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Tompkins Financial Corporation Reports Second Quarter Earnings

July 22, 2016 9:00 AM

ITHACA, N.Y.--(BUSINESS WIRE)-- Tompkins Financial Corporation (NYSEMKT: TMP)

Tompkins Financial Corporation reported net income of $14.6 million for the quarter, and $28.8 million for the year to date period ended June 30, 2016, down $2.8 million and $1.3 million, respectively, from the same period in 2015. Prior year results included a non-recurring curtailment gain of $3.6 million after tax ($0.24 per share) related to changes to the Company’s pension plan, which was recognized in the second quarter of 2015.

Diluted earnings per share were $0.96 for the second quarter of 2016, down $0.19 per share (16.5%) from the second quarter of 2015. For the year to date period ended June 30, 2016, diluted earnings per share were $1.89, down $0.11 per share (5.5%) from the same period in 2015. If the non-recurring curtailment gain were excluded from prior year results, the current period diluted earnings per share would reflect growth of 5.5% for the quarter and 8.0% for the year to date when compared to the same periods in 2015. Refer to the table of “NON-GAAP MEASURES” included in this press release for additional details.

President and CEO, Stephen S. Romaine said "The current quarter and year to date periods reflect very good results for our Company. Solid loan growth, stable margins, and very good credit quality have been key to our success in the first half of the year.”

SELECTED HIGHLIGHTS FOR SECOND QUARTER:

NET INTEREST INCOME

Net interest income of $44.9 million for the second quarter of 2016 increased by $3.6 million, or 8.7% compared to the same period in 2015. For the year to date period, net interest income was $88.9 million, up $6.4 million, or 7.7% from the same period in 2015.

Growth in net interest income was largely driven by $537.7 million of growth in total loans since the second quarter of 2015, an increase of 17.8%. The loan growth was supported in part by a $265.6 million increase in total deposits over the same period. The net interest margin was 3.36%, and has remained relatively stable since the second quarter of 2015.

NONINTEREST INCOME

Noninterest income represented 27.6% of total revenues in the second quarter of 2016, compared to 31.5% compared to the same period in 2015. While fee based revenue has remained relatively stable when compared to the prior year, overall noninterest income was down from the prior year both for the quarter and year to date periods. The lower noninterest income for the quarter was largely related to higher income in the prior year related to gains on the sale of available-for-sale securities (higher by $484,000 in the prior year) and gains on the sale of other real estate owned (higher by $858,000 in the prior year).

NONINTEREST EXPENSE

Noninterest expense was $39.4 million for the second quarter of 2016, up $6.5 million over the second quarter of 2015. For the year to date period, noninterest expense was $79.0, up $6.3 million from the same period in 2015. The second quarter and year to date noninterest expense in 2015 were reduced by a $6.0 million non-recurring curtailment gain related to a change in the Company’s defined benefit pension plan.

ASSET QUALITY

Asset quality trends showed continued improvement in the second quarter of 2016. Nonperforming assets were down 21.0% compared to the second quarter in 2015, and down 15.5% from the first quarter of 2016. Nonperforming assets represented 0.32% of total assets at June 30, 2016, down from 0.43% at December 31, 2015, and from 0.39% at March 31, 2016. Nonperforming asset levels continue to be well below the most recent Federal Reserve Board Peer Group Average1 of 0.89%.

Provision for loan and lease losses was $978,000 for the second quarter of 2016, up from $922,000 compared to the second quarter of 2015. The year-over-year increase in provision expense is primarily due to loan growth. Net charge-offs for the second quarter of 2016 were $384,000 compared to $316,000 reported in the second quarter 2015.

The Company’s allowance for originated loan and lease losses totaled $33.0 million at June 30, 2016, and represented 0.93% of total originated loans at June 30, 2016, compared to 0.98% at June 30, 2015, and 0.95% at December 31, 2015. The total allowance represented 183.0% of total nonperforming loans and leases at June 30, 2016, up from 146.7% at December 31, 2015, and 139.36% at June 30, 2015.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets of 8.79%, compared to 8.82% reported for December 31, 2015, and 8.92% at June 30, 2015. Total Capital to risk-weighted assets at June 30, 2016 was 12.95%, compared to 13.03% reported at December 31, 2015 and 13.46% at June 30, 2015.

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.

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share and per share data) (Unaudited) As of As of
ASSETS 06/30/2016 12/31/2015
Cash and noninterest bearing balances due from banks $ 64,551 $ 56,261
Interest bearing balances due from banks 1,834 1,996
Cash and Cash Equivalents 66,385 58,257
Trading securities, at fair value 6,719 7,368
Available-for-sale securities, at fair value (amortized cost of $1,388,108 at June 30,
2016 and $1,390,255 at December 31, 2015) 1,412,382 1,385,684
Held-to-maturity securities, at amortized cost (fair value of $152,901 at June 30, 2016
and $146,686 at December 31, 2015) 144,979 146,071
Originated loans and leases, net of unearned income and deferred costs and fees (2) 3,551,628 3,310,768
Acquired loans and leases, covered (3) 12,269 14,031
Acquired loans and leases, non-covered (3) 414,216 447,243
Less: Allowance for loan and lease losses 33,125 32,004
Net Loans and Leases 3,944,988 3,740,038
Federal Home Loan Bank stock 36,462 29,969
Bank premises and equipment, net 61,683 60,331
Corporate owned life insurance 76,921 75,792
Goodwill 92,942 91,792
Other intangible assets, net 12,532 12,448
Accrued interest and other assets 68,913 82,245
Total Assets $ 5,924,906 $ 5,689,995
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market 2,462,885 2,401,519
Time 883,320 855,133
Noninterest bearing 1,123,516 1,138,654
Total Deposits 4,469,721 4,395,306
Federal funds purchased and securities sold under agreements to repurchase 97,180 136,513
Other borrowings, including certain amounts at fair value of $10,426 at June 30, 2016
and $10,576 at December 31, 2015 700,026 536,285
Trust preferred debentures 37,595 37,509
Other liabilities 65,949 67,916
Total Liabilities $ 5,370,471 $ 5,173,529
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:

15,071,279 at June 30, 2016; and 15,015,594 at December 31, 2015

1,507 1,502
Additional paid-in capital 355,462 350,823
Retained earnings 212,990 197,445
Accumulated other comprehensive loss (13,267) (31,001)
Treasury stock, at cost – 114,110 shares at June 30, 2016, and 116,126 shares
at December 31, 2015 (3,774) (3,755)
Total Tompkins Financial Corporation Shareholders’ Equity 552,918 515,014
Noncontrolling interests 1,517 1,452
Total Equity $ 554,435 $ 516,466
Total Liabilities and Equity $ 5,924,906 $ 5,689,995
TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
(In thousands, except per share data) (Unaudited) 06/30/2016 06/30/2015 06/30/2016 06/30/2015
INTEREST AND DIVIDEND INCOME
Loans $ 41,834 $ 38,059 $ 82,321 $ 75,435
Due from banks 1 1 3 2
Trading securities 77 90 158 184
Available-for-sale securities 7,284 7,374 14,815 15,188
Held-to-maturity securities 903 674 1,814 1,270
Federal Home Loan Bank stock and Federal Reserve Bank stock 318 225 615 572
Total Interest and Dividend Income 50,417 46,423 99,726 92,651
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more 422 354 812 689
Other deposits 2,264 2,267 4,473 4,553

Federal funds purchased and securities sold under agreements to

repurchase

644 665 1,310 1,335
Trust preferred debentures 594 573 1,183 1,143
Other borrowings 1,586 1,234 3,003 2,373
Total Interest Expense 5,510 5,093 10,781 10,093
Net Interest Income 44,907 41,330 88,945 82,558
Less: Provision for loan and lease losses 978 922 1,833 1,131
Net Interest Income After Provision for Loan and Lease Losses 43,929 40,408 87,112 81,427
NONINTEREST INCOME
Insurance commissions and fees 7,517 7,407 15,079 14,777
Investment services income 3,834 3,838 7,620 7,844
Service charges on deposit accounts 2,092 2,244 4,356 4,402
Card services income 2,002 2,025 3,943 3,843
Mark-to-market loss on trading securities (60) (74) (106) (137)
Mark-to-market gain on liabilities held at fair value 92 104 149 145
Other income 1,367 2,695 3,074 4,721
Gain on sale of available-for-sale securities 240 723 472 1,013
Total Noninterest Income 17,084 18,962 34,587 36,608
NONINTEREST EXPENSES
Salaries and wages 19,333 18,394 38,322 35,962
Pension and other employee benefits 4,934 (519) 10,217 5,475
Net occupancy expense of premises 2,999 3,073 6,147 6,412
Furniture and fixture expense 1,577 1,483 3,266 2,933
FDIC insurance 783 748 1,605 1,489
Amortization of intangible assets 521 500 1,048 1,007
Other operating expense 9,241 9,239 18,289 19,332
Total Noninterest Expenses 39,388 32,918 78,894 72,610
Income Before Income Tax Expense 21,625 26,452 42,805 45,425
Income Tax Expense 7,022 9,030 13,989 15,290
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation 14,603 17,422 28,816 30,135
Less: Net income attributable to noncontrolling interests 32 32 65 65
Net Income Attributable to Tompkins Financial Corporation $ 14,571 $ 17,390 $ 28,751 $ 30,070
Basic Earnings Per Share $ 0.97 $ 1.16 $ 1.91 $ 2.01
Diluted Earnings Per Share $ 0.96 $ 1.15 $ 1.89 $ 2.00
Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
Quarter Ended Year to Date Period Ended Year to Date Period Ended
June 30, 2016 June 30, 2016 June 30, 2015
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 $ 1,936 $ 2 0.42% $ 2,015 $ 3 0.30% $ 1,607 $ 2 0.25%
Securities (4)
U.S. Government securities 1,464,091 7,647 2.10% 1,461,423 15,549 2.14% 1,442,846 15,366 2.15%
Trading securities 6,920 78 4.53% 7,084 158 4.49% 8,654 184 4.29%
State and municipal (5) 99,493 840 3.40% 98,562 1,678 3.42% 87,502 1,703 3.92%
Other securities (5) 3,641 30 3.31% 3,664 61 3.35% 3,758 60 3.22%
Total securities 1,574,145 8,595 2.20% 1,570,733 17,446 2.23% 1,542,760 17,313 2.26%
FHLBNY and FRB stock 31,617 318 4.05% 29,708 615 4.16% 22,355 572 5.15%
Total loans and leases, net of unearned income (5)(6) 3,885,215 42,525 4.40% 3,838,211 83,713 4.39% 3,431,282 76,635 4.50%
Total interest-earning assets 5,492,913 51,440 3.77% 5,440,667 101,777 3.76% 4,998,004 94,522 3.81%
Other assets 349,474 345,662 355,264
Total assets 5,842,387 5,786,329 5,353,268
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market 2,531,393 982 0.16% 2,532,290 1,938 0.15% 2,337,605 1,914 0.17%
Time deposits 890,864 1,704 0.77% 879,479 3,347 0.77% 912,016 3,328 0.74%
Total interest-bearing deposits 3,422,257 2,686 0.32% 3,411,769 5,285 0.31% 3,249,621 5,242 0.33%
Federal funds purchased & securities sold under
agreements to repurchase 99,015 644 2.62% 112,639 1,310 2.34% 136,811 1,335 1.97%
Other borrowings 584,193 1,586 1.09% 543,256 3,003 1.11% 385,233 2,373 1.24%
Trust preferred debentures 37,566 594 6.36% 37,545 1,183 6.34% 37,374 1,143 6.17%
Total interest-bearing liabilities 4,143,031 5,510 0.53% 4,105,209 10,781 0.53% 3,809,039 10,093 0.53%
Noninterest bearing deposits 1,093,113 1,080,375 978,233
Accrued expenses and other liabilities 62,960 64,946 64,615
Total liabilities 5,299,104 5,250,530 4,851,887
Tompkins Financial Corporation Shareholders’ equity 541,781 534,314 499,896
Noncontrolling interest 1,502 1,485 1,485
Total equity 543,283 535,799 501,381
Total liabilities and equity $ 5,842,387 $ 5,786,329 $ 5,353,268
Interest rate spread 3.23% 3.23% 3.28%
Net interest income/margin on earning assets 45,930 3.36% 90,996 3.36% 84,429 3.41%
Tax Equivalent Adjustment (1,023) (2,051) (1,871)
Net interest income per consolidated financial statements $ 44,907 $ 88,945 $ 82,558
Tompkins Financial Corporation - Summary Financial Data (Unaudited)
(In thousands, except per share data) Quarter-Ended Year-Ended
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Dec-15
Period End Balance Sheet
Securities $ 1,564,080 $ 1,583,742 $ 1,539,123 $ 1,542,332 $ 1,536,374 $ 1,539,123
Originated loans and leases, net of unearned income and deferred costs and fees (2) 3,551,628 3,370,791 3,310,768 3,149,386 3,013,968 3,310,768
Acquired loans and leases (3) 426,485 450,122 461,274 484,927 507,963 461,274
Allowance for loan and lease losses 33,125 32,530 32,004 30,965 30,091 32,004
Total assets 5,924,906 5,764,971 5,689,995 5,594,718 5,436,136 5,689,995
Total deposits 4,469,721 4,555,228 4,395,306 4,437,073 4,204,089 4,395,306
Federal funds purchased and securities sold under agreements to repurchase 97,180 116,551 136,513 134,941 131,063 136,513
Other borrowings 700,026 455,341 536,285 398,946 493,326 536,285
Trust preferred debentures 37,595 37,552 37,509 37,466 37,423 37,509
Total common equity 552,918 538,408 515,014 516,409 503,877 515,014
Total equity 554,435 539,893 516,466 517,959 505,394 516,466
Average Balance Sheet
Average earning assets $ 5,492,913 $ 5,388,420 $ 5,260,979 $ 5,138,665 $ 5,038,586 $ 5,099,743
Average assets 5,842,387 5,730,271 5,624,351 5,486,645 5,391,114 5,455,214
Average interest-bearing liabilities 4,143,031 4,067,385 3,930,707 3,856,025 3,835,430 3,851,549
Average equity 543,283 528,314 518,529 509,518 505,667 507,754
Share data
Weighted average shares outstanding (basic) 14,798,515 14,760,276 14,719,394 14,739,915 14,751,844 14,728,193
Weighted average shares outstanding (diluted) 14,975,115 14,905,919 14,869,103 14,866,735 14,878,107 14,863,026
Period-end shares outstanding 15,035,369 15,023,776 14,979,684 14,905,576 14,942,107 14,979,684
Common equity book value per share $ 36.77 $ 35.84 $ 34.38 $ 34.65 $ 33.72 $ 34.38
Tangible book value per share (Non-GAAP) $ 29.82 $ 28.85 $ 27.48 $ 27.64 $ 26.71 $ 27.48
Income Statement
Net interest income $ 44,907 $ 44,038 $ 43,437 $ 42,386 $ 41,330 $ 168,381
Provision (Credit) for loan/lease losses 978 855 1,533 281 922 2,945
Noninterest income 17,084 17,503 17,910 17,422 18,962 71,940
Noninterest expense 39,388 39,506 39,370 37,882 32,918 149,862
Income tax expense 7,022 6,967 6,557 7,115 9,030 28,962
Net income attributable to Tompkins Financial Corporation 14,571 14,180 13,854 14,497 17,390 58,421
Noncontrolling interests 32 33 33 33 32 131
Basic earnings per share (9) $ 0.97 $ 0.95 $ 0.93 $ 0.97 $ 1.16 $ 3.91
Diluted earnings per share (9) $ 0.96 $ 0.94 $ 0.92 $ 0.96 $ 1.15 $ 3.87
Nonperforming Assets
Originated nonaccrual loans and leases $ 11,008 $ 12,671 $ 13,506 $ 14,821 $ 14,566 $ 13,506
Acquired nonaccrual loans and leases 4,831 4,145 4,331 4,908 5,030 4,331
Originated loans and leases 90 days past due and accruing 89 57 58 57 58 58
Troubled debt restructurings not included above 2,172 3,862 3,915 3,465 1,939 3,915
Total nonperforming loans and leases 18,100 20,735 21,810 23,251 21,593 21,810
OREO (8) 1,001 1,865 2,692 3,188 2,570 2,692
Total nonperforming assets $ 19,101 $ 22,600 $ 24,502 $ 26,439 $ 24,163 $ 24,502

Quarter-Ended Year-Ended
Delinquency - Originated loan and lease portfolio Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Dec-15
Loans and leases 30-89 days past due and
accruing (2) $ 6,580 $ 2,519 $ 3,280 $ 3,550 $ 3,315 $ 3,280
Loans and leases 90 days past due and accruing (2) 89 57 58 57 58 58
Total originated loans and leases past due and accruing (2) 6,669 2,576 3,338 3,607 3,373 3,338
Delinquency - Acquired loan and lease portfolio
Covered loans and leases 30-89 days past due and accruing (3)(7) $ 850 $ 1 $ 276 $ 309 $ 455 $ 276
Covered loans and leases 90 days or more past
due and accruing (3)(7) 474 469 524 508 674 524
Non-covered loans and leases 30-89 days past
due and accruing (3)(7) 900 1,038 933 1,028 917 933
Non-covered loans and leases 90 days past
due and accruing (3)(7) 1,387 1,446 1,991 2,069 3,031 1,991
Total acquired loans and leases past due and accruing 3,611 2,954 3,724 3,914 5,077 3,724
Total loans and leases past due and accruing $ 10,280 $ 5,530 $ 7,062 $ 7,521 $ 8,450 $ 7,062
Allowance for Loan Losses - Originated loan and lease portfolio
Balance at beginning of period $ 31,981 $ 31,312 $ 30,450 $ 29,428 $ 28,690 $ 28,156
Provision for loan and lease losses 978 872 1,185 173 769 2,467
Net loan and lease (recoveries) charge-offs (9) 203 323 (849) 31 (689)
Allowance for loan and lease losses (originated 32,968 31,981 31,312 30,450 29,428 31,312
loan portfolio) - balance at end of period $ $ $ $ $ $
Allowance for Loan Losses - Acquired loan and lease portfolio
Balance at beginning of period $ 549 $ 692 $ 515 $ 663 $ 795 $ 841
Provision (Credit) for loan and lease losses 0 (17) 348 108 153 478
Net loan and lease charge-offs 392 126 171 256 285 627
Allowance for loan and lease losses (acquired
loan portfolio) - balance at end of period 157 549 692 515 663 692
Total allowance for loan and lease losses $ 33,125 $ 32,530 $ 32,004 $ 30,965 $ 30,091 $ 32,004
Loan Classification - Originated Portfolio
Special Mention $ 20,639 $ 20,388 $ 19,657 $ 25,133 $ 25,706 $ 19,657
Substandard 16,462 18,026 18,186 19,937 21,600 18,186
Loan Classification - Acquired Portfolio
Special Mention 550 534 540 1,446 1,589 540
Substandard 13,975 17,445 17,007 23,683 21,932 17,007
Loan Classifications - Total Portfolio
Special Mention 21,189 20,922 20,197 26,579 27,295 20,197
Substandard 30,437 35,471 35,193 43,620 43,532 35,193
RATIO ANALYSIS Quarter-Ended Year-Ended
Credit Quality Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Dec-15
Nonperforming loans and leases/total loans and leases (7) 0.45% 0.54% 0.58% 0.64% 0.61% 0.58%
Nonperforming assets/total assets 0.32% 0.39% 0.43% 0.47% 0.44% 0.43%
Allowance for originated loan and lease losses/total originated loans and leases 0.93% 0.95% 0.95% 0.97% 0.98% 0.95%
Allowance/nonperforming loans and leases 183.01% 156.88% 146.74% 133.18% 139.36% 146.74%
Net loan and lease losses (recoveries) annualized/total average loans and leases 0.04% 0.03% 0.05% (0.07%) 0.04% (0.00%)
Capital Adequacy (period-end)
Tier 1 capital / average assets * 8.79% 8.79% 8.82% 8.89% 8.92% 8.82%
Total capital / risk-weighted assets * 12.95% 13.18% 13.03% 13.29% 13.46% 13.03%
Profitability
Return on average assets * 1.00% 0.99% 0.98% 1.05% 1.29% 1.07%
Return on average equity * 10.79% 10.77% 10.63% 11.29% 13.79% 11.51%
Net interest margin (TE) * 3.36% 3.36% 3.35% 3.35% 3.37% 3.38%
* Quarterly ratios have been annualized
NON-GAAP MEASURES

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

Non-GAAP Disclosure - Adjusted Diluted Earnings Per Share
Net income available to common shareholders $ 14,571 $ 14,180 $ 13,854 $ 14,497 $ 17,390 $ 58,421
Less: Dividends and undistributed earnings allocated to unvested restricted stock awards 224 229 229 189 234 834
Adjusted net income available to common shareholders 14,347 13,951 13,625 14,308 17,156 57,587
Gain on pension plan curtailment (net of tax) 0 0 0 0 (3,602) (3,602)
Net operating income (Non-GAAP) 14,347 13,951 13,625 14,308 13,554 53,985
Weighted average shares outstanding (diluted) 14,975,115 14,905,919 14,869,103 14,866,735 14,878,107 14,863,026
Adjusted diluted earnings per share (Non-GAAP) (9) $ 0.96 $ 0.94 $ 0.92 $ 0.96 $ 0.91 $ 3.63
Non-GAAP Disclosure - Tangible Book Value Per Share
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Dec-15
Total common equity $ 552,918 $ 538,408 $ 515,014 $ 516,409 $ 503,877 $ 515,014
Less: Goodwill and intangibles (10) 104,636 104,987 103,347 104,349 104,845 103,347
Tangible common equity 448,282 433,421 411,667 412,060 399,032 411,667
Ending shares outstanding 15,035,369 15,023,776 14,979,684 14,905,576 14,942,107 14,979,684
Tangible book value per share (Non-GAAP) $ 29.82 $ 28.85 $ 27.48 $ 27.64 $ 26.71 $ 27.48
Non-GAAP Disclosure - YTD adjusted diluted earnings per share
Jun-16 Jun-15
Net income available to common shareholders $ 28,751 $ 30,070
Less: Dividends and undistributed earnings allocated to unvested restricted stock awards 453 420
Adjusted net income available to common shareholders 28,298 29,650
Gain on pension plan curtailment 0 (3,602)
Net operating income (Non-GAAP) 28,298 26,048
Weighted average shares outstanding (diluted) 14,940,518 14,858,127
Adjusted diluted earnings per share (Non-GAAP) $ 1.89 $ 1.75

(1) Federal Reserve peer ratio as of March 31, 2016, includes banks and bank holding companies with consolidated assets between $3 billionand $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 anFDIC-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 beenrecognized as disclosed in Note 1 of the Company's consolidated financial statements included in Part I of the Company's annual report onForm 10-K for the fiscal year ended December 31, 2015.

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

Tompkins Financial Corporation

Stephen S. Romaine, 888-503-5753

President & CEO

or

Francis M. Fetsko, 888-503-5753

Executive VP, CFO & COO

Source: Tompkins Financial Corporation

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