TMP Tompkins Financial Corporation

Tompkins Financial Corporation (NYSE American:TMP):

Tompkins Financial Corporation reported diluted earnings per share of $1.36 for the third quarter of 2018, which represents an increase of 19.3% over the $1.14 reported in the third quarter of 2017. Net income for the third quarter of 2018 was $20.9 million, an increase of 20.2% over the $17.4 million reported for the same period in 2017.

Year-to-date diluted earnings per share of $4.12 for the first nine months of 2018 represents an increase of 26.0% over the same period in 2017. Year-to-date net income was $63.4 million, an increase of $13.4 million, or 26.7% over the same period in 2017.

President and CEO, Stephen S. Romaine said, “We are pleased to once again report record earnings for both the year-to-date and quarterly results. Current period net income growth rates have benefited from lower tax rates, though our year-to-date income before tax also reflected strong growth, with an increase of 8.3% over the same period in 2017. The current interest rate environment is challenging as we, along with most in our industry, have seen narrowing of our net interest margin. Despite the pressure on margins, our ability to grow loans and deposits has allowed us to see continued growth in net interest income, with the third quarter of 2018 representing our fourteenth consecutive quarterly increase in net interest income."

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

• Year-to-date diluted earnings per share reflect the best performance for the first nine months of any year in the Company's history. Quarterly diluted earnings per share also reflect the best third quarter performance in the Company's history.
• Year-to-date profitability indicators remain strong with return on average assets of 1.27%; and a return on average shareholders' equity of 14.47% for 2018, which are improved from 1.06% and 11.70%, respectively, for the same period in 2017.
• Total loans of $4.8 billion at September 30, 2018, were up 7.0% over September 30, 2017, and up 2.9% over December 31, 2017.
• Total deposits of $5.0 billion at September 30, 2018, were up $81.1 million, or 1.6% compared to September 30, 2017, and up $187.3 million, or 3.9% over December 31, 2017. Total non-interest bearing deposits were up $26.9 million over prior quarter.

NET INTEREST INCOME

Net interest income of $53.2 million for the third quarter of 2018 increased by $2.2 million, or 4.2% compared to the same period in 2017. For the year-to-date period, net interest income was $158.6 million, up $9.2 million, or 6.2% from the same nine-month period in 2017.

Growth in net interest income for the nine months ended September 30, 2018 was largely driven by $388.0 million of growth in average loans over the same period in 2017, an increase of 8.9%. Average deposits for the nine months ended September 30, 2018, increased $93.6 million, or 2.0% compared to the same period in 2017. Included in the increase in average deposits was a $125.0 million or 10.1% increase in average noninterest bearing deposits. The net interest margin for the third quarter of 2018 was 3.35%, compared to 3.40% reported for the same period in 2017, and 3.36% for the quarter ended June 30, 2018. The decline in margin from the same period last year is largely due to changes in the interest rate environment, which has resulted in funding costs rising at a faster rate than asset yields.

NONINTEREST INCOME

Noninterest income represented 25.9% of total revenues in the third quarter of 2018, compared to 25.2% in the same period in 2017, and 26.6% for the first nine months of 2018, compared to 25.8% in the same period in 2017. Noninterest income of $18.6 million for the third quarter of 2018 was up 8.1% compared to the same period last year. Fee income in the third quarter of 2018 associated with insurance, wealth management, deposit services, and card services were up a combined $671,000 or 4.2% over the same period in 2017.

NONINTEREST EXPENSE

Noninterest expense was $45.1 million for the third quarter of 2018, up $3.3 million, or 7.8%, over the third quarter of 2017. For the year-to-date period, noninterest expense was $133.8 million, up $9.0 million, or 7.2%, from the same period in 2017. The higher noninterest expense in 2018 included lease write-downs of $2.0 million (pre-tax) in the second quarter and $514,000 (pre-tax) in the third quarter related to leases on recently vacated space. Noninterest expense increases for both the third quarter and year-to-date periods of 2018 also included normal annual increases in salaries and wages.

INCOME TAX EXPENSE

The Company's effective tax rate was 20.6% in the third quarter of 2018, compared to 32.8% for the same period in 2017. The decrease is a direct result of The Tax Cuts and Jobs Act of 2017, which reduced the Federal statutory tax rate from 35% in 2017, to 21% in 2018.

ASSET QUALITY

Asset quality trends remained strong in the third quarter of 2018. Nonperforming assets represented 0.39% of total assets at September 30, 2018, compared to 0.38% at December 31, 2017, and 0.37% at September 30, 2017. Nonperforming asset levels continue to be well below the most recent Federal Reserve Board Peer Group Average1 of 0.61%.

Provision for loan and lease losses was $272,000 for the third quarter of 2018, compared to $402,000 for the third quarter of 2017. Net charge-offs for the third quarter of 2018 were $138,000 compared to net recoveries of $479,000 in the third quarter of 2017.

The Company’s allowance for originated loan and lease losses totaled $41.3 million at September 30, 2018, and represented 0.91% of total originated loans and leases at September 30, 2018, unchanged from both December 31, 2017, and September 30, 2017. The total allowance represented 169.00% of total nonperforming loans and leases at September 30, 2018, compared to 172.84% at December 31, 2017, and 170.12% at September 30, 2017.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. The ratio of tangible common equity to tangible assets was 7.49% at September 30, 2018, improved from the 7.36% reported for the most recent prior quarter ended June 30, 2018, and down from 7.58% at September 30, 2017.

ABOUT TOMPKINS FINANCIAL CORPORATION

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

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

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

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

  TOMPKINS FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (In thousands, except share and per share data) (Unaudited)       As of     As of ASSETS 09/30/2018     12/31/2017   Cash and noninterest bearing balances due from banks $ 111,245 $ 77,688 Interest bearing balances due from banks       1,917       6,615   Cash and Cash Equivalents 113,162 84,303   Available-for-sale securities, at fair value (amortized cost of $1,360,508 at September 30, 2018 and $1,408,996 at December 31, 2017) 1,310,672 1,391,863 Held-to-maturity securities, at amortized cost (fair value of $138,232 at September 30, 2018 and $140,315 at December 31, 2017) 141,236 139,216 Equity securities, at fair value (amortized cost $1,000,000 at September 30, 2018 and $1,000,000 at December 31, 2017) 880 913 Originated loans and leases, net of unearned income and deferred costs and fees (2) 4,531,241 4,358,543 Acquired loans (3) 271,468 310,577 Less: Allowance for loan and lease losses       41,358       39,771   Net Loans and Leases 4,761,351 4,629,349   Federal Home Loan Bank and other stock 48,456 50,498 Bank premises and equipment, net 95,638 86,995 Corporate owned life insurance 81,625 80,106 Goodwill 92,283 92,291 Other intangible assets, net 7,989 9,263 Accrued interest and other assets       93,668       83,494   Total Assets       $ 6,746,960       $ 6,648,290   LIABILITIES Deposits: Interest bearing: Checking, savings and money market 2,950,616 2,651,632 Time 640,102 748,250 Noninterest bearing       1,434,364       1,437,925   Total Deposits 5,025,082 4,837,807   Federal funds purchased and securities sold under agreements to repurchase 52,875 75,177 Other borrowings 988,515 1,071,742 Trust preferred debentures 16,820 16,691 Other liabilities       64,524       70,671   Total Liabilities       $ 6,147,816       $ 6,072,088   EQUITY Tompkins Financial Corporation shareholders' equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 15,313,825 at September 30, 2018; and 15,301,524 at December 31, 2017 1,531 1,530 Additional paid-in capital 367,669 364,031 Retained earnings 308,121 265,007 Accumulated other comprehensive loss (74,937 ) (51,296 ) Treasury stock, at cost – 120,278 shares at September 30,2018, and 120,805 shares at December 31, 2017 (4,748 ) (4,492 ) Total Tompkins Financial Corporation Shareholders’ Equity 597,636 574,780   Noncontrolling interests       1,508       1,422   Total Equity       $ 599,144       $ 576,202   Total Liabilities and Equity       $ 6,746,960       $ 6,648,290           Three Months Ended     Nine Months Ended (In thousands, except per share data) (Unaudited) 09/30/2018     09/30/2017     09/30/2018     09/30/2017 INTEREST AND DIVIDEND INCOME         Loans $ 54,769 $ 48,949 $ 158,419 $ 141,257 Due from banks 8 9 22 15 Available-for-sale securities 7,448 7,415 22,821 22,384 Held-to-maturity securities 860 865 2,572 2,613 Federal Home Loan Bank and other stock       899       534       2,433       1,466   Total Interest and Dividend Income       63,984       57,772       186,267       167,735   INTEREST EXPENSE Time certificates of deposits of $250,000 or more 563 457 1,088 1,364 Other deposits 3,830 2,679 9,699 7,508 Federal funds purchased and securities sold under agreements to repurchase 35 44 115 195 Trust preferred debentures 318 265 904 888 Other borrowings       6,075       3,327       15,897       8,445   Total Interest Expense       10,821       6,772       27,703       18,400   Net Interest Income       53,163       51,000       158,564       149,335   Less: Provision for loan and lease losses       272       402       1,884       2,147   Net Interest Income After Provision for Loan and Lease Losses       52,891       50,598       156,680       147,188   NONINTEREST INCOME Insurance commissions and fees 7,903 7,682 22,684 21,892 Investment services income 4,097 3,862 12,365 11,544 Service charges on deposit accounts 2,088 2,125 6,300 6,337 Card services income 2,442 2,190 7,209 6,875 Other income 2,057 1,766 8,743 5,667 Gain (loss) on securities transactions       16       (423 )     290       (423 ) Total Noninterest Income       18,603       17,202       57,591       51,892   NONINTEREST EXPENSE Salaries and wages 22,029 20,931 64,404 60,868 Pension and other employee benefits 5,300 5,344 15,859 16,195 Net occupancy expense of premises 3,057 3,064 9,873 9,965 Furniture and fixture expense 1,814 1,585 5,461 4,819 FDIC insurance 712 620 2,083 1,775 Amortization of intangible assets 440 481 1,334 1,459 Other operating expense       11,781       9,858       34,825       29,738   Total Noninterest Expenses       45,133       41,883       133,839       124,819   Income Before Income Tax Expense       26,361       25,917       80,432       74,261   Income Tax Expense       5,427       8,491       16,939       24,127   Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation       20,934       17,426       63,493       50,134   Less: Net Income Attributable to Noncontrolling Interests       32       32       96       97   Net Income Attributable to Tompkins Financial Corporation       $ 20,902       $ 17,394       $ 63,397       $ 50,037   Basic Earnings Per Share $ 1.37 $ 1.14 $ 4.15 $ 3.30 Diluted Earnings Per Share       $ 1.36       $ 1.14       $ 4.12       $ 3.27     Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)                                       Quarter Ended YTD Period Ended YTD Period Ended           September 30, 2018       September 30, 2018       September 30, 2017 Average Average Average Balance Average Balance Average Balance Average (Dollar amounts in thousands)         (QTD)     Interest     Yield/ Rate       (YTD)     Interest     Yield/ Rate       (YTD)     Interest     Yield/ Rate ASSETS Interest-earning assets Interest-bearing balances due from banks $ 2,513 $ 8 1.26 % $ 2,121 $ 22 1.39 % $ 3,547 $ 15 0.57 % Securities (4) U.S. Government securities 1,418,742 7,766 2.17 % 1,438,322 23,763 2.21 % 1,476,459 23,352 2.11 % State and municipal (5) 95,758 627 2.60 % 97,556 1,898 2.60 % 101,080 2,552 3.38 % Other securities (5)   3,435       39     4.50 %       3,516     113     4.30 %       3,602     96     3.56 % Total securities 1,517,935 8,432 2.20 % 1,539,394 25,774 2.24 % 1,581,141 26,000 2.20 % FHLBNY and FRB stock 54,871 899 6.50 % 52,802 2,433 6.16 % 41,639 1,466 4.71 %   Total loans and leases, net of unearned income (5)(6)   4,781,462       55,095     4.57 %       4,740,257     159,398     4.50 %       4,352,292     143,497     4.41 % Total interest-earning assets   6,356,781       64,434     4.02 %       6,334,574     187,627     3.96 %       5,978,619     170,978     3.82 %   Other assets 359,671 351,949 355,983   Total assets       $ 6,716,452                   $ 6,686,523                 $ 6,334,602               LIABILITIES & EQUITY Deposits Interest-bearing deposits Interest bearing checking, savings & money market $ 2,789,432 2,532 0.36 % $ 2,806,119 6,118 0.29 % $ 2,664,405 3,620 0.18 % Time deposits   637,426       1,861       1.16 %       671,888       4,669       0.93 %       845,058       5,252       0.83 % Total interest-bearing deposits 3,426,858 4,393 0.51 % 3,478,007 10,787 0.41 % 3,509,463 8,872 0.34 %   Federal funds purchased & securities sold under agreements to repurchase 59,626 35 0.23 % 62,956 115 0.24 % 65,798 195 0.40 % Other borrowings 1,141,257 6,075 2.11 % 1,113,120 15,897 1.91 % 861,289 8,445 1.31 % Trust preferred debentures   16,792       318     7.51 %       16,749     904     7.22 %       18,903     888     6.28 % Total interest-bearing liabilities 4,644,533 10,821 0.92 % 4,670,832 27,703 0.79 % 4,455,453 18,400 0.55 %   Non-interest bearing deposits 1,409,401 1,366,219 1,241,173 Accrued expenses and other liabilities 65,307   63,682 66,094 Total liabilities 6,119,241 6,100,733 5,762,720   Tompkins Financial Corporation Shareholders’ equity 595,721 584,331 570,403 Noncontrolling interest 1,490   1,459 1,479 Total equity 597,211 585,790 571,882   Total liabilities and equity $ 6,716,452   $ 6,686,523 $ 6,334,602 Interest rate spread       3.10 %       3.17 %       3.27 % Net interest income/margin on earning assets 53,613 3.35 % 159,924 3.38 % 152,578 3.41 %   Tax equivalent adjustments (450) (1,360) (3,243)   Net interest income per consolidated financial statements               $ 53,163                     $ 158,564                     $ 149,335                                  

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

  (In thousands, except per share data)                                 Quarter-Ended    

Year-Ended

Period End Balance Sheet       Sep-18     Jun-18     Mar-18    

Dec-17

   

Sep-17

   

Dec-17

Securities       $ 1,452,788     $ 1,483,991     $ 1,510,795     $ 1,531,991     $ 1,546,199     $1,531,991 Originated loans and leases, net of unearned income and deferred costs and fees (2)         4,531,241       4,507,006       4,408,081       4,358,543       4,167,254     4,358,543 Acquired loans and leases (3)         271,468       284,187       296,765       310,577       323,259     310,577 Allowance for loan and lease losses         41,358       41,225       40,211       39,771       38,038     39,771 Total assets         6,746,960       6,745,800       6,648,128       6,648,290       6,524,060     6,648,290 Total deposits         5,025,082       4,792,229       4,929,903       4,837,807       4,943,944     4,837,807 Federal funds purchased and securities sold under agreements to repurchase         52,875       52,042       69,131       75,177       73,874     75,177 Other borrowings         988,515       1,229,956       995,074       1,071,742       834,574     1,071,742 Trust preferred debentures         16,820       16,777       16,734       16,691       16,648     16,691 Total common equity         597,636       589,173       577,967       574,780       588,349     574,780 Total equity         599,144       590,649       579,411       576,202       589,868     576,202   Average Balance Sheet                                       Average earning assets       $ 6,356,781     $ 6,348,562     $ 6,297,727     $ 6,159,396     $ 6,072,269     $6,024,186 Average assets         6,716,452       6,689,649       6,652,763       6,552,414       6,430,497     6,389,504 Average interest-bearing liabilities         4,644,533       4,709,122       4,658,998       4,500,649       4,463,606     4,466,846 Average equity         597,211       584,951       574,963       593,956       586,671     577,446   Share data                                       Weighted average shares outstanding (basic)         15,047,405       15,038,061       15,013,478       14,988,542       14,966,231     14,950,432 Weighted average shares outstanding (diluted)         15,144,491       15,135,970       15,112,518       15,103,906       15,078,555     15,073,255 Period-end shares outstanding         15,277,915       15,278,430       15,285,335       15,265,614       15,202,444     15,265,614 Common equity book value per share       $ 39.12     $ 38.56     $ 37.81     $ 37.65     $ 38.70     $37.65 Tangible book value per share (Non-GAAP)       $ 32.60     $ 32.02     $ 31.24     $ 31.04     $ 32.03     $31.04   Income Statement                                       Net interest income       $ 53,163     $ 52,714     $ 52,687     $ 51,969     $ 51,000     $201,304 Provision for loan/lease losses         272       1,045       567       2,014       402     4,161 Noninterest income         18,603       21,158       17,830       17,312       17,202     69,204 Noninterest expense         45,133       44,985       43,721       46,286       41,883     171,105 Income tax expense         5,427       5,751       5,761       18,493       8,491     42,620 Net income attributable to Tompkins Financial Corporation         20,902       22,059       20,436       2,457       17,394     52,494 Noncontrolling interests         32       32       32       31       32     128 Basic earnings per share (8)       $ 1.37     $ 1.44     $ 1.34     $ 0.16     $ 1.14     $3.46 Diluted earnings per share (8)       $ 1.36     $ 1.43     $ 1.33     $ 0.16     $ 1.14     $3.43   Nonperforming Assets                                       Originated nonaccrual loans and leases       $ 17,518     $ 19,082     $ 18,429     $ 16,253     $ 15,667     $16,253 Acquired nonaccrual loans and leases         2,659       2,673       3,352       3,264       3,152     3,264 Originated loans and leases 90 days past due and accruing         0       0       0       44       0     44 Troubled debt restructurings not included above         4,295       4,324       3,455       3,449       3,541     3,449 Total nonperforming loans and leases         24,472       26,079       25,236       23,010       22,360     23,010 OREO         1,870       2,233       2,047       2,047       2,030     2,047 Total nonperforming assets       $ 26,342     $ 28,312     $ 27,283     $ 25,057     $ 24,390     $25,057          

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

           

Quarter-Ended

    Year-Ended Delinquency - Originated loan and lease portfolio         Sep-18       Jun-18       Mar-18       Dec-17       Sep-17       Dec-17

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

      $ 6,454       $ 5,875       $ 6,513       $ 6,791       $ 5,567       $ 6,791   Loans and leases 90 days past due and accruing (2)         0         0         0         44         0         44   Total originated loans and leases past due and accruing (2)         6,454         5,875         6,513         6,835         5,567         6,835     Delinquency - Acquired loan and lease portfolio Loans 30-89 days past due and accruing (3)(7)       $ 1,109       $ 1,108       $ 823       $ 1,256       $ 2,857       $ 1,256   Loans 90 days or more past due         1,420         1,110         1,077         1,146         1,306         1,146   Total acquired loans and leases past due and accruing         2,529         2,218         1,900         2,402         4,163         2,402   Total loans and leases past due and accruing       $ 8,983       $ 8,093       $ 8,413       $ 9,237       $ 9,730       $ 9,237     Allowance for Loan Losses - Originated loan and lease portfolio Balance at beginning of period       $ 41,111       $ 40,107       $ 39,686       $ 37,903       $ 36,960       $ 35,598   Provision for loan and lease losses         208         1,035         608         1,849         931         4,428   Net loan and lease (recoveries) charge-offs         30         31         187         66         (12 )       140   Allowance for loan and lease losses (originated                 loan portfolio) - balance at end of period       $ 41,289       $ 41,111       $ 40,107       $ 39,686       $ 37,903       $ 39,686     Allowance for Loan Losses - Acquired loan and lease portfolio Balance at beginning of period       $ 114       $ 104       $ 85       $ 135       $ 197       $ 157   Provision (credit) for loan and lease losses         64         10         (41 )       165         (529 )       (67 ) Net loan and lease (recoveries) charge-offs         108         0         (60 )       215         (467 )       5   Allowance for loan and lease losses (acquired loan portfolio) - balance at end of period         69         114         104         85         135         85                                                       Total allowance for loan and lease losses       $ 41,358       $ 41,225       $ 40,211       $ 39,771       $ 38,038       $ 39,771     Loan Classification - Originated Portfolio Special Mention       $ 34,245       $ 44,068       $ 34,546       $ 46,074       $ 50,423       $ 46,074   Substandard         49,597         41,572         35,746         20,584         20,532         20,584   Loan Classification - Acquired Portfolio                                                   Special Mention         465         469         476         525         539         525   Substandard         3,041         3,180         3,468         5,355         8,193         5,355     Loan Classifications - Total Portfolio Special Mention         34,710         44,537         35,022         46,599         50,962         46,599   Substandard         52,638         44,752         39,214         25,939         28,725         25,939    

Ratio Analysis

 

Credit Quality

Nonperforming loans and leases/total loans and leases (7)         0.51 %       0.54 %       0.54 %       0.49 %       0.50 %       0.49 % Nonperforming assets/total assets         0.39 %       0.42 %       0.41 %       0.38 %       0.37 %       0.38 % Allowance for originated loan and lease losses/total originated loans and leases         0.91 %       0.91 %       0.91 %       0.91 %       0.91 %       0.91 % Allowance/nonperforming loans and leases         169.00 %       158.11 %       159.34 %       172.84 %       170.12 %       172.84 % Net loan and lease losses (recoveries) annualized/total average loans and leases         0.01 %       0.00 %       0.01 %       0.02 %       (0.04 )%       0.00 %  

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

         

Quarter-Ended

    Year-Ended Capital Adequacy (period-end)       Sep-18     Jun-18     Mar-18     Dec-17     Sep-17     Dec-17 Tangible common equity/tangible assets       7.49 %     7.36 %     7.29 %     7.24 %     7.58 %     7.24 %                 Profitability                                       Return on average assets *       1.23 %     1.32 %     1.25 %     0.15 %     1.07 %     0.82 % Return on average equity *       13.89 %     15.13 %     14.41 %     1.64 %     11.77 %     9.09 % Net interest margin (TE) *       3.35 %     3.36 %     3.42 %     3.42 %     3.40 %     3.41 % * Quarterly ratios have been annualized  

Non-GAAP Measures

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

Non-GAAP Disclosure - Adjusted Diluted Earnings Per Share         Quarter-Ended     Year-Ended           Sep-18       Jun-18       Mar-18       Dec-17       Sep-17       Dec-17 Net income available to common shareholders       $ 20,902       $ 22,059       $ 20,436       $ 2,457       $ 17,394       $ 52,494 Income attributable to unvested stock-based compensation awards         318         359         351         26         266         818 Net earnings allocated to common shareholders         20,584         21,700         20,085         2,431         17,128         51,676 Remeasurement of net deferred taxes         0         0         0         14,944         0         14,994 Gain on sale of real estate, net of tax                 2,227         0         0         0         0 Write-down of impaired leases, net of tax         (388 )       (1,527 )       0         0         0         0 Net income (Non-GAAP)         20,972         21,000         20,085         17,375         17,128         66,620 Weighted average shares outstanding (diluted)       15,144,491       15,135,970       15,112,518       15,103,906       15,078,555       15,073,255 Adjusted diluted earnings per share (Non-GAAP)       $ 1.38       $ 1.39       $ 1.33       $ 1.15       $ 1.14       $ 4.42   Non-GAAP Disclosure - Tangible Book Value Per Share Total common equity       $ 597,636       $ 589,173       $ 577,967       $ 574,780       $ 588,349       $ 574,780 Less: Goodwill and intangibles (9)         99,543         99,983         100,436         100,887         101,360         100,887 Tangible common equity         498,093         489,190         477,531         473,893         486,989         473,893 Ending shares outstanding       15,277,915       15,278,430       15,285,335       15,265,614       15,202,444       15,265,614 Tangible book value per share (Non-GAAP)       $ 32.60       $ 32.02       $ 31.24       $ 31.04       $ 32.03       $ 31.04

(1) Federal Reserve peer ratio as of June 30, 2018, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.(2) "Originated" equals loans and leases not included by definition in "acquired loans".(3) "Acquired Loans and Leases" equals loans and leases acquired at fair value, accounted for in accordance with FASB ASC Topic 805.(4) Average balances and yields on available-for-sale securities are based on historical amortized cost.(5) Interest income includes the tax effects of taxable-equivalent basis.(6) Nonaccrual loans are included in the average asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company's consolidated financial statements included in Part I of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2017.(7) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans. The risk of credit loss on these loans has been considered by virtue of the Corporation's estimate of acquisition-date fair value and these loans are considered accruing as the Corporation primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows.(8)Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares(9) "Goodwill and intangibles" equal Total Intangible Assets less Mortgage Servicing Rights in the above tables.

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