EX-99.1 2 q42019pressrelease.htm EXHIBIT 99.1 Exhibit
EXHIBIT 99.1
tmp-logoa49.jpg


For more information contact:
Stephen S. Romaine, President & CEO
Francis M. Fetsko, Executive VP, CFO & COO
Tompkins Financial Corporation (888) 503-5753

For Immediate Release
Friday, January 31, 2020

Tompkins Financial Corporation Reports Increased Fourth Quarter and Full Year Earnings Per Share
ITHACA, NY - Tompkins Financial Corporation (NYSE American: TMP)
Tompkins Financial Corporation reported record diluted earnings per share of $5.37 for the full year of 2019, an increase of 0.4% compared to the $5.35 per share reported for the twelve-month period ended December 31, 2018. For the fourth quarter of 2019, diluted earnings per share of $1.40 were up 13.8% over the $1.23 per share reported in the same quarter of 2018.
President and CEO, Stephen S. Romaine said, “We are pleased to report record earnings per share for the year ended December 31, 2019. When compared to the third quarter of 2019, the fourth quarter of 2019 benefited from growth in average loans and deposits, along with a slight improvement in net interest margin. Credit quality remains strong, and during the quarter we saw improving trends in classified and criticized credits.”

SELECTED HIGHLIGHTS FOR THE FOURTH QUARTER:
•
Total loans of $4.9 billion were up 1.7% over total loans at December 31, 2018.
•
Total deposits of $5.2 billion reflect an increase of 6.6% over the prior year end.
•
Noninterest bearing deposits of $1.5 billion increased by 4.2% over December 31, 2018.
•
Net interest margin was 3.44% for the fourth quarter of 2019, up from 3.34% reported for the fourth quarter of 2018, and up from 3.43% for the third quarter of 2019.
•
Return on average equity was 12.59% for the fourth quarter of 2019, up from the 12.38% reported for the quarter ended December 31, 2018, and up from 12.15% for the third quarter of 2019.


NET INTEREST INCOME
Net interest income of $53.2 million for the fourth quarter of 2019 was unchanged from the same quarter of the prior year. The net interest margin for the fourth quarter of 2019 was 3.44%, compared to 3.34% reported for the quarter ended December 31, 2018, and 3.43% for the third quarter of 2019. When compared to the third quarter of 2019, the fourth quarter of 2019 saw lower yields on earning assets that were offset by lower funding costs.
For the full year ended December 31, 2019, net interest income of $210.6 million, was down 0.6% from the prior year. The impact of an improved net interest margin in 2019 was slightly offset by average balances in the securities portfolio, which were down $132.1 million or 8.6%.
NONINTEREST INCOME
Noninterest income represented 26.4% of total revenues in 2019, compared to 26.8% in 2018. Noninterest income for the fourth quarter of 2019 was $18.0 million, down 9.5% compared to the same period in 2018. For the full year, noninterest income of $75.4 million was down $2.0 million, or 2.6%, when compared to 2018. The negative variance to prior year was largely due to the fact that results from the fourth quarter of the prior year included higher than normal investment service fees associated with trust and estate activities, as well as approximately $2.5 million related to the collection of nonaccrual interest and fees associated with a loan that was previously charged off. Comparison of full year noninterest income to the prior year was also impacted by $2.9 million of gains on the sale of real estate that were realized in the second quarter of 2018.
NONINTEREST EXPENSE
Noninterest expense was $45.9 million for the fourth quarter of 2019, down 2.8%, from the fourth quarter of 2018. For the full year 2019, noninterest expense was $181.8 million, which was in line with 2018. Other operating expense in 2019 was reduced by $1.5 million of deposit insurance credits received from the FDIC, of which $0.4 million were applied during the fourth quarter of 2019. Noninterest expense in 2018 included $2.5 million related to the write-down of leases on vacated space, which was recognized in the second quarter of 2018.
INCOME TAX EXPENSE
The Company's effective tax rate was 19.8% in the fourth quarter of 2019, compared to 20.4% for the same period in 2018. For calendar year 2019, the Company’s effective tax rate was 20.5% compared to 20.9% for 2018.
ASSET QUALITY
Asset quality trends remained strong in the fourth quarter of 2019, as the ratio of nonperforming assets to total assets of 0.47% at December 31, 2019 was unchanged from the prior quarter end, and was up from 0.42% at December 31, 2018. Nonperforming asset levels at December 31, 2019 remained below the most recent Federal Reserve Board Peer Group Average1 of 0.60%.


The provision for loan and lease losses for the fourth quarter of 2019 was a negative $1.0 million compared to an expense of $2.1 million in the fourth quarter of 2018. For the full year, the provision for loan and lease losses was $1.4 million in 2019, compared to $3.9 million for the same period in 2018. Net charge-offs for the year ended December 31, 2019 were $4.9 million, compared to $0.3 million reported for the year-to-date period ended December 31, 2018. The year over year increase in net charge-offs was mainly attributable to the charge-off of one commercial real estate credit in the first quarter of 2019.
The Company’s allowance for originated loan and lease losses totaled $39.8 million at December 31, 2019, and represented 0.85% of total originated loans and leases, down from 0.89% at September 30, 2019, and 0.95% at December 31, 2018. Improving trends in classified and criticized loans in the most recent quarter, along with favorable trends in certain qualitative factors contributed to the lower allowance level at December 31, 2019. The allowance at December 31, 2018 included a specific reserve of $3.0 million related to one commercial real estate credit that was subsequently charged off in the first quarter of 2019, as noted above. The total allowance represented 126.90% of total nonperforming loans and leases at December 31, 2019, compared to 137.46% at September 30, 2019, and 163.25% at December 31, 2018.
CAPITAL POSITION
Capital ratios remained well above the regulatory minimums for well capitalized institutions. The ratio of Tier 1 capital to average assets was 9.61% at December 31, 2019, improved from 9.43% at September 30, 2019, and 9.05% at December 31, 2018. During the year ended December 31, 2019, the Company repurchased 376,021 common shares at an average price of $79.43 per share. During 2018, the Company repurchased 32,483 common shares at an average price of $75.36 per share.














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

"Safe Harbor" Statement under the Private Securities Litigation Reform of 1995:
This press release may include forward-looking statements with respect to revenue sources, growth, market risk, and corporate objectives. The Company assumes no duty, and specifically disclaims any obligation, to update forward-looking statements, and cautions that these statements are subject to numerous assumptions, risks, and uncertainties, all of which could change over time. Actual results could differ materially from forward-looking statements.
The statements made herein shall not confer upon any person any rights or remedies of any nature, and shall not be construed to establish, amend, or modify any benefit plan, program, agreement, or arrangement, nor to alter any existing at-will employment relationship between the Company and its employees.



TOMPKINS FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(In thousands, except share and per share data)
As of
As of
ASSETS
12/31/2019

12/31/2018
 
 
 
Cash and noninterest bearing balances due from banks
$
136,010

$
78,524

Interest bearing balances due from banks
1,972

1,865

Cash and Cash Equivalents
137,982

80,389

 
 
 
Available-for-sale securities, at fair value (amortized cost of $1,293,239 at December 31, 2019 and $1,363,902 at December 31, 2018)
1,298,587

1,332,658

Held-to-maturity securities, at amortized cost (fair value of $0 at December 31, 2019 and $139,377 at December 31, 2018)
0

140,579

Equity securities, at fair value (amortized cost $1,000 at December 31, 2019 and $1,000 at December 31, 2018)
915

887

Originated loans and leases, net of unearned income and deferred costs and fees
4,697,401

4,568,741

Acquired loans
220,149

265,198

Less: Allowance for loan and lease losses
39,892

43,410

Net Loans and Leases
4,877,658

4,790,529

 
 
 
Federal Home Loan Bank and other stock
33,695

52,262

Bank premises and equipment, net
94,355

97,202

Corporate owned life insurance
82,961

81,928

Goodwill
92,447

92,283

Other intangible assets, net
6,223

7,628

Accrued interest and other assets
100,800

82,091

Total Assets
$
6,725,623

$
6,758,436

LIABILITIES
 
 
Deposits:
 
 
Interest bearing:
 
 
  Checking, savings and money market
3,080,686

2,853,190

  Time
675,014

637,295

Noninterest bearing
1,457,221

1,398,474

Total Deposits
5,212,921

4,888,959

 
 
 
Federal funds purchased and securities sold under agreements to repurchase
60,346

81,842

Other borrowings
658,100

1,076,075

Trust preferred debentures
17,035

16,863

Other liabilities
114,167

73,826

Total Liabilities
$
6,062,569

$
6,137,565

EQUITY
 
 
Tompkins Financial Corporation shareholders' equity:
 
 
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 15,014,499 at December 31, 2019; and 15,348,287 at December 31, 2018
1,501

1,535

Additional paid-in capital
338,507

366,595

Retained earnings
370,477

319,396

Accumulated other comprehensive loss
(43,564
)
(63,165
)
Treasury stock, at cost – 123,956 shares at December 31, 2019, and 122,227 shares at December 31, 2018
(5,279
)
(4,902
)
Total Tompkins Financial Corporation Shareholders’ Equity
661,642

619,459

 
 
 
Noncontrolling interests
1,412

1,412

Total Equity
$
663,054

$
620,871

Total Liabilities and Equity
$
6,725,623

$
6,758,436

 
 
 


TOMPKINS FINANCIAL CORPORATION
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
 
(In thousands, except per share data) (Unaudited)
Three Months Ended
Twelve Months Ended
 
12/31/2019

12/31/2018

12/31/2019

12/31/2018

INTEREST AND DIVIDEND INCOME
 
 
 
 
Loans
$
57,039

$
55,951

$
226,723

$
214,370

Due from banks
9

9

41

31

Available-for-sale securities
6,406

7,556

28,460

30,377

Held-to-maturity securities
568

865

3,151

3,437

Federal Home Loan Bank and other stock
561

944

3,003

3,377

Total Interest and Dividend Income
64,583

65,325

261,378

251,592

INTEREST EXPENSE
 
 
 
 
Time certificates of deposits of $250,000 or more
912

624

3,095

1,712

Other deposits
7,399

5,184

27,809

14,883

Federal funds purchased and securities sold under agreements to repurchase
33

37

143

152

Trust preferred debentures
303

323

1,276

1,227

Other borrowings
2,696

5,921

18,427

21,818

Total Interest Expense
11,343

12,089

50,750

39,792

Net Interest Income
53,240

53,236

210,628

211,800

Less: Provision for loan and lease losses
(1,000
)
2,058

1,366

3,942

Net Interest Income After Provision for Loan and Lease Losses
54,240

51,178

209,262

207,858

NONINTEREST INCOME
 
 
 
 
Insurance commissions and fees
6,777

6,685

31,091

29,369

Investment services income
4,268

4,923

16,434

17,288

Service charges on deposit accounts
2,110

2,135

8,321

8,435

Card services income
2,436

2,484

10,526

9,693

Other income
2,171

4,387

8,416

13,130

Net gain (loss) on securities transactions
210

(756
)
645

(466
)
Total Noninterest Income
17,972

19,858

75,433

77,449

NONINTEREST EXPENSE
 
 
 
 
Salaries and wages
23,250

21,221

89,399

85,625

Other employee benefits
6,394

6,231

23,488

22,090

Net occupancy expense of premises
3,115

3,436

13,210

13,309

Furniture and fixture expense
1,921

1,890

7,815

7,351

Amortization of intangible assets
421

437

1,673

1,771

Other operating expense
10,799

14,013

46,249

50,921

Total Noninterest Expenses
45,900

47,228

181,834

181,067

Income Before Income Tax Expense
26,312

23,808

102,861

104,240

Income Tax Expense
5,200

4,866

21,016

21,805

Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation
21,112

18,942

81,845

82,435

Less: Net Income Attributable to Noncontrolling Interests
32

32

127

127

Net Income Attributable to Tompkins Financial Corporation
$
21,080

$
18,910

$
81,718

$
82,308

Basic Earnings Per Share
$
1.41

$
1.24

$
5.39

$
5.39

Diluted Earnings Per Share
$
1.40

$
1.23

$
5.37

$
5.35

  
 
 
 
 
 
 
 



Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Year Ended
Year Ended
 
 
 
 
December 31, 2019
 
December 31, 2019
 
December 31, 2018
 
 
 
 
Average
 
 
 
Average
 
 
 
Average
 
 
 
 
 
 
Balance
 
Average
 
Balance
 
Average
 
Balance
 
Average
(Dollar amounts in thousands)
 
Quarter Ended
Interest
Yield/ Rate
 
Year Ended
Interest
Yield/ Rate
 
Year Ended
Interest
Yield/ Rate
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing balances due from banks
$
2,763

$
9

1.29
%
$
1,647
$
41

2.49
%
$
2,139
$
31

1.45
%
 
Securities (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government securities
 
1,192,035

6,421
2.14
%
 
1,301,813
29,411
2.26
%
 
1,429,875
31,645
2.21
%
 
 
State and municipal (3)
 
93,275

643
2.73
%
 
93,168
2,547
2.73
%
 
97,116
2,520
2.59
%
 
 
Other securities (3)
 
3,417

37
4.30
%
 
3,417
158
4.62
%
 
3,491
153
4.38
%
 
 
Total securities
 
1,288,727

7,101
2.19
%
 
1,398,398
32,116
2.30
%
 
1,530,482
34,318
2.24
%
 
FHLBNY and FRB stock
 
25,469

561
8.74
%
 
38,308
3,003
7.84
%
 
51,815
3,377
6.52
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases, net of unearned income (3)(4)
 
4,871,483

57,332
4.67
%
 
4,830,089
227,869
4.72
%
 
4,757,583
215,648
4.53
%
 
Total interest-earning assets
 
6,188,442

65,003
4.17
%
 
6,268,442
263,029
4.20
%
 
6,342,019
253,374
4.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other assets
 
424,760

 
 
 
411,136
 
 
 
350,659
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
6,613,202

 
 
$
6,679,578
 
 
$
6,692,678
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES & EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing checking, savings & money market
$
3,140,707

5,234
0.66
%
$
3,007,221
20,099
0.67
%
$
2,822,747
9,847
0.35
%
 
 
Time deposits
 
692,541

3,077

1.76
%
 
676,106

10,805

1.60
%
 
664,788

6,748

1.02
%
 
 
Total interest-bearing deposits
 
3,833,248

8,311
0.86
%
 
3,683,327
30,904
0.84
%
 
3,487,535
16,595
0.48
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased & securities sold under
 
 
 
 
 
 
 
 
 
 
 
 
 
 
agreements to repurchase
 
54,907

33
0.24
%
 
59,825
143
0.24
%
 
63,472
152
0.24
%
Other borrowings
 
469,410

2,696
2.28
%
 
762,993
18,427
2.42
%
 
1,086,847
21,818
2.01
%
Trust preferred debentures
 
17,007

303
7.07
%
 
16,943
1,276
7.53
%
 
16,771
1,227
7.32
%
 
Total interest-bearing liabilities
 
4,374,572

11,343
1.03
%
 
4,523,088
50,750
1.12
%
 
4,654,625
39,792
0.85
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
 
1,471,377

 
 
 
1,403,330
 
 
 
1,382,550
 
 
Accrued expenses and other liabilities
 
102,812

 
 
 
101,819
 
 
 
64,559
 
 
 
Total liabilities
 
5,948,761

 
 
 
6,028,237
 
 
 
6,101,734
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tompkins Financial Corporation Shareholders’ equity
 
662,940

 
 
 
649,871
 
 
 
589,475
 
 
Noncontrolling interest
 
1,501

 
 
 
1,470
 
 
 
1,469
 
 
 
Total equity
 
664,441

 
 
 
651,341
 
 
 
590,944
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and equity
$
6,613,202

 
 
$
6,679,578
 
 
$
6,692,678
 
 
Interest rate spread
 
 
 
3.14
%
 
 
 
3.07
%
 
 
 
3.14
%
 
Net interest income/margin on earning assets
 
 
53,660
3.44
%
 
 
212,279
3.39
%
 
 
213,582
3.37
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax equivalent adjustments
 
 
(420)
 
 
 
(1,651)
 
 
 
(1,782)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income per consolidated financial statements
 
 
$
53,240

 
 
 
$
210,628

 
 
 
$
211,800

 



Tompkins Financial Corporation - Summary Financial Data (Unaudited)
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter-Ended
Year-Ended
Period End Balance Sheet
 
Dec-19

 
Sep-19

 
Jun-19

 
Mar-19

 
Dec-18

 
Dec-19

Securities
$
1,299,502

$
1,282,026

$
1,330,719

$
1,484,151

$
1,474,124

$
1,299,502

Total Loans
 
4,917,550

 
4,857,073

 
4,855,802

 
4,789,700

 
4,833,939

 
4,917,550

Allowance for loan and lease losses
 
39,892

 
41,371

 
40,790

 
40,328

 
43,410

 
39,892

Total assets
 
6,725,623

 
6,627,982

 
6,654,390

 
6,738,719

 
6,758,436

 
6,725,623

Total deposits
 
5,212,921

 
5,369,990

 
4,988,897

 
4,989,925

 
4,888,959

 
5,212,921

Federal funds purchased and securities sold under agreements to repurchase
 
60,346

 
50,541

 
63,978

 
66,918

 
81,842

 
60,346

Other borrowings
 
658,100

 
429,000

 
824,562

 
923,427

 
1,076,075

 
658,100

Trust preferred debentures
 
17,035

 
16,992

 
16,949

 
16,906

 
16,863

 
17,035

Total common equity
 
661,642

 
658,358

 
656,201

 
645,823

 
619,459

 
661,642

Total equity
 
663,054

 
659,865

 
657,677

 
647,267

 
620,871

 
663,054



Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
Average earning assets
$
6,188,442

$
6,203,078

$
6,337,983

$
6,350,325

$
6,364,113

$
6,268,440

Average assets
 
6,613,202

 
6,621,412

 
6,742,409

 
6,743,360

 
6,710,944

 
6,679,578

Average interest-bearing liabilities
 
4,374,572

 
4,415,079

 
4,638,249

 
4,668,875

 
4,606,536

 
4,523,088

Average equity
 
664,441

 
659,650

 
650,079

 
630,731

 
606,238

 
651,341

Share data
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding (basic)
14,726,023
 
14,827,114
 
15,019,710
 
15,060,175
 
15,057,673
 
14,907,057
 
Weighted average shares outstanding (diluted)
14,790,503
 
14,887,626
 
15,085,945
 
15,136,523
 
15,135,750
 
14,973,951
 
Period-end shares outstanding
14,978,589
 
14,975,750
 
15,160,719
 
15,314,078
 
15,312,377
 
14,978,589
 
Common equity book value per share
$
44.17

$
43.96

$
43.28

$
42.17

$
40.45

$
44.17

Tangible book value per share (Non-GAAP)**
$
37.64

$
37.40

$
36.77

$
35.73

$
33.98

$
37.64

** See "Non-GAAP measures" below for a discussion of non-GAAP financial measures and a reconciliation of non-GAAP financial measures to the most directly comparable financial measures presented in accordance with GAAP.
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
53,240

$
53,156

$
52,318

$
51,914

$
53,236

$
210,628

Provision for loan/lease losses
 
(1,000
)
 
1,320

 
601

 
445

 
2,058

 
1,366

Noninterest income
 
17,972

 
19,534

 
18,520

 
19,407

 
19,858

 
75,433

Noninterest expense
 
45,900

 
45,655

 
46,070

 
44,209

 
47,228

 
181,834

Income tax expense
 
5,200

 
5,478

 
4,743

 
5,595

 
4,866

 
21,016

Net income attributable to Tompkins Financial Corporation
 
21,080

 
20,206

 
19,392

 
21,040

 
18,911

 
81,718

Noncontrolling interests
 
32

 
31

 
32

 
32

 
31

 
127

Basic earnings per share (5)
$
1.41

$
1.34

$
1.27

$
1.37

$
1.24

$
5.39

Diluted earnings per share (5)
$
1.40

$
1.34

$
1.27

$
1.37

$
1.23

$
5.37

Nonperforming Assets
 
 
 
 
 
 
 
 
 
 
 
 
Originated nonaccrual loans and leases
$
22,485

$
21,404

$
16,543

$
15,165

$
19,340

$
22,485

Acquired nonaccrual loans and leases
 
1,796

 
2,164

 
2,363

 
2,579

 
2,856

 
1,796

Originated loans and leases 90 days past due and accruing
 
0

 
0

 
0

 
0

 
0

 
0

Troubled debt restructuring not included above
 
7,154

 
6,528

 
4,889

 
5,234

 
4,395

 
7,154

Total nonperforming loans and leases
 
31,435

 
30,096

 
23,795

 
22,978

 
26,591

 
31,435

OREO
 
428

 
888

 
2,229

 
1,595

 
1,595

 
428

Total nonperforming assets
$
31,863

$
30,984

$
26,024

$
24,573

$
28,186

$
31,863




Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
 
 
Quarter-Ended
Year-Ended
 
Delinquency - Originated loan and lease portfolio
 
Dec-19

 
Sep-19

 
Jun-19

 
Mar-19

 
Dec-18

 
Dec-19

Loans and leases 30-89 days past due and
 
 
 
 
 
 
 
 
 
 
 
 
accruing
$
3,559

$
3,287

$
3,883

$
4,193

$
7,796

$
3,559

Loans and leases 90 days past due and accruing
 
0

 
0

 
0

 
0

 
0

 
0

Total originated loans and leases past due and accruing
 
3,559

 
3,287

 
3,883

 
4,193

 
7,796

 
3,559

Delinquency - Acquired loan and lease portfolio
Loans 30-89 days past due and accruing (6)
$
165

$
232

$
493

$
474

$
67

$
165

Loans 90 days or more past due
 
794

 
1,219

 
1,229

 
1,218

 
1,316

 
794

Total acquired loans and leases past due and accruing
 
959

 
1,451

 
1,722

 
1,692

 
1,383

 
959

Total loans and leases past due and accruing
$
4,518

$
4,738

$
5,605

$
5,885

$
9,179

$
4,518


Allowance for Loan Losses - Originated loan and lease portfolio
Balance at beginning of period
$
41,231

$
40,689

$
40,245

$
43,321

$
41,289

$
43,321

Provision (credit) for loan and lease losses
 
(997
)
 
1,245

 
590

 
480

 
2,046

 
1,318

Net loan and lease (recoveries) charge-offs
 
420

 
703

 
146

 
3,556

 
14

 
4,825

Allowance for loan and lease losses (originated
 
 
 
 
 
 
 
 
 
 
 
 
loan portfolio) - balance at end of period
$
39,814

$
41,231

$
40,689

$
40,245

$
43,321

$
39,814

Allowance for Loan Losses - Acquired loan and lease portfolio
Balance at beginning of period
$
140

$
101

$
83

$
89

$
69

$
89

Provision (credit) for loan and lease losses
 
(3
)
 
75

 
11

 
(35
)
 
12

 
48

Net loan and lease (recoveries) charge-offs
 
59

 
36

 
(7
)
 
(29
)
 
(8
)
 
59

Allowance for loan and lease losses (acquired
 
 
 
 
 
 
 
 
 
 
 
 
loan portfolio) - balance at end of period
 
78

 
140

 
101

 
83

 
89

 
78

 
 
 
 
 
 
 
 
 
 
 
 
 
Total allowance for loan and lease losses
$
39,892

$
41,371

$
40,791

$
40,328

$
43,410

$
39,892

Loan Classification - Originated Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Special Mention
$
29,800

$
41,314

$
36,619

$
33,689

$
28,074

$
29,800

Substandard
 
58,092

 
58,873

 
44,770

 
35,895

 
43,963

 
58,092

Loan Classification - Acquired Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Special Mention
 
0

 
261

 
265

 
270

 
452

 
0

Substandard
 
2,407

 
2,809

 
2,857

 
2,830

 
2,914

 
2,407

Loan Classifications - Total Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Special Mention
 
29,800

 
41,575

 
36,884

 
33,959

 
28,526

 
29,800

Substandard
 
60,499

 
61,682

 
47,627

 
38,725

 
46,877

 
60,499


Ratio Analysis
Credit Quality
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming loans and leases/total loans and leases (6)
 
0.64
%
 
0.62
%
 
0.49
%
 
0.48
%
 
0.55
%
 
0.64
%
Nonperforming assets/total assets
 
0.47
%
 
0.47
%
 
0.39
%
 
0.36
%
 
0.42
%
 
0.47
%
Allowance for originated loan and lease losses/total originated loans and leases
 
0.85
%
 
0.89
%
 
0.88
%
 
0.89
%
 
0.95
%
 
0.85
%
Allowance/nonperforming loans and leases
 
126.90
%
 
137.46
%
 
171.42
%
 
175.51
%
 
163.25
%
 
126.90
%
Net loan and lease losses annualized/total average loans and leases
 
0.04
%
 
0.06
%
 
0.01
%
 
0.30
%
 
0.00
%
 
0.10
%



Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
 
 
Year-Ended
Capital Adequacy (period-end)
 
Dec-19

 
Sep-19

 
Jun-19

 
Mar-19

 
Dec-18

 
Dec-19

Tier 1 Capital (to average assets)
 
9.61
%
 
9.43
%
 
9.25
%
 
9.24
%
 
9.05
%
 
9.61
%
Common Equity Tier 1 Capital (to risk-weighted assets)
 
12.33
%
 
12.14
%
 
12.13
%
 
12.19
%
 
11.84
%
 
12.33
%
Profitability
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets *
 
1.26
%
 
1.21
%
 
1.15
%
 
1.27
%
 
1.12
%
 
1.22
%
Return on average equity *
 
12.59
%
 
12.15
%
 
11.96
%
 
13.53
%
 
12.38
%
 
12.55
%
Net interest margin (TE) *
 
3.44
%
 
3.43
%
 
3.34
%
 
3.34
%
 
3.34
%
 
3.39
%
* Quarterly ratios have been annualized
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Measures
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as reconciliation to the comparable GAAP measure, is provided in the below tables. The Company believes the non-GAAP measures provide meaningful comparisons of our underlying operational performance and facilitate management's and investors' assessments of business and performance trends in comparison to others in the financial services industry. 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. The non-GAAP financial measures 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.
Reconciliation of Common Equity Book Value Per Share (GAAP) to Tangible Book Value Per Share (non-GAAP)
Total common equity
$
661,642

$
658,358

$
656,201

$
645,823

$
619,459

$
661,642

Less: Goodwill and intangibles (7)
 
97,855

 
98,277

 
98,698

 
98,694

 
99,106

 
97,855

Tangible common equity (Non-GAAP)
 
563,787

 
560,081

 
557,503

 
547,129

 
520,353

 
563,787

Ending shares outstanding
14,978,589
 
14,975,750
 
15,160,719
 
15,314,078
 
15,312,377
 
14,978,589
 
Tangible book value per share (Non-GAAP)
$
37.64

$
37.40

$
36.77

$
35.73

$
33.98

$
37.64































Tompkins Financial Corporation - Summary Financial Data (Unaudited) - continued
Reconciliation of Diluted Earnings Per Share (GAAP) to Adjusted Diluted Earnings Per Share (non-GAAP)
 
 
Dec-19
Dec-18
Net income available to common shareholders
$81,718
$82,308
Income attributable to unvested stock-based compensation awards
1,306

1,315

Net earnings allocated to common shareholders (GAAP)
80,412

80,993

Weighted average shares outstanding (diluted)
14,973,951

15,132,257

Diluted earnings per share (5)
$5.37
$5.35
Adjustments for non-operating income and expense:
 
 
  Gain on sale of real estate, net of tax
0

2,227

  Write-down of impaired leases, net of tax
0

(1,915
)
Adjusted net income (Non-GAAP)
80,412

80,681

Weighted average shares outstanding (diluted)
14,973,951

15,132,257

Adjusted diluted earnings per share (Non-GAAP)
$5.37
$5.33

(1) Federal Reserve peer ratio as of September 30, 2019, the most recent data available, includes banks and bank holding companies with consolidated assets between $3 billion and $10 billion.
(2) Average balances and yields on available-for-sale securities are based on historical amortized cost.
(3) Interest income includes the tax effects of taxable-equivalent basis.
(4) Nonaccrual loans are included in the average asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company's consolidated financial statements included in Part I of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2018.
(5) Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares
(6) Certain acquired loans and leases that are past due are not on nonaccrual and are not included in nonperforming loans. The risk of credit loss on these loans has been considered by virtue of the Corporation's estimate of acquisition-date fair value and these loans are considered accruing as the Corporation primarily recognizes interest income through accretion of the difference between the carrying value of these loans and their expected cash flows. Earnings per share year-to-date may not equal the sum of the quarterly earnings per share as a result of rounding of average shares
(7) "Goodwill and intangibles" equal Total Intangible Assets less Mortgage Servicing Rights in the above tables.