,895 $ 4,932,993 $ 3,502,044 Interest rate spread   3.45 %   3.46 %   3.31 % Net interest income/margin on earning assets 40,819 3.58 % 79,967 3.59 % 56,716 3.51 %   Tax Equivalent Adjustment (993 ) (1,935 ) (1,165 )   Net interest income per consolidated financial statements         $ 39,826         $ 78,032         $ 55,551     (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 a combined New York State and Federal effective income tax rat of 40% 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 condensed consolidated financial statement included in Part I of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2012.

 

Tompkins Financial Corporation - Summary Financial Data (Unaudited)                                       (In thousands, except per share data)   Quarter-Ended   Year-Ended   Jun-13     Mar-13     Dec-12     Sep-12     Jun-12     Dec-12           Period End Balance Sheet                                       Securities     $ 1,469,315   $ 1,566,510   $ 1,433,852   $ 1,516,913   $ 1,228,143   $ 1,433,852 Originated loans and leases, net of unearned income and deferred costs and fees (2)       2,309,232     2,208,346     2,133,106     2,060,539     2,019,681     2,133,106 Acquired loans and leases (3)       745,951     785,449     821,504     869,211     0     821,504 Allowance for loan and lease losses       25,458     24,661     24,643     26,632     26,865     24,643 Total assets       4,931,883     4,987,280     4,837,197     4,924,786     3,482,669     4,837,197 Total deposits       3,912,910     4,072,352     3,950,169     4,037,644     2,765,093     3,950,169 Federal funds purchased and securities sold under agreements to repurchase       171,498     194,091     213,973     206,996     161,662     213,973 Other borrowings       299,098     156,649     111,848     125,461     121,934     111,848 Trust preferred debentures       43,703     43,687     43,668     43,651     25,067     43,668 Shareholders' equity       431,894     446,812     441,360     440,950     353,700     441,360   Average Balance Sheet                                       Average earning assets     $ 4,571,428   $ 4,409,455   $ 4,431,698   $ 4,087,264   $ 3,278,519   $ 3,754,667 Average assets       4,965,895     4,899,727     4,901,374     4,450,013     3,539,170     4,092,473 Average interest-bearing liabilities       3,663,230     3,611,748     3,563,731     3,248,839     2,521,285     2,963,097 Average equity       447,088     443,277     443,592     410,300     349,021     376,890   Share data                                       Weighted average shares outstanding (basic)       14,427,838     14,374,265     14,332,672     13,580,771     12,146,622     12,797,173 Weighted average shares outstanding (diluted)       14,500,429     14,436,757     14,374,368     13,630,464     12,166,417     12,836,043 Period-end shares outstanding       14,599,558     14,447,017     14,390,801     14,358,230     12,223,790     14,390,801 Book value per share       29.58     30.93     30.67     30.71     28.94     30.67 Tangible book value per share (Non-GAAP)       23.09     23.29     22.96     22.71     24.96     22.96   Income Statement                             Net interest income     $ 39,826   $ 38,206   $ 41,849   $ 36,743   $ 28,110   $ 134,143 Provision for loan/lease losses       2,489     1,038     5,659     1,042     1,011     8,837 Noninterest income       16,541     17,390     15,608     14,773     12,766     54,808 Noninterest expense       37,777     37,520     38,188     46,194     26,855     137,608 Income tax expense       5,061     5,495     2,416     761     4,151     11,090 Net income attributable to Tompkins Financial Corporation       11,007     11,510     11,161     3,487     8,826     31,286 Noncontrolling interests       33     33     33     32     33     131 Basic earnings per share (9)     $ 0.76   $ 0.80   $ 0.78   $ 0.26   $ 0.72   $ 2.44 Diluted earnings per share (9)     $ 0.75   $ 0.79   $ 0.77   $ 0.25   $ 0.72   $ 2.43   Nonperforming Assets                                       Originated nonaccrual loans and leases     $ 32,100   $ 32,554   $ 33,388   $ 36,996   $ 36,749   $ 33,388 Acquired nonaccrual loans and leases       6,916     4,561     4,352     -     -     4,352 Originated loans and leases 90 days past due and accruing       155     157     257     126     321     257 Troubled debt restructurings not included above       -     -     1,532     1,468     1,507     1,532 Total nonperforming loans and leases       39,171     37,272     39,529     38,590     38,577     39,529 OREO (8)       4,918     3,950     4,862     4,675     2,161     4,862 Total nonperforming assets       44,089     41,222     44,391     43,265     40,738     44,391       Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued         Quarter-Ended   Year-Ended Delinquency - Originated loan and lease portfolio       Jun-13     Mar-13     Dec-12     Sep-12     Jun-12     Dec-12

Loans and leases 30-89 days past due and accruing (2)

    $ 9,597   $ 10,888   $ 7,990   $ 9,412   $ 10,149   $ 7,990 Loans and leases 90 days past due and accruing (2)       156     157     257     126     321     257 Total originated loans and leases past due and accruing (2)       9,753     11,045     8,247     9,538     10,470     8,247   Delinquency - Acquired loan and lease portfolio       Covered loans and leases 30-89 days past due and accruing (3)(7)       1,613     3,503     1,014     669     0     1,014 Covered loans and leases 90 days or more past due and accruing (3)(7)       3,091     3,809     4,272     2,837     0     4,272 Non-covered loans and leases 30-89 days past due and accruing (3)(7)       5,591     5,738     4,249     5,848     0     4,249 Non-Covered loans and leases 90 days past due and accruing (3)(7)       13,324     14,026     14,438     19,339     0     14,438 Total acquired loans and leases past due and accruing       23,619     27,076     23,973     28,693     0     23,973                                         Total loans and leases past due and accruing     $ 33,372   $ 38,121   $ 32,220   $ 38,231   $ 10,470   $ 32,220   Allowance for Loan Losses - Originated loan and lease portfolio       Balance at beginning of period     $ 24,598   $ 24,643   $ 26,632   $ 26,865   $ 26,948   $ 27,593 Provision for loan and lease losses       (993)     820     5,659     1,042     1,011     8,837 Net loan and lease (recoveries) charge-offs       (1,248)     864     7,648     1,275     1,094     11,787 Allowance for loan and lease losses (originated 24,853 24,598 24,643 26,632 26,865 24,643 loan portfolio) - balance at end of period                             Allowance for Loan Losses - Acquired loan and lease portfolio       Balance at beginning of period     $ 63   $ 0   $ 0   $ 0   $ 0   $ 0 Provision for loan and lease losses       3,483     218     0     0     0     0 Net loan and lease (recoveries) charge-offs       2,941     155     0     0     0     0 Allowance for loan and lease losses (acquired loan portfolio) - balance at end of period       605     63     0     0     0     0                                         Total allowance for loan and lease losses       25,458     24,661     24,643     26,632     26,865     24,643   Loan Classification - Originated Portfolio                                       Special Mention     $ 43,099   $ 48,468   $ 56,342   $ 58,598   $ 63,652   $ 56,342 Substandard       41,969     43,449     45,083     54,383     58,185     45,083 Doubtful       0     0     0     494     588     0 Loan Classification - Acquired Portfolio                                       Special Mention       29,300     26,568     25,381     14,723     0     25,381 Substandard       55,079     47,698     45,207     31,087     0     45,207 Loan Classifications - Total Portfolio                                       Special Mention       72,399     75,036     81,723     73,321     63,652     81,723 Substandard       97,048     91,147     90,290     85,470     58,185     90,290 Doubtful       0     0     0     494     588     0       Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued                                   RATIO ANALYSIS   Quarter-Ended   Year-Ended Credit Quality       Jun-13     Mar-13     Dec-12     Sep-12     Jun-12     Dec-12 Nonperforming loans and leases/total loans and leases (7)       1.28%     1.24%     1.34%     1.32%     1.91%     1.34% Nonperforming assets/total assets       0.89%     0.83%     0.92%     0.88%     1.17%     0.92% Allowance for originated loan and lease losses/total originated loans and leases       1.08%     1.11%     1.16%     1.29%     1.33%     1.16% Allowance/nonperforming loans and leases       64.99%     66.16%     62.34%     69.01%     69.64%     62.34% Net loan and lease losses (annualized)/total average loans and leases       0.22%     0.14%     1.04%     0.20%     0.22%     0.49%                                   Capital Adequacy (period-end)                                       Tier 1 capital / average assets       8.16%     8.11%     7.95%     8.50%     9.53%     7.95% Total capital / risk-weighted assets       13.34%     12.93%     12.94%     12.87%     16.22%     12.94% Tangible common equity / tangible assets       6.99%     6.90%     6.99%     6.78%     8.88%     6.99%   Profitability                                       Return on average assets *       0.92%     0.95%     0.91%     0.31%     1.00%     0.76% Return on average equity *       10.20%     10.53%     10.01%     3.38%     10.17%     8.30% Net interest margin (TE) *       3.58%     3.57%     3.83%     3.66%     3.52%     3.65% * Quarterly ratios have been annualized   Non-GAAP Disclosure                                       Reported net income (GAAP)     $ 11,007   $ 11,510   $ 11,161   $ 3,487   $ 8,826   $ 31,285 Adjustments (net of tax):                                       Accrual adjustment VISA       0     0     0     0     -243     -243 Merger related expenses       22     118     462     8,424     703     9,664 Subtotal adjustments       22     118     462     8,424     460     9,421 Net operating income (Non-GAAP)       11,029     11,628     11,623     11,911     9,286     40,706 Weighted average shares outstanding (diluted)       14,500,429     14,436,757     14,374,368     13,630,464     12,166,417     12,836,043 Adjusted diluted earnings per share (Non-GAAP) (9)     $ 0.76   $ 0.81   $ 0.81   $ 0.87   $ 0.76   $ 3.17   Non-GAAP Disclosure                                       Reported net income (GAAP)     $ 11,007   $ 11,510   $ 11,161   $ 3,487   $ 8,826   $ 31,285 Merger related expenses (net of tax)       22     118     462     8,424     703     9,664 Net operating income (Non-GAAP)     $ 11,029   $ 11,628   $ 11,623   $ 11,911   $ 9,529   $ 40,949 Amortization of intangibles, (net of tax)       328     334     348     256     74     758 Adjusted net operating income (Non-GAAP)       11,357     11,962     11,971     12,167     9,603     41,707                                         Average total shareholders' equity       447,088     443,277     443,592     410,300     349,021     376,890 Less: Average goodwill and intangibles       110,037     110,687     114,644     92,748     48,665     76,149 Average tangible shareholders' equity (Non-GAAP)       337,051     332,590     328,948     317,552     300,356     300,741                                         Adjusted operating return on shareholders' tangible equity (annualized) (Non-GAAP)       13.48%     14.59%     14.56%     15.24%     12.86%     13.87%   Non-GAAP Disclosure                                       Total shareholders' equity (GAAP)     $ 431,894   $ 446,812   $ 441,360   $ 440,950   $ 353,700   $ 441,360 Less: goodwill and intangibles       109,540     110,314     110,947     114,859     48,652     110,947 Tangible shareholders' equity       322,354     336,498     330,413     326,030     305,048     330,413                                         Ending shares outstanding       14,599,558     14,447,017     14,390,801     14,358,230     12,223,790     14,390,801 Tangible book value per share (Non-GAAP)       22.08     23.29     22.96     22.71     24.96     22.96   Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued                 Non-GAAP Disclosure     Year-to-date period ended       Jun-13   Jun-12 Reported net income (GAAP)       22,516   $ 16,640 Adjustments (net of tax):               Accrual adjustment VISA       0     (243) Merger related expenses       155     778 Subtotal adjustments       155     535 Net operating income (Non-GAAP)       22,671     17,175 Weighted average shares outstanding (diluted)       14,500,429     11,656,771 Adjusted diluted earnings per share     $ 1.56   $ 1.47 (1) Federal Reserve peer ratio as of March 31, 2013, 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. "Covered Loans" are loans for which the Company will share losses with the FDIC and consist of loans VIST Bank acquired as part of an FDIC-assisted transaction during the fourth quarter of 2010.

(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, 2012. (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. There have been no significant changes in expected cash flows since acquisition. (8) Includes all other real estate owned, including those balances acquired through business combinations.

(9) 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.

Tompkins Financial CorporationStephen S. Romaine, President & CEOFrancis M. Fetsko, CFO & COO607-273-3210