TOMPKINS FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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EX-99.2 - EXHIBIT 99.2 - TOMPKINS FINANCIAL CORP	ex99_2.htm
8-K - FORM 8-K - TOMPKINS FINANCIAL CORP	tompkins_8k.htm

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, October 27, 2010

Tompkins Financial Corporation reports third quarter earnings

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

Tompkins Financial Corporation reported net income of $7.5 million for the third quarter of 2010, a decrease of 11.46% from the $8.5 million reported for the same period in 2009. Net income of $24.9 million for the year-to-date period ended September 30, 2010, remains 5.60% ahead of the $23.6 million reported for the same nine month period last year.

Diluted earnings per share were $0.69 for the third quarter of 2010, a 12.7% decrease from the $0.79 reported for the third quarter of 2009. Diluted earnings per share totaled $2.30 for the first nine months of 2010, an increase of 5.02% over the $2.19 reported for the first nine months of 2009.

President and CEO Stephen S. Romaine commented, “Although earnings for the quarter declined from the same quarter last year, our year-to-date results remain strong, and in fact are the highest in our Company’s history. During the quarter, we also saw continuing improvement to our already strong capital position. Earning performance in the third quarter was negatively impacted by an increase in provision expense to address deterioration in a few larger credits that have been affected by the prolonged economic downturn. We recognize that many of our customers remain challenged by the current economic environment, but we are also encouraged by the fact that improving financial conditions were noted for several borrowers in the portfolio. Additionally, we continue to regularly receive payments on approximately 65% of the loans that we categorize as nonperforming. We remain diligent and proactive in managing credit exposure, which has served us well in these challenging economic times.”

Selected highlights for the third quarter and year-to-date period are included below:

	■	Capital levels at September 30, 2010, remain comfortably above the regulatory minimums to be considered well capitalized, with a ratio of Tier I capital to average assets of 8.01%; and a ratio of total capital to risk-weighted assets of 13.14%. These ratios are improved from 7.44% and 11.89%, respectively at September 30, 2009.

	■	Total loans were $1.9 billion at September 30, 2010, up 1.69% from September 30, 2009.

	■	Total deposits were $2.5 billion at quarter end, up 5.47% from the same period in 2009.

	■	Growth in average earning assets and noninterest bearing deposits offset a modest decline in the net interest margin, allowing net interest income to grow to $27.9 million in the third quarter of 2010, an increase of 4.05% from the same quarter last year. Net interest income for the year-to-date period ended September 30, 2010 was $83.9 million, an increase of 6.03% over the same period prior year.

	■	The net interest margin for the third quarter of 2010 was 3.85% compared to 3.91% for the third quarter of 2009, and 3.91% for the second quarter of 2010.

	■	Noninterest income was down 3.22% for the quarter and down 0.56% for the year-to-date period. Fee income from investment services, insurance, and card services were all up for both the quarter and year-to-date periods, while service charges on deposit accounts declined. The lower level of revenue from deposit service charges was attributable to new regulations that went into effect July 1, 2010 for new customers and August 15, 2010 for pre-existing customers. The new regulations require depositors to affirmatively elect certain deposit account services and the applicable fees associated with those services.

	■	Noninterest expense for the third quarter of 2010 was $24.9 million, up 4.76% over the same period prior year. Noninterest expense for the year-to-date period was $73.9 million, an increase of 3.03% over the same nine month period in 2009.

	■	The Company’s allowance for loan and lease losses totaled $28.7 million at September 30, 2010, which represented 1.50% of total loans. This allowance as a percentage of total loans has increased from 1.27% at year-end 2009, and 1.21% at September 30, 2009. The provision for loan and lease losses was $3.5 million in the third quarter of 2010, compared to $2.1 million in the third quarter of 2009, an increase of 63.8%. Higher net charge-offs and an increase in nonperforming loans contributed to the increase in provision expense from the prior year.

	■	Annualized net charge-offs for the nine months ended September 30, 2010, represented 0.19% of average loans and leases, relatively unchanged from 0.18% for the same period in 2009. Nonperforming assets represented 1.72% of total assets as of September 30, 2010, up from 1.12% at December 31, 2009, and up from 0.87% at September 30, 2009. The increase in the current quarter was mainly due to the addition of a few larger credits. Performance ratios related to nonperforming asset levels and net charge-offs, remain well below the most recent peer averages published by the Federal Reserve.

Mr. Romaine added, “Our markets and our customers have not been immune to the challenges of the current economic climate, yet by being committed to our long term strategy we have been able to continue to perform at a high level. While many in the industry have experienced losses in recent years, we have continued to deliver double digit returns of shareholders equity. We remain committed to a strategy of long term sustainable growth that is focused on leveraging our current business model, driving operation efficiency, appropriately managing risk, and responding proactively to challenges.”

Tompkins Financial Corporation operates 45 banking offices in the New York State markets served by the Company’s subsidiary banks - Tompkins Trust Company, The Bank of Castile, and Mahopac National Bank. Through its community banking subsidiaries, the Company provides traditional banking services, and offers a full range of money management services through Tompkins Investment Services (a division of Tompkins Trust Company). The Company offers insurance services through its Tompkins Insurance Agencies, Inc. subsidiary, an independent agency serving individuals and business clients throughout New York State. The Company offers fee-based financial planning and wealth management services through its AM&M Financial Services, Inc. subsidiary. AM&M Financial Services, Inc. is also the parent company to Ensemble Financial Services, Inc., an independent broker dealer and leading outsourcing company for financial planners and investment advisors. Each Tompkins subsidiary operates with a community focus, meeting the unique needs of the communities served.

“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 June 30, 2010, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data) (Unaudited)

	As of			As of
	09/30/2010			12/31/2009
ASSETS

Cash and noninterest bearing balances due from banks	$	59,859		$	43,686
Interest bearing balances due from banks		21,138			1,676
Federal funds sold		27,000			0
Money market funds		100			100
Cash and Cash Equivalents		108,097			45,462

Trading securities, at fair value		24,377			31,718
Available-for-sale securities, at fair value		985,569			928,770
Held-to-maturity securities, fair value of $44,696 at September 30, 2010, and $46,340 at December 31, 2009		43,092			44,825
Loans and leases, net of unearned income and deferred costs and fees		1,914,064			1,914,818
Less: Allowance for loan and lease losses		28,684			24,350
Net Loans and Leases		1,885,380			1,890,468

FHLB and FRB stock		19,330			20,041
Bank premises and equipment, net		46,261			46,650
Corporate owned life insurance		37,041			35,953
Goodwill		41,589			41,589
Other intangible assets, net		4,316			4,864
Accrued interest and other assets		52,059			62,920
Total Assets	$	3,247,111		$	3,153,260

LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market		1,256,812			1,183,145
Time		771,038			794,738
Noninterest bearing		500,678			461,981
Total Deposits		2,528,528			2,439,864

Federal funds purchased and securities sold under agreements to repurchase, including certain amounts at fair value of $0 at September 30, 2010, and $5,500 at December 31, 2009		191,596			192,784
Other borrowings, including certain amounts at fair value of $12,129 at September 30, 2010 and $11,335 at December 31, 2009		182,779			208,965
Trust preferred debentures		25,059			25,056
Other liabilities		42,654			41,583
Total Liabilities	$	2,970,616		$	2,908,252

EQUITY
Tompkins Financial Corporation shareholders’ equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued and outstanding: 10,914,723 at September 30, 2010; and 9,785,265 at December 31, 2009		1,091			978
Additional paid-in capital		196,898			155,589
Retained earnings		71,254			92,402
Accumulated other comprehensive income (loss)		8,075			(3,087	)
Treasury stock, at cost – 90,419 shares at September 30, 2010, and 81,723 shares at December 31, 2009		(2,373	)		(2,326	)

Total Tompkins Financial Corporation Shareholders’ Equity		274,945			243,556
Noncontrolling interests		1,550			1,452
Total Equity	$	276,495		$	245,008
Total Liabilities and Equity	$	3,247,111		$	3,153,260

See accompanying notes to unaudited condensed consolidated financial statements.

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data) (Unaudited)

	Three Months Ended						Nine Months Ended
	09/30/2010			09/30/2009			09/30/2010			09/30/2009
INTEREST AND DIVIDEND INCOME
Loans	$	26,675		$	26,916		$	80,044		$	80,092
Due from banks		5			3			27			15
Federal funds sold		5			2			14			10
Money market funds		0			7			0			35
Trading securities		255			342			843			1,049
Available-for-sale securities		8,215			8,849			26,009			26,683
Held-to-maturity securities		359			411			1,160			1,397
FHLB and FRB stock		230			28			731			86
Total Interest and Dividend Income		35,744			36,558			108,828			109,367
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more		1,035			1,352			3,360			4,157
Other deposits		3,178			4,468			10,506			14,427
Federal funds purchased and repurchase agreements		1,336			1,560			4,069			4,690
Trust preferred securities		407			347			1,210			725
Other borrowings		1,924			2,051			5,770			6,229
Total Interest Expense		7,880			9,778			24,915			30,228
Net Interest Income		27,864			26,780			83,913			79,139
Less: Provision for loan/lease losses		3,483			2,127			7,074			6,530
Net Interest Income After Provision for Loan/Lease Losses		24,381			24,653			76,839			72,609
NONINTEREST INCOME
Investment services income		3,423			3,287			10,764			9,826
Insurance commissions and fees		3,365			3,198			9,722			9,438
Service charges on deposit accounts		2,115			2,371			6,602			6,861
Card services income		1,105			960			3,147			2,684
Mark-to-market gain on trading securities		177			256			558			354
Mark-to-market (loss) gain on liabilities held at fair value		(323	)		73			(940	)		761
Other income		1,401			1,497			3,887			4,163
Net other-than-temporary impairment losses		(34	)		(146	)		(34	)		(146	)
Net gain on security transactions		(2	)		104			173			130
Total Noninterest Income		11,227			11,600			33,879			34,071
NONINTEREST EXPENSES
Salaries and wages		10,611			10,265			31,618			29,862
Pension and other employee benefits		3,616			3,340			10,970			10,086
Net occupancy expense of premises		1,820			1,680			5,427			5,467
Furniture and fixture expense		986			1,117			3,312			3,361
FDIC insurance		978			810			2,747			3,328
Amortization of intangible assets		186			218			586			702
Other operating expense		6,655			6,293			19,202			18,881
Total Noninterest Expenses		24,852			23,723			73,862			71,687
Income Before Income Tax Expense		10,756			12,530			36,856			34,993
Income Tax Expense		3,233			4,037			11,818			11,279
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation		7,523			8,493			25,038			23,714
Less: Net income attributable to noncontrolling interests		33			33			98			98
Net Income Attributable to Tompkins Financial Corporation	$	7,490		$	8,460		$	24,940		$	23,616
Basic Earnings Per Share	$	0.69		$	0.79		$	2.31		$	2.21
Diluted Earnings Per Share	$	0.69		$	0.79		$	2.30		$	2.19
Per share data has been retroactively adjusted to reflect 10% stock dividend paid on Feburary 15, 2010

See accompanying notes to unaudited condensed consolidated financial statements.

Average Consolidated Balance Sheet and Net Interest Analysis

	Quarter Ended								Year to Date Period Ended								Year to Date Period Ended
	September 30, 2010								September 30, 2010								September 30, 2009
(Dollar amounts in thousands)	Average Balance (QTD)		Interest			Average Yield/Rate			Average Balance (YTD)		Interest			Average Yield/Rate			Average Balance (YTD)		Interest			Average Yield/Rate
ASSETS

Interest-earning assets

Interest-bearing balances due from banks	$	16,603	$	5			0.12	%	$	30,112	$	27			0.12	%	$	9,730	$	15			0.21	%
Money market funds		100		—			0.00	%		100		—			0.00	%		19,447		35			0.24	%
Securities (1)
U.S. Government Securities		842,432		7,461			3.51	%		837,883		23,710			3.78	%		700,549		23,605			4.51	%
Trading Securities		25,324		255			3.99	%		28,569		843			3.95	%		35,851		1,049			3.91	%
State and municipal (2)		105,954		1,471			5.51	%		105,441		4,581			5.81	%		112,657		5,111			6.07	%
Other Securities (2)		17,231		211			4.86	%		17,855		654			4.90	%		21,106		1,327			8.41	%
Total securities		990,941		9,398			3.76	%		989,748		29,788			4.02	%		870,163		31,092			4.78	%
Federal Funds Sold		10,364		5			0.19	%		10,956		14			0.17	%		7,642		10			0.17	%
FHLB and FRB stock		19,549		230			4.67	%		19,526		731			5.01	%		20,364		86			0.56	%
Loans, net of unearned income (3)
Real Estate		1,354,265		19,023			5.57	%		1,340,032		56,878			5.67	%		1,273,356		56,447			5.93	%
Commercial Loans (2)		455,770		6,205			5.40	%		462,442		18,749			5.42	%		460,777		18,756			5.44	%
Consumer Loans		79,869		1,409			7.00	%		81,818		4,271			6.98	%		87,239		4,525			6.93	%
Direct Lease Financing		10,334		155			5.95	%		11,044		498			6.03	%		13,269		602			6.07	%
Total loans, net of unearned income		1,900,238		26,792			5.59	%		1,895,336		80,396			5.67	%		1,834,641		80,330			5.85	%
Total interest-earning assets		2,937,795		36,430			4.92	%		2,945,778		110,956			5.04	%		2,761,987		111,568			5.40	%

Other assets		230,683								228,545								205,370

Total assets		3,168,478								3,174,323								2,967,357

LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market		1,193,990		1,381			0.46	%		1,217,756		4,776			0.52	%		1,106,931		6,632			0.80	%
Time Dep > $100,000		323,616		1,035			1.27	%		333,814		3,360			1.35	%		295,104		4,156			1.88	%
Time Dep < $100,000		436,887		1,726			1.57	%		432,415		5,382			1.66	%		419,254		7,151			2.28	%
Brokered Time Dep < $100,000		19,394		71			1.45	%		27,968		348			1.66	%		42,493		645			2.03	%
Total interest-bearing deposits		1,973,887		4,213			0.85	%		2,011,953		13,866			0.92	%		1,863,782		18,584			1.33	%
Federal funds purchased & securities sold under agreements to repurchase repurchase		185,525		1,336			2.86	%		183,521		4,069			2.96	%		188,403		4,690			3.33	%
Other borrowings		188,159		1,924			4.06	%		192,551		5,770			4.01	%		207,496		6,229			4.01	%
Trust preferred debentures		25,059		407			6.44	%		25,057		1,210			6.46	%		15,260		725			6.35	%
Total interest-bearing liabilities		2,372,630		7,880			1.32	%		2,413,082		24,915			1.38	%		2,274,941		30,228			1.78	%
Noninterest bearing deposits		479,980								458,931								423,588
Accrued expenses and other liabilities		42,351								41,122								39,919

Total liabilities		2,894,961								2,913,135								2,738,448

Tompkins Financial Corporation Shareholders’ equity		271,983								259,687								227,408

Noncontrolling interest		1,534								1,501								1,501

Total equity		273,517								261,188								228,909

Total liabilities and equity	$	3,168,478							$	3,174,323							$	2,967,357
Interest rate spread							3.60	%							3.66	%							3.62	%
Net interest income/margin on earning assets				28,550			3.85	%				86,041			3.91	%				81,340			3.94	%

Tax Equivalent Adjustment				(686	)							(2,128	)							(2,201	)

Net interest income per consolidated financial statements			$	27,864							$	83,913							$	79,139

(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 condensed consolidated financial statements included in Part I of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2009.

Tompkins Financial Corporation - Summary Financial Data (Unaudited)

(In thousands, except per share data	Quarter-Ended										Year-Ended
	Sep-10		Jun-10		Mar-10		Dec-09		Sep-09		Dec-09

Period End Balance Sheet
Securities	$	1,053,038	$	1,023,220	$	1,026,301	$	1,005,313	$	908,765	$	1,005,313
Loans and leases, net of unearned income and deferred costs and fees		1,914,064		1,900,303		1,887,038		1,914,818		1,882,321		1,914,818
Allowance for loan and lease losses		28,684		26,530		25,366		24,350		22,800		24,350
Total assets		3,247,111		3,161,648		3,206,763		3,153,260		3,088,039		3,153,260

Total deposits		2,528,528		2,460,223		2,512,201		2,439,864		2,397,431		2,439,864
Federal funds purchased and securities sold under agreements to repurchase		191,596		175,336		181,255		192,784		192,099		192,784
Other borrowings		182,779		189,561		190,545		208,965		194,795		208,965
Trust preferred debentures		25,059		25,058		25,057		25,056		23,018		25,056
Shareholders’ equity		276,495		268,683		254,444		245,008		241,647		245,008

Average Balance Sheet
Average earning assets	$	2,937,795	$	2,953,673	$	2,945,953	$	2,920,269	$	2,792,319	$	2,801,884
Average assets		3,168,478		3,181,476		3,173,064		3,132,599		2,999,961		3,009,007
Average interest-bearing liabilities		2,372,630		2,424,245		2,443,145		2,408,997		2,289,144		2,308,731
Average equity		273,517		260,197		249,586		245,176		233,535		233,009

Share data
Weighted average shares outstanding (basic) [1]		10,845,106		10,818,218		10,724,644		10,702,447		10,693,698		10,686,989
Weighted average shares outstanding (diluted) [1]		10,893,641		10,876,421		10,776,934		10,752,737		10,763,374		10,759,520
Period-end shares outstanding		10,878,813		10,830,001		10,793,573		9,752,619		9,722,834		9,752,619
Book value per share [1]		25.42		24.81		23.57		22.84		22.59		22.84

Income Statement
Net interest income	$	27,864	$	28,106	$	27,944	$	27,897	$	26,780	$	107,037
Provision for loan/lease losses		3,483		1,408		2,183		2,758		2,127		9,288
Noninterest income		11,227		11,331		11,320		12,142		11,600		46,213
Noninterest expense		24,852		24,516		24,494		24,931		23,723		96,617
Income tax expense		3,233		4,447		4,138		4,104		4,037		15,383
Net income attributable to Tompkins Financial		7,490		9,033		8,416		8,214		8,460		31,831
Noncontrolling interests		33		33		33		32		33		131
Basic earnings per share [1]	$	0.69	$	0.84	$	0.78	$	0.77	$	0.79	$	2.98
Diluted earnings per share [1]	$	0.69	$	0.83	$	0.78	$	0.76	$	0.79	$	2.96

Asset Quality
Net charge-offs		1,329		244		1,167		1,208		646		3,610
Nonaccrual loans and leases		48,966		33,645		29,521		31,289		25,837		31,289
Loans and leases 90 days past due and accruing		1,737		1,758		51		369		579		369
Troubled debt restructurings not included above		3,264		3,264		3,703		3,265		0		3,265
Total nonperforming loans and leases		53,967		38,667		33,275		34,923		26,416		34,923
OREO		1,845		1,638		558		299		440		299
Nonperforming assets		55,812		40,305		33,833		35,222		26,856		35,222

RATIO ANALYSIS	Quarter-Ended															Year-Ended
	Sep-10			Jun-10			Mar-10			Dec-09			Sep-09				Dec-09
Credit Quality
Net loan and lease losses/ average loans and leases *		0.28	%		0.05	%		0.25	%		0.25	%		0.14	%			0.20	%
Nonperforming loans and leases/loans and leases		2.82	%		2.03	%		1.76	%		1.82	%		1.40	%			1.82	%
Nonperforming assets/assets		1.72	%		1.28	%		1.06	%		1.12	%		0.87	%			1.12	%
Allowance/nonperforming loans and leases		53.15	%		68.61	%		76.23	%		69.72	%		86.31	%			69.72	%
Allowance/loans and leases		1.50	%		1.40	%		1.34	%		1.27	%		1.21	%			1.27	%

Capital Adequacy (period-end)
Tier I capital / average assets		8.01	%		7.77	%		7.56	%		7.44	%		7.44	%			7.44	%
Total capital / risk-weighted assets		13.14	%		13.10	%		12.56	%		12.14	%		11.89	%			12.14	%

Profitability
Return on average assets *		0.94	%		1.14	%		1.08	%		1.04	%		1.12	%			1.06	%
Return on average equity *		10.86	%		13.92	%		13.68	%		13.29	%		14.37	%			13.66	%
Net interest margin (TE) *		3.85	%		3.91	%		3.95	%		3.89	%		3.91	%			3.92	%

* Quarterly ratios have been annualized

	Quarter-Ended										Year-Ended
	Sep-10		Jun-10		Mar-10		Dec-09		Sep-09			Dec-09
Non-GAAP Disclosure
Reported net income	$	7,490	$	9,033	$	8,416	$	8,214	$	8,460		$	31,831
Adjustments:
FDIC special insurance assessment (after-tax)		0		0		0		0		0			822
Subtotal adjustments		0		0		0		0		0			822
Adjusted net income		7,490		9,033		8,416		8,214		8,460			32,653
Weighted average shares outstanding (diluted)		10,893,641		10,876,421		10,776,934		10,752,737		10,763,374			10,759,520
Adjusted diluted earnings per share	$	0.69	$	0.83	$	0.78	$	0.76	$	0.79		$	3.03

	Year-to-date period ended
Non-GAAP Disclosure	Sep-10		Sep-09
Reported net income	$	24,940	$	23,616
Adjustments:
FDIC special insurance assessment (after-tax)		—		822
Subtotal adjustments		—		822
Adjusted net income		24,940		24,438
Weighted average shares outstanding (diluted)[1]		10,844,880		10,761,439
Adjusted diluted earnings per share	$	2.30	$	2.27

[1] Weighted average shares and per share data in this press release have been retroactively adjusted to reflect a 10% stock dividend paid on February 15, 2010.

TOMPKINS FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 29, 2010

Attached files

TOMPKINS FINANCIAL CORP Reports