10-Q

United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-12709

Tompkins Financial Corporation

(Exact name of registrant as specified in its charter)

New York	16-1482357
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
The Commons, P.O. Box 460, Ithaca, NY	14851
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (888) 503-5753

Former name, former address, and former fiscal year, if changed since last report: NA

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐	Accelerated Filer ☒
Non-Accelerated Filer ☐ (Do not check if a smaller reporting company)	Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)  Yes ☐  No ☒.

Indicate the number of shares of the Registrant’s Common Stock outstanding as of the latest practicable date:

Class	Outstanding as of October 30, 2014
Common Stock, $0.10 par value	14,763,078 shares

TOMPKINS FINANCIAL CORPORATION

FORM 10-Q

INDEX

PART I -FINANCIAL INFORMATION
			PAGE
	Item 1 –	Condensed Financial Statements
		Consolidated Statements of Condition as of September 30, 2014 (Unaudited)		3
		Consolidated Statements of Income for the three and nine months ended September 30, 2014 and 2013 (Unaudited)		4
		Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2014 and 2013 (Unaudited)		5
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 (Unaudited)		6
		Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2014 and 2013 (Unaudited)		8
		Notes to Unaudited Consolidated Condensed Financial Statements		9-46
	Item 2 –	Management’s Discussion and Analysis of Financial Condition and Results of Operations		46-66
	Item 3 –	Quantitative and Qualitative Disclosures About Market Risk		66
	Item 4 –	Controls and Procedures		67
PART II - OTHER INFORMATION
	Item 1 –	Legal Proceedings		67
	Item 1A –	Risk Factors		67
	Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds		67
	Item 3 –	Defaults Upon Senior Securities		68
	Item 4 –	Mine Safety Disclosures		68
	Item 5 –	Other Information		68
	Item 6 –	Exhibits		68
SIGNATURES				69
EXHIBIT INDEX				70

2

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share and per share data) (Unaudited)	As of			As of
ASSETS	09/30/2014			12/31/2013
Cash and noninterest bearing balances due from banks	$	84,129		$	82,163
Interest bearing balances due from banks		988			721
Cash and Cash Equivalents		85,117			82,884
Trading securities, at fair value		9,473			10,991
Available-for-sale securities, at fair value (amortized cost of $1,375,637 at September 30, 2014 and $1,368,736 at December 31, 2013)		1,374,756			1,354,811
Held-to-maturity securities, at amortized cost (fair value of $48,017 at September 30, 2014, and $19,625 at December 31, 2013)		47,608			18,980
Originated loans and leases, net of unearned income and deferred costs and fees		2,674,971			2,527,244
Acquired loans and leases, covered		20,910			25,868
Acquired loans and leases, non-covered		561,588			641,172
Less: Allowance for loan and lease losses		27,786			27,970
Net Loans and Leases		3,229,683			3,166,314
FDIC indemnification asset		2,298			4,790
Federal Home Loan Bank stock		14,838			25,041
Bank premises and equipment, net		59,550			55,932
Corporate owned life insurance		73,269			69,335
Goodwill		92,243			92,140
Other intangible assets, net		15,206			16,298
Accrued interest and other assets		86,878			105,523
Total Assets	$	5,090,919		$	5,003,039
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market		2,310,629			2,190,616
Time		930,796			865,702
Noninterest bearing		971,435			890,898
Total Deposits		4,212,860			3,947,216
Federal funds purchased and securities sold under agreements to repurchase		128,368			167,724
Other borrowings, including certain amounts at fair value of $11,032 at September 30, 2014 and $11,292 at December 31, 2013		166,509			331,531
Trust preferred debentures		37,298			37,169
Other liabilities		55,273			61,460
Total Liabilities	$	4,600,308		$	4,545,100
EQUITY
Tompkins Financial Corporation shareholders’ equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,830,002 at September 30, 2014; and 14,785,007 at December 31, 2013		1,483			1,479
Additional paid-in capital		348,992			346,096
Retained earnings		158,673			137,102
Accumulated other comprehensive loss		(16,810	)		(25,119	)
Treasury stock, at cost – 108,788 shares at September 30, 2014, and 105,449 shares at December 31, 2013		(3,277	)		(3,071	)
Total Tompkins Financial Corporation Shareholders’ Equity		489,061			456,487
Noncontrolling interests		1,550			1,452
Total Equity	$	490,611		$	457,939
Total Liabilities and Equity	$	5,090,919		$	5,003,039

See notes to consolidated financial statements

3

TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended						Nine Months Ended
(In thousands, except per share data) (Unaudited)	09/30/2014			09/30/2013			09/30/2014			09/30/2013
INTEREST AND DIVIDEND INCOME
Loans	$	38,298		$	38,048		$	112,601		$	112,027
Due from banks		0			1			2			9
Trading securities		102			147			321			472
Available-for-sale securities		7,718			7,830			23,637			23,222
Held-to-maturity securities		288			160			626			528
Federal Home Loan Bank stock and Federal Reserve Bank stock		212			193			616			538
Total Interest and Dividend Income		46,618			46,379			137,803			136,796
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more		996			1,208			2,900			3,651
Other deposits		1,830			1,894			5,446			6,093
Federal funds purchased and securities sold under agreements to repurchase		683			901			2,263			2,877
Trust preferred debentures		573			660			1,714			2,037
Other borrowings		961			1,243			3,362			3,634
Total Interest Expense		5,043			5,906			15,685			18,292
Net Interest Income		41,575			40,473			122,118			118,504
Less: (Credit) Provision for loan and lease losses		(59	)		2,049			751			5,576
Net Interest Income After Provision for Loan and Lease Losses		41,634			38,424			121,367			112,928
NONINTEREST INCOME
Insurance commissions and fees		7,520			7,160			21,823			21,588
Investment services income		3,636			3,694			11,549			11,180
Service charges on deposit accounts		2,506			2,254			7,010			6,186
Card services income		1,936			1,735			5,968			5,163
Mark-to-market loss on trading securities		(87	)		(87	)		(181	)		(472	)
Mark-to-market gain on liabilities held at fair value		132			119			260			543
Other income		1,892			3,372			6,129			7,548
Gain on sale of available-for-sale securities		20			281			151			723
Total Noninterest Income		17,555			18,528			52,709			52,459
NONINTEREST EXPENSES
Salaries and wages		17,553			16,755			51,859			48,618
Pension and other employee benefits		4,941			5,606			15,964			17,014
Net occupancy expense of premises		2,969			2,850			9,296			8,865
Furniture and fixture expense		1,451			1,448			4,247			4,367
FDIC insurance		682			808			2,228			2,401
Amortization of intangible assets		518			544			1,570			1,648
Merger related expenses		0			0			0			228
Other operating expense		10,423			9,543			30,511			29,710
Total Noninterest Expenses		38,537			37,554			115,675			112,851
Income Before Income Tax Expense		20,652			19,398			58,401			52,536
Income Tax Expense		6,897			5,316			18,951			15,873
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation		13,755			14,082			39,450			36,663
Less: Net income attributable to noncontrolling interests		33			33			98			98
Net Income Attributable to Tompkins Financial Corporation	$	13,722		$	14,049		$	39,352		$	36,565
Basic Earnings Per Share	$	0.92		$	0.96		$	2.65		$	2.51
Diluted Earnings Per Share	$	0.92		$	0.95		$	2.64		$	2.50

See notes to consolidated financial statements

4

Consolidated Statements of Comprehensive Income
	Three Months Ended
(in thousands) (Unaudited)	09/30/2014			09/30/2013
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$	13,755		$	14,082
Other comprehensive income, net of tax:
Available-for-sale securities:
Change in net unrealized gain (loss) during the period		(4,123	)		(318	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(12	)		(169	)
Employee benefit plans:
Amortization of net retirement plan actuarial loss		159			387
Amortization of net retirement plan prior service cost		1			8
Amortization of net retirement plan transition liability		0			8
Other comprehensive (loss) income		(3,975	)		(84	)
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation		9,780			13,998
Less: Net income attributable to noncontrolling interests		(33	)		(33	)
Total comprehensive income attributable to Tompkins Financial Corporation	$	9,747		$	13,965

See notes to unaudited condensed consolidated financial statements.

Consolidated Statements of Comprehensive Income
	Nine Months Ended
(in thousands) (Unaudited)	09/30/2014			09/30/2013
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$	39,450		$	36,663
Other comprehensive income, net of tax:
Available-for-sale securities:
Change in net unrealized gain (loss) during the period		7,918			(26,420	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(90	)		(434	)
Employee benefit plans:
Amortization of net retirement plan actuarial gain		479			1,160
Amortization of net retirement plan prior service cost		2			26
Amortization of net retirement plan transition liability		0			23
Other comprehensive income (loss)		8,309			(25,645	)
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation		47,759			11,018
Less: Net income attributable to noncontrolling interests		(98	)		(98	)
Total comprehensive income attributable to Tompkins Financial Corporation	$	47,661		$	10,920

See notes to unaudited condensed consolidated financial statements.

5

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)	09/30/2014			09/30/2013
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$	39,352		$	36,565
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses		751			5,576
Depreciation and amortization of premises, equipment, and software		4,203			4,284
Amortization of intangible assets		1,570			1,648
Earnings from corporate owned life insurance		(1,431	)		(1,482	)
Net amortization on securities		7,824			10,724
Amortization/accretion related to purchase accounting		(6,147	)		(7,212	)
Mark-to-market loss on trading securities		181			472
Mark-to-market gain on liabilities held at fair value		(260	)		(543	)
Net gain on securities transactions		(151	)		(723	)
Net gain on sale of loans		(345	)		(212	)
Proceeds from sale of loans		19,007			7,076
Loans originated for sale		(18,357	)		(8,271	)
Gain on conversion of deposits		(140	)		0
Net loss (gain) on sale of bank premises and equipment		2			(7	)
Gain on redemption of trust preferred		0			(1,410	)
Stock-based compensation expense		1,081			960
Decrease in accrued interest receivable		92			927
Decrease in accrued interest payable		(294	)		(809	)
Proceeds from maturities and payments of trading securities		1,323			4,425
Decrease in FDIC prepaid insurance		0			5,386
Other, net		9,494			20,241
Net Cash Provided by Operating Activities		57,755			77,615
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale securities		157,157			197,009
Proceeds from sales of available-for-sale securities		48,005			99,378
Proceeds from maturities, calls and principal paydowns of held-to-maturity securities		10,325			11,798
Purchases of available-for-sale securities		(219,695	)		(316,705	)
Purchases of held-to-maturity securities		(38,981	)		(7,511	)
Net increase in loans		(60,416	)		(167,106	)
Net decrease (increase) in Federal Home Loan Bank stock		10,203			(2,567	)
Proceeds from sale of bank premises and equipment		172			116
Purchases of bank premises and equipment		(7,445	)		(4,811	)
Purchase of corporate owned life insurance		(2,500	)		(1,500	)
Net cash used in acquisition		(415	)		0
Other, net		386			(3,417	)
Net Cash Used in Investing Activities		(103,204	)		(195,316	)
FINANCING ACTIVITIES
Net increase in demand, money market, and savings deposits		200,550			90,297
Net increase (decrease) in time deposits		66,568			(67,710	)
Net decrease in Federal funds purchases and securities sold under agreements to repurchase		(38,507	)		(51,856	)
Increase in other borrowings		149,845			194,674
Repayment of other borrowings		(314,606	)		(63,801	)
Redemption of trust preferred debentures		0			(5,191	)
Cash dividends		(17,781	)		(16,574	)
Common stock issued		50			0
Repurchase of common stock		(2,932	)		0
Shares issued for dividend reinvestment plan		2,186			3,009
Shares issued for employee stock ownership plan		1,528			717
Net shares issued related to restricted stock awards		64			(68	)
Net proceeds from exercise of stock options		633			3,639
Tax benefit from stock option exercises		84			215
Net Cash Provided by Financing Activities		47,682			87,351
Net Increase (Decrease) in Cash and Cash Equivalents		2,233			(30,350	)
Cash and cash equivalents at beginning of period		82,884			118,930
Total Cash & Cash Equivalents at End of Period		85,117			88,580

See notes to unaudited condensed consolidated financial statements.

6

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)	09/30/2014		09/30/2013
Supplemental Information:
Cash paid during the year for - Interest	$	18,033	$	21,534
Cash paid during the year for - Taxes		3,258		6,283
Transfer of loans to other real estate owned		4,697		4,407

See notes to unaudited condensed consolidated financial statements.

7

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(in thousands except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Non-controlling Interests		Total
Balances at January 1, 2013	$	1,443		$	334,649		$	108,709		$	(2,106	)	$	(2,787	)	$	1,452	$	441,360
Net income attributable to noncontrolling interests and Tompkins Financial Corporation								36,565									98		36,663
Other comprehensive loss											(25,645	)							(25,645	)
Total Comprehensive Income																			11,018
Cash dividends ($1.14 per share)								(16,574	)										(16,574	)
Net exercise of stock options and related tax benefit (111,307 shares)		11			3,843														3,854
Stock-based compensation expense					960														960
Shares issued for dividend reinvestment plan (70,530 shares)		7			3,002														3,009
Shares issued for employee stock ownership plan (17,290 shares)		2			715														717
Directors deferred compensation plan (3,228 shares)					185									(185	)				0
Restricted stock activity (102,743 shares)		10			(78	)													(68	)
Balances at September 30, 2013	$	1,473		$	343,276		$	128,700		$	(27,751	)	$	(2,972	)	$	1,550	$	444,276
Balances at January 1, 2014	$	1,479		$	346,096		$	137,102		$	(25,119	)	$	(3,071	)	$	1,452	$	457,939
Net income attributable to noncontrolling interests and Tompkins Financial Corporation								39,352									98		39,450
Other comprehensive income											8,309								8,309
Total Comprehensive Income																			47,759
Cash dividends ($1.20 per share)								(17,781	)										(17,781	)
Net exercise of stock options and related tax benefit (36,885 shares)		4			713														717
Common stock repurchased and returned to unissued status (65,059 shares)		(7	)		(2,925	)													(2,932	)
Shares issued for dividend reinvestment plan (46,081 shares)		4			2,182														2,186
Stock-based compensation expense					1,081														1,081
Shares issued for employee stock ownership plan (31,192 shares)		3			1,525														1,528
Directors deferred compensation plan (3,339 shares)					206									(206	)				0
Restricted stock activity ((5,184) shares)		0			64														64
Stock issued for purchase acquisition (1,080 shares)		0			50														50
Balances at September 30, 2014	$	1,483		$	348,992		$	158,673		$	(16,810	)	$	(3,277	)	$	1,550	$	490,611

See notes to unaudited condensed consolidated financial statements

8

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Business

Tompkins Financial Corporation (“Tompkins” or the “Company”) is headquartered in Ithaca, New York and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company is a locally oriented, community-based financial services organization that offers a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, insurance, and brokerage services. At September 30, 2014, the Company’s subsidiaries included: four wholly-owned banking subsidiaries, Tompkins Trust Company (the “Trust Company”), The Bank of Castile (DBA Tompkins Bank of Castile), Mahopac Bank (formerly known as Mahopac National Bank, DBA Tompkins Mahopac Bank), VIST Bank (DBA Tompkins VIST Bank); and a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). TFA Wealth Management and the trust division of the Trust Company provide a full array of investment services under the Tompkins Financial Advisors brand, including investment management, trust and estate, financial and tax planning as well as life, disability and long-term care insurance services. The Company’s principal offices are located at The Commons, Ithaca, New York, 14851, and its telephone number is (888) 503-5753. The Company’s common stock is traded on the NYSE MKT LLC under the Symbol “TMP.”

As a registered financial holding company, the Company is regulated under the Bank Holding Company Act of 1956 (“BHC Act”), as amended and is subject to examination and comprehensive regulation by the Federal Reserve Board (“FRB”). The Company is also subject to the jurisdiction of the Securities and Exchange Commission (“SEC”) and is subject to disclosure and regulatory requirements under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. The Company is subject to the rules of the NYSE MKT LLC for listed companies.

The Company’s banking subsidiaries are subject to examination and comprehensive regulation by various regulatory authorities, including the Federal Deposit Insurance Corporation (“FDIC”), the New York State Department of Financial Services (“NYSDFS”), and the Pennsylvania Department of Banking and Securities (“PDBS”). Each of these agencies issues regulations and requires the filing of reports describing the activities and financial condition of the entities under its jurisdiction. Likewise, such agencies conduct examinations on a recurring basis to evaluate the safety and soundness of the institutions, and to test compliance with various regulatory requirements, including: consumer protection, privacy, fair lending, the Community Reinvestment Act, the Bank Secrecy Act, sales of non-deposit investments, electronic data processing, and trust department activities.

The Company’s wealth management subsidiary is subject to examination and regulation by various regulatory agencies, including the SEC and the Financial Industry Regulatory Authority (“FINRA”). The trust division of Tompkins Trust Company is subject to examination and comprehensive regulation by the FDIC and NYSDFS.

The Company’s insurance subsidiary is subject to examination and regulation by the NYSDFS and the Pennsylvania Insurance Department.

2. Basis of Presentation

The unaudited consolidated financial statements included in this quarterly report do not include all of the information and footnotes required by GAAP for a full year presentation and certain disclosures have been condensed or omitted in accordance with rules and regulations of the SEC. In the application of certain accounting policies, management is required to make assumptions regarding the effect of matters that are inherently uncertain. These estimates and assumptions affect the reported amounts of certain assets, liabilities, revenues, and expenses in the unaudited condensed consolidated financial statements. Different amounts could be reported under different conditions, or if different assumptions were used in the application of these accounting policies. The accounting policies that management considers critical in this respect are the determination of the allowance for loan and lease losses, the expenses and liabilities associated with the Company’s pension and post-retirement benefits, and the review of its securities portfolio for other than temporary impairment.

In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year ended December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes to the Company’s accounting policies from those presented in the 2013 Annual Report on Form 10-K. Refer to Note 3- “Accounting Standards Updates” of this Report for a discussion of recently issued accounting guidelines.

9

Cash and cash equivalents in the consolidated statements of cash flow include cash and noninterest bearing balances due from banks, interest-bearing balances due from banks, and money market funds. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes that the Company is not exposed to any significant credit risk on cash and cash equivalents.

The Company has evaluated subsequent events for potential recognition and/or disclosure, and determined that no further disclosures were required.

The consolidated financial information included herein combines the results of operations, the assets, liabilities, and shareholders’ equity of the Company and its subsidiaries. Amounts in the prior periods’ unaudited condensed consolidated financial statements are reclassified when necessary to conform to the current periods’ presentation. During the quarter ended March 31, 2014, the Company revised the comparative December 31, 2013 outstanding principal balance of acquired credit impaired loans from $70,727 to $62,146, and the balance of outstanding principal balance of acquired non-credit impaired loans from $666,089 to $630,600. The Company has assessed the materiality of this correction of an error and concluded, based on qualitative and quantitative considerations, that the adjustments are not material to the financial statements as a whole. All significant intercompany balances and transactions are eliminated in consolidation.

3. Accounting Standards Updates

ASU 2014-01, “Investments (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects.” The amendments in this ASU provide guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). The amendments in this ASU are effective for the Company for annual periods beginning January 1, 2015 and should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements.

ASU 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40”), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure.” This new guidance clarifies when an in substance repossession or foreclosure occurs, and requires all creditors who obtain physical possession (resulting from an in substance repossession or foreclosure) of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable to reclassify the collateralized mortgage loan such that the loan should be derecognized and the collateral asset recognized. This guidance is effective prospectively for the Company for annual and interim periods beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

ASU 2014-12 “Compensation—Stock Compensation” (Topic 718”): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, a consensus of the FASB Emerging Issues Task Force (ASU 2014-12). ASU 2014-12 requires that a performance target that affects vesting of share-based payment awards and that could be achieved after the requisite service period be treated as a performance condition. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. ASU 2014-12 is effective for all entities for interim and annual periods beginning after December 15, 2015, with early adoption permitted. An entity may apply the amendments in ASU 2014-12 either (i) prospectively to all awards granted or modified after the effective date or (ii) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on the Company’s consolidated financial condition or results of operations.

10

4. Securities

Available-for-Sale Securities

The following table summarizes available-for-sale securities held by the Company at September 30, 2014:

		Available-for-Sale Securities
September 30, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	587,933	$	6,061	$	3,100	$	590,894
Obligations of U.S. states and political subdivisions		69,704		1,179		381		70,502
Mortgage-backed securities – residential, issued by
U.S. Government agencies		119,049		2,370		1,702		119,717
U.S. Government sponsored entities		594,700		7,195		12,116		589,779
Non-U.S. Government agencies or sponsored entities		276		4		0		280
U.S. corporate debt securities		2,500		0		337		2,163
Total debt securities		1,374,162		16,809		17,636		1,373,335
Equity securities		1,475		0		54		1,421
Total available-for-sale securities	$	1,375,637	$	16,809	$	17,690	$	1,374,756

The following table summarizes available-for-sale securities held by the Company at December 31, 2013:
		Available-for-Sale Securities
December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	558,130	$	7,720	$	9,505	$	556,345
Obligations of U.S. states and political subdivisions		68,216		1,193		1,447		67,962
Mortgage-backed securities – residential, issued by
U.S. Government agencies		147,766		2,554		3,642		146,678
U.S. Government sponsored entities		587,843		8,122		18,493		577,472
Non-U.S. Government agencies or sponsored entities		306		5		0		311
U.S. corporate debt securities		5,000		8		375		4,633
Total debt securities		1,367,261		19,602		33,462		1,353,401
Equity securities		1,475		0		65		1,410
Total available-for-sale securities	$	1,368,736	$	19,602	$	33,527	$	1,354,811

Held-to-Maturity Securities

The following table summarizes held-to-maturity securities held by the Company at September 30, 2014:

	Held-to-Maturity Securities
September 30, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	30,869	$	0	$	197	$	30,672
Obligations of U.S. states and political subdivisions	$	16,739	$	606	$	0	$	17,345
Total held-to-maturity debt securities	$	47,608	$	606	$	197	$	48,017

11

The following table summarizes held-to-maturity securities held by the Company at December 31, 2013:
	Held-to-Maturity Securities
December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. states and political subdivisions	$	18,980	$	645	$	0	$	19,625
Total held-to-maturity debt securities	$	18,980	$	645	$	0	$	19,625

The Company may from time to time sell investment securities from its available-for-sale portfolio. Realized gains on available-for-sale securities sold were $20,000 and $186,000 in the third quarter and nine months ending September 30, 2014, respectively, and $303,000 and $808,000 in the same periods of 2013. Realized losses on available-for-sale securities sold were $0 and $78,000 in the third quarter and nine months ending September 30, 2014, respectively, and $22,000 and $85,000 in the third quarter and nine months ending September 30, 2013, respectively.

The following table summarizes available-for-sale securities that had unrealized losses at September 30, 2014:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	169,741	$	849	$	95,197	$	2,251	$	264,938	$	3,100
Obligations of U.S. states and political subdivisions		15,235		105		11,929		276		27,164		381
Mortgage-backed securities – issued by
U.S. Government agencies		27,840		101		41,748		1,601		69,588		1,702
U.S. Government sponsored entities		133,210		1,095		270,358		11,021		403,568		12,116
U.S. corporate debt securities		0		0		2,163		337		2,163		337
Equity securities		0		0		946		54		946		54
Total available-for-sale securities	$	346,026	$	2,150	$	422,341	$	15,540	$	768,367	$	17,690

The following table summarizes held-to-maturity securities that had unrealized losses at September 30, 2014.

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	30,672	$	197	$	0	$	0	$	30,672	$	197
Total held-to-maturity securities	$	30,672	$	197	$	0	$	0	$	30,672	$	197

12

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2013:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	337,967	$	9,467	$	1,761	$	38	$	339,728	$	9,505
Obligations of U.S. states and political subdivisions		21,821		821		6,173		626		27,994		1,447
Mortgage-backed securities – residential, issued by
U.S. Government agencies		70,052		2,701		14,874		941		84,926		3,642
U.S. Government sponsored entities		293,945		14,061		76,070		4,432		370,015		18,493
U.S. corporate debt securities		0		0		2,125		375		2,125		375
Equity securities		0		0		935		65		935		65
Total available-for-sale securities	$	723,785	$	27,050	$	101,938	$	6,477	$	825,723	$	33,527

There were no unrealized losses on held-to-maturity securities at December 31, 2013.

The gross unrealized losses reported for residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and U.S. government agencies such as Government National Mortgage Association. The total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

The Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities, before recovery of their amortized cost basis, which may be at maturity. Accordingly, as of September 30, 2014, and December 31, 2013, management has determined that the unrealized losses detailed in the tables above are not other-than-temporary.

Ongoing Assessment of Other-Than-Temporary Impairment

On a quarterly basis, the Company performs an assessment to determine whether there have been any events or economic circumstances indicating that a security with an unrealized loss has suffered other-than-temporary impairment (“OTTI”). A debt security is considered impaired if the fair value is less than its amortized cost basis (including any previous OTTI charges) at the reporting date. If impaired, the Company then assesses whether the unrealized loss is other-than-temporary. An unrealized loss on a debt security is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value, discounted at the security’s effective rate, of the expected future cash flows is less than the amortized cost basis of the debt security. As a result, the credit loss component of an other-than-temporary impairment write-down for debt securities is recorded in earnings while the remaining portion of the impairment loss is recognized, net of tax, in other comprehensive income provided that the Company does not intend to sell the underlying debt security and it is more-likely-than not that the Company would not have to sell the debt security prior to recovery of the unrealized loss, which may be to maturity. If the Company intended to sell any securities with an unrealized loss or it is more-likely-than not that the Company would be required to sell the investment securities, before recovery of their amortized cost basis, then the entire unrealized loss would be recorded in earnings.

The Company considers the following factors in determining whether a credit loss exists.

- The length of time and the extent to which the fair value has been less than the amortized cost basis;

- The level of credit enhancement provided by the structure which includes, but is not limited to, credit subordination positions, excess spreads, overcollateralization, protective triggers;

- Changes in the near term prospects of the issuer or underlying collateral of a security, such as changes in default rates, loss severities given default and significant changes in prepayment assumptions;

- The level of excess cash flow generated from the underlying collateral supporting the principal and interest payments of the debt securities; and

- Any adverse change to the credit conditions of the issuer or the security such as credit downgrades by the rating agencies.

13

As a result of the other-than-temporarily impairment review process, the Company does not consider any investment security held at September 30, 2014 to be other-than-temporarily impaired.

The following table summarizes the roll-forward of credit losses on debt securities held by the Company for which a portion of an other-than-temporary impairment is recognized in other comprehensive income:

	Three Months Ended					Nine Months Ended
(in thousands)	09/30/2014		09/30/2013			09/30/2014		09/30/2013
Credit losses at beginning of the period	$	0	$	441		$	0	$	441
Sales of securities for which an other-than-temporary impairment was previously recognized		0		(441	)		0		(441	)
Ending balance of credit losses on debt securities held for which a portion of another-than temporary impairment was recognized in other comprehensive income	$	0	$	0		$	0	$	0

The amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

September 30, 2014
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	47,644	$	48,142
Due after one year through five years		409,758		415,198
Due after five years through ten years		182,467		180,485
Due after ten years		20,268		19,734
Total		660,137		663,559
Mortgage-backed securities		714,025		709,776
Total available-for-sale debt securities	$	1,374,162	$	1,373,335

December 31, 2013
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	25,596	$	26,017
Due after one year through five years		263,553		271,303
Due after five years through ten years		313,245		304,414
Due after ten years		28,952		27,206
Total		631,346		628,940
Mortgage-backed securities		735,915		724,461
Total available-for-sale debt securities	$	1,367,261	$	1,353,401

14

September 30, 2014
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	11,454	$	11,534
Due after one year through five years		3,648		3,938
Due after five years through ten years		32,133		32,121
Due after ten years		373		424
Total held-to-maturity debt securities	$	47,608	$	48,017

December 31, 2013
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	10,952	$	11,021
Due after one year through five years		5,636		6,004
Due after five years through ten years		1,878		2,051
Due after ten years		514		549
Total held-to-maturity debt securities	$	18,980	$	19,625

The Company also holds non-marketable Federal Home Loan Bank New York (“FHLBNY”) stock, non-marketable Federal Home Loan Bank Pittsburgh (“FHLBPITT”) stock and non-marketable Atlantic Central Bankers Bank stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock, FHLBPITT stock and ACBB stock totaled $9.4 million, $5.3 million and $95,000 at September 30, 2014, respectively. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue to pay dividends and repurchase stock. As such, the Company has not recognized any impairment on its holdings of FHLBNY and FHLBPITT stock. Quarterly, we evaluate our investment in the FHLB for impairment. We evaluate recent and long-term operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history and impact of legislative and regulatory changes. Based on our most recent evaluation, as of September 30, 2014, we have determined that no impairment write-downs are currently required.

Trading Securities
The following summarizes trading securities, at estimated fair value, as of:
(in thousands)	09/30/2014		12/31/2013
Obligations of U.S. Government sponsored entities	$	7,631	$	8,275
Mortgage-backed securities – residential, issued by
U.S. Government sponsored entities		1,842		2,716
Total	$	9,473	$	10,991

The decrease in trading securities reflects principal repayments and maturities received during the quarter ended September 30, 2014. The pre-tax mark-to-market losses on trading securities totaled $87,000 and $181,000 for the third quarter and nine months ending September 30, 2014, respectively, and $87,000 and $472,000 for the third quarter and nine months ending September 30, 2013, respectively.

The Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. Securities carried of $1.1 billion and $1.0 billion at September 30, 2014, and December 31, 2013, respectively, were either pledged or sold under agreements to repurchase.

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5. Loans and Leases
Loans and Leases at September 30, 2014 and December 31, 2013 were as follows:
	09/30/2014								12/31/2013
(in thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	49,828		$	0	$	49,828		$	74,788		$	0	$	74,788
Commercial and industrial other		627,290			102,601		729,891			562,439			128,503		690,942
Subtotal commercial and industrial		677,118			102,601		779,719			637,227			128,503		765,730
Commercial real estate
Construction		51,988			41,313		93,301			46,441			39,353		85,794
Agriculture		57,158			3,182		60,340			52,627			3,135		55,762
Commercial real estate other		960,346			321,714		1,282,060			903,320			366,438		1,269,758
Subtotal commercial real estate		1,069,492			366,209		1,435,701			1,002,388			408,926		1,411,314
Residential real estate
Home equity		182,994			58,459		241,453			171,809			67,183		238,992
Mortgages		685,989			33,200		719,189			658,966			35,336		694,302
Subtotal residential real estate		868,983			91,659		960,642			830,775			102,519		933,294
Consumer and other
Indirect		18,825			0		18,825			21,202			5		21,207
Consumer and other		34,327			1,119		35,446			32,312			1,219		33,531
Subtotal consumer and other		53,152			1,119		54,271			53,514			1,224		54,738
Leases		8,317			0		8,317			5,563			0		5,563
Covered loans		0			20,910		20,910			0			25,868		25,868
Total loans and leases		2,677,062			582,498		3,259,560			2,529,467			667,040		3,196,507
Less: unearned income and deferred costs and fees		(2,091	)		0		(2,091	)		(2,223	)		0		(2,223	)
Total loans and leases, net of unearned income and deferred costs and fees	$	2,674,971		$	582,498	$	3,257,469		$	2,527,244		$	667,040	$	3,194,284

The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the VIST Bank acquisition are as follows at September 30, 2014 and December 31, 2013:
(in thousands)	09/30/2014		12/31/2013
Acquired Credit Impaired Loans
Outstanding principal balance	$	49,410	$	62,146
Carrying amount		38,561		46,809
Acquired Non-Credit Impaired Loans
Outstanding principal balance		551,074		630,600
Carrying amount		543,937		620,231
Total Acquired Loans
Outstanding principal balance		600,484		692,746
Carrying amount		582,498		667,040

16

The following tables present changes in accretable yield on loans acquired from VIST Bank that were considered credit impaired.
(in thousands)
Balance at January 1, 2013	$	7,337
Accretion		(8,896	)
Disposals (loans paid in full)		(212	)
Reclassifications to/from nonaccretable difference1		7,933
Other changes in expected cash flows2		4,792
Balance at December 31, 2013	$	10,954

(in thousands)
Balance at January 1, 2014	$	10,954
Accretion		(3,740	)
Disposals (loans paid in full)		(250	)
Reclassifications to/from nonaccretable difference1		1,873
Other changes in expected cash flows2		0
Balance at September 30, 2014	$	8,837

¹ Results in increased interest income as a prospective yield adjustment over the remaining life of the loans, as well as increased interest income from loan sales, modification and prepayments.

² Represents changes in cash flows expected to be collected due to factors other than credit (e.g. changes in prepayment assumptions and/or changes in interest rates on variable rate loans).

At September 30, 2014, acquired loans included $20.9 million of covered loans. VIST Bank had previously acquired these loans in an FDIC assisted transaction in the fourth quarter of 2010. In accordance with a loss sharing agreement with the FDIC, certain losses and expenses relating to covered loans may be reimbursed by the FDIC at 70% or, if net losses exceed certain levels specified in the loss sharing agreements, 80%. See Note 7 – “FDIC Indemnification Asset Related to Covered Loans” for further discussion of the loss sharing agreements and related FDIC indemnification assets.

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 4 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes in these policies and guidelines. As such, these policies are reflective of new originations as well as those balances held at September 30, 2014. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan origination, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Generally loans are placed on nonaccrual status if principal or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question as well as when required by regulatory agencies. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan. Loans are generally returned to accrual status when all the principal and interest amounts contractually due are brought current, the borrower has established a payment history, and future payments are reasonably assured. When management determines that the collection of principal in full is improbable, management will charge-off a partial amount or full amount of the loan balance. Management considers specific facts and circumstances relative to each individual credit in making such a determination. For residential and consumer loans, management uses specific regulatory guidance and thresholds for determining charge-offs.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing after the date of acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if the Company expects to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. To the extent we cannot reasonably estimate cash flows, interest income recognition is discontinued. The Company has determined that it can reasonably estimate future cash flows on our acquired loans that are past due 90 days or more and accruing interest and the Company expects to fully collect the carrying value of the loans. Nonaccrual loans represent loans that were performing at acquisition date but have subsequently become past due.

17

The below table is an age analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of September 30, 2014 and December 31, 2013.

September 30, 2014
(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Originated Loans and Leases
Commercial and industrial
Agriculture	$	0	$	0	$	49,828	$	49,828		$	0	$	0
Commercial and industrial other		169		508		626,613		627,290			0		1,639
Subtotal commercial and industrial		169		508		676,441		677,118			0		1,639
Commercial real estate
Construction		0		0		51,988		51,988			0		534
Agriculture		0		29		57,129		57,158			0		132
Commercial real estate other		473		4,325		955,548		960,346			0		5,162
Subtotal commercial real estate		473		4,354		1,064,665		1,069,492			0		5,828
Residential real estate
Home equity		1,175		1,384		179,785		182,994			60		1,550
Mortgages		1,250		6,964		676,943		685,989			335		6,850
Subtotal residential real estate		2,425		8,348		856,728		868,983			395		8,400
Consumer and other
Indirect		508		0		18,317		18,825			0		72
Consumer and other		236		241		33,850		34,327			0		380
Subtotal consumer and other		744		241		52,167		53,152			0		452
Leases		0		0		8,317		8,317			0		0
Total loans and leases		3,811		14,933		2,658,318		2,677,062			395		16,319
Less: unearned income and deferred costs and fees		0		0		0		(2,091	)		0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	3,811	$	14,933	$	2,658,318	$	2,674,971		$	395	$	16,319
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other		0		941		101,660		102,601			649		761
Subtotal commercial and industrial		0		941		101,660		102,601			649		761
Commercial real estate
Construction		0		1,970		39,343		41,313			1,709		466
Agriculture		0		0		3,182		3,182			0		0
Commercial real estate other		0		1,857		319,857		321,714			79		2,084
Subtotal commercial real estate		0		3,827		362,382		366,209			1,788		2,550
Residential real estate
Home equity		156		643		57,660		58,459			173		660
Mortgages		580		703		31,917		33,200			561		1,027
Subtotal residential real estate		736		1,346		89,577		91,659			734		1,687
Consumer and other
Consumer and other		0		0		1,119		1,119			0		0
Subtotal consumer and other		0		0		1,119		1,119			0		0
Covered loans		0		1,149		19,761		20,910			1,149		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	736	$	7,263	$	574,499	$	582,498		$	4,320	$	4,998

18

December 31, 2013
(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Originated loans and leases
Commercial and industrial
Agriculture	$	0	$	0	$	74,788	$	74,788		$	0	$	0
Commercial and industrial other		211		1,187		561,041		562,439			0		1,260
Subtotal commercial and industrial		211		1,187		635,829		637,227			0		1,260
Commercial real estate
Construction		216		7,657		38,568		46,441			0		9,873
Agriculture		180		0		52,447		52,627			0		46
Commercial real estate other		1,104		6,976		895,240		903,320			161		9,522
Subtotal commercial real estate		1,500		14,633		986,255		1,002,388			161		19,441
Residential real estate
Home equity		784		1,248		169,777		171,809			62		1,477
Mortgages		2,439		5,946		650,581		658,966			384		7,443
Subtotal residential real estate		3,223		7,194		820,358		830,775			446		8,920
Consumer and other
Indirect		768		152		20,282		21,202			0		216
Consumer and other		60		0		32,252		32,312			0		38
Subtotal consumer and other		828		152		52,534		53,514			0		254
Leases		0		0		5,563		5,563			0		0
Total loans and leases		5,762		23,166		2,500,539		2,529,467			607		29,875
Less: unearned income and deferred costs and fees		0		0		0		(2,223	)		0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	5,762	$	23,166	$	2,500,539	$	2,527,244		$	607	$	29,875
Acquired loans and leases
Commercial and industrial
Commercial and industrial other		554		1,651		126,298		128,503			1,231		419
Subtotal commercial and industrial		554		1,651		126,298		128,503			1,231		419
Commercial real estate
Construction		0		2,148		37,205		39,353			1,676		473
Agriculture		0		0		3,135		3,135			0		0
Commercial real estate other		403		3,585		362,450		366,438			709		3,450
Subtotal commercial real estate		403		5,733		402,790		408,926			2,385		3,923
Residential real estate
Home equity		213		934		66,036		67,183			347		1,844
Mortgages		345		1,264		33,727		35,336			594		2,322
Subtotal residential real estate		558		2,198		99,763		102,519			941		4,166
Consumer and other
Indirect		0		0		5		5			0		0
Consumer and other		17		0		1,202		1,219			0		0
Subtotal consumer and other		17		0		1,207		1,224			0		0
Covered loans		0		2,416		23,452		25,868			2,416		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	1,532	$	11,998	$	653,510	$	667,040		$	6,973	$	8,508

19

6. Allowance for Loan and Lease Losses

Originated Loans and Leases

Management reviews the appropriateness of the allowance for loan and lease losses (“allowance”) on a regular basis. Management considers the accounting policy relating to the allowance to be a critical accounting policy, given the inherent uncertainty in evaluating the levels of the allowance required to cover credit losses in the portfolio and the material effect that assumptions could have on the Company’s results of operations. The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan portfolio to assure that an appropriate allowance is maintained. The Company’s methodology is based upon guidance provided in SEC Staff Accounting Bulletin No. 102, Selected Loan Loss Allowance Methodology and Documentation Issues and ASC Topic 310, Receivables and ASC Topic 450, Contingencies.

The Company’s methodology for determining and allocating the allowance for loan and lease losses focuses on ongoing reviews of larger individual loans and leases, historical net charge-offs, delinquencies in the loan and lease portfolio, the level of impaired and nonperforming loans, values of underlying loan and lease collateral, the overall risk characteristics of the portfolios, changes in character or size of the portfolios, geographic location, current economic conditions, changes in capabilities and experience of lending management and staff, and other relevant factors. The various factors used in the methodologies are reviewed on a regular basis.

At least annually, management reviews all commercial and commercial real estate loans exceeding a certain threshold and assigns a risk rating. The Company uses an internal loan rating system of pass credits, special mention loans, substandard loans, doubtful loans, and loss loans (which are fully charged off). The definitions of “special mention”, “substandard”, “doubtful” and “loss” are consistent with banking regulatory definitions. Factors considered in assigning loan ratings include: the customer’s ability to repay based upon customer’s expected future cash flow, operating results, and financial condition; the underlying collateral, if any; and the economic environment and industry in which the customer operates. Special mention loans have potential weaknesses that if left uncorrected may result in deterioration of the repayment prospects and a downgrade to a more severe risk rating. A substandard loan credit has a well-defined weakness which makes payment default or principal exposure likely, but not yet certain. There is a possibility that the Company will sustain some loss if the deficiencies are not corrected. A doubtful loan has a high possibility of loss, but the extent of the loss is difficult to quantify because of certain important and reasonably specific pending factors.

At least quarterly, management reviews all commercial and commercial real estate loans and leases and agriculturally related loans with an outstanding principal balance of over $500,000 that are internally risk rated special mention or worse, giving consideration to payment history, debt service payment capacity, collateral support, strength of guarantors, local market trends, industry trends, and other factors relevant to the particular borrowing relationship. Through this process, management identifies impaired loans. For loans and leases considered impaired, estimated exposure amounts are based upon collateral values or present value of expected future cash flows discounted at the original effective interest rate of each loan. For commercial loans, commercial mortgage loans, and agricultural loans not specifically reviewed, and for homogenous loan portfolios such as residential mortgage loans and consumer loans, estimated exposure amounts are assigned based upon historical net loss experience and current charge-off trends, past due status, and management’s judgment of the effects of current economic conditions on portfolio performance. In determining and assigning historical loss factors to the various homogeneous portfolios, the Company calculates average net losses over a period of time and compares this average to current levels and trends to ensure that the calculated average loss factors are reasonable.

Since the methodology is based upon historical experience and trends as well as management’s judgment, factors may arise that result in different estimates. Significant factors that could give rise to changes in these estimates may include, but are not limited to, changes in economic conditions in the local area, concentration of risk, changes in interest rates, and declines in local property values. While management’s evaluation of the allowance as of September 30, 2014, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance.

Acquired Loans and Leases

Acquired loans accounted for under ASC 310-30

For our acquired loans, our allowance for loan losses is estimated based upon our expected cash flows for these loans. To the extent that we experience a deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans.

20

Acquired loans accounted for under ASC 310-20

We establish our allowance for loan losses through a provision for credit losses based upon an evaluation process that is similar to our evaluation process used for originated loans. This evaluation, which includes a review of loans on which full collectability may not be reasonably assured, considers, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan loss experience, carrying value of the loans, which includes the remaining net purchase discount or premium, and other factors that warrant recognition in determining our allowance for loan losses.

The following tables detail activity in the allowance for loan and lease losses segregated by originated and acquired loan and lease portfolios and by portfolio segment for the three months ended September 30, 2014 and 2013. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for originated loans and leases
Beginning balance	$	8,562		$	10,389		$	5,445		$	2,356		$	0	$	26,752
Charge-offs		(21	)		(6	)		(118	)		(286	)		0		(431	)
Recoveries		68			944			1			115			0		1,128
Provision (credit)		249			(645	)		95			37					(264	)
Ending Balance	$	8,858		$	10,682		$	5,423		$	2,222		$	0	$	27,185
Allowance for acquired loans
Beginning balance	$	159		$	460		$	49		$	97		$	0	$	765
Charge-offs		(218	)		(80	)		(68	)		(3	)		0		(369	)
Recoveries		0			0			0			0			0		0
Provision (credit)		154			(20	)		147			(76	)		0		205
Ending Balance	$	95		$	360		$	128		$	18		$	0	$	601

Three months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	6,955		$	10,409		$	5,273		$	2,195		$	21		$	24,853
Charge-offs		(55	)		(49	)		(116	)		(578	)		0			(798	)
Recoveries		48			21			3			96			0			168
Provision (credit)		790			516			149			65			(21	)		1,499
Ending Balance	$	7,738		$	10,897		$	5,309		$	1,778		$	0		$	25,722

Three months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate		Residential Real Estate			Consumer and Other		Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	64		$	381	$	126		$	34	$	0	$	605
Charge-offs		(1	)		0		(467	)		0		0		(468	)
Recoveries		0			0		0			0		0		0
Provision (credit)		(12	)		56		504			1		0		549
Ending Balance	$	51		$	437	$	163		$	35	$	0	$	686

21

Nine months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	8,406		$	10,459		$	5,771		$	2,059		$	5		$	26,700
Charge-offs		(275	)		(619	)		(385	)		(952	)		0			(2,231	)
Recoveries		557			1,506			87			375			0			2,525
Provision (credit)		170			(664	)		(50	)		740			(5	)		191
Ending Balance	$	8,858		$	10,682		$	5,423		$	2,222		$	0		$	27,185

Nine months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	168		$	770		$	274		$	58		$	0	$	1,270
Charge-offs		(243	)		(631	)		(345	)		(10	)		0		(1,229	)
Recoveries		0			0			0			0			0		0
Provision (credit)		170			221			199			(30	)		0		560
Ending Balance	$	95		$	360		$	128		$	18		$	0	$	601

Nine months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	7,533		$	10,184		$	4,981		$	1,940		$	5		$	24,643
Charge-offs		(487	)		(539	)		(455	)		(1,040	)		0			(2,521	)
Recoveries		1,490			457			32			296			0			2,275
Provision (credit)		(798	)		795			751			582			(5	)		1,325
Ending Balance	$	7,738		$	10,897		$	5,309		$	1,778		$	0		$	25,722

Nine months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	0		$	0		$	0		$	0		$	0	$	0
Charge-offs		(2,930	)		(32	)		(577	)		(25	)		0		(3,564	)
Recoveries		0			0			0			0			0		0
Provision (credit)		2,981			469			740			60			0		4,250
Ending Balance	$	51		$	437		$	163		$	35		$	0	$	686

22

At September 30, 2014 and December 31, 2013, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows:

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
September 30, 2014
Individually evaluated for impairment	$	302	$	0	$	0	$	0	$	0	$	302
Collectively evaluated for impairment		8,556		10,682		5,423		2,222		0		26,883
Ending balance	$	8,858	$	10,682	$	5,423	$	2,222	$	0	$	27,185
Allowance for acquired loans
September 30, 2014
Individually evaluated for impairment	$	80	$	80	$	0	$	0	$	0	$	160
Collectively evaluated for impairment		15		280		128		18		0		441
Ending balance	$	95	$	360	$	128	$	18	$	0	$	601

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
December 31, 2013
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment		8,406		10,459		5,771		2,059		5		26,700
Ending balance	$	8,406	$	10,459	$	5,771	$	2,059	$	5	$	26,700
Allowance for acquired loans
December 31, 2013
Individually evaluated for impairment	$	0	$	250	$	0	$	0	$	0	$	250
Collectively evaluated for impairment		168		520		274		58		0		1,020
Ending balance	$	168	$	770	$	274	$	58	$	0	$	1,270

The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology as of September 30, 2014 and December 31, 2013 was as follows:

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases
September 30, 2014
Individually evaluated for impairment	$	1,917	$	7,889	$	1,038	$	0	$	0	$	10,844
Collectively evaluated for impairment		675,201		1,061,603		867,945		53,152		8,317		2,666,218
Total	$	677,118	$	1,069,492	$	868,983	$	53,152	$	8,317	$	2,677,062

23

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Covered Loans		Total
Acquired loans
September 30, 2014
Individually evaluated for impairment	$	785	$	1,582	$	290	$	0	$	0	$	2,657
Loans acquired with deteriorated credit quality	$	1,142	$	8,294	$	8,215	$	0	$	20,910	$	38,561
Collectively evaluated for impairment		100,674		356,333		83,154		1,119		0		541,280
Total	$	102,601	$	366,209	$	91,659	$	1,119	$	20,910	$	582,498

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases
December 31, 2013
Individually evaluated for impairment	$	4,664		16,269	$	1,223	$	0	$	0	$	22,156
Collectively evaluated for impairment		632,563		986,119		829,552		53,514		5,563		2,507,311
Total	$	637,227	$	1,002,388	$	830,775	$	53,514	$	5,563	$	2,529,467

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Covered Loans		Total
Acquired loans
December 31, 2013
Individually evaluated for impairment	$	2,231		2,429	$	73	$	0	$	0	$	4,733
Loans acquired with deteriorated credit quality		2,558		10,263		9,355		0		24,633		46,809
Collectively evaluated for impairment		123,714		396,234		93,091		1,224		1,235		615,498
Total	$	128,503	$	408,926	$	102,519	$	1,224	$	25,868	$	667,040

A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans consist of our non-homogenous nonaccrual loans, and all loans restructured in a troubled debt restructuring (TDR). Specific reserves on individually identified impaired loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that are collateral dependent, impairment is measured based on the fair value of the collateral less estimated selling costs, and such impaired amounts are generally charged off. The majority of impaired loans are collateral dependent impaired loans that have limited exposure or require limited specific reserves because of the amount of collateral support with respect to these loans, and previous charge-offs. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured. In these cases, interest is recognized on a cash basis.

24

	09/30/2014						12/31/2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	1,408	$	1,432	$	0	$	4,664	$	5,069	$	0
Commercial real estate
Construction		0		0		0		6,073		11,683		0
Commercial real estate other		7,889		8,567		0		10,196		13,518		0
Residential real estate
Residential real estate other		1,038		1,129		0		1,223		1,299		0
Subtotal	$	10,335	$	11,128	$	0	$	22,156	$	31,569	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		509		509		302		0		0		0
Subtotal	$	509	$	509	$	302	$	0	$	0	$	0
Total	$	10,844	$	11,637	$	302	$	22,156	$	31,569	$	0

	09/30/2014						12/31/2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	341	$	341	$	0	$	2,231	$	5,081	$	0
Commercial real estate
Commercial real estate other		1,311		1,311		0		1,960		1,960		0
Residential real estate
Residential real estate other		290		290		0		73		73		0
Subtotal	$	1,942	$	1,942	$	0	$	4,264	$	7,114	$	0
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		444		444		80		0		0		0
Commercial real estate
Commercial real estate other		271		271		80		469		719		250
Subtotal	$	715	$	715	$	160	$	469	$	719	$	250
Total	$	2,657	$	2,657	$	160	$	4,733	$	7,833	$	250

25

The average recorded investment and interest income recognized on impaired loans for the three months ended September 30, 2014 and 2013 was as follows:

	Three Months Ended				Three Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		1,422		0		4,040		0
Commercial real estate
Construction		0		0		6,184		0
Commercial real estate other		7,940		42		13,918		0
Residential real estate
Residential real estate other		1,038		0		1,047		0
Subtotal	$	10,400	$	42	$	25,189	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		511		7		1,544		0
Commercial real estate
Commercial real estate other		0		0		360		0
Subtotal	$	511	$	7	$	1,904	$	0
Total	$	10,911	$	49	$	27,093	$	0

	Three Months Ended				Three Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		343		0		1,327		0
Commercial real estate
Commercial real estate other		1,312		0		2,764		5
Residential real estate other		290		0		85		0
Subtotal	$	1,945	$	0	$	4,176	$	5
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		449		0		0		0
Commercial real estate
Commercial real estate other		271		0		701		0
Subtotal	$	720	$	0	$	701	$	0
Total	$	2,665	$	0	$	4,877	$	5

26

	Nine Months Ended				Nine Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		1,636		0		4,057		0
Commercial real estate
Construction		0		0		6,374		0
Commercial real estate other		7,871		42		12,892		0
Residential real estate
Residential real estate other		1,038		0		1,047		0
Subtotal	$	10,545	$	42	$	24,370	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		511		7		1,560		0
Commercial real estate
Commercial real estate other		0		0		319		0
Subtotal	$	511	$	7	$	1,879	$	0
Total	$	11,056	$	49	$	26,249	$	0

	Nine Months Ended				Nine Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		346		0		2,783		5
Commercial real estate
Commercial real estate other		1,333		0		2,785		31
Residential real estate
Residential real estate other		290		0		85		0
Subtotal	$	1,969	$	0	$	5,653	$	36
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		454		0		0		0
Commercial real estate
Commercial real estate other		271		0		0		0
Residential real estate
Residential real estate other		0		0		718		4
Subtotal	$	725	$	0	$	718	$	4
Total	$	2,694	$	0	$	6,371	$	40

Loans are considered modified in a TDR when, due to a borrower’s financial difficulties, the Company makes a concession(s) to the borrower that it would not otherwise consider. These modifications may include, among others, an extension for the term of the loan, and granting a period when interest-only payments can be made with the principal payments made over the remaining term of the loan or at maturity.

There we no loans modified in a TDR for the quarter ending September 30, 2014.

27

The following tables present information on loans modified in troubled debt restructuring during the periods indicated.

September 30, 2013	Three months ended
							Defaulted TDRs4
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		4	$	1,275		1,275		0	$	0
Commercial real estate
Commercial real estate other2		6		1,530		1,530		0		0
Residential real estate
Residential real estate other3		1		195		195		0		0
Total		11	$	3,000		3,000		0	$	0

¹ Represents the following concessions: extension of term and reduction of rate (3 loans: $1.2 million) and extended term (1 loan: $87,000)

² Represents the following concessions: extension of term and reduction of rate

³ Represents the following concessions: extension of term and reduction of rate

⁴ TDRs that defaulted in the quarter ended September 30, 2013 that had been restructured in the prior twelve months.

September 30, 2014	Nine months ended
							Defaulted TDRs3
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		1	$	88		88		0	$	0
Commercial real estate
Commercial real estate other2		1	$	480		480		1	$	63
Residential real estate
Residential real estate other		0		0		0		1		195
Total		2	$	568		568		2	$	258

¹ Represents the following concessions: extension of term and reduction of rate

² Represents the following concessions: extension of term and reduction of rate

³ TDRs that defaulted during the nine months ended September 30, 2014, that had been restructured in the prior twelve months.

28

September 30, 2013	Nine months ended
							Defaulted TDRs4
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		6	$	1,414		1,414		0	$	0
Commercial real estate
Commercial real estate other2		9		1,901		1,901		0		0
Residential real estate
Residential real estate other3		1		195		195		0		0
Total		16	$	3,510		3,510		0	$	0

¹ Represents the following concessions: extension of term and reduction in rate (5 loans: $1.3 million ) and extended term (1 loan: $87,000)

² Represents the following concessions: extension of term and reduction of rate (8 loans: $1.8 million) and extension of term (1 loan: $129,000)

³ Represents the following concessions: extension of term and reduction of rate

⁴ TDRs that defaulted during the nine months ended September 30, 2013, that had been restructured in the prior twelve months.

The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of September 30, 2014 and December 31, 2013.

September 30, 2014
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Originated Loans and Leases
Internal risk grade:
Pass	$	608,164	$	49,405	$	930,551	$	56,540	$	48,207	$	1,692,867
Special Mention		11,146		197		12,503		227		3,781		27,854
Substandard		7,980		226		17,292		391		0		25,889
Total	$	627,290	$	49,828	$	960,346	$	57,158	$	51,988	$	1,746,610

September 30, 2014
		Commercial		Commercial		Commercial		Commercial		Commercial
		and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)		Other		Agriculture		Other		Agriculture		Construction		Total
Acquired Loans and Leases
Internal risk grade:
Pass	$	99,323	$	0	$	296,680	$	3,182	$	37,986	$	437,171
Special Mention		109		0		7,496		0		0		7,605
Substandard		3,169		0		17,538		0		3,327		24,034
Total	$	102,601	$	0	$	321,714	$	3,182	$	41,313	$	468,810

December 31, 2013
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Originated Loans and Leases
Internal risk grade:
Pass	$	531,293	$	72,997	$	869,488	$	52,054	$	36,396	$	1,562,228
Special Mention		20,688		100		17,536		123		3,918		42,365
Substandard		10,458		1,691		16,296		450		6,127		35,022
Total	$	562,439	$	74,788	$	903,320	$	52,627	$	46,441	$	1,639,615

29

December 31, 2013
		Commercial		Commercial		Commercial		Commercial		Commercial
		and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)		Other		Agriculture		Other		Agriculture		Construction		Total
Acquired Loans and Leases
Internal risk grade:
Pass	$	116,160	$	0	$	363,427	$	1,150	$	5,809	$	486,546
Special Mention		3,821		0		11,516		1,985		0		17,322
Substandard		8,522		0		22,028		0		3,011		33,561
Total	$	128,503	$	0	$	396,971	$	3,135	$	8,820	$	537,429

The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of September 30, 2014 and December 31, 2013. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing.

September 30, 2014
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated Loans and Leases
Performing	$	181,384	$	678,804	$	18,753	$	33,947	$	912,888
Nonperforming		1,610		7,185		72		380		9,247
Total	$	182,994	$	685,989	$	18,825	$	34,327	$	922,135

September 30, 2014
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	57,626	$	31,612	$	0	$	1,119	$	90,357
Nonperforming		833		1,588		0		0		2,421
Total	$	58,459	$	33,200	$	0	$	1,119	$	92,778

December 31, 2013
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated Loans and Leases
Performing	$	170,270	$	651,139	$	20,986	$	32,274	$	874,669
Nonperforming		1,539		7,827		216		38		9,620
Total	$	171,809	$	658,966	$	21,202	$	32,312	$	884,289

December 31, 2013
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	65,339	$	33,014	$	5	$	1,219	$	99,577
Nonperforming		1,844		2,322		0		0		4,166
Total	$	67,183	$	35,336	$	5	$	1,219	$	103,743

30

7. FDIC Indemnification Asset Related to Covered Loans

Certain loans acquired in the VIST Financial acquisition were covered loans with loss share agreements with the FDIC. Under the terms of loss sharing agreements, the FDIC will reimburse the Company for 70 percent of net losses on covered single family assets up to $4.0 million, and 70 percent of net losses incurred on covered commercial assets up to $12.0 million. The FDIC will increase its reimbursement of net losses to 80 percent if net losses exceed the $4.0 million and $12 million thresholds, respectively. The term for loss sharing on residential real estate loans is ten years, while the term for loss sharing on non-residential real estate loans is five years in respect to losses and eight years in respect to loss recoveries.

The receivable arising from the loss sharing agreements (referred to as the “FDIC indemnification asset” on our consolidated statements of financial condition) is measured separately from covered loans because the agreements are not contractually part of the covered loans and are not transferable should the Company choose to dispose of the covered loans. As of the acquisition date with VIST Financial, the Company recorded an aggregate FDIC indemnification asset of $4.4 million, consisting of the present value of the expected future cash flows the Company expected to receive from the FDIC under loss sharing agreements. The FDIC indemnification asset is reduced as loss sharing payments are received from the FDIC for losses realized on covered loans. Actual or expected losses in excess of the acquisition date estimates and accretion of the acquisition date present value discount will result in an increase in the FDIC indemnification asset and the immediate recognition of non-interest income in our financial statements.

A decrease in expected losses would generally result in a corresponding decline in the FDIC indemnification asset and the non-accretable difference. Reductions in the FDIC indemnification asset due to actual or expected losses that are less than the acquisition date estimates are recognized prospectively over the shorter of (i) the estimated life of the applicable covered loans or (ii) the term of the loss sharing agreements with the FDIC.

Changes in the FDIC indemnification asset during the nine months ended September 30, 2014 are shown below.

Nine months ended September 30, 2014
(in thousands)	Nine Months Ended
Balance, beginning of the period	$	4,790
Discount accretion of the present value at the acquisition date		44
Prospective adjustment for additional cash flows		(1,520	)
Increase due to impairment on covered loans		0
Reimbursements from the FDIC		(1,016	)
Balance, end of period	$	2,298

8. Earnings Per Share

Earnings per share in the table below, for the three and nine month periods ending September 30, 2014 and 2013 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share. ASC 260 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company has issued restricted stock awards that contain such rights and are therefore considered participating securities. Basic earnings per common share are calculated by dividing net income allocable to common stock by the weighted average number of common shares, excluding participating securities, during the period. Diluted earnings per common share include the dilutive effect of additional potential shares from stock compensations awards.

31

	Three Months Ended
(in thousands, except share and per share data)	09/30/2014			09/30/2013
Basic
Net income available to common shareholders	$	13,722		$	14,049
Less: dividends and undistributed earnings allocated to unvested restricted stock awards		(119	)		(137	)
Net earnings allocated to common shareholders		13,603			13,912
Weighted average shares outstanding, including participating securities		14,839,663			14,658,056
Less: average participating securities		(127,954	)		(143,003	)
Weighted average shares outstanding - Basic		14,711,709			14,515,053
Diluted
Net earnings allocated to common shareholders		13,603			13,912
Weighted average shares outstanding - Basic		14,711,709			14,515,053
Dilutive effect of common stock options or restricted stock awards		83,634			107,459
Weighted average shares outstanding - Diluted		14,795,343			14,622,512
Basic EPS		0.92			0.96
Diluted EPS		0.92			0.95

The dilutive effect of common stock options or restricted awards calculation for the three months ended September 30, 2014 and 2013 excludes stock options, stock appreciation rights and restricted stock awards covering an aggregate of 208,324 and 221,525 shares, respectively, because the exercise prices were greater than the average market price during these periods.

	Nine Months Ended
(in thousands, except share and per share data)	09/30/2014			09/30/2013
Basic
Net income available to common shareholders	$	39,352		$	36,565
Less: dividends and undistributed earnings allocated to unvested restricted stock awards		(353	)		(284	)
Net earnings allocated to common shareholders		38,999			36,281
Weighted average shares outstanding, including participating securities		14,821,992			14,539,728
Less: average participating securities		(133,066	)		(99,794	)
Weighted average shares outstanding - Basic		14,688,926			14,439,934
Diluted
Net earnings allocated to common shareholders		38,999			36,281
Weighted average shares outstanding - Basic		14,688,926			14,439,934
Dilutive effect of common stock options or restricted stock awards		108,594			80,848
Weighted average shares outstanding - Diluted		14,797,520			14,520,782
Basic EPS		2.65			2.51
Diluted EPS		2.64			2.50

The dilutive effect of common stock options or restricted awards calculation for the nine months ended September 30, 2014 and 2013 excludes stock options, stock appreciation rights and restricted stock awards covering an aggregate of 116,527 and 283,725 shares, respectively, because the exercise prices were greater than the average market price during these periods.

32

9. Other Comprehensive Income (Loss)

The following table presents reclassifications out of the accumulated other comprehensive income for the three and nine month periods ended September 30, 2014 and 2013.

	Three months ended September 30, 2014
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(6,871	)	$	2,748		$	(4,123	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(20	)		8			(12	)
Net unrealized losses		(6,891	)		2,756			(4,135	)
Employee benefit plans:
Amortization of net retirement plan actuarial gain		266			(107	)		159
Amortization of net retirement plan prior service cost		1			0			1
Employee benefit plans		267			(107	)		160
Other comprehensive (loss) income	$	(6,624	)	$	2,649		$	(3,975	)

	Three months ended September 30, 2013
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(531	)	$	213		$	(318	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(281	)		112			(169	)
Reclassification adjustment for credit impairment on available-for-sale
Net unrealized losses		(812	)		325			(487	)
Employee benefit plans:
Amortization of net retirement plan actuarial loss		645			(258	)		387
Amortization of net retirement plan prior service cost		14			(6	)		8
Amortization of net retirement plan transition liability		13			(5	)		8
Employee benefit plans		672			(269	)		403
Other comprehensive (loss) income	$	(140	)	$	56		$	(84	)

	Nine months ended September 30, 2014
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	13,195		$	(5,277	)	$	7,918
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(151	)		61			(90	)
Net unrealized gains		13,044			(5,216	)		7,828
Employee benefit plans:
Amortization of net retirement plan actuarial gain		798			(319	)		479
Amortization of net retirement plan prior service cost		3			(1	)		2
Employee benefit plans		801			(320	)		481
Other comprehensive income (loss)	$	13,845		$	(5,536	)	$	8,309

33

	Nine months ended September 30, 2013
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(44,028	)	$	17,608		$	(26,420	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(723	)		289			(434	)
Reclassification adjustment for credit impairment on available-for-sale
Net unrealized losses		(44,751	)		17,897			(26,854	)
Employee benefit plans:
Amortization of net retirement plan actuarial loss		1,934			(774	)		1,160
Amortization of net retirement plan prior service cost		44			(18	)		26
Amortization of net retirement plan transition liability		38			(15	)		23
Employee benefit plans		2,016			(807	)		1,209
Other comprehensive (loss) income	$	(42,735	)	$	17,090		$	(25,645	)

The following table presents the activity in our accumulated other comprehensive income for the periods indicated:

(in thousands)	Available-for- Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income
Balance at July 1, 2014	$	3,606		$	(16,441	)	$	(12,835	)
Other comprehensive income (loss) before reclassifications		(4,123	)		0			(4,123	)
Amounts reclassified from accumulated other comprehensive income		(12	)		160			148
Net current-period other comprehensive (loss) income		(4,135	)		160			(3,975	)
Balance at September 30, 2014	$	(529	)	$	(16,281	)	$	(16,810	)
Balance at January 1, 2014	$	(8,357	)	$	(16,762	)	$	(25,119	)
Other comprehensive income (loss) before reclassifications		7,918			0			7,918
Amounts reclassified from accumulated other comprehensive (loss) income		(90	)		481			391
Net current-period other comprehensive income		7,828			481			8,309
Balance at September 30, 2014	$	(529	)	$	(16,281	)	$	(16,810	)

(in thousands)	Available-for- Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income
Balance at July 1, 2013	$	(11	)	$	(27,656	)	$	(27,667	)
Other comprehensive (loss) income before reclassifications		(318	)		0			(318	)
Amounts reclassified from accumulated other comprehensive (loss) income		(169	)		403			234
Net current-period other comprehensive (loss) income		(487	)		403			(84	)
Balance at September 30, 2013	$	(498	)	$	(27,253	)	$	(27,751	)
Balance at January 1, 2013	$	26,356		$	(28,462	)	$	(2,106	)
Other comprehensive (loss) income before reclassifications		(26,420	)		0			(26,420	)
Amounts reclassified from accumulated other comprehensive (loss) income		(434	)		1,209			775
Net current-period other comprehensive (loss) income		(26,854	)		1,209			(25,645	)
Balance at September 30, 2013	$	(498	)	$	(27,253	)	$	(27,751	)

34

The following tables present the amounts reclassified out of each component of accumulated other comprehensive income for the three and nine months ended September 30, 2014 and 2013.

Three months ended September 30, 2014
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	20		Net gain on securities transactions
		(8	)	Tax expense
		12		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(266	)
Net retirement plan prior service cost		(1	)
		(267	)	Total before tax
		107		Tax benefit
		(160	)	Net of tax

Nine months ended September 30, 2014
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	151		Net gain on securities transactions
		(61	)	Tax expense
		90		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(798	)
Net retirement plan prior service cost		(3	)
		(801	)	Total before tax
		320		Tax benefit
		(481	)	Net of tax

35

Three months ended September 30, 2013
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	281		Net gain on securities transactions
		(112	)	Tax expense
		169		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(645	)
Net retirement plan prior service cost		(14	)
Net retirement plan transition liability		(13	)
		(672	)	Total before tax
		269		Tax benefit
		(403	)	Net of tax

Nine months ended September 30, 2013
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	723		Net gain on securities transactions
		(289	)	Tax expense
		434		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(1,934	)
Net retirement plan prior service cost		(44	)
Net retirement plan transition liability		(38	)
		(2,016	)	Total before tax
		807		Tax benefit
		(1,209	)	Net of tax

¹ Amounts in parentheses indicated debits in income statement

² The accumulated other comprehensive income components are included in the computation of net periodic benefit cost (See Note 10 - “Employee Benefit Plan”)

36

10. Employee Benefit Plan

The following table sets forth the amount of the net periodic benefit cost recognized by the Company for the Company’s pension plan, post-retirement plan (Life and Health), and supplemental employee retirement plans (“SERP”) including the following components: service cost, interest cost, expected return on plan assets for the period, amortization of the unrecognized transitional obligation or transition asset, and the amounts of recognized gains and losses, prior service cost recognized, and gain or loss recognized due to settlement or curtailment.

Components of Net Periodic Benefit Cost
	Pension Benefits						Life and Health				SERP Benefits
	Three Months Ended						Three Months Ended				Three Months Ended
(in thousands)	09/30/2014			09/30/2013			09/30/2014		09/30/2013		09/30/2014		09/30/2013
Service cost	$	608		$	729		$	50	$	66	$	56	$	120
Interest cost		767			672			92		86		216		184
Expected return on plan assets		(1,256	)		(1,002	)		0		0		0		0
Amortization of net retirement plan actuarial loss		215			506			0		24		51		115
Amortization of net retirement plan prior service cost (credit)		(31	)		(31	)		4		4		28		41
Amortization of net retirement plan transition liability		0			0			0		13		0		0
Net periodic benefit cost	$	303		$	874		$	146	$	193	$	351	$	460

Components of Net Period Benefit Cost
	Pension Benefits						Life and Health				SERP Benefits
	Nine Months Ended						Nine Months Ended				Nine Months Ended
(in thousands)	09/30/2014			09/30/2013			09/30/2014		09/30/2013		09/30/2014		09/30/2013
Service cost	$	1,825		$	2,187		$	151	$	199	$	167	$	359
Interest cost		2,302			2,016			275		259		649		553
Expected return on plan assets		(3,768	)		(3,007	)		0		0		0		0
Amortization of net retirement plan actuarial loss		644			1,517			0		72		154		345
Amortization of net retirement plan prior service cost (credit)		(92	)		(92	)		12		12		84		124
Amortization of net retirement plan transition liability		0			0			0		38		0		0
Net periodic benefit cost	$	911		$	2,621		$	438	$	580	$	1,054	$	1,381

The net periodic benefit cost for the Company’s benefit plans are recorded as a component of salaries and benefits in the consolidated statements of income.

The Company realized approximately $481,000 and $1.2 million, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive income, for the nine months ended September 30, 2014 and 2013, respectively.

The Company is not required to contribute to the pension plan in 2014, but it may make voluntary contributions. The Company did not contribute to the pension plan in the nine months ended September 30, 2014 or 2013.

37

11. Other Income and Operating Expense

Other income and operating expense totals are presented in the table below. Components of these totals exceeding 1% of the aggregate of total noninterest income and total noninterest expenses for any of the years presented below are stated separately.

	Three Months Ended				Nine Months Ended
(in thousands)	09/30/2014		09/30/2013		09/30/2014		09/30/2013
Noninterest Income
Other service charges	$	708	$	959	$	2,511	$	2,569
Increase in cash surrender value of corporate owned life insurance		456		444		1,431		1,482
Net gain on sale of loans		125		115		345		212
Other income		603		1,854		1,842		3,285
Total other income	$	1,892	$	3,372	$	6,129	$	7,548
Noninterest Expenses
Marketing expense	$	1,029	$	1,055	$	3,448	$	3,597
Professional fees		1,585		1,490		4,484		4,255
Legal fees		130		410		1,191		1,532
Software licensing and maintenance		1,196		1,082		3,512		3,642
Cardholder expense		678		827		2,076		2,363
Other expenses		5,805		4,679		15,800		14,321
Total other operating expense	$	10,423	$	9,543	$	30,511	$	29,710

12. Financial Guarantees

The Company currently does not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit. The Company extends standby letters of credit to its customers in the normal course of business. The standby letters of credit are generally short-term. As of September 30, 2014, the Company’s maximum potential obligation under standby letters of credit was $60.5 million compared to $62.6 million at December 31, 2013. Management uses the same credit policies to extend standby letters of credit that it uses for on-balance sheet lending decisions and may require collateral to support standby letters of credit based upon its evaluation of the counterparty. Management does not anticipate any significant losses as a result of these transactions, and has determined that the fair value of standby letters of credit is not significant.

13. Segment and Related Information

The Company manages its operations through three reportable business segments in accordance with the standards set forth in FASB ASC 280, “Segment Reporting”: (i) banking (“Banking”), (ii) insurance (“Tompkins Insurance Agencies, Inc.”) and (iii) wealth management (“Tompkins Financial Advisors”). The Company’s insurance services and wealth management services, other than trust services, are managed separately from the Banking segment.

Banking

The Banking segment is primarily comprised of the four banking subsidiaries: Tompkins Trust Company, a commercial bank with fifteen banking offices located in Ithaca, NY and surrounding communities; The Bank of Castile, a commercial bank with sixteen banking offices located in the Genesee Valley region of New York State as well as Monroe County; Mahopac Bank, a commercial bank with fifteen full-service banking offices and one limited service office in the counties north of New York City; and VIST Bank, a banking organization with twenty banking offices headquartered and operating in the areas surrounding southeastern Pennsylvania.

Insurance

The Company provides property and casualty insurance services and employee benefits consulting through Tompkins Insurance Agencies, Inc., a 100% wholly-owned subsidiary of the Company, headquartered in Batavia, New York. Tompkins Insurance is an independent insurance agency, representing many major insurance carriers and provides employee benefit consulting to employers in Western and Central New York, assisting them with their medical, group life insurance and group disability insurance. Through the 2012 acquisition of VIST Financial, Tompkins Insurance expanded its operations with the addition of VIST Insurance, a full service insurance agency offering a similar array of insurance products as Tompkins Insurance in southeastern Pennsylvania.

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Wealth Management

The Wealth Management segment is generally organized under the Tompkins Financial Advisors brand. Tompkins Financial Advisors offers a comprehensive suite of financial services to customers, including trust and estate services, investment management and financial and insurance planning for individuals, corporate executives, small business owners and high net worth individuals. Tompkins Financial Advisors has offices in each of the Company’s four subsidiary banks.

Summarized financial information concerning the Company’s reportable segments and the reconciliation to the Company’s consolidated results is shown in the following table. Investment in subsidiaries is netted out of the presentations below. The “Intercompany” column identifies the intercompany activities of revenues, expenses and other assets between the banking, insurance and wealth management services segments. The Company accounts for intercompany fees and services at an estimated fair value according to regulatory requirements for the services provided. Intercompany items relate primarily to the use of human resources, information systems, accounting and marketing services provided by any of the banks and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the 2013 Annual Report on Form 10-K.

As of and for the three months ended September 30, 2014
(in thousands)	Banking			Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	46,583		$	1	$	35	$	(1	)	$	46,618
Interest expense		5,044			0		0		(1	)		5,043
Net interest income		41,539			1		35		0			41,575
Provision for loan and lease losses		(59	)		0		0		0			(59	)
Noninterest income		6,607			7,555		3,746		(353	)		17,555
Noninterest expense		30,129			5,977		2,784		(353	)		38,537
Income before income tax expense		18,076			1,579		997		0			20,652
Income tax expense		5,903			653		341		0			6,897
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		12,173			926		656		0			13,755
Less: Net income attributable to noncontrolling interests		33			0		0		0			33
Net Income attributable to Tompkins Financial Corporation	$	12,140		$	926	$	656	$	0		$	13,722
Depreciation and amortization	$	1,320		$	75	$	36	$	0		$	1,431
Assets		5,049,237			34,742		13,634		(6,694	)		5,090,919
Goodwill		64,500			19,662		8,081		0			92,243
Other intangibles, net		9,681			4,987		538		0			15,206
Net loans and leases		3,229,683			0		0		0			3,229,683
Deposits		4,219,127			0		0		(6,267	)		4,212,860
Total Equity		453,317			27,177		10,117		0			490,611

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As of and for the three months ended September 30, 2013
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	46,334	$	2	$	45	$	(2	)	$	46,379
Interest expense		5,908		0		0		(2	)		5,906
Net interest income		40,426		2		45		0			40,473
Provision for loan and lease losses		2,049		0		0		0			2,049
Noninterest income		7,956		7,077		3,877		(382	)		18,528
Noninterest expense		29,552		5,532		2,852		(382	)		37,554
Income before income tax expense		16,781		1,547		1,070		0			19,398
Income tax expense		4,308		646		362		0			5,316
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		12,473		901		708		0			14,082
Less: Net income attributable to noncontrolling interests		33		0		0		0			33
Net Income attributable to Tompkins Financial Corporation	$	12,440	$	901	$	708	$	0		$	14,049
Depreciation and amortization	$	1,310	$	51	$	33	$	0		$	1,394
Assets		4,894,161		34,087		12,702		(8,522	)		4,932,428
Goodwill		64,500		19,559		8,081		0			92,140
Other intangibles, net		11,070		5,150		621		0			16,841
Net loans and leases		3,092,904		0		0		0			3,092,904
Deposits		3,980,890		0		0		(8,134	)		3,972,756
Total Equity		408,102		25,524		10,650		0			444,276

For the nine months ended September 30, 2014
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	137,703	$	5	$	100	$	(5	)	$	137,803
Interest expense		15,688		2		0		(5	)		15,685
Net interest income		122,015		3		100		0			122,118
Provision for loan and lease losses		751		0		0		0			751
Noninterest income		19,835		21,918		11,990		(1,034	)		52,709
Noninterest expense		90,560		17,541		8,608		(1,034	)		115,675
Income before income tax expense		50,539		4,380		3,482		0			58,401
Income tax expense		15,982		1,776		1,193		0			18,951
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		34,557		2,604		2,289		0			39,450
Less: Net income attributable to noncontrolling interests		98		0		0		0			98
Net Income attributable to Tompkins Financial Corporation	$	34,459	$	2,604	$	2,289	$	0		$	39,352
Depreciation and amortization	$	3,909	$	184	$	110	$	0		$	4,203

40

For the nine months ended September 30, 2013
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	136,647	$	5	$	149	$	(5	)	$	136,796
Interest expense		18,297		0		0		(5	)		18,292
Net interest income		118,350		5		149		0			118,504
Provision for loan and lease losses		5,576		0		0		0			5,576
Noninterest income		20,410		21,371		11,813		(1,135	)		52,459
Noninterest expense		88,555		16,589		8,842		(1,135	)		112,851
Income before income tax expense		44,629		4,787		3,120		0			52,536
Income tax expense		12,883		1,935		1,055		0			15,873
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		31,746		2,852		2,065		0			36,663
Less: Net income attributable to noncontrolling interests		98		0		0		0			98
Net Income attributable to Tompkins Financial Corporation	$	31,648	$	2,852	$	2,065	$	0		$	36,565
Depreciation and amortization	$	4,021	$	160	$	103	$	0		$	4,284

14. Fair Value

FASB ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. FASB ASC Topic 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Transfers between levels, when determined to be appropriate, are recognized at the end of each reporting period.

The three levels of the fair value hierarchy under FASB ASC Topic 820 are:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

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Recurring Fair Value Measurements
September 30, 2014
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Trading securities
Obligations of U.S. Government sponsored entities	$	7,631	$	0	$	7,631	$	0
Mortgage-backed securities – residential
U.S. Government sponsored entities		1,842		0		1,842		0
Available-for-sale securities
Obligations of U.S. Government sponsored entities		590,894		0		590,894		0
Obligations of U.S. states and political subdivisions		70,502		0		70,502		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies		119,717		0		119,717		0
U.S. Government sponsored entities		589,779		0		589,779		0
Non-U.S. Government agencies or sponsored entities		280		0		280		0
U.S. corporate debt securities		2,163		0		2,163		0
Equity securities		1,421		0		0		1,421
Borrowings
Other borrowings		11,032		0		11,032		0

The change in the fair value of the $1.4 million of available-for-sale securities valued using significant unobservable inputs (level 3), between January 1, 2014 and September 30, 2014 was immaterial.

Recurring Fair Value Measurements
December 31, 2013
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Trading securities
Obligations of U.S. Government sponsored entities	$	8,275	$	0	$	8,275	$	0
Mortgage-backed securities – residential
U.S. Government sponsored entities		2,716		0		2,716		0
Available-for-sale securities				.
Obligations of U.S. Government sponsored entities		556,345		0		556,345		0
Obligations of U.S. states and political subdivisions		67,962		0		67,962		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies		146,678		0		146,678		0
U.S. Government sponsored entities		577,472		0		577,472		0
Non-U.S. Government agencies or sponsored entities		311		0		311		0
U.S. corporate debt securities		4,633		0		4,633		0
Equity securities		1,410		0		0		1,410
Borrowings
Other borrowings		11,292		0		11,292		0

The change in the fair value of the $1.4 million of available-for-sale securities valued using significant unobservable inputs (level 3), between January 1, 2013 and December 31, 2013 was immaterial.

There were no transfers between Levels 1, 2 and 3 for the three months ended September 30, 2014.

The Company determines fair value for its trading securities using independently quoted market prices. The Company determines fair value for its available-for-sale securities using an independent bond pricing service for identical assets or very similar securities. The Company has reviewed the pricing sources, including methodologies used, and finds them to be fairly stated.

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Fair values of borrowings are estimated using Level 2 inputs based upon observable market data. The Company determines fair value for its borrowings using a discounted cash flow technique based upon expected cash flows and current spreads on FHLB advances with the same structure and terms. The Company also receives pricing information from third parties, including the FHLB. The pricing obtained is considered representative of the transfer price if the liabilities were assumed by a third party. The Company’s potential credit risk did not have a material impact on the quoted settlement prices used in measuring the fair value of the FHLB borrowings at September 30, 2014.

Certain assets are measured at fair value on a nonrecurring basis. For the Company, these include loans held for sale, collateral dependent impaired loans, and other real estate owned (“OREO”). During the third quarter of 2014, certain collateral dependent impaired loans were remeasured and reported at fair value through a specific valuation allowance and/or partial charge-offs for loan and lease losses based upon the fair value of the underlying collateral. Collateral values are estimated using Level 2 inputs based upon observable market data. In addition to collateral dependent impaired loans, certain other real estate owned were remeasured and reported at fair value based upon the fair value of the underlying collateral. The fair values of other real estate owned are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. In general, the fair values of other real estate owned are based upon appraisals, with discounts made to reflect estimated costs to sell the real estate. Upon initial recognition, fair value write-downs on other real estate owned are taken through a charge-off to the allowance for loan and lease losses. Subsequent fair value write-downs on other real estate owned are reported in other noninterest expense.

Three months ended September 30, 2014
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Three months ended
Assets:	09/30/2014		(Level 1)		(Level 2)		(Level 3)		09/30/2014
Impaired Loans	$	8,149	$	0	$	8,149	$	0	$	(67	)
Other real estate owned		2,689		0		2,689		0		10

Three months ended September 30, 2013
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Three months ended
Assets:	09/30/2013		(Level 1)		(Level 2)		(Level 3)		09/30/2013
Impaired Loans	$	5,405	$	0	$	5,405	$	0	$	(650	)
Other real estate owned		2,718		0		2,718		0		(56	)

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Nine months ended September 30, 2014
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Nine months ended
Assets:	09/30/2014		(Level 1)		(Level 2)		(Level 3)		09/30/2014
Impaired Loans	$	9,226	$	0	$	9,226	$	0	$	(252	)
Other real estate owned		5,182		0		5,182		0		(32	)

Nine months ended September 30, 2013
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Nine months ended
Assets:	09/30/2013		(Level 1)		(Level 2)		(Level 3)		09/30/2013
Impaired Loans	$	10,530	$	0	$	10,530	$	0	$	(884	)
Other real estate owned		1,625		0		1,625		0		(247	)

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at September 30, 2014 and December 31, 2013. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions.

The fair value estimates, methods and assumptions set forth below for the Company’s financial instruments, including those financial instruments carried at cost, are made solely to comply with disclosures required by generally accepted accounting principles in the United States and do not always incorporate the exit-price concept of fair value prescribed by ASC Topic 820-10 and should be read in conjunction with the financial statements and notes included in this Report.

Estimated Fair Value of Financial Instruments
September 30, 2014
(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	85,117	$	85,117	$	85,117	$	0	$	0
Securities - held to maturity		47,608		48,017		0		48,017		0
FHLB stock		14,838		14,838		0		14,838		0
Accrued interest receivable		16,494		16,494		0		16,494		0
Loans/leases, net1		3,229,683		3,248,727		0		9,226		3,239,501
Financial Liabilities:
Time deposits	$	930,796	$	932,938	$	0	$	932,938	$	0
Other deposits		3,282,064		3,282,064		0		3,282,064		0
Fed funds purchased and securities sold under agreements to repurchase		128,368		132,383		0		132,383		0
Other borrowings		155,477		155,739		0		155,739		0
Accrued interest payable		1,827		1,827		0		1,827		0
Trust preferred debentures		37,298		43,904		0		43,904		0

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Estimated Fair Value of Financial Instruments

December 31, 2013

(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	82,884	$	82,884	$	82,884	$	0	$	0
Securities - held to maturity		18,980		19,625		0		19,625		0
FHLB and FRB stock		25,041		25,041		0		25,041		0
Accrued interest receivable		16,586		16,586		0		16,586		0
Loans/leases, net1		3,166,314		3,201,837		0		6,846		3,194,991
Financial Liabilities:
Time deposits	$	865,702	$	870,857	$	0	$	870,857	$	0
Other deposits		3,081,514		3,081,514		0		3,081,514		0
Fed funds purchased and securities sold under agreements to repurchase		167,724		173,425		0		173,425		0
Other borrowings		320,239		326,193		0		326,193		0
Accrued interest payable		2,121		2,121		0		2,121		0
Trust preferred debentures		37,169		41,673		0		41,673		0

¹ Lease receivables, although excluded from the scope of ASC Topic 825, are included in the estimated fair value amounts at their carrying value.

The following methods and assumptions were used in estimating fair value disclosures for financial instruments.

Cash and Cash Equivalents: The carrying amounts reported in the Consolidated Statements of Condition for cash, noninterest-bearing deposits, money market funds, and Federal funds sold approximate the fair value of those assets.

Securities: Fair values for U.S. Treasury securities are based on quoted market prices. Fair values for obligations of U.S. government sponsored entities, mortgage-backed securities-residential, obligations of U.S. states and political subdivisions, and U.S. corporate debt securities are based on quoted market prices, where available, as provided by third party pricing vendors. If quoted market prices were not available, fair values are based on quoted market prices of comparable instruments in active markets and/or based upon matrix pricing methodology, which uses comprehensive interest rate tables to determine market price, movement and yield relationships. These securities are reviewed periodically to determine if there are any events or changes in circumstances that would adversely affect their value.

Loans and Leases: The fair values of residential loans are estimated using discounted cash flow analyses, based upon available market benchmarks for rates and prepayment assumptions. The fair values of commercial and consumer loans are estimated using discounted cash flow analyses, based upon interest rates currently offered for loans and leases with similar terms and credit quality. The fair value of loans held for sale are determined based upon contractual prices for loans with similar characteristics.

FHLB STOCK: The carrying amount of FHLB stock approximates fair value. If the stock is redeemed, the Company will receive an amount equal to the par value of the stock. For miscellaneous equity securities, carrying value is cost.

ACCRUED INTEREST RECEIVABLE AND ACCRUED INTEREST PAYABLE: The carrying amount of these short term instruments approximate fair value.

Deposits: The fair values disclosed for noninterest bearing accounts and accounts with no stated maturities are equal to the amount payable on demand at the reporting date. The fair value of time deposits is based upon discounted cash flow analyses using rates offered for FHLB advances, which is the Company’s primary alternative source of funds.

Securities Sold Under Agreements to Repurchase: The carrying amounts of repurchase agreements and other short-term borrowings approximate their fair values. Fair values of long-term borrowings are estimated using a discounted cash flow approach, based on current market rates for similar borrowings. For securities sold under agreements to repurchase where the Company has elected the fair value option, the Company also receives pricing information from third parties, including the FHLB.

Other Borrowings: The fair values of other borrowings are estimated using discounted cash flow analysis, discounted at the Company’s current incremental borrowing rate for similar borrowing arrangements. For other borrowings where the Company has elected the fair value option, the Company also receives pricing information from third parties, including the FHLB.

45

TRUST PREFERRED DEBENTURES: The fair value of the trust preferred debentures has been estimated using a discounted cash flow analysis which uses a discount factor of a market spread over current interest rates for similar instruments.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

BUSINESS

Corporate Overview and Strategic Initiatives

Tompkins Financial Corporation (“Tompkins” or the “Company”) is headquartered in Ithaca, New York and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company is a locally oriented, community-based financial services organization that offers a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, insurance, and brokerage services. At September 30, 2014, the Company’s subsidiaries included: four wholly-owned banking subsidiaries, Tompkins Trust Company (the “Trust Company”), The Bank of Castile (DBA Tompkins Bank of Castile), Mahopac Bank (formerly known as Mahopac National Bank, DBA Tompkins Mahopac Bank), VIST Bank (DBA Tompkins VIST Bank); and a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). TFA Wealth Management and the trust division of the Trust Company provide a full array of investment services under the Tompkins Financial Advisors brand, including investment management, trust and estate, financial and tax planning as well as life, disability and long-term care insurance services. The Company’s principal offices are located at The Commons, Ithaca, New York, 14851, and its telephone number is (888) 503-5753. The Company’s common stock is traded on the NYSE MKT LLC under the Symbol “TMP.”

The Company’s strategic initiatives include diversification within its markets, growth of its fee-based businesses, and growth internally and through acquisitions of financial institutions, branches, and financial services businesses. As such, the Company from time to time considers acquiring banks, thrift institutions, branch offices of banks or thrift institutions, or other businesses within markets currently served by the Company or in other locations that would complement the Company’s business or its geographic reach. The Company generally targets merger or acquisition partners that are culturally similar and have experienced management and possess either significant market presence or have potential for improved profitability through financial management, economies of scale and expanded services. The Company has pursued acquisition opportunities in the past, and continues to review new opportunities.

Acquisitions

On January 31, 2014, Tompkins Insurance acquired certain assets of Breakthrough Benefits, LLC, an employee benefits company located in Downingtown, Pennsylvania, in a cash transaction. The principal partner continued as an employee of Tompkins Insurance after the acquisition. The aggregate purchase price for the assets was $350,000. In addition to $210,000 paid at closing, consideration includes two annual post-closing payments of $70,000 payable on subsequent anniversary dates. Payment is contingent upon certain criteria being met, which Tompkins considers to be likely. The purchase price was allocated as follows: goodwill of $103,000, customer related intangibles of $102,000 and a covenant-not-to-compete of $142,000. The value of the customer related intangible is being amortized over 15 years, while the covenant-not-to-compete will be amortized over 5 years commencing with the departure of the principal. The goodwill is not being amortized but will be evaluated annually for impairment. At the end of the third quarter 2014, Tompkins Insurance purchased the employee benefits book of business from Aigen Financial Group, LLC. of Ithaca, New York in a cash transaction. The purchase price of $205,000 was allocated as follows: customer related intangibles of $140,000 and a covenant-not-to-compete of $65,000. The value of the customer related intangible is being amortized over 15 years, while the covenant-not-to-compete will be amortized over 5 years.

Business Segments

Banking services consist primarily of attracting deposits from the areas served by the Company’s four banking subsidiaries’ 66 banking offices (46 offices in New York and 20 offices in Pennsylvania) and using those deposits to originate a variety of commercial loans, consumer loans, real estate loans (including commercial loans collateralized by real estate), and leases. The Company’s lending function is managed within the guidelines of a comprehensive Board-approved lending policy. Reporting systems are in place to provide management with ongoing information related to loan production, loan quality, concentrations of credit, loan delinquencies, and nonperforming and potential problem loans. Banking services also include a full suite of products such as debit cards, credit cards, remote deposit, electronic banking, mobile banking, cash management, and safe deposit services.

46

Wealth management services consist of investment management, trust and estate, financial and tax planning as well as life, disability and long-term care insurance services. Wealth management services are under the trade name Tompkins Financial Advisors. Tompkins Financial Advisors has office locations at all four of the Company’s subsidiary banks.

Insurance services include property and casualty insurance, employee benefit consulting, and life, long-term care and disability insurance. Tompkins Insurance is headquartered in Batavia, New York. Over the past thirteen years, Tompkins Insurance has acquired smaller insurance agencies in the market areas serviced by the Company’s banking subsidiaries and successfully consolidated them into Tompkins Insurance. The VIST Financial acquisition in 2012, which included VIST Insurance, nearly doubled the Company’s annual insurance revenues. In the first quarter of 2014, Tompkins Insurance acquired certain assets of Breakthrough Benefits, LLC, an employee benefits company located in Downingtown, Pennsylvania. Details of this transaction are discussed above. Tompkins Insurance offers services to customers of the Company’s banking subsidiaries by sharing offices with The Bank of Castile, Trust Company, and VIST Bank. In addition to these shared offices, Tompkins Insurance has five stand-alone offices in Western New York, two stand-alone offices in Tompkins County, New York and one stand-alone office in Montgomery County, Pennsylvania.

The Company’s principal expenses are interest on deposits, interest on borrowings, and operating and general administrative expenses, as well as provisions for loan and lease losses. Funding sources, other than deposits, include borrowings, securities sold under agreements to repurchase, and cash flow from lending and investing activities.

Competition

Competition for commercial banking and other financial services is strong in the Company’s market areas. In one or more aspects of its businesses, the Company’s subsidiaries compete with other commercial banks, savings and loan associations, credit unions, finance companies, Internet-based financial services companies, mutual funds, insurance companies, brokerage and investment banking companies, and other financial intermediaries. Some of these competitors have substantially greater resources and lending capabilities and may offer service that the Company does not currently provide. In addition, many of the Company’s non-bank competitors are not subject to the same extensive Federal regulations that govern financial holding companies and Federally-insured banks.

Management believes that a community based financial organization is better positioned to establish personalized financial relationships with both commercial customers and individual households. The Company’s community commitment and involvement in its primary market areas, as well as its commitment to quality and personalized financial services, are factors that contribute to the Company’s competitiveness. Management believes that each of the Company’s subsidiary banks can compete successfully in its primary market areas by making prudent lending decisions quickly and more efficiently than its competitors, without compromising asset quality or profitability, although no assurances can be given that such factors will assure success.

Regulation

Banking, insurance services and wealth management are highly regulated. As a financial holding company with four community banks, a registered investment advisor, and an insurance agency subsidiary, the Company and its subsidiaries are subject to examination and regulation by the Federal Reserve Board (“FRB”), Securities and Exchange Commission (“SEC”), the Federal Deposit Insurance Corporation (“FDIC”), the New York State Department of Financial Services, Pennsylvania Department of Banking and Securities, Financial Industry Regulatory Authority, and the Pennsylvania Insurance Department.

OTHER IMPORTANT INFORMATION

The following discussion is intended to provide an understanding of the consolidated financial condition and results of operations of the Company for the three and nine months ended September 30, 2014. It should be read in conjunction with the Company’s Audited Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, and the Unaudited Consolidated Financial Statements and notes thereto included in Part I of this Quarterly Report on Form 10-Q.

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Forward-Looking Statements

The Company is making this statement in order to satisfy the “Safe Harbor” provision contained in the Private Securities Litigation Reform Act of 1995. The statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting the Company and are subject to certain uncertainties and factors relating to the Company’s operations and economic environment, all of which are difficult to predict and many of which are beyond the control of the Company. These uncertainties and factors that could cause actual results of the Company to differ materially from those matters expressed and/or implied by such forward-looking statements. The following factors are among those that could cause actual results to differ materially from the forward-looking statements: changes in general economic, market and regulatory conditions; the development of an interest rate environment that may adversely affect the Company’s interest rate spread, other income or cash flow anticipated from the Company’s operations, investment and/or lending activities; changes in laws and regulations affecting banks, insurance companies, bank holding companies and/or financial holding companies, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; governmental and public policy changes, including environmental regulation; protection and validity of intellectual property rights; reliance on large customers; financial resources in the amounts, at the times and on the terms required to support the Company’s future businesses; and other factors discussed elsewhere in this Quarterly Report on Form 10-Q and in other reports we file with the SEC, in particular the “Risk Factors” discussed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In addition, such forward-looking statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, including interest rate and currency exchange rate fluctuations, and other factors.

Critical Accounting Policies

The accounting and reporting policies followed by the Company conform, in all material respects, to accounting principles generally accepted in the United States and to general practices within the financial services industry. In the course of normal business activity, management must select and apply many accounting policies and methodologies and make estimates and assumptions that lead to the financial results presented in the Company’s consolidated financial statements and accompanying notes. There are uncertainties inherent in making these estimates and assumptions, which could materially affect the Company’s results of operations and financial position.

Management considers accounting estimates to be critical to reported financial results if (i) the accounting estimates require management to make assumptions about matters that are highly uncertain, and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on the Company’s financial statements. Management considers the accounting policies relating to the allowance for loan and lease losses (“allowance”), pension and postretirement benefits, the review of the securities portfolio for other-than-temporary impairment, and acquired loans to be critical accounting policies because of the uncertainty and subjectivity involved in these policies and the material effect that estimates related to these areas can have on the Company’s results of operations.

For additional information on critical accounting policies and to gain a greater understanding of how the Company’s financial performance is reported, refer to Note 1 – “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements, and the section captioned “Critical Accounting Policies” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes in the Company’s application of critical accounting policies since December 31, 2013. Refer to Note 3 – “Accounting Standards Updates” in the Notes to Unaudited Consolidated Financial Statements included in Part I of this Quarterly Report on Form 10-Q for a discussion of recent accounting updates.

In this Report there are comparisons of the Company’s performance to that of a peer group. Unless otherwise stated, this peer group is comprised of the group of 117 domestic bank holding companies with $3 billion to $10 billion in total assets as defined in the Federal Reserve’s “Bank Holding Company Performance Report” for June 30, 2014 (the most recent report available).

OVERVIEW

Net income for the third quarter was $13.7 million or $0.92 diluted earnings per share, compared to $14.0 million or $0.95 diluted earnings per share for the same period in 2013. Net income for the first nine months of 2014 was $39.4 million or $2.64 diluted earnings per share, compared to $36.6 million or $2.50 diluted earnings per share in the first nine months of 2013. Prior period net income was impacted by nonrecurring income and merger related expenses. Third quarter 2013 net income included an after-tax gain of $846,000 related to the redemption of a Trust Preferred Debenture, while net income for the first nine months of 2013 included the after-tax gain of $846,000 partially offset by after-tax merger related expenses of $140,000. Excluding these items, the Company’s operating (Non-GAAP) net income for the third quarter of 2013 was $13.2 million or $0.89 diluted per share and for the nine months ended September 30, 2013 was $35.9 million or $2.45 diluted per share.

Return on average assets (“ROA”) for the quarter ended September 30, 2014 was 1.08%, compared to 1.10% for the quarter ended September 30, 2013. Return on average shareholders’ equity (“ROE”) for the third quarter of 2014 was 11.11%, compared to 12.83%, for the same period in 2013. Tompkins’ third quarter ROA and ROE compare to the most recent peer average ratios of 0.93% and 8.32%, respectively, published as of June 30, 2014 by the Federal Reserve, ranking Tompkins’ ROA in the 62^nd percentile and ROE in the 58^th percentile of the peer group.

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The following table summarizes our results of operations for the periods indicated on a GAAP basis and on an operating (Non-GAAP) basis for the periods indicated. Our operating results exclude merger and acquisition integration expenses and nonrecurring income and expenses. The Company believes this non-GAAP measure provides a meaningful comparison of our underlying operational performance and facilitates managements’ and investors’ assessments of business and performance trends in comparison to others in the financial services industry. In addition, the Company believes the exclusion of the nonoperating items from our performance enables management and investors to perform a more effective evaluation and comparison of our results and to assess performance in relation to our ongoing operations (in thousands). These non-GAAP financial measures should not be considered in isolation or as a measure of the Company’s profitability or liquidity; they are in addition to, and are not a substitute for, financial measures under GAAP. Net operating income as presented herein may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies. Further, the Company may utilize other measures to illustrate performance in the future. Non-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP.

	Three months ended						Nine months ended
(in thousands)	09/30/2014			09/30/2013			09/30/2014			09/30/2013
Net income attributable to Tompkins Financial Corporation	$	13,722		$	14,049		$	39,352		$	36,565
Adjustments for non-operating income and expense, net of tax:
Gain on redemption of trust preferred		0			(846	)		0			(846	)
Merger and acquisition integration related expenses		0			0			0			140
Total adjustments, net of tax		0			(846	)		0			(706	)
Net operating income (Non-GAAP)		13,722			13,203			39,352			35,859
Amortization of intangibles, net of tax		311			327			942			990
Adjusted net operating income (Non-GAAP)		14,033			13,530			40,294			36,849
Average total assets		5,058,608			4,897,678			5,023,960			4,921,092
Average goodwill and intangibles		107,525			109,277			107,990			109,995
Average tangible assets		4,951,083			4,788,401			4,915,970			4,811,097
Adjusted operating return on average shareholders’ tangible assets (annualized) (Non-GAAP)		1.12	%		1.12	%		1.10	%		1.02	%
Average total shareholders’ equity		489,920			434,482			479,579			441,583
Average goodwill and intangibles		107,525			109,277			107,990			109,995
Average shareholders’ tangible equity (Non-GAAP)		382,395			325,205			371,589			331,588
Adjusted operating return on average shareholders’ tangible equity (annualized) (Non-GAAP)		14.56	%		16.51	%		14.50	%		14.86	%

Segment Reporting

The Company operates in the following three business segments, banking, insurance, and wealth management. Insurance is comprised of property and casualty insurance services and employee benefit consulting operated under the Tompkins Insurance Agencies, Inc. subsidiary. Wealth management activities include the results of the Company’s trust, financial planning, and wealth management services, organized under the Tompkins Financial Advisors brand. All other activities are considered banking.

Banking Segment

The banking segment reported net income of $12.1 million for the third quarter of 2014, down $300,000 or 2.4% from net income of $12.4 million for the same period in 2013. For the nine months ended September 30, 2014, the banking segment reported net income of $34.5 million, up $2.8 million or 8.9% from the same period in 2013.

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Net interest income of $41.5 million for the third quarter and $122.0 million for the nine month period ended September 30, 2014 was up 2.8% and 3.1%, respectively over the same periods in 2013. Growth in average earning assets and lower funding costs neutralized the effect of lower asset yields and contributed to favorable year-over-year comparisons. Net interest margin for the nine months ended September 30, 2014 was 3.58% compared to 3.60% for the same period prior year.

The Company recorded a recapture of provision for loan and lease losses totaling $59,000 for the three months ended September 30, 2014 and a $2.0 million expense for the same period in 2013. For the nine month period ended September 30, 2014, provision expense of $751,000, decreased $4.8 million or 86.5% compared to the same period prior year. The decrease in provision expense was largely attributable to improvements in credit quality as well as recoveries of previously charged off loans, partially offset by growth in total loans over prior year.

Noninterest income for the three months ended September 30, 2014 of $6.6 million was down $1.3 million or 17.0% compared to the same period in 2013. For the nine months ended September 30, 2014, noninterest income of $19.8 million was down $575,000 or 2.8% compared to the same period in 2013. Both the third quarter and nine month period ended September 30, 2013 included pre-tax gains of $1.4 million on the redemption of trust preferred securities. Additional contributors to the year-to-date decrease in noninterest income include realized gains on securities transactions (down $572,000), and net mark-to-market gain on liabilities held at fair value (down $283,000). Partially offsetting these items were the following: a decrease in net mark-to-market loss on trading securities (down $291,000); and increases in service charges on deposit accounts (up $824,000), card services income (up $805,000) and gains on the sale of residential mortgage loans (up $133,000).

Noninterest expenses for the third quarter ended September 30, 2014 of $30.1 million were up $577,000 or 2.0% from the same period in 2013. For the nine months ended September 30, 2014, noninterest expenses were up $2.0 million or 2.3% compared to the same period prior year. This increase was primarily related to an increase in the number of employees, normal annual merit and market increases and higher incentive accruals.

Insurance Segment

The insurance segment reported net income of $926,000 for the three months ended September 30, 2014, up $25,000 or 2.8% from the third quarter of 2013. For the nine months ended September 30, 2014, net income of $2.6 million was down $248,000 or 8.7% from the same period in 2013. Noninterest income was up $478,000 or 6.8% for the third quarter and up $547,000 or 2.6% for the nine months ended September 30, 2014, compared to the same periods in 2013. Noninterest expenses for the three months ended September 30, 2014, were up $445,000 or 8.0% compared to the third quarter of 2013. Noninterest expenses for the nine months ended September 30, 2014 of $17.5 million were $952,000 or 5.7% above the same period in 2013. Salaries and benefits costs were the largest contributors to the increase in noninterest expense compared to the same period last year. The increase reflects normal annual merit adjustments and higher incentive accruals.

Wealth Management Segment

The wealth management segment reported net income of $656,000 for the three months ended September 30, 2014, down $52,000 or 7.3% compared to the third quarter of 2013. Net income for the nine months ended September 30, 2014 of $2.3 million was $224,000 or 10.8% above the same period prior year. Noninterest income for the third quarter and nine months ended September 30, 2014 was $3.7 million and $12.0 million, which is down $131,000 or 3.4% from the third quarter of 2013 and up $177,000 or 1.5%, respectively. Noninterest expenses of $2.8 million for the three months ended September 30, 2014, were down $68,000 or 2.4% compared to the same period of 2013. Noninterest expenses of $8.6 million for the nine months ended September 30, 2014 were down $234,000 or 2.6% compared to the same period in 2013. The decline compared to the same periods last year was mainly due to lower incentive based compensation.

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

	Quarter Ended								Year to Date Period Ended								Year to Date Period Ended
	September 30, 2014								September 30, 2014								September 30, 2013
	Average								Average								Average
(nts in thousands)	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	$	579	$	—			0.00	%	$	782	$	2			0.34	%	$	2,261	$	9			0.53	%
Securities (1)
U.S. Government securities		1,310,291		7,286			2.21	%		1,304,141		22,163			2.27	%		1,334,735		21,269			2.13	%
Trading securities		9,823		102			4.12	%		10,327		321			4.16	%		15,141		472			4.17	%
State and municipal (2)		110,819		1,030			3.69	%		96,992		3,157			4.35	%		97,253		3,750			5.16	%
Other securities (2)		4,259		32			2.98	%		4,571		107			3.13	%		7,996		210			3.51	%
Total securities		1,435,192		8,450			2.34	%		1,416,031		25,748			2.43	%		1,455,125		25,701			2.36	%
FHLBNY and FRB stock		19,252		212			4.37	%		20,192		616			4.08	%		22,051		538			3.26	%
Total loans and leases, net of unearned income (2)(3)		3,240,837		38,765			4.74	%		3,218,371		113,924			4.73	%		3,025,846		113,440			5.01	%
Total interest-earning assets		4,695,860		47,427			4.01	%		4,655,376		140,290			4.03	%		4,505,283		139,688			4.15	%
Other assets		362,748								368,584								415,809
Total assets		5,058,608								5,023,960								4,921,092
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market		2,252,622		1,066			0.19	%		2,265,787		3,276			0.19	%		2,224,540		3,816			0.23	%
Time deposits		913,501		1,760			0.76	%		901,283		5,070			0.75	%		955,284		5,928			0.83	%
Total interest-bearing deposits		3,166,123		2,826			0.35	%		3,167,070		8,346			0.35	%		3,179,824		9,744			0.41	%
Federal funds purchased & securities sold under
agreements to repurchase		135,647		683			1.99	%		147,775		2,263			2.05	%		180,939		2,877			2.13	%
Other borrowings		248,633		961			1.53	%		258,578		3,362			1.74	%		211,828		3,634			2.29	%
Trust preferred debentures		37,270		573			6.10	%		37,227		1,714			6.16	%		43,160		2,037			6.31	%
Total interest-bearing liabilities		3,587,673		5,043			0.56	%		3,610,650		15,685			0.58	%		3,615,751		18,292			0.68	%
Noninterest bearing deposits		925,986								879,691								790,557
Accrued expenses and other liabilities		55,029								54,040								73,201
Total liabilities		4,568,688								4,544,381								4,479,509
Tompkins Financial Corporation Shareholders’ equity		488,386								478,078								440,082
Noncontrolling interest		1,534								1,501								1,501
Total equity		489,920								479,579								441,583
Total liabilities and equity	$	5,058,608							$	5,023,960							$	4,921,092
Interest rate spread							3.45	%							3.45	%							3.47	%
Net interest income/margin on earning assets				42,384			3.58	%				124,605			3.58	%				121,396			3.60	%
Tax Equivalent Adjustment				(809	)							(2,487	)							(2,892	)
Net interest income per consolidated financial statements			$	41,575							$	122,118							$	118,504

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. Payment received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company’s condensed consolidated financial statements included in Part 1 of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2013.

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Net Interest Income

Net interest income is the Company’s largest source of revenue, representing 70.3% and 69.9% of total revenues for the three and nine month periods ended September 30, 2014, compared to 68.6% and 69.3% for the same periods in 2013. Net interest income is dependent on the volume and composition of interest earning assets and interest-bearing liabilities and the level of market interest rates. The above table shows average interest-earning assets and interest-bearing liabilities, and the corresponding yield or cost associated with each.

Taxable-equivalent net interest income for the three and nine months ended September 30, 2014 was up 2.3% and 2.6%, respectively, over the same periods in 2013. Taxable-equivalent net interest income in 2014 benefitted from growth in average earning assets, which increased by 3.6% and 3.3% for the three and nine month periods ended September 30, 2014, and growth in noninterest bearing deposits which increased by 13.6% and 11.3% compared to the same periods prior year. These factors helped to lessen the impact of lower asset yields and maintain a relatively stable net interest margin compared to prior year. The taxable equivalent net interest margin was 3.58% for the three and nine month periods ended September 30, 2014 compared to 3.63% and 3.60%, respectively, for the same periods in 2013.

Taxable-equivalent interest income for the three and nine month periods ended September 30, 2014 was $47.4 million and $140.3 million, respectively, which is in line with the same periods in 2013. Growth in average earning assets and a higher concentration of loans helped to offset lower asset yields. The average yield on interest earning assets declined 13 basis points or 3.1% and 12 basis points or 2.9% for the three and nine months ended September 30, 2014 compared to the same period in 2013. Average loan balances for the three and nine months ended September 30, 2014 were up $167.0 million or 5.4%, and $192.5 million or 6.4%, respectively, while the average yields on loans for the same periods were down 23 basis points and 28 basis points, respectively, compared to the same periods in 2013. Average loan balances represented about 69.0% and 69.1% of average earning assets for the three and nine months ended September 30, 2014, up from 67.8% and 67.2%, respectively, for the same periods in 2013. Average securities balances for the three months ended September 30, 2014 were in line with prior year, and for the nine months ended September 30, 2014 were down by $39.1 million or 2.7% from the nine months ended September 30, 2013. The average yield on securities for the third quarter of 2014 was up 4 basis points and for the nine months ended September 30, 2014 was up 7 basis points.

Interest expense for the three and nine months ended September 30, 2014 decreased by $863,000 or 14.6% and $2.6 million or 14.3%, respectively, compared to the same periods in 2013, reflecting lower average rates paid on deposits and borrowings. The average rate paid on interest bearing deposits was 0.35% during both the three and nine months ended September 30, 2014, down 5 basis points and 6 basis points, respectively, from the same periods in 2013. Average interest bearing deposits for the third quarter of 2014 were up $75.9 million or 2.5% compared to the same period in 2013, while year-to-date average interest bearing deposits were in line with the same period in 2013. Average noninterest bearing deposits for the three and nine month periods ended September 30, 2014 were up $111.1 million or 13.6% and $89.1 million or 11.3%, respectively, compared to the same periods in 2013. Year-to-date average other borrowings increased by $46.8 million or 22.1% compared to the same period in 2013, and was mainly in overnight borrowings with the FHLB, which contributed to the decrease in average funding cost in this category in 2014.

Provision for Loan and Lease Losses

The provision for loan and lease losses represents management’s estimate of the amount necessary to maintain the allowance for loan and lease losses at an adequate level. The provision for loan and lease losses was a credit of $59,000 for the third quarter of 2014 and an expense of $751,000 for the nine months ended September 30, 2014, compared to expenses of $2.0 million and $5.6 million for the respective periods in 2013. The decrease in provision expense was mainly a result of improved asset quality metrics and recoveries received on previously charged off credits. The section captioned “Financial Condition – Allowance for Loan and Lease Losses and Nonperforming Assets” below has further details on the allowance for loan and lease losses and asset quality metrics.

Noninterest Income

Noninterest income was $17.6 million for the third quarter of 2014 and $52.7 million for the nine months ended September 30, 2014. Noninterest income for the third quarter of 2014 is down 5.3% compared to the same period prior year, and is in line with the year-to-date period ending September 30, 2014. Third quarter 2013 noninterest income included non-recurring gains of $1.4 million on the redemption of trust preferred securities. Noninterest income represented 29.7% of total revenue for the three months ended September 30, 2014 compared to 31.4% in the third quarter of 2013, and 30.1% for the nine months ended September 30, 2014 compared to 30.7% for the same period in 2013.

Insurance commissions and fees were $7.5 million and $21.8 million for the three and nine months ended September 30, 2014, compared to $7.2 million and $21.6 million, respectively, for the same periods in 2013. The health and benefit portfolio grew by 2.6% compared to the same three month period in 2013.

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Investment services income was $3.6 million in third quarter of 2014, a decrease of 1.6% from $3.7 million in the third quarter of 2013. Investment services income of $11.5 million for the first nine months of 2014 was up 3.3% from the comparable period in 2013. The increase was mainly attributed to increases in assets under management, reflecting new business and higher equities markets. Investment services income includes trust services, financial planning, wealth management services, and brokerage related services. With fees largely based on the market value and the mix of assets managed, the general direction of the stock market can have a considerable impact on fee income. The fair value of assets managed by, or in custody of, Tompkins was $3.7 billion at September 30, 2014, up 8.8% from $3.4 billion at September 30, 2013. These figures include $1.0 billion and $921.8 million, respectively, of Company-owned securities where Tompkins Trust Company is custodian.

Service charges on deposit accounts were up $252,000 or 11.2% for the third quarter of 2014 compared to the third quarter of 2013 and up $824,000 or 13.3% for the nine months ended September 30, 2014 compared to the same period in 2013. The increase was mainly due to growth in noninterest bearing accounts, and an increase in account analysis fees, partially a result of fee increases on certain types of deposit accounts. Overdraft fees, the largest component of service charges on deposit accounts, were flat for both the three and nine months ended September 30, 2014 compared to same periods prior year.

Card services income for the three months and nine months ended September 30, 2014 was up $201,000 or 11.6% and $805,000 or 15.6% over the same periods in 2013. Debit card income, the largest component of card services income, benefitted in the first quarter of 2014 from the termination of the Company’s debit card reward program at year-end 2013, as final redemption rates came in below management’s estimates. Favorable trends in the number of debit cards issued and transaction volume have been partially offset by lower interchange fees.

The Company recognized gains on the sales/calls of available-for-sale securities of $20,000 and $151,000 for the three and nine months ended September 30, 2014, which were down from gains of $281,000 and $723,000, respectively, for the same periods in 2013. Sales of available-for-sale securities are generally the result of general portfolio maintenance and interest rate risk management.

Other income of $1.9 million in the third quarter of 2014 was down 43.9% from the third quarter of 2013. For the first nine months of 2014, other income was $6.1 million, down 18.8% from the same period in 2013. The significant components of other income are other service charges, increases in cash surrender value of corporate owned life insurance (“COLI”), gains on the sales of residential mortgage loans, FDIC Indemnification accretion and income from miscellaneous equity investments. The three and nine month periods in 2013 included a pre-tax gain of $1.4 million on the redemption of a trust preferred debenture acquired as part of the VIST acquisition.

Noninterest Expense

Noninterest expense of $38.5 million and $115.7 million for the three and nine months ended September 30, 2014, was up 2.6% and 2.5%, respectively, compared to the same periods in 2013. The increase in noninterest expense compared to the same period prior year is mainly a result of higher salary and wages expense and other operating expense.

Salaries and wages expense for the three and nine months ended September 30, 2014 were up by $798,000 or 4.8% and $3.2 million or 6.7%, respectively, over the same periods in 2013. The increases reflect additional employees, annual merit increases and higher accruals for incentive compensation. Pension and other employee related benefits were down 11.9% for the third quarter of 2014 and down 6.2% for the nine months ended September 30, 2014 compared to the same periods in 2013. Pension and other post-retirement benefit expenses in 2014 were down compared to 2013, mainly a result of an increase in the discount rate used to calculate the annual expense of these plans.

Net occupancy expense was $3.0 million for the third quarter of 2014, up $119,000 or 4.2% form the same period in 2013 and was $9.3 million for the nine months ended September 30, 2013, up $431,000 or 4.9% from the same period in 2013. The increase reflects higher expenses related to rent, utilities, real estate taxes, depreciation and general maintenance of properties for both the three and nine month periods ended September 30, 2014.

Other operating expense for the three and nine months ended September 30, 2014 was up 9.2% and 2.7%, respectively, compared to the same periods prior year. The increase is mainly due to amortization of the FDIC indemnification asset as a result of better than expected performance on FDIC covered loans.

Overall, all other expense categories remained relatively flat compared to the same period prior year.

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Income Tax Expense

The provision for income taxes was $6.9 million for an effective rate of 33.4% for the third quarter of 2014, compared to tax expense of $5.3 million and an effective rate of 27.4% for the same quarter in 2013. The third quarter 2013 tax provision and effective rate were favorably impacted by the recognition of the tax benefit of an historical tax credit investment. For the first nine months of 2014, the tax provision was $19.0 million for an effective rate of 32.5% compared to a tax provision of $15.9 million and an effective rate of 30.2% for the same period in 2013. The effective rates differ from the U.S. statutory rate of 35.0% during the comparable periods primarily due to the effect of tax-exempt income from loans, securities and life insurance assets.

FINANCIAL CONDITION

Total assets were $5.1 billion at September 30, 2014, up $87.9 million or 1.8% over December 31, 2013. The growth over year-end was primarily attributable to growth in originated loans, which were up $147.7 million or 5.9%, growth in available-for-sale securities, which were up $19.9 million or 1.5%, and growth in held-to-maturity securities which were up $28.6 million or 150.8%. This growth was partially offset by a decrease in acquired loans, which were down $84.5 million or 12.7%. Total deposits increased $265.6 million or 6.7% compared to December 31, 2013, mainly a result of an inflow of municipal deposits. Other borrowings decreased $165.0 million or 49.8% from December 31, 2013, as a result of the paydown of short-term advances with the FHLB.

Securities

As of September 30, 2014, total securities were $1.4 billion or 28.1% of total assets, compared to $1.4 billion or 27.7% of total assets at year-end 2013, and $1.4 billion or 28.2% at September 30, 2013. The following table details the composition of available-for-sale and held-to-maturity securities.

Available-for-Sale Securities

	09/30/2014				12/31/2013
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Obligations of U.S. Government sponsored entities	$	587,933	$	590,894	$	558,130	$	556,345
Obligations of U.S. states and political subdivisions		69,704		70,502		68,216		67,962
Mortgage-backed securities
U.S. Government agencies		119,049		119,717		147,766		146,678
U.S. Government sponsored entities		594,700		589,779		587,843		577,472
Non-U.S. Government agencies or sponsored entities		276		280		306		311
U.S. corporate debt securities		2,500		2,163		5,000		4,633
Total debt securities		1,374,162		1,373,335		1,367,261		1,353,401
Equity securities		1,475		1,421		1,475		1,410
Total available-for-sale securities	$	1,375,637	$	1,374,756	$	1,368,736	$	1,354,811

Held-to-Maturity Securities 

	09/30/2014				12/31/2013
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Obligations of U.S. Government sponsored entities	$	30,869	$	30,672	$	0	$	0
Obligations of U.S. states and political subdivisions	$	16,739	$	17,345	$	18,980	$	19,625
Total held-to-maturity debt securities	$	47,608	$	48,017	$	18,980	$	19,625

The increase in the fair value of the available-for-sale portfolio was due to the changes in interest rates during the first nine months of 2014. The decrease in interest rates during 2014 resulted in an increase in the unrealized gains in the available-for-sale portfolio. Management’s policy is to purchase investment grade securities that on average have relatively short duration, which helps mitigate interest rate risk and provides sources of liquidity without significant risk to capital. The increase in the held-to-maturity portfolio was due to purchases of Obligations of U.S. Government sponsored entities during the three month period ended September 30, 2014.

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The Company has no investments in preferred stock of U.S. government sponsored entities and no investments in pools of Trust Preferred securities. Quarterly, the Company evaluates all investment securities with a fair value less than amortized cost to identify any other-than-temporary impairment as defined under generally accepted accounting principles.

As a result of the other-than-temporarily impairment review process, the Company does not consider any investment security held at September 30, 2014 to be other-than-temporarily impaired. Future changes in interest rates or the credit quality and credit support of the underlying issuers may reduce the market value of these and other securities. If such decline is determined to be other than temporary, the Company will record the necessary charge to earnings and/or accumulated other comprehensive income to reduce the securities to their then current fair value.

The Company maintained a trading portfolio with a fair value of $9.5 million as of September 30, 2014, compared to $11.0 million at December 31, 2013. The decrease in the trading portfolio reflects maturities or payments during the three and nine months ended September 30, 2014. For the three and nine months ended September 30, 2014, net mark-to-market losses related to the securities trading portfolio were $87,000 and $181,000, respectively, compared to net mark-to-market losses for the three and nine months ended September 30, 2013 of $87,000 and $472,000, respectively.

Loans and Leases

Loans and leases at September 30, 2014 and December 31, 2013 were as follows:

	09/30/2014								12/31/2013
(in thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	49,828		$	0	$	49,828		$	74,788		$	0	$	74,788
Commercial and industrial other		627,290			102,601		729,891			562,439			128,503		690,942
Subtotal commercial and industrial		677,118			102,601		779,719			637,227			128,503		765,730
Commercial real estate
Construction		51,988			41,313		93,301			46,441			39,353		85,794
Agriculture		57,158			3,182		60,340			52,627			3,135		55,762
Commercial real estate other		960,346			321,714		1,282,060			903,320			366,438		1,269,758
Subtotal commercial real estate		1,069,492			366,209		1,435,701			1,002,388			408,926		1,411,314
Residential real estate
Home equity		182,994			58,459		241,453			171,809			67,183		238,992
Mortgages		685,989			33,200		719,189			658,966			35,336		694,302
Subtotal residential real estate		868,983			91,659		960,642			830,775			102,519		933,294
Consumer and other
Indirect		18,825			0		18,825			21,202			5		21,207
Consumer and other		34,327			1,119		35,446			32,312			1,219		33,531
Subtotal consumer and other		53,152			1,119		54,271			53,514			1,224		54,738
Leases		8,317			0		8,317			5,563			0		5,563
Covered loans		0			20,910		20,910			0			25,868		25,868
Total loans and leases		2,677,062			582,498		3,259,560			2,529,467			667,040		3,196,507
Less: unearned income and deferred costs and fees		(2,091	)		0		(2,091	)		(2,223	)		0		(2,223	)
Total loans and leases, net of unearned income and deferred costs and fees	$	2,674,971		$	582,498	$	3,257,469		$	2,527,244		$	667,040	$	3,194,284

Residential real estate loans, including home equity loans at September 30, 2014 were $960.6 million, up $27.3 million or 2.9% compared to December 31, 2013, and comprised 29.5% of total loans and leases. Growth in residential loan balances is impacted by the Company’s decision to retain these loans or sell them in the secondary market due to interest rate considerations. The Company’s Asset/Liability Committee meets regularly and establishes standards for selling and retaining residential real estate mortgage originations.

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Prior to August 2012, any residential real estate loans that were sold were generally sold to Federal Home Loan Mortgage Corporation (“FHLMC”) or State of New York Mortgage Agency (“SONYMA”). With the acquisition of VIST on August 1, 2012, the Company also sells loans to other third parties, including money center banks. Residential real estate loans are generally sold without recourse in accordance with standard secondary market loan sale agreements and are also subject to customary representations and warranties made by the Company, including representations and warranties related to gross incompetence and fraud. The Company has not had to repurchase any loans as a result of these general representations and warranties. While in the past in rare circumstances the Company agreed to sell residential real estate loans with recourse, the Company has not done so in the past several years and the amount of such loans included on the Company’s balance sheet at September 30, 2014 is insignificant. The Company has never had to repurchase a loan sold with recourse.

During the first nine months of 2014 and 2013, the Company sold residential mortgage loans totaling $18.7 million and $6.9 million, respectively, and realized gains on these sales of $345,000 and $212,000, respectively. These residential real estate loans were sold without recourse in accordance with standard secondary market loan sale agreements. When residential mortgage loans are sold, the Company typically retains all servicing rights, which provides the Company with a source of fee income. Mortgage servicing rights, at amortized basis, totaled $1.1 million at September 30, 2014 and $1.0 million at December 31, 2013.

The Company has not originated any hybrid loans, such as payment option ARMs. The Company underwrites residential real estate loans in accordance with secondary market standards in effect at the time of origination, including loan-to-value (“LTV”) and documentation requirements. The Company does not underwrite low or reduced documentation loans other than those that meet secondary market standards for low or reduced documentation loans. In those instances, W-2’s and paystubs are used instead of sending Verification of Employment forms to employers to verify income and bank deposit statements are used instead of Verification of Deposit forms mailed to financial institutions to verify deposit balances.

Commercial real estate loans were $1.4 billion, and represented 44.1% of total loans as of September 30, 2014. Commercial and industrial loans at September 30, 2014 were $779.7 million, and represented 23.9% of total loans. As of September 30, 2014, agriculturally-related loans totaled $110.2 million or 3.4% of total loans and leases, down from $130.6 million or 4.1% of total loans and leases at December 31, 2013. There is generally an increase in agriculturally-related loans at year end related to tax planning and these loans are typically paid down over the first part of the year. Agriculturally-related loans include loans to dairy farms and cash and vegetable crop farms. Agriculturally-related loans are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral, personal guarantees, and government related guarantees. Agriculturally-related loans are generally secured by the assets or property being financed or other business assets such as accounts receivable, livestock, equipment or commodities/crops.

The acquired loans in the above table reflect loans acquired in the acquisition of VIST Financial Corp. during the third quarter of 2012. The acquired loans were recorded at fair value pursuant to the purchase accounting guidelines in FASB ASC 805 – “Fair Value Measurements and Disclosures” (as determined by the present value of expected future cash flows) with no valuation allowance (i.e., the allowance for loan losses). Upon acquisition, the Company evaluated whether each acquired loan (regardless of size) was within the scope of ASC 310-30, “Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality”. The carrying value of the acquired loans reflects management’s best estimate of the amount to be realized from the acquired loan and lease portfolios. However, the amounts the Company actually realizes on these loans could differ materially from the carrying value reflected in these financial statements, based upon the timing of collections on the acquired loans in future periods, underlying collateral values and the ability of borrowers to continue to make payments.

The carrying value of acquired loans acquired and accounted for in accordance with ASC Subtopic 310-30, “Receivables Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $38.6 million at September 30, 2014, as compared to $46.8 million at December 31, 2013. Under ASC Subtopic 310-30, loans may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. The Company elected to account for the loans with evidence of credit deterioration individually rather than aggregate them into pools. The difference between the undiscounted cash flows expected at acquisition and the investment in the acquired loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or as a valuation allowance.

Increases in expected cash flows subsequent to the acquisition are recognized prospectively through an adjustment of the yield on the loans over the remaining life. Subsequent decreases to the expected cash flows require us to evaluate the need for an addition to the allowance for loan losses. Valuation allowances (recognized in the allowance for loan losses) on these impaired loans reflect only losses incurred after the acquisition (representing all cash flows that were expected at acquisition but currently are not expected to be received).

The carrying value of loans not exhibiting evidence of credit impairment at the time of the acquisition (i.e. loans outside of the scope of ASC 310-30) was $543.9 million at September 30, 2014. At acquisition, these loans were recorded at fair value, including a credit discount. Credit losses on acquired performing loans are estimated based on analysis of the performing portfolio. The purchased performing portfolio also included a general interest rate mark (premium). Both the credit discount and interest rate mark are accreted/amortized as a yield adjustment over the estimated lives of the loans. Interest is accrued daily on the outstanding principal balance of purchased performing loans.

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At September 30, 2014, acquired loans included $20.9 million of covered loans. VIST Financial Corp had acquired these loans in an FDIC assisted transaction in the fourth quarter of 2010. In accordance with loss sharing agreements with the FDIC, certain losses and expenses relating to covered loans may be reimbursed by the FDIC at 70% or, if certain levels of reimbursement are reached, 80%. See Note 7 – “FDIC Indemnification Asset Related to Covered Loans” in the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I of this Quarterly Report on Form 10-Q.

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 4 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes in these policies and guidelines. As such, these policies are reflective of new originations as well as those balances held at September 30, 2014. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan originations, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

The Company’s loan and lease customers are located primarily in the New York and Pennsylvania communities served by its four subsidiary banks. Although operating in numerous communities in New York State and Pennsylvania, the Company is still dependent on the general economic conditions of these states. Other than geographic and general economic risks, management is not aware of any material concentrations of credit risk to any industry or individual borrower.

The Allowance for Loan and Lease Losses

Originated Loans and Leases

Management reviews the appropriateness of the allowance for loan and lease losses (“allowance”) on a regular basis. Management considers the accounting policy relating to the allowance to be a critical accounting policy, given the inherent uncertainty in evaluating the levels of the allowance required to cover credit losses in the portfolio and the material effect that assumptions could have on the Company’s results of operations. The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan portfolio to assure that an appropriate allowance is maintained. The Company’s methodology is based upon guidance provided in SEC Staff Accounting Bulletin No. 102, Selected Loan Loss Allowance Methodology and Documentation Issues and allowance allocations are calculated in accordance with ASC Topic 310, Receivables and ASC Topic 450, Contingencies.

The Company’s methodology for determining and allocating the allowance for loan and lease losses focuses on ongoing reviews of larger individual loans and leases, historical net charge-offs, delinquencies in the loan and lease portfolio, the level of impaired and nonperforming loans, values of underlying loan and lease collateral, changes in anticipated cash flows of acquired loans, the overall risk characteristics of the portfolios, changes in character or size of the portfolios, geographic location, current economic conditions, changes in capabilities and experience of lending management and staff, and other relevant factors. The various factors used in the methodologies are reviewed on a regular basis.

At least annually, management reviews all commercial and commercial real estate loans exceeding a certain threshold and assigns a risk rating. The Company uses an internal loan rating system of pass credits, special mention loans, substandard loans, doubtful loans, and loss loans (which are fully charged off). The definitions of “special mention”, “substandard”, “doubtful” and “loss” are consistent with banking regulatory definitions. Factors considered in assigning loan ratings include: the customer’s ability to repay based upon the customer’s expected future cash flow, operating results, and financial condition; value of the underlying collateral, if any; and the economic environment and industry in which the customer operates. Special mention loans have potential weaknesses that if left uncorrected may result in deterioration of the repayment prospects and a downgrade to a more severe risk rating. A substandard loan credit has a well-defined weakness which makes payment default or principal exposure likely, but not yet certain. There is a possibility that the Company will sustain some loss if the deficiencies are not corrected. A doubtful loan has a high possibility of loss, but the extent of the loss is difficult to quantify because of certain important and reasonably specific pending factors.

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At least quarterly, management reviews all commercial and commercial real estate loans and leases and agriculturally related loans with an outstanding principal balance of over $500,000 that are internally risk rated as special mention or worse, giving consideration to payment history, debt service payment capacity, collateral support, strength of guarantors, local market trends, industry trends, and other factors relevant to the particular borrowing relationship. Through this process, management identifies impaired loans. For loans and leases considered impaired, estimated exposure amounts are based upon collateral values or present value of expected future cash flows discounted at the original effective rate of each loan. For commercial loans, commercial mortgage loans, and agricultural loans not specifically reviewed, and for homogenous loan portfolios such as residential mortgage loans and consumer loans, estimated exposure amounts are assigned based upon historical net loss experience and current charge-off trends, past due status, and management’s judgment of the effects of current economic conditions on portfolio performance.

Since the methodology is based upon historical experience and trends as well as management’s judgment, factors may arise that result in different estimations. Significant factors that could give rise to changes in these estimates may include, but are not limited to, changes in economic conditions in the local area, concentration of risk, changes in interest rates, and declines in local property values. Based on its evaluation of the allowance as of September 30, 2014, management considers the allowance to be appropriate. Under different conditions or assumptions, the Company would need to increase or decrease the allowance.

Acquired Loans and Leases

Acquired loans accounted for under ASC 310-30

For our acquired loans, our allowance for loan losses is estimated based upon our expected cash flows for these loans. To the extent that we experience a deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans.

Acquired loans accounted for under ASC 310-20

We establish our allowance for loan losses through a provision for credit losses based upon an evaluation process that is similar to our evaluation process used for originated loans. This evaluation, which includes a review of loans on which full collectability may not be reasonably assured, considers, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan loss experience, carrying value of the loans, which includes the remaining net purchase discount or premium, and other factors that warrant recognition in determining our allowance for loan losses.

The tables below provide, as of the dates indicated, an allocation of the allowance for probable loan losses by type.

(in thousands)	09/30/2014		12/31/2013		09/30/2013
Allowance for originated loans and leases
Commercial and industrial	$	8,858	$	8,406	$	7,738
Commercial real estate		10,682		10,459		10,897
Residential real estate		5,423		5,771		5,309
Consumer and other		2,222		2,059		1,778
Leases		0		5		0
Total	$	27,185	$	26,700	$	25,722

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(in thousands)	09/30/2014		12/31/2013		09/30/2013
Allowance for acquired loans
Commercial and industrial	$	95	$	168	$	51
Commercial real estate		360		770		437
Residential real estate		128		274		163
Consumer and other		18		58		35
Total	$	601	$	1,270	$	686

As of September 30, 2014, the total allowance for loan and lease losses was $27.8 million, which was comparable to year-end 2013. Growth in the originated loan portfolio was offset by improved asset quality. Loans internally-classified Special Mention, Substandard and Doubtful were down from prior year as were the level of nonperforming loans and leases. The allowance for loan and lease losses covered 108.9% of nonperforming loans and leases as of September 30, 2014, compared to 71.7% at December 31, 2013, and 61.2% at September 30, 2013.

The Company’s allowance for originated loan and lease losses totaled $27.2 million at September 30, 2014, which represented 1.02% of total originated loans which was comparable to prior quarter, and 1.06% at September 30, 2013. Originated loans internally-classified as Special Mention, Substandard and Doubtful totaled $53.7 million at September 30, 2014, which were in down $3.0 million or 5.3% compared to prior quarter, and down $26.2 million or 32.8% compared to September 30, 2013. The decrease is mainly due to paydowns of classified assets and upgrades of risk ratings in our commercial real estate, agriculture loan, and commercial real estate construction portfolios as a result of improving financial conditions of our commercial and agricultural customers. The decrease in the residential real estate allocation compared to year end 2013, reflected slower growth, lower nonperforming loans and overall improvement in the housing market. The increase in the allocation for commercial and industrial loans was mainly a result of a slight uptick in the historical loss component, which is based on average losses in the portfolio and growth in the commercial portfolio.

The allowance for acquired loans at September 30, 2014 was $601,000, down $668,000 or 52.6% compared to year-end 2013. The amount of acquired loans internally-classified as Special Mention, Substandard and Doubtful totaled $31.6 million at September 30, 2014, down from $50.9 million at year-end 2013 and $66.4 million at September 30, 2013. Loan pay downs, the movement of loans to other real estate owned, and charge offs have contributed to the decrease from both year-end and the same quarter prior year. Nonaccrual loans in the acquired portfolio decreased from $8.5 million at year-end 2013 to $5.0 million at September 30, 2014.

Activity in the Company’s allowance for loan and lease losses during the nine months of 2014 and 2013 is illustrated in the table below.

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Analysis of the Allowance for Originated Loan and Lease Losses

(in thousands)	09/30/2014			09/30/2013
Average originated loans outstanding during period	$	2,586,982		$	2,260,793
Balance of originated allowance at beginning of year	$	26,700		$	24,643
ORIGINATED LOANS CHARGED-OFF:
Commercial and industrial		275			487
Commercial real estate		619			539
Residential real estate		385			455
Consumer and other		952			1,040
Total loans charged-off	$	2,231		$	2,521
RECOVERIES OF ORIGINATED LOANS PREVIOUSLY CHARGED-OFF:
Commercial and industrial		557			1,490
Commercial real estate		1,506			457
Residential real estate		87			32
Consumer and other		375			296
Total loans recoveries	$	2,525		$	2,275
Net loans (recovered) charged-off		(294	)		246
Additions to originated allowance charged to operations		191			1,325
Balance of originated allowance at end of period	$	27,185		$	25,722
Allowance for originated loans and leases as a percentage of originated loans and leases		1.02	%		1.06	%
Annualized net (recoveries) charge-offs on originated loans to average total originated loans and leases during the period		(0.02	%)		0.01	%

Analysis of the Allowance for Acquired Loan Losses

(in thousands)	09/30/2014			09/30/2013
Average acquired loans outstanding during period	$	631,389		$	765,053
Balance of acquired allowance at beginning of year		1,270			0
ACQUIRED LOANS CHARGED-OFF:
Commercial and industrial		243			2,930
Commercial real estate		631			32
Residential real estate		345			577
Consumer and other		10			25
Total loans charged-off	$	1,229		$	3,564
Net loans charged-off		1,229			3,564
Additions to acquired allowance charged to operations		560			4,250
Balance of acquired allowance at end of period	$	601		$	686
Allowance for acquired loans as a percentage of acquired loans  outstanding acquired loans and leases		0.10	%		0.09	%
Annualized net charge-offs on acquired loans as a percentage of average acquired loans and leases outstanding during the period		0.26	%		0.67	%
Annualized total net charge-offs as a percentage of average loans and leases outstanding during the period		0.04	%		0.12	%

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Net loan and lease (recoveries)/charge-offs totaled $(328,000) and $935,000 for the three and nine months ended September 30, 2014, compared to $1.1 million and $3.8 million for the same periods in 2013. Recoveries in originated commercial loans in 2014 were mainly related to one larger commercial relationship that was charged off in 2012. Annualized net charge offs for the period ended September 30, 2014 as a percentage of average total loans and leases was 0.04% compared to 0.09% for the twelve months ended December 31, 2013 and 0.17% for the nine months ended September 30, 2013. The most recent peer percentage is 0.15%. The peer data is from the Federal Reserve Board and represents banks or bank holding companies with assets between $3.0 billion and $10.0 billion. The peer data is as of June 30, 2014, the one most recent data available. The gross charge-offs in the acquired commercial real estate in 2014 are mainly related to one loan that was previously provided for in the allowance calculation and that was charged-off in the second quarter.

The (credit)/provision for loan and lease losses was $(59,000) and $751,000 for the three and nine months ended September 30, 2014, compared to $2.0 million and $5.6 million for the same periods in 2013. Positive credit quality trends, including reductions in classified loans and nonperforming loans, and recoveries of previously charged of credits, are the main reasons for the lower provision compared to the same period last year.

Analysis of Past Due and Nonperforming Loans

(in thousands)	09/30/20141			12/31/20131			09/30/20131
Loans 90 days past due and accruing
Commercial and industrial	$	0		$	0		$	0
Commercial real estate		0			161			140
Residential real estate		395			446			1,077
Total loans 90 days past due and accruing		395			607			1,217
Nonaccrual loans2
Commercial and industrial		2,400			1,679			2,767
Commercial real estate		8,378			23,364			25,860
Residential real estate		10,087			13,086			13,082
Consumer and other		452			254			180
Total nonaccrual loans		21,317			38,383			41,889
Troubled debt restructurings not included above		3,800			45			46
Total nonperforming loans and leases		25,512			39,035			43,152
Other real estate owned		6,533			4,253			6,264
Total nonperforming assets	$	32,045		$	43,288		$	49,416
Allowance as a percentage of nonperforming loans and leases		108.92	%		71.65	%		61.20	%
Total nonperforming loans and leases as percentage of total loans and leases		0.78	%		1.22	%		1.38	%
Total nonperforming assets as percentage of total assets		0.63	%		0.87	%		1.00	%

¹ The September 30, 2014, December 31, 2013, and September 30, 2013 columns in the above table exclude $4.3 million, $7.0 million, and $13.5 million, respectively, of acquired loans that are 90 days past due and accruing interest. These loans were originally recorded at fair value on the acquisition date of August 1, 2012. These loans are considered to be accruing as we can reasonably estimate future cash flows on these acquired loans and we expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value of these loans and their expected cash flows into interest income.

² Nonaccrual loans at September 30, 2014, December 31, 2013, and September 30, 2013 include $5.0 million and $8.5 million, and $8.0 million, respectively, of nonaccrual acquired loans.

Nonperforming assets include nonaccrual loans, troubled debt restructurings (“TDR”), and foreclosed real estate/other real estate owned. Nonperforming assets represented 0.63% of total assets at September 30, 2014, compared to 0.87% at December 31, 2013, and 1.00% at September 30, 2013. The Company’s ratio of nonperforming assets to total assets continues to compare favorably to our peer group’s most recent ratio of 1.47% at June 30, 2014.

Total nonperforming loans and leases were down $13.5 million or 34.6% from year end 2013, and down $17.6 million or 40.9% from September 30, 2013. A breakdown of nonperforming loans by portfolio segment is shown above. The decrease in nonperforming commercial real estate loans since year-end 2013 is mainly due to significant payoffs of two large commercial relationships during the nine months ended September 30, 2014. In addition, one larger commercial real estate property was acquired through foreclosure during the second quarter of 2014 and is included in the table above under the caption ‘Other Real Estate Owned’.

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Loans are considered modified in a TDR when, due to a borrower’s financial difficulties, the Company makes a concession(s) to the borrower that it would not otherwise consider and the borrower could not obtain elsewhere. These modifications may include, among others, an extension of the term of the loan, and granting a period when interest-only payments can be made, with the principal payments made over the remaining term of the loan or at maturity. TDRs are included in the above table within the following categories: “loans 90 days past due and accruing”, “nonaccrual loans”, or “troubled debt restructurings not included above”. Loans in the latter category include loans that meet the definition of a TDR but are performing in accordance with the modified terms and therefore classified as accruing loans. At September 30, 2014 the Company had $5.1 million in TDRs, of that total $1.3 million were reported as nonaccrual and $3.8 million were considered performing and included in the table above.

In general, the Company places a loan on nonaccrual status if principal or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question, as well as when required by applicable regulations. Although in nonaccrual status, the Company may continue to receive payments on these loans. These payments are generally recorded as a reduction to principal, and interest income is recorded only after principal recovery is reasonably assured.

The Company’s recorded investment in loans and leases that are considered impaired totaled $13.5 million at September 30, 2014, down 49.8% compared to the $26.9 million reported at December 31, 2013. A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans consist of our non-homogenous nonaccrual loans, and all TDRs. Specific reserves on individually identified impaired loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that are collateral dependent, impairment is measured based on the fair value of the collateral less estimated selling costs, and such impaired amounts are generally charged off.

The year-to-date average recorded investment in impaired loans and leases was $13.7 million at September 30, 2014, $29.0 million at December 31, 2013, and $32.6 million at September 30, 2013. At September 30, 2014 there was a specific reserve of $462,000 on impaired loans compared to $250,000 of specific reserves at December 31, 2013 and $976,000 of specific reserves at September 30, 2013. The specific reserve of $462,000 reported at September 30, 2014 includes a specific reserve of $302,000 on the originated portfolio that includes two loans with balances totaling $509,000, and a specific reserve of $160,000 on the acquired portfolio that includes 3 loans with balances totaling $715,000. The majority of impaired loans are collateral dependent impaired loans that have limited exposure or require limited specific reserve because of the amount of collateral support with respect to these loans and previous charge-offs. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured. In these cases, interest is recognized on a cash basis.

The ratio of the allowance to nonperforming loans (loans past due 90 days and accruing, nonaccrual loans and restructured troubled debt) was 108.9% at September 30, 2014, improved from 71.7% in December 31, 2013, and 61.2% at September 30, 2013. The improvement in the ratio reflects the decrease in nonperforming loans over the year as well as an increase in the total allowance. The Company’s nonperforming loans are mostly made up of collateral dependent impaired loans requiring little to no specific allowance due to the level of collateral available with respect to these loans and/or previous charge-offs. The Company’s peer group ratio as provided by the Federal Reserve Bank was 131.3% as of June 30, 2014.

Management reviews the loan portfolio continuously for evidence of potential problem loans and leases. Potential problem loans and leases are loans and leases that are currently performing in accordance with contractual terms, but where known information about possible credit problems of the related borrowers causes management to have doubt as to the ability of such borrowers to comply with the present loan payment terms and may result in such loans and leases becoming nonperforming at some time in the future. Management considers loans and leases classified as Substandard, which continue to accrue interest, to be potential problem loans and leases. The Company, identified 34 commercial relationships from the originated portfolio and 27 commercial relationships from the acquired portfolio totaling $19.2 million and $12.4 million, respectively at September 30, 2014 that were potential problem loans. At December 31, 2013, the Company had identified 50 relationships totaling $14.5 million in the originated portfolio and 29 relationships totaling $11.5 million in the acquired portfolio that were potential problem loans. Of the 34 commercial relationships in the originated portfolio at September 30, 2014, that were Substandard, there were 6 relationships that equaled or exceeded $1.0 million, which in aggregate totaled $13.5 million, the largest of which was $3.6 million. Of the 27 commercial relationships from the acquired loan portfolio at September 30, 2014, there were 2 relationships that equaled or exceeded $1.0 million, which in aggregate totaled $2.9 million, the largest of which is $2.5 million. The Company continues to monitor these potential problem relationships; however, management cannot predict the extent to which continued weak economic conditions or other factors may further impact borrowers. These loans remain in a performing status due to a variety of factors, including payment history, the value of collateral supporting the credits, and personal or government guarantees. These factors, when considered in the aggregate, give management reason to believe that the current risk exposure on these loans does not warrant accounting for these loans as nonperforming. However, these loans do exhibit certain risk factors, which have the potential to cause them to become nonperforming. Accordingly, management’s attention is focused on these credits, which are reviewed on at least a quarterly basis.

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Capital

Total equity was $490.6 million at September 30, 2014, an increase of $32.6 million or 7.1% from December 31, 2013. The increase reflects growth in retained earnings and additional paid-in capital and a decrease in accumulated other comprehensive loss.

Additional paid-in capital increased by $2.9 million, from $346.1 million at December 31, 2013, to $349.0 million at September 30, 2014. The increase is primarily attributable to the following: $2.2 million related to shares issued for dividend reinvestment, $1.5 million related to shares issued under the employee stock ownership plan, $1.1 million related to stock-based compensation, and $712,000 related to shares issued for the exercise of stock options. These were partially offset by $2.9 million related to the Company’s repurchase of shares under a repurchase program authorized by the Company’s Board of Directors. Retained earnings increased by $21.6 million from $137.1 million at December 31, 2013, to $158.7 million at September 30, 2014, reflecting net income of $39.4 million less dividends paid of $17.8 million. Accumulated other comprehensive loss decreased from a net loss of $25.1 million at December 31, 2013 to a net loss of $16.8 million at September 30, 2014, reflecting a $7.8 million increase in unrealized gains on available-for-sale securities due to a decrease in market rates, and a $481,000 increase related to postretirement benefit plans. Under regulatory requirements, amounts reported as accumulated other comprehensive income/loss related to net unrealized gain or loss on available-for-sale securities and the funded status of the Company’s defined benefit post-retirement benefit plans do not increase or reduce regulatory capital and are not included in the calculation of risk-based capital and leverage ratios.

Cash dividends paid in the first nine months of 2014 totaled approximately $17.8 million, representing 45.2% of year to date 2014 earnings. Cash dividends of $1.20 per common share paid in the first nine months of 2014 were up 5.3% over cash dividends of $1.14 per common share paid in the first nine months of 2013.

On July 24, 2014, the Company’s Board of Directors authorized, at the discretion of senior management, the repurchase of up to 400,000 shares of the Company’s outstanding common stock. Purchases may be made on the open market or in privately negotiated transactions over the next 24 months. During the third quarter of 2014, the Company repurchased 65,059 shares at an average price of $45.06.

The Company and its banking subsidiaries are subject to various regulatory capital requirements administered by Federal banking agencies. The table below reflects the Company’s capital position at September 30, 2014, compared to the regulatory capital requirements for “well capitalized” institutions.

REGULATORY CAPITAL ANALYSIS

September 30, 2014	Actual					Well Capitalized Requirement
(dollar amounts in thousands)	Amount		Ratio			Amount		Ratio
Total Capital (to risk weighted assets)	$	466,402		13.92	%	$	334,971		10.00	%
Tier 1 Capital (to risk weighted assets)	$	438,203		13.08	%	$	200,982		6.00	%
Tier 1 Capital (to average assets)	$	438,203		8.85	%	$	247,512		5.00	%

As illustrated above, the Company’s capital ratios on September 30, 2014 remain above the minimum requirements for well capitalized institutions. Total capital as a percent of risk weighted assets increased from 13.4% as of December 31, 2013 to 13.9% at September 30, 2014. Tier 1 capital as a percent of risk weighted assets increased from 12.6% at the end of 2013 to 13.1% as of September 30, 2014. Tier 1 capital as a percent of average assets was 8.9% at September 30, 2014 up from 8.5% at year end December 31, 2013.

As of September 30, 2014, the capital ratios for the Company’s subsidiary banks also exceeded the minimum levels required to be considered well capitalized.

On July 9, 2013, the FDIC’s Board of Directors approved an interim final capital rule titled: Regulatory Capital Rules: Regulatory Capital, Implementation of Basel III, Capital Adequacy, Transition Provisions, Prompt Corrective Action, Standardized Approach for Risk-weighted Assets, Market Discipline and Disclosure Requirements, Advanced Approaches Risk-Based Capital Rule, and Market Risk Capital Rule. The interim final rule makes several key changes to the regulatory capital framework that are effective for community banks beginning on January 1, 2015, with some items phasing in over a period of time. The primary focus of the new capital rule is to strengthen the quality and loss-absorbency of regulatory capital so as to enhance banks’ abilities to continue functioning as financial intermediaries, including during periods of financial stress. Provided below is a brief overview of some key aspects of the new rule. The Company continues to evaluate the provisions of the final rules and their expected impact on the Company’s capital ratios. Management believes that, as of September 30, 2014, the Company and its subsidiary banks would meet all capital adequacy requirements under the Basel III Capital Rules on a fully phased-in basis if such requirements were currently effective.

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As required under Dodd-Frank, the new rules add a new capital ratio, a “common equity tier 1 capital ratio” (CET1). The primary difference between this ratio and the current tier 1 leverage ratio is that only common equity will qualify as tier 1 capital under the new ratio. The new CET1 ratio also will include most elements of accumulated other comprehensive income, including unrealized securities gains and losses, as part of both total regulatory capital (numerator) and total assets (denominator), although community banks are given the opportunity to make a one-time irrevocable election to include or not to include certain elements of other comprehensive income, most notably unrealized securities gains or losses.

In addition to setting higher minimum capital ratios, the new rules, introduce a new concept, a so-called “capital conservation buffer” (set at 2.5%), which must be added to each of the minimum capital ratios (which by themselves are somewhat higher than the current minimum ratios). The capital conservation buffer will be phased-in over five years. When, during economic downturns, an institution’s capital begins to erode, the first deductions from a regulatory perspective would be taken against the conservation buffer. To the extent that buffer should erode below the required level, the bank would not necessarily be required to replace the capital deficit immediately but would face restrictions on paying dividends and other negative consequences until it did so.

The final rules eliminated the proposed phase-out over 10 years of Trust Preferred Services, or “TRUPs” as tier 1 capital for banks, such as Tompkins, that have less than $15 billion in total assets. Under the final rule, grandfathered TRUP, such as Tompkins’ outstanding TRUP’s, would continue to qualify as tier 1 capital until they mature or are redeemed, up to a limit of 25% of tier 1 capital (for grandfathered TRUPs and other grandfathered tier 1 capital components).

The following is a summary of the capital definitions for community banks:

Common Equity Tier 1 Capital: The sum of common stock instruments and related surplus net of treasury stock, retained earnings, accumulated other comprehensive income (AOCI), and qualifying minority interests, minus applicable regulatory adjustments and deductions. Such deductions will include AOCI, if the organization exercises its irrevocable option not to include AOCI in capital. Mortgage-servicing assets, deferred tax assets, and investments in financial institutions are limited to 15 percent of CET1 in the aggregate and 10 percent of CET1 for each such item individually.

Additional Tier 1 Capital: The sum of noncumulative perpetual preferred stock, tier 1 minority interests, grandfathered TRUPs, and Troubled Asset Relief Program instruments, minus applicable regulatory adjustments and deductions.

Tier 2 Capital: The sum of subordinated debt and preferred stock, total capital minority interests not included in Tier 1, allowance for loan and lease losses (not exceeding 1.25 percent of risk-weighted assets) minus applicable regulatory adjustments and deductions.

Deposits and Other Liabilities

Total deposits of $4.2 billion at September 30, 2014 increased $265.6 million or 6.7% from December 31, 2013. The increase from year-end 2013 was comprised mainly of increases in money market savings and interest bearing checking deposits (up $120.0 million), non interest bearing deposits (up $80.5 million) and time deposit accounts (up $65.1 million).

The most significant source of funding for the Company is core deposits. The Company defines core deposits as total deposits less time deposits of $250,000 or more (formerly $100,000), brokered deposits and municipal money market deposits. Core deposits of $3.4 billion increased $132.8 million at September 30, 2014 compared to year-end 2013. Core deposits represented 81.3% of total deposits at September 30, 2014, compared to 83.4% of total deposits at December 31, 2013.

Municipal money market savings and interest checking accounts of $709.0 million at September 30, 2014 increased $108.7 million or 18.1% from $600.3 million at year-end 2013. In general, there is a seasonal pattern to municipal deposits starting with a low point during July and August. Account balances tend to increase throughout the fall and into the winter months from tax deposits and the Company receives an additional inflow at the end of March from the electronic deposit of state funds.

The Company uses both retail and wholesale repurchase agreements. Retail repurchase agreements are arrangements with local customers of the Company, in which the Company agrees to sell securities to the customer with an agreement to repurchase those securities at a specified later date. Retail repurchase agreements totaled $41.8 million at September 30, 2014, and $55.3 million at December 31, 2013. Management generally views local repurchase agreements as an alternative to large time deposits. The Company’s wholesale repurchase agreements totaled $86.6 million at September 30, 2014 and included $55.0 million with the FHLB and $31.6 million with a large financial institution. Wholesale repurchase agreements totaled $112.4 million at December 31, 2013.

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The Company’s other borrowings totaled $166.5 million at September 30, 2014, down $165.0 million or 49.8% from $331.5 million at December 31, 2013. Borrowings at September 30, 2014 included $42.0 million in FHLB overnight advances, $111.0 million of FHLB term advances, and a $13.5 million advance from a bank. Borrowings at year-end 2013 included $215.7 million in overnight advances from FHLB, $101.3 million of FHLB term advances, and a $14.5 million advance from a bank. The decrease in short term borrowings reflects the repayment of overnight FHLB advances with other funding sources, mainly deposits. Of the $111.0 million in FHLB term advance at September 30, 2014, $71.0 million is due over one year. In 2007, the Company elected the fair value option under FASB ASC Topic 825 for a $10.0 million advance with the FHLB. The fair value of this advance decreased by $260,000 (net mark-to-market gain of $260,000) over the nine months ended September 30, 2014.

Liquidity

The objective of liquidity management is to ensure the availability of adequate funding sources to satisfy the demand for credit, deposit withdrawals, and business investment opportunities. The Company’s large, stable core deposit base and strong capital position are the foundation for the Company’s liquidity position. The Company uses a variety of resources to meet its liquidity needs, which include deposits, cash and cash equivalents, short-term investments, cash flow from lending and investing activities, repurchase agreements, and borrowings. The Company’s Asset/Liability Management Committee monitors asset and liability positions of the Company’s subsidiary banks individually and on a combined basis. The Committee reviews periodic reports on liquidity and interest rate sensitivity positions. Comparisons with industry and peer groups are also monitored. The Company’s strong reputation in the communities it serves, along with its strong financial condition, provides access to numerous sources of liquidity as described below. Management believes these diverse liquidity sources provide sufficient means to meet all demands on the Company’s liquidity that are reasonably likely to occur.

Core deposits, discussed above under “Deposits and Other Liabilities”, are a primary and low cost funding source obtained primarily through the Company’s branch network. In addition to core deposits, the Company uses non-core funding sources to support asset growth. These non-core funding sources include time deposits of $250,000 or more, brokered time deposits, national deposit listing services, municipal money market deposits, bank borrowings, securities sold under agreements to repurchase and overnight and term advances from the FHLB. Rates and terms are the primary determinants of the mix of these funding sources. Non-core funding sources of $1.1 billion at September 30, 2014 decreased $71.5 million or 6.2% as compared to year end 2013. Non-core funding sources, as a percentage of total liabilities, were 23.6% at September 30, 2014, compared to 25.4% at December 31, 2013. The decrease in non-core funding sources reflects the repayment of overnight borrowings with the FHLB as a result of deposit growth.

Non-core funding sources may require securities to be pledged against the underlying liability. Securities carried at $1.1 billion and $1.0 billion at September 30, 2014 and December 31, 2013, respectively, were either pledged or sold under agreements to repurchase. Pledged securities represented 77.5% of total securities at September 30, 2014, compared to 74.7% of total securities at December 31, 2013.

Cash and cash equivalents totaled $85.1 million as of September 30, 2014 which was relatively flat compared to $82.9 million at December 31, 2013. Short-term investments, consisting of securities due in one year or less, increased from $37.0 million at December 31, 2013, to $59.6 million on September 30, 2014. The Company also had $9.5 million of securities designated as trading securities at September 30, 2014.

Cash flow from the loan and investment portfolios provides a significant source of liquidity. These assets may have stated maturities in excess of one year, but have monthly principal reductions. Total mortgage-backed securities, at fair value, were $709.8 million at September 30, 2014 compared with $724.5 million at December 31, 2013. Outstanding principal balances of residential mortgage loans, consumer loans, and leases totaled approximately $1.0 billion at September 30, 2014 as compared to $993.6 million at December 31, 2013. Aggregate amortization from monthly payments on these assets provides significant additional cash flow to the Company.

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Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered certificates of deposit, and FHLB advances. Through its subsidiary banks, the Company has borrowing relationships with the FHLB and correspondent banks, which provide secured and unsecured borrowing capacity. At September 30, 2014, the unused borrowing capacity on established lines with the FHLB was $1.1 billion. As members of the FHLB, the Company’s subsidiary banks can use certain unencumbered mortgage-related assets and securities to secure additional borrowings from the FHLB. At September 30, 2014, total unencumbered residential mortgage loans and securities of the Company were $699.3 million. Additional assets may also qualify as collateral for FHLB advances upon approval of the FHLB.

The Company has not identified any trends or circumstances that are reasonably likely to result in material increases or decreases in liquidity in the near term.

The Company continues to evaluate the potential impact on liquidity management of regulatory proposals, including Basel III and those required under the Dodd-Frank Act.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Interest rate risk is the primary market risk category associated with the Company’s operations. Interest rate risk refers to the volatility of earnings caused by changes in interest rates. The Company manages interest rate risk using income simulation to measure interest rate risk inherent in its on-balance sheet and off-balance sheet financial instruments at a given point in time. The simulation models are used to estimate the potential effect of interest rate shifts on net interest income for future periods. Each quarter, the Company’s Asset/Liability Management Committee reviews the simulation results to determine whether the exposure of net interest income to changes in interest rates remains within levels approved by the Company’s Board of Directors. The Committee also considers strategies to manage this exposure and incorporates these strategies into the investment and funding decisions of the Company. The Company does not currently use derivatives, such as interest rate swaps, to manage its interest rate risk exposure, but may consider such instruments in the future.

The Company’s Board of Directors has set a policy that interest rate risk exposure will remain within a range whereby net interest income will not decline by more than 10% in one year as a result of a 100 basis point parallel change in rates. Based upon the simulation analysis performed as of August 31, 2014 a 200 basis point parallel upward change in interest rates over a one-year time frame would result in a one-year decrease in net interest income from the base case of approximately 0.5%, while a 100 basis point parallel decline in interest rates over a one-year period would result in an decrease in one-year net interest income from the base case of 1.2%. The simulation assumes no balance sheet growth and no management action to address balance sheet mismatches.

If rates rise in a parallel fashion (+200 basis points over 12 months, or +400 basis points over 24 months), net interest income is expected to trend slightly below the base assumption, as upward adjustments to rate sensitive deposits and short-term funding outpace increases to asset yields which are concentrated in intermediate to longer-term products. Once market rates stabilize, increases to funding costs dissipate while asset yields continue to cycle higher. As a result, net interest income improves for the remainder of the projection period.

Although the simulation model is useful in identifying potential exposure to interest rate movements, actual results may differ from those modeled as the repricing, maturity, and prepayment characteristics of financial instruments may change to a different degree than modeled. In addition, the model does not reflect actions that management may employ to manage the Company’s interest rate risk exposure. The Company’s current liquidity profile, capital position, and growth prospects, offer a level of flexibility for management to take actions that could offset some of the negative effects of unfavorable movements in interest rates. Management believes the current exposure to changes in interest rates is not significant in relation to the earnings and capital strength of the Company.

In addition to the simulation analysis, management uses an interest rate gap measure. The table below is a Condensed Static Gap Report, which illustrates the anticipated repricing intervals of assets and liabilities as of September 30, 2014. The Company’s one-year net interest rate gap was a negative $226.9 million or 4.46% of total assets at September 30, 2014, compared with a negative $288.7 million or 5.77% of total assets at December 31, 2013. A negative gap position exists when the amount of interest-bearing liabilities maturing or repricing exceeds the amount of interest-earning assets maturing or repricing within a particular time period. This analysis suggests that the Company’s net interest income is moderately more vulnerable to an increasing rate environment than it is to a prolonged declining interest rate environment. An interest rate gap measure could be significantly affected by external factors such as a rise or decline in interest rates, loan or securities prepayments, and deposit withdrawals.

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Condensed Static Gap –September 30, 2014						Repricing Interval
(in thousands)	Total		0-3 months			3-6 months			6-12 months			Cumulative 12 months
Interest-earning assets1	$	4,706,012	$	956,999		$	242,673		$	407,767		$	1,607,439
Interest-bearing liabilities		3,573,601		1,405,681			174,952			253,679			1,834,312
Net gap position				(448,682	)		67,721			154,088			(226,873	)
Net gap position as a percentage of total assets				(8.81	%)		1.33	%		3.03	%		(4.46	%)

¹ Balances of available securities are shown at amortized cost

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30, 2014. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Report on Form 10-Q, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2014, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

There have been no material changes in the risk factors previously disclosed under Item 1A. of the Company’s Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2013.

Item 2. Unregistered Sales of Equity Securities and the Use of Proceeds

Issuer Purchases of Equity Securities

	Total Number of Shares Purchased (a)		Average Price Paid Per Share (b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c)		Maximum Number of Shares that May Yet Be Purchased Under the Plans or  Programs (d)
July 1, 2014 through July 31, 2014		2,010	$	48.23		0		400,000
August 1, 2014 through August 31, 2014		27,558		45.09		26,909		373,091
September 1, 2014 through September 30, 2014		38,150		45.03		38,150		334,941
Total		67,718	$	45.15		65,059		334,941

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Included in the table above are 2,010 shares purchased in July 2014, at an average cost of $48.23 and 649 shares purchased in August 2014, at an average cost of $44.50, in each case by the trustee of the rabbi trust established by the Company under the Company’s Amended and Restated Retainer Plan For Eligible Directors of Tompkins Financial Corporation and its wholly-owned Subsidiaries. The shares purchased were part of the director deferred compensation under that plan.

On July 24, 2014, the Company’s Board of Directors authorized a new stock repurchase plan for the Company to repurchase up to 400,000 shares of the Company’s common stock. Purchases may be made on the open market or in privately negotiated transactions over the 24 months following adoption of the plan. The repurchase program may be suspended, modified or terminated at any time for any reason. During the third quarter of 2014, the Company repurchased 65,059 shares at an average price of $45.06.

Recent Sales of Unregistered Securities

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosure

Not applicable

Item 5. Other Information

On September 2, 2014, the Company and James W. Fulmer, Vice Chairman of the Company, entered into an amendment to Mr. Fulmer’s Supplemental Executive Retirement Agreement dated December 28, 2005. A copy of the amendment is being filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

Item 6. Exhibits

The information called for by this item is incorporated by reference to the Exhibit Index included in this Quarterly Report on Form 10-Q, immediately following the signature page.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 10, 2014

TOMPKINS FINANCIAL CORPORATION

By:	/S/ Stephen S. Romaine
	Stephen S. Romaine
	President and Chief Executive Officer
	(Principal Executive Officer)
By:	/S/ Francis M. Fetsko
	Francis M. Fetsko
	Executive Vice President, Chief Financial Officer, and Chief Operating Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit Number	Description	Pages
10.1	Amendment to Supplemental Executive Retirement Agreement between James W. Fulmer and the Company (f/k/a Tompkins Trustco. Inc.), dated as of September 2, 2014.
31.1	Certification of Principal Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350.
32.2	Certification of Principal Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350.
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Condition as of September 30, 2014 and December 31, 2013; (ii) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2014 and 2013; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30,2014 and 2013; (iv)Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013; (v) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2014 and 2013; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.

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EX-10.1

Tompkins Financial Corporation 10-Q

Exhibit 10.1 

AMENDMENT TO

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

This Amendment (the “Amendment”) to the Supplemental Executive Retirement Agreement dated September 2, 2014 between Tompkins Trustco, Inc. and James W. Fulmer (the “Agreement”), is entered into between Tompkins Financial Corporation, as successor to Tompkins Trustco, Inc., with offices at 110 The Commons, Ithaca, New York 14851 (the “Company”), and James W. Fulmer, residing at 38 Wolcott St, Leroy, NY (the “Executive”).

IT IS AGREED AS FOLLOWS:

1.	For good and valuable consideration, the receipt of which is hereby acknowledged by the Company and the Executive, the Agreement is hereby modified to eliminate the provisions requiring the reduction of the Executive’s retirement benefit if the Executive’s Retirement Date occurs prior to the Executive attaining age sixty-five (65), and the retirement benefit payable to the Executive shall be unreduced on account of the Executive’s attained age at his Retirement Date.
2.	Except as modified by this Amendment, the remaining provisions of the Agreement shall remain in full force and effect.
3.	This Amendment shall be effective on the date of signing set forth below.

IN WITNESS WHEREOF, this Agreement has been executed on this second day of September, 2014.

		TOMPKINS FINANCIAL CORPORATION
		By:	/s/ Kathleen Manley
		Name:	Kathleen A. Manley
ATTEST:	/s/ Cindy A. Cute	Title:	AVP, Corporate Secretary
		By:	/s/ James W. Fulmer
ATTEST:	/s/ Heather Robbins	Name:	James W. Fulmer

EX-31.1

Tompkins Financial Corporation 10-Q

Exhibit 31.1

CERTIFICATION

I, Stephen S. Romaine, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tompkins Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2014

/S/Stephen S. Romaine

Stephen S. Romaine

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Tompkins Financial Corporation 10-Q

Exhibit 31.2

CERTIFICATION

I, Francis M. Fetsko, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tompkins Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2014

/S/ Francis M. Fetsko

Francis M. Fetsko

Executive Vice President, Chief Financial Officer, and Chief Operating Officer

(Principal Financial Officer)

(Principal Accounting Officer)

EX-32.1

Tompkins Financial Corporation 10-Q

Exhibit 32.1

CERTIFICATION

In connection with the filing of the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014 (the “Report”) by Tompkins Financial Corporation (the “Company”), the undersigned, as the Chief Executive Officer of the Company, hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

November 10, 2014

/S/ Stephen S. Romaine

Stephen S. Romaine

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Tompkins Financial Corporation 10-Q

Exhibit 32.2

CERTIFICATION

In connection with the filing of the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014 (the “Report”) by Tompkins Financial Corporation (the “Company”), the undersigned, as the Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has ben provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

November 10, 2014

/S/ Francis M. Fetsko

Francis M. Fetsko

Executive Vice President, Chief Financial Officer, and Chief Operating Officer

(Principal Financial Officer)

(Principal Accounting Officer)

XML

Securities (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Available For Sale Securities, Amortized Cost
Due in one year or less	$ 47,644	$ 25,596
Due after one year through five years	409,758	263,553
Due after five years through ten years	182,467	313,245
Due after ten years	20,268	28,952
Total	660,137	631,346
Available For Sale Securities, Fair value
Due in one year or less	48,142	26,017
Due after one year through five years	415,198	271,303
Due after five years through ten years	180,485	304,414
Due after ten years	19,734	27,206
Total	663,559	628,940
Total debt securities [Member]
Available For Sale Securities, Amortized Cost
Total	1,374,162	1,367,261
Available For Sale Securities, Fair value
Total	1,373,335	1,353,401
Mortgage-backed securities [Member]
Available For Sale Securities, Amortized Cost
Total	714,025	735,915
Available For Sale Securities, Fair value
Total	$ 709,776	$ 724,461

XML

Allowance for Loan and Lease Losses (Details 7) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Orginated Loans and Leases [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	$ 922,135	$ 884,289
Orginated Loans and Leases [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	912,888	874,669
Orginated Loans and Leases [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	9,247	9,620
Orginated Loans and Leases [Member] | Residential Real Estate - Home equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	182,994	171,809
Orginated Loans and Leases [Member] | Residential Real Estate - Home equity [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	181,384	170,270
Orginated Loans and Leases [Member] | Residential Real Estate - Home equity [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	1,610	1,539
Orginated Loans and Leases [Member] | Residential Real Estate - Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	685,989	658,966
Orginated Loans and Leases [Member] | Residential Real Estate - Mortgages [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	678,804	651,139
Orginated Loans and Leases [Member] | Residential Real Estate - Mortgages [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	7,185	7,827
Orginated Loans and Leases [Member] | Consumer and other - Indirect [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	18,825	21,202
Orginated Loans and Leases [Member] | Consumer and other - Indirect [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	18,753	20,986
Orginated Loans and Leases [Member] | Consumer and other - Indirect [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	72	216
Orginated Loans and Leases [Member] | Consumer and other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	34,327	32,312
Orginated Loans and Leases [Member] | Consumer and other [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	33,947	32,274
Orginated Loans and Leases [Member] | Consumer and other [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	380	38
Acquired Loans and Leases [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	92,778	103,743
Acquired Loans and Leases [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	90,357	99,577
Acquired Loans and Leases [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	2,421	4,166
Acquired Loans and Leases [Member] | Residential Real Estate - Home equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	58,459	67,183
Acquired Loans and Leases [Member] | Residential Real Estate - Home equity [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	57,626	65,339
Acquired Loans and Leases [Member] | Residential Real Estate - Home equity [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	833	1,844
Acquired Loans and Leases [Member] | Residential Real Estate - Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	33,200	35,336
Acquired Loans and Leases [Member] | Residential Real Estate - Mortgages [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	31,612	33,014
Acquired Loans and Leases [Member] | Residential Real Estate - Mortgages [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	1,588	2,322
Acquired Loans and Leases [Member] | Consumer and other - Indirect [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	5
Acquired Loans and Leases [Member] | Consumer and other - Indirect [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	5
Acquired Loans and Leases [Member] | Consumer and other - Indirect [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	0
Acquired Loans and Leases [Member] | Consumer and other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	1,119	1,219
Acquired Loans and Leases [Member] | Consumer and other [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	1,119	1,219
Acquired Loans and Leases [Member] | Consumer and other [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	$ 0	$ 0

XML

Allowance for Loan and Lease Losses (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Ending Balance	$ 27,786		$ 27,970
Orginated Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	302		0
Collectively evaluated for impairment	26,883		26,700
Ending Balance	27,185	26,752	26,700	25,722	24,853	24,643
Orginated Loans and Leases [Member] | Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	302		0
Collectively evaluated for impairment	8,556		8,406
Ending Balance	8,858	8,562	8,406	7,738	6,955	7,533
Orginated Loans and Leases [Member] | Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	10,682		10,459
Ending Balance	10,682	10,389	10,459	10,897	10,409	10,184
Orginated Loans and Leases [Member] | Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	5,423		5,771
Ending Balance	5,423	5,445	5,771	5,309	5,273	4,981
Orginated Loans and Leases [Member] | Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	2,222		2,059
Ending Balance	2,222	2,356	2,059	1,778	2,195	1,940
Orginated Loans and Leases [Member] | Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	0		5
Ending Balance	0	0	5	0	21	5
Acquired Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	160		250
Collectively evaluated for impairment	441		1,020
Ending Balance	601	765	1,270	686	605	0
Acquired Loans and Leases [Member] | Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	80		0
Collectively evaluated for impairment	15		168
Ending Balance	95	159	168	51	64	0
Acquired Loans and Leases [Member] | Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	80		250
Collectively evaluated for impairment	280		520
Ending Balance	360	460	770	437	381	0
Acquired Loans and Leases [Member] | Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	128		274
Ending Balance	128	49	274	163	126	0
Acquired Loans and Leases [Member] | Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	18		58
Ending Balance	18	97	58	35	34	0
Acquired Loans and Leases [Member] | Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	0		0
Ending Balance	$ 0	$ 0	$ 0

XML

FDIC Indemnification Asset Related to Covered Loans (Details Narrative) (VIST Financial Corp. ("VIST Financial") [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Covered single family assets [Member]
Business Acquisition [Line Items]
Certain losses and expenses relating to covered loans, percentage reimburseable by FDIC	70.00%
Maximum threshold precentage of reimbursement covered loans	$ 4,000
Net losses exceed levels relating to covered loans, percentage reimburseable by FDIC	80.00%
Residential real estate, total [Member]
Business Acquisition [Line Items]
Loss sharing term period	10 years
Covered commercial assets [Member]
Business Acquisition [Line Items]
Certain losses and expenses relating to covered loans, percentage reimburseable by FDIC	70.00%
Maximum threshold precentage of reimbursement covered loans	$ 12,000
Net losses exceed levels relating to covered loans, percentage reimburseable by FDIC	80.00%
Non-residential real estate loans [Member]
Business Acquisition [Line Items]
Loss sharing term period	5 years
Loss recoveries term period	8 years

XML

Loans and Leases (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	$ 3,259,560	$ 3,196,507
Less: unearned income and deferred costs and fees	(2,091)	(2,223)
Total loans and leases, net	3,257,469	3,194,284
Commercial and Industrial - Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	49,828	74,788
Commercial and Industrial Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	729,891	690,942
Commercial and industrial, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	779,719	765,730
Commercial Real Estate - Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	93,301	85,794
Commercial Real Estate - Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	60,340	55,762
Commercial Real Estate Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	1,282,060	1,269,758
Commercial real estate, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	1,435,701	1,411,314
Residential Real Estate - Home equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	241,453	238,992
Residential Real Estate - Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	719,189	694,302
Residential real estate, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	960,642	933,294
Consumer and other - Indirect [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	18,825	21,207
Consumer and other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	35,446	33,531
Consumer and other, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	54,271	54,738
Finance Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	8,317	5,563
Covered Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	20,910	25,868
Orginated Loans and Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	3,811	5,762
90 days or more	14,933	23,166
Current Loans	2,658,318	2,500,539
Total loans and leases	2,677,062	2,529,467
90 days and accruing	395	607
Nonaccrual	16,319	29,875
Less: unearned income and deferred costs and fees	(2,091)	(2,223)
Total loans and leases, net	2,674,971	2,527,244
Orginated Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	0
90 days or more	0	0
Current Loans	49,828	74,788
Total loans and leases	49,828	74,788
90 days and accruing	0	0
Nonaccrual	0	0
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	169	211
90 days or more	508	1,187
Current Loans	626,613	561,041
Total loans and leases	627,290	562,439
90 days and accruing	0	0
Nonaccrual	1,639	1,260
Orginated Loans and Leases [Member] | Commercial and industrial, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	169	211
90 days or more	508	1,187
Current Loans	676,441	635,829
Total loans and leases	677,118	637,227
90 days and accruing	0	0
Nonaccrual	1,639	1,260
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	216
90 days or more	0	7,657
Current Loans	51,988	38,568
Total loans and leases	51,988	46,441
90 days and accruing	0	0
Nonaccrual	534	9,873
Orginated Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	180
90 days or more	29	0
Current Loans	57,129	52,447
Total loans and leases	57,158	52,627
90 days and accruing	0	0
Nonaccrual	132	46
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	473	1,104
90 days or more	4,325	6,976
Current Loans	955,548	895,240
Total loans and leases	960,346	903,320
90 days and accruing	0	161
Nonaccrual	5,162	9,522
Orginated Loans and Leases [Member] | Commercial real estate, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	473	1,500
90 days or more	4,354	14,633
Current Loans	1,064,665	986,255
Total loans and leases	1,069,492	1,002,388
90 days and accruing	0	161
Nonaccrual	5,828	19,441
Orginated Loans and Leases [Member] | Residential Real Estate - Home equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	1,175	784
90 days or more	1,384	1,248
Current Loans	179,785	169,777
Total loans and leases	182,994	171,809
90 days and accruing	60	62
Nonaccrual	1,550	1,477
Orginated Loans and Leases [Member] | Residential Real Estate - Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	1,250	2,439
90 days or more	6,964	5,946
Current Loans	676,943	650,581
Total loans and leases	685,989	658,966
90 days and accruing	335	384
Nonaccrual	6,850	7,443
Orginated Loans and Leases [Member] | Residential real estate, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	2,425	3,223
90 days or more	8,348	7,194
Current Loans	856,728	820,358
Total loans and leases	868,983	830,775
90 days and accruing	395	446
Nonaccrual	8,400	8,920
Orginated Loans and Leases [Member] | Consumer and other - Indirect [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	508	768
90 days or more	0	152
Current Loans	18,317	20,282
Total loans and leases	18,825	21,202
90 days and accruing	0	0
Nonaccrual	72	216
Orginated Loans and Leases [Member] | Consumer and other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	236	60
90 days or more	241	0
Current Loans	33,850	32,252
Total loans and leases	34,327	32,312
90 days and accruing	0	0
Nonaccrual	380	38
Orginated Loans and Leases [Member] | Consumer and other, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	744	828
90 days or more	241	152
Current Loans	52,167	52,534
Total loans and leases	53,152	53,514
90 days and accruing	0	0
Nonaccrual	452	254
Orginated Loans and Leases [Member] | Finance Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	0
90 days or more	0	0
Current Loans	8,317	5,563
Total loans and leases	8,317	5,563
90 days and accruing	0	0
Nonaccrual	0	0
Orginated Loans and Leases [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	736	1,532
90 days or more	7,263	11,998
Current Loans	574,499	653,510
Total loans and leases	582,498	667,040
90 days and accruing	4,320	6,973
Nonaccrual	4,998	8,508
Less: unearned income and deferred costs and fees	0	0
Total loans and leases, net	582,498	667,040
Acquired Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	554
90 days or more	941	1,651
Current Loans	101,660	126,298
Total loans and leases	102,601	128,503
90 days and accruing	649	1,231
Nonaccrual	761	419
Acquired Loans and Leases [Member] | Commercial and industrial, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	554
90 days or more	941	1,651
Current Loans	101,660	126,298
Total loans and leases	102,601	128,503
90 days and accruing	649	1,231
Nonaccrual	761	419
Acquired Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	0
90 days or more	1,970	2,148
Current Loans	39,343	37,205
Total loans and leases	41,313	39,353
90 days and accruing	1,709	1,676
Nonaccrual	466	473
Acquired Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	0
90 days or more	0	0
Current Loans	3,182	3,135
Total loans and leases	3,182	3,135
90 days and accruing	0	0
Nonaccrual	0	0
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	403
90 days or more	1,857	3,585
Current Loans	319,857	362,450
Total loans and leases	321,714	366,438
90 days and accruing	79	709
Nonaccrual	2,084	3,450
Acquired Loans and Leases [Member] | Commercial real estate, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	403
90 days or more	3,827	5,733
Current Loans	362,382	402,790
Total loans and leases	366,209	408,926
90 days and accruing	1,788	2,385
Nonaccrual	2,550	3,923
Acquired Loans and Leases [Member] | Residential Real Estate - Home equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	156	213
90 days or more	643	934
Current Loans	57,660	66,036
Total loans and leases	58,459	67,183
90 days and accruing	173	347
Nonaccrual	660	1,844
Acquired Loans and Leases [Member] | Residential Real Estate - Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	580	345
90 days or more	703	1,264
Current Loans	31,917	33,727
Total loans and leases	33,200	35,336
90 days and accruing	561	594
Nonaccrual	1,027	2,322
Acquired Loans and Leases [Member] | Residential real estate, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	736	558
90 days or more	1,346	2,198
Current Loans	89,577	99,763
Total loans and leases	91,659	102,519
90 days and accruing	734	941
Nonaccrual	1,687	4,166
Acquired Loans and Leases [Member] | Consumer and other - Indirect [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days		0
90 days or more		0
Current Loans		5
Total loans and leases	0	5
90 days and accruing		0
Nonaccrual		0
Acquired Loans and Leases [Member] | Consumer and other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	17
90 days or more	0	0
Current Loans	1,119	1,202
Total loans and leases	1,119	1,219
90 days and accruing	0	0
Nonaccrual	0	0
Acquired Loans and Leases [Member] | Consumer and other, total [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	17
90 days or more	0	0
Current Loans	1,119	1,207
Total loans and leases	1,119	1,224
90 days and accruing	0	0
Nonaccrual	0	0
Acquired Loans and Leases [Member] | Finance Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days	0	0
90 days or more	1,149	2,416
Current Loans	19,761	23,452
Total loans and leases	20,910	25,868
90 days and accruing	1,149	2,416
Nonaccrual	$ 0	$ 0

XML

Basis of Presentation (Details Narrative) (VIST Financial Corp. ("VIST Financial") [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Acquired Credit Impaired Loans [Member]
Outstanding principal balance	$ 49,410	$ 62,146
Acquired Credit Impaired Loans [Member] | As Previously Reported [Member]
Outstanding principal balance		70,727
Acquired Non Credit Impaired Loans [Member]
Outstanding principal balance	551,074	630,600
Acquired Non Credit Impaired Loans [Member] | As Previously Reported [Member]
Outstanding principal balance		$ 666,089

XML

Earnings Per Share (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earning per share	208,324	221,525	116,527	283,725

XML

Allowance for Loan and Lease Losses (Tables)

9 Months Ended

Sep. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Schedule of activity in the allowance for orginated loan and lease losses

The following tables detail activity in the allowance for loan and lease losses segregated by originated and acquired loan and lease portfolios and by portfolio segment for the three months ended September 30, 2014 and 2013. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for originated loans and leases
Beginning balance	$	8,562		$	10,389		$	5,445		$	2,356		$	0	$	26,752
Charge-offs		(21	)		(6	)		(118	)		(286	)		0		(431	)
Recoveries		68			944			1			115			0		1,128
Provision (credit)		249			(645	)		95			37					(264	)
Ending Balance	$	8,858		$	10,682		$	5,423		$	2,222		$	0	$	27,185
Allowance for acquired loans
Beginning balance	$	159		$	460		$	49		$	97		$	0	$	765
Charge-offs		(218	)		(80	)		(68	)		(3	)		0		(369	)
Recoveries		0			0			0			0			0		0
Provision (credit)		154			(20	)		147			(76	)		0		205
Ending Balance	$	95		$	360		$	128		$	18		$	0	$	601

Three months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	6,955		$	10,409		$	5,273		$	2,195		$	21		$	24,853
Charge-offs		(55	)		(49	)		(116	)		(578	)		0			(798	)
Recoveries		48			21			3			96			0			168
Provision (credit)		790			516			149			65			(21	)		1,499
Ending Balance	$	7,738		$	10,897		$	5,309		$	1,778		$	0		$	25,722

Three months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate		Residential Real Estate			Consumer and Other		Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	64		$	381	$	126		$	34	$	0	$	605
Charge-offs		(1	)		0		(467	)		0		0		(468	)
Recoveries		0			0		0			0		0		0
Provision (credit)		(12	)		56		504			1		0		549
Ending Balance	$	51		$	437	$	163		$	35	$	0	$	686

Nine months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	8,406		$	10,459		$	5,771		$	2,059		$	5		$	26,700
Charge-offs		(275	)		(619	)		(385	)		(952	)		0			(2,231	)
Recoveries		557			1,506			87			375			0			2,525
Provision (credit)		170			(664	)		(50	)		740			(5	)		191
Ending Balance	$	8,858		$	10,682		$	5,423		$	2,222		$	0		$	27,185

Nine months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	168		$	770		$	274		$	58		$	0	$	1,270
Charge-offs		(243	)		(631	)		(345	)		(10	)		0		(1,229	)
Recoveries		0			0			0			0			0		0
Provision (credit)		170			221			199			(30	)		0		560
Ending Balance	$	95		$	360		$	128		$	18		$	0	$	601

Nine months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	7,533		$	10,184		$	4,981		$	1,940		$	5		$	24,643
Charge-offs		(487	)		(539	)		(455	)		(1,040	)		0			(2,521	)
Recoveries		1,490			457			32			296			0			2,275
Provision (credit)		(798	)		795			751			582			(5	)		1,325
Ending Balance	$	7,738		$	10,897		$	5,309		$	1,778		$	0		$	25,722

Nine months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	0		$	0		$	0		$	0		$	0	$	0
Charge-offs		(2,930	)		(32	)		(577	)		(25	)		0		(3,564	)
Recoveries		0			0			0			0			0		0
Provision (credit)		2,981			469			740			60			0		4,250
Ending Balance	$	51		$	437		$	163		$	35		$	0	$	686

Schedule of activity in the allowance for loan and lease losses based on impairment methodology

At September 30, 2014 and December 31, 2013, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows:

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
September 30, 2014
Individually evaluated for impairment	$	302	$	0	$	0	$	0	$	0	$	302
Collectively evaluated for impairment		8,556		10,682		5,423		2,222		0		26,883
Ending balance	$	8,858	$	10,682	$	5,423	$	2,222	$	0	$	27,185
Allowance for acquired loans
September 30, 2014
Individually evaluated for impairment	$	80	$	80	$	0	$	0	$	0	$	160
Collectively evaluated for impairment		15		280		128		18		0		441
Ending balance	$	95	$	360	$	128	$	18	$	0	$	601

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
December 31, 2013
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment		8,406		10,459		5,771		2,059		5		26,700
Ending balance	$	8,406	$	10,459	$	5,771	$	2,059	$	5	$	26,700
Allowance for acquired loans
December 31, 2013
Individually evaluated for impairment	$	0	$	250	$	0	$	0	$	0	$	250
Collectively evaluated for impairment		168		520		274		58		0		1,020
Ending balance	$	168	$	770	$	274	$	58	$	0	$	1,270

Schedule of recorded investment in loans and leases impairment methodology

The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology as of September 30, 2014 and December 31, 2013 was as follows:

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases
September 30, 2014
Individually evaluated for impairment	$	1,917	$	7,889	$	1,038	$	0	$	0	$	10,844
Collectively evaluated for impairment		675,201		1,061,603		867,945		53,152		8,317		2,666,218
Total	$	677,118	$	1,069,492	$	868,983	$	53,152	$	8,317	$	2,677,062

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Covered Loans		Total
Acquired loans
September 30, 2014
Individually evaluated for impairment	$	785	$	1,582	$	290	$	0	$	0	$	2,657
Loans acquired with deteriorated credit quality	$	1,142	$	8,294	$	8,215	$	0	$	20,910	$	38,561
Collectively evaluated for impairment		100,674		356,333		83,154		1,119		0		541,280
Total	$	102,601	$	366,209	$	91,659	$	1,119	$	20,910	$	582,498

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases
December 31, 2013
Individually evaluated for impairment	$	4,664		16,269	$	1,223	$	0	$	0	$	22,156
Collectively evaluated for impairment		632,563		986,119		829,552		53,514		5,563		2,507,311
Total	$	637,227	$	1,002,388	$	830,775	$	53,514	$	5,563	$	2,529,467

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Covered Loans		Total
Acquired loans
December 31, 2013
Individually evaluated for impairment	$	2,231		2,429	$	73	$	0	$	0	$	4,733
Loans acquired with deteriorated credit quality		2,558		10,263		9,355		0		24,633		46,809
Collectively evaluated for impairment		123,714		396,234		93,091		1,224		1,235		615,498
Total	$	128,503	$	408,926	$	102,519	$	1,224	$	25,868	$	667,040

Schedule of recorded investments in impaired loans

	09/30/2014						12/31/2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	1,408	$	1,432	$	0	$	4,664	$	5,069	$	0
Commercial real estate
Construction		0		0		0		6,073		11,683		0
Commercial real estate other		7,889		8,567		0		10,196		13,518		0
Residential real estate
Residential real estate other		1,038		1,129		0		1,223		1,299		0
Subtotal	$	10,335	$	11,128	$	0	$	22,156	$	31,569	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		509		509		302		0		0		0
Subtotal	$	509	$	509	$	302	$	0	$	0	$	0
Total	$	10,844	$	11,637	$	302	$	22,156	$	31,569	$	0

	09/30/2014						12/31/2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	341	$	341	$	0	$	2,231	$	5,081	$	0
Commercial real estate
Commercial real estate other		1,311		1,311		0		1,960		1,960		0
Residential real estate
Residential real estate other		290		290		0		73		73		0
Subtotal	$	1,942	$	1,942	$	0	$	4,264	$	7,114	$	0
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		444		444		80		0		0		0
Commercial real estate
Commercial real estate other		271		271		80		469		719		250
Subtotal	$	715	$	715	$	160	$	469	$	719	$	250
Total	$	2,657	$	2,657	$	160	$	4,733	$	7,833	$	250

The average recorded investment and interest income recognized on impaired loans for the three months ended September 30, 2014 and 2013 was as follows:

	Three Months Ended				Three Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		1,422		0		4,040		0
Commercial real estate
Construction		0		0		6,184		0
Commercial real estate other		7,940		42		13,918		0
Residential real estate
Residential real estate other		1,038		0		1,047		0
Subtotal	$	10,400	$	42	$	25,189	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		511		7		1,544		0
Commercial real estate
Commercial real estate other		0		0		360		0
Subtotal	$	511	$	7	$	1,904	$	0
Total	$	10,911	$	49	$	27,093	$	0

	Three Months Ended				Three Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		343		0		1,327		0
Commercial real estate
Commercial real estate other		1,312		0		2,764		5
Residential real estate other		290		0		85		0
Subtotal	$	1,945	$	0	$	4,176	$	5
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		449		0		0		0
Commercial real estate
Commercial real estate other		271		0		701		0
Subtotal	$	720	$	0	$	701	$	0
Total	$	2,665	$	0	$	4,877	$	5

	Nine Months Ended				Nine Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		1,636		0		4,057		0
Commercial real estate
Construction		0		0		6,374		0
Commercial real estate other		7,871		42		12,892		0
Residential real estate
Residential real estate other		1,038		0		1,047		0
Subtotal	$	10,545	$	42	$	24,370	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		511		7		1,560		0
Commercial real estate
Commercial real estate other		0		0		319		0
Subtotal	$	511	$	7	$	1,879	$	0
Total	$	11,056	$	49	$	26,249	$	0

	Nine Months Ended				Nine Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		346		0		2,783		5
Commercial real estate
Commercial real estate other		1,333		0		2,785		31
Residential real estate
Residential real estate other		290		0		85		0
Subtotal	$	1,969	$	0	$	5,653	$	36
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		454		0		0		0
Commercial real estate
Commercial real estate other		271		0		0		0
Residential real estate
Residential real estate other		0		0		718		4
Subtotal	$	725	$	0	$	718	$	4
Total	$	2,694	$	0	$	6,371	$	40

Schedule of troubled debt restructurings

The following tables present information on loans modified in troubled debt restructuring during the periods indicated.

September 30, 2013	Three months ended
							Defaulted TDRs4
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		4	$	1,275		1,275		0	$	0
Commercial real estate
Commercial real estate other2		6		1,530		1,530		0		0
Residential real estate
Residential real estate other3		1		195		195		0		0
Total		11	$	3,000		3,000		0	$	0

¹ Represents the following concessions: extension of term and reduction of rate (3 loans: $1.2 million) and extended term (1 loan: $87,000)

² Represents the following concessions: extension of term and reduction of rate

³ Represents the following concessions: extension of term and reduction of rate

⁴ TDRs that defaulted in the quarter ended September 30, 2013 that had been restructured in the prior twelve months.

September 30, 2014	Nine months ended
							Defaulted TDRs3
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		1	$	88		88		0	$	0
Commercial real estate
Commercial real estate other2		1	$	480		480		1	$	63
Residential real estate
Residential real estate other		0		0		0		1		195
Total		2	$	568		568		2	$	258

¹ Represents the following concessions: extension of term and reduction of rate

² Represents the following concessions: extension of term and reduction of rate

³ TDRs that defaulted during the nine months ended September 30, 2014, that had been restructured in the prior twelve months.

September 30, 2013	Nine months ended
							Defaulted TDRs4
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		6	$	1,414		1,414		0	$	0
Commercial real estate
Commercial real estate other2		9		1,901		1,901		0		0
Residential real estate
Residential real estate other3		1		195		195		0		0
Total		16	$	3,510		3,510		0	$	0

¹ Represents the following concessions: extension of term and reduction in rate (5 loans: $1.3 million ) and extended term (1 loan: $87,000)

² Represents the following concessions: extension of term and reduction of rate (8 loans: $1.8 million) and extension of term (1 loan: $129,000)

³ Represents the following concessions: extension of term and reduction of rate

⁴ TDRs that defaulted during the nine months ended September 30, 2013, that had been restructured in the prior twelve months.

Schedule of credit quality indicators on loans by class of commercial and industrial loans and commercial real estate loans

The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of September 30, 2014 and December 31, 2013.

September 30, 2014
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Originated Loans and Leases
Internal risk grade:
Pass	$	608,164	$	49,405	$	930,551	$	56,540	$	48,207	$	1,692,867
Special Mention		11,146		197		12,503		227		3,781		27,854
Substandard		7,980		226		17,292		391		0		25,889
Total	$	627,290	$	49,828	$	960,346	$	57,158	$	51,988	$	1,746,610

September 30, 2014
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Acquired Loans and Leases
Internal risk grade:
Pass	$	99,323	$	0	$	296,680	$	3,182	$	37,986	$	437,171
Special Mention		109		0		7,496		0		0		7,605
Substandard		3,169		0		17,538		0		3,327		24,034
Total	$	102,601	$	0	$	321,714	$	3,182	$	41,313	$	468,810

December 31, 2013
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Originated Loans and Leases
Internal risk grade:
Pass	$	531,293	$	72,997	$	869,488	$	52,054	$	36,396	$	1,562,228
Special Mention		20,688		100		17,536		123		3,918		42,365
Substandard		10,458		1,691		16,296		450		6,127		35,022
Total	$	562,439	$	74,788	$	903,320	$	52,627	$	46,441	$	1,639,615

December 31, 2013
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Acquired Loans and Leases
Internal risk grade:
Pass	$	116,160	$	0	$	363,427	$	1,150	$	5,809	$	486,546
Special Mention		3,821		0		11,516		1,985		0		17,322
Substandard		8,522		0		22,028		0		3,011		33,561
Total	$	128,503	$	0	$	396,971	$	3,135	$	8,820	$	537,429

Schedule of credit quality indicators by class of residential real estate and consumer loans

The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of September 30, 2014 and December 31, 2013. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing.

September 30, 2014
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated Loans and Leases
Performing	$	181,384	$	678,804	$	18,753	$	33,947	$	912,888
Nonperforming		1,610		7,185		72		380		9,247
Total	$	182,994	$	685,989	$	18,825	$	34,327	$	922,135

September 30, 2014
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	57,626	$	31,612	$	0	$	1,119	$	90,357
Nonperforming		833		1,588		0		0		2,421
Total	$	58,459	$	33,200	$	0	$	1,119	$	92,778

December 31, 2013
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated Loans and Leases
Performing	$	170,270	$	651,139	$	20,986	$	32,274	$	874,669
Nonperforming		1,539		7,827		216		38		9,620
Total	$	171,809	$	658,966	$	21,202	$	32,312	$	884,289

December 31, 2013
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	65,339	$	33,014	$	5	$	1,219	$	99,577
Nonperforming		1,844		2,322		0		0		4,166
Total	$	67,183	$	35,336	$	5	$	1,219	$	103,743

XML

Allowance for Loan and Lease Losses (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Orginated Loans and Leases [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	$ 10,335	$ 22,156
Unpaid Principal Balance With No Related Allowance	11,128	31,569
Recorded Investment With Related Allowance	509	0
Unpaid Principal Balance With Related Allowance	509	0
Related Allowance	302	0
Recorded Investment	10,844	22,156
Unpaid Principal Balance	11,637	31,569
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	1,408	4,664
Unpaid Principal Balance With No Related Allowance	1,432	5,069
Recorded Investment With Related Allowance	509	0
Unpaid Principal Balance With Related Allowance	509	0
Related Allowance	302	0
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	0	6,073
Unpaid Principal Balance With No Related Allowance	0	11,683
Related Allowance	0	0
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	7,889	10,196
Unpaid Principal Balance With No Related Allowance	8,567	13,518
Related Allowance	0	0
Orginated Loans and Leases [Member] | Residential real estate other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	1,038	1,223
Unpaid Principal Balance With No Related Allowance	1,129	1,299
Related Allowance	0	0
Acquired Loans and Leases [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	1,942	4,264
Unpaid Principal Balance With No Related Allowance	1,942	7,114
Recorded Investment With Related Allowance	715	469
Unpaid Principal Balance With Related Allowance	715	719
Related Allowance	160	250
Recorded Investment	2,657	4,733
Unpaid Principal Balance	2,657	7,833
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	341	2,231
Unpaid Principal Balance With No Related Allowance	341	5,081
Recorded Investment With Related Allowance	444	0
Unpaid Principal Balance With Related Allowance	444	0
Related Allowance	80	0
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	1,311	1,960
Unpaid Principal Balance With No Related Allowance	1,311	1,960
Recorded Investment With Related Allowance	271	469
Unpaid Principal Balance With Related Allowance	271	719
Related Allowance	80	250
Acquired Loans and Leases [Member] | Residential real estate other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	290	73
Unpaid Principal Balance With No Related Allowance	290	73
Related Allowance	$ 0	$ 0

XML

Loans and Leases (Details Narrative) (VIST Financial Corp. ("VIST Financial") [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Business Acquisition [Line Items]
Acquired loans and leases, covered and non-covered	$ 20,900
Covered Loans [Member]
Business Acquisition [Line Items]
Certain losses and expenses relating to covered loans, percentage reimburseable by FDIC	70.00%
Net losses exceed levels relating to covered loans, percentage reimburseable by FDIC	80.00%

XML

Securities (Details 2) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Available-for-sale securities
Less Than 12 Months, Fair Value	$ 346,026	$ 723,785
Less Than 12 Months, Unrealized Losses	2,150	27,050
12 Months Or Longer, Fair Value	422,341	101,938
12 Months Or Longer, Unrealized Losses	15,540	6,477
Total Fair Value	768,367	825,723
Total Unrealized Losses	17,690	33,527
Held-to-maturity debt securities
Less Than 12 Months, Fair Value	30,672
Less Than 12 Months, Unrealized Losses	197
12 Months Or Longer, Fair Value	0
12 Months Or Longer, Unrealized Losses	0
Total Fair Value	30,672
Total Unrealized Losses	197
Obligations of U.S. Government sponsored entities [Member]
Available-for-sale securities
Less Than 12 Months, Fair Value	169,741	337,967
Less Than 12 Months, Unrealized Losses	849	9,467
12 Months Or Longer, Fair Value	95,197	1,761
12 Months Or Longer, Unrealized Losses	2,251	38
Total Fair Value	264,938	339,728
Total Unrealized Losses	3,100	9,505
Held-to-maturity debt securities
Less Than 12 Months, Fair Value	30,672
Less Than 12 Months, Unrealized Losses	197
12 Months Or Longer, Fair Value	0
12 Months Or Longer, Unrealized Losses	0
Total Fair Value	30,672
Total Unrealized Losses	197
Obligations of U.S. states and political subdivisions [Member]
Available-for-sale securities
Less Than 12 Months, Fair Value	15,235	21,821
Less Than 12 Months, Unrealized Losses	105	821
12 Months Or Longer, Fair Value	11,929	6,173
12 Months Or Longer, Unrealized Losses	276	626
Total Fair Value	27,164	27,994
Total Unrealized Losses	381	1,447
Residential Mortgage-backed securities U.S. Government agencies [Member]
Available-for-sale securities
Less Than 12 Months, Fair Value	27,840	70,052
Less Than 12 Months, Unrealized Losses	101	2,701
12 Months Or Longer, Fair Value	41,748	14,874
12 Months Or Longer, Unrealized Losses	1,601	941
Total Fair Value	69,588	84,926
Total Unrealized Losses	1,702	3,642
Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Available-for-sale securities
Less Than 12 Months, Fair Value	133,210	293,945
Less Than 12 Months, Unrealized Losses	1,095	14,061
12 Months Or Longer, Fair Value	270,358	76,070
12 Months Or Longer, Unrealized Losses	11,021	4,432
Total Fair Value	403,568	370,015
Total Unrealized Losses	12,116	18,493
U.S. corporate debt securities [Member]
Available-for-sale securities
Less Than 12 Months, Fair Value	0	0
Less Than 12 Months, Unrealized Losses	0	0
12 Months Or Longer, Fair Value	2,163	2,125
12 Months Or Longer, Unrealized Losses	337	375
Total Fair Value	2,163	2,125
Total Unrealized Losses	337	375
Equity securities [Member]
Available-for-sale securities
Less Than 12 Months, Fair Value	0	0
Less Than 12 Months, Unrealized Losses	0	0
12 Months Or Longer, Fair Value	946	935
12 Months Or Longer, Unrealized Losses	54	65
Total Fair Value	946	935
Total Unrealized Losses	$ 54	$ 65

XML

Allowance for Loan and Lease Losses (Details 5) (Orginated Loans and Leases [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013 Number		Sep. 30, 2014 Number		Sep. 30, 2013 Number
Financing Receivable, Modifications [Line Items]
Number Of Loans	11		2		16
Premodification Outstanding Recorded Investment	$ 3,000		$ 568		$ 3,510
Postmodification Outstanding Recorded Investment	3,000		568		3,510
Number Of Loans Tdr	0	[1]	2	[2]	0	[2]
Postmodification Outstanding Recorded Investment Tdr	0	[1]	258	[2]	0	[2]
Commercial and Industrial Other [Member]
Financing Receivable, Modifications [Line Items]
Number Of Loans	4	[3]	1	[4]	6	[5]
Premodification Outstanding Recorded Investment	1,275	[3]	88	[4]	1,414	[5]
Postmodification Outstanding Recorded Investment	1,275	[3]	88	[4]	1,414	[5]
Number Of Loans Tdr	0	[1],[3]	0	[2],[4]	0	[2],[5]
Postmodification Outstanding Recorded Investment Tdr	0	[1],[3]	0	[2],[4]	0	[2],[5]
Concession, extension of term, loan	87				87
Concession, extended term and lowered rate, loan	1,200				1,300
Commercial Real Estate Other [Member]
Financing Receivable, Modifications [Line Items]
Number Of Loans	6	[4]	1	[4]	9	[6]
Premodification Outstanding Recorded Investment	1,530	[4]	480	[4]	1,901	[6]
Postmodification Outstanding Recorded Investment	1,530	[4]	480	[4]	1,901	[6]
Number Of Loans Tdr	0	[1],[4]	1	[2],[4]	0	[2],[6]
Postmodification Outstanding Recorded Investment Tdr	0	[1],[4]	63	[2],[4]	0	[2],[6]
Concession, extension of term, loan					129
Concession, extended term and lowered rate, loan					1,800
Residential real estate other [Member]
Financing Receivable, Modifications [Line Items]
Number Of Loans	1	[4]	0		1	[4]
Premodification Outstanding Recorded Investment	195	[4]	0		195	[4]
Postmodification Outstanding Recorded Investment	195	[4]	0		195	[4]
Number Of Loans Tdr	0	[1],[4]	1	[2]	0	[2],[4]
Postmodification Outstanding Recorded Investment Tdr	$ 0	[1],[4]	$ 195	[2]	$ 0	[2],[4]

[1] TDRs that defaulted in the current quarter that were restructured in the prior twelve months.

[2] TDRs that defaulted during the last nine months that were restructured in the prior twelve months.

[3] Represents the following concessions: extension of term and reduction of rate (3 loans: $1.2 million) and extended term (1 loan: $87,000)

[4] Represents the following concessions: extension of term and reduction or rate

[5] Represents the following concessions: extension of term and reduction in rate (5 loans: $1.3 million ) and extended term (1 loan: $87,000)

[6] Represents the following concessions: extension of term and reduction of rate (8 loans: $1.8 million) and extension of term (1 loan: $129,000)

XML

Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	$ 9,473	$ 10,991
Available-for-sale securities, at fair value	1,374,756	1,354,811
Other borrowings, fair value	11,032	11,292
Obligations of U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	7,631	8,275
Available-for-sale securities, at fair value	590,894	556,345
Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	1,842	2,716
Available-for-sale securities, at fair value	589,779	577,472
Obligations of U.S. states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	70,502	67,962
Residential Mortgage-backed securities U.S. Government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	119,717	146,678
Residential Mortgage-backed securities Non-U.S. Government agencies or sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	280	311
U.S. corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	2,163	4,633
Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	1,421	1,410
Recurring [Member] | Fair Value [Member] | Other borrowings [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other borrowings, fair value	11,032	11,292
Recurring [Member] | Fair Value [Member] | Obligations of U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	7,631	8,275
Available-for-sale securities, at fair value	590,894	556,345
Recurring [Member] | Fair Value [Member] | Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	1,842	2,716
Available-for-sale securities, at fair value	589,779	577,472
Recurring [Member] | Fair Value [Member] | Obligations of U.S. states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	70,502	67,962
Recurring [Member] | Fair Value [Member] | Residential Mortgage-backed securities U.S. Government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	119,717	146,678
Recurring [Member] | Fair Value [Member] | Residential Mortgage-backed securities Non-U.S. Government agencies or sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	280	311
Recurring [Member] | Fair Value [Member] | U.S. corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	2,163	4,633
Recurring [Member] | Fair Value [Member] | Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	1,421	1,410
Recurring [Member] | Level 1 [Member] | Other borrowings [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other borrowings, fair value	0	0
Recurring [Member] | Level 1 [Member] | Obligations of U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	0	0
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 1 [Member] | Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	0	0
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 1 [Member] | Obligations of U.S. states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 1 [Member] | Residential Mortgage-backed securities U.S. Government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 1 [Member] | Residential Mortgage-backed securities Non-U.S. Government agencies or sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 1 [Member] | U.S. corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 1 [Member] | Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 2 [Member] | Other borrowings [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other borrowings, fair value	11,032	11,292
Recurring [Member] | Level 2 [Member] | Obligations of U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	7,631	8,275
Available-for-sale securities, at fair value	590,894	556,345
Recurring [Member] | Level 2 [Member] | Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	1,842	2,716
Available-for-sale securities, at fair value	589,779	577,472
Recurring [Member] | Level 2 [Member] | Obligations of U.S. states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	70,502	67,962
Recurring [Member] | Level 2 [Member] | Residential Mortgage-backed securities U.S. Government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	119,717	146,678
Recurring [Member] | Level 2 [Member] | Residential Mortgage-backed securities Non-U.S. Government agencies or sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	280	311
Recurring [Member] | Level 2 [Member] | U.S. corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	2,163	4,633
Recurring [Member] | Level 2 [Member] | Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 3 [Member] | Other borrowings [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other borrowings, fair value	0	0
Recurring [Member] | Level 3 [Member] | Obligations of U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	0	0
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 3 [Member] | Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, fair value	0	0
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 3 [Member] | Obligations of U.S. states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 3 [Member] | Residential Mortgage-backed securities U.S. Government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 3 [Member] | Residential Mortgage-backed securities Non-U.S. Government agencies or sponsored entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 3 [Member] | U.S. corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Recurring [Member] | Level 3 [Member] | Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	$ 1,421	$ 1,410

XML

Employee Benefit Plan (Details Narrative) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Compensation and Retirement Disclosure [Abstract]
Amortization of amounts previously recognized in accumulated other comprehensive income	$ 160	[1]	$ 403	[1]	$ 481	[1]	$ 1,200	[1]

[1] Amounts in parentheses indicated debits in income statement

XML

Allowance for Loan and Lease Losses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Orginated Loans and Leases [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Finance Leases [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Finance Leases [Member]	Sep. 30, 2014 Orginated Loans and Leases [Member] Finance Leases [Member]	Sep. 30, 2013 Orginated Loans and Leases [Member] Finance Leases [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Commercial and industrial, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Commercial real estate, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Residential real estate, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Consumer and other, total [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Finance Leases [Member]	Dec. 31, 2013 Acquired Loans and Leases [Member] Finance Leases [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Covered Loans [Member]	Sep. 30, 2014 Acquired Loans and Leases [Member] Covered Loans [Member]	Sep. 30, 2013 Acquired Loans and Leases [Member] Covered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			$ 27,970		$ 26,752	$ 24,853	$ 26,700	$ 24,643	$ 8,562	$ 6,955	$ 8,406	$ 7,533	$ 10,389	$ 10,409	$ 10,459	$ 10,184	$ 5,445	$ 5,273	$ 5,771	$ 4,981	$ 2,356	$ 2,195	$ 2,059	$ 1,940	$ 0	$ 21	$ 5	$ 5	$ 765	$ 605	$ 1,270	$ 0	$ 159	$ 64	$ 168	$ 0	$ 460	$ 381	$ 770	$ 0	$ 49	$ 126	$ 274	$ 0	$ 97	$ 34	$ 58	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0
Charge-offs					(431)	(798)	(2,231)	(2,521)	(21)	(55)	(275)	(487)	(6)	(49)	(619)	(539)	(118)	(116)	(385)	(455)	(286)	(578)	(952)	(1,040)	0	0	0	0	(369)	(468)	(1,229)	(3,564)	(218)	(1)	(243)	(2,930)	(80)	0	(631)	(32)	(68)	(467)	(345)	(577)	(3)	0	(10)	(25)	0		0	0	0
Recoveries					1,128	168	2,525	2,275	68	48	557	1,490	944	21	1,506	457	1	3	87	32	115	96	375	296	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0		0	0	0
Provision (credit)	(59)	2,049	751	5,576	(264)	1,499	191	1,325	249	790	170	(798)	(645)	516	(664)	795	95	149	(50)	751	37	65	740	582		(21)	(5)	(5)	205	549	560	4,250	154	(12)	170	2,981	(20)	56	221	469	147	504	199	740	(76)	1	(30)	60	0		0	0	0
Ending Balance	$ 27,786		$ 27,786		$ 27,185	$ 25,722	$ 27,185	$ 25,722	$ 8,858	$ 7,738	$ 8,858	$ 7,738	$ 10,682	$ 10,897	$ 10,682	$ 10,897	$ 5,423	$ 5,309	$ 5,423	$ 5,309	$ 2,222	$ 1,778	$ 2,222	$ 1,778	$ 0	$ 0	$ 0	$ 0	$ 601	$ 686	$ 601	$ 686	$ 95	$ 51	$ 95	$ 51	$ 360	$ 437	$ 360	$ 437	$ 128	$ 163	$ 128	$ 163	$ 18	$ 35	$ 18	$ 35	$ 0	$ 0	$ 0	$ 0	$ 0

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Business

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

1. Business

Tompkins Financial Corporation (“Tompkins” or the “Company”) is headquartered in Ithaca, New York and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company is a locally oriented, community-based financial services organization that offers a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, insurance, and brokerage services. At September 30, 2014, the Company’s subsidiaries included: four wholly-owned banking subsidiaries, Tompkins Trust Company (the “Trust Company”), The Bank of Castile (DBA Tompkins Bank of Castile), Mahopac Bank (formerly known as Mahopac National Bank, DBA Tompkins Mahopac Bank), VIST Bank (DBA Tompkins VIST Bank); and a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). TFA Wealth Management and the trust division of the Trust Company provide a full array of investment services under the Tompkins Financial Advisors brand, including investment management, trust and estate, financial and tax planning as well as life, disability and long-term care insurance services. The Company’s principal offices are located at The Commons, Ithaca, New York, 14851, and its telephone number is (888) 503-5753. The Company’s common stock is traded on the NYSE MKT LLC under the Symbol “TMP.”

As a registered financial holding company, the Company is regulated under the Bank Holding Company Act of 1956 (“BHC Act”), as amended and is subject to examination and comprehensive regulation by the Federal Reserve Board (“FRB”). The Company is also subject to the jurisdiction of the Securities and Exchange Commission (“SEC”) and is subject to disclosure and regulatory requirements under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. The Company is subject to the rules of the NYSE MKT LLC for listed companies.

The Company’s banking subsidiaries are subject to examination and comprehensive regulation by various regulatory authorities, including the Federal Deposit Insurance Corporation (“FDIC”), the New York State Department of Financial Services (“NYSDFS”), and the Pennsylvania Department of Banking and Securities (“PDBS”). Each of these agencies issues regulations and requires the filing of reports describing the activities and financial condition of the entities under its jurisdiction. Likewise, such agencies conduct examinations on a recurring basis to evaluate the safety and soundness of the institutions, and to test compliance with various regulatory requirements, including: consumer protection, privacy, fair lending, the Community Reinvestment Act, the Bank Secrecy Act, sales of non-deposit investments, electronic data processing, and trust department activities.

The Company’s wealth management subsidiary is subject to examination and regulation by various regulatory agencies, including the SEC and the Financial Industry Regulatory Authority (“FINRA”). The trust division of Tompkins Trust Company is subject to examination and comprehensive regulation by the FDIC and NYSDFS.

The Company’s insurance subsidiary is subject to examination and regulation by the NYSDFS and the Pennsylvania Insurance Department.

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Employee Benefit Plan (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Pension Plan [Member]
Components of Net Period Benefit Cost
Service cost	$ 608	$ 729	$ 1,825	$ 2,187
Interest cost	767	672	2,302	2,016
Expected return on plan assets	(1,256)	(1,002)	(3,768)	(3,007)
Amortization of net retirement plan actuarial loss	215	506	644	1,517
Amortization of net retirement plan prior service cost (credit)	(31)	(31)	(92)	(92)
Amortization of net retirement plan transition liability	0	0	0	0
Net periodic benefit cost	303	874	911	2,621
SERP Plan [Member]
Components of Net Period Benefit Cost
Service cost	56	120	167	359
Interest cost	216	184	649	553
Expected return on plan assets	0	0	0	0
Amortization of net retirement plan actuarial loss	51	115	154	345
Amortization of net retirement plan prior service cost (credit)	28	41	84	124
Amortization of net retirement plan transition liability	0	0	0	0
Net periodic benefit cost	351	460	1,054	1,381
Life and Healthcare Plan [Member]
Components of Net Period Benefit Cost
Service cost	50	66	151	199
Interest cost	92	86	275	259
Expected return on plan assets	0	0	0	0
Amortization of net retirement plan actuarial loss	0	24	0	72
Amortization of net retirement plan prior service cost (credit)	4	4	12	12
Amortization of net retirement plan transition liability	0	13	0	38
Net periodic benefit cost	$ 146	$ 193	$ 438	$ 580

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Loans and Leases (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 3,259,560	$ 3,196,507
Less: unearned income and deferred costs and fees	(2,091)	(2,223)
Total loans and leases, net of unearned income and deferred costs and fees	3,257,469	3,194,284
Commercial and Industrial - Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	49,828	74,788
Commercial and Industrial Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	729,891	690,942
Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	779,719	765,730
Commercial Real Estate - Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	93,301	85,794
Commercial Real Estate - Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	60,340	55,762
Commercial Real Estate Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,282,060	1,269,758
Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,435,701	1,411,314
Residential Real Estate - Home equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	241,453	238,992
Residential Real Estate - Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	719,189	694,302
Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	960,642	933,294
Consumer and other - Indirect [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	18,825	21,207
Consumer and other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	35,446	33,531
Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	54,271	54,738
Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	8,317	5,563
Covered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	20,910	25,868
Orginated Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,677,062	2,529,467
Less: unearned income and deferred costs and fees	(2,091)	(2,223)
Total loans and leases, net of unearned income and deferred costs and fees	2,674,971	2,527,244
Orginated Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	49,828	74,788
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	627,290	562,439
Orginated Loans and Leases [Member] | Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	677,118	637,227
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	51,988	46,441
Orginated Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	57,158	52,627
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	960,346	903,320
Orginated Loans and Leases [Member] | Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,069,492	1,002,388
Orginated Loans and Leases [Member] | Residential Real Estate - Home equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	182,994	171,809
Orginated Loans and Leases [Member] | Residential Real Estate - Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	685,989	658,966
Orginated Loans and Leases [Member] | Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	868,983	830,775
Orginated Loans and Leases [Member] | Consumer and other - Indirect [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	18,825	21,202
Orginated Loans and Leases [Member] | Consumer and other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	34,327	32,312
Orginated Loans and Leases [Member] | Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	53,152	53,514
Orginated Loans and Leases [Member] | Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	8,317	5,563
Orginated Loans and Leases [Member] | Covered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	582,498	667,040
Less: unearned income and deferred costs and fees	0	0
Total loans and leases, net of unearned income and deferred costs and fees	582,498	667,040
Acquired Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	102,601	128,503
Acquired Loans and Leases [Member] | Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	102,601	128,503
Acquired Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	41,313	39,353
Acquired Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	3,182	3,135
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	321,714	366,438
Acquired Loans and Leases [Member] | Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	366,209	408,926
Acquired Loans and Leases [Member] | Residential Real Estate - Home equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	58,459	67,183
Acquired Loans and Leases [Member] | Residential Real Estate - Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	33,200	35,336
Acquired Loans and Leases [Member] | Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	91,659	102,519
Acquired Loans and Leases [Member] | Consumer and other - Indirect [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	5
Acquired Loans and Leases [Member] | Consumer and other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,119	1,219
Acquired Loans and Leases [Member] | Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,119	1,224
Acquired Loans and Leases [Member] | Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases [Member] | Covered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 20,910	$ 25,868

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Employee Benefits Plan (Tables)

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of net periodic benefit cost and other comprehensive income

Components of Net Periodic Benefit Cost
	Pension Benefits						Life and Health				SERP Benefits
	Three Months Ended						Three Months Ended				Three Months Ended
(in thousands)	09/30/2014			09/30/2013			09/30/2014		09/30/2013		09/30/2014		09/30/2013
Service cost	$	608		$	729		$	50	$	66	$	56	$	120
Interest cost		767			672			92		86		216		184
Expected return on plan assets		(1,256	)		(1,002	)		0		0		0		0
Amortization of net retirement plan actuarial loss		215			506			0		24		51		115
Amortization of net retirement plan prior service cost (credit)		(31	)		(31	)		4		4		28		41
Amortization of net retirement plan transition liability		0			0			0		13		0		0
Net periodic benefit cost	$	303		$	874		$	146	$	193	$	351	$	460

Components of Net Period Benefit Cost
	Pension Benefits						Life and Health				SERP Benefits
	Nine Months Ended						Nine Months Ended				Nine Months Ended
(in thousands)	09/30/2014			09/30/2013			09/30/2014		09/30/2013		09/30/2014		09/30/2013
Service cost	$	1,825		$	2,187		$	151	$	199	$	167	$	359
Interest cost		2,302			2,016			275		259		649		553
Expected return on plan assets		(3,768	)		(3,007	)		0		0		0		0
Amortization of net retirement plan actuarial loss		644			1,517			0		72		154		345
Amortization of net retirement plan prior service cost (credit)		(92	)		(92	)		12		12		84		124
Amortization of net retirement plan transition liability		0			0			0		38		0		0
Net periodic benefit cost	$	911		$	2,621		$	438	$	580	$	1,054	$	1,381

XML

Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Schedule of reclassifications out of the accumulated other comprehensive income

The following table presents reclassifications out of the accumulated other comprehensive income for the three and nine month periods ended September 30, 2014 and 2013.

	Three months ended September 30, 2014
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(6,871	)	$	2,748		$	(4,123	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(20	)		8			(12	)
Net unrealized losses		(6,891	)		2,756			(4,135	)
Employee benefit plans:
Amortization of net retirement plan actuarial gain		266			(107	)		159
Amortization of net retirement plan prior service cost		1			0			1
Employee benefit plans		267			(107	)		160
Other comprehensive (loss) income	$	(6,624	)	$	2,649		$	(3,975	)

	Three months ended September 30, 2013
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(531	)	$	213		$	(318	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(281	)		112			(169	)
Reclassification adjustment for credit impairment on available-for-sale
Net unrealized losses		(812	)		325			(487	)
Employee benefit plans:
Amortization of net retirement plan actuarial loss		645			(258	)		387
Amortization of net retirement plan prior service cost		14			(6	)		8
Amortization of net retirement plan transition liability		13			(5	)		8
Employee benefit plans		672			(269	)		403
Other comprehensive (loss) income	$	(140	)	$	56		$	(84	)

	Nine months ended September 30, 2014
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	13,195		$	(5,277	)	$	7,918
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(151	)		61			(90	)
Net unrealized gains		13,044			(5,216	)		7,828
Employee benefit plans:
Amortization of net retirement plan actuarial gain		798			(319	)		479
Amortization of net retirement plan prior service cost		3			(1	)		2
Employee benefit plans		801			(320	)		481
Other comprehensive income (loss)	$	13,845		$	(5,536	)	$	8,309

	Nine months ended September 30, 2013
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(44,028	)	$	17,608		$	(26,420	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(723	)		289			(434	)
Reclassification adjustment for credit impairment on available-for-sale
Net unrealized losses		(44,751	)		17,897			(26,854	)
Employee benefit plans:
Amortization of net retirement plan actuarial loss		1,934			(774	)		1,160
Amortization of net retirement plan prior service cost		44			(18	)		26
Amortization of net retirement plan transition liability		38			(15	)		23
Employee benefit plans		2,016			(807	)		1,209
Other comprehensive (loss) income	$	(42,735	)	$	17,090		$	(25,645	)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive income for the three and nine months ended September 30, 2014 and 2013.

Three months ended September 30, 2014
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	20		Net gain on securities transactions
		(8	)	Tax expense
		12		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(266	)
Net retirement plan prior service cost		(1	)
		(267	)	Total before tax
		107		Tax benefit
		(160	)	Net of tax

Nine months ended September 30, 2014
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	151		Net gain on securities transactions
		(61	)	Tax expense
		90		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(798	)
Net retirement plan prior service cost		(3	)
		(801	)	Total before tax
		320		Tax benefit
		(481	)	Net of tax

Three months ended September 30, 2013
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	281		Net gain on securities transactions
		(112	)	Tax expense
		169		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(645	)
Net retirement plan prior service cost		(14	)
Net retirement plan transition liability		(13	)
		(672	)	Total before tax
		269		Tax benefit
		(403	)	Net of tax

Nine months ended September 30, 2013
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	723		Net gain on securities transactions
		(289	)	Tax expense
		434		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(1,934	)
Net retirement plan prior service cost		(44	)
Net retirement plan transition liability		(38	)
		(2,016	)	Total before tax
		807		Tax benefit
		(1,209	)	Net of tax

¹ Amounts in parentheses indicated debits in income statement

² The accumulated other comprehensive income components are included in the computation of net periodic benefit cost (See Note 10 - “Employee Benefit Plan”)

Schedule of activity in accumulated other comprehensive income

The following table presents the activity in our accumulated other comprehensive income for the periods indicated:

(in thousands)	Available-for- Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income
Balance at July 1, 2014	$	3,606		$	(16,441	)	$	(12,835	)
Other comprehensive income (loss) before reclassifications		(4,123	)		0			(4,123	)
Amounts reclassified from accumulated other comprehensive income		(12	)		160			148
Net current-period other comprehensive (loss) income		(4,135	)		160			(3,975	)
Balance at September 30, 2014	$	(529	)	$	(16,281	)	$	(16,810	)
Balance at January 1, 2014	$	(8,357	)	$	(16,762	)	$	(25,119	)
Other comprehensive income (loss) before reclassifications		7,918			0			7,918
Amounts reclassified from accumulated other comprehensive (loss) income		(90	)		481			391
Net current-period other comprehensive income		7,828			481			8,309
Balance at September 30, 2014	$	(529	)	$	(16,281	)	$	(16,810	)

(in thousands)	Available-for- Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income
Balance at July 1, 2013	$	(11	)	$	(27,656	)	$	(27,667	)
Other comprehensive (loss) income before reclassifications		(318	)		0			(318	)
Amounts reclassified from accumulated other comprehensive (loss) income		(169	)		403			234
Net current-period other comprehensive (loss) income		(487	)		403			(84	)
Balance at September 30, 2013	$	(498	)	$	(27,253	)	$	(27,751	)
Balance at January 1, 2013	$	26,356		$	(28,462	)	$	(2,106	)
Other comprehensive (loss) income before reclassifications		(26,420	)		0			(26,420	)
Amounts reclassified from accumulated other comprehensive (loss) income		(434	)		1,209			775
Net current-period other comprehensive (loss) income		(26,854	)		1,209			(25,645	)
Balance at September 30, 2013	$	(498	)	$	(27,253	)	$	(27,751	)

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FDIC Indemnification Asset Related to Covered Loans (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
FDIC Indemnification Asset [Roll Forward]
Balance, beginning of the period	$ 4,790
Discount accretion of the present value at the acquisition dates	44
Prospective adjustment for additional cash flows	(1,520)
Increase due to impairment on covered loans	0
Reimbursements from the FDIC	(1,016)
Balance, end of period	$ 2,298

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Loans and Leases (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Acquired Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	$ 2,657	$ 7,833
Carrying amount	2,657	4,733
VIST Financial Corp. ("VIST Financial") [Member] | Acquired Credit Impaired Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	49,410	62,146
Carrying amount	38,561	46,809
VIST Financial Corp. ("VIST Financial") [Member] | Acquired Non Credit Impaired Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	551,074	630,600
Carrying amount	543,937	620,231
VIST Financial Corp. ("VIST Financial") [Member] | Acquired Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	600,484	692,746
Carrying amount	$ 582,498	$ 667,040

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Other Income and Operating Expense (Tables)

9 Months Ended

Sep. 30, 2014

Other Income and Expenses [Abstract]

Schedule of other income and operating expense

Other income and operating expense totals are presented in the table below. Components of these totals exceeding 1% of the aggregate of total noninterest income and total noninterest expenses for any of the years presented below are stated separately.

	Three Months Ended				Nine Months Ended
(in thousands)	09/30/2014		09/30/2013		09/30/2014		09/30/2013
Noninterest Income
Other service charges	$	708	$	959	$	2,511	$	2,569
Increase in cash surrender value of corporate owned life insurance		456		444		1,431		1,482
Net gain on sale of loans		125		115		345		212
Other income		603		1,854		1,842		3,285
Total other income	$	1,892	$	3,372	$	6,129	$	7,548
Noninterest Expenses
Marketing expense	$	1,029	$	1,055	$	3,448	$	3,597
Professional fees		1,585		1,490		4,484		4,255
Legal fees		130		410		1,191		1,532
Software licensing and maintenance		1,196		1,082		3,512		3,642
Cardholder expense		678		827		2,076		2,363
Other expenses		5,805		4,679		15,800		14,321
Total other operating expense	$	10,423	$	9,543	$	30,511	$	29,710

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Segment and Related Information (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of segment and related information

Summarized financial information concerning the Company’s reportable segments and the reconciliation to the Company’s consolidated results is shown in the following table. Investment in subsidiaries is netted out of the presentations below. The “Intercompany” column identifies the intercompany activities of revenues, expenses and other assets between the banking, insurance and wealth management services segments. The Company accounts for intercompany fees and services at an estimated fair value according to regulatory requirements for the services provided. Intercompany items relate primarily to the use of human resources, information systems, accounting and marketing services provided by any of the banks and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the 2013 Annual Report on Form 10-K.

As of and for the three months ended September 30, 2014
(in thousands)	Banking			Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	46,583		$	1	$	35	$	(1	)	$	46,618
Interest expense		5,044			0		0		(1	)		5,043
Net interest income		41,539			1		35		0			41,575
Provision for loan and lease losses		(59	)		0		0		0			(59	)
Noninterest income		6,607			7,555		3,746		(353	)		17,555
Noninterest expense		30,129			5,977		2,784		(353	)		38,537
Income before income tax expense		18,076			1,579		997		0			20,652
Income tax expense		5,903			653		341		0			6,897
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		12,173			926		656		0			13,755
Less: Net income attributable to noncontrolling interests		33			0		0		0			33
Net Income attributable to Tompkins Financial Corporation	$	12,140		$	926	$	656	$	0		$	13,722
Depreciation and amortization	$	1,320		$	75	$	36	$	0		$	1,431
Assets		5,049,237			34,742		13,634		(6,694	)		5,090,919
Goodwill		64,500			19,662		8,081		0			92,243
Other intangibles, net		9,681			4,987		538		0			15,206
Net loans and leases		3,229,683			0		0		0			3,229,683
Deposits		4,219,127			0		0		(6,267	)		4,212,860
Total Equity		453,317			27,177		10,117		0			490,611

As of and for the three months ended September 30, 2013
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	46,334	$	2	$	45	$	(2	)	$	46,379
Interest expense		5,908		0		0		(2	)		5,906
Net interest income		40,426		2		45		0			40,473
Provision for loan and lease losses		2,049		0		0		0			2,049
Noninterest income		7,956		7,077		3,877		(382	)		18,528
Noninterest expense		29,552		5,532		2,852		(382	)		37,554
Income before income tax expense		16,781		1,547		1,070		0			19,398
Income tax expense		4,308		646		362		0			5,316
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		12,473		901		708		0			14,082
Less: Net income attributable to noncontrolling interests		33		0		0		0			33
Net Income attributable to Tompkins Financial Corporation	$	12,440	$	901	$	708	$	0		$	14,049
Depreciation and amortization	$	1,310	$	51	$	33	$	0		$	1,394
Assets		4,894,161		34,087		12,702		(8,522	)		4,932,428
Goodwill		64,500		19,559		8,081		0			92,140
Other intangibles, net		11,070		5,150		621		0			16,841
Net loans and leases		3,092,904		0		0		0			3,092,904
Deposits		3,980,890		0		0		(8,134	)		3,972,756
Total Equity		408,102		25,524		10,650		0			444,276

For the nine months ended September 30, 2014
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	137,703	$	5	$	100	$	(5	)	$	137,803
Interest expense		15,688		2		0		(5	)		15,685
Net interest income		122,015		3		100		0			122,118
Provision for loan and lease losses		751		0		0		0			751
Noninterest income		19,835		21,918		11,990		(1,034	)		52,709
Noninterest expense		90,560		17,541		8,608		(1,034	)		115,675
Income before income tax expense		50,539		4,380		3,482		0			58,401
Income tax expense		15,982		1,776		1,193		0			18,951
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		34,557		2,604		2,289		0			39,450
Less: Net income attributable to noncontrolling interests		98		0		0		0			98
Net Income attributable to Tompkins Financial Corporation	$	34,459	$	2,604	$	2,289	$	0		$	39,352
Depreciation and amortization	$	3,909	$	184	$	110	$	0		$	4,203

For the nine months ended September 30, 2013
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	136,647	$	5	$	149	$	(5	)	$	136,796
Interest expense		18,297		0		0		(5	)		18,292
Net interest income		118,350		5		149		0			118,504
Provision for loan and lease losses		5,576		0		0		0			5,576
Noninterest income		20,410		21,371		11,813		(1,135	)		52,459
Noninterest expense		88,555		16,589		8,842		(1,135	)		112,851
Income before income tax expense		44,629		4,787		3,120		0			52,536
Income tax expense		12,883		1,935		1,055		0			15,873
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		31,746		2,852		2,065		0			36,663
Less: Net income attributable to noncontrolling interests		98		0		0		0			98
Net Income attributable to Tompkins Financial Corporation	$	31,648	$	2,852	$	2,065	$	0		$	36,565
Depreciation and amortization	$	4,021	$	160	$	103	$	0		$	4,284

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statement of Stockholders' Equity [Abstract]
Cash dividends per share (in dollars per share)	$ 1.20	$ 1.14
Exercise of stock options and related tax benefit, shares	36,885	111,307
Shares issued for dividend reinvestment plan, shares	46,081	70,530
Shares issued for employee stock ownership plan, shares	31,192	17,290
Directors deferred compensation plan, shares	3,339	3,228
Shares issued related to restricted stock awards, shares	5,184	102,743
Common stock repurchased and returned to unissued status, shares	65,059
Stock issued for purchase acquisition, shares	1,080

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements
September 30, 2014
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Trading securities
Obligations of U.S. Government sponsored entities	$	7,631	$	0	$	7,631	$	0
Mortgage-backed securities – residential
U.S. Government sponsored entities		1,842		0		1,842		0
Available-for-sale securities
Obligations of U.S. Government sponsored entities		590,894		0		590,894		0
Obligations of U.S. states and political subdivisions		70,502		0		70,502		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies		119,717		0		119,717		0
U.S. Government sponsored entities		589,779		0		589,779		0
Non-U.S. Government agencies or sponsored entities		280		0		280		0
U.S. corporate debt securities		2,163		0		2,163		0
Equity securities		1,421		0		0		1,421
Borrowings
Other borrowings		11,032		0		11,032		0

The change in the fair value of the $1.4 million of available-for-sale securities valued using significant unobservable inputs (level 3), between January 1, 2014 and September 30, 2014 was immaterial.

Recurring Fair Value Measurements
December 31, 2013
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Trading securities
Obligations of U.S. Government sponsored entities	$	8,275	$	0	$	8,275	$	0
Mortgage-backed securities – residential
U.S. Government sponsored entities		2,716		0		2,716		0
Available-for-sale securities				.
Obligations of U.S. Government sponsored entities		556,345		0		556,345		0
Obligations of U.S. states and political subdivisions		67,962		0		67,962		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies		146,678		0		146,678		0
U.S. Government sponsored entities		577,472		0		577,472		0
Non-U.S. Government agencies or sponsored entities		311		0		311		0
U.S. corporate debt securities		4,633		0		4,633		0
Equity securities		1,410		0		0		1,410
Borrowings
Other borrowings		11,292		0		11,292		0

Schedule of assets and liabilities measured at fair value on a non recurring basis

Three months ended September 30, 2014
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Three months ended
Assets:	09/30/2014		(Level 1)		(Level 2)		(Level 3)		09/30/2014
Impaired Loans	$	8,149	$	0	$	8,149	$	0	$	(67	)
Other real estate owned		2,689		0		2,689		0		10

Three months ended September 30, 2013
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Three months ended
Assets:	09/30/2013		(Level 1)		(Level 2)		(Level 3)		09/30/2013
Impaired Loans	$	5,405	$	0	$	5,405	$	0	$	(650	)
Other real estate owned		2,718		0		2,718		0		(56	)

Nine months ended September 30, 2014
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Nine months ended
Assets:	09/30/2014		(Level 1)		(Level 2)		(Level 3)		09/30/2014
Impaired Loans	$	9,226	$	0	$	9,226	$	0	$	(252	)
Other real estate owned		5,182		0		5,182		0		(32	)

Nine months ended September 30, 2013
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Nine months ended
Assets:	09/30/2013		(Level 1)		(Level 2)		(Level 3)		09/30/2013
Impaired Loans	$	10,530	$	0	$	10,530	$	0	$	(884	)
Other real estate owned		1,625		0		1,625		0		(247	)

Schedule of carrying amount and fair value of financial instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at September 30, 2014 and December 31, 2013. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions.

Estimated Fair Value of Financial Instruments
September 30, 2014
(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	85,117	$	85,117	$	85,117	$	0	$	0
Securities - held to maturity		47,608		48,017		0		48,017		0
FHLB stock		14,838		14,838		0		14,838		0
Accrued interest receivable		16,494		16,494		0		16,494		0
Loans/leases, net1		3,229,683		3,248,727		0		9,226		3,239,501
Financial Liabilities:
Time deposits	$	930,796	$	932,938	$	0	$	932,938	$	0
Other deposits		3,282,064		3,282,064		0		3,282,064		0
Fed funds purchased and securities sold under agreements to repurchase		128,368		132,383		0		132,383		0
Other borrowings		155,477		155,739		0		155,739		0
Accrued interest payable		1,827		1,827		0		1,827		0
Trust preferred debentures		37,298		43,904		0		43,904		0

Estimated Fair Value of Financial Instruments

December 31, 2013

(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	82,884	$	82,884	$	82,884	$	0	$	0
Securities - held to maturity		18,980		19,625		0		19,625		0
FHLB and FRB stock		25,041		25,041		0		25,041		0
Accrued interest receivable		16,586		16,586		0		16,586		0
Loans/leases, net1		3,166,314		3,201,837		0		6,846		3,194,991
Financial Liabilities:
Time deposits	$	865,702	$	870,857	$	0	$	870,857	$	0
Other deposits		3,081,514		3,081,514		0		3,081,514		0
Fed funds purchased and securities sold under agreements to repurchase		167,724		173,425		0		173,425		0
Other borrowings		320,239		326,193		0		326,193		0
Accrued interest payable		2,121		2,121		0		2,121		0
Trust preferred debentures		37,169		41,673		0		41,673		0

¹ Lease receivables, although excluded from the scope of ASC Topic 825, are included in the estimated fair value amounts at their carrying value.

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Securities (Details 5) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Held To Maturity Securities, Amortized Cost
Due in one year or less	$ 11,454	$ 10,952
Due after one year through five years	3,648	5,636
Due after five years through ten years	32,133	1,878
Due after ten years	373	514
Total	47,608	18,980
Held To Maturity Securities, Fair value
Due in one year or less	11,534	11,021
Due after one year through five years	3,938	6,004
Due after five years through ten years	32,121	2,051
Due after ten years	424	549
Total	$ 48,017	$ 19,625

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Allowance for Loan and Lease Losses (Details 6) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Orginated Loans and Leases [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	$ 1,746,610	$ 1,639,615
Orginated Loans and Leases [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	1,692,867	1,562,228
Orginated Loans and Leases [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	27,854	42,365
Orginated Loans and Leases [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	25,889	35,022
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	627,290	562,439
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	608,164	531,293
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	11,146	20,688
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	7,980	10,458
Orginated Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	49,828	74,788
Orginated Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	49,405	72,997
Orginated Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	197	100
Orginated Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	226	1,691
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	960,346	903,320
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	930,551	869,488
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	12,503	17,536
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	17,292	16,296
Orginated Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	57,158	52,627
Orginated Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	56,540	52,054
Orginated Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	227	123
Orginated Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	391	450
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	51,988	46,441
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	48,207	36,396
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	3,781	3,918
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	6,127
Acquired Loans and Leases [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	468,810	537,429
Acquired Loans and Leases [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	437,171	486,546
Acquired Loans and Leases [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	7,605	17,322
Acquired Loans and Leases [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	24,034	33,561
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	102,601	128,503
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	99,323	116,160
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	109	3,821
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	3,169	8,522
Acquired Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	0
Acquired Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	0
Acquired Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	0
Acquired Loans and Leases [Member] | Commercial and Industrial - Agriculture [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	0
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	321,714	396,971
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	296,680	363,427
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	7,496	11,516
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	17,538	22,028
Acquired Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	3,182	3,135
Acquired Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	3,182	1,150
Acquired Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	1,985
Acquired Loans and Leases [Member] | Commercial Real Estate - Agriculture [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	0
Acquired Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	41,313	8,820
Acquired Loans and Leases [Member] | Commercial Real Estate - Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	37,986	5,809
Acquired Loans and Leases [Member] | Commercial Real Estate - Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	0	0
Acquired Loans and Leases [Member] | Commercial Real Estate - Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases, gross	$ 3,327	$ 3,011

XML

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
ASSETS
Cash and noninterest bearing balances due from banks	$ 84,129	$ 82,163
Interest bearing balances due from banks	988	721
Cash and Cash Equivalents	85,117	82,884
Trading securities, at fair value	9,473	10,991
Available-for-sale securities, at fair value (amortized cost of $1,375,637 at September 30, 2014 and $1,368,736 at December 31, 2013)	1,374,756	1,354,811
Held-to-maturity securities, at fair value (amortized cost of $48,017 at September 30, 2014, and $19,625 at December 31, 2013)	47,608	18,980
Originated loans and leases, net of unearned income and deferred costs and fees	2,674,971	2,527,244
Acquired loans and leases, covered	20,910	25,868
Acquired loans and leases, non-covered	561,588	641,172
Less: Allowance for loan and lease losses	27,786	27,970
Net Loans and Leases	3,229,683	3,166,314
FDIC indemnification asset	2,298	4,790
Federal Home Loan Bank stock	14,838	25,041
Bank premises and equipment, net	59,550	55,932
Corporate owned life insurance	73,269	69,335
Goodwill	92,243	92,140
Other intangible assets, net	15,206	16,298
Accrued interest and other assets	86,878	105,523
Total Assets	5,090,919	5,003,039
Interest bearing:
Checking, savings and money market	2,310,629	2,190,616
Time	930,796	865,702
Noninterest bearing	971,435	890,898
Total Deposits	4,212,860	3,947,216
Federal funds purchased and securities sold under agreements to repurchase	128,368	167,724
Other borrowings, including certain amounts at fair value of $11,032 at September 30, 2014 and $11,292 at December 31, 2013	166,509	331,531
Trust preferred debentures	37,298	37,169
Other liabilities	55,273	61,460
Total Liabilities	4,600,308	4,545,100
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,830,002 at September 30, 2014; and 14,785,007 at December 31, 2013	1,483	1,479
Additional paid-in capital	348,992	346,096
Retained earnings	158,673	137,102
Accumulated other comprehensive loss	(16,810)	(25,119)
Treasury stock, at cost - 108,788 shares at September 30, 2014, and 105,449 shares at December 31, 2013	(3,277)	(3,071)
Total Tompkins Financial Corporation Shareholders' Equity	489,061	456,487
Noncontrolling interests	1,550	1,452
Total Equity	490,611	457,939
Total Liabilities and Equity	$ 5,090,919	$ 5,003,039

XML

Loans and Leases (Details 2) (VIST Financial Corp. ("VIST Financial") [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 30, 2014		Dec. 31, 2013
VIST Financial Corp. ("VIST Financial") [Member]
Accretable discounts
Balance, beginning	$ 10,954		$ 7,337
Accretion	(3,740)		(8,896)
Disposals (loans paid in full)	(250)		(212)
Reclassifications to/from nonaccretable difference	1,873	[1]	7,933	[1]
Other changes in expected cash flows	0	[2]	4,792	[2]
Balance, ending	$ 8,837		$ 10,954

[1] Results in increased interest income as a prospective yield adjustment over the remaining life of the loans, as well as increased interest income from loan sales, modification and prepayments.

[2] Represents changes in cash flows expected to be collected due to factors other than credit (e.g. changes in prepayment assumptions and/or changes in interest rates on variable rate loans).

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
OPERATING ACTIVITIES
Net Income attributable to Tompkins Financial Corporation	$ 39,352	$ 36,565
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses	751	5,576
Depreciation and amortization of premises, equipment, and software	4,203	4,284
Amortization of intangible assets	1,570	1,648
Earnings from corporate owned life insurance	(1,431)	(1,482)
Net amortization on securities	7,824	10,724
Amortization/accretion related to purchase accounting	(6,147)	(7,212)
Mark-to-market loss on trading securities	181	472
Mark-to-market gain on liabilities held at fair value	(260)	(543)
Net gain on securities transactions	(151)	(723)
Net gain on sale of loans	(345)	(212)
Proceeds from sale of loans	19,007	7,076
Loans originated for sale	(18,357)	(8,271)
Gain on conversion of deposits	(140)	0
Net loss (gain) on sale of bank premises and equipment	2	(7)
Gain on redemption of trust preferred	0	(1,410)
Stock-based compensation expense	1,081	960
Decrease in accrued interest receivable	92	927
Decrease in accrued interest payable	(294)	(809)
Proceeds from maturities and payments of trading securities	1,323	4,425
Decrease in FDIC prepaid insurance	0	5,386
Other, net	9,494	20,241
Net Cash Provided by Operating Activities	57,755	77,615
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale securities	157,157	197,009
Proceeds from sales of available-for-sale securities	48,005	99,378
Proceeds from maturities, calls and principal paydowns of held-to-maturity securities	10,325	11,798
Purchases of available-for-sale securities	(219,695)	(316,705)
Purchases of held-to-maturity securities	(38,981)	(7,511)
Net increase in loans	(60,416)	(167,106)
Net decrease (increase) in Federal Home Loan Bank stock	10,203	(2,567)
Proceeds from sale of bank premises and equipment	172	116
Purchases of bank premises and equipment	(7,445)	(4,811)
Purchased of corporate owned life insurance	(2,500)	(1,500)
Net cash used in acquisitions	(415)	0
Other, net	386	(3,417)
Net Cash Used in Investing Activities	(103,204)	(195,316)
FINANCING ACTIVITIES
Net increase in demand, money market, and savings deposits	200,550	90,297
Net increase (decrease) in time deposits	66,568	(67,710)
Net decrease in Federal funds purchases and securities sold under agreements to repurchase	(38,507)	(51,856)
Increase in other borrowings	149,845	194,674
Repayment of other borrowings	(314,606)	(63,801)
Redemption of trust preferred debentures	0	(5,191)
Cash dividends	(17,781)	(16,574)
Common stock issued	50	0
Repurchase of common stock	(2,932)	0
Shares issued for dividend reinvestment plan	2,186	3,009
Shares issued for employee stock ownership plan	1,528	717
Net shares issued related to restricted stock awards	64	(68)
Net proceeds from exercise of stock options	633	3,639
Tax benefit from stock option exercises	84	215
Net Cash Provided by Financing Activities	47,682	87,351
Net Increase (Decrease) in Cash and Cash Equivalents	2,233	(30,350)
Cash and cash equivalents at beginning of period	82,884	118,930
Total Cash & Cash Equivalents at End of Period	85,117	88,580
Supplemental Information:
Cash paid during the year for - Interest	18,033	21,534
Cash paid during the year for - Taxes	3,258	6,283
Transfer of loans to other real estate owned	$ 4,697	$ 4,407

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Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$ (6,871)		$ (531)		$ 13,195		$ (44,028)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income	(20)	[1]	(281)	[1]	(151)	[1]	(723)	[1]
Net unrealized losses	(6,891)		(812)		13,044		(44,751)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	266	[1],[2]	645	[1],[2]	798	[1],[2]	1,934	[1],[2]
Amortization of net retirement plan prior service cost	1	[1],[2]	14	[1],[2]	3	[1],[2]	44	[1],[2]
Amortization of net retirement plan transition liability			13	[1],[2]			38	[1],[2]
Employee benefit plans	267	[1]	672	[1]	801	[1]	2,016	[1]
Other comprehensive (loss) income	(6,624)		(140)		13,845		(42,735)
Available-for-sale securities:
Change in net unrealized gain/loss during the period, tax	2,748		213		(5,277)		17,608
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income, tax	8	[1]	112	[1]	61	[1]	289	[1]
Net unrealized losses, tax	2,756		325		(5,216)		17,897
Employee benefit plans:
Amortization of net retirement plan actuarial gain	(107)		(258)		(319)		(774)
Amortization of net retirement plan prior service cost	0		(6)		(1)		(18)
Amortization of net retirement plan transition liability			(5)				(15)
Employee benefit plans, tax	(107)	[1]	(269)	[1]	(320)	[1]	(807)	[1]
Other comprehensive (loss) income, tax	2,649		56		(5,536)		17,090
Available-for-sale securities:
Change in net unrealized gain/loss during the period	(4,123)		(318)		7,918		(26,420)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income	(12)	[1]	(169)	[1]	(90)	[1]	(434)	[1]
Net unrealized losses	(4,135)		(487)		7,828		(26,854)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	159		387		479		1,160
Amortization of net retirement plan prior service cost	1		8		2		26
Amortization of net retirement plan transition liability	0		8		0		23
Employee benefit plans	160	[1]	403	[1]	481	[1]	1,200	[1]
Other comprehensive (loss) income	$ (3,975)		$ (84)		$ 8,309		$ (25,645)

[1] Amounts in parentheses indicated debits in income statement

[2] The accumulated other comprehensive income components are included in the computation of net periodic benefit cost (See Note 10 - "Employee Benefit Plan")

XML

Securities (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 1,375,637	$ 1,368,736
Gross Unrealized Gains	16,809	19,602
Gross Unrealized Losses	17,690	33,527
Fair Value	1,374,756	1,354,811
Obligations of U.S. Government sponsored entities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	587,933	558,130
Gross Unrealized Gains	6,061	7,720
Gross Unrealized Losses	3,100	9,505
Fair Value	590,894	556,345
Obligations of U.S. states and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	69,704	68,216
Gross Unrealized Gains	1,179	1,193
Gross Unrealized Losses	381	1,447
Fair Value	70,502	67,962
Residential Mortgage-backed securities U.S. Government agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	119,049	147,766
Gross Unrealized Gains	2,370	2,554
Gross Unrealized Losses	1,702	3,642
Fair Value	119,717	146,678
Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	594,700	587,843
Gross Unrealized Gains	7,195	8,122
Gross Unrealized Losses	12,116	18,493
Fair Value	589,779	577,472
Residential Mortgage-backed securities Non-U.S. Government agencies or sponsored entities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	276	306
Gross Unrealized Gains	4	5
Gross Unrealized Losses	0	0
Fair Value	280	311
U.S. corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,500	5,000
Gross Unrealized Gains	0	8
Gross Unrealized Losses	337	375
Fair Value	2,163	4,633
Total debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,374,162	1,367,261
Gross Unrealized Gains	16,809	19,602
Gross Unrealized Losses	17,636	33,462
Fair Value	1,373,335	1,353,401
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,475	1,475
Gross Unrealized Gains	0	0
Gross Unrealized Losses	54	65
Fair Value	$ 1,421	$ 1,410

XML

Financial Guarantees (Details Narrative) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Guarantees [Abstract]
Obligations to extend credit for loan commitments	$ 60,500	$ 62,600

XML

Fair Value

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value

14. Fair Value

FASB ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. FASB ASC Topic 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Transfers between levels, when determined to be appropriate, are recognized at the end of each reporting period.

The three levels of the fair value hierarchy under FASB ASC Topic 820 are:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements
September 30, 2014
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Trading securities
Obligations of U.S. Government sponsored entities	$	7,631	$	0	$	7,631	$	0
Mortgage-backed securities – residential
U.S. Government sponsored entities		1,842		0		1,842		0
Available-for-sale securities
Obligations of U.S. Government sponsored entities		590,894		0		590,894		0
Obligations of U.S. states and political subdivisions		70,502		0		70,502		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies		119,717		0		119,717		0
U.S. Government sponsored entities		589,779		0		589,779		0
Non-U.S. Government agencies or sponsored entities		280		0		280		0
U.S. corporate debt securities		2,163		0		2,163		0
Equity securities		1,421		0		0		1,421
Borrowings
Other borrowings		11,032		0		11,032		0

The change in the fair value of the $1.4 million of available-for-sale securities valued using significant unobservable inputs (level 3), between January 1, 2014 and September 30, 2014 was immaterial.

Recurring Fair Value Measurements
December 31, 2013
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Trading securities
Obligations of U.S. Government sponsored entities	$	8,275	$	0	$	8,275	$	0
Mortgage-backed securities – residential
U.S. Government sponsored entities		2,716		0		2,716		0
Available-for-sale securities				.
Obligations of U.S. Government sponsored entities		556,345		0		556,345		0
Obligations of U.S. states and political subdivisions		67,962		0		67,962		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies		146,678		0		146,678		0
U.S. Government sponsored entities		577,472		0		577,472		0
Non-U.S. Government agencies or sponsored entities		311		0		311		0
U.S. corporate debt securities		4,633		0		4,633		0
Equity securities		1,410		0		0		1,410
Borrowings
Other borrowings		11,292		0		11,292		0

The change in the fair value of the $1.4 million of available-for-sale securities valued using significant unobservable inputs (level 3), between January 1, 2013 and December 31, 2013 was immaterial.

There were no transfers between Levels 1, 2 and 3 for the three months ended September 30, 2014.

The Company determines fair value for its trading securities using independently quoted market prices. The Company determines fair value for its available-for-sale securities using an independent bond pricing service for identical assets or very similar securities. The Company has reviewed the pricing sources, including methodologies used, and finds them to be fairly stated.

Fair values of borrowings are estimated using Level 2 inputs based upon observable market data. The Company determines fair value for its borrowings using a discounted cash flow technique based upon expected cash flows and current spreads on FHLB advances with the same structure and terms. The Company also receives pricing information from third parties, including the FHLB. The pricing obtained is considered representative of the transfer price if the liabilities were assumed by a third party. The Company’s potential credit risk did not have a material impact on the quoted settlement prices used in measuring the fair value of the FHLB borrowings at September 30, 2014.

Certain assets are measured at fair value on a nonrecurring basis. For the Company, these include loans held for sale, collateral dependent impaired loans, and other real estate owned (“OREO”). During the third quarter of 2014, certain collateral dependent impaired loans were remeasured and reported at fair value through a specific valuation allowance and/or partial charge-offs for loan and lease losses based upon the fair value of the underlying collateral. Collateral values are estimated using Level 2 inputs based upon observable market data. In addition to collateral dependent impaired loans, certain other real estate owned were remeasured and reported at fair value based upon the fair value of the underlying collateral. The fair values of other real estate owned are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. In general, the fair values of other real estate owned are based upon appraisals, with discounts made to reflect estimated costs to sell the real estate. Upon initial recognition, fair value write-downs on other real estate owned are taken through a charge-off to the allowance for loan and lease losses. Subsequent fair value write-downs on other real estate owned are reported in other noninterest expense.

Three months ended September 30, 2014
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Three months ended
Assets:	09/30/2014		(Level 1)		(Level 2)		(Level 3)		09/30/2014
Impaired Loans	$	8,149	$	0	$	8,149	$	0	$	(67	)
Other real estate owned		2,689		0		2,689		0		10

Three months ended September 30, 2013
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Three months ended
Assets:	09/30/2013		(Level 1)		(Level 2)		(Level 3)		09/30/2013
Impaired Loans	$	5,405	$	0	$	5,405	$	0	$	(650	)
Other real estate owned		2,718		0		2,718		0		(56	)

Nine months ended September 30, 2014
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Nine months ended
Assets:	09/30/2014		(Level 1)		(Level 2)		(Level 3)		09/30/2014
Impaired Loans	$	9,226	$	0	$	9,226	$	0	$	(252	)
Other real estate owned		5,182		0		5,182		0		(32	)

Nine months ended September 30, 2013
				Fair value measurements at reporting					Gain (losses) from fair
				date using:					value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Nine months ended
Assets:	09/30/2013		(Level 1)		(Level 2)		(Level 3)		09/30/2013
Impaired Loans	$	10,530	$	0	$	10,530	$	0	$	(884	)
Other real estate owned		1,625		0		1,625		0		(247	)

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at September 30, 2014 and December 31, 2013. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions.

The fair value estimates, methods and assumptions set forth below for the Company’s financial instruments, including those financial instruments carried at cost, are made solely to comply with disclosures required by generally accepted accounting principles in the United States and do not always incorporate the exit-price concept of fair value prescribed by ASC Topic 820-10 and should be read in conjunction with the financial statements and notes included in this Report.

Estimated Fair Value of Financial Instruments
September 30, 2014
(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	85,117	$	85,117	$	85,117	$	0	$	0
Securities - held to maturity		47,608		48,017		0		48,017		0
FHLB stock		14,838		14,838		0		14,838		0
Accrued interest receivable		16,494		16,494		0		16,494		0
Loans/leases, net1		3,229,683		3,248,727		0		9,226		3,239,501
Financial Liabilities:
Time deposits	$	930,796	$	932,938	$	0	$	932,938	$	0
Other deposits		3,282,064		3,282,064		0		3,282,064		0
Fed funds purchased and securities sold under agreements to repurchase		128,368		132,383		0		132,383		0
Other borrowings		155,477		155,739		0		155,739		0
Accrued interest payable		1,827		1,827		0		1,827		0
Trust preferred debentures		37,298		43,904		0		43,904		0

Estimated Fair Value of Financial Instruments

December 31, 2013

(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	82,884	$	82,884	$	82,884	$	0	$	0
Securities - held to maturity		18,980		19,625		0		19,625		0
FHLB and FRB stock		25,041		25,041		0		25,041		0
Accrued interest receivable		16,586		16,586		0		16,586		0
Loans/leases, net1		3,166,314		3,201,837		0		6,846		3,194,991
Financial Liabilities:
Time deposits	$	865,702	$	870,857	$	0	$	870,857	$	0
Other deposits		3,081,514		3,081,514		0		3,081,514		0
Fed funds purchased and securities sold under agreements to repurchase		167,724		173,425		0		173,425		0
Other borrowings		320,239		326,193		0		326,193		0
Accrued interest payable		2,121		2,121		0		2,121		0
Trust preferred debentures		37,169		41,673		0		41,673		0

¹ Lease receivables, although excluded from the scope of ASC Topic 825, are included in the estimated fair value amounts at their carrying value.

The following methods and assumptions were used in estimating fair value disclosures for financial instruments.

Cash and Cash Equivalents: The carrying amounts reported in the Consolidated Statements of Condition for cash, noninterest-bearing deposits, money market funds, and Federal funds sold approximate the fair value of those assets.

Securities: Fair values for U.S. Treasury securities are based on quoted market prices. Fair values for obligations of U.S. government sponsored entities, mortgage-backed securities-residential, obligations of U.S. states and political subdivisions, and U.S. corporate debt securities are based on quoted market prices, where available, as provided by third party pricing vendors. If quoted market prices were not available, fair values are based on quoted market prices of comparable instruments in active markets and/or based upon matrix pricing methodology, which uses comprehensive interest rate tables to determine market price, movement and yield relationships. These securities are reviewed periodically to determine if there are any events or changes in circumstances that would adversely affect their value.

Loans and Leases: The fair values of residential loans are estimated using discounted cash flow analyses, based upon available market benchmarks for rates and prepayment assumptions. The fair values of commercial and consumer loans are estimated using discounted cash flow analyses, based upon interest rates currently offered for loans and leases with similar terms and credit quality. The fair value of loans held for sale are determined based upon contractual prices for loans with similar characteristics.

FHLB STOCK: The carrying amount of FHLB stock approximates fair value. If the stock is redeemed, the Company will receive an amount equal to the par value of the stock. For miscellaneous equity securities, carrying value is cost.

ACCRUED INTEREST RECEIVABLE AND ACCRUED INTEREST PAYABLE: The carrying amount of these short term instruments approximate fair value.

Deposits: The fair values disclosed for noninterest bearing accounts and accounts with no stated maturities are equal to the amount payable on demand at the reporting date. The fair value of time deposits is based upon discounted cash flow analyses using rates offered for FHLB advances, which is the Company’s primary alternative source of funds.

Securities Sold Under Agreements to Repurchase: The carrying amounts of repurchase agreements and other short-term borrowings approximate their fair values. Fair values of long-term borrowings are estimated using a discounted cash flow approach, based on current market rates for similar borrowings. For securities sold under agreements to repurchase where the Company has elected the fair value option, the Company also receives pricing information from third parties, including the FHLB.

Other Borrowings: The fair values of other borrowings are estimated using discounted cash flow analysis, discounted at the Company’s current incremental borrowing rate for similar borrowing arrangements. For other borrowings where the Company has elected the fair value option, the Company also receives pricing information from third parties, including the FHLB.

TRUST PREFERRED DEBENTURES: The fair value of the trust preferred debentures has been estimated using a discounted cash flow analysis which uses a discount factor of a market spread over current interest rates for similar instruments.

XML

Securities (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 47,608	$ 18,980
Gross Unrealized Gains	606	645
Gross Unrealized Losses	197	0
Fair Value	48,017	19,625
Obligations of U.S. states and political subdivisions [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	16,739	18,980
Gross Unrealized Gains	606	645
Gross Unrealized Losses	0	0
Fair Value	17,345	19,625
Obligations of U.S. Government sponsored entities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	30,869
Gross Unrealized Gains	0
Gross Unrealized Losses	197
Fair Value	$ 30,672

XML

Loans and Leases (Tables)

9 Months Ended

Sep. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Schedule of loans and leases

Loans and Leases at September 30, 2014 and December 31, 2013 were as follows:
	09/30/2014								12/31/2013
(in thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	49,828		$	0	$	49,828		$	74,788		$	0	$	74,788
Commercial and industrial other		627,290			102,601		729,891			562,439			128,503		690,942
Subtotal commercial and industrial		677,118			102,601		779,719			637,227			128,503		765,730
Commercial real estate
Construction		51,988			41,313		93,301			46,441			39,353		85,794
Agriculture		57,158			3,182		60,340			52,627			3,135		55,762
Commercial real estate other		960,346			321,714		1,282,060			903,320			366,438		1,269,758
Subtotal commercial real estate		1,069,492			366,209		1,435,701			1,002,388			408,926		1,411,314
Residential real estate
Home equity		182,994			58,459		241,453			171,809			67,183		238,992
Mortgages		685,989			33,200		719,189			658,966			35,336		694,302
Subtotal residential real estate		868,983			91,659		960,642			830,775			102,519		933,294
Consumer and other
Indirect		18,825			0		18,825			21,202			5		21,207
Consumer and other		34,327			1,119		35,446			32,312			1,219		33,531
Subtotal consumer and other		53,152			1,119		54,271			53,514			1,224		54,738
Leases		8,317			0		8,317			5,563			0		5,563
Covered loans		0			20,910		20,910			0			25,868		25,868
Total loans and leases		2,677,062			582,498		3,259,560			2,529,467			667,040		3,196,507
Less: unearned income and deferred costs and fees		(2,091	)		0		(2,091	)		(2,223	)		0		(2,223	)
Total loans and leases, net of unearned income and deferred costs and fees	$	2,674,971		$	582,498	$	3,257,469		$	2,527,244		$	667,040	$	3,194,284

Schedule of outstanding principal and the related carrying amount of loans acquired in the VIST Bank Acquisition

The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the VIST Bank acquisition are as follows at September 30, 2014 and December 31, 2013:
(in thousands)	09/30/2014		12/31/2013
Acquired Credit Impaired Loans
Outstanding principal balance	$	49,410	$	62,146
Carrying amount		38,561		46,809
Acquired Non-Credit Impaired Loans
Outstanding principal balance		551,074		630,600
Carrying amount		543,937		620,231
Total Acquired Loans
Outstanding principal balance		600,484		692,746
Carrying amount		582,498		667,040

Schedule of the change in the accretable yield

The following tables present changes in accretable yield on loans acquired from VIST Bank that were considered credit impaired.
(in thousands)
Balance at January 1, 2013	$	7,337
Accretion		(8,896	)
Disposals (loans paid in full)		(212	)
Reclassifications to/from nonaccretable difference1		7,933
Other changes in expected cash flows2		4,792
Balance at December 31, 2013	$	10,954

(in thousands)
Balance at January 1, 2014	$	10,954
Accretion		(3,740	)
Disposals (loans paid in full)		(250	)
Reclassifications to/from nonaccretable difference1		1,873
Other changes in expected cash flows2		0
Balance at September 30, 2014	$	8,837

¹ Results in increased interest income as a prospective yield adjustment over the remaining life of the loans, as well as increased interest income from loan sales, modification and prepayments.

² Represents changes in cash flows expected to be collected due to factors other than credit (e.g. changes in prepayment assumptions and/or changes in interest rates on variable rate loans).

Schedule of age analysis of past due loans

The below table is an age analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of September 30, 2014 and December 31, 2013.

September 30, 2014
(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Originated Loans and Leases
Commercial and industrial
Agriculture	$	0	$	0	$	49,828	$	49,828		$	0	$	0
Commercial and industrial other		169		508		626,613		627,290			0		1,639
Subtotal commercial and industrial		169		508		676,441		677,118			0		1,639
Commercial real estate
Construction		0		0		51,988		51,988			0		534
Agriculture		0		29		57,129		57,158			0		132
Commercial real estate other		473		4,325		955,548		960,346			0		5,162
Subtotal commercial real estate		473		4,354		1,064,665		1,069,492			0		5,828
Residential real estate
Home equity		1,175		1,384		179,785		182,994			60		1,550
Mortgages		1,250		6,964		676,943		685,989			335		6,850
Subtotal residential real estate		2,425		8,348		856,728		868,983			395		8,400
Consumer and other
Indirect		508		0		18,317		18,825			0		72
Consumer and other		236		241		33,850		34,327			0		380
Subtotal consumer and other		744		241		52,167		53,152			0		452
Leases		0		0		8,317		8,317			0		0
Total loans and leases		3,811		14,933		2,658,318		2,677,062			395		16,319
Less: unearned income and deferred costs and fees		0		0		0		(2,091	)		0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	3,811	$	14,933	$	2,658,318	$	2,674,971		$	395	$	16,319
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other		0		941		101,660		102,601			649		761
Subtotal commercial and industrial		0		941		101,660		102,601			649		761
Commercial real estate
Construction		0		1,970		39,343		41,313			1,709		466
Agriculture		0		0		3,182		3,182			0		0
Commercial real estate other		0		1,857		319,857		321,714			79		2,084
Subtotal commercial real estate		0		3,827		362,382		366,209			1,788		2,550
Residential real estate
Home equity		156		643		57,660		58,459			173		660
Mortgages		580		703		31,917		33,200			561		1,027
Subtotal residential real estate		736		1,346		89,577		91,659			734		1,687
Consumer and other
Consumer and other		0		0		1,119		1,119			0		0
Subtotal consumer and other		0		0		1,119		1,119			0		0
Covered loans		0		1,149		19,761		20,910			1,149		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	736	$	7,263	$	574,499	$	582,498		$	4,320	$	4,998

December 31, 2013
(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Originated loans and leases
Commercial and industrial
Agriculture	$	0	$	0	$	74,788	$	74,788		$	0	$	0
Commercial and industrial other		211		1,187		561,041		562,439			0		1,260
Subtotal commercial and industrial		211		1,187		635,829		637,227			0		1,260
Commercial real estate
Construction		216		7,657		38,568		46,441			0		9,873
Agriculture		180		0		52,447		52,627			0		46
Commercial real estate other		1,104		6,976		895,240		903,320			161		9,522
Subtotal commercial real estate		1,500		14,633		986,255		1,002,388			161		19,441
Residential real estate
Home equity		784		1,248		169,777		171,809			62		1,477
Mortgages		2,439		5,946		650,581		658,966			384		7,443
Subtotal residential real estate		3,223		7,194		820,358		830,775			446		8,920
Consumer and other
Indirect		768		152		20,282		21,202			0		216
Consumer and other		60		0		32,252		32,312			0		38
Subtotal consumer and other		828		152		52,534		53,514			0		254
Leases		0		0		5,563		5,563			0		0
Total loans and leases		5,762		23,166		2,500,539		2,529,467			607		29,875
Less: unearned income and deferred costs and fees		0		0		0		(2,223	)		0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	5,762	$	23,166	$	2,500,539	$	2,527,244		$	607	$	29,875
Acquired loans and leases
Commercial and industrial
Commercial and industrial other		554		1,651		126,298		128,503			1,231		419
Subtotal commercial and industrial		554		1,651		126,298		128,503			1,231		419
Commercial real estate
Construction		0		2,148		37,205		39,353			1,676		473
Agriculture		0		0		3,135		3,135			0		0
Commercial real estate other		403		3,585		362,450		366,438			709		3,450
Subtotal commercial real estate		403		5,733		402,790		408,926			2,385		3,923
Residential real estate
Home equity		213		934		66,036		67,183			347		1,844
Mortgages		345		1,264		33,727		35,336			594		2,322
Subtotal residential real estate		558		2,198		99,763		102,519			941		4,166
Consumer and other
Indirect		0		0		5		5			0		0
Consumer and other		17		0		1,202		1,219			0		0
Subtotal consumer and other		17		0		1,207		1,224			0		0
Covered loans		0		2,416		23,452		25,868			2,416		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	1,532	$	11,998	$	653,510	$	667,040		$	6,973	$	8,508

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Fair Value (Details 1) (Non-Recurring [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain Loss on impaired loans	$ (67)	$ (650)	$ (252)	$ (884)
Gain Loss on Other real estate owned	10	(56)	(32)	(247)
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	8,149	5,405	9,226	10,530
Other real estate owned	2,689	2,718	5,182	1,625
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	0	0	0	0
Other real estate owned	0	0	0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	8,149	5,405	9,226	10,530
Other real estate owned	2,689	2,718	5,182	1,625
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	0	0	0	0
Other real estate owned	$ 0	$ 0	$ 0	$ 0

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Treasury Stock [Member]	Noncontrolling Interests [Member]	Total
Balances, beginning at Dec. 31, 2012	$ 1,443	$ 334,649	$ 108,709	$ (2,106)	$ (2,787)	$ 1,452	$ 441,360
Net income attributable to noncontrolling interests and Tompkins Financial Corporation			36,565			98	36,663
Other comprehensive income				(25,645)			(25,645)
Total Comprehensive Income							11,018
Cash dividends			(16,574)				(16,574)
Net exercise of stock options and related tax benefit	11	3,843					3,854
Stock-based compensation expense		960					960
Shares issued for dividend reinvestment plan	7	3,002					3,009
Shares issued for employee stock ownership plan	2	715					717
Directors deferred compensation plan		185			(185)		0
Restricted stock activity	10	(78)					(68)
Balances, ending at Sep. 30, 2013	1,473	343,276	128,700	(27,751)	(2,972)	1,550	444,276
Balances, beginning at Dec. 31, 2013	1,479	346,096	137,102	(25,119)	(3,071)	1,452	457,939
Net income attributable to noncontrolling interests and Tompkins Financial Corporation			39,352			98	39,450
Other comprehensive income				8,309			8,309
Total Comprehensive Income							47,759
Cash dividends			(17,781)				(17,781)
Net exercise of stock options and related tax benefit	4	713					717
Common stock repurchased and returned to unissued status	(7)	(2,925)					(2,932)
Stock-based compensation expense		1,081					1,081
Shares issued for dividend reinvestment plan	4	2,182					2,186
Shares issued for employee stock ownership plan	3	1,525					1,528
Directors deferred compensation plan		206			(206)		0
Restricted stock activity	0	64					64
Stock issued for purchase acquisition	0	50					50
Balances, ending at Sep. 30, 2014	$ 1,483	$ 348,992	$ 158,673	$ (16,810)	$ (3,277)	$ 1,550	$ 490,611

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CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Available-for-sale securities, at amortized cost	$ 1,375,637	$ 1,368,736
Held-to-maturity securities, at amortized cost	48,017	19,625
Other borrowings, including certain amounts at fair value	$ 11,032	$ 11,292
Common Stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common Stock, shares authorized (in shares)	25,000,000	25,000,000
Common Stock, shares issued (in shares)	14,830,002	14,785,007
Treasury stock, shares (in shares)	108,788	105,449

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Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2014

Other Comprehensive Income Loss

Other Comprehensive Income (Loss)

9. Other Comprehensive Income (Loss)

The following table presents reclassifications out of the accumulated other comprehensive income for the three and nine month periods ended September 30, 2014 and 2013.

	Three months ended September 30, 2014
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(6,871	)	$	2,748		$	(4,123	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(20	)		8			(12	)
Net unrealized losses		(6,891	)		2,756			(4,135	)
Employee benefit plans:
Amortization of net retirement plan actuarial gain		266			(107	)		159
Amortization of net retirement plan prior service cost		1			0			1
Employee benefit plans		267			(107	)		160
Other comprehensive (loss) income	$	(6,624	)	$	2,649		$	(3,975	)

	Three months ended September 30, 2013
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(531	)	$	213		$	(318	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(281	)		112			(169	)
Reclassification adjustment for credit impairment on available-for-sale
Net unrealized losses		(812	)		325			(487	)
Employee benefit plans:
Amortization of net retirement plan actuarial loss		645			(258	)		387
Amortization of net retirement plan prior service cost		14			(6	)		8
Amortization of net retirement plan transition liability		13			(5	)		8
Employee benefit plans		672			(269	)		403
Other comprehensive (loss) income	$	(140	)	$	56		$	(84	)

	Nine months ended September 30, 2014
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	13,195		$	(5,277	)	$	7,918
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(151	)		61			(90	)
Net unrealized gains		13,044			(5,216	)		7,828
Employee benefit plans:
Amortization of net retirement plan actuarial gain		798			(319	)		479
Amortization of net retirement plan prior service cost		3			(1	)		2
Employee benefit plans		801			(320	)		481
Other comprehensive income (loss)	$	13,845		$	(5,536	)	$	8,309

	Nine months ended September 30, 2013
(in thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
Change in net unrealized gain/loss during the period	$	(44,028	)	$	17,608		$	(26,420	)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income		(723	)		289			(434	)
Reclassification adjustment for credit impairment on available-for-sale
Net unrealized losses		(44,751	)		17,897			(26,854	)
Employee benefit plans:
Amortization of net retirement plan actuarial loss		1,934			(774	)		1,160
Amortization of net retirement plan prior service cost		44			(18	)		26
Amortization of net retirement plan transition liability		38			(15	)		23
Employee benefit plans		2,016			(807	)		1,209
Other comprehensive (loss) income	$	(42,735	)	$	17,090		$	(25,645	)

The following table presents the activity in our accumulated other comprehensive income for the periods indicated:

(in thousands)	Available-for- Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income
Balance at July 1, 2014	$	3,606		$	(16,441	)	$	(12,835	)
Other comprehensive income (loss) before reclassifications		(4,123	)		0			(4,123	)
Amounts reclassified from accumulated other comprehensive income		(12	)		160			148
Net current-period other comprehensive (loss) income		(4,135	)		160			(3,975	)
Balance at September 30, 2014	$	(529	)	$	(16,281	)	$	(16,810	)
Balance at January 1, 2014	$	(8,357	)	$	(16,762	)	$	(25,119	)
Other comprehensive income (loss) before reclassifications		7,918			0			7,918
Amounts reclassified from accumulated other comprehensive (loss) income		(90	)		481			391
Net current-period other comprehensive income		7,828			481			8,309
Balance at September 30, 2014	$	(529	)	$	(16,281	)	$	(16,810	)

(in thousands)	Available-for- Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income
Balance at July 1, 2013	$	(11	)	$	(27,656	)	$	(27,667	)
Other comprehensive (loss) income before reclassifications		(318	)		0			(318	)
Amounts reclassified from accumulated other comprehensive (loss) income		(169	)		403			234
Net current-period other comprehensive (loss) income		(487	)		403			(84	)
Balance at September 30, 2013	$	(498	)	$	(27,253	)	$	(27,751	)
Balance at January 1, 2013	$	26,356		$	(28,462	)	$	(2,106	)
Other comprehensive (loss) income before reclassifications		(26,420	)		0			(26,420	)
Amounts reclassified from accumulated other comprehensive (loss) income		(434	)		1,209			775
Net current-period other comprehensive (loss) income		(26,854	)		1,209			(25,645	)
Balance at September 30, 2013	$	(498	)	$	(27,253	)	$	(27,751	)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive income for the three and nine months ended September 30, 2014 and 2013.

Three months ended September 30, 2014
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	20		Net gain on securities transactions
		(8	)	Tax expense
		12		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(266	)
Net retirement plan prior service cost		(1	)
		(267	)	Total before tax
		107		Tax benefit
		(160	)	Net of tax

Nine months ended September 30, 2014
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	151		Net gain on securities transactions
		(61	)	Tax expense
		90		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(798	)
Net retirement plan prior service cost		(3	)
		(801	)	Total before tax
		320		Tax benefit
		(481	)	Net of tax

Three months ended September 30, 2013
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	281		Net gain on securities transactions
		(112	)	Tax expense
		169		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(645	)
Net retirement plan prior service cost		(14	)
Net retirement plan transition liability		(13	)
		(672	)	Total before tax
		269		Tax benefit
		(403	)	Net of tax

Nine months ended September 30, 2013
Details about Accumulated other Comprehensive Income Components (in thousands)		Amount Reclassified from Accumulated Other Comprehensive Income1		Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	723		Net gain on securities transactions
		(289	)	Tax expense
		434		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss		(1,934	)
Net retirement plan prior service cost		(44	)
Net retirement plan transition liability		(38	)
		(2,016	)	Total before tax
		807		Tax benefit
		(1,209	)	Net of tax

¹ Amounts in parentheses indicated debits in income statement

² The accumulated other comprehensive income components are included in the computation of net periodic benefit cost (See Note 10 - “Employee Benefit Plan”)

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 30, 2014
Document And Entity Information
Entity Registrant Name	TOMPKINS FINANCIAL CORPORATION
Entity Central Index Key	0001005817
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		14,763,078
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2014

XML

Employee Benefit Plan

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Employee Benefits Plan

10. Employee Benefit Plan

The following table sets forth the amount of the net periodic benefit cost recognized by the Company for the Company’s pension plan, post-retirement plan (Life and Health), and supplemental employee retirement plans (“SERP”) including the following components: service cost, interest cost, expected return on plan assets for the period, amortization of the unrecognized transitional obligation or transition asset, and the amounts of recognized gains and losses, prior service cost recognized, and gain or loss recognized due to settlement or curtailment.

Components of Net Periodic Benefit Cost
	Pension Benefits						Life and Health				SERP Benefits
	Three Months Ended						Three Months Ended				Three Months Ended
(in thousands)	09/30/2014			09/30/2013			09/30/2014		09/30/2013		09/30/2014		09/30/2013
Service cost	$	608		$	729		$	50	$	66	$	56	$	120
Interest cost		767			672			92		86		216		184
Expected return on plan assets		(1,256	)		(1,002	)		0		0		0		0
Amortization of net retirement plan actuarial loss		215			506			0		24		51		115
Amortization of net retirement plan prior service cost (credit)		(31	)		(31	)		4		4		28		41
Amortization of net retirement plan transition liability		0			0			0		13		0		0
Net periodic benefit cost	$	303		$	874		$	146	$	193	$	351	$	460

Components of Net Period Benefit Cost
	Pension Benefits						Life and Health				SERP Benefits
	Nine Months Ended						Nine Months Ended				Nine Months Ended
(in thousands)	09/30/2014			09/30/2013			09/30/2014		09/30/2013		09/30/2014		09/30/2013
Service cost	$	1,825		$	2,187		$	151	$	199	$	167	$	359
Interest cost		2,302			2,016			275		259		649		553
Expected return on plan assets		(3,768	)		(3,007	)		0		0		0		0
Amortization of net retirement plan actuarial loss		644			1,517			0		72		154		345
Amortization of net retirement plan prior service cost (credit)		(92	)		(92	)		12		12		84		124
Amortization of net retirement plan transition liability		0			0			0		38		0		0
Net periodic benefit cost	$	911		$	2,621		$	438	$	580	$	1,054	$	1,381

The net periodic benefit cost for the Company’s benefit plans are recorded as a component of salaries and benefits in the consolidated statements of income.

The Company realized approximately $481,000 and $1.2 million, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive income, for the nine months ended September 30, 2014 and 2013, respectively.

The Company is not required to contribute to the pension plan in 2014, but it may make voluntary contributions. The Company did not contribute to the pension plan in the nine months ended September 30, 2014 or 2013.

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
INTEREST AND DIVIDEND INCOME
Loans	$ 38,298	$ 38,048	$ 112,601	$ 112,027
Due from banks	0	1	2	9
Trading securities	102	147	321	472
Available-for-sale securities	7,718	7,830	23,637	23,222
Held-to-maturity securities	288	160	626	528
Federal Home Loan Bank stock and Federal Reserve Bank stock	212	193	616	538
Total Interest and Dividend Income	46,618	46,379	137,803	136,796
INTEREST EXPENSE
Time certificates of deposits of $100,000 or more	996	1,208	2,900	3,651
Other deposits	1,830	1,894	5,446	6,093
Federal funds purchased and securities sold under agreements to repurchase	683	901	2,263	2,877
Trust preferred debentures	573	660	1,714	2,037
Other borrowings	961	1,243	3,362	3,634
Total Interest Expense	5,043	5,906	15,685	18,292
Net Interest Income	41,575	40,473	122,118	118,504
Less: (Credit) Provision for loan and lease losses	(59)	2,049	751	5,576
Net Interest Income After Provision for Loan and Lease Losses	41,634	38,424	121,367	112,928
NONINTEREST INCOME
Insurance commissions and fees	7,520	7,160	21,823	21,588
Investment services income	3,636	3,694	11,549	11,180
Service charges on deposit accounts	2,506	2,254	7,010	6,186
Card services income	1,936	1,735	5,968	5,163
Mark-to-market loss on trading securities	(87)	(87)	(181)	(472)
Mark-to-market gain on liabilities held at fair value	132	119	260	543
Other income	1,892	3,372	6,129	7,548
Gain on sale of available-for-sale securities	20	281	151	723
Total Noninterest Income	17,555	18,528	52,709	52,459
NONINTEREST EXPENSES
Salaries and wages	17,553	16,755	51,859	48,618
Pension and other employee benefits	4,941	5,606	15,964	17,014
Net occupancy expense of premises	2,969	2,850	9,296	8,865
Furniture and fixture expense	1,451	1,448	4,247	4,367
FDIC insurance	682	808	2,228	2,401
Amortization of intangible assets	518	544	1,570	1,648
Merger related expenses	0	0	0	228
Other operating expense	10,423	9,543	30,511	29,710
Total Noninterest Expenses	38,537	37,554	115,675	112,851
Income Before Income Tax Expense	20,652	19,398	58,401	52,536
Income Tax Expense	6,897	5,316	18,951	15,873
Net Income attributable to Noncontrolling Interests and Tompkins Financial Corporation	13,755	14,082	39,450	36,663
Less: Net income attributable to noncontrolling interests	33	33	98	98
Net Income Attributable to Tompkins Financial Corporation	$ 13,722	$ 14,049	$ 39,352	$ 36,565
Basic Earnings Per Share (in dollars per share)	$ 0.92	$ 0.96	$ 2.65	$ 2.51
Diluted Earnings Per Share (in dollars per share)	$ 0.92	$ 0.95	$ 2.64	$ 2.50

XML

Securities

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Securities

4. Securities

Available-for-Sale Securities

The following table summarizes available-for-sale securities held by the Company at September 30, 2014:

		Available-for-Sale Securities
September 30, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	587,933	$	6,061	$	3,100	$	590,894
Obligations of U.S. states and political subdivisions		69,704		1,179		381		70,502
Mortgage-backed securities – residential, issued by
U.S. Government agencies		119,049		2,370		1,702		119,717
U.S. Government sponsored entities		594,700		7,195		12,116		589,779
Non-U.S. Government agencies or sponsored entities		276		4		0		280
U.S. corporate debt securities		2,500		0		337		2,163
Total debt securities		1,374,162		16,809		17,636		1,373,335
Equity securities		1,475		0		54		1,421
Total available-for-sale securities	$	1,375,637	$	16,809	$	17,690	$	1,374,756

The following table summarizes available-for-sale securities held by the Company at December 31, 2013:
		Available-for-Sale Securities
December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	558,130	$	7,720	$	9,505	$	556,345
Obligations of U.S. states and political subdivisions		68,216		1,193		1,447		67,962
Mortgage-backed securities – residential, issued by
U.S. Government agencies		147,766		2,554		3,642		146,678
U.S. Government sponsored entities		587,843		8,122		18,493		577,472
Non-U.S. Government agencies or sponsored entities		306		5		0		311
U.S. corporate debt securities		5,000		8		375		4,633
Total debt securities		1,367,261		19,602		33,462		1,353,401
Equity securities		1,475		0		65		1,410
Total available-for-sale securities	$	1,368,736	$	19,602	$	33,527	$	1,354,811

Held-to-Maturity Securities

The following table summarizes held-to-maturity securities held by the Company at September 30, 2014:

	Held-to-Maturity Securities
September 30, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	30,869	$	0	$	197	$	30,672
Obligations of U.S. states and political subdivisions	$	16,739	$	606	$	0	$	17,345
Total held-to-maturity debt securities	$	47,608	$	606	$	197	$	48,017

The following table summarizes held-to-maturity securities held by the Company at December 31, 2013:
	Held-to-Maturity Securities
December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. states and political subdivisions	$	18,980	$	645	$	0	$	19,625
Total held-to-maturity debt securities	$	18,980	$	645	$	0	$	19,625

The Company may from time to time sell investment securities from its available-for-sale portfolio. Realized gains on available-for-sale securities sold were $20,000 and $186,000 in the third quarter and nine months ending September 30, 2014, respectively, and $303,000 and $808,000 in the same periods of 2013. Realized losses on available-for-sale securities sold were $0 and $78,000 in the third quarter and nine months ending September 30, 2014, respectively, and $22,000 and $85,000 in the third quarter and nine months ending September 30, 2013, respectively.

The following table summarizes available-for-sale securities that had unrealized losses at September 30, 2014:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	169,741	$	849	$	95,197	$	2,251	$	264,938	$	3,100
Obligations of U.S. states and political subdivisions		15,235		105		11,929		276		27,164		381
Mortgage-backed securities – issued by
U.S. Government agencies		27,840		101		41,748		1,601		69,588		1,702
U.S. Government sponsored entities		133,210		1,095		270,358		11,021		403,568		12,116
U.S. corporate debt securities		0		0		2,163		337		2,163		337
Equity securities		0		0		946		54		946		54
Total available-for-sale securities	$	346,026	$	2,150	$	422,341	$	15,540	$	768,367	$	17,690

The following table summarizes held-to-maturity securities that had unrealized losses at September 30, 2014.

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	30,672	$	197	$	0	$	0	$	30,672	$	197
Total held-to-maturity securities	$	30,672	$	197	$	0	$	0	$	30,672	$	197

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2013:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	337,967	$	9,467	$	1,761	$	38	$	339,728	$	9,505
Obligations of U.S. states and political subdivisions		21,821		821		6,173		626		27,994		1,447
Mortgage-backed securities – residential, issued by
U.S. Government agencies		70,052		2,701		14,874		941		84,926		3,642
U.S. Government sponsored entities		293,945		14,061		76,070		4,432		370,015		18,493
U.S. corporate debt securities		0		0		2,125		375		2,125		375
Equity securities		0		0		935		65		935		65
Total available-for-sale securities	$	723,785	$	27,050	$	101,938	$	6,477	$	825,723	$	33,527

There were no unrealized losses on held-to-maturity securities at December 31, 2013.

The gross unrealized losses reported for residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and U.S. government agencies such as Government National Mortgage Association. The total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

The Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities, before recovery of their amortized cost basis, which may be at maturity. Accordingly, as of September 30, 2014, and December 31, 2013, management has determined that the unrealized losses detailed in the tables above are not other-than-temporary.

Ongoing Assessment of Other-Than-Temporary Impairment

On a quarterly basis, the Company performs an assessment to determine whether there have been any events or economic circumstances indicating that a security with an unrealized loss has suffered other-than-temporary impairment (“OTTI”). A debt security is considered impaired if the fair value is less than its amortized cost basis (including any previous OTTI charges) at the reporting date. If impaired, the Company then assesses whether the unrealized loss is other-than-temporary. An unrealized loss on a debt security is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value, discounted at the security’s effective rate, of the expected future cash flows is less than the amortized cost basis of the debt security. As a result, the credit loss component of an other-than-temporary impairment write-down for debt securities is recorded in earnings while the remaining portion of the impairment loss is recognized, net of tax, in other comprehensive income provided that the Company does not intend to sell the underlying debt security and it is more-likely-than not that the Company would not have to sell the debt security prior to recovery of the unrealized loss, which may be to maturity. If the Company intended to sell any securities with an unrealized loss or it is more-likely-than not that the Company would be required to sell the investment securities, before recovery of their amortized cost basis, then the entire unrealized loss would be recorded in earnings.

The Company considers the following factors in determining whether a credit loss exists.

- The length of time and the extent to which the fair value has been less than the amortized cost basis;

- The level of credit enhancement provided by the structure which includes, but is not limited to, credit subordination positions, excess spreads, overcollateralization, protective triggers;

- Changes in the near term prospects of the issuer or underlying collateral of a security, such as changes in default rates, loss severities given default and significant changes in prepayment assumptions;

- The level of excess cash flow generated from the underlying collateral supporting the principal and interest payments of the debt securities; and

- Any adverse change to the credit conditions of the issuer or the security such as credit downgrades by the rating agencies.

As a result of the other-than-temporarily impairment review process, the Company does not consider any investment security held at September 30, 2014 to be other-than-temporarily impaired.

The following table summarizes the roll-forward of credit losses on debt securities held by the Company for which a portion of an other-than-temporary impairment is recognized in other comprehensive income:

	Three Months Ended					Nine Months Ended
(in thousands)	09/30/2014		09/30/2013			09/30/2014		09/30/2013
Credit losses at beginning of the period	$	0	$	441		$	0	$	441
Sales of securities for which an other-than-temporary impairment was previously recognized		0		(441	)		0		(441	)
Ending balance of credit losses on debt securities held for which a portion of another-than temporary impairment was recognized in other comprehensive income	$	0	$	0		$	0	$	0

The amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

September 30, 2014
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	47,644	$	48,142
Due after one year through five years		409,758		415,198
Due after five years through ten years		182,467		180,485
Due after ten years		20,268		19,734
Total		660,137		663,559
Mortgage-backed securities		714,025		709,776
Total available-for-sale debt securities	$	1,374,162	$	1,373,335

December 31, 2013
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	25,596	$	26,017
Due after one year through five years		263,553		271,303
Due after five years through ten years		313,245		304,414
Due after ten years		28,952		27,206
Total		631,346		628,940
Mortgage-backed securities		735,915		724,461
Total available-for-sale debt securities	$	1,367,261	$	1,353,401

September 30, 2014
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	11,454	$	11,534
Due after one year through five years		3,648		3,938
Due after five years through ten years		32,133		32,121
Due after ten years		373		424
Total held-to-maturity debt securities	$	47,608	$	48,017

December 31, 2013
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	10,952	$	11,021
Due after one year through five years		5,636		6,004
Due after five years through ten years		1,878		2,051
Due after ten years		514		549
Total held-to-maturity debt securities	$	18,980	$	19,625

The Company also holds non-marketable Federal Home Loan Bank New York (“FHLBNY”) stock, non-marketable Federal Home Loan Bank Pittsburgh (“FHLBPITT”) stock and non-marketable Atlantic Central Bankers Bank stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock, FHLBPITT stock and ACBB stock totaled $9.4 million, $5.3 million and $95,000 at September 30, 2014, respectively. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue to pay dividends and repurchase stock. As such, the Company has not recognized any impairment on its holdings of FHLBNY and FHLBPITT stock. Quarterly, we evaluate our investment in the FHLB for impairment. We evaluate recent and long-term operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history and impact of legislative and regulatory changes. Based on our most recent evaluation, as of September 30, 2014, we have determined that no impairment write-downs are currently required.

Trading Securities
The following summarizes trading securities, at estimated fair value, as of:
(in thousands)	09/30/2014		12/31/2013
Obligations of U.S. Government sponsored entities	$	7,631	$	8,275
Mortgage-backed securities – residential, issued by
U.S. Government sponsored entities		1,842		2,716
Total	$	9,473	$	10,991

The decrease in trading securities reflects principal repayments and maturities received during the quarter ended September 30, 2014. The pre-tax mark-to-market losses on trading securities totaled $87,000 and $181,000 for the third quarter and nine months ending September 30, 2014, respectively, and $87,000 and $472,000 for the third quarter and nine months ending September 30, 2013, respectively.

The Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. Securities carried of $1.1 billion and $1.0 billion at September 30, 2014, and December 31, 2013, respectively, were either pledged or sold under agreements to repurchase.

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Accounting Standards Updates

9 Months Ended

Sep. 30, 2014

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Updates

3. Accounting Standards Updates

ASU 2014-01, “Investments (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects.” The amendments in this ASU provide guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). The amendments in this ASU are effective for the Company for annual periods beginning January 1, 2015 and should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements.

ASU 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40”), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure.” This new guidance clarifies when an in substance repossession or foreclosure occurs, and requires all creditors who obtain physical possession (resulting from an in substance repossession or foreclosure) of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable to reclassify the collateralized mortgage loan such that the loan should be derecognized and the collateral asset recognized. This guidance is effective prospectively for the Company for annual and interim periods beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

ASU 2014-12 “Compensation—Stock Compensation” (Topic 718”): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, a consensus of the FASB Emerging Issues Task Force (ASU 2014-12). ASU 2014-12 requires that a performance target that affects vesting of share-based payment awards and that could be achieved after the requisite service period be treated as a performance condition. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. ASU 2014-12 is effective for all entities for interim and annual periods beginning after December 15, 2015, with early adoption permitted. An entity may apply the amendments in ASU 2014-12 either (i) prospectively to all awards granted or modified after the effective date or (ii) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on the Company’s consolidated financial condition or results of operations.

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Securities (Tables)

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule of available for sale securities

The following table summarizes available-for-sale securities held by the Company at September 30, 2014:

		Available-for-Sale Securities
September 30, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	587,933	$	6,061	$	3,100	$	590,894
Obligations of U.S. states and political subdivisions		69,704		1,179		381		70,502
Mortgage-backed securities – residential, issued by
U.S. Government agencies		119,049		2,370		1,702		119,717
U.S. Government sponsored entities		594,700		7,195		12,116		589,779
Non-U.S. Government agencies or sponsored entities		276		4		0		280
U.S. corporate debt securities		2,500		0		337		2,163
Total debt securities		1,374,162		16,809		17,636		1,373,335
Equity securities		1,475		0		54		1,421
Total available-for-sale securities	$	1,375,637	$	16,809	$	17,690	$	1,374,756

The following table summarizes available-for-sale securities held by the Company at December 31, 2013:
		Available-for-Sale Securities
December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	558,130	$	7,720	$	9,505	$	556,345
Obligations of U.S. states and political subdivisions		68,216		1,193		1,447		67,962
Mortgage-backed securities – residential, issued by
U.S. Government agencies		147,766		2,554		3,642		146,678
U.S. Government sponsored entities		587,843		8,122		18,493		577,472
Non-U.S. Government agencies or sponsored entities		306		5		0		311
U.S. corporate debt securities		5,000		8		375		4,633
Total debt securities		1,367,261		19,602		33,462		1,353,401
Equity securities		1,475		0		65		1,410
Total available-for-sale securities	$	1,368,736	$	19,602	$	33,527	$	1,354,811

Schedule of held to maturity securities

The following table summarizes held-to-maturity securities held by the Company at September 30, 2014:

	Held-to-Maturity Securities
September 30, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. Government sponsored entities	$	30,869	$	0	$	197	$	30,672
Obligations of U.S. states and political subdivisions	$	16,739	$	606	$	0	$	17,345
Total held-to-maturity debt securities	$	47,608	$	606	$	197	$	48,017

The following table summarizes held-to-maturity securities held by the Company at December 31, 2013:
	Held-to-Maturity Securities
December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)
Obligations of U.S. states and political subdivisions	$	18,980	$	645	$	0	$	19,625
Total held-to-maturity debt securities	$	18,980	$	645	$	0	$	19,625

Schedule available for sale securities with unrealized losses

The following table summarizes available-for-sale securities that had unrealized losses at September 30, 2014:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	169,741	$	849	$	95,197	$	2,251	$	264,938	$	3,100
Obligations of U.S. states and political subdivisions		15,235		105		11,929		276		27,164		381
Mortgage-backed securities – issued by
U.S. Government agencies		27,840		101		41,748		1,601		69,588		1,702
U.S. Government sponsored entities		133,210		1,095		270,358		11,021		403,568		12,116
U.S. corporate debt securities		0		0		2,163		337		2,163		337
Equity securities		0		0		946		54		946		54
Total available-for-sale securities	$	346,026	$	2,150	$	422,341	$	15,540	$	768,367	$	17,690

The following table summarizes held-to-maturity securities that had unrealized losses at September 30, 2014.

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	30,672	$	197	$	0	$	0	$	30,672	$	197
Total held-to-maturity securities	$	30,672	$	197	$	0	$	0	$	30,672	$	197

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2013:

	Less than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	337,967	$	9,467	$	1,761	$	38	$	339,728	$	9,505
Obligations of U.S. states and political subdivisions		21,821		821		6,173		626		27,994		1,447
Mortgage-backed securities – residential, issued by
U.S. Government agencies		70,052		2,701		14,874		941		84,926		3,642
U.S. Government sponsored entities		293,945		14,061		76,070		4,432		370,015		18,493
U.S. corporate debt securities		0		0		2,125		375		2,125		375
Equity securities		0		0		935		65		935		65
Total available-for-sale securities	$	723,785	$	27,050	$	101,938	$	6,477	$	825,723	$	33,527

Schedule of rollforward of credit losses on debt securities for which portion of OTTI is recognized in OCI

The following table summarizes the roll-forward of credit losses on debt securities held by the Company for which a portion of an other-than-temporary impairment is recognized in other comprehensive income:

	Three Months Ended					Nine Months Ended
(in thousands)	09/30/2014		09/30/2013			09/30/2014		09/30/2013
Credit losses at beginning of the period	$	0	$	441		$	0	$	441
Sales of securities for which an other-than-temporary impairment was previously recognized		0		(441	)		0		(441	)
Ending balance of credit losses on debt securities held for which a portion of another-than temporary impairment was recognized in other comprehensive income	$	0	$	0		$	0	$	0

Schedule of amortized cost and estimated fair value of debt securities by contractual maturity

The amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

September 30, 2014
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	47,644	$	48,142
Due after one year through five years		409,758		415,198
Due after five years through ten years		182,467		180,485
Due after ten years		20,268		19,734
Total		660,137		663,559
Mortgage-backed securities		714,025		709,776
Total available-for-sale debt securities	$	1,374,162	$	1,373,335

December 31, 2013
(in thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	25,596	$	26,017
Due after one year through five years		263,553		271,303
Due after five years through ten years		313,245		304,414
Due after ten years		28,952		27,206
Total		631,346		628,940
Mortgage-backed securities		735,915		724,461
Total available-for-sale debt securities	$	1,367,261	$	1,353,401

September 30, 2014
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	11,454	$	11,534
Due after one year through five years		3,648		3,938
Due after five years through ten years		32,133		32,121
Due after ten years		373		424
Total held-to-maturity debt securities	$	47,608	$	48,017

December 31, 2013
(in thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	10,952	$	11,021
Due after one year through five years		5,636		6,004
Due after five years through ten years		1,878		2,051
Due after ten years		514		549
Total held-to-maturity debt securities	$	18,980	$	19,625

Schedule of trading securities at estimated fair value

The following summarizes trading securities, at estimated fair value, as of:
(in thousands)	09/30/2014		12/31/2013
Obligations of U.S. Government sponsored entities	$	7,631	$	8,275
Mortgage-backed securities – residential, issued by
U.S. Government sponsored entities		1,842		2,716
Total	$	9,473	$	10,991

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Other Income and Operating Expense

9 Months Ended

Sep. 30, 2014

Other Income and Expenses [Abstract]

Other Income and Operating Expense

11. Other Income and Operating Expense

Other income and operating expense totals are presented in the table below. Components of these totals exceeding 1% of the aggregate of total noninterest income and total noninterest expenses for any of the years presented below are stated separately.

	Three Months Ended				Nine Months Ended
(in thousands)	09/30/2014		09/30/2013		09/30/2014		09/30/2013
Noninterest Income
Other service charges	$	708	$	959	$	2,511	$	2,569
Increase in cash surrender value of corporate owned life insurance		456		444		1,431		1,482
Net gain on sale of loans		125		115		345		212
Other income		603		1,854		1,842		3,285
Total other income	$	1,892	$	3,372	$	6,129	$	7,548
Noninterest Expenses
Marketing expense	$	1,029	$	1,055	$	3,448	$	3,597
Professional fees		1,585		1,490		4,484		4,255
Legal fees		130		410		1,191		1,532
Software licensing and maintenance		1,196		1,082		3,512		3,642
Cardholder expense		678		827		2,076		2,363
Other expenses		5,805		4,679		15,800		14,321
Total other operating expense	$	10,423	$	9,543	$	30,511	$	29,710

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FDIC Indemnification Asset Related to Covered Loans

9 Months Ended

Sep. 30, 2014

Banking and Thrift [Abstract]

FDIC Indemnification Asset Related to Covered Loans

7. FDIC Indemnification Asset Related to Covered Loans

Certain loans acquired in the VIST Financial acquisition were covered loans with loss share agreements with the FDIC. Under the terms of loss sharing agreements, the FDIC will reimburse the Company for 70 percent of net losses on covered single family assets up to $4.0 million, and 70 percent of net losses incurred on covered commercial assets up to $12.0 million. The FDIC will increase its reimbursement of net losses to 80 percent if net losses exceed the $4.0 million and $12 million thresholds, respectively. The term for loss sharing on residential real estate loans is ten years, while the term for loss sharing on non-residential real estate loans is five years in respect to losses and eight years in respect to loss recoveries.

The receivable arising from the loss sharing agreements (referred to as the “FDIC indemnification asset” on our consolidated statements of financial condition) is measured separately from covered loans because the agreements are not contractually part of the covered loans and are not transferable should the Company choose to dispose of the covered loans. As of the acquisition date with VIST Financial, the Company recorded an aggregate FDIC indemnification asset of $4.4 million, consisting of the present value of the expected future cash flows the Company expected to receive from the FDIC under loss sharing agreements. The FDIC indemnification asset is reduced as loss sharing payments are received from the FDIC for losses realized on covered loans. Actual or expected losses in excess of the acquisition date estimates and accretion of the acquisition date present value discount will result in an increase in the FDIC indemnification asset and the immediate recognition of non-interest income in our financial statements.

A decrease in expected losses would generally result in a corresponding decline in the FDIC indemnification asset and the non-accretable difference. Reductions in the FDIC indemnification asset due to actual or expected losses that are less than the acquisition date estimates are recognized prospectively over the shorter of (i) the estimated life of the applicable covered loans or (ii) the term of the loss sharing agreements with the FDIC.

Changes in the FDIC indemnification asset during the nine months ended September 30, 2014 are shown below.

Nine months ended September 30, 2014
(in thousands)	Nine Months Ended
Balance, beginning of the period	$	4,790
Discount accretion of the present value at the acquisition date		44
Prospective adjustment for additional cash flows		(1,520	)
Increase due to impairment on covered loans		0
Reimbursements from the FDIC		(1,016	)
Balance, end of period	$	2,298

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Other Comprehensive Income (Loss) (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Other Comprehensive Income Available For Sale Securities Adjustment Net Of Tax Period Increase Decrease [Roll Forward]
Beginning Balance	$ 3,606		$ (11)		$ (8,357)		$ 26,356
Other comprehensive (loss) income before reclassifications	(4,123)		(318)		7,918		(26,420)
Amounts reclassified from accumulated other comprehensive (loss) income	(12)	[1]	(169)	[1]	(90)	[1]	(434)	[1]
Net current-period other comprehensive loss (income)	(4,135)		(487)		7,828		(26,854)
Ending Balance	(529)		(498)		(529)		(498)
Other Comprehensive Income Defined Benefit Plans Adjustment Net Of Tax Period Increase Decrease [Roll Forward]
Beginning Balance	(16,441)		(27,656)		(16,762)		(28,462)
Other comprehensive (loss) income before reclassifications	0		0		0		0
Amounts reclassified from accumulated other comprehensive (loss) income	160		403		481		1,209
Net current-period other comprehensive loss (income)	160	[1]	403	[1]	481	[1]	1,200	[1]
Ending Balance	(16,281)		(27,253)		(16,281)		(27,253)
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward]
Beginning Balance	(12,835)		(27,667)		(25,119)		(2,106)
Other comprehensive (loss) income before reclassifications	(4,123)		(318)		7,918		(26,420)
Amounts reclassified from accumulated other comprehensive (loss) income	148		234		391		775
Net current-period other comprehensive loss (income)	(3,975)		(84)		8,309		(25,645)
Ending Balance	$ (16,810)		$ (27,751)		$ (16,810)		$ (27,751)

[1] Amounts in parentheses indicated debits in income statement

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Loans and Leases

9 Months Ended

Sep. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Loans and Leases

5. Loans and Leases
Loans and Leases at September 30, 2014 and December 31, 2013 were as follows:
	09/30/2014								12/31/2013
(in thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	49,828		$	0	$	49,828		$	74,788		$	0	$	74,788
Commercial and industrial other		627,290			102,601		729,891			562,439			128,503		690,942
Subtotal commercial and industrial		677,118			102,601		779,719			637,227			128,503		765,730
Commercial real estate
Construction		51,988			41,313		93,301			46,441			39,353		85,794
Agriculture		57,158			3,182		60,340			52,627			3,135		55,762
Commercial real estate other		960,346			321,714		1,282,060			903,320			366,438		1,269,758
Subtotal commercial real estate		1,069,492			366,209		1,435,701			1,002,388			408,926		1,411,314
Residential real estate
Home equity		182,994			58,459		241,453			171,809			67,183		238,992
Mortgages		685,989			33,200		719,189			658,966			35,336		694,302
Subtotal residential real estate		868,983			91,659		960,642			830,775			102,519		933,294
Consumer and other
Indirect		18,825			0		18,825			21,202			5		21,207
Consumer and other		34,327			1,119		35,446			32,312			1,219		33,531
Subtotal consumer and other		53,152			1,119		54,271			53,514			1,224		54,738
Leases		8,317			0		8,317			5,563			0		5,563
Covered loans		0			20,910		20,910			0			25,868		25,868
Total loans and leases		2,677,062			582,498		3,259,560			2,529,467			667,040		3,196,507
Less: unearned income and deferred costs and fees		(2,091	)		0		(2,091	)		(2,223	)		0		(2,223	)
Total loans and leases, net of unearned income and deferred costs and fees	$	2,674,971		$	582,498	$	3,257,469		$	2,527,244		$	667,040	$	3,194,284

The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the VIST Bank acquisition are as follows at September 30, 2014 and December 31, 2013:
(in thousands)	09/30/2014		12/31/2013
Acquired Credit Impaired Loans
Outstanding principal balance	$	49,410	$	62,146
Carrying amount		38,561		46,809
Acquired Non-Credit Impaired Loans
Outstanding principal balance		551,074		630,600
Carrying amount		543,937		620,231
Total Acquired Loans
Outstanding principal balance		600,484		692,746
Carrying amount		582,498		667,040

The following tables present changes in accretable yield on loans acquired from VIST Bank that were considered credit impaired.
(in thousands)
Balance at January 1, 2013	$	7,337
Accretion		(8,896	)
Disposals (loans paid in full)		(212	)
Reclassifications to/from nonaccretable difference1		7,933
Other changes in expected cash flows2		4,792
Balance at December 31, 2013	$	10,954

(in thousands)
Balance at January 1, 2014	$	10,954
Accretion		(3,740	)
Disposals (loans paid in full)		(250	)
Reclassifications to/from nonaccretable difference1		1,873
Other changes in expected cash flows2		0
Balance at September 30, 2014	$	8,837

¹ Results in increased interest income as a prospective yield adjustment over the remaining life of the loans, as well as increased interest income from loan sales, modification and prepayments.

² Represents changes in cash flows expected to be collected due to factors other than credit (e.g. changes in prepayment assumptions and/or changes in interest rates on variable rate loans).

At September 30, 2014, acquired loans included $20.9 million of covered loans. VIST Bank had previously acquired these loans in an FDIC assisted transaction in the fourth quarter of 2010. In accordance with a loss sharing agreement with the FDIC, certain losses and expenses relating to covered loans may be reimbursed by the FDIC at 70% or, if net losses exceed certain levels specified in the loss sharing agreements, 80%. See Note 7 – “FDIC Indemnification Asset Related to Covered Loans” for further discussion of the loss sharing agreements and related FDIC indemnification assets.

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 4 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes in these policies and guidelines. As such, these policies are reflective of new originations as well as those balances held at September 30, 2014. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan origination, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Generally loans are placed on nonaccrual status if principal or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question as well as when required by regulatory agencies. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan. Loans are generally returned to accrual status when all the principal and interest amounts contractually due are brought current, the borrower has established a payment history, and future payments are reasonably assured. When management determines that the collection of principal in full is improbable, management will charge-off a partial amount or full amount of the loan balance. Management considers specific facts and circumstances relative to each individual credit in making such a determination. For residential and consumer loans, management uses specific regulatory guidance and thresholds for determining charge-offs.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing after the date of acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if the Company expects to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. To the extent we cannot reasonably estimate cash flows, interest income recognition is discontinued. The Company has determined that it can reasonably estimate future cash flows on our acquired loans that are past due 90 days or more and accruing interest and the Company expects to fully collect the carrying value of the loans. Nonaccrual loans represent loans that were performing at acquisition date but have subsequently become past due.

The below table is an age analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of September 30, 2014 and December 31, 2013.

September 30, 2014
(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Originated Loans and Leases
Commercial and industrial
Agriculture	$	0	$	0	$	49,828	$	49,828		$	0	$	0
Commercial and industrial other		169		508		626,613		627,290			0		1,639
Subtotal commercial and industrial		169		508		676,441		677,118			0		1,639
Commercial real estate
Construction		0		0		51,988		51,988			0		534
Agriculture		0		29		57,129		57,158			0		132
Commercial real estate other		473		4,325		955,548		960,346			0		5,162
Subtotal commercial real estate		473		4,354		1,064,665		1,069,492			0		5,828
Residential real estate
Home equity		1,175		1,384		179,785		182,994			60		1,550
Mortgages		1,250		6,964		676,943		685,989			335		6,850
Subtotal residential real estate		2,425		8,348		856,728		868,983			395		8,400
Consumer and other
Indirect		508		0		18,317		18,825			0		72
Consumer and other		236		241		33,850		34,327			0		380
Subtotal consumer and other		744		241		52,167		53,152			0		452
Leases		0		0		8,317		8,317			0		0
Total loans and leases		3,811		14,933		2,658,318		2,677,062			395		16,319
Less: unearned income and deferred costs and fees		0		0		0		(2,091	)		0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	3,811	$	14,933	$	2,658,318	$	2,674,971		$	395	$	16,319
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other		0		941		101,660		102,601			649		761
Subtotal commercial and industrial		0		941		101,660		102,601			649		761
Commercial real estate
Construction		0		1,970		39,343		41,313			1,709		466
Agriculture		0		0		3,182		3,182			0		0
Commercial real estate other		0		1,857		319,857		321,714			79		2,084
Subtotal commercial real estate		0		3,827		362,382		366,209			1,788		2,550
Residential real estate
Home equity		156		643		57,660		58,459			173		660
Mortgages		580		703		31,917		33,200			561		1,027
Subtotal residential real estate		736		1,346		89,577		91,659			734		1,687
Consumer and other
Consumer and other		0		0		1,119		1,119			0		0
Subtotal consumer and other		0		0		1,119		1,119			0		0
Covered loans		0		1,149		19,761		20,910			1,149		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	736	$	7,263	$	574,499	$	582,498		$	4,320	$	4,998

December 31, 2013
(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Originated loans and leases
Commercial and industrial
Agriculture	$	0	$	0	$	74,788	$	74,788		$	0	$	0
Commercial and industrial other		211		1,187		561,041		562,439			0		1,260
Subtotal commercial and industrial		211		1,187		635,829		637,227			0		1,260
Commercial real estate
Construction		216		7,657		38,568		46,441			0		9,873
Agriculture		180		0		52,447		52,627			0		46
Commercial real estate other		1,104		6,976		895,240		903,320			161		9,522
Subtotal commercial real estate		1,500		14,633		986,255		1,002,388			161		19,441
Residential real estate
Home equity		784		1,248		169,777		171,809			62		1,477
Mortgages		2,439		5,946		650,581		658,966			384		7,443
Subtotal residential real estate		3,223		7,194		820,358		830,775			446		8,920
Consumer and other
Indirect		768		152		20,282		21,202			0		216
Consumer and other		60		0		32,252		32,312			0		38
Subtotal consumer and other		828		152		52,534		53,514			0		254
Leases		0		0		5,563		5,563			0		0
Total loans and leases		5,762		23,166		2,500,539		2,529,467			607		29,875
Less: unearned income and deferred costs and fees		0		0		0		(2,223	)		0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	5,762	$	23,166	$	2,500,539	$	2,527,244		$	607	$	29,875
Acquired loans and leases
Commercial and industrial
Commercial and industrial other		554		1,651		126,298		128,503			1,231		419
Subtotal commercial and industrial		554		1,651		126,298		128,503			1,231		419
Commercial real estate
Construction		0		2,148		37,205		39,353			1,676		473
Agriculture		0		0		3,135		3,135			0		0
Commercial real estate other		403		3,585		362,450		366,438			709		3,450
Subtotal commercial real estate		403		5,733		402,790		408,926			2,385		3,923
Residential real estate
Home equity		213		934		66,036		67,183			347		1,844
Mortgages		345		1,264		33,727		35,336			594		2,322
Subtotal residential real estate		558		2,198		99,763		102,519			941		4,166
Consumer and other
Indirect		0		0		5		5			0		0
Consumer and other		17		0		1,202		1,219			0		0
Subtotal consumer and other		17		0		1,207		1,224			0		0
Covered loans		0		2,416		23,452		25,868			2,416		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	1,532	$	11,998	$	653,510	$	667,040		$	6,973	$	8,508

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Allowance for Loan and Lease Losses

9 Months Ended

Sep. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Allowance for Loan and Lease Losses

6. Allowance for Loan and Lease Losses

Originated Loans and Leases

Management reviews the appropriateness of the allowance for loan and lease losses (“allowance”) on a regular basis. Management considers the accounting policy relating to the allowance to be a critical accounting policy, given the inherent uncertainty in evaluating the levels of the allowance required to cover credit losses in the portfolio and the material effect that assumptions could have on the Company’s results of operations. The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan portfolio to assure that an appropriate allowance is maintained. The Company’s methodology is based upon guidance provided in SEC Staff Accounting Bulletin No. 102, Selected Loan Loss Allowance Methodology and Documentation Issues and ASC Topic 310, Receivables and ASC Topic 450, Contingencies.

The Company’s methodology for determining and allocating the allowance for loan and lease losses focuses on ongoing reviews of larger individual loans and leases, historical net charge-offs, delinquencies in the loan and lease portfolio, the level of impaired and nonperforming loans, values of underlying loan and lease collateral, the overall risk characteristics of the portfolios, changes in character or size of the portfolios, geographic location, current economic conditions, changes in capabilities and experience of lending management and staff, and other relevant factors. The various factors used in the methodologies are reviewed on a regular basis.

At least annually, management reviews all commercial and commercial real estate loans exceeding a certain threshold and assigns a risk rating. The Company uses an internal loan rating system of pass credits, special mention loans, substandard loans, doubtful loans, and loss loans (which are fully charged off). The definitions of “special mention”, “substandard”, “doubtful” and “loss” are consistent with banking regulatory definitions. Factors considered in assigning loan ratings include: the customer’s ability to repay based upon customer’s expected future cash flow, operating results, and financial condition; the underlying collateral, if any; and the economic environment and industry in which the customer operates. Special mention loans have potential weaknesses that if left uncorrected may result in deterioration of the repayment prospects and a downgrade to a more severe risk rating. A substandard loan credit has a well-defined weakness which makes payment default or principal exposure likely, but not yet certain. There is a possibility that the Company will sustain some loss if the deficiencies are not corrected. A doubtful loan has a high possibility of loss, but the extent of the loss is difficult to quantify because of certain important and reasonably specific pending factors.

At least quarterly, management reviews all commercial and commercial real estate loans and leases and agriculturally related loans with an outstanding principal balance of over $500,000 that are internally risk rated special mention or worse, giving consideration to payment history, debt service payment capacity, collateral support, strength of guarantors, local market trends, industry trends, and other factors relevant to the particular borrowing relationship. Through this process, management identifies impaired loans. For loans and leases considered impaired, estimated exposure amounts are based upon collateral values or present value of expected future cash flows discounted at the original effective interest rate of each loan. For commercial loans, commercial mortgage loans, and agricultural loans not specifically reviewed, and for homogenous loan portfolios such as residential mortgage loans and consumer loans, estimated exposure amounts are assigned based upon historical net loss experience and current charge-off trends, past due status, and management’s judgment of the effects of current economic conditions on portfolio performance. In determining and assigning historical loss factors to the various homogeneous portfolios, the Company calculates average net losses over a period of time and compares this average to current levels and trends to ensure that the calculated average loss factors are reasonable.

Since the methodology is based upon historical experience and trends as well as management’s judgment, factors may arise that result in different estimates. Significant factors that could give rise to changes in these estimates may include, but are not limited to, changes in economic conditions in the local area, concentration of risk, changes in interest rates, and declines in local property values. While management’s evaluation of the allowance as of September 30, 2014, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance.

Acquired Loans and Leases

Acquired loans accounted for under ASC 310-30

For our acquired loans, our allowance for loan losses is estimated based upon our expected cash flows for these loans. To the extent that we experience a deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans.

Acquired loans accounted for under ASC 310-20

We establish our allowance for loan losses through a provision for credit losses based upon an evaluation process that is similar to our evaluation process used for originated loans. This evaluation, which includes a review of loans on which full collectability may not be reasonably assured, considers, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan loss experience, carrying value of the loans, which includes the remaining net purchase discount or premium, and other factors that warrant recognition in determining our allowance for loan losses.

The following tables detail activity in the allowance for loan and lease losses segregated by originated and acquired loan and lease portfolios and by portfolio segment for the three months ended September 30, 2014 and 2013. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for originated loans and leases
Beginning balance	$	8,562		$	10,389		$	5,445		$	2,356		$	0	$	26,752
Charge-offs		(21	)		(6	)		(118	)		(286	)		0		(431	)
Recoveries		68			944			1			115			0		1,128
Provision (credit)		249			(645	)		95			37					(264	)
Ending Balance	$	8,858		$	10,682		$	5,423		$	2,222		$	0	$	27,185
Allowance for acquired loans
Beginning balance	$	159		$	460		$	49		$	97		$	0	$	765
Charge-offs		(218	)		(80	)		(68	)		(3	)		0		(369	)
Recoveries		0			0			0			0			0		0
Provision (credit)		154			(20	)		147			(76	)		0		205
Ending Balance	$	95		$	360		$	128		$	18		$	0	$	601

Three months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	6,955		$	10,409		$	5,273		$	2,195		$	21		$	24,853
Charge-offs		(55	)		(49	)		(116	)		(578	)		0			(798	)
Recoveries		48			21			3			96			0			168
Provision (credit)		790			516			149			65			(21	)		1,499
Ending Balance	$	7,738		$	10,897		$	5,309		$	1,778		$	0		$	25,722

Three months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate		Residential Real Estate			Consumer and Other		Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	64		$	381	$	126		$	34	$	0	$	605
Charge-offs		(1	)		0		(467	)		0		0		(468	)
Recoveries		0			0		0			0		0		0
Provision (credit)		(12	)		56		504			1		0		549
Ending Balance	$	51		$	437	$	163		$	35	$	0	$	686

Nine months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	8,406		$	10,459		$	5,771		$	2,059		$	5		$	26,700
Charge-offs		(275	)		(619	)		(385	)		(952	)		0			(2,231	)
Recoveries		557			1,506			87			375			0			2,525
Provision (credit)		170			(664	)		(50	)		740			(5	)		191
Ending Balance	$	8,858		$	10,682		$	5,423		$	2,222		$	0		$	27,185

Nine months ended September 30, 2014
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	168		$	770		$	274		$	58		$	0	$	1,270
Charge-offs		(243	)		(631	)		(345	)		(10	)		0		(1,229	)
Recoveries		0			0			0			0			0		0
Provision (credit)		170			221			199			(30	)		0		560
Ending Balance	$	95		$	360		$	128		$	18		$	0	$	601

Nine months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for originated loans and leases
Beginning balance	$	7,533		$	10,184		$	4,981		$	1,940		$	5		$	24,643
Charge-offs		(487	)		(539	)		(455	)		(1,040	)		0			(2,521	)
Recoveries		1,490			457			32			296			0			2,275
Provision (credit)		(798	)		795			751			582			(5	)		1,325
Ending Balance	$	7,738		$	10,897		$	5,309		$	1,778		$	0		$	25,722

Nine months ended September 30, 2013
(in thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Covered Loans		Total
Allowance for acquired loans
Beginning balance	$	0		$	0		$	0		$	0		$	0	$	0
Charge-offs		(2,930	)		(32	)		(577	)		(25	)		0		(3,564	)
Recoveries		0			0			0			0			0		0
Provision (credit)		2,981			469			740			60			0		4,250
Ending Balance	$	51		$	437		$	163		$	35		$	0	$	686

At September 30, 2014 and December 31, 2013, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows:

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
September 30, 2014
Individually evaluated for impairment	$	302	$	0	$	0	$	0	$	0	$	302
Collectively evaluated for impairment		8,556		10,682		5,423		2,222		0		26,883
Ending balance	$	8,858	$	10,682	$	5,423	$	2,222	$	0	$	27,185
Allowance for acquired loans
September 30, 2014
Individually evaluated for impairment	$	80	$	80	$	0	$	0	$	0	$	160
Collectively evaluated for impairment		15		280		128		18		0		441
Ending balance	$	95	$	360	$	128	$	18	$	0	$	601

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
December 31, 2013
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment		8,406		10,459		5,771		2,059		5		26,700
Ending balance	$	8,406	$	10,459	$	5,771	$	2,059	$	5	$	26,700
Allowance for acquired loans
December 31, 2013
Individually evaluated for impairment	$	0	$	250	$	0	$	0	$	0	$	250
Collectively evaluated for impairment		168		520		274		58		0		1,020
Ending balance	$	168	$	770	$	274	$	58	$	0	$	1,270

The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology as of September 30, 2014 and December 31, 2013 was as follows:

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases
September 30, 2014
Individually evaluated for impairment	$	1,917	$	7,889	$	1,038	$	0	$	0	$	10,844
Collectively evaluated for impairment		675,201		1,061,603		867,945		53,152		8,317		2,666,218
Total	$	677,118	$	1,069,492	$	868,983	$	53,152	$	8,317	$	2,677,062

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Covered Loans		Total
Acquired loans
September 30, 2014
Individually evaluated for impairment	$	785	$	1,582	$	290	$	0	$	0	$	2,657
Loans acquired with deteriorated credit quality	$	1,142	$	8,294	$	8,215	$	0	$	20,910	$	38,561
Collectively evaluated for impairment		100,674		356,333		83,154		1,119		0		541,280
Total	$	102,601	$	366,209	$	91,659	$	1,119	$	20,910	$	582,498

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases
December 31, 2013
Individually evaluated for impairment	$	4,664		16,269	$	1,223	$	0	$	0	$	22,156
Collectively evaluated for impairment		632,563		986,119		829,552		53,514		5,563		2,507,311
Total	$	637,227	$	1,002,388	$	830,775	$	53,514	$	5,563	$	2,529,467

(in thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Covered Loans		Total
Acquired loans
December 31, 2013
Individually evaluated for impairment	$	2,231		2,429	$	73	$	0	$	0	$	4,733
Loans acquired with deteriorated credit quality		2,558		10,263		9,355		0		24,633		46,809
Collectively evaluated for impairment		123,714		396,234		93,091		1,224		1,235		615,498
Total	$	128,503	$	408,926	$	102,519	$	1,224	$	25,868	$	667,040

A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans consist of our non-homogenous nonaccrual loans, and all loans restructured in a troubled debt restructuring (TDR). Specific reserves on individually identified impaired loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that are collateral dependent, impairment is measured based on the fair value of the collateral less estimated selling costs, and such impaired amounts are generally charged off. The majority of impaired loans are collateral dependent impaired loans that have limited exposure or require limited specific reserves because of the amount of collateral support with respect to these loans, and previous charge-offs. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured. In these cases, interest is recognized on a cash basis.

	09/30/2014						12/31/2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	1,408	$	1,432	$	0	$	4,664	$	5,069	$	0
Commercial real estate
Construction		0		0		0		6,073		11,683		0
Commercial real estate other		7,889		8,567		0		10,196		13,518		0
Residential real estate
Residential real estate other		1,038		1,129		0		1,223		1,299		0
Subtotal	$	10,335	$	11,128	$	0	$	22,156	$	31,569	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		509		509		302		0		0		0
Subtotal	$	509	$	509	$	302	$	0	$	0	$	0
Total	$	10,844	$	11,637	$	302	$	22,156	$	31,569	$	0

	09/30/2014						12/31/2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	341	$	341	$	0	$	2,231	$	5,081	$	0
Commercial real estate
Commercial real estate other		1,311		1,311		0		1,960		1,960		0
Residential real estate
Residential real estate other		290		290		0		73		73		0
Subtotal	$	1,942	$	1,942	$	0	$	4,264	$	7,114	$	0
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		444		444		80		0		0		0
Commercial real estate
Commercial real estate other		271		271		80		469		719		250
Subtotal	$	715	$	715	$	160	$	469	$	719	$	250
Total	$	2,657	$	2,657	$	160	$	4,733	$	7,833	$	250

The average recorded investment and interest income recognized on impaired loans for the three months ended September 30, 2014 and 2013 was as follows:

	Three Months Ended				Three Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		1,422		0		4,040		0
Commercial real estate
Construction		0		0		6,184		0
Commercial real estate other		7,940		42		13,918		0
Residential real estate
Residential real estate other		1,038		0		1,047		0
Subtotal	$	10,400	$	42	$	25,189	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		511		7		1,544		0
Commercial real estate
Commercial real estate other		0		0		360		0
Subtotal	$	511	$	7	$	1,904	$	0
Total	$	10,911	$	49	$	27,093	$	0

	Three Months Ended				Three Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		343		0		1,327		0
Commercial real estate
Commercial real estate other		1,312		0		2,764		5
Residential real estate other		290		0		85		0
Subtotal	$	1,945	$	0	$	4,176	$	5
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		449		0		0		0
Commercial real estate
Commercial real estate other		271		0		701		0
Subtotal	$	720	$	0	$	701	$	0
Total	$	2,665	$	0	$	4,877	$	5

	Nine Months Ended				Nine Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		1,636		0		4,057		0
Commercial real estate
Construction		0		0		6,374		0
Commercial real estate other		7,871		42		12,892		0
Residential real estate
Residential real estate other		1,038		0		1,047		0
Subtotal	$	10,545	$	42	$	24,370	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		511		7		1,560		0
Commercial real estate
Commercial real estate other		0		0		319		0
Subtotal	$	511	$	7	$	1,879	$	0
Total	$	11,056	$	49	$	26,249	$	0

	Nine Months Ended				Nine Months Ended
	09/30/2014				09/30/2013
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other		346		0		2,783		5
Commercial real estate
Commercial real estate other		1,333		0		2,785		31
Residential real estate
Residential real estate other		290		0		85		0
Subtotal	$	1,969	$	0	$	5,653	$	36
Acquired loans and leases with related allowance
Commercial and industrial
Commercial and industrial other		454		0		0		0
Commercial real estate
Commercial real estate other		271		0		0		0
Residential real estate
Residential real estate other		0		0		718		4
Subtotal	$	725	$	0	$	718	$	4
Total	$	2,694	$	0	$	6,371	$	40

Loans are considered modified in a TDR when, due to a borrower’s financial difficulties, the Company makes a concession(s) to the borrower that it would not otherwise consider. These modifications may include, among others, an extension for the term of the loan, and granting a period when interest-only payments can be made with the principal payments made over the remaining term of the loan or at maturity.

There we no loans modified in a TDR for the quarter ending September 30, 2014.

The following tables present information on loans modified in troubled debt restructuring during the periods indicated.

September 30, 2013	Three months ended
							Defaulted TDRs4
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		4	$	1,275		1,275		0	$	0
Commercial real estate
Commercial real estate other2		6		1,530		1,530		0		0
Residential real estate
Residential real estate other3		1		195		195		0		0
Total		11	$	3,000		3,000		0	$	0

¹ Represents the following concessions: extension of term and reduction of rate (3 loans: $1.2 million) and extended term (1 loan: $87,000)

² Represents the following concessions: extension of term and reduction of rate

³ Represents the following concessions: extension of term and reduction of rate

⁴ TDRs that defaulted in the quarter ended September 30, 2013 that had been restructured in the prior twelve months.

September 30, 2014	Nine months ended
							Defaulted TDRs3
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		1	$	88		88		0	$	0
Commercial real estate
Commercial real estate other2		1	$	480		480		1	$	63
Residential real estate
Residential real estate other		0		0		0		1		195
Total		2	$	568		568		2	$	258

¹ Represents the following concessions: extension of term and reduction of rate

² Represents the following concessions: extension of term and reduction of rate

³ TDRs that defaulted during the nine months ended September 30, 2014, that had been restructured in the prior twelve months.

September 30, 2013	Nine months ended
							Defaulted TDRs4
(in thousands)	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Post-Modification Outstanding Recorded Investment
Commercial and industrial
Commercial and industrial other1		6	$	1,414		1,414		0	$	0
Commercial real estate
Commercial real estate other2		9		1,901		1,901		0		0
Residential real estate
Residential real estate other3		1		195		195		0		0
Total		16	$	3,510		3,510		0	$	0

¹ Represents the following concessions: extension of term and reduction in rate (5 loans: $1.3 million ) and extended term (1 loan: $87,000)

² Represents the following concessions: extension of term and reduction of rate (8 loans: $1.8 million) and extension of term (1 loan: $129,000)

³ Represents the following concessions: extension of term and reduction of rate

⁴ TDRs that defaulted during the nine months ended September 30, 2013, that had been restructured in the prior twelve months.

The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of September 30, 2014 and December 31, 2013.

September 30, 2014
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Originated Loans and Leases
Internal risk grade:
Pass	$	608,164	$	49,405	$	930,551	$	56,540	$	48,207	$	1,692,867
Special Mention		11,146		197		12,503		227		3,781		27,854
Substandard		7,980		226		17,292		391		0		25,889
Total	$	627,290	$	49,828	$	960,346	$	57,158	$	51,988	$	1,746,610

September 30, 2014
		Commercial		Commercial		Commercial		Commercial		Commercial
		and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)		Other		Agriculture		Other		Agriculture		Construction		Total
Acquired Loans and Leases
Internal risk grade:
Pass	$	99,323	$	0	$	296,680	$	3,182	$	37,986	$	437,171
Special Mention		109		0		7,496		0		0		7,605
Substandard		3,169		0		17,538		0		3,327		24,034
Total	$	102,601	$	0	$	321,714	$	3,182	$	41,313	$	468,810

December 31, 2013
	Commercial		Commercial		Commercial		Commercial		Commercial
	and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)	Other		Agriculture		Other		Agriculture		Construction		Total
Originated Loans and Leases
Internal risk grade:
Pass	$	531,293	$	72,997	$	869,488	$	52,054	$	36,396	$	1,562,228
Special Mention		20,688		100		17,536		123		3,918		42,365
Substandard		10,458		1,691		16,296		450		6,127		35,022
Total	$	562,439	$	74,788	$	903,320	$	52,627	$	46,441	$	1,639,615

December 31, 2013
		Commercial		Commercial		Commercial		Commercial		Commercial
		and Industrial		and Industrial		Real Estate		Real Estate		Real Estate
(in thousands)		Other		Agriculture		Other		Agriculture		Construction		Total
Acquired Loans and Leases
Internal risk grade:
Pass	$	116,160	$	0	$	363,427	$	1,150	$	5,809	$	486,546
Special Mention		3,821		0		11,516		1,985		0		17,322
Substandard		8,522		0		22,028		0		3,011		33,561
Total	$	128,503	$	0	$	396,971	$	3,135	$	8,820	$	537,429

The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of September 30, 2014 and December 31, 2013. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing.

September 30, 2014
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated Loans and Leases
Performing	$	181,384	$	678,804	$	18,753	$	33,947	$	912,888
Nonperforming		1,610		7,185		72		380		9,247
Total	$	182,994	$	685,989	$	18,825	$	34,327	$	922,135

September 30, 2014
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	57,626	$	31,612	$	0	$	1,119	$	90,357
Nonperforming		833		1,588		0		0		2,421
Total	$	58,459	$	33,200	$	0	$	1,119	$	92,778

December 31, 2013
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated Loans and Leases
Performing	$	170,270	$	651,139	$	20,986	$	32,274	$	874,669
Nonperforming		1,539		7,827		216		38		9,620
Total	$	171,809	$	658,966	$	21,202	$	32,312	$	884,289

December 31, 2013
(in thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	65,339	$	33,014	$	5	$	1,219	$	99,577
Nonperforming		1,844		2,322		0		0		4,166
Total	$	67,183	$	35,336	$	5	$	1,219	$	103,743

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Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

8. Earnings Per Share

Earnings per share in the table below, for the three and nine month periods ending September 30, 2014 and 2013 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share. ASC 260 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company has issued restricted stock awards that contain such rights and are therefore considered participating securities. Basic earnings per common share are calculated by dividing net income allocable to common stock by the weighted average number of common shares, excluding participating securities, during the period. Diluted earnings per common share include the dilutive effect of additional potential shares from stock compensations awards.

	Three Months Ended
(in thousands, except share and per share data)	09/30/2014			09/30/2013
Basic
Net income available to common shareholders	$	13,722		$	14,049
Less: dividends and undistributed earnings allocated to unvested restricted stock awards		(119	)		(137	)
Net earnings allocated to common shareholders		13,603			13,912
Weighted average shares outstanding, including participating securities		14,839,663			14,658,056
Less: average participating securities		(127,954	)		(143,003	)
Weighted average shares outstanding - Basic		14,711,709			14,515,053
Diluted
Net earnings allocated to common shareholders		13,603			13,912
Weighted average shares outstanding - Basic		14,711,709			14,515,053
Dilutive effect of common stock options or restricted stock awards		83,634			107,459
Weighted average shares outstanding - Diluted		14,795,343			14,622,512
Basic EPS		0.92			0.96
Diluted EPS		0.92			0.95

The dilutive effect of common stock options or restricted awards calculation for the three months ended September 30, 2014 and 2013 excludes stock options, stock appreciation rights and restricted stock awards covering an aggregate of 208,324 and 221,525 shares, respectively, because the exercise prices were greater than the average market price during these periods.

	Nine Months Ended
(in thousands, except share and per share data)	09/30/2014			09/30/2013
Basic
Net income available to common shareholders	$	39,352		$	36,565
Less: dividends and undistributed earnings allocated to unvested restricted stock awards		(353	)		(284	)
Net earnings allocated to common shareholders		38,999			36,281
Weighted average shares outstanding, including participating securities		14,821,992			14,539,728
Less: average participating securities		(133,066	)		(99,794	)
Weighted average shares outstanding - Basic		14,688,926			14,439,934
Diluted
Net earnings allocated to common shareholders		38,999			36,281
Weighted average shares outstanding - Basic		14,688,926			14,439,934
Dilutive effect of common stock options or restricted stock awards		108,594			80,848
Weighted average shares outstanding - Diluted		14,797,520			14,520,782
Basic EPS		2.65			2.51
Diluted EPS		2.64			2.50

The dilutive effect of common stock options or restricted awards calculation for the nine months ended September 30, 2014 and 2013 excludes stock options, stock appreciation rights and restricted stock awards covering an aggregate of 116,527 and 283,725 shares, respectively, because the exercise prices were greater than the average market price during these periods.

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Other Income and Operating Expense (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Noninterest Income
Other service charges	$ 708	$ 959	$ 2,511	$ 2,569
Increase in cash surrender value of corporate owned life insurance	456	444	1,431	1,482
Net gain on sale of loans	125	115	345	212
Other income	603	1,854	1,842	3,285
Total other income	1,892	3,372	6,129	7,548
Noninterest Expenses
Marketing expense	1,029	1,055	3,448	3,597
Professional fees	1,585	1,490	4,484	4,255
Legal fees	130	410	1,191	1,532
Software licensing and maintenance	1,196	1,082	3,512	3,642
Cardholder expense	678	827	2,076	2,363
Other miscellaneous expenses	5,805	4,679	15,800	14,321
Total other operating expense	$ 10,423	$ 9,543	$ 30,511	$ 29,710

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Segment and Related Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Interest income	$ 46,618	$ 46,379	$ 137,803	$ 136,796
Interest expense	5,043	5,906	15,685	18,292
Net interest income	41,575	40,473	122,118	118,504
Provision for loan and lease losses	(59)	2,049	751	5,576
Noninterest income	17,555	18,528	52,709	52,459
Noninterest expense	38,537	37,554	115,675	112,851
Income before income tax expense	20,652	19,398	58,401	52,536
Income tax expense	6,897	5,316	18,951	15,873
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	13,755	14,082	39,450	36,663
Less: Net income attributable to noncontrolling interests	33	33	98	98
Net Income attributable to Tompkins Financial Corporation	13,722	14,049	39,352	36,565
Depreciation and amortization	1,431	1,394	4,203	4,284
Assets	5,090,919	4,932,428	5,090,919	4,932,428	5,003,039
Goodwill	92,243	92,140	92,243	92,140	92,140
Other intangibles, net	15,206	16,841	15,206	16,841	16,298
Net loans and leases	3,229,683	3,092,904	3,229,683	3,092,904	3,166,314
Deposits	4,212,860	3,972,756	4,212,860	3,972,756	3,947,216
Total Equity	490,611	444,276	490,611	444,276	457,939	441,360
Banking [Member]
Interest income	46,583	46,334	137,703	136,647
Interest expense	5,044	5,908	15,688	18,297
Net interest income	41,539	40,426	122,015	118,350
Provision for loan and lease losses	(59)	2,049	751	5,576
Noninterest income	6,607	7,956	19,835	20,410
Noninterest expense	30,129	29,552	90,560	88,555
Income before income tax expense	18,076	16,781	50,539	44,629
Income tax expense	5,903	4,308	15,982	12,883
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	12,173	12,473	34,557	31,746
Less: Net income attributable to noncontrolling interests	33	33	98	98
Net Income attributable to Tompkins Financial Corporation	12,140	12,440	34,459	31,648
Depreciation and amortization	1,320	1,310	3,909	4,021
Assets	5,049,237	4,894,161	5,049,237	4,894,161
Goodwill	64,500	64,500	64,500	64,500
Other intangibles, net	9,681	11,070	9,681	11,070
Net loans and leases	3,229,683	3,092,904	3,229,683	3,092,904
Deposits	4,219,127	3,980,890	4,219,127	3,980,890
Total Equity	453,317	408,102	453,317	408,102
Insurance [Member]
Interest income	1	2	5	5
Interest expense	0	0	2	0
Net interest income	1	2	3	5
Provision for loan and lease losses	0	0	0	0
Noninterest income	7,555	7,077	21,918	21,371
Noninterest expense	5,977	5,532	17,541	16,589
Income before income tax expense	1,579	1,547	4,380	4,787
Income tax expense	653	646	1,776	1,935
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	926	901	2,604	2,852
Less: Net income attributable to noncontrolling interests	0	0	0	0
Net Income attributable to Tompkins Financial Corporation	926	901	2,604	2,852
Depreciation and amortization	75	51	184	160
Assets	34,742	34,087	34,742	34,087
Goodwill	19,662	19,559	19,662	19,559
Other intangibles, net	4,987	5,150	4,987	5,150
Net loans and leases	0	0	0	0
Deposits	0	0	0	0
Total Equity	27,177	25,524	27,177	25,524
Wealth Management [Member]
Interest income	35	45	100	149
Interest expense	0	0	0	0
Net interest income	35	45	100	149
Provision for loan and lease losses	0	0	0	0
Noninterest income	3,746	3,877	11,990	11,813
Noninterest expense	2,784	2,852	8,608	8,842
Income before income tax expense	997	1,070	3,482	3,120
Income tax expense	341	362	1,193	1,055
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	656	708	2,289	2,065
Less: Net income attributable to noncontrolling interests	0	0	0	0
Net Income attributable to Tompkins Financial Corporation	656	708	2,289	2,065
Depreciation and amortization	36	33	110	103
Assets	13,634	12,702	13,634	12,702
Goodwill	8,081	8,081	8,081	8,081
Other intangibles, net	538	621	538	621
Net loans and leases	0	0	0	0
Deposits	0	0	0	0
Total Equity	10,117	10,650	10,117	10,650
Intercompany and Merger [Member]
Interest income	(1)	(2)	(5)	(5)
Interest expense	(1)	(2)	(5)	(5)
Net interest income	0	0	0	0
Provision for loan and lease losses	0	0	0	0
Noninterest income	(353)	(382)	(1,034)	(1,135)
Noninterest expense	(353)	(382)	(1,034)	(1,135)
Income before income tax expense	0	0	0	0
Income tax expense	0	0	0	0
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	0	0	0	0
Less: Net income attributable to noncontrolling interests	0	0	0	0
Net Income attributable to Tompkins Financial Corporation	0	0	0	0
Depreciation and amortization	0	0	0	0
Assets	(6,694)	(8,522)	(6,694)	(8,522)
Goodwill	0	0	0	0
Other intangibles, net	0	0	0	0
Net loans and leases	0	0	0	0
Deposits	(6,267)	(8,134)	(6,267)	(8,134)
Total Equity	$ 0	$ 0	$ 0	$ 0

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Other Income and Operating Expense (Details Narrative)	9 Months Ended
	Sep. 30, 2014
Other Income and Expenses [Abstract]
Reporting threshold for other income and operating expenses	1.00%

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Securities (Details Narrative) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Realized gains - available-for-sale securities	$ 20	$ 303	$ 186	$ 808
Realized losses - available-for-sale securities	0	22	78	85
Mark to market Loss on trading securities	(87)	(87)	(181)	(472)
Secutities pledged or sold under agreements to repurchase	1,100,000		1,100,000		1,000,000
Federal Home Loan Bank New York ("FHLBNY") [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal Home Loan Bank, Advances, Branch of FHLB Bank, amount of advances	9,400		9,400
Federal Home Loan Bank Pittsburgh ("FHLBPITT") [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal Home Loan Bank, Advances, Branch of FHLB Bank, amount of advances	5,300		5,300
Atlantic Central Bankers Bank ("ACBB") [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal Home Loan Bank, Advances, Branch of FHLB Bank, amount of advances	$ 95		$ 95

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Allowance for Loan and Lease Losses (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Orginated Loans and Leases [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	$ 10,400	$ 25,189	$ 10,545	$ 24,370
Interest Income Recognized With No Related Allowance	42	0	42	0
Average Recorded Investment With Related Allowance	511	1,904	511	1,879
Interest Income Recognized With Related Allowance	7	0	7	0
Average Recorded Investment	10,911	27,093	11,056	26,249
Interest Income Recognized	49	0	49	0
Orginated Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	1,422	4,040	1,636	4,057
Interest Income Recognized With No Related Allowance	0	0	0	0
Average Recorded Investment With Related Allowance	511	1,544	511	1,560
Interest Income Recognized With Related Allowance	7	0	7	0
Orginated Loans and Leases [Member] | Commercial Real Estate - Construction [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	0	6,184	0	6,374
Interest Income Recognized With No Related Allowance	0	0	0	0
Orginated Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	7,940	13,918	7,871	12,892
Interest Income Recognized With No Related Allowance	42	0	42	0
Average Recorded Investment With Related Allowance	0	360	0	319
Interest Income Recognized With Related Allowance	0	0	0	0
Orginated Loans and Leases [Member] | Residential real estate other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	1,038	1,047	1,038	1,047
Interest Income Recognized With No Related Allowance	0	0	0	0
Acquired Loans and Leases [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	1,945	4,176	1,969	5,653
Interest Income Recognized With No Related Allowance	0	5	0	36
Average Recorded Investment With Related Allowance	720	701	725	718
Interest Income Recognized With Related Allowance	0	0	0	4
Average Recorded Investment	2,665	4,877	2,694	6,371
Interest Income Recognized	0	5	0	40
Acquired Loans and Leases [Member] | Commercial and Industrial Other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	343	1,327	346	2,783
Interest Income Recognized With No Related Allowance	0	0	0	5
Average Recorded Investment With Related Allowance	449	0	454	0
Interest Income Recognized With Related Allowance	0	0	0	0
Acquired Loans and Leases [Member] | Commercial Real Estate Other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	1,312	2,764	1,333	2,785
Interest Income Recognized With No Related Allowance	0	5	0	31
Average Recorded Investment With Related Allowance	271	701	271	0
Interest Income Recognized With Related Allowance	0	0	0	0
Acquired Loans and Leases [Member] | Residential real estate other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	290	85	290	85
Interest Income Recognized With No Related Allowance	0	0	0	0
Average Recorded Investment With Related Allowance			0	718
Interest Income Recognized With Related Allowance			$ 0	$ 4

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Segment and Related Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment and Related Information

13. Segment and Related Information

The Company manages its operations through three reportable business segments in accordance with the standards set forth in FASB ASC 280, “Segment Reporting”: (i) banking (“Banking”), (ii) insurance (“Tompkins Insurance Agencies, Inc.”) and (iii) wealth management (“Tompkins Financial Advisors”). The Company’s insurance services and wealth management services, other than trust services, are managed separately from the Banking segment.

Banking

The Banking segment is primarily comprised of the four banking subsidiaries: Tompkins Trust Company, a commercial bank with fifteen banking offices located in Ithaca, NY and surrounding communities; The Bank of Castile, a commercial bank with sixteen banking offices located in the Genesee Valley region of New York State as well as Monroe County; Mahopac Bank, a commercial bank with fifteen full-service banking offices and one limited service office in the counties north of New York City; and VIST Bank, a banking organization with twenty banking offices headquartered and operating in the areas surrounding southeastern Pennsylvania.

Insurance

The Company provides property and casualty insurance services and employee benefits consulting through Tompkins Insurance Agencies, Inc., a 100% wholly-owned subsidiary of the Company, headquartered in Batavia, New York. Tompkins Insurance is an independent insurance agency, representing many major insurance carriers and provides employee benefit consulting to employers in Western and Central New York, assisting them with their medical, group life insurance and group disability insurance. Through the 2012 acquisition of VIST Financial, Tompkins Insurance expanded its operations with the addition of VIST Insurance, a full service insurance agency offering a similar array of insurance products as Tompkins Insurance in southeastern Pennsylvania.

Wealth Management

The Wealth Management segment is generally organized under the Tompkins Financial Advisors brand. Tompkins Financial Advisors offers a comprehensive suite of financial services to customers, including trust and estate services, investment management and financial and insurance planning for individuals, corporate executives, small business owners and high net worth individuals. Tompkins Financial Advisors has offices in each of the Company’s four subsidiary banks.

Summarized financial information concerning the Company’s reportable segments and the reconciliation to the Company’s consolidated results is shown in the following table. Investment in subsidiaries is netted out of the presentations below. The “Intercompany” column identifies the intercompany activities of revenues, expenses and other assets between the banking, insurance and wealth management services segments. The Company accounts for intercompany fees and services at an estimated fair value according to regulatory requirements for the services provided. Intercompany items relate primarily to the use of human resources, information systems, accounting and marketing services provided by any of the banks and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the 2013 Annual Report on Form 10-K.

As of and for the three months ended September 30, 2014
(in thousands)	Banking			Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	46,583		$	1	$	35	$	(1	)	$	46,618
Interest expense		5,044			0		0		(1	)		5,043
Net interest income		41,539			1		35		0			41,575
Provision for loan and lease losses		(59	)		0		0		0			(59	)
Noninterest income		6,607			7,555		3,746		(353	)		17,555
Noninterest expense		30,129			5,977		2,784		(353	)		38,537
Income before income tax expense		18,076			1,579		997		0			20,652
Income tax expense		5,903			653		341		0			6,897
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		12,173			926		656		0			13,755
Less: Net income attributable to noncontrolling interests		33			0		0		0			33
Net Income attributable to Tompkins Financial Corporation	$	12,140		$	926	$	656	$	0		$	13,722
Depreciation and amortization	$	1,320		$	75	$	36	$	0		$	1,431
Assets		5,049,237			34,742		13,634		(6,694	)		5,090,919
Goodwill		64,500			19,662		8,081		0			92,243
Other intangibles, net		9,681			4,987		538		0			15,206
Net loans and leases		3,229,683			0		0		0			3,229,683
Deposits		4,219,127			0		0		(6,267	)		4,212,860
Total Equity		453,317			27,177		10,117		0			490,611

As of and for the three months ended September 30, 2013
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	46,334	$	2	$	45	$	(2	)	$	46,379
Interest expense		5,908		0		0		(2	)		5,906
Net interest income		40,426		2		45		0			40,473
Provision for loan and lease losses		2,049		0		0		0			2,049
Noninterest income		7,956		7,077		3,877		(382	)		18,528
Noninterest expense		29,552		5,532		2,852		(382	)		37,554
Income before income tax expense		16,781		1,547		1,070		0			19,398
Income tax expense		4,308		646		362		0			5,316
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		12,473		901		708		0			14,082
Less: Net income attributable to noncontrolling interests		33		0		0		0			33
Net Income attributable to Tompkins Financial Corporation	$	12,440	$	901	$	708	$	0		$	14,049
Depreciation and amortization	$	1,310	$	51	$	33	$	0		$	1,394
Assets		4,894,161		34,087		12,702		(8,522	)		4,932,428
Goodwill		64,500		19,559		8,081		0			92,140
Other intangibles, net		11,070		5,150		621		0			16,841
Net loans and leases		3,092,904		0		0		0			3,092,904
Deposits		3,980,890		0		0		(8,134	)		3,972,756
Total Equity		408,102		25,524		10,650		0			444,276

For the nine months ended September 30, 2014
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	137,703	$	5	$	100	$	(5	)	$	137,803
Interest expense		15,688		2		0		(5	)		15,685
Net interest income		122,015		3		100		0			122,118
Provision for loan and lease losses		751		0		0		0			751
Noninterest income		19,835		21,918		11,990		(1,034	)		52,709
Noninterest expense		90,560		17,541		8,608		(1,034	)		115,675
Income before income tax expense		50,539		4,380		3,482		0			58,401
Income tax expense		15,982		1,776		1,193		0			18,951
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		34,557		2,604		2,289		0			39,450
Less: Net income attributable to noncontrolling interests		98		0		0		0			98
Net Income attributable to Tompkins Financial Corporation	$	34,459	$	2,604	$	2,289	$	0		$	39,352
Depreciation and amortization	$	3,909	$	184	$	110	$	0		$	4,203

For the nine months ended September 30, 2013
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	136,647	$	5	$	149	$	(5	)	$	136,796
Interest expense		18,297		0		0		(5	)		18,292
Net interest income		118,350		5		149		0			118,504
Provision for loan and lease losses		5,576		0		0		0			5,576
Noninterest income		20,410		21,371		11,813		(1,135	)		52,459
Noninterest expense		88,555		16,589		8,842		(1,135	)		112,851
Income before income tax expense		44,629		4,787		3,120		0			52,536
Income tax expense		12,883		1,935		1,055		0			15,873
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation		31,746		2,852		2,065		0			36,663
Less: Net income attributable to noncontrolling interests		98		0		0		0			98
Net Income attributable to Tompkins Financial Corporation	$	31,648	$	2,852	$	2,065	$	0		$	36,565
Depreciation and amortization	$	4,021	$	160	$	103	$	0		$	4,284

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FDIC Indemnification Asset Related to Covered Loans (Tables)

9 Months Ended

Sep. 30, 2014

Banking and Thrift [Abstract]

Schedule of changes in the FDIC indemnification asset

Changes in the FDIC indemnification asset during the nine months ended September 30, 2014 are shown below.

Nine months ended September 30, 2014
(in thousands)	Nine Months Ended
Balance, beginning of the period	$	4,790
Discount accretion of the present value at the acquisition date		44
Prospective adjustment for additional cash flows		(1,520	)
Increase due to impairment on covered loans		0
Reimbursements from the FDIC		(1,016	)
Balance, end of period	$	2,298

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Allowance for Loan and Lease Losses (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	$ 3,259,560	$ 3,196,507
Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	779,719	765,730
Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,435,701	1,411,314
Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	960,642	933,294
Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	54,271	54,738
Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	8,317	5,563
Covered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	20,910	25,868
Orginated Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	10,844	22,156
Collectively Evaluated For Impairment	2,666,218	2,507,311
Total	2,677,062	2,529,467
Orginated Loans and Leases [Member] | Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	1,917	4,664
Collectively Evaluated For Impairment	675,201	632,563
Total	677,118	637,227
Orginated Loans and Leases [Member] | Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	7,889	16,269
Collectively Evaluated For Impairment	1,061,603	986,119
Total	1,069,492	1,002,388
Orginated Loans and Leases [Member] | Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	1,038	1,223
Collectively Evaluated For Impairment	867,945	829,552
Total	868,983	830,775
Orginated Loans and Leases [Member] | Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	0	0
Collectively Evaluated For Impairment	53,152	53,514
Total	53,152	53,514
Orginated Loans and Leases [Member] | Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	0	0
Collectively Evaluated For Impairment	8,317	5,563
Total	8,317	5,563
Orginated Loans and Leases [Member] | Covered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
Acquired Loans and Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	2,657	4,733
Loans Acquired With Deteriorated Credit Quality	38,561	46,809
Collectively Evaluated For Impairment	541,280	615,498
Total	582,498	667,040
Acquired Loans and Leases [Member] | Commercial and industrial, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	785	2,231
Loans Acquired With Deteriorated Credit Quality	1,142	2,558
Collectively Evaluated For Impairment	100,674	123,714
Total	102,601	128,503
Acquired Loans and Leases [Member] | Commercial real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	1,582	2,429
Loans Acquired With Deteriorated Credit Quality	8,294	10,263
Collectively Evaluated For Impairment	356,333	396,234
Total	366,209	408,926
Acquired Loans and Leases [Member] | Residential real estate, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	290	73
Loans Acquired With Deteriorated Credit Quality	8,215	9,355
Collectively Evaluated For Impairment	83,154	93,091
Total	91,659	102,519
Acquired Loans and Leases [Member] | Consumer and other, total [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	0	0
Loans Acquired With Deteriorated Credit Quality	0	0
Collectively Evaluated For Impairment	1,119	1,224
Total	1,119	1,224
Acquired Loans and Leases [Member] | Finance Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	0	0
Acquired Loans and Leases [Member] | Covered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually Evaluated For Impairment	0	0
Loans Acquired With Deteriorated Credit Quality	20,910	24,633
Collectively Evaluated For Impairment	0	1,235
Total	$ 20,910	$ 25,868

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Securities (Details 6) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Trading Securities
Trading securities, at estimated fair value	$ 9,473	$ 10,991
Obligations of U.S. Government sponsored entities [Member]
Trading Securities
Trading securities, at estimated fair value	7,631	8,275
Residential Mortgage-backed securities U.S. Government sponsored entities [Member]
Trading Securities
Trading securities, at estimated fair value	$ 1,842	$ 2,716

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$ 13,755		$ 14,082		$ 39,450		$ 36,663
Available-for-sale securities:
Change in net unrealized gain (loss) during the period	(4,123)		(318)		7,918		(26,420)
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income	(12)	[1]	(169)	[1]	(90)	[1]	(434)	[1]
Employee benefit plans:
Amortization of net retirement plan actuarial gain (loss)	159		387		479		1,160
Amortization of net retirement plan prior service cost	1		8		2		26
Amortization of net retirement plan transition liability	0		8		0		23
Other comprehensive income (loss)	(3,975)		(84)		8,309		(25,645)
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation	9,780		13,998		47,759		11,018
Less: Net income attributable to noncontrolling interests	(33)		(33)		(98)		(98)
Total comprehensive income attributable to Tompkins Financial Corporation	$ 9,747		$ 13,965		$ 47,661		$ 10,920

[1] Amounts in parentheses indicated debits in income statement

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Basis of Presentation

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Basis Of Presentation

2. Basis of Presentation

The unaudited consolidated financial statements included in this quarterly report do not include all of the information and footnotes required by GAAP for a full year presentation and certain disclosures have been condensed or omitted in accordance with rules and regulations of the SEC. In the application of certain accounting policies, management is required to make assumptions regarding the effect of matters that are inherently uncertain. These estimates and assumptions affect the reported amounts of certain assets, liabilities, revenues, and expenses in the unaudited condensed consolidated financial statements. Different amounts could be reported under different conditions, or if different assumptions were used in the application of these accounting policies. The accounting policies that management considers critical in this respect are the determination of the allowance for loan and lease losses, the expenses and liabilities associated with the Company’s pension and post-retirement benefits, and the review of its securities portfolio for other than temporary impairment.

In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year ended December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes to the Company’s accounting policies from those presented in the 2013 Annual Report on Form 10-K. Refer to Note 3- “Accounting Standards Updates” of this Report for a discussion of recently issued accounting guidelines.

Cash and cash equivalents in the consolidated statements of cash flow include cash and noninterest bearing balances due from banks, interest-bearing balances due from banks, and money market funds. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes that the Company is not exposed to any significant credit risk on cash and cash equivalents.

The Company has evaluated subsequent events for potential recognition and/or disclosure, and determined that no further disclosures were required.

The consolidated financial information included herein combines the results of operations, the assets, liabilities, and shareholders’ equity of the Company and its subsidiaries. Amounts in the prior periods’ unaudited condensed consolidated financial statements are reclassified when necessary to conform to the current periods’ presentation. During the quarter ended March 31, 2014, the Company revised the comparative December 31, 2013 outstanding principal balance of acquired credit impaired loans from $70,727 to $62,146, and the balance of outstanding principal balance of acquired non-credit impaired loans from $666,089 to $630,600. The Company has assessed the materiality of this correction of an error and concluded, based on qualitative and quantitative considerations, that the adjustments are not material to the financial statements as a whole. All significant intercompany balances and transactions are eliminated in consolidation.

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Basic
Net income available to common shareholders	$ 13,722	$ 14,049	$ 39,352	$ 36,565
Less: dividends and undistributed earnings allocated to unvested restricted stock awards	(119)	(137)	(353)	(284)
Net earnings allocated to common shareholders	13,603	13,912	38,999	36,281
Weighted average shares outstanding, including participating securities	14,839,663	14,658,056	14,821,992	14,539,728
Less: average participating securities	(127,954)	(143,003)	(133,066)	(99,794)
Weighted average shares outstanding - Basic	14,711,709	14,515,053	14,688,926	14,439,934
Diluted
Net earnings allocated to common shareholders	13,603	13,912	38,999	36,281
Dilutive effect of common stock options or restricted stock awards	$ 83,634	$ 107,459	$ 108,594	$ 80,848
Weighted average shares outstanding - Diluted	14,795,343	14,622,512	14,797,520	14,520,782
Basic EPS (in dollars per share)	$ 0.92	$ 0.96	$ 2.65	$ 2.51
Diluted EPS (in dollars per share)	$ 0.92	$ 0.95	$ 2.64	$ 2.50

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Fair Value (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Fair value of financial assets
Securities - held to maturity	$ 48,017		$ 19,625
FHLB stock	14,838		25,041
Financial Liabilities:
Time deposits	930,796		865,702
Fed funds purchased and securities sold under agreements to repurchase	128,368		167,724
Other borrowings	166,509		331,531
Trust preferred debentures	37,298		37,169
Carrying Amount [Member]
Fair value of financial assets
Cash and cash equivalaents	85,117		82,884
Securities - held to maturity	47,608		18,980
FHLB stock	14,838		25,041
Accrued interest receivable	16,494		16,586
Loans/leases, net	3,229,683	[1]	3,166,314	[1]
Financial Liabilities:
Time deposits	930,796		865,702
Other deposits	3,282,064		3,081,514
Fed funds purchased and securities sold under agreements to repurchase	128,368		167,724
Other borrowings	155,477		320,239
Accrued interest payable	1,827		2,121
Trust preferred debentures	37,298		37,169
Fair Value [Member]
Fair value of financial assets
Cash and cash equivalaents	85,117		82,884
Securities - held to maturity	48,017		19,625
FHLB stock	14,838		25,041
Accrued interest receivable	16,494		16,586
Loans/leases, net	3,248,727	[1]	3,201,837	[1]
Financial Liabilities:
Time deposits	932,938		870,857
Other deposits	3,282,064		3,081,514
Fed funds purchased and securities sold under agreements to repurchase	132,383		173,425
Other borrowings	155,739		326,193
Accrued interest payable	1,827		2,121
Trust preferred debentures	43,904		41,673
Level 1 [Member]
Fair value of financial assets
Cash and cash equivalaents	85,117		82,884
Securities - held to maturity	0		0
FHLB stock	0		0
Accrued interest receivable	0		0
Loans/leases, net	0	[1]	0	[1]
Financial Liabilities:
Time deposits	0		0
Other deposits	0		0
Fed funds purchased and securities sold under agreements to repurchase	0		0
Other borrowings	0		0
Accrued interest payable	0		0
Trust preferred debentures	0		0
Level 2 [Member]
Fair value of financial assets
Cash and cash equivalaents	0		0
Securities - held to maturity	48,017		19,625
FHLB stock	14,838		25,041
Accrued interest receivable	16,494		16,586
Loans/leases, net	9,226	[1]	6,846	[1]
Financial Liabilities:
Time deposits	932,938		870,857
Other deposits	3,282,064		3,081,514
Fed funds purchased and securities sold under agreements to repurchase	132,383		173,425
Other borrowings	155,739		326,193
Accrued interest payable	1,827		2,121
Trust preferred debentures	43,904		41,673
Level 3 [Member]
Fair value of financial assets
Cash and cash equivalaents	0		0
Securities - held to maturity	0		0
FHLB stock	0		0
Accrued interest receivable	0		0
Loans/leases, net	3,239,501	[1]	3,194,991	[1]
Financial Liabilities:
Time deposits	0		0
Other deposits	0		0
Fed funds purchased and securities sold under agreements to repurchase	0		0
Other borrowings	0		0
Accrued interest payable	0		0
Trust preferred debentures	$ 0		$ 0

[1] Lease receivables, although excluded from the scope of ASC Topic 825, are included in the estimated fair value amounts at their carrying value.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of computation of EPS Basic and Diluted Table Text Block

	Three Months Ended
(in thousands, except share and per share data)	09/30/2014			09/30/2013
Basic
Net income available to common shareholders	$	13,722		$	14,049
Less: dividends and undistributed earnings allocated to unvested restricted stock awards		(119	)		(137	)
Net earnings allocated to common shareholders		13,603			13,912
Weighted average shares outstanding, including participating securities		14,839,663			14,658,056
Less: average participating securities		(127,954	)		(143,003	)
Weighted average shares outstanding - Basic		14,711,709			14,515,053
Diluted
Net earnings allocated to common shareholders		13,603			13,912
Weighted average shares outstanding - Basic		14,711,709			14,515,053
Dilutive effect of common stock options or restricted stock awards		83,634			107,459
Weighted average shares outstanding - Diluted		14,795,343			14,622,512
Basic EPS		0.92			0.96
Diluted EPS		0.92			0.95

	Nine Months Ended
(in thousands, except share and per share data)	09/30/2014			09/30/2013
Basic
Net income available to common shareholders	$	39,352		$	36,565
Less: dividends and undistributed earnings allocated to unvested restricted stock awards		(353	)		(284	)
Net earnings allocated to common shareholders		38,999			36,281
Weighted average shares outstanding, including participating securities		14,821,992			14,539,728
Less: average participating securities		(133,066	)		(99,794	)
Weighted average shares outstanding - Basic		14,688,926			14,439,934
Diluted
Net earnings allocated to common shareholders		38,999			36,281
Weighted average shares outstanding - Basic		14,688,926			14,439,934
Dilutive effect of common stock options or restricted stock awards		108,594			80,848
Weighted average shares outstanding - Diluted		14,797,520			14,520,782
Basic EPS		2.65			2.51
Diluted EPS		2.64			2.50

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Securities (Details 3) (Total debt securities [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Total debt securities [Member]
Credit losses at beginning of the period	$ 0	$ 441	$ 0	$ 441
Sales of securities for which an other-than-temporary impairment was previously recognized	0	(441)	0	(441)
Ending balance of credit losses on debt securities held for which a portion of an other-than-temporary impairment was recognized in other comprehensive income	$ 0	$ 0	$ 0	$ 0

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Financial Guarantees

9 Months Ended

Sep. 30, 2014

Guarantees [Abstract]

Financial Guarantees

12. Financial Guarantees

The Company currently does not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit. The Company extends standby letters of credit to its customers in the normal course of business. The standby letters of credit are generally short-term. As of September 30, 2014, the Company’s maximum potential obligation under standby letters of credit was $60.5 million compared to $62.6 million at December 31, 2013. Management uses the same credit policies to extend standby letters of credit that it uses for on-balance sheet lending decisions and may require collateral to support standby letters of credit based upon its evaluation of the counterparty. Management does not anticipate any significant losses as a result of these transactions, and has determined that the fair value of standby letters of credit is not significant.