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 and financial services (“Banking”), (ii) insurance services (“Tompkins Insurance Agencies, Inc.”) and (iii) wealth management (“Tompkins Financial Advisors”). The Company’s insurance services and wealth management services are managed separately from the Banking segment.

Banking

The banking segment is primarily comprised of the Company's four banking subsidiaries: Tompkins Trust Company, a commercial bank with 14 banking offices operated in Ithaca, NY and surrounding communities. The Bank of Castile (DBA Tompkins Bank of Castile), a commercial bank with 18 banking offices located in the Genesee Valley region of New York State as well as Monroe County; Mahopac Bank (DBA Tompkins Mahopac Bank), a commercial bank with 14 full-service banking offices located in the counties north of New York City; and VIST Bank (DBA Tompkins VIST Bank), a banking organization with 20 banking offices headquartered and operating in Southeastern Pennsylvania.

Banking services consist primarily of attracting deposits from the areas served by the Company’s banking subsidiaries and using those deposits to originate a variety of commercial loans, agricultural loans, consumer loans, real estate loans and leases in those same areas. The Company’s subsidiary banks provide a variety of retail banking services including checking accounts, savings accounts, time deposits, IRA products, residential mortgage loans, personal loans, home equity loans, credit cards, debit cards and safe deposit services delivered through its branch facilities, ATMs, voice response, mobile banking, Internet banking and remote deposit services. The Company’s subsidiary banks also provide a variety of commercial banking services such as lending activities for a variety of business purposes, including real estate financing, construction, equipment financing, accounts receivable financing and commercial leasing. Other commercial services include deposit and cash management services, letters of credit, sweep accounts, credit cards, Internet-based account services, mobile banking and remote deposit services. The banking subsidiaries do not engage in sub-prime lending.

Insurance

The Company provides property and casualty insurance services and employee benefits consulting through Tompkins Insurance Agencies, Inc., a wholly-owned subsidiary of the Company, headquartered in Batavia, New York. Tompkins Insurance is an independent insurance agency, representing many major insurance carriers. Tompkins Insurance provides employee benefit consulting to employers in Western and Central New York and Southeastern Pennsylvania, 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 agency offering a similar array of insurance products as Tompkins Insurance in southeastern Pennsylvania. Tompkins Insurance offers services to customers of the Company’s banking subsidiaries by sharing offices with The Bank of Castile, Tompkins Trust Company and VIST Bank. In addition to these shared offices, Tompkins Insurance has five stand-alone offices in Western New York.

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 and financial 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 Note 1 “Summary of significant accounting policies” in this Report.



As of and for the year ended December 31, 2018
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	251,592	$	3	$	0	$	(3	)	$	251,592
Interest expense	39,795		0		0		(3		)	39,792
Net interest income	211,797		3		0		0			211,800
Provision for loan and lease losses	3,942		0		0		0			3,942
Noninterest income	31,738		29,760		17,997		(2,046		)	77,449
Noninterest expense	145,070		25,427		12,616		(2,046		)	181,067
Income before income tax expense	94,523		4,336		5,381		0			104,240
Income tax expense	19,486		1,092		1,227		0			21,805
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	75,037		3,244		4,154		0			82,435
Less: Net income attributable to noncontrolling interests	127		0		0		0			127
Net Income attributable to Tompkins Financial Corporation	$	74,910	$	3,244	$	4,154	$	0		$	82,308

Depreciation and amortization	$	9,194	$	230	$	130	$	0		$	9,554
Assets	6,707,625		42,088		21,365		(12,642		)	6,758,436
Goodwill	64,370		19,702		8,211		0			92,283
Other intangibles, net	4,224		3,192		212		0			7,628
Net loans and leases	4,790,529		0		0		0			4,790,529
Deposits	4,900,464		0		0		(11,505		)	4,888,959
Total equity	568,988		32,996		18,887		0			620,871



As of and for the year ended December 31, 2017
(in thousands)	Banking		Insurance		Wealth Management		Intercompany & Merger			Consolidated
Interest income	$	226,764	$	2	$	0	$	(2	)	$	226,764
Interest expense	25,462		0		0		(2		)	25,460
Net interest income	201,302		2		0		0			201,304
Provision for loan and lease losses	4,161		0		0		0			4,161
Noninterest income	25,498		29,106		16,345		(1,745		)	69,204
Noninterest expense	135,750		24,503		12,597		(1,745		)	171,105
Income before income tax expense	86,889		4,605		3,748		0			95,242
Income tax expense	39,731		1,705		1,184		0			42,620
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	47,158		2,900		2,564		0			52,622
Less: Net income attributable to noncontrolling interests	128		0		0		0			128
Net Income attributable to Tompkins Financial Corporation	$	47,030	$	2,900	$	2,564	$	0		$	52,494

Depreciation and amortization	$	7,927	$	285	$	57	$	0		$	8,269
Assets	6,602,242		39,599		17,779		(11,330		)	6,648,290
Goodwill	64,369		19,711		8,211		0			92,291
Other intangibles, net	5,170		3,812		281		0			9,263
Net loans and leases	4,629,349		0		0		0			4,629,349
Deposits	4,848,654		0		0		(10,847		)	4,837,807
Total equity	530,386		31,083		14,733		0			576,202



As of and for the year ended December 31, 2016
(in thousands)	Banking		Insurance		Wealth Management		Intercompany & Merger			Consolidated
Interest income	$	202,739	$	2	$	0	$	(2	)	$	202,739
Interest expense	22,105		0		0		(2		)	22,103
Net interest income	180,634		2		0		0			180,636
Provision for loan and lease losses	4,321		0		0		0			4,321
Noninterest income	24,402		29,741		15,842		(1,177		)	68,808
Noninterest expense	123,004		24,564		12,216		(1,177		)	158,607
Income before income tax expense	77,711		5,179		3,626		0			86,516
Income tax expense	23,928		1,906		1,211		0			27,045
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	53,783		3,273		2,415		0			59,471
Less: Net income attributable to noncontrolling interests	131		0		0		0			131
Net Income attributable to Tompkins Financial Corporation	$	53,652	$	3,273	$	2,415	$	0		$	59,340

Depreciation and amortization	6,401		353		75		0			$	6,829
Assets	6,190,824		38,988		15,403		(8,459		)	6,236,756
Goodwill	64,369		20,043		8,211		0			92,623
Other intangibles, net	6,433		4,560		356		0			11,349
Net loans and leases	4,222,278		0		0		0			4,222,278
Deposits	4,633,527		0		0		(8,388		)	4,625,139
Total equity	506,411		30,825		12,169		0			549,405