TMP Tompkins Financial Corporation

Tompkins Financial Corporation (NYSEMKT:TMP)

Tompkins Financial Corporation reported record net income of $17.4 million for the second quarter of 2015, an increase of 33.1% from the $13.1 million reported for the same period in 2014. Diluted earnings per share were $1.15 for the quarter, up from $0.87 per share for the second quarter last year. Results for the current quarter were helped by a one-time curtailment gain of $3.6 million after tax ($0.24 per share) related to changes to the Company’s pension plan. If this gain were excluded from the current period results, diluted earnings per share would have been $0.91, which would still reflect the best second quarter in Company history. The impact of this non-recurring item on the Company’s financial statements is more fully detailed in the non-GAAP disclosure tables included with this press release.

For the year-to-date period ended June 30, 2015, net income was $30.1 million, an increase of 17.3% from the $25.6 million reported for the same period in 2014. Diluted earnings per share were $2.00 for the year-to-date period ended June 30, 2015, up 16.3% compared to the $1.72 per share reported for the same period last year. These results were also aided by the curtailment gain described above. If this gain were excluded from year to date results, net income for the period would have been $26.0 million for the first six months of 2015, and diluted earnings per share would have been $1.75. Refer to non-GAAP disclosures for additional details.

SELECTED HIGHLIGHTS FOR SECOND QUARTER:

• Net interest income of $41.3 million was up 2.0% compared to the second quarter of 2014.
• Total loans of $3.5 billion were up 9.1% over June 30, 2014.
• Credit quality improved with non-performing assets representing 0.44% of total assets, which is the lowest this percentage has been over the past 25 quarters. The percentage is down from 0.66% one year ago and remains well below the most recent Federal Reserve peer average1 of 0.88%.
• Annualized return on average equity was 13.79% for the second quarter of 2015, compared to 10.91% reported for the second quarter of 2014, the second quarter of 2015 included a $3.6 million (net of tax) gain on the pension plan curtailment.
• Tangible book value per share is up 4.1% from the second quarter of 2014. Refer to Non-GAAP disclosure for additional details on tangible book value per share.

President and CEO, Stephen S. Romaine said "It is very exciting to report on another record quarter for earnings performance. When compared to the same period last year, positive trends that contributed to these results included: growth in loans, deposits, insurance revenue, and card related revenue, as well as continued excellent asset quality.”

NET INTEREST INCOME

Net interest income of $41.3 million for the second quarter of 2015 increased 2.0% compared to the same period in 2014, and was in line with the first quarter of 2015. For the year-to-date period, net interest income of $82.6 million was up 2.5% from the prior year. The net interest margin for the second quarter of 2015 was 3.37%, compared to 3.55% for the same period in 2014. For the year to date, net interest margin was 3.41% in 2015, compared to 3.58% in 2014.

NONINTEREST INCOME

Noninterest income represented 31.5% of total revenue for the second quarter of 2015, compared to 30.4% of total revenue in the second quarter of 2014. Noninterest income was $19.0 million for the second quarter of 2015, up 7.0% compared to the second quarter of 2014, and up 7.5% compared to first quarter 2015. The increase over the same quarter last year included improvements in insurance revenue and card services income. Growth during the quarter also benefited from $723,000 of gains on the sale of available-for-sale securities and $924,000 of gains on the sale of other real estate owned (OREO). For the first six months of 2015, noninterest income was up $1.5 million, or 4.1% over the same period in 2014.

NONINTEREST EXPENSE

Noninterest expense was $32.9 million for the second quarter of 2015, down 15.4% compared to the second quarter of 2014. For the year-to-date period, noninterest expense was down 5.9% from the same period in 2014. The decrease in noninterest expense for both the quarter-to-date and year-to-date periods was mainly due to a $6.0 million gain on a pension plan curtailment recorded in the second quarter of 2015. The curtailment gain is related to a freeze of the Company’s defined benefit pension plan which has been replaced with a more flexible defined contribution pension plan.

ASSET QUALITY

Asset quality remains strong. Substandard and Special Mention loans declined by $28.3 million from the same period last year, and by $10.1 million from the previous quarter.

Provision for loan and lease losses was $922,000 for the second quarter of 2015, up $855,000 compared to the second quarter of 2014. The increase over the second quarter of 2014 reflects increased provision expense primarily due to loan growth.

The Company’s allowance for originated loan and lease losses totaled $29.4 million at June 30, 2015, which represented 0.98% of total originated loans, compared to 1.02% at June 30, 2014 and 0.99% at year-end 2014. The allowance for loan and lease losses covered 139.36% of nonperforming loans and leases as of June 30, 2015, compared to 103.08% at June 30, 2014 and 128.43% at year-end 2014.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets of 8.92% is up from 8.79% at June 30, 2014. The ratio of tangible common equity to tangible assets (refer to Non-GAAP disclosures) improved to 7.48%, up from 7.40% reported at December 31, 2014.

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.

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 06/30/2015 12/31/2014   Cash and noninterest bearing balances due from banks $ 58,237 $ 53,921 Interest bearing balances due from banks     1,902       2,149   Cash and Cash Equivalents 60,139 56,070   Trading securities, at fair value 8,153 8,992 Available-for-sale securities, at fair value (amortized cost of $1,381,440 at June 30, 2015 and $1,397,458 at December 31, 2014) 1,382,484 1,402,236 Held-to-maturity securities, at amortized cost (fair value of $146,076 at June 30, 2015 and $89,036 at December 31, 2014) 145,737 88,168 Originated loans and leases, net of unearned income and deferred costs and fees (2) 3,013,968 2,839,974 Acquired loans and leases, covered (3) 15,771 19,319 Acquired loans and leases, non-covered (3) 492,192 533,995 Less: Allowance for loan and lease losses     30,091       28,997   Net Loans and Leases 3,491,840 3,364,291   FDIC indemnification asset 634 1,903 Federal Home Loan Bank stock 27,128 21,259 Bank premises and equipment, net 59,451 59,800 Corporate owned life insurance 74,894 73,725 Goodwill 92,243 92,243 Other intangible assets, net 13,569 14,649 Accrued interest and other assets     79,864       86,225     Total Assets   $ 5,436,136     $ 5,269,561     LIABILITIES Deposits: Interest bearing: Checking, savings and money market 2,314,510 2,247,708 Time 906,345 898,081   Noninterest bearing     983,234       1,023,365   Total Deposits 4,204,089 4,169,154   Federal funds purchased and securities sold under agreements to repurchase 131,063 147,037 Other borrowings, including certain amounts at fair value of $10,817 at June 30, 2015 and $10,961 at December 31, 2014 493,326 356,541 Trust preferred debentures 37,423 37,337 Other liabilities     64,841       69,909     Total Liabilities   $ 4,930,742     $ 4,779,978     EQUITY Tompkins Financial Corporation shareholders' equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,978,017 at June 30, 2015; and 14,931,354 at December 31, 2014 1,498 1,493 Additional paid-in capital 351,549 348,889 Retained earnings 181,955 165,160 Accumulated other comprehensive loss (27,621 ) (24,011 ) Treasury stock, at cost – 111,467 shares at June 30, 2015, and 111,436 shares at December 31, 2014 (3,504 ) (3,400 )   Total Tompkins Financial Corporation Shareholders’ Equity 503,877 488,131 Noncontrolling interests     1,517       1,452     Total Equity   $ 505,394     $ 489,583     Total Liabilities and Equity   $ 5,436,136     $ 5,269,561         TOMPKINS FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME   Three Months Ended Six Months Ended (In thousands, except per share data) (Unaudited) 06/30/2015 06/30/2014 06/30/2015 06/30/2014 INTEREST AND DIVIDEND INCOME Loans $ 38,059 $ 37,348 $ 75,435 $ 74,302 Due from banks 1 0 2 1 Trading securities 90 107 184 219 Available-for-sale securities 7,374 7,984 15,188 15,920 Held-to-maturity securities 674 186 1,270 338 Federal Home Loan Bank stock and Federal Reserve Bank stock     225     194     572     404   Total Interest and Dividend Income     46,423     45,819     92,651     91,184   INTEREST EXPENSE Time certificates of deposits of $250,000 or more 354 328 689 635 Other deposits 2,267 2,449 4,553 4,884 Federal funds purchased and securities sold under agreements to repurchase 665 763 1,335 1,580 Trust preferred debentures 573 571 1,143 1,141 Other borrowings     1,234     1,192     2,373     2,401   Total Interest Expense     5,093     5,303     10,093     10,641   Net Interest Income     41,330     40,516     82,558     80,543   Less: Provision for loan and lease losses     922     67     1,131     810   Net Interest Income After Provision for Loan and Lease Losses     40,408     40,449     81,427     79,733   NONINTEREST INCOME Insurance commissions and fees 7,407 7,046 14,777 14,303 Investment services income 3,838 3,902 7,844 7,912 Service charges on deposit accounts 2,244 2,388 4,402 4,504 Card services income 2,025 1,920 3,843 4,032 Mark-to-market loss on trading securities (74 ) (34 ) (137 ) (93 ) Mark-to-market gain on liabilities held at fair value 104 63 145 128 Other income 2,695 2,400 4,721 4,239 Gain on sale of available-for-sale securities     723     35     1,013     129   Total Noninterest Income     18,962     17,720     36,608     35,154   NONINTEREST EXPENSES Salaries and wages 18,394 17,660 35,962 34,306 Pension and other employee benefits (519 ) 4,978 5,475 11,023 Net occupancy expense of premises 3,073 3,066 6,412 6,326 Furniture and fixture expense 1,483 1,459 2,933 2,796 FDIC insurance 748 735 1,489 1,546 Amortization of intangible assets 500 525 1,007 1,052 Other operating expense     9,239     10,505     19,332     20,089   Total Noninterest Expenses     32,918     38,928     72,610     77,138   Income Before Income Tax Expense     26,452     19,241     45,425     37,749   Income Tax Expense     9,030     6,148     15,290     12,054   Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation     17,422     13,093     30,135     25,695   Less: Net income attributable to noncontrolling interests     32     32     65     65   Net Income Attributable to Tompkins Financial Corporation   $ 17,390   $ 13,061   $ 30,070   $ 25,630   Basic Earnings Per Share $ 1.16 $ 0.88 $ 2.01 $ 1.73 Diluted Earnings Per Share   $ 1.15   $ 0.87   $ 2.00   $ 1.72         Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)     Quarter Ended Year to Date Period Ended Year to Date Period Ended         June 30, 2015   June 30, 2015   June 30, 2014 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 $ 1,824 $ 1 0.22 % $ 1,607 $ 2 0.25 % $ 885 $ 1 0.23 % Securities (4) U.S. Government securities 1,450,039 7,513 2.08 % 1,442,846 15,366 2.15 % 1,301,015 14,877 2.31 % Trading securities 8,453 90 4.27 % 8,654 184 4.29 % 10,584 219 4.17 % State and municipal (5) 86,710 832 3.85 % 87,502 1,703 3.92 % 89,964 2,127 4.77 % Other securities (5) 3,752   30   3.21 %   3,758   60   3.22 %   4,729   76   3.24 % Total securities 1,548,954 8,465 2.19 % 1,542,760 17,313 2.26 % 1,406,292 17,299 2.48 % FHLBNY and FRB stock 23,927 225 3.76 % 22,355 572 5.15 % 20,670 404 3.94 %   Total loans and leases, net of unearned income (5)(6) 3,463,881   38,680   4.48 %   3,431,282   76,635   4.50 %   3,206,950   75,161   4.73 % Total interest-earning assets 5,038,586   47,371   3.77 %   4,998,004   94,522   3.81 %   4,634,797   92,865   4.04 %   Other assets 352,528 355,264 371,552   Total assets 5,391,114 5,353,268 5,006,349                                     LIABILITIES & EQUITY Deposits Interest-bearing deposits Interest bearing checking, savings, & money market 2,326,361 924 0.16 % 2,337,605 1,914 0.17 % 2,272,478 2,211 0.20 % Time deposits 917,986   1,697   0.74 %   912,016   3,328   0.74 %   895,073   3,308   0.75 % Total interest-bearing deposits 3,244,347 2,621 0.32 % 3,249,621 5,242 0.33 % 3,167,551 5,519 0.35 %   Federal funds purchased & securities sold under agreements to repurchase 131,324 665 2.03 % 136,811 1,335 1.97 % 153,939 1,580 2.07 % Other borrowings 422,364 1,234 1.17 % 385,233 2,373 1.24 % 263,633 2,401 1.84 % Trust preferred debentures 37,395   573   6.15 %   37,374   1,143   6.17 %   37,205   1,141   6.18 % Total interest-bearing liabilities 3,835,430 5,093 0.53 % 3,809,039 10,093 0.53 % 3,622,328 10,641 0.59 %   Noninterest bearing deposits 983,199 978,233 856,161 Accrued expenses and other liabilities 66,818 64,615 53,539 Total liabilities 4,885,447 4,851,887 4,532,028   Tompkins Financial Corporation Shareholders’ equity 504,166 499,896 472,836 Noncontrolling interest 1,501 1,485 1,485 Total equity 505,667 501,381 474,321   Total liabilities and equity $ 5,391,114 $ 5,353,268 $ 5,006,349 Interest rate spread   3.24 %   3.28 %   3.45 % Net interest income/margin on earning assets 42,278 3.37 % 84,429 3.41 % 82,224 3.58 %   Tax Equivalent Adjustment (948 ) (1,871 ) (1,681 )     Net interest income per consolidated financial statements     $ 41,330         $ 82,558         $ 80,543           Tompkins Financial Corporation - Summary Financial Data (Unaudited)                         (In thousands, except per share data)   Quarter-Ended Year-Ended   Jun-15   Mar-15   Dec-14   Sep-14   Jun-14   Dec-14   Period End Balance Sheet                         Securities $ 1,536,374   $ 1,555,597   $ 1,499,396   $ 1,431,837   $ 1,420,226   $ 1,499,396   Originated loans and leases, net of unearned income and deferred costs and fees (2)   3,013,968     2,898,533     2,839,974     2,674,971     2,610,289     2,839,974   Acquired loans and leases (3)   507,963     529,024     553,314     582,498     618,679     553,314   Allowance for loan and lease losses   30,091     29,485     28,997     27,786     27,517     28,997   Total assets   5,436,136     5,357,533     5,269,561     5,090,919     5,057,821     5,269,561   Total deposits   4,204,089     4,282,766     4,169,154     4,212,860     4,044,389     4,169,154   Federal funds purchased and securities sold under agreements to repurchase   131,063     135,769     147,037     128,368     144,796     147,037   Other borrowings   493,326     330,850     356,541     166,509     287,158     356,541   Trust preferred debentures   37,423     37,380     37,337     37,298     37,254     37,337   Total common equity   503,877     502,811     488,131     489,061     487,720     488,131   Total equity   505,394     504,296     489,583     490,611     489,237     489,583     Average Balance Sheet                         Average earning assets $ 5,038,586   $ 4,956,972   $ 4,799,027   $ 4,695,860   $ 4,666,722   $ 4,691,582   Average assets   5,391,114     5,315,002     5,193,347     5,058,608     5,030,395     5,066,655   Average interest-bearing liabilities   3,835,430     3,782,355     3,668,311     3,587,673     3,620,130     3,625,184   Average equity   505,667     497,047     495,531     489,920     480,063     483,599     Share data                         Weighted average shares outstanding (basic)   14,751,844     14,701,397     14,639,631     14,711,709     14,709,881     14,676,622   Weighted average shares outstanding (diluted)   14,878,107     14,837,935     14,765,855     14,795,343     14,821,191     14,789,624   Period-end shares outstanding   14,942,107     14,962,079     14,895,444     14,794,092     14,853,439     14,895,444   Common equity book value per share $ 33.72   $ 33.61   $ 32.77   $ 33.06   $ 32.84   $ 32.77   Tangible book value per share (Non-GAAP) $ 26.71   $ 26.56   $ 25.66   $ 25.87   $ 25.65   $ 25.66     Income Statement                         Net interest income $ 41,330   $ 41,228   $ 41,692   $ 41,575   $ 40,516   $ 163,810   Provision (Credit) for loan/lease losses   922     209     1,555     (59 )   67     2,306   Noninterest income   18,962     17,646     18,056     17,555     17,720     70,765   Noninterest expense   32,918     39,692     39,018     38,537     38,928     154,693   Income tax expense   9,030     6,260     6,453     6,897     6,148     25,404   Net income attributable to Tompkins Financial Corporation   17,390     12,680     12,689     13,722     13,061     52,041   Noncontrolling interests   32     33     33     33     32     131   Basic earnings per share (9) $ 1.16   $ 0.85   $ 0.86   $ 0.92   $ 0.88   $ 3.51   Diluted earnings per share (9) $ 1.15   $ 0.84   $ 0.85   $ 0.92   $ 0.87   $ 3.48     Nonperforming Assets                         Originated nonaccrual loans and leases $ 14,566   $ 13,811   $ 14,299   $ 16,319   $ 16,918   $ 14,299   Acquired nonaccrual loans and leases   5,030     4,683     4,729     4,998     5,907     4,729   Originated loans and leases 90 days past due and accruing   58     236     106     395     543     106   Troubled debt restructurings not included above   1,939     1,589     3,444     3,800     3,327     3,444   Total nonperforming loans and leases   21,593     20,319     22,578     25,512     26,695     22,578   OREO (8)   2,570     5,816     5,683     6,533     6,795     5,683   Total nonperforming assets $ 24,163   $ 26,135   $ 28,261   $ 32,045   $ 33,490   $ 28,261                                 Quarter-Ended Year-Ended Delinquency - Originated loan and lease portfolio   Jun-15   Mar-15   Dec-14   Sep-14   Jun-14   Dec-14 Loans and leases 30-89 days past due and accruing (2) $ 3,315   $ 2,438   $ 6,849   $ 3,811   $ 5,221   $ 6,849   Loans and leases 90 days past due and accruing (2)   58     236     106     395     543     106   Total originated loans and leases past due and accruing (2)   3,373     2,674     6,955     4,206     5,764     6,955     Delinquency - Acquired loan and lease portfolio Covered loans and leases 30-89 days past due and accruing (3)(7) $ 455   $ 547   $ 533   $ 0   $ 0   $ 533   Covered loans and leases 90 days or more past due and accruing (3)(7)   674     682     914     1,149     904     914   Non-covered loans and leases 30-89 days past due and accruing (3)(7)   917     2,546     1,186     736     1,620     1,186   Non-covered loans and leases 90 days past due and accruing (3)(7)   3,031     2,811     2,614     3,171     3,048     2,614   Total acquired loans and leases past due and accruing   5,077     6,586     5,247     5,056     5,572     5,247   Total loans and leases past due and accruing $ 8,450   $ 9,260   $ 12,202   $ 9,262   $ 11,336   $ 12,202     Allowance for Loan Losses - Originated loan and lease portfolio Balance at beginning of period $ 28,690   $ 28,156   $ 27,185   $ 26,752   $ 26,661   $ 26,700   Provision (Credit) for loan and lease losses   769     340     1,102     (264 )   (56 )   1,293   Net loan and lease charge-offs (recoveries)   31     (194 )   131     (697 )   (147 )   (163 ) Allowance for loan and lease losses (originated 29,428   28,690   28,156   27,185   26,752   28,156   loan portfolio) - balance at end of period $ $ $ $ $ $   Allowance for Loan Losses - Acquired loan and lease portfolio Balance at beginning of period $ 795   $ 841   $ 601   $ 765   $ 1,353   $ 1,270   Provision (Credit) for loan and lease losses   153     (131 )   453     205     123     1,013   Net loan and lease charge-offs (recoveries)   285     (85 )   213     369     711     1,442   Allowance for loan and lease losses (acquired loan portfolio) - balance at end of period   663     795     841     601     765     841   Total allowance for loan and lease losses $ 30,091   $ 29,485   $ 28,997   $ 27,786   $ 27,517   $ 28,997     Loan Classification - Originated Portfolio                         Special Mention $ 25,706   $ 34,965   $ 36,331   $ 27,854   $ 35,484   $ 36,331   Substandard   21,600     19,150     19,970     25,889     21,253     19,970   Loan Classification - Acquired Portfolio                         Special Mention   1,589     5,053     5,758     7,605     12,124     5,758   Substandard   21,932     21,752     21,567     24,034     30,273     21,567   Loan Classifications - Total Portfolio                         Special Mention   27,295     40,018     42,089     35,459     47,608     42,089   Substandard   43,532     40,902     41,537     49,923     51,526     41,537                               RATIO ANALYSIS   Quarter-Ended Year-Ended Credit Quality   Jun-15   Mar-15   Dec-14   Sep-14   Jun-14   Dec-14 Nonperforming loans and leases/total loans and leases (7)   0.61 %   0.59 %   0.67 %   0.78 %   0.83 %   0.67 % Nonperforming assets/total assets   0.44 %   0.49 %   0.54 %   0.63 %   0.66 %   0.54 % Allowance for originated loan and lease losses/total originated loans and leases   0.98 %   0.99 %   0.99 %   1.02 %   1.02 %   0.99 % Allowance/nonperforming loans and leases   139.36 %   145.11 %   128.43 %   108.92 %   103.08 %   128.43 % Net loan and lease losses (recoveries) annualized/total average loans and leases   0.04 %   (0.03 %)   0.04 %   (0.04 %)   0.07 %   0.04 %   Capital Adequacy (period-end)                         Tier 1 capital / average assets *   8.92 %   8.85 %   8.75 %   8.85 %   8.79 %   8.75 % Total capital / risk-weighted assets *   13.46 %   13.37 %   13.60 %   13.92 %   13.92 %   13.60 % *Beginning with March 31, 2015, ratios are calculated utilizing Basel III regulatory capital framework   Profitability                         Return on average assets *   1.29 %   0.97 %   0.97 %   1.08 %   1.04 %   1.03 % Return on average equity *   13.79 %   10.35 %   10.16 %   11.11 %   10.91 %   10.76 % Net interest margin (TE) *   3.37 %   3.45 %   3.53 %   3.58 %   3.55 %   3.57 % * Quarterly ratios have been annualized   Non-GAAP Disclosure - Adjusted Diluted Earnings Per Share                 Net income available to common shareholders $ 17,390   $ 12,680   $ 12,689   $ 13,722   $ 13,061   $ 52,041   Less: Dividends and undistributed earnings allocated to unvested restricted stock awards   234     182     150     119     118     503   Adjusted net income available to common shareholders   17,156     12,498     12,539     13,603     12,943     51,538   Gain on pension plan curtailment (net of tax)   (3,602 )   0     0     0     0     0   Net operating income (Non-GAAP)   13,554     12,498     12,539     13,603     12,943     51,538   Weighted average shares outstanding (diluted)   14,878,107     14,837,935     14,765,855     14,795,343     14,821,191     14,789,624   Adjusted diluted earnings per share (Non-GAAP) (9) $ 0.91   $ 0.84   $ 0.85   $ 0.92   $ 0.87   $ 3.48     Non-GAAP Disclosure - Tangible Common Equity / Tangible Assets                 Total Common equity $ 503,877   $ 502,811   $ 488,131   $ 489,061   $ 487,720   $ 488,131   Less: Goodwill and intangibles (10)   104,845     105,344     105,852     106,377     106,690     105,852   Tangible common equity   399,032     397,467     382,279     382,684     381,030     382,279   Total assets   5,436,136     5,357,533     5,269,561     5,090,919     5,057,821     5,269,561   Less: Goodwill and intangibles (10)   104,845     105,344     105,852     106,377     106,690     105,852   Tangible assets   5,331,291     5,252,189     5,163,709     4,984,542     4,951,131     5,163,709   Tangible common equity / tangible assets (Non-GAAP)   7.48 %   7.57 %   7.40 %   7.68 %   7.70 %   7.40 %                             Non-GAAP Disclosure - Return on Average   Quarter-Ended Year-Ended Tangible Common Equity   Jun-15   Mar-15   Dec-14   Sep-14   Jun-14   Dec-14 Net income available to common shareholders $ 17,390   $ 12,680   $ 12,689   $ 13,722   $ 13,061   $ 52,041   Less: Dividends and undistributed earnings allocated to unvested restricted stock awards   234     182     150     119     118     503   Adjusted net income available to common shareholders   17,156     12,498     12,539     13,603     12,943     51,538   Gain on pension plan curtailment (net of tax)   (3,602 )   0     0     0     0     0   Net operating income (Non-GAAP)   13,554     12,498     12,539     13,603     12,943     51,538   Amortization of intangibles (net of tax)   300     304     315     311     315     1,257   Adjusted net operating income (Non-GAAP)   13,854     12,802     12,854     13,914     13,258     52,795   Average common equity   504,166     495,579     493,986     488,386     478,561     482,087   Less: Average goodwill and intangibles (10)   105,130     105,644     106,151     106,471     106,988     106,748   Average tangible common equity capital   399,036     389,935     387,835     381,915     371,573     375,339   Adjusted operating return on average tangible common equity (annualized) (Non-GAAP)   13.93 %   13.32 %   13.15 %   14.46 %   14.31 %   14.07 %     Non-GAAP Disclosure - Tangible Book Value Per Share   Total common equity $ 503,877   $ 502,811   $ 488,131   $ 489,061   $ 487,720   $ 488,131   Less: Goodwill and intangibles (10)   104,845     105,344     105,852     106,377     106,690     105,852   Tangible common equity   399,032     397,467     382,279     382,684     381,030     382,279   Ending shares outstanding   14,942,107     14,962,079     14,895,444     14,794,092     14,853,439     14,895,444   Tangible book value per share (Non-GAAP) $ 26.71   $ 26.56   $ 25.66   $ 25.87   $ 25.65   $ 25.66                   Non-GAAP Disclosure - YTD adjusted diluted earnings per share       Jun-15 Jun-14 Net income available to common shareholders $ 30,070   $ 25,630   Less: Dividends and undistributed earnings allocated to unvested restricted stock awards   420     234   Adjusted net income available to common shareholders   29,650     25,396   Gain on pension plan curtailment   (3,602 )   0   Net operating income (Non-GAAP)   26,048     25,396   Weighted average shares outstanding (diluted)   14,858,127     14,798,462   Adjusted diluted earnings per share (Non-GAAP) $ 1.75   $ 1.72  

 

(1) Federal Reserve peer ratio as of March 31, 2015, 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, 2014. (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) 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.

(10) "Goodwill and intangibles" equal Total Intangible Assets less Mortgage Servicing Rights in the above tables.

 

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Tompkins Financial CorporationStephen S. Romaine, 888-503-5753President & CEOorFrancis M. Fetsko, 888-503-5753Executive VP, CFO & COO