TMP Tompkins Financial Corporation

Tompkins Financial Corporation (NYSEMKT:TMP)

Tompkins Financial Corporation reported net income of $12.6 million for the first quarter of 2014, an increase of 9.2% from the $11.5 million reported for the same period in 2013. Diluted earnings per share were $0.84 for the first quarter of 2014, a 6.3% increase from $0.79 reported for the first quarter of 2013. Prior period results included in this press release were impacted by certain non-recurring items, which are more fully described in the non-GAAP disclosure tables included with this press release.

President and CEO Stephen S. Romaine said, "We are pleased to start 2014 with the strongest first quarter in our history. In addition to earnings per share growth over the first quarter of 2013, loan and deposit levels increased from the same period last year, and from the most recent prior quarter. At the same time we saw continued improvement in nearly all credit quality indicators.”

FIRST QUARTER SELECTED HIGHLIGHTS:

• Net interest income of $40.0 million was up 4.8% from the same period last year.
• Annualized return on average equity was 10.88% for the quarter ended March 31, 2014, compared to 10.53% for the same period in 2013.
• Tangible book value per share has increased for the third consecutive quarter, and is up 5.8% from the first quarter of 2013. Refer to Non-GAAP disclosure for additional details on tangible book value per share.
• Credit quality improved with non-performing assets representing 0.81% of total assets, which is the lowest this percentage has been over the past 20 quarters, and remains well below the most recent peer average of 1.69% by the Federal Reserve1.
• Total loans of $3.2 billion were up 7.0% over the same period in 2013, and were up an annualized 1.3% over year-end 2013.
• The average cost of deposits declined from 0.34% in the first quarter of 2013, to 0.28% in 2014. Average total deposits for the first quarter of 2014 were $4.0 billion, which is comparable to the same period in 2013.

NET INTEREST INCOME

Net interest income of $40.0 million for the first quarter of 2014 increased 4.8% compared to $38.2 million reported for the same period in 2013. Net interest income was down $2.6 million or 6.1% from the fourth quarter of 2013. The fourth quarter included higher interest income related to interest collected on the payoff of a nonaccrual loan and a higher level of purchase accounting accretion related to loans paid off during the fourth quarter of 2013. The net interest margin for the first quarter of 2014 was 3.60% compared to 3.57% for the first quarter of 2013 and 3.78% for the fourth quarter of 2013.

NONINTEREST INCOME

Noninterest income was $17.4 million for the first quarter of 2014, which was in line with both the same period prior year and the fourth quarter of 2013. Noninterest income represented 30.3% of total revenue for the first quarter of 2014, compared to 31.3% for the same period in 2013. Fee based services related to wealth management, deposit fees, and card services fees, were all up from the same period in 2013, while insurance revenues were in line with the prior year period. Other noninterest income was down from the first quarter of 2013, in part due to certain nonrecurring items in the first quarter of 2013. The first quarter of 2014 also saw a decline in realized gains on the sale of securities, when compared to the first quarter of 2013.

NONINTEREST EXPENSE

Noninterest expense was $38.2 million for the first quarter of 2014, up 1.8% compared to March 31, 2013, and down 5.1% from the fourth quarter of 2013. The increase in noninterest expense compared to the same period prior year is mainly a result of higher salary and wages expense. The decline in noninterest expense when compared to the fourth quarter of 2013 was driven by higher salary and wages in the fourth quarter, which included increased variable compensation accruals, reflecting the Company’s strong performance in 2013.

ASSET QUALITY

Asset quality trends improved in nearly all categories during the quarter. Substandard and Special Mention loans declined by $39.5 million from the same period last year, and by $1.6 million from the most recent previous quarter. The percentage of nonperforming loans and leases to total loans and leases improved to 1.11% at March 31, 2014, compared to 1.24% reported at March 31, 2013.

Provision for loan and lease losses was $743,000 for the first quarter of 2014, which was an improvement of 28.4% compared to the first quarter of 2013. Net loan and lease charge-offs totaled $699,000 in the first quarter of 2014, down from $1.0 million in the first quarter of 2013.

The Company’s allowance for originated loan and lease losses totaled $26.7 million at March 31, 2014, which represented 1.04% of total originated loans, compared to 1.11% at March 31, 2013 and 1.06% at year-end 2013. The allowance for loan and lease losses covered 78.88% of nonperforming loans and leases as of March 31, 2014, compared to 66.16% at March 31, 2013 and 71.65% at year-end 2013.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets improved for the fifth consecutive quarter, to 8.68% at March 31, 2014, and the ratio of total capital to risk-weighted assets was 13.68%.

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 Bank, 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 03/31/2014 12/31/2013   Cash and noninterest bearing balances due from banks $ 97,283 $ 82,163 Interest bearing balances due from banks     1,016       721   Cash and Cash Equivalents 98,299 82,884   Trading securities, at fair value 10,498 10,991

Available-for-sale securities, at fair value (amortized cost of $1,384,804 at March 31, 2014 and $1,368,736 at December 31, 2013)

1,379,600 1,354,811

Held-to-maturity securities, fair value of $19,434 at March 31, 2014, and $19,625 at December 31, 2013

18,820 18,980 Originated loans and leases, net of unearned income and deferred costs and fees 2,555,522 2,527,244 Acquired loans and leases, covered 24,106 25,868 Acquired loans and leases, non-covered 624,584 641,172 Less: Allowance for loan and lease losses     28,014       27,970   Net Loans and Leases 3,176,198 3,166,314   FDIC Indemnification Asset 3,999 4,790 Federal Home Loan Bank stock 18,240 25,041 Bank premises and equipment, net 56,776 55,932 Corporate owned life insurance 72,339 69,335 Goodwill 92,246 92,140 Other intangible assets, net 16,004 16,298 Accrued interest and other assets     98,781       105,523   Total Assets   $ 5,041,800     $ 5,003,039     LIABILITIES Deposits: Interest bearing: Checking, savings and money market 2,338,780 2,190,616 Time 898,884 865,702 Noninterest bearing     867,506       890,898   Total Deposits 4,105,170 3,947,216   Federal funds purchased and securities sold under agreements to repurchase 158,794 167,724

Other borrowings, including certain amounts at fair value of $11,228 at March 31, 2014 and $11,292 at December 31, 2013

214,616 331,531 Trust preferred debentures 37,211 37,169 Other liabilities     52,187       61,460   Total Liabilities   $ 4,567,978     $ 4,545,100     EQUITY Tompkins Financial Corporation shareholders' equity:

Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,864,917 at March 31, 2014; and 14,785,007 at December 31, 2013

1,486 1,479 Additional paid-in capital 349,812 346,096 Retained earnings 143,766 137,102 Accumulated other comprehensive loss (19,685 ) (25,119 )

Treasury stock, at cost – 103,921 shares at March 31, 2014, and 105,449 shares at December 31, 2013

(3,042 ) (3,071 )   Total Tompkins Financial Corporation Shareholders’ Equity 472,337 456,487 Noncontrolling interests     1,485       1,452   Total Equity   $ 473,822     $ 457,939   Total Liabilities and Equity   $ 5,041,800     $ 5,003,039     TOMPKINS FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME     Three Months Ended (In thousands, except per share data) (Unaudited) 03/31/2014   03/31/2013 INTEREST AND DIVIDEND INCOME Loans $ 36,954 $ 36,429 Due from banks 1 7 Trading securities 112 165 Available-for-sale securities 7,936 7,480 Held-to-maturity securities 152 191 Federal Home Loan Bank stock and Federal Reserve Bank stock     210       185   Total Interest and Dividend Income     45,365       44,457   INTEREST EXPENSE Time certificates of deposits of $100,000 or more 952 1,204 Other deposits 1,790 2,182

Federal funds purchased and securities sold under agreements to repurchase

817 1,010 Trust preferred debentures 570 687 Other borrowings     1,209       1,168   Total Interest Expense     5,338       6,251   Net Interest Income     40,027       38,206   Less: Provision for loan and lease losses     743       1,038   Net Interest Income After Provision for Loan and Lease Losses     39,284       37,168   NONINTEREST INCOME Insurance commissions and fees 7,257 7,261 Investment services income 4,010 3,788 Service charges on deposit accounts 2,116 1,908 Card services income 2,112 1,738 Mark-to-market loss on trading securities (59 ) (115 ) Mark-to-market gain on liabilities held at fair value 65 77 Other income 1,839 2,366 Gain on sale of available-for-sale securities     94       367   Total Noninterest Income     17,434       17,390   NONINTEREST EXPENSES Salaries and wages 16,646 15,572 Pension and other employee benefits 6,045 6,070 Net occupancy expense of premises 3,260 3,061 Furniture and fixture expense 1,337 1,457 FDIC insurance 811 772 Amortization of intangible assets 527 557 Merger related expenses 0 196 Other operating expense     9,584       9,835   Total Noninterest Expenses     38,210       37,520   Income Before Income Tax Expense     18,508       17,038   Income Tax Expense     5,906       5,495   Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation     12,602       11,543   Less: Net income attributable to noncontrolling interests     33       33   Net Income Attributable to Tompkins Financial Corporation   $ 12,569     $ 11,510   Basic Earnings Per Share $ 0.85 $ 0.80 Diluted Earnings Per Share   $ 0.84     $ 0.79     Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)     Year to Date Period Ended   Year to Date Period Ended       March 31, 2014     March 31, 2013 Average     Average     Balance Average Balance Average (Dollar amounts in thousands)     (YTD)     Interest   Yield/Rate     (YTD)     Interest   Yield/Rate ASSETS Interest-earning assets Interest-bearing balances due from banks $

1,026

 

$ 1 0.40 % $

3,908

 

$ 7 0.73 % Securities (4) U.S. Government securities 1,284,771 7,373 2.33 % 1,297,578 6,794 2.12 % Trading securities 10,832 112 4.19 % 16,126 165 4.15 % State and municipal (5) 88,037 1,109 5.11 % 100,089 1,299 5.26 % Other securities (5)   5,194       44     3.44 %     9,158       90     3.99 % Total securities 1,388,834 8,638 2.52 % 1,422,951 8,348 2.38 % FHLBNY and FRB stock 20,137 210 4.23 % 18,859 185 3.98 %   Total loans and leases, net of unearned income (5)(6)   3,192,520       37,399     4.75 %     2,963,737       36,567     5.00 % Total interest-earning assets   4,602,517       46,248     4.08 %     4,409,455       45,107     4.15 %   Other assets 379,516 490,272   Total assets 4,982,033   4,899,727                                     LIABILITIES & EQUITY Deposits Interest-bearing deposits Interest bearing checking, savings, & money market 2,287,871 1,097 0.19 % 2,269,900 1,418 0.25 % Time deposits   888,474       1,645     0.75 %     979,860       1,968     1.02 % Total interest-bearing deposits 3,176,345 2,742 0.35 % 3,249,760 3,386 0.42 %  

Federal funds purchased & securities sold under agreements to repurchase

162,348 817 2.04 % 198,707 1,010 2.06 % Other borrowings 248,678 1,209 1.97 % 119,606 1,168 3.96 % Trust preferred debentures   37,184       570     6.22 %     43,675       687     6.38 % Total interest-bearing liabilities 3,624,555 5,338 0.60 % 3,611,748 6,251 0.70 %   Noninterest bearing deposits 834,864 771,761 Accrued expenses and other liabilities 54,099   72,941   Total liabilities 4,513,518 4,456,450   Tompkins Financial Corporation Shareholders’ equity 467,048 441,810 Noncontrolling interest 1,467   1,467   Total equity 468,515 443,277   Total liabilities and equity $ 4,982,033   $ 4,899,727   Interest rate spread     3.48 %     3.45 % Net interest income/margin on earning assets 40,910 3.60 % 38,856 3.57 %   Tax Equivalent Adjustment (883 ) (650 )   Net interest income per consolidated financial statements         $ 40,027               $ 38,206         Tompkins Financial Corporation - Summary Financial Data (Unaudited)     (In thousands, except per share data)   Quarter-Ended   Year-Ended   Mar-14     Dec-13     Sep-13     Jun-13     Mar-13     Dec-13           Period End Balance Sheet                                     Securities   $ 1,408,918   $ 1,384,782   $ 1,390,233   $ 1,469,315   $ 1,566,510   $ 1,384,782 Originated loans and leases, net of unearned income and deferred costs and fees (2)     2,555,522     2,527,244     2,420,695     2,309,232     2,208,346     2,527,244 Acquired loans and leases (3)     648,690     667,040     698,617     745,951     785,449     667,040 Allowance for loan and lease losses     28,014     27,970     26,408     25,458     24,661     27,970 Total assets     5,041,800     5,003,039     4,932,428     4,931,883     4,987,280     5,003,039 Total deposits     4,105,170     3,947,216     3,972,756     3,912,910     4,072,352     3,947,216 Federal funds purchased and securities sold under agreements to repurchase     158,794     167,724     162,117     171,498     194,091     167,724 Other borrowings     214,616     331,531     242,177     299,098     156,649     331,531 Trust preferred debentures     37,211     37,169     37,127     43,703     43,687     37,169 Shareholders' equity     473,822     457,939     444,276     431,894     446,812     457,939   Average Balance Sheet                                     Average earning assets   $ 4,602,517   $ 4,571,099   $ 4,533,603   $ 4,571,428   $ 4,409,455   $ 4,521,873 Average assets     4,982,033     4,950,476     4,897,678     4,965,895     4,899,727     4,928,499 Average interest-bearing liabilities     3,624,555     3,574,803     3,572,708     3,663,230     3,611,748     3,605,430 Average equity     468,515     449,445     434,482     447,088     443,277     443,565   Share data                                     Weighted average shares outstanding (basic)     14,644,548     14,589,120     14,515,053     14,427,838     14,374,265     14,477,617 Weighted average shares outstanding (diluted)     14,775,386     14,731,786     14,622,512     14,496,859     14,436,757     14,573,919 Period-end shares outstanding     14,829,007     14,749,097     14,692,671     14,599,558     14,447,017     14,749,097 Book value per share     31.95     31.05     30.24     29.58     30.93     31.05 Tangible book value per share (Non-GAAP)     24.65     23.70     22.82     22.08     23.29     23.70   Income Statement                                     Net interest income   $ 40,027   $ 42,624   $ 40,473   $ 39,826   $ 38,206   $ 161,129 Provision for loan/lease losses     743     585     2,049     2,489     1,038     6,161 Noninterest income     17,434     17,439     18,528     16,541     17,390     69,898 Noninterest expense     38,210     40,251     37,554     37,777     37,520     153,102 Income tax expense     5,906     4,905     5,316     5,061     5,495     20,777 Net income attributable to Tompkins Financial Corporation     12,602     14,290     14,049     11,007     11,510     50,856 Noncontrolling interests     33     32     33     33     33     131 Basic earnings per share (9)   $ 0.85   $ 0.97   $ 0.96   $ 0.76   $ 0.80   $ 3.48 Diluted earnings per share (9)   $ 0.84   $ 0.96   $ 0.95   $ 0.75   $ 0.79   $ 3.46   Nonperforming Assets                                     Originated nonaccrual loans and leases   $ 26,974   $ 29,875   $ 33,881   $ 32,100   $ 32,554   $ 29,875 Acquired nonaccrual loans and leases     6,936     8,508     8,008     6,916     4,561     8,508 Originated loans and leases 90 days past due and accruing     339     607     1,217     156     157     607 Troubled debt restructurings not included above     1,266     45     46     0     -     45 Total nonperforming loans and leases     35,515     39,035     43,152     39,172     37,272     39,035 OREO (8)     5,351     4,253     6,264     4,918     3,950     4,253 Total nonperforming assets     40,866     43,288     49,416     44,090     41,222     43,288   Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued     Quarter-Ended   Year-Ended Delinquency - Originated loan and lease portfolio     Mar-14     Dec-13     Sep-13     Jun-13     Mar-13     Dec-13

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

  $ 5,660   $ 5,762     $ 12,193   $ 9,597     $ 10,888   $ 5,762   Loans and leases 90 days past due and accruing (2)     339     607       1,217     156       157     607   Total originated loans and leases past due and accruing (2)     5,999     6,369       13,410     9,753       11,045     6,369             Delinquency - Acquired loan and lease portfolio Covered loans and leases 30-89 days past due and accruing (3)(7)     635     0       1,132     1,613       3,503     0  

Covered loans and leases 90 days or more past due and accruing (3)(7)

    1,135     2,416       2,980     3,091       3,809     2,416  

Non-covered loans and leases 30-89 days past due and accruing (3)(7)

    2,293     1,532       6,887     5,591       5,738     1,532  

Non-Covered loans and leases 90 days past due and accruing (3)(7)

    3,746     4,557       10,521     13,324       14,026     4,557   Total acquired loans and leases past due and accruing     7,809     8,505       21,520     23,619       27,076     8,505                                         Total loans and leases past due and accruing   $ 13,808   $ 14,874     $ 34,930   $ 33,372     $ 38,121   $ 14,874     Allowance for Loan Losses - Originated loan and lease portfolio Balance at beginning of period   $ 26,700   $ 25,722     $ 24,853   $ 24,598     $ 24,643   $ 24,643   Provision for loan and lease losses     511     (325 )     1,499     (994 )     820     1,000   Net loan and lease (recoveries) charge-offs     550     (1,303 )     630     (1,249 )     865     (1,057 )

 

26,661 26,700   25,722 24,853   24,598 26,700  

Allowance for loan and lease losses (originated loan portfolio) - balance at end of period

                          Allowance for Loan Losses - Acquired loan and lease portfolio Balance at beginning of period   $ 1,270   $ 686     $ 605   $ 63     $ 0   $ 0   Provision for loan and lease losses     232     910       549     3,483       218     5,160   Net loan and lease charge-offs     149     326       468     2,941       155     3,890  

Allowance for loan and lease losses (acquired loan portfolio) - balance at end of period

    1,353     1,270       686     605       63     1,270                                         Total allowance for loan and lease losses     28,014     27,970       26,408     25,458       24,661     27,970     Loan Classification - Originated Portfolio                                     Special Mention   $ 44,725   $ 42,365     $ 42,975   $ 43,099     $ 48,468   $ 42,365   Substandard     32,917     35,022       37,004     41,969       43,449     35,022   Loan Classification - Acquired Portfolio                                     Special Mention     14,936     17,322       23,939     29,300       26,568     17,322   Substandard     34,137     33,561       42,433     55,079       47,698     33,561   Loan Classifications - Total Portfolio                                     Special Mention     59,661     59,687       66,914     72,399       75,036     59,687   Substandard     67,054     68,583       79,437     97,048       91,147     68,583     Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued       RATIO ANALYSIS   Quarter-Ended   Year-Ended Credit Quality     Mar-14     Dec-13     Sep-13     Jun-13     Mar-13     Dec-13 Nonperforming loans and leases/total loans and leases (7)     1.11 %     1.22 %     1.38 %     1.28 %     1.24 %     1.22 % Nonperforming assets/total assets     0.81 %     0.87 %     1.00 %     0.89 %     0.83 %     0.87 % Allowance for originated loan and lease losses/total originated loans and leases     1.04 %     1.06 %     1.06 %     1.08 %     1.11 %     1.06 % Allowance/nonperforming loans and leases     78.88 %     71.65 %     61.20 %     64.99 %     66.16 %     71.65 % Net loan and lease losses (recoveries) annualized/total average loans and leases     0.09 %     (0.12 %)     0.14 %     0.22 %     0.14 %     0.09 %           Capital Adequacy (period-end)                                     Tier 1 capital / average assets     8.68 %     8.52 %     8.37 %     8.16 %     8.11 %     8.52 % Total capital / risk-weighted assets     13.68 %     13.42 %     13.32 %     13.34 %     12.93 %     13.42 % Tangible common equity / tangible assets     7.38 %     7.11 %     6.92 %     6.65 %     6.87 %     7.11 %   Profitability                                     Return on average assets *     1.02 %     1.15 %     1.10 %     0.89 %     0.95 %     1.03 % Return on average equity *     10.88 %     12.62 %     12.83 %     9.87 %     10.53 %     11.47 % Net interest margin (TE) *     3.60 %     3.78 %     3.63 %     3.58 %     3.57 %     3.65 % * Quarterly ratios have been annualized   Non-GAAP Disclosure                                     Reported noninterest income (GAAP)   $ 17,434     $ 17,439     $ 18,528     $ 16,541     $ 17,390     $ 69,898   Adjustments (pre-tax):                                     Gain on redemption of trust preferred     0       0       (1,410 )     0       0       (1,410 ) Gain on deposit conversion     0       (1,285 )     0       0       0       (1,285 ) Noninterest income (Non-GAAP)   $ 17,434     $ 16,154     $ 17,118     $ 16,541     $ 17,390     $ 67,203     Non-GAAP Disclosure                                     Reported net income (GAAP)   $ 12,569     $ 14,290     $ 14,049     $ 11,007     $ 11,510     $ 50,856   Adjustments (net of tax):                                     Merger related expenses     0       0       0       22       118       140   Gain on redemption of trust preferred     0       0       (846 )     0       0       (846 ) Gain on deposit conversion     0       (771 )     0       0       0       (771 ) Subtotal adjustments     0       (771 )     (846 )     22       118       (1,477 ) Net operating income (Non-GAAP)     12,569       13,519       13,203       11,029       11,628       49,379   Adjusted diluted earnings per share (Non-GAAP) (9)   $ 0.84     $ 0.91     $ 0.89     $ 0.75     $ 0.80     $ 3.36    

 

 

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

      Non-GAAP Disclosure   Quarter-Ended   Year-Ended       Mar-14     Dec-13     Sep-13     Jun-13     Mar-13     Dec-13 Reported net income (GAAP)   $ 12,569     $ 14,290     $ 14,049     $ 11,007     $ 11,510     $ 50,856   Merger related expenses (net of tax)     0       0       0       22       118       140   Gain on redemption of trust preferred (net of tax)     0       0       (846 )     0       0       (846 ) Gain on deposit conversion     0       (771 )     0       0       0       (771 ) Net operating income (Non-GAAP)   $ 12,569     $ 13,519     $ 13,203     $ 11,029     $ 11,628     $ 49,379   Amortization of intangibles (net of tax)     316       329       327       328       334       1,318   Adjusted net operating income (Non-GAAP)     12,885       13,848       13,530       11,357       11,962       50,697                                         Average total shareholders' equity     468,515       449,445       434,482       447,088       443,277       443,565   Less: Average goodwill and intangibles     108,437       108,729       109,277       110,037       110,687       109,676   Average tangible shareholders' equity (Non-GAAP)     360,078       340,716       325,205       337,051       332,590       333,889                                         Adjusted operating return on shareholders' tangible equity (annualized) (Non-GAAP)     14.51 %     16.13 %     16.51 %     13.52 %     14.59 %     15.18 %             Non-GAAP Disclosure           Total shareholders' equity (GAAP)   $ 473,822     $ 457,939     $ 444,276     $ 431,894     $ 446,812     $ 457,939   Less: goodwill and intangibles     108,250       108,438       108,981       109,540       110,314       108,438   Tangible shareholders' equity     365,572       349,501       335,295       322,354       336,498       349,501                                         Ending shares outstanding     14,829,007       14,749,097       14,692,671       14,599,558       14,447,017       14,749,097   Tangible book value per share (Non-GAAP)     24.65       23.70       22.82       22.08       23.29       23.70  

_________________________________________________________(1) Federal Reserve peer ratio as of December 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, 2013.(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.

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