Tompkins Financial (TMP) 8-K Results of Operations and Financial Condition

Tompkins Financial 8-K

Exhibit 99.1

For more information contact:

Stephen S. Romaine, President & CEO

Francis M. Fetsko, CFO

Tompkins Financial Corporation 607.273.3210

For Immediate Release

Wednesday, April 25, 2012

Tompkins Financial Corporation Reports First Quarter Earnings

ITHACA, NY – Tompkins Financial Corporation (TMP–NYSE Amex)

Tompkins Financial Corporation reported net income of $7.8 million for the first quarter of 2012, a decrease of 11.0% from the $8.8 million reported for the same period in 2011.  Diluted earnings per share were $0.70 for the first quarter of 2012, a 12.5% decrease from $0.80 reported for the first quarter of 2011.

Stephen S. Romaine, President and CEO stated, “Quarterly earnings results were negatively impacted by the continued weak economic climate.  Loan demand has remained slow and the low rate environment continues to put pressure on net interest margin.  We are encouraged that despite pressure on net interest margin, net interest income remained relatively stable over the last twelve months and we continue to see improving trends in credit quality.”

Selected highlights for the first quarter:

§   Return on average equity was 10.35% for the first quarter of 2012.

§   Total loans were $2.0 billion at March 31, 2012, relatively unchanged from December 31, 2011, and up $63.2 million or 3.3% from March 31, 2011.

§   Total deposits were $2.9 billion at March 31, 2012, up 7.5% from December 31, 2011, and up 9.5% from March 31, 2011.

§   The net interest margin for the first quarter of 2012 was 3.51%, compared to 3.62% for the fourth quarter of 2011, and 3.78% for the first quarter of 2011.  Despite the decline in net interest margin over the past 12 months, net interest income of $27.4 million for the first quarter of 2012 remains generally in line with the same period in 2011. Growth in interest earning assets, primarily in the securities portfolio, and funded primarily with core deposits, has helped mitigate the earnings impact from the decline in margin.

§   Noninterest income was down 6.7% for the quarter, when compared to the same period in 2011.  Card services income and insurance commissions and fees were up from the prior year.  Investment services income and deposits services fees were down from the same period last year.  A majority of the decline in investment services revenue was the result of a planned decrease in the number of external broker dealer relationships, which was implemented in the third quarter of 2011.  Other negative variances compared to the first quarter of 2011 included: a $118,000 decline in net mark-to-market gains on securities and liabilities held at fair value; a $93,000 decline in net realized gains on securities transactions; and a $565,000 decline in other income primarily from lower gains on the sale of residential mortgage loans and reduced income from the Company's investment in a small business investment company.

§   Noninterest expense for the first quarter of 2012 was $26.4 million, up 4.6% from the same period last year.  Salaries and wages were up in part due to normal salary increases and in part due to higher incentive accruals for business development activities.  Lower interest rates have contributed to the increase in the cost of pension and employee benefits.  The increase in other operating expense was impacted by approximately $94,000 in expenses related to the pending merger with VIST Financial, and $310,000 related to marketing and business development.  Increased expenses in the above categories were partially offset by a reduction in FDIC insurance costs.

§   Provision for loan and lease losses was $1.1 million for the first quarter of 2012, down from $1.2 million in the fourth quarter of 2011, and $1.9 million in the first quarter of 2011.

§   Nonperforming assets were $42.3 million at March 31, 2012, and have remained relatively flat over the last four quarters.  The ratio of nonperforming assets to total assets of 1.19% at March 31, 2012, has improved for six consecutive quarters and remains well below the most recent peer averages of 2.87% published as of December 31, 2011, by the Federal Reserve1.  The Company continues to receive regular payments on over of loan balances that we categorize as nonperforming.

§   The Company’s allowance for loan and lease losses totaled $26.9 million at March 31, 2012, which represented 1.36% of total loans, compared to $27.6 million and 1.39% at December 31, 2011.  The allowance for loan and lease losses covered 66.65% of nonperforming loans as of March 31, 2012, unchanged from December 31, 2011.

§   Capital ratios remain well above the regulatory well capitalized minimums.  Tier 1 capital as a percentage of average assets at March 31, 2012 was 8.46%; and the ratio of total capital to risk-weighted assets was 14.37%.

Mr. Romaine, added, “The first quarter of 2012 was very significant in preparing us for continued success into the future.  We announced the planned acquisition with VIST Financial Corporation and are excited by the opportunities as we expand our business into new markets.  We remain on track to close this transaction during the third quarter of this year, pending required approvals.  We also announced in March that we were successful in raising $38.2 million in equity capital, net of transaction costs, which closed on April 3, 2012.  With this new capital, we are well positioned to pursue responsible growth opportunities and manage risk in the continued volatile market environment.”

Tompkins Financial Corporation operates 46 banking offices in the New York State markets served by the Company's three community banks - Tompkins Trust Company, The Bank of Castile, and Mahopac National Bank, and provides insurance through Tompkins Insurance Agencies, Inc. and wealth management through Tompkins Financial Advisors.

"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.

  1 Federal Reserve peer ratio as of December 31, 2012, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share and per share data) (Unaudited)	As of			As of
ASSETS	03/31/2012			12/31/2011
Cash and noninterest bearing balances due from banks	$	102,163		$	47,297
Interest bearing balances due from banks		1,154			2,170
Money market funds		0			100
Cash and Cash Equivalents		103,317			49,567
Trading securities, at fair value		18,766			19,598
Available-for-sale securities, at fair value		1,240,598			1,143,546
Held-to-maturity securities, fair value of $26,849 at March 31, 2012, and $27,255
at December 31, 2011		26,321			26,673
Loans and leases, net of unearned income and deferred costs and fees		1,977,569			1,981,849
Less:  Allowance for loan and lease losses		26,948			27,593
Net Loans and Leases		1,950,621			1,954,256
Federal Home Loan Bank stock and Federal Reserve Bank stock		16,460			19,070
Bank premises and equipment, net		45,200			44,712
Corporate owned life insurance		43,473			43,044
Goodwill		44,653			43,898
Other intangible assets, net		3,916			4,096
Accrued interest and other assets		53,369			51,788
Total Assets	$	3,546,694		$	3,400,248
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market		1,524,978			1,356,870
Time		729,107			687,321
Noninterest bearing		605,351			616,373
Total Deposits		2,859,436			2,660,564
Federal funds purchased and securities sold under agreements to repurchase		169,456			169,090
Other borrowings, including certain amounts at fair value of $12,005 at March 31, 2012
and $12,093 at December 31, 2011		132,884			186,075
Trust preferred debentures		25,066			25,065
Other liabilities		53,885			60,311
Total Liabilities	$	3,240,727		$	3,101,105
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
11,233,280 at March 31, 2012; and 11,159,466 at December 31, 2011		1,123			1,116
Additional paid-in capital		209,472			206,395
Retained earnings		100,251			96,445
Accumulated other comprehensive loss		(3,837	)		(3,677	)
Treasury stock, at cost – 93,433 shares at March 31, 2012, and 95,105 shares
at December 31, 2011		(2,527	)		(2,588	)
Total Tompkins Financial Corporation Shareholders’ Equity		304,482			297,691
Noncontrolling interests		1,485			1,452
Total Equity	$	305,967		$	299,143
Total Liabilities and Equity	$	3,546,694		$	3,400,248

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended
(In thousands, except per share data) (Unaudited)	03/31/2012			03/31/2011
INTEREST AND DIVIDEND INCOME
Loans	$	25,303		$	25,701
Due from banks		3			6
Federal funds sold		2			3
Trading securities		198			235
Available-for-sale securities		7,176			7,687
Held-to-maturity securities		225			365
Federal Home Loan Bank stock and Federal Reserve Bank stock		221			290
Total Interest and Dividend Income		33,128			34,287
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more		734			849
Other deposits		2,027			2,625
Federal funds purchased and securities sold under agreements to repurchase		1,092			1,291
Trust preferred debentures		405			405
Other borrowings		1,429			1,575
Total Interest Expense		5,687			6,745
Net Interest Income		27,441			27,542
Less:  Provision for loan and lease losses		1,125			1,910
Net Interest Income After Provision for Loan and Lease Losses		26,316			25,632
NONINTEREST INCOME
Investment services income		3,397			3,841
Insurance commissions and fees		3,638			3,374
Service charges on deposit accounts		1,785			1,984
Card services income		1,569			1,245
Mark-to-market loss on trading securities		(82	)		(50	)
Mark-to-market gain on liabilities held at fair value		88			174
Other income		1,264			1,829
Net gain on securities transactions		2			95
Total Noninterest Income		11,661			12,492
NONINTEREST EXPENSES
Salaries and wages		11,300			10,825
Pension and other employee benefits		4,299			4,031
Net occupancy expense of premises		1,805			1,894
Furniture and fixture expense		1,100			1,038
FDIC insurance		528			1,050
Amortization of intangible assets		133			170
Other operating expense		7,206			6,208
Total Noninterest Expenses		26,371			25,216
Income Before Income Tax Expense		11,606			12,908
Income Tax Expense		3,762			4,102
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation		7,844			8,806
Less:  Net income attributable to noncontrolling interests		33			33
Net Income Attributable to Tompkins Financial Corporation	$	7,811		$	8,773
Basic Earnings Per Share	$	0.70		$	0.80
Diluted Earnings Per Share	$	0.70		$	0.80

Average Consolidated Statements of Condition and Net Interest Analysis
	Year to Date Period Ended								Year to Date Period Ended
	March 31, 2012								March 31, 2011
	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	$	38,652	$	3			0.03	%	$	16,151	$	6			0.15	%
Money market funds		73		-			0.00	%		100		-			0.00	%
Securities (1)
U.S. Government securities		1,061,800		6,577			2.49	%		928,576		6,988			3.05	%
Trading securities		19,352		198			4.12	%		22,542		235			4.23	%
State and municipal (2)		83,113		1,129			5.46	%		112,328		1,447			5.22	%
Other securities		12,051		139			4.64	%		15,237		180			4.79	%
Total securities		1,176,316		8,043			2.75	%		1,078,683		8,850			3.33	%
Federal Funds Sold		7,376		2			0.11	%		8,767		3			0.14	%
FHLBNY and FRB stock		16,722		221			5.32	%		18,923		290			6.21	%
Loans, net of unearned income (3)
Real estate		1,437,328		18,231			5.10	%		1,368,589		18,429			5.46	%
Commercial loans (2)		466,753		6,091			5.25	%		456,691		6,022			5.35	%
Consumer loans		62,551		1,034			6.65	%		72,532		1,254			7.01	%
Direct lease financing		5,762		83			5.79	%		8,752		131			6.07	%
Total loans, net of unearned income		1,972,394		25,439			5.19	%		1,906,564		25,836			5.50	%
Total interest-earning assets		3,211,533		33,708			4.22	%		3,029,188		34,985			4.68	%
Other assets		253,384								223,361
Total assets		3,464,917								3,252,549
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings,  & money market		1,458,332		1,004			0.28	%		1,309,121		1,171			0.36	%
Time deposits > $100,000		333,061		734			0.89	%		309,746		849			1.11	%
Time deposits < $100,000		382,098		1,023			1.08	%		424,028		1,434			1.37	%
Brokered time deposits < $100,000		-		-			0.00	%		6,074		20			1.34	%
Total interest-bearing deposits		2,173,491		2,761			0.51	%		2,048,969		3,474			0.69	%
Federal funds purchased & securities sold under
agreements to repurchase		169,903		1,092			2.59	%		185,456		1,291			2.82	%
Other borrowings		138,687		1,429			4.14	%		171,659		1,575			3.72	%
Trust preferred debentures		25,065		405			6.50	%		25,061		405			6.55	%
Total interest-bearing liabilities		2,507,146		5,687			0.91	%		2,431,145		6,745			1.13	%
Noninterest bearing deposits		596,416								507,660
Accrued expenses and other liabilities		57,809								36,461
Total liabilities		3,161,371								2,975,266
Tompkins Financial Corporation Shareholders’ equity		302,077								275,814
Noncontrolling interest		1,469								1,469
Total equity		303,546								277,283
Total liabilities and equity	$	3,464,917							$	3,252,549
Interest rate spread							3.31	%							3.55	%
Net interest income/margin on earning assets				28,021			3.51	%				28,240			3.78	%
Tax Equivalent Adjustment				(580	)							(698	)
Net interest income per consolidated financial statements			$	27,441							$	27,542

(1)  Average balances and yields on available-for-sale securities are based on historical amortized cost.
(2)  Interest income includes the tax effects of taxable-equivalent adjustments using a combined New York State and Federal effective income tax rate
of 40% to increase tax exempt interest income to taxable-equivalent basis.
(3)  Nonaccrual loans are included in the average asset totals presented above.  Payments received on nonaccrual loans have been recognized as disclosed in Note 1
	of the Company’s consolidated financial statements included in Part I of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)	Quarter-Ended										Year-Ended
	Mar-12		Dec-11		Sep-11		Jun-11		Mar-11		Dec-11
Period End Balance Sheet
Securities	$	1,285,685	$	1,189,817	$	1,130,769	$	1,138,563	$	1,121,443	$	1,189,817
Loans and leases, net of unearned income and deferred costs and fees		1,977,569		1,981,849		1,951,598		1,920,716		1,914,344		1,981,849
Allowance for loan and lease losses		26,948		27,593		27,878		28,361		28,035		27,593
Total assets		3,546,694		3,400,248		3,359,017		3,287,598		3,278,894		3,400,248
Total deposits		2,859,436		2,660,564		2,675,674		2,572,008		2,612,517		2,660,564
Federal funds purchased and securities sold under agreements to repurchase		169,456		169,090		171,943		178,545		182,009		169,090
Other borrowings		132,884		186,075		138,001		172,643		140,353		186,075
Trust preferred debentures		25,066		25,065		25,063		25,062		25,061		25,065
Shareholders' equity		305,967		299,143		309,335		300,060		282,237		299,143
Average Balance Sheet
Average earning assets	$	3,211,533	$	3,131,051	$	3,050,346	$	3,047,494	$	3,029,188	$	3,064,761
Average assets		3,464,917		3,368,135		3,286,159		3,271,895		3,252,549		3,294,982
Average interest-bearing liabilities		2,507,146		2,435,326		2,391,576		2,432,556		2,431,145		2,422,577
Average equity		303,546		307,539		303,861		288,341		277,283		294,620
Share data
Weighted average shares outstanding (basic)		11,103,192		11,074,330		11,049,831		10,974,615		10,905,197		11,002,106
Weighted average shares outstanding (diluted)		11,147,489		11,104,623		11,124,331		11,016,515		10,955,430		11,035,384
Period-end shares outstanding		11,197,370		11,123,556		11,122,886		11,051,894		10,952,410		11,123,556
Book value per share		27.32		26.89		27.81		27.15		25.77		26.89
Income Statement
Net interest income	$	27,441	$	27,999	$	27,913	$	27,952	$	27,542	$	111,406
Provision for loan/lease losses		1,125		1,160		4,870		1,005		1,910		8,945
Noninterest income		11,661		11,197		12,312		12,013		12,492		48,014
Noninterest expense		26,371		24,200		23,973		25,163		25,216		98,552
Income tax expense		3,762		4,417		3,490		4,364		4,102		16,373
Net income attributable to Tompkins Financial Corporation		7,811		9,387		7,859		9,400		8,773		35,419
Noncontrolling interests		33		32		33		33		33		131
Basic earnings per share	$	0.70	$	0.84	$	0.71	$	0.86	$	0.80	$	3.21
Diluted earnings per share	$	0.70	$	0.84	$	0.71	$	0.85	$	0.80	$	3.20
Asset Quality
Net charge-offs		1,770		1,445		5,353		679		1,707		9,184
Nonaccrual loans and leases		38,455		39,588		40,419		38,457		39,902		39,588
Loans and leases 90 days past due and accruing		1,552		1,380		379		2,512		1,266		1,380
Troubled debt restructurings not included above		423		428		441		0		2,411		428
Total nonperforming loans and leases		40,430		41,396		41,239		40,969		43,579		41,396
OREO		1,906		1,334		1,632		1,742		2,270		1,334
Nonperforming assets		42,336		42,730		42,871		42,711		45,849		42,730
Loan Classifications
Special Mention		62,649		52,156		66,697		80,470		70,765		52,156
Substandard		58,272		72,920		73,313		80,003		85,973		72,920
Doubtful		1,344		1,494		509		2,450		2,468		1,494

RATIO ANALYSIS	Quarter-Ended																Year-Ended
Credit Quality	Mar-12				Dec-11			Sep-11			Jun-11			Mar-11			Dec-11
Net loan and lease losses/ average loans
and leases *		0.36	%			0.29	%		1.10	%		0.14	%		0.36	%		0.48	%
Nonperforming loans and leases/loans and leases		2.04	%			2.09	%		2.11	%		2.13	%		2.28	%		2.09	%
Nonperforming assets/assets		1.19	%			1.26	%		1.28	%		1.30	%		1.40	%		1.26	%
Allowance/nonperforming loans and leases		66.65	%			66.65	%		67.60	%		69.23	%		64.33	%		66.65	%
Allowance/loans and leases		1.36	%	��		1.39	%		1.43	%		1.48	%		1.46	%		1.39	%
Capital Adequacy (period-end)
Tier I capital / average assets		8.46	%			8.51	%		8.55	%		8.39	%		8.22	%		8.51	%
Total capital / risk-weighted assets		14.37	%			14.17	%		14.11	%		13.98	%		13.66	%		14.17	%
Profitability
Return on average assets *		0.91	%			1.11	%		0.95	%		1.15	%		1.09	%		1.07	%
Return on average equity *		10.35	%			12.07	%		10.29	%		13.08	%		12.83	%		12.02	%
Net interest margin (TE) *		3.51	%			3.62	%		3.71	%		3.77	%		3.78	%		3.72	%
* Quarterly ratios have been annualized