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

Tompkins Financial Corporation 8-K

EXHIBIT 99.1

For more information contact:

Stephen S. Romaine, President & CEO

Francis M. Fetsko, Executive VP, CFO & COO

Tompkins Financial Corporation (888)503-5753

For Immediate Release

Friday, October 28, 2016

Tompkins Financial Corporation Reports Record Third Quarter Earnings

ITHACA, NY – Tompkins Financial Corporation (NYSEMKT:TMP)

Tompkins Financial Corporation reported diluted earnings per share of $0.97 for the third quarter of 2016, an increase from the $0.96 reported in the third quarter of 2015. Net income for the third quarter of 2016 was $14.9 million, up 2.5% compared to the $14.5 million reported in 2015.

For the year to date period ended September 30, 2016, diluted earnings per share were $2.87, and were down 3.0% ($0.09 per share) compared to the same period in 2015. Prior year to date 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. Refer to the table of “NON-GAAP MEASURES” included in this press release for additional details.

President and CEO, Stephen S. Romaine said "We are very pleased to report earnings that represent the best third quarter in our history. Several positive trends continued during the quarter that contributed to these results, including solid growth in loans and deposits, along with continued strong credit quality. We are excited that during the quarter we opened a new office in Lyndon Corners, representing our first physical presence in this attractive Syracuse market.”

Selected highlights for third quarter:

▪ Net interest income of $45.3 million was up 6.9% compared to the third quarter of 2015

▪ Total loans of $4.1 billion were up 12.5% over the same period in 2015

▪ Noninterest bearing deposit balances are up 7.4% over September 30, 2015

▪ Nonperforming assets of $19.3 million are down 27.0% over the same period in 2015, and have remained relatively stable when compared to the most recent quarter

NET INTEREST INCOME

Net interest income of $45.3 million for the third quarter of 2016 increased by $2.9 million, or 6.9% compared to the same period in 2015. For the year to date period, net interest income was $134.3 million, up $9.3 million, or 7.5% from the same period in 2015.

Growth in net interest income was largely driven by $455.8 million of growth in total loans since the third quarter of 2015, an increase of 12.5%. The loan growth was supported in part by a $253.2 million increase in total deposits over the same period. The net interest margin was 3.31%, down 5 basis points compared to the most recent prior quarter, largely due to lower yields on average loans and securities during the quarter.

NONINTEREST INCOME

Noninterest income was $17.9 million for the third quarter of 2016, and was up 2.8% compared to the same period in 2015. Year-to-date noninterest income of $52.5 million is down compared to $54.0 million reported for September 30, 2015. Prior year-to-date results included gains on the sale of other real estate owned which were higher by $924,000, when compared to the current year-to-date period. Fee based revenue was relatively flat compared to prior year for the quarter and year-to-date periods. Noninterest income represented 28.3% of total revenues in the third quarter of 2016, compared to 29.1% compared to the same period in 2015.

NONINTEREST EXPENSE

Noninterest expense was $40.3 million for the third quarter of 2016, up $2.4 million over the third quarter of 2015. For the year to date period, noninterest expense was $119.2 million, up $8.7 million from the same period in 2015. The current quarter and year to date results included $313,000 of expense related to the early termination of an FDIC loss share agreement. Noninterest expenses for the prior year to date period were reduced by a $6.0 million (pretax) non-recurring curtailment gain (recognized in the second quarter of 2015) related to a change in the Company’s defined benefit pension plan.

ASSET QUALITY

Asset quality trends remain strong in the third quarter of 2016. Nonperforming assets were down 27.0% compared to the third quarter in 2015, and in line with the second quarter of 2016. Nonperforming assets represented 0.32% of total assets at September 30, 2016, down from 0.43% at December 31, 2015, and in line with prior quarter. Nonperforming asset levels continue to be well below the most recent Federal Reserve Board Peer Group Average¹ of 0.83%.

Provision for loan and lease losses was $782,000 for the third quarter of 2016, up from $281,000 compared to the third quarter of 2015. The year-over-year increase in provision expense is primarily due to loan growth, as well as higher net recoveries in the prior period. Net recoveries for the third quarter of 2016 were $205,000 compared to net recoveries of $593,000 reported in the third quarter of 2015.

The Company’s allowance for originated loan and lease losses totaled $34.1 million at September 30, 2016, and represented 0.92% of total originated loans at September 30, 2016, compared to 0.97% at September 30, 2015, and 0.95% at December 31, 2015. The total allowance represented 186.5% of total nonperforming loans and leases at September 30, 2016, up from 146.7% at December 31, 2015, and 133.2% at September 30, 2015.

CAPITAL POSITION

Capital ratios remain well above the regulatory well capitalized minimums. Tier 1 capital to average assets of 8.83%, compared to 8.82% reported for December 31, 2015, and 8.89% at September 30, 2015. Total Capital to risk-weighted assets at September 30, 2016 was 12.97%, compared to 13.03% reported at December 31, 2015 and 13.29% at September 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, visitwww.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				09/30/2016		12/31/2015
Cash and noninterest bearing balances due from banks			$	177,342	$	56,261
Interest bearing balances due from banks				2,244		1,996
	Cash and Cash Equivalents			179,586		58,257
Trading securities, at fair value				0		7,368
Available-for-sale securities, at fair value (amortized cost of $1,352,845 at September 30,
	2016 and $1,390,255 at December 31, 2015)			1,371,111		1,385,684
Held-to-maturity securities, at amortized cost (fair value of $151,626 at September 30, 2016
	and $146,686 at December 31, 2015)			144,650		146,071
Originated loans and leases, net of unearned income and deferred costs and fees (2)				3,672,539		3,310,768
Acquired loans and leases, covered (3)				0		14,031
Acquired loans and leases, non-covered (3)				417,008		447,243
Less:  Allowance for loan and lease losses				34,112		32,004
	Net Loans and Leases			4,055,435		3,740,038
Federal Home Loan Bank and other stock				34,246		29,969
Bank premises and equipment, net				63,687		60,331
Corporate owned life insurance				77,409		75,792
Goodwill				92,623		91,792
Other intangible assets, net				11,902		12,448
Accrued interest and other assets				71,566		82,245
	Total Assets		$	6,102,215	$	5,689,995
LIABILITIES
Deposits:
	Interest bearing:
	Checking, savings and money market			2,618,465		2,401,519
	Time			877,427		855,133
	Noninterest bearing			1,194,408		1,138,654
	Total Deposits			4,690,300		4,395,306
Federal funds purchased and securities sold under agreements to repurchase				77,218		136,513
Other borrowings, including certain amounts at fair value of $0 at September 30, 2016
	and $10,576 at December 31, 2015			671,000		536,285
Trust preferred debentures				37,638		37,509
Other liabilities				64,869		67,916
	Total Liabilities		$	5,541,025	$	5,173,529
EQUITY
Tompkins Financial Corporation shareholders' equity:
	Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
		15,091,864 at September 30, 2016; and 15,015,594 at December 31, 2015		1,509		1,502
	Additional paid-in capital			357,468		350,823
	Retained earnings			221,235		197,445
	Accumulated other comprehensive loss			(16,660)		(31,001)
	Treasury stock, at cost – 116,203 shares at September 30, 2016, and 116,126 shares
		at December 31, 2015		(3,912)		(3,755)
	Total Tompkins Financial Corporation Shareholders’ Equity			559,640		515,014
Noncontrolling interests				1,550		1,452
	Total Equity		$	561,190	$	516,466
	Total Liabilities and Equity		$	6,102,215	$	5,689,995

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

		Three Months Ended				Nine Months Ended
(In thousands, except per share data) (Unaudited)		09/30/2016		09/30/2015		09/30/2016		09/30/2015
INTEREST AND DIVIDEND INCOME
Loans	$	43,057	$	39,235	$	125,378	$	114,670
Due from banks		2		1		5		3
Trading securities		62		86		220		270
Available-for-sale securities		6,683		7,031		21,498		22,219
Held-to-maturity securities		898		915		2,712		2,185
Federal Home Loan Bank and other stock		375		262		990		834
Total Interest and Dividend Income		51,077		47,530		150,803		140,181
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more		402		369		1,214		1,058
Other deposits		2,291		2,284		6,764		6,837
Federal funds purchased and securities sold under agreements to
repurchase		630		685		1,940		2,020
Trust preferred debentures		600		583		1,783		1,726
Other borrowings		1,837		1,223		4,840		3,596
Total Interest Expense		5,760		5,144		16,541		15,237
Net Interest Income		45,317		42,386		134,262		124,944
Less:  Provision for loan and lease losses		782		281		2,615		1,412
Net Interest Income After Provision for Loan and Lease Losses		44,535		42,105		131,647		123,532
NONINTEREST INCOME
Insurance commissions and fees		7,729		7,564		22,808		22,341
Investment services income		3,735		3,674		11,355		11,518
Service charges on deposit accounts		2,203		2,410		6,559		6,812
Card services income		2,037		2,001		5,980		5,844
Mark-to-market loss on trading securities		(76)		(69)		(182)		(206)
Mark-to-market gain on liabilities held at fair value		77		81		227		226
Other income		1,745		1,669		4,819		6,390
Gain on sale of available-for-sale securities		455		92		926		1,105
Total Noninterest Income		17,905		17,422		52,492		54,030
NONINTEREST EXPENSES
Salaries and wages		19,801		18,357		58,123		54,319
Pension and other employee benefits		5,218		5,368		15,435		10,843
Net occupancy expense of premises		3,046		2,891		9,193		9,303
Furniture and fixture expense		1,707		1,532		4,973		4,465
FDIC insurance		783		729		2,388		2,218
Amortization of intangible assets		524		496		1,572		1,503
Other operating expense		9,245		8,509		27,534		27,841
Total Noninterest Expenses		40,324		37,882		119,218		110,492
Income Before Income Tax Expense		22,116		21,645		64,921		67,070
Income Tax Expense		7,219		7,115		21,208		22,405
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation		14,897		14,530		43,713		44,665
Less:  Net income attributable to noncontrolling interests		33		33		98		98
Net Income Attributable to Tompkins Financial Corporation	$	14,864	$	14,497	$	43,615	$	44,567
Basic Earnings Per Share	$	0.99	$	0.97	$	2.90	$	2.98
Diluted Earnings Per Share	$	0.97	$	0.96	$	2.87	$	2.96

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)

				Quarter Ended					Year to Date Period Ended					Year to Date Period Ended
				September 30, 2016					September 30, 2016					September 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		$	1,874	$	2	0.42%	$	1,968	$	5	0.34%	$	1,725	$	3	0.23%
	Securities (4)
		U.S. Government securities		1,419,808		7,058	1.98%		1,447,450		22,608	2.09%		1,441,360		22,807	2.12%
		Trading securities		5,452		62	4.52%		6,536		220	4.50%		8,437		270	4.28%
		State and municipal (5)		96,607		809	3.33%		97,906		2,488	3.39%		86,846		2,486	3.83%
		Other securities (5)		3,632		30	3.29%		3,653		91	3.33%		3,740		91	3.25%
		Total securities		1,525,499		7,959	2.08%		1,555,545		25,407	2.18%		1,540,383		25,654	2.23%
	FHLBNY and FRB stock			35,841		375	4.16%		31,767		990	4.16%		23,771		834	4.69%
	Total loans and leases, net of unearned income (5)(6)			4,014,671		43,772	4.34%		3,897,461		127,484	4.37%		3,479,528		116,547	4.48%
	Total interest-earning assets			5,577,885		52,108	3.72%		5,486,741		153,886	3.75%		5,045,407		143,038	3.79%
Other assets				364,375					351,944					352,808
	Total assets			5,942,260					5,838,685					5,398,215
LIABILITIES & EQUITY
Deposits
	Interest-bearing deposits
		Interest bearing checking, savings,  & money market		2,478,292		1,021	0.16%		2,514,159		2,958	0.16%		2,332,674		2,863	0.16%
		Time deposits		871,937		1,672	0.76%		876,947		5,020	0.76%		904,911		5,032	0.74%
		Total interest-bearing deposits		3,350,229		2,693	0.32%		3,391,106		7,978	0.31%		3,237,585		7,895	0.33%
Federal funds purchased & securities sold under
		agreements to repurchase		99,387		630	2.52%		108,189		1,940	2.40%		136,073		2,020	1.98%
Other borrowings				681,654		1,837	1.07%		589,726		4,840	1.10%		413,819		3,596	1.16%
Trust preferred debentures				37,609		600	6.35%		37,567		1,783	6.34%		37,395		1,726	6.17%
	Total interest-bearing liabilities			4,168,879		5,760	0.55%		4,126,588		16,541	0.54%		3,824,872		15,237	0.53%
Noninterest bearing deposits				1,148,081					1,103,108					1,003,318
Accrued expenses and other liabilities				68,019					65,978					65,902
	Total liabilities			5,384,979					5,295,674					4,894,092
Tompkins Financial Corporation Shareholders’ equity				555,747					541,510					502,622
Noncontrolling interest				1,534					1,501					1,501
	Total equity			557,281					543,011					504,123
	Total liabilities and equity		$	5,942,260				$	5,838,685				$	5,398,215
Interest rate spread							3.17%					3.21%					3.26%
	Net interest income/margin on earning assets					46,348	3.31%				137,345	3.34%				127,801	3.39%
Tax Equivalent Adjustment						(1,031)					(3,083)					(2,857)
	Net interest income per consolidated financial statements				$	45,317				$	134,262				$	124,944

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)		Quarter-Ended									Year-Ended
		Sep-16		Jun-16		Mar-16		Dec-15		Sep-15		Dec-15
Period End Balance Sheet
Securities	$	1,515,761	$	1,564,080	$	1,583,742	$	1,539,123	$	1,542,332	$	1,539,123
Originated loans and leases, net of unearned income and deferred costs and fees (2)		3,672,539		3,551,628		3,370,791		3,310,768		3,149,386		3,310,768
Acquired loans and leases (3)		417,008		426,485		450,122		461,274		484,927		461,274
Allowance for  loan and lease losses		34,112		33,125		32,530		32,004		30,965		32,004
Total assets		6,102,215		5,924,906		5,764,971		5,689,995		5,594,718		5,689,995
Total deposits		4,690,300		4,469,721		4,555,228		4,395,306		4,437,073		4,395,306
Federal funds purchased and securities sold under agreements to repurchase		77,218		97,180		116,551		136,513		134,941		136,513
Other borrowings		671,000		700,026		455,341		536,285		398,946		536,285
Trust preferred debentures		37,638		37,595		37,552		37,509		37,466		37,509
Total common equity		559,640		552,918		538,408		515,014		516,409		515,014
Total equity		561,190		554,435		539,893		516,466		517,959		516,466
Average Balance Sheet
Average earning assets	$	5,577,885	$	5,492,913	$	5,388,420	$	5,260,979	$	5,138,665	$	5,099,743
Average assets		5,942,260		5,842,387		5,730,271		5,624,351		5,486,645		5,455,214
Average interest-bearing liabilities		4,168,879		4,143,031		4,067,385		3,930,707		3,856,025		3,851,549
Average equity		557,281		543,283		528,314		518,529		509,518		507,754
Share data
Weighted average shares outstanding (basic)		14,829,222		14,798,515		14,760,276		14,719,394		14,739,915		14,728,193
Weighted average shares outstanding (diluted)		15,033,531		14,975,115		14,905,919		14,869,103		14,866,735		14,863,026
Period-end shares outstanding		15,055,954		15,035,369		15,023,776		14,979,684		14,905,576		14,979,684
Common equity book value per share	$	37.17	$	36.77	$	35.84	$	34.38	$	34.65	$	34.38
Tangible book value per share (Non-GAAP)	$	30.28	$	29.82	$	28.85	$	27.48	$	27.64	$	27.48
Income Statement
Net interest income	$	45,317	$	44,907	$	44,038	$	43,437	$	42,386	$	168,381
Provision for loan/lease losses		782		978		855		1,533		281		2,945
Noninterest income		17,905		17,084		17,503		17,910		17,422		71,940
Noninterest expense		40,324		39,388		39,506		39,370		37,882		149,862
Income tax expense		7,219		7,022		6,967		6,557		7,115		28,962
Net income attributable to Tompkins Financial Corporation		14,864		14,571		14,180		13,854		14,497		58,421
Noncontrolling interests		33		32		33		33		33		131
Basic earnings per share (9)	$	0.99	$	0.97	$	0.95	$	0.93	$	0.97	$	3.91
Diluted earnings per share (9)	$	0.97	$	0.96	$	0.94	$	0.92	$	0.96	$	3.87
Nonperforming Assets
Originated nonaccrual loans and leases	$	11,554	$	11,008	$	12,671	$	13,506	$	14,821	$	13,506
Acquired nonaccrual loans and leases		4,559		4,831		4,145		4,331		4,908		4,331
Originated loans and leases 90 days past due and accruing		35		89		57		58		57		58
Troubled debt restructurings not included above		2,148		2,172		3,862		3,915		3,465		3,915
Total nonperforming loans and leases		18,296		18,100		20,735		21,810		23,251		21,810
OREO (8)		1,008		1,001		1,865		2,692		3,188		2,692
Total nonperforming assets	$	19,304	$	19,101	$	22,600	$	24,502	$	26,439	$	24,502

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

		Quarter-Ended									Year-Ended
Delinquency - Originated loan and lease portfolio		Sep-16		Jun-16		Mar-16		Dec-15		Sep-15		Dec-15
Loans and leases 30-89 days past due and
accruing (2)	$	4,551	$	4,464	$	2,519	$	3,280	$	3,550	$	3,280
Loans and leases 90 days past due and accruing (2)		35		89		57		58		57		58
Total originated loans and leases past due and accruing (2)		4,586		4,553		2,576		3,338		3,607		3,338
Delinquency - Acquired loan and lease portfolio
Covered loans and leases 30-89 days past due and accruing (3)(7)	$	0	$	850	$	1	$	276	$	309	$	276
Covered loans and leases 90 days or more past
due and accruing (3)(7)		0		474		469		524		508		524
Non-covered loans and leases 30-89 days past
due and accruing (3)(7)		1,069		900		1,038		933		1,028		933
Non-covered loans and leases 90 days past
due and accruing (3)(7)		2,555		1,387		1,446		1,991		2,069		1,991
Total acquired loans and leases past due and accruing		3,624		3,611		2,954		3,724		3,914		3,724
Total loans and leases past due and accruing	$	8,210	$	8,164	$	5,530	$	7,062	$	7,521	$	7,062
Allowance for Loan Losses - Originated loan and lease portfolio
Balance at beginning of period	$	32,968	$	31,981	$	31,312	$	30,450	$	29,428	$	28,156
Provision for loan and lease losses		868		978		872		1,185		173		2,467
Net loan and lease (recoveries) charge-offs		(120)		(9)		203		323		(849)		(689)
Allowance for loan and lease losses (originated		33,956		32,968		31,981		31,312		30,450		31,312
loan portfolio) - balance at end of period	$		$		$		$		$		$
Allowance for Loan Losses - Acquired loan and lease portfolio
Balance at beginning of period	$	157	$	549	$	692	$	515	$	663	$	841
Provision (Credit) for loan and lease losses		(86)		0		(17)		348		108		478
Net loan and lease (recoveries) charge-offs		(85)		392		126		171		256		627
Allowance for loan and lease losses (acquired
loan portfolio) - balance at end of period		156		157		549		692		515		692
Total allowance for loan and lease losses	$	34,112	$	33,125	$	32,530	$	32,004	$	30,965	$	32,004
Loan Classification - Originated Portfolio
Special Mention	$	27,215	$	20,639	$	20,388	$	19,657	$	25,133	$	19,657
Substandard		18,121		16,462		18,026		18,186		19,937		18,186
Loan Classification - Acquired Portfolio
Special Mention		540		550		534		540		1,446		540
Substandard		14,000		13,975		17,445		17,007		23,683		17,007
Loan Classifications - Total Portfolio
Special Mention		27,755		21,189		20,922		20,197		26,579		20,197
Substandard		32,121		30,437		35,471		35,193		43,620		35,193

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

RATIO ANALYSIS	Quarter-Ended					Year-Ended
Credit Quality	Sep-16	Jun-16	Mar-16	Dec-15	Sep-15		Dec-15
Nonperforming loans and leases/total loans and leases (7)	0.45%	0.45%	0.54%	0.58%	0.64%		0.58%
Nonperforming assets/total assets	0.32%	0.32%	0.39%	0.43%	0.47%		0.43%
Allowance for originated loan and lease losses/total originated loans and leases	0.92%	0.93%	0.95%	0.95%	0.97%		0.95%
Allowance/nonperforming loans and leases	186.45%	183.01%	156.88%	146.74%	133.18%		146.74%
Net loan and lease losses (recoveries) annualized/total average loans and leases	(0.02%)	0.04%	0.03%	0.05%	(0.07%)		(0.00%)
Capital Adequacy (period-end)
Tier 1 capital / average assets *	8.83%	8.79%	8.79%	8.82%	8.89%		8.82%
Total capital / risk-weighted assets *	12.97%	12.95%	13.18%	13.03%	13.29%		13.03%
Profitability
Return on average assets *	1.00%	1.00%	0.99%	0.98%	1.05%		1.07%
Return on average equity *	10.61%	10.76%	10.77%	10.63%	11.29%		11.51%
Net interest margin (TE) *	3.31%	3.36%	3.36%	3.35%	3.35%		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 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 measure 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-16		Jun-16		Mar-16		Dec-15		Sep-15		Dec-15
Net income available to common shareholders	$	14,864	$	14,571	$	14,180	$	13,854	$	14,497	$	58,421
Less: Dividends and undistributed earnings allocated to unvested restricted stock awards		215		224		229		229		189		834
Adjusted net income available to common shareholders		14,649		14,347		13,951		13,625		14,308		57,587
Gain on pension plan curtailment (net of tax)		0		0		0		0		0		(3,602)
Net operating income (Non-GAAP)		14,649		14,347		13,951		13,625		14,308		53,985
Weighted average shares outstanding (diluted)		15,033,531		14,975,115		14,905,919		14,869,103		14,866,735		14,863,026
Adjusted diluted earnings per share (Non-GAAP) (9)	$	0.97	$	0.96	$	0.94	$	0.92	$	0.96	$	3.63

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

Non-GAAP Disclosure - Tangible Book Value Per Share

		Quarter-Ended									Year-Ended
		Sep-16		Jun-16		Mar-16		Dec-15		Sep-15		Dec-15
Total common equity	$	559,640	$	552,918	$	538,408	$	515,014	$	516,409	$	515,014
Less:  Goodwill and intangibles (10)		103,732		104,636		104,987		103,347		104,349		103,347
Tangible common equity		455,908		448,282		433,421		411,667		412,060		411,667
Ending shares outstanding		15,055,954		15,035,369		15,023,776		14,979,684		14,905,576		14,979,684
Tangible book value per share (Non-GAAP)	$	30.28	$	29.82	$	28.85	$	27.48	$	27.64	$	27.48
Non-GAAP Disclosure - YTD adjusted diluted earnings per share
			Sep-16		Sep-15
Net income available to common shareholders			$	43,615	$	44,567
Less: Dividends and undistributed earnings allocated to unvested restricted stock awards				668		609
Adjusted net income available to common shareholders				42,947		43,958
Gain on pension plan curtailment (net of tax)				0		(3,602)
Net operating income (Non-GAAP)				42,947		40,356
Weighted average shares outstanding (diluted)				14,971,601		14,861,003
Adjusted diluted earnings per share (Non-GAAP)			$	2.87	$	2.72

(1) Federal Reserve peer ratio as of June 30, 2016, 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, 2015.

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

(8) Includes all other real estate owned, including those balances acquired through business combinations.

(9)Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares.

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