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EX-99.2 - PRESS RELEASE OF TOMPKINS FINANCIAL CORPORATION DATED JANUARY 25, 2013 - TOMPKINS FINANCIAL CORPex99_2.htm


 
Exhibit 99.1
 
 
For more information contact:
Stephen S. Romaine, President & CEO
Francis M. Fetsko, Executive VP & CFO
Tompkins Financial Corporation 607.273.3210

For Immediate Release
Friday, January 25, 2013

Tompkins Financial Corporation Reports Fourth Quarter Operating Results

ITHACA, NY – Tompkins Financial Corporation (TMP–NYSE MKT LLC)
 
Tompkins Financial Corporation today released operating results and selected other financial information for the three and twelve month periods ended December 31, 2012.  The fourth quarter represents the first full quarter reflecting results inclusive of the VIST Financial Corporation acquisition, which closed on August 1, 2012.
 
Stephen S. Romaine, President and CEO commented, “2012 was an eventful year for our Company. The acquisition of VIST Financial gives us exciting new growth opportunities in a new geography with attractive demographics.  Results for the year to date and the fourth quarter were negatively impacted by merger related costs.  Excluding those costs, our per share earnings performance for the two quarters that have included results with VIST has been among the best of any six month period in our Company’s long history.”
 
SUMMARY HIGHLIGHTS
 
Net Income for the fourth quarter of 2012 was $11.2 million, up from $9.4 million in the same period in 2011. Despite the rise in net income, diluted earnings per share of $0.77 for the quarter was down 8.3% from the fourth quarter of 2011 due to the greater number shares outstanding in 2012 as a result of shares issued to complete the VIST acquisition.   Net income was reduced by after-tax merger related expenses of $462,000 in the fourth quarter of 2012 and $152,000 in the fourth quarter of 2011. Non-GAAP operating income, which excludes merger related expenses, was $11.6 million for the quarter, or $0.81 diluted operating earnings per share.  This represents a decrease of 5.8% from the $0.86 diluted operating earnings per share reported for the fourth quarter of 2011.  The decrease in current period operating performance is attributable to higher provision expense primarily related to loan charge-offs in the Hudson Valley Region.  A more detailed discussion of credit quality is included later in this press release.
 
 
 

 
 
Net income for the year ended December 31, 2012 was $31.3 million, down from $35.4 million in 2011. Diluted earnings per share of $2.43 for the full year in 2012 represents a decline from diluted earnings per share of $3.20 in 2011.  The decline from 2011 is primarily due to the $9.7 million ($0.76 diluted per share) in after tax merger related expenses included in 2012 results, versus $152,000 ($0.01 per share) in after tax merger related expenses included in 2011 results; as well as the increase in weighted average shares outstanding.
 
NET INTEREST INCOME
 
Net interest income for the fourth quarter of 2012 was $41.8 million, compared to $28.0 million for the same period in 2011.  The increase in 2012 reflects the addition of VIST Bank, which was acquired on August 1, 2012.  The net interest margin for the fourth quarter of 2012 was 3.83%, an improvement from the 3.66% margin reported in the third quarter of 2012, and from the 3.62% margin reported in the fourth quarter of 2011.  The margin improvement in the most recent two quarters benefited from the inclusion of VIST Bank into the Company’s combined results.  The paydown of certain higher cost borrowings and non-core time deposits also helped the margin in the fourth quarter of 2012.
 
NONINTEREST INCOME
 
Noninterest income for the fourth quarter of 2012 was $15.6 million, up 39.4% over the same period in 2011.   The largest category of improvement was insurance commissions and fees, which nearly doubled as a result of the VIST acquisition.   The increase was partially offset by lower service charges on deposit accounts, which were impacted by regulatory changes implemented in the first quarter of 2012.  Improvement in other income benefited from higher loan related fees (up $334,000) and gains on the sale of loans (up $187,000).   Fourth quarter noninterest income also reflected $499,000 in losses on the sale of investments, which were used to pay down certain higher cost borrowings and non-core time deposits.
 
NONINTEREST EXPENSE
 
Noninterest expense for the fourth quarter of 2012 was $38.2 million, up 57.8% from the same period last year. The increase was mainly a result of the VIST acquisition and additional expenses related to the integration of VIST into the Company’s operations beginning in the third quarter of this year.  Mr. Romaine added, “We are pleased that our system conversion for VIST Bank was successfully completed in December 2012 and we are on track to realize the cost savings from the integration that were contemplated when the merger was announced.”
 
 
 

 

ASSET QUALITY
 
Asset quality trends were generally positive during the quarter, despite a spike in the level of loan charge-offs.  Mr. Romaine stated, “The charge-offs during the quarter consisted of a handful of loans that had previously been reported as nonperforming, classified and impaired.  While deterioration in these credits during the fourth quarter resulted in elevated charge-offs, the result is that the overall risk profile of the loan portfolio has improved, as some of the most risky loans have now been removed from the balance sheet.”
 
The ratio of nonperforming assets to total assets of 0.92% at December 31, 2012, has improved from a ratio of 1.26% as of the year ending December 31,  2011 and remains well below the most recent peer averages of 2.21% published the Federal Reserve1.   The balance of originated loans classified as either Substandard or Special Mention improved for 2 consecutive quarters. The majority of the improvement from the third quarter of 2012 came in the more severe Substandard category, which declined by approximately $9.3 million.   Although there was an increase in loans classified as Substandard or Special Mention in the acquired loan portfolio, the changes in risk ratings are not impactful to the credit marks that were recorded at the time of acquisition.  Furthermore, the level of past due loans in the acquired portfolio have remained relatively steady between periods.
 
Provision for loan and lease losses was $5.7 million for the fourth quarter of 2012, up from $1.0 million for the third quarter of 2012, and $1.2 million in the fourth quarter of 2011.  The increased provision was largely due to $7.6 million in net charge-offs during the quarter, which is up from $1.3 million in the third quarter of 2012, and $1.4 million in the fourth quarter 2011.  Despite the elevated charge-offs in the most recent quarter, net charge-offs for the full year in 2012, represented only 0.49% of average total loans, which compares favorably to the most recent Federal Reserve peer ratio1 of 0.64%.
 
The Company’s allowance for loan and lease losses totaled $24.6 million at December 31, 2012, which represented 1.16% of total originated loans, compared to an allowance for loan and lease losses of $27.6 million, representing 1.39% of total originated loans at December 31, 2011.  The allowance for loan and lease losses covered 70.05% of originated nonperforming loans and leases as of December 31, 2012, up from 69.01% at September 30, 2012, and 66.66% at December 31, 2011.

 
 

 

CAPITAL POSITION
 
Capital ratios remain well above the regulatory well capitalized minimums.  Tier 1 capital as a percentage of average assets at December 31, 2012 was 7.95% and the ratio of total capital to risk-weighted assets was 12.94%.
 
ABOUT TOMPKINS FINANCIAL CORPORATION
 
Tompkins Financial Corporation is a financial services company with $4.8 billion in assets serving the Central, Western, and Hudson Valley regions of New York and the Southeastern region of Pennsylvania.  Headquartered in Ithaca, NY, Tompkins Financial is parent to Tompkins Trust Company, The Bank of Castile, Mahopac National Bank, VIST Bank, Tompkins Insurance Agencies, Inc., and Tompkins Financial Advisors.  For more information on Tompkins Financial, visit www.tompkinsfinancial.com.
 
NON-GAAP MEASURES
 
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP).  Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a 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” tables for Non-GAAP related calculations.
 
"Safe Harbor" Statement under the Private Securities Litigation Reform of 1995:
 
This press release may include forward-looking statements with respect to revenue sources, growth, market risk, and corporate objectives. The Company assumes no duty, and specifically disclaims any obligation, to update forward-looking statements, and cautions that these statements are subject to numerous assumptions, risks, and uncertainties, all of which could change over time. Actual results could differ materially from forward-looking statements.
 
 

 
 
             
TOMPKINS FINANCIAL CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
 
             
(In thousands, except share and per share data) (Unaudited)
 
As of
   
As of
 
ASSETS
 
12/31/2012
   
12/31/2011
 
             
             
Cash and noninterest bearing balances due from banks
  $ 117,448     $ 47,297  
Interest bearing balances due from banks
    1,482       2,170  
Money market funds
    0       100  
Cash and Cash Equivalents
    118,930       49,567  
                 
Trading securities, at fair value
    16,450       19,598  
Available-for-sale securities, at fair value
    1,393,340       1,143,546  
Held-to-maturity securities, fair value of $25,163 at December 31, 2012, and $27,255
               
at December 31, 2011
    24,062       26,673  
Originated loans and leases, net of unearned income and deferred costs and fees (2)
    2,133,106       1,981,849  
Less:  Allowance for originated loan and lease losses
    24,643       27,593  
Acquired loans and leases, covered (3)
    37,600       0  
Acquired loans and leases, non-covered (3)
    783,904       0  
Net Loans and Leases
    2,929,967       1,954,256  
                 
FDIC Idemnification Asset
    4,385       0  
Federal Home Loan Bank stock and Federal Reserve Bank stock
    19,388       19,070  
Bank premises and equipment, net
    54,581       44,712  
Corporate owned life insurance
    65,102       43,044  
Goodwill 
    92,305       43,898  
Other intangible assets, net
    18,643       4,096  
Accrued interest and other assets
    100,044       51,788  
Total Assets
  $ 4,837,197     $ 3,400,248  
                 
LIABILITIES
               
Deposits:
               
Interest bearing:
               
Checking, savings and money market
    2,144,367       1,356,870  
Time
    973,883       687,321  
Noninterest bearing    
    831,919       616,373  
Total Deposits
    3,950,169       2,660,564  
                 
Federal funds purchased and securities sold under agreements to repurchase
    213,973       169,090  
Other borrowings, including certain amounts at fair value of $11,847 at December 31, 2012
               
and $12,093 at December 31, 2011
    111,848       186,075  
Trust preferred debentures
    43,668       25,065  
Other liabilities
    76,179       60,311  
Total Liabilities
  $ 4,395,837     $ 3,101,105  
                 
EQUITY
               
Tompkins Financial Corporation shareholders' equity:
               
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued:
               
 14,426,711 at December 31, 2012; and 11,159,466 at December 31, 2011
    1,443       1,116  
Additional paid-in capital
    334,649       206,395  
Retained earnings
    108,709       96,445  
Accumulated other comprehensive loss
    (2,106 )     (3,677 )
Treasury stock, at cost – 100,054 shares at December 31, 2012, and 95,105 shares
               
 at December 31, 2011
    (2,787 )     (2,588 )
                 
Total Tompkins Financial Corporation Shareholders’ Equity
    439,908       297,691  
Noncontrolling interests
    1,452       1,452  
Total Equity
  $ 441,360     $ 299,143  
Total Liabilities and Equity
  $ 4,837,197     $ 3,400,248  
                 

 
 

 

TOMPKINS FINANCIAL CORPORATION
 
CONSOLIDATED STATEMENTS OF INCOME
 
   
   
Three Months Ended
   
Twelve Months Ended
 
 (In thousands, except per share data) (Unaudited)
 
12/31/2012
   
12/31/2011
   
12/31/2012
   
12/31/2011
 
 INTEREST AND DIVIDEND INCOME
                   
 
 
 Loans
  $ 39,952     $ 26,280     $ 124,662     $ 103,998  
 Due from banks
    19       1       32       12  
 Federal funds sold
    0       2       2       7  
 Trading securities
    175       205       744       873  
 Available-for-sale securities
    8,214       6,996       31,232       30,103  
 Held-to-maturity securities
    203       240       860       1,185  
 Federal Home Loan Bank stock and Federal Reserve Bank stock
    205       189       824       910  
 Total Interest and Dividend Income
    48,768       33,913       158,356       137,088  
 INTEREST EXPENSE
                               
 Interest on deposits
    3,805       2,914       12,231       13,087  
 Federal funds purchased and securities sold under agreements to repurchase
    1,111       1,129       4,451       4,872  
 Trust preferred debentures
    798       382       2,094       1,580  
 Other borrowings
    1,205       1,489       5,437       6,143  
 Total Interest Expense
    6,919       5,914       24,213       25,682  
 Net Interest Income
    41,849       27,999       134,143       111,406  
 Less:  Provision for loan and lease losses
    5,659       1,160       8,837       8,945  
 Net Interest Income After Provision for Loan and Lease Losses
    36,190       26,839       125,306       102,461  
 NONINTEREST INCOME
                               
 Investment services income
    3,836       3,196       14,340       14,287  
 Insurance commissions and fees
    6,237       3,136       19,421       13,542  
 Service charges on deposit accounts
    2,076       2,235       7,441       8,491  
 Card services income
    1,678       1,275       6,030       5,060  
 Mark-to-market (loss) gain on trading securities
    (134 )     (108 )     (332 )     62  
 Mark-to-market  gain (loss) on liabilities held at fair value
    108       25       246       (464 )
 Net other-than-temporary impairment losses
    (76 )     (65 )     (196 )     (65 )
 Other income
    2,382       1,488       7,534       6,705  
 Net (loss) gain on securities transactions
    (499 )     15       324       396  
 Total Noninterest Income
    15,608       11,197       54,808       48,014  
 NONINTEREST EXPENSES
                               
 Salaries and wages
    15,427       10,914       51,700       44,140  
 Pension and other employee benefits
    4,827       3,213       18,075       14,275  
 Net occupancy expense of premises
    2,899       1,796       8,969       7,117  
 Furniture and fixture expense
    1,416       1,138       4,996       4,463  
 FDIC insurance
    844       471       2,685       2,527  
 Amortization of intangible assets
    580       136       1,264       589  
 Merger and integration related expenses
    770       174       15,584       174  
 Other operating expense
    11,425       6,358       34,335       25,267  
 Total Noninterest Expenses
    38,188       24,200       137,608       98,552  
 Income Before Income Tax Expense
    13,610       13,836       42,506       51,923  
 Income Tax Expense
    2,416       4,417       11,090       16,373  
 Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation
    11,194       9,419       31,416       35,550  
 Less:  Net income attributable to noncontrolling interests
    33       32       131       131  
 Net Income Attributable to Tompkins Financial Corporation
  $ 11,161     $ 9,387     $ 31,285     $ 35,419  
 Basic Earnings Per Share
  $ 0.78     $ 0.84     $ 2.44     $ 3.21  
 Diluted Earnings Per Share
  $ 0.77     $ 0.84     $ 2.43     $ 3.20  
                                 
   


 
 

 


Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
 
 
 
Quarter Ended
   
Year to Date Period Ended
   
Year to Date Period Ended
 
 
 
December 31, 2012
   
December 31, 2012
   
December 31, 2011
 
 
 
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
  $ 27,905     $ 19       0.27 %   $ 21,442     $ 32       0.15 %   $ 12,717     $ 12       0.09 %
Money market funds
                0.00 %     18             0.00 %     100             0.00 %
Securities (4)
                                                                       
U.S. Government securities
    1,309,625       7,457       2.27 %     1,205,759       28,547       2.37 %     969,303       27,504       2.84 %
Trading securities
    17,080       175       4.08 %     18,162       744       4.10 %     21,262       873       4.11 %
State and municipal (5)
    105,944       1,352       5.08 %     95,095       4,946       5.20 %     95,039       5,143       5.41 %
Other securities
    11,745       140       4.74 %     11,766       544       4.62 %     13,971       648       4.64 %
Total securities
    1,444,394       9,124       2.51 %     1,330,782       34,781       2.61 %     1,099,575       34,168       3.11 %
Federal Funds Sold
                0.00 %     1,837       2       0.11 %     5,837       7       0.12 %
FHLBNY and FRB stock
    19,587       205       4.16 %     18,479       824       4.46 %     17,992       910       5.06 %
Total loans, net of unearned income (6)
    2,939,812       40,274       5.45 %     2,382,109       125,541       5.27 %     1,928,540       104,548       5.42 %
  Total interest-earning assets
    4,431,698       49,622       4.45 %     3,754,667       161,180       4.29 %     3,064,761       139,645       4.56 %
 
                                                                       
Other assets
    469,676                       337,806                       230,221                  
 
                                                                       
  Total assets
    4,901,374                       4,092,473                       3,294,982                  
 
                                                                       
LIABILITIES & EQUITY
                                                                       
Deposits
                                                                       
Interest-bearing deposits
                                                                       
Interest bearing checking, savings,  & money market
    2,166,739       1,604       0.29 %     1,750,444       4,854       0.28 %     1,350,659       4,741       0.35 %
Time deposits
    1,022,807       2,201       0.86 %     846,166       7,377       0.87 %     717,514       8,346       1.16 %
Total interest-bearing deposits
    3,189,546       3,805       0.47 %     2,596,610       12,231       0.47 %     2,068,173       13,087       0.63 %
Federal funds purchased & securities sold under agreements
                                                                       
to repurchase
    216,848       1,111       2.04 %     200,906       4,451       2.22 %     173,692       4,872       2.80 %
Other borrowings
    113,680       1,205       4.22 %     132,746       5,437       4.10 %     155,650       6,143       3.95 %
Trust preferred debentures
    43,657       798       7.27 %     32,835       2,094       6.38 %     25,062       1,580       6.30 %
  Total interest-bearing liabilities
    3,563,731       6,919       0.77 %     2,963,097       24,213       0.82 %     2,422,577       25,682       1.06 %
 
                                                                       
Noninterest bearing deposits
    786,867                       681,260                       539,917                  
Accrued expenses and other liabilities
    107,184                       71,226                       37,868                  
  Total liabilities
    4,457,782                       3,715,583                       3,000,362                  
 
                                                                       
Tompkins Financial Corporation Shareholders’ equity
    442,051                       375,378                       292,845                  
Noncontrolling interest
    1,541                       1,512                       1,775                  
  Total equity
    443,592                       376,890                       294,620                  
 
                                                                       
  Total liabilities and equity
  $ 4,901,374                     $ 4,092,473                     $ 3,294,982                  
Interest rate spread
                    3.68 %                     3.47 %                     3.50 %
Net interest income/margin on earning assets
            42,703       3.83 %             136,967       3.65 %             113,963       3.72 %
 
                                                                       
Tax Equivalent Adjustment
            (854 )                     (2,824 )                     (2,557 )        
 
                                                                       
Net interest income per consolidated financial statements
          $ 41,849                     $ 134,143                     $ 111,406          

 
 

 


Tompkins Financial Corporation - Summary Financial Data (Unaudited)
(In thousands, except per share data)
 
   
 
Quarter-Ended
 
Year-Ended
 
   
 
Dec-12
 
 
Sep-12
 
 
Jun-12
 
 
Mar-12
 
 
Dec-11
 
 
Dec-12
 
   
 
   
 
   
 
   
 
   
 
   
 
   
Period End Balance Sheet
 
 
   
 
   
 
   
 
   
 
   
Securities
 
$
 1,433,852 
 
$
 1,516,913 
 
$
 1,228,143 
 
$
 1,285,685 
 
$
 1,189,817 
 
$
 1,433,852
 
Originated loans and leases, net of unearned income and deferred costs and fees (2)
 
 
 2,133,106 
 
 
 2,060,539 
 
 
 2,019,681 
 
 
 1,977,569 
 
 
 1,981,849 
 
 
 2,133,106
 
Allowance for originated loan and lease losses
 
 
 24,643 
 
 
 26,632 
 
 
 26,865 
 
 
 26,948 
 
 
 27,593 
 
 
 24,643
 
Acquired loans and leases (3)
 
 
 821,504 
 
 
 869,211 
 
 
 
 
 
 
 
 
821,504
 
Total assets
 
 
 4,837,197
 
 
 4,924,786 
 
 
 3,482,669 
 
 
 3,546,694 
 
 
 3,400,248 
 
 
 4,837,197
 
Total deposits
 
 
 3,950,169 
 
 
 4,037,644 
 
 
 2,765,093 
 
 
 2,859,436 
 
 
 2,660,564 
 
 
 3,950,169
 
Federal funds purchased and securities sold under agreements to repurchase
 
 
 213,973 
 
 
 206,996 
 
 
 161,662 
 
 
 169,456 
 
 
 169,090 
 
 
 213,973
 
Other borrowings
 
 
 111,848 
 
 
 125,461 
 
 
 121,934 
 
 
 132,884 
 
 
 186,075 
 
 
 111,848
 
Trust preferred debentures
 
 
 43,668 
 
 
 43,651 
 
 
 25,067 
 
 
 25,066 
 
 
 25,065 
 
 
43,668
 
Shareholders' equity
 
 
 441,360 
 
 
 440,950 
 
 
 353,700 
 
 
 305,967 
 
 
 299,143 
 
 
 441,360
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average earning assets
 
$
 4,431,698 
 
$
 4,087,264 
 
$
 3,278,519 
 
$
 3,211,533 
 
$
 3,131,051 
 
$
 3,754,667
 
Average assets
 
 
 4,901,374 
 
 
 4,450,013 
 
 
 3,539,170 
 
 
 3,464,917 
 
 
 3,368,135 
 
 
 4,092,473
 
Average interest-bearing liabilities
 
 
 3,563,731 
 
 
 3,248,839 
 
 
 2,521,285 
 
 
 2,507,146 
 
 
 2,435,326 
 
 
 2,963,097
 
Average equity
 
 
 443,592 
 
 
 410,300 
 
 
 349,021 
 
 
 303,546 
 
 
 307,539 
 
 
 376,890
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding (basic)
 
 
 14,332,672 
 
 
 13,580,771 
 
 
 12,146,622 
 
 
 11,103,192 
 
 
 11,074,330 
 
 
 12,797,173
 
Weighted average shares outstanding (diluted)
 
 
 14,374,368 
 
 
 13,630,464 
 
 
 12,166,417 
 
 
 11,147,490 
 
 
 11,104,623 
 
 
 12,836,043
 
Period-end shares outstanding
 
 
 14,390,801 
 
 
 14,358,230 
 
 
 12,223,790 
 
 
 11,197,370 
 
 
 11,123,556 
 
 
 14,390,801
 
Book value per share
 
 
 30.67 
 
 
 30.71 
 
 
 28.94 
 
 
 27.32 
 
 
 26.89 
 
 
 30.67
 
Tangible book value per share (Non-GAAP)
   
22.96
   
22.71
   
24.96
 
22.99
   
22.58
   
22.96
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
 41,849 
 
$
 36,743 
 
$
 28,110 
 
$
 27,441 
 
$
 27,999 
 
$
 134,143
 
Provision for loan/lease losses
 
 
 5,659 
 
 
 1,042 
 
 
 1,011 
 
 
 1,125 
 
 
 1,160 
 
 
 8,837
 
Noninterest income
 
 
 15,608 
 
 
 14,773 
 
 
 12,766 
 
 
 11,661 
 
 
 11,197 
 
 
 54,808
 
Noninterest expense
 
 
 38,188 
 
 
 46,194 
 
 
 26,855 
 
 
 26,371 
 
 
 24,200 
 
 
 137,608
 
Income tax expense
 
 
 2,416 
 
 
 761 
 
 
 4,151 
 
 
 3,762 
 
 
 4,417 
 
 
 11,090
 
Net income attributable to Tompkins Financial Corporation
 
 
 11,161 
 
 
 3,487 
 
 
 8,826 
 
 
 7,811 
 
 
 9,387 
 
 
 31,285
 
Noncontrolling interests
 
 
 33 
 
 
 32 
 
 
 33 
 
 
 33 
 
 
 32 
 
 
 131
 
Basic earnings per share (9)
 
$
 0.78 
 
$
 0.26 
 
$
 0.72 
 
$
 0.70 
 
$
 0.84 
 
$
 2.44
 
Diluted earnings per share (9)
 
$
 0.77 
 
$
 0.25 
 
$
 0.72 
 
$
 0.70 
 
$
 0.84 
 
$
 2.43
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

 
 
Tompkins Financial Corporation - Summary Financial Data (Unaudited)
(In thousands, except per share data)
 
                                     
   
Quarter-Ended
 
Year-Ended
 
   
Dec-12
   
Sep-12
   
Jun-12
   
Mar-12
   
Dec-11
   
Dec-12
 
                                     
Period End Balance Sheet
                               
Securities
$
1,433,852 
 
$
1,516,913 
 
$
1,228,143 
 
$
1,285,685 
 
$
1,189,817 
 
$
1,433,852 
 
Originated loans and leases, net of unearned income and deferred costs and fees (2)
 
2,133,106 
   
2,060,539 
   
2,019,681 
   
1,977,569 
   
1,981,849 
   
2,133,106
 
Allowance for originated loan and lease losses
 
24,643 
   
26,632 
   
26,865 
   
26,948 
   
27,593 
   
24,643 
 
Acquired loans and leases (3)
 
821,504 
   
869,211 
   
   
   
   
821,504 
 
Total assets
 
4,837,197
   
4,924,786 
   
3,482,669 
   
3,546,694 
   
3,400,248 
   
4,837,197 
 
Total deposits
 
3,950,169 
   
4,037,644 
   
2,765,093 
   
2,859,436 
   
2,660,564 
   
3,950,169 
 
Federal funds purchased and securities sold under agreements to repurchase
 
213,973 
   
206,996 
   
161,662 
   
169,456 
   
169,090 
   
213,973 
 
Other borrowings
 
111,848 
   
125,461 
   
121,934 
   
132,884 
   
186,075 
   
111,848 
 
Trust preferred debentures
 
43,668 
   
43,651 
   
25,067 
   
25,066 
   
25,065 
   
43,668 
 
Shareholders' equity
 
441,360 
   
440,950 
   
353,700 
   
305,967 
   
299,143 
   
441,360 
 
                                     
Average Balance Sheet
                                   
Average earning assets
$
4,431,698 
 
$
4,087,264 
 
$
3,278,519 
 
$
3,211,533 
 
$
3,131,051 
 
$
3,754,667 
 
Average assets
 
4,901,374 
   
4,450,013 
   
3,539,170 
   
3,464,917 
   
3,368,135 
   
4,092,473 
 
Average interest-bearing liabilities
 
3,563,731 
   
3,248,839 
   
2,521,285 
   
2,507,146 
   
2,435,326 
   
2,963,097 
 
Average equity
 
443,592 
   
410,300 
   
349,021 
   
303,546 
   
307,539 
   
376,890 
 
                                     
Share data
                                   
Weighted average shares outstanding (basic)
 
14,332,672 
   
13,580,771 
   
12,146,622 
   
11,103,192 
   
11,074,330 
   
12,797,173
 
Weighted average shares outstanding (diluted)
 
14,374,368 
   
13,630,464 
   
12,166,417 
   
11,147,490 
   
11,104,623 
   
12,836,043
 
Period-end shares outstanding
 
14,390,801 
   
14,358,230 
   
12,223,790 
   
11,197,370 
   
11,123,556 
   
14,390,801 
 
Book value per share
 
30.67 
   
30.71 
   
28.94 
   
27.32 
   
26.89 
   
30.67 
 
Tangible book value per share (Non-GAAP)
 
22.96
   
22.71
   
24.96
 
22.99
   
22.58
   
22.96
 
                                     
Income Statement
                                   
Net interest income
$
41,849 
 
$
36,743 
 
$
28,110 
 
$
27,441 
 
$
27,999 
 
$
134,143 
 
Provision for loan/lease losses
 
5,659 
   
1,042 
   
1,011 
   
1,125 
   
1,160 
   
8,837 
 
Noninterest income
 
15,608 
   
14,773 
   
12,766 
   
11,661 
   
11,197 
   
54,808 
 
Noninterest expense
 
38,188 
   
46,194 
   
26,855 
   
26,371 
   
24,200 
   
137,608 
 
Income tax expense
 
2,416 
   
761 
   
4,151 
   
3,762 
   
4,417 
   
11,090 
 
Net income attributable to Tompkins Financial Corporation
 
11,161 
   
3,487 
   
8,826 
   
7,811 
   
9,387 
   
31,285 
 
Noncontrolling interests
 
33 
   
32 
   
33 
   
33 
   
32 
   
131 
 
Basic earnings per share (9)
$
0.78 
 
$
0.26 
 
$
0.72 
 
$
0.70 
 
$
0.84 
 
$
2.44 
 
Diluted earnings per share (9)
$
0.77 
 
$
0.25 
 
$
0.72 
 
$
0.70 
 
$
0.84 
 
$
2.43 
 
                                     

 
 

 
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
 
 
 
 
Quarter-Ended
 
 Year-Ended
 
   
Dec-12
 
 
Sep-12
   
Jun-12
 
 
Mar-12
   
Dec-11
 
 
Dec-12
 
Asset Quality
 
Nonaccrual loans and leases (7)
$
 37,740 
 
$
 36,996 
   
 36,749 
 
$
 38,455 
 
 39,588 
 
$
 37,740 
 
Loans and leases 90 days past due and accruing (7)
 
 257 
 
 
 126 
   
 321 
 
 
 1,552 
   
 1,380 
 
 
 257 
 
Troubled debt restructurings not included above (7)
 
 1,532 
 
 
 1,468 
   
1,507 
 
 
 423 
   
 428 
 
 
1,532 
 
Total nonperforming loans and leases (7)
 
 39,529 
 
 
 38,590 
   
 38,577 
 
 
 40,430 
   
 41,396 
 
 
 39,529 
 
OREO (8)
 
 4,862 
 
 
 4,675 
   
 2,161 
 
 
 1,906 
   
 1,334 
 
 
 4,862 
 
Total nonperforming assets
 
 44,391 
 
 
 43,265 
   
 40,738 
 
 
 42,336 
   
 42,730 
 
 
 44,391 
 
   
Delinquency- Originated loan and lease portfolio
 
  Loans and leases 30-89 days past due and accruing (2)
$
 8,818 
 
$
 9,412 
 
 10,149 
 
$
 12,080 
 
 13,171 
 
$
 8,818 
 
  Loans and leases 90 days past due and accruing (2)
 
 257 
 
 
 126 
   
 321 
 
 
 1,552 
   
 1,380 
 
 
 257 
 
  Nonaccrual loans and leases (2)
 
 33,388 
 
 
 36,996 
   
 36,749 
 
 
 38,455 
   
 39,588 
 
 
 33,388 
 
Total past due and accruing and nonaccrual originated loans (2)
 
42,463 
 
 
 46,534 
   
 47,219 
 
 
 52,087 
   
 54,139 
 
 
42,463 
 
 
Delinquency- Acquired loan and lease portfolio
 
Covered loans and leases 30-89 days past due and accruing (3)(7)
 
 1,014 
 
 
669 
   
 
 
   
 
 
 1,014 
 
Covered loans and leases 90 days or more past due and accruing (3)(7)
 
 4,754 
 
 
2,837 
   
 
 
   
 
 
 4,754 
 
Non-covered loans and leases 30-89 days past due and accruing (3)(7)
 
 4,249 
 
 
5,848 
   
 
 
   
 
 
 4,249 
 
Non-covered loans and leases 90 days or more past due and accruing (3)(7)
 
 14,506 
 
 
19,339 
   
 
 
   
 
 
 14,506 
 
Non-covered Nonaccrual loans and leases (3)
 
 4,352 
 
 
   
 
 
   
 
 
 4,352 
 
Total past due and accruing and nonaccrual acquired loans and leases
 
 28,875 
 
 
28,693 
   
 
 
   
 
 
 28,875 
 

Allowance for Loan Losses - Originated loan and lease portfolio
  Balance at beginning of period
$
26,632 
 
$
26,865 
 
$
26,948 
 
$
27,593 
 
$
27,878 
 
$
27,593 
 
  Provision for loan and lease losses
 
5,659 
   
1,042 
   
1,011 
   
1,125 
   
1,160 
   
8,837 
 
  Net loan and lease charge-offs
 
7,648 
   
1,275 
   
1,094 
   
1,770 
   
1,445 
   
11,787 
 
Allowance for loan and lease losses  (originated loan portfolio)
 
24,643 
   
26,632 
   
26,865 
   
26,948 
   
27,593 
   
24,643 
 
Allowance for loan and lease losses (acquired loan portfolio)
 
   
   
   
 0 
   
  0 
   
 
  Total allowance for loan and lease losses
 
24,643 
   
26,632 
   
26,865 
   
26,948 
   
27,593 
   
24,643 
 

Loan Classifications - Originated portfolio
  Special Mention
$
 56,342 
 
$
 58,598 
 
$
 63,652 
 
$
62,649 
 
$
52,156 
   $
         56,342 
 
  Substandard
 
45,083 
 
 
 54,383 
 
 
 58,185 
 
58,272 
 
72,920 
   
45,083 
 
  Doubtful
 
 
 
 494 
 
 
 588 
 
 
 1,344 
 
 
 1,494 
   
 0 
 

Loan Classifications - Acquired portfolio
  Special Mention
 
 25,381 
 
 
 17,743 
 
 
 
 
 
 
   
 25,381 
 
  Substandard
 
 45,207 
 
 
 39,860 
 
 
 
 
 
 
   
  45,207 
 

 
 

 
 
Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
 
 
 
 
Quarter-Ended
 
 Year-Ended
 
   
Dec-12
 
 
Sep-12
 
 
Jun-12
 
 
Mar-12
 
 
Dec-11
 
 
Dec-12
 

RATIO ANALYSIS
 
 
 
 
 
Credit Quality
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming originated loans and leases/total originated loans and leases (2)(7)
 
1.65%
 
 
1.87%
 
 
1.91%
 
 
2.04%
 
 
2.09%
 
 
1.65%
 
Nonperforming assets/total assets
 
0.92%
 
 
0.88%
 
 
1.17%
 
 
1.19%
 
 
1.26%
 
 
0.92%
 
Allowance for loan and lease losses/total originated loans and leases
 
1.16%
 
 
1.29%
 
 
1.33%
 
 
1.36%
 
 
1.39%
 
 
1.16%
 
Allowance/nonperforming loans and leases
 
62.34%
 
 
69.01%
 
 
69.75%
 
 
66.65%
 
 
66.65%
 
 
62.34%
 
Net loan and lease losses (annualized)/total average loans and leases
 
1.03%
 
 
0.19%
 
 
0.22%
 
 
0.36%
 
 
0.29%
 
 
0.49%
 

Capital Adequacy (period-end)
Tier I capital / average assets
 
7.95%
   
8.50%
 
 
9.53%
   
8.46%
 
 
8.51%
 
 
7.95%
 
Total capital / risk-weighted assets
 
12.94%
   
12.42%
 
 
16.22%
   
14.37%
 
 
14.17%
 
 
12.94%
 
Tangible Common Equity / Tangible Assets
 
6.99%
   
6.78%
   
8.88%
   
7.36%
   
7.49%
   
6.99%
 
 
 
Profitability
 
Return on average assets *
 
0.91%
   
0.31%
 
 
1.00%
   
0.91%
 
 
1.11%
 
 
0.76%
 
Return on average equity *
 
10.01%
   
3.38%
 
 
10.17%
   
10.35%
 
 
12.07%
 
 
8.30%
 
Net interest margin (TE)
 
3.83%
   
3.66%
 
 
3.52%
   
3.51%
 
 
3.62%
 
 
3.65%
 
* Quarterly ratios have been annualized
 

Non-GAAP Disclosure
Reported net income (GAAP)
$
11,161 
 
$
3,487 
 
$
8,826 
 
$
7,811 
 
$
9,387 
 
$
31,285 
 
Adjustments (net of tax):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrual adjustment VISA
 
0
   
   
(243)
   
   
 
(243)
 
Merger related expenses
 
462 
 
 
8,424 
 
 
703 
 
 
75 
 
 
152 
 
 
9,664 
 
Subtotal adjustments
 
462 
 
 
8,424 
 
 
460 
 
 
75 
 
 
152 
 
 
9,421 
 
Net operating income (Non-GAAP)
 
11,623 
 
 
11,911 
 
 
9,286 
 
 
7,886 
 
 
9,539 
 
 
40,706
 
Weighted average shares outstanding (diluted)
14,374,368 
 
13,630,464 
 
12,166,417 
 
11,147,490 
 
11,104,623 
 
12,836,043 
 
Adjusted diluted earnings per share (Non-GAAP)
$
0.81 
 
$
0.87 
 
$
0.76 
 
$
0.71 
 
$
0.86 
 
$
3.17 
 

Non-GAAP Disclosure
 
Reported net income (GAAP)
$
11,161 
 
$
3,487 
 
$
8,826 
 
$
7,811 
 
$
9,387 
 
$
31,285
 
Merger related expenses (net of tax)
 
462 
 
 
8,424 
 
 
703 
 
 
75 
 
 
152 
 
 
9,664 
 
Net operating income (Non-GAAP)
$
11,623 
 
$
11,911 
 
$
9,529 
 
$
7,886 
 
$
9,539 
 
$
40,949
 
Amortization of intangibles, (net of tax)
 
348 
 
 
256 
 
 
74 
 
 
80 
 
 
81 
 
 
758 
 
Adjusted net operating income (Non-GAAP)
 
11,971 
 
 
12,167 
 
 
9,603 
 
 
7,966 
 
 
9,620 
 
 
41,707 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average total shareholders' equity
 
 443,592 
 
 
 410,300 
 
 
 349,021 
 
 
 303,546 
 
 
 307,539 
 
 
 376,890 
 
Less:  Average goodwill and intangibles
 
114,644 
 
 
92,789 
 
 
48,665 
 
 
47,922 
 
 
48,195 
 
 
76,149 
 
Average tangible shareholders' equity (Non-GAAP)
 
328,948 
 
 
317,511 
 
 
300,356 
 
 
255,624 
 
 
259,344 
 
 
300,741 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating return on shareholders' tangible equity (annualized) (Non-GAAP)
 
14.56%
   
15.24%
   
12.86%
   
12.53%
   
14.71%
   
13.87%
 

 
 

 
 
Tompkins Financial Corporation - Summary Financial Data (Unaudited) – continued
 
 
 
Quarter-Ended
 
 Year-Ended
 
   
Dec-12
 
 
Sep-12
 
 
Jun-12
 
 
Mar-12
 
 
Dec-11
 
 
Dec-12
 

Non-GAAP Disclosure
Total shareholders' equity (GAAP)
$
441,360 
 
$
440,950 
 
$
353,700 
 
$
305,967 
 
$
299,143 
 
$
441,360 
 
Less:  goodwill and intangibles
 
110,947 
 
 
114,920 
 
 
48,652 
 
 
48,569 
 
 
47,994 
 
 
110,947 
 
Tangible shareholders' equity (Non-GAAP)
 
330,413 
 
 
326,030 
 
 
305,048 
 
 
257,398 
 
 
251,149 
 
 
330,413 
 
Ending shares outstanding
14,390,801 
 
14,358,230 
 
 12,223,790 
 
11,197,370 
 
11,123,556 
 
14,390,801
 
Tangible book value per share (Non-GAAP)
 
22.96 
 
 
22.71 
 
 
24.96 
 
 
22.99 
 
 
22.58 
 
 
22.96 
 

 
Non-GAAP Disclosure
Year-to-date period ended
 
 
 
   
 
 
 
 
 
Dec-12
Dec-11
 
 
 
 
 
 
 
 
Reported net income (GAAP)
 $
31,285 
$
 
35,419 
 
 
 
 
 
 
 
 
Adjustments (net of tax):
 
 
 
 
 
 
 
 
 
 
 
 
 
  Accrual adjustment VISA
 
(243)
 
 
 
 
 
 
 
 
 
 
  Merger related expenses
 
9,664 
 
 
152 
 
 
 
 
 
 
 
 
Subtotal adjustments
 
9,421
 
 
152 
 
 
 
 
 
 
 
 
Net operating income (Non-GAAP)
 
40,706 
 
 
35,571
 
 
 
 
 
 
 
 
Weighted average shares outstanding (diluted)
 
12,836,043 
 
 
11,035,384 
 
 
 
 
 
 
 
 
Adjusted diluted earnings per share (Non-GAAP)
$
3.17
$
 
3.22
               
 
 
(1) Federal Reserve peer ratio as of September 30, 2012, 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.  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.  Because acquired loans are initially recorded at an amount estimated to be collectible, losses on such loans, when incurred, are first applied against the non-accretable difference established in purchase accounting and then to any allowance of loan losses recognized subsequent to acquisition.  "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, 2011.
 
(7) Acquired loans and leases are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, as we can reasonably estimate the timing and amount of the expected cash flows on the acquired loans and we expect to fully collect the new carrying value of the loans. As such, we do not consider the loans to be nonaccrual or nonperforming.
 
(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.