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 19, 2018

Tompkins Financial Corporation Reports Record Year-to-Date and Third Quarter Earnings

ITHACA, NY - Tompkins Financial Corporation (NYSE American: TMP)

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

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

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

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

▪ Year-to-date diluted earnings per share reflect the best performance for the first nine months of any year in the Company’s history. Quarterly diluted earnings per share also reflect the best third quarter performance in the Company’s history.

▪ Year-to-date profitability indicators remain strong with return on average assets of 1.27%; and a return on average shareholders’ equity of 14.47% for 2018, which are improved from 1.06% and 11.70%, respectively, for the same period in 2017.

▪ Total loans of $4.8 billion at September 30, 2018, were up 7.0% over September 30, 2017, and up 2.9% over December 31, 2017.

▪ Total deposits of $5.0 billion at September 30, 2018, were up $81.1 million, or 1.6% compared to September 30, 2017, and up $187.3 million, or 3.9% over December 31, 2017. Total non-interest bearing deposits were up $26.9 million over prior quarter.

NET INTEREST INCOME

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

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

NONINTEREST INCOME

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

NONINTEREST EXPENSE

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

INCOME TAX EXPENSE

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

ASSET QUALITY

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

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

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

CAPITAL POSITION

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

ABOUT TOMPKINS FINANCIAL CORPORATION

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

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

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

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

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share and per share data) (Unaudited)				As of			As of
ASSETS				09/30/2018			12/31/2017
Cash and noninterest bearing balances due from banks			$	111,245		$	77,688
Interest bearing balances due from banks				1,917			6,615
	Cash and Cash Equivalents			113,162			84,303
Available-for-sale securities, at fair value (amortized cost of $1,360,508 at September 30, 2018
	and $1,408,996 at December 31, 2017)			1,310,672			1,391,863
Held-to-maturity securities, at amortized cost (fair value of $138,232 at September 30, 2018 and
	$140,315 at December 31, 2017)			141,236			139,216
Equity securities, at fair value (amortized cost $1,000,000 at September 30, 2018 and $1,000,000
	at December 31, 2017)			880			913
Originated loans and leases, net of unearned income and deferred costs and fees (2)				4,531,241			4,358,543
Acquired loans (3)				271,468			310,577
Less:  Allowance for loan and lease losses				41,358			39,771
	Net Loans and Leases			4,761,351			4,629,349
Federal Home Loan Bank and other stock				48,456			50,498
Bank premises and equipment, net				95,638			86,995
Corporate owned life insurance				81,625			80,106
Goodwill				92,283			92,291
Other intangible assets, net				7,989			9,263
Accrued interest and other assets				93,668			83,494
	Total Assets		$	6,746,960		$	6,648,290
LIABILITIES
Deposits:
	Interest bearing:
	Checking, savings and money market			2,950,616			2,651,632
	Time			640,102			748,250
	Noninterest bearing			1,434,364			1,437,925
	Total Deposits			5,025,082			4,837,807
Federal funds purchased and securities sold under agreements to repurchase				52,875			75,177
Other borrowings				988,515			1,071,742
Trust preferred debentures				16,820			16,691
Other liabilities				64,524			70,671
	Total Liabilities		$	6,147,816		$	6,072,088
EQUITY
Tompkins Financial Corporation shareholders’ equity:
	Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 15,313,825 at
		September 30, 2018; and 15,301,524 at December 31, 2017		1,531			1,530
	Additional paid-in capital			367,669			364,031
	Retained earnings			308,121			265,007
	Accumulated other comprehensive loss			(74,937	)		(51,296	)
	Treasury stock, at cost - 120,278 shares at September 30, 2018, and 120,805 shares
		at December 31, 2017		(4,748	)		(4,492	)
	Total Tompkins Financial Corporation Shareholders’ Equity			597,636			574,780
Noncontrolling interests				1,508			1,422
	Total Equity		$	599,144		$	576,202
	Total Liabilities and Equity		$	6,746,960		$	6,648,290

	Three Months Ended					Nine Months Ended
(In thousands, except per share data) (Unaudited)	09/30/2018		09/30/2017			09/30/2018		09/30/2017
INTEREST AND DIVIDEND INCOME
Loans	$	54,769	$	48,949		$	158,419	$	141,257
Due from banks	8		9			22		15
Available-for-sale securities	7,448		7,415			22,821		22,384
Held-to-maturity securities	860		865			2,572		2,613
Federal Home Loan Bank and other stock	899		534			2,433		1,466
Total Interest and Dividend Income	63,984		57,772			186,267		167,735
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	563		457			1,088		1,364
Other deposits	3,830		2,679			9,699		7,508
Federal funds purchased and securities sold under agreements to repurchase	35		44			115		195
Trust preferred debentures	318		265			904		888
Other borrowings	6,075		3,327			15,897		8,445
Total Interest Expense	10,821		6,772			27,703		18,400
Net Interest Income	53,163		51,000			158,564		149,335
Less:  Provision for loan and lease losses	272		402			1,884		2,147
Net Interest Income After Provision for Loan and Lease Losses	52,891		50,598			156,680		147,188
NONINTEREST INCOME
Insurance commissions and fees	7,903		7,682			22,684		21,892
Investment services income	4,097		3,862			12,365		11,544
Service charges on deposit accounts	2,088		2,125			6,300		6,337
Card services income	2,442		2,190			7,209		6,875
Other income	2,057		1,766			8,743		5,667
Gain (loss) on securities transactions	16		(423		)	290		(423		)
Total Noninterest Income	18,603		17,202			57,591		51,892
NONINTEREST EXPENSE
Salaries and wages	22,029		20,931			64,404		60,868
Pension and other employee benefits	5,300		5,344			15,859		16,195
Net occupancy expense of premises	3,057		3,064			9,873		9,965
Furniture and fixture expense	1,814		1,585			5,461		4,819
FDIC insurance	712		620			2,083		1,775
Amortization of intangible assets	440		481			1,334		1,459
Other operating expense	11,781		9,858			34,825		29,738
Total Noninterest Expenses	45,133		41,883			133,839		124,819
Income Before Income Tax Expense	26,361		25,917			80,432		74,261
Income Tax Expense	5,427		8,491			16,939		24,127
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	20,934		17,426			63,493		50,134
Less:  Net Income Attributable to Noncontrolling Interests	32		32			96		97
Net Income Attributable to Tompkins Financial Corporation	$	20,902	$	17,394		$	63,397	$	50,037
Basic Earnings Per Share	$	1.37	$	1.14		$	4.15	$	3.30
Diluted Earnings Per Share	$	1.36	$	1.14		$	4.12	$	3.27

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
				Quarter Ended						YTD Period Ended						YTD Period Ended
				September 30, 2018						September 30, 2018						September 30, 2017
				Average						Average						Average
				Balance			Average			Balance			Average			Balance			Average
(Dollar amounts in thousands)				(QTD)	Interest		Yield/ Rate			(YTD)	Interest		Yield/ Rate			(YTD)	Interest		Yield/ Rate
ASSETS
Interest-earning assets
	Interest-bearing balances due from banks		$	2,513	$	8	1.26	%	$	2,121	$	22	1.39	%	$	3,547	$	15	0.57	%
	Securities (4)
		U.S. Government securities		1,418,742	7,766		2.17	%		1,438,322	23,763		2.21	%		1,476,459	23,352		2.11	%
		State and municipal (5)		95,758	627		2.60	%		97,556	1,898		2.60	%		101,080	2,552		3.38	%
		Other securities (5)		3,435	39		4.50	%		3,516	113		4.30	%		3,602	96		3.56	%
		Total securities		1,517,935	8,432		2.20	%		1,539,394	25,774		2.24	%		1,581,141	26,000		2.20	%
	FHLBNY and FRB stock			54,871	899		6.50	%		52,802	2,433		6.16	%		41,639	1,466		4.71	%
	Total loans and leases, net of unearned income (5)(6)			4,781,462	55,095		4.57	%		4,740,257	159,398		4.50	%		4,352,292	143,497		4.41	%
	Total interest-earning assets			6,356,781	64,434		4.02	%		6,334,574	187,627		3.96	%		5,978,619	170,978		3.82	%
Other assets				359,671						351,949						355,983
	Total assets		$	6,716,452					$	6,686,523					$	6,334,602
LIABILITIES & EQUITY
Deposits
	Interest-bearing deposits
		Interest bearing checking, savings & money market	$	2,789,432	2,532		0.36	%	$	2,806,119	6,118		0.29	%	$	2,664,405	3,620		0.18	%
		Time deposits		637,426	1,861		1.16	%		671,888	4,669		0.93	%		845,058	5,252		0.83	%
		Total interest-bearing deposits		3,426,858	4,393		0.51	%		3,478,007	10,787		0.41	%		3,509,463	8,872		0.34	%
Federal funds purchased & securities sold under
		agreements to repurchase		59,626	35		0.23	%		62,956	115		0.24	%		65,798	195		0.40	%
Other borrowings				1,141,257	6,075		2.11	%		1,113,120	15,897		1.91	%		861,289	8,445		1.31	%
Trust preferred debentures				16,792	318		7.51	%		16,749	904		7.22	%		18,903	888		6.28	%
	Total interest-bearing liabilities			4,644,533	10,821		0.92	%		4,670,832	27,703		0.79	%		4,455,453	18,400		0.55	%
Non-interest bearing deposits				1,409,401						1,366,219						1,241,173
Accrued expenses and other liabilities				65,307						63,682						66,094
	Total liabilities			6,119,241						6,100,733						5,762,720
Tompkins Financial Corporation Shareholders’ equity				595,721						584,331						570,403
Noncontrolling interest				1,490						1,459						1,479
	Total equity			597,211						585,790						571,882
	Total liabilities and equity		$	6,716,452					$	6,686,523					$	6,334,602
Interest rate spread							3.10	%					3.17	%					3.27	%
	Net interest income/margin on earning assets				53,613		3.35	%			159,924		3.38	%			152,578		3.41	%
Tax equivalent adjustments					(450)						(1,360)						(3,243)
	Net interest income per consolidated financial statements				$	53,163					$	158,564					$	149,335

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data)
	Quarter-Ended										Year-Ended
Period End Balance Sheet		Sep-18		Jun-18		Mar-18		Dec-17		Sep-17		Dec-17
Securities	$	1,452,788	$	1,483,991	$	1,510,795	$	1,531,991	$	1,546,199	$	1,531,991
Originated loans and leases, net of unearned income and deferred costs and fees (2)		4,531,241		4,507,006		4,408,081		4,358,543		4,167,254		4,358,543
Acquired loans and leases (3)		271,468		284,187		296,765		310,577		323,259		310,577
Allowance for  loan and lease losses		41,358		41,225		40,211		39,771		38,038		39,771
Total assets		6,746,960		6,745,800		6,648,128		6,648,290		6,524,060		6,648,290
Total deposits		5,025,082		4,792,229		4,929,903		4,837,807		4,943,944		4,837,807
Federal funds purchased and securities sold under agreements to repurchase		52,875		52,042		69,131		75,177		73,874		75,177
Other borrowings		988,515		1,229,956		995,074		1,071,742		834,574		1,071,742
Trust preferred debentures		16,820		16,777		16,734		16,691		16,648		16,691
Total common equity		597,636		589,173		577,967		574,780		588,349		574,780
Total equity		599,144		590,649		579,411		576,202		589,868		576,202

Average Balance Sheet
Average earning assets	$	6,356,781	$	6,348,562	$	6,297,727	$	6,159,396	$	6,072,269	$	6,024,186
Average assets		6,716,452		6,689,649		6,652,763		6,552,414		6,430,497		6,389,504
Average interest-bearing liabilities		4,644,533		4,709,122		4,658,998		4,500,649		4,463,606		4,466,846
Average equity		597,211		584,951		574,963		593,956		586,671		577,446

Share data
Weighted average shares outstanding (basic)	15,047,405		15,038,061		15,013,478		14,988,542		14,966,231		14,950,432
Weighted average shares outstanding (diluted)	15,144,491		15,135,970		15,112,518		15,103,906		15,078,555		15,073,255
Period-end shares outstanding	15,277,915		15,278,430		15,285,335		15,265,614		15,202,444		15,265,614
Common equity book value per share	$	39.12	$	38.56	$	37.81	$	37.65	$	38.70	$	37.65
Tangible book value per share (Non-GAAP)	$	32.60	$	32.02	$	31.24	$	31.04	$	32.03	$	31.04

Income Statement
Net interest income	$	53,163	$	52,714	$	52,687	$	51,969	$	51,000	$	201,304
Provision for loan/lease losses		272		1,045		567		2,014		402		4,161
Noninterest income		18,603		21,158		17,830		17,312		17,202		69,204
Noninterest expense		45,133		44,985		43,721		46,286		41,883		171,105
Income tax expense		5,427		5,751		5,761		18,493		8,491		42,620
Net income attributable to Tompkins Financial Corporation		20,902		22,059		20,436		2,457		17,394		52,494
Noncontrolling interests		32		32		32		31		32		128
Basic earnings per share (8)	$	1.37	$	1.44	$	1.34	$	0.16	$	1.14	$	3.46
Diluted earnings per share (8)	$	1.36	$	1.43	$	1.33	$	0.16	$	1.14	$	3.43

Nonperforming Assets
Originated nonaccrual loans and leases	$	17,518	$	19,082	$	18,429	$	16,253	$	15,667	$	16,253
Acquired nonaccrual loans and leases		2,659		2,673		3,352		3,264		3,152		3,264
Originated loans and leases 90 days past due and accruing		0		0		0		44		0		44
Troubled debt restructurings not included above		4,295		4,324		3,455		3,449		3,541		3,449
Total nonperforming loans and leases		24,472		26,079		25,236		23,010		22,360		23,010
OREO		1,870		2,233		2,047		2,047		2,030		2,047
Total nonperforming assets	$	26,342	$	28,312	$	27,283	$	25,057	$	24,390	$	25,057

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

		Quarter-Ended									Year-Ended
Delinquency - Originated loan and lease portfolio		Sep-18		Jun-18		Mar-18		Dec-17		Sep-17		Dec-17
Loans and leases 30-89 days past due and accruing (2)	$	6,454	$	5,875	$	6,513	$	6,791	$	5,567	$	6,791
Loans and leases 90 days past due and accruing (2)		0		0		0		44		0		44
Total originated loans and leases past due and accruing (2)		6,454		5,875		6,513		6,835		5,567		6,835

Delinquency - Acquired loan and lease portfolio
Loans 30-89 days past due and accruing (3)(7)	$	1,109	$	1,108	$	823	$	1,256	$	2,857	$	1,256
Loans 90 days or more past due		1,420		1,110		1,077		1,146		1,306		1,146
Total acquired loans and leases past due and accruing		2,529		2,218		1,900		2,402		4,163		2,402
Total loans and leases past due and accruing	$	8,983	$	8,093	$	8,413	$	9,237	$	9,730	$	9,237

Allowance for Loan Losses - Originated loan and lease portfolio
Balance at beginning of period	$	41,111	$	40,107	$	39,686	$	37,903	$	36,960		$	35,598
Provision for loan and lease losses		208		1,035		608		1,849		931			4,428
Net loan and lease (recoveries) charge-offs		30		31		187		66		(12	)		140
Allowance for loan and lease losses (originated
loan portfolio) - balance at end of period	$	41,289	$	41,111	$	40,107	$	39,686	$	37,903		$	39,686

Allowance for Loan Losses - Acquired loan and lease portfolio
Balance at beginning of period	$	114	$	104	$	85		$	135	$	197		$	157
Provision (credit) for loan and lease losses		64		10		(41	)		165		(529	)		(67	)
Net loan and lease (recoveries) charge-offs		108		0		(60	)		215		(467	)		5
Allowance for loan and lease losses (acquired
loan portfolio) - balance at end of period		69		114		104			85		135			85
Total allowance for loan and lease losses	$	41,358	$	41,225	$	40,211		$	39,771	$	38,038		$	39,771

Loan Classification - Originated Portfolio
Special Mention	$	34,245	$	44,068	$	34,546	$	46,074	$	50,423	$	46,074
Substandard		49,597		41,572		35,746		20,584		20,532		20,584
Loan Classification - Acquired Portfolio
Special Mention		465		469		476		525		539		525
Substandard		3,041		3,180		3,468		5,355		8,193		5,355
Loan Classifications - Total Portfolio
Special Mention		34,710		44,537		35,022		46,599		50,962		46,599
Substandard		52,638		44,752		39,214		25,939		28,725		25,939

Ratio Analysis

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

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

											Year-Ended
Capital Adequacy (period-end)	Sep-18		Jun-18		Mar-18		Dec-17		Sep-17			Dec-17
Tangible common equity/tangible assets	7.49	%	7.36	%	7.29	%	7.24	%	7.58	%		7.24	%

Profitability
Return on average assets *	1.23	%	1.32	%	1.25	%	0.15	%	1.07	%	0.82	%
Return on average equity *	13.89	%	15.13	%	14.41	%	1.64	%	11.77	%	9.09	%
Net interest margin (TE) *	3.35	%	3.36	%	3.42	%	3.42	%	3.40	%	3.41	%
* Quarterly ratios have been annualized

Non-GAAP Measures

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

Non-GAAP Disclosure - Adjusted Diluted Earnings Per Share
		Quarter-Ended											Year-Ended
		Sep-18			Jun-18			Mar-18		Dec-17		Sep-17		Dec-17
Net income available to common shareholders	$	20,902		$	22,059		$	20,436	$	2,457	$	17,394	$	52,494
Income attributable to unvested stock-based compensation awards		318			359			351		26		266		818
Net earnings allocated to common shareholders		20,584			21,700			20,085		2,431		17,128		51,676
Remeasurement of net deferred taxes		0			0			0		14,944		0		14,994
Gain on sale of real estate, net of tax					2,227			0		0		0		0
Write-down of impaired leases, net of tax		(388	)		(1,527	)		0		0		0		0
Net income (Non-GAAP)		20,972			21,000			20,085		17,375		17,128		66,620
Weighted average shares outstanding (diluted)	15,144,491			15,135,970			15,112,518		15,103,906		15,078,555		15,073,255
Adjusted diluted earnings per share (Non-GAAP)	$	1.38		$	1.39		$	1.33	$	1.15	$	1.14	$	4.42

Non-GAAP Disclosure - Tangible Book Value Per Share
Total common equity	$	597,636	$	589,173	$	577,967	$	574,780	$	588,349	$	574,780
Less:  Goodwill and intangibles (9)		99,543		99,983		100,436		100,887		101,360		100,887
Tangible common equity		498,093		489,190		477,531		473,893		486,989		473,893
Ending shares outstanding	15,277,915		15,278,430		15,285,335		15,265,614		15,202,444		15,265,614
Tangible book value per share (Non-GAAP)	$	32.60	$	32.02	$	31.24	$	31.04	$	32.03	$	31.04

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

Non-GAAP Disclosure - Year to date adjusted diluted earnings per share
		Sep-18		Sep-17
Net income available to common shareholders	$	63,397	$	50,037
Income attributable to unvested stock-based compensation awards		1,024		792
Net earnings allocated to common shareholders		62,373		49,245
Gain on sale of real estate, net of tax		2,227		0
Write-down of impaired leases, net of tax		(1,915)		0
Net income (Non-GAAP)		62,061		49,245
Weighted average shares outstanding (diluted)		15,131,018		15,062,870
Adjusted diluted earnings per share (Non-GAAP)	$	4.10	$	3.27

(1) Federal Reserve peer ratio as of June 30, 2018, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.

(2) “Originated” equals loans and leases not included by definition in “acquired loans”.

(3) “Acquired Loans and Leases” equals loans and leases acquired at fair value, accounted for in accordance with FASB ASC Topic 805.

(4) Average balances and yields on available-for-sale securities are based on historical amortized cost.

(5) Interest income includes the tax effects of taxable-equivalent basis.

(6) Nonaccrual loans are included in the average asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company’s consolidated financial statements included in Part I of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017.

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

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

(9) “Goodwill and intangibles” equal Total Intangible Assets less Mortgage Servicing Rights in the above tables.