10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________

FORM 10-K

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

For the fiscal year ended December 31, 2019

☐ 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.)

118 E. Seneca Street, P.O. Box 460, Ithaca, NY

(Address of principal executive offices)

14851

(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($.10 Par Value Per Share)	TMP	NYSE American

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of Securities Act. Yes ☐ No ☒.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒.

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (S232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "nonaccelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒ Accelerated Filer ☐ Nonaccelerated Filer ☐ Smaller Reporting Company ¨ ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The aggregate market value of the registrant’s common stock held by non-affiliates was $1.0 billion on June 30, 2019, based on the closing sales price of a share of the registrant’s common stock, $.10 par value (the “Common Stock”), as reported on the NYSE American, on such date.

The number of shares of the registrant’s Common Stock outstanding as of February 18, 2020, was 14,979,825 shares.

DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the registrant’s definitive Proxy Statement relating to its 2020 Annual Meeting of stockholders, to be held on May 5, 2020, are incorporated by reference into Part III of this Form 10-K where indicated.

TOMPKINS FINANCIAL CORPORATION

Annual Report on Form 10-K

For the Fiscal Year Ended December 31, 2019

Table of Contents

PART I		Page
Item 1.	Business	1
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	22
Item 2.	Properties	22
Item 3.	Legal Proceedings	22
Item 4.	Mine Safety Disclosures	22
	Information About Our Executive Officers	23
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Financial Data	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 8.	Financial Statements and Supplementary Data	65
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	138
Item 9A.	Controls and Procedures	138
Item 9B.	Other Information	138
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	139
Item 11.	Executive Compensation	139
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	139
Item 13.	Certain Relationships and Related Transactions, and Director Independence	139
Item 14.	Principal Accounting Fees and Services	140
Part IV
Item 15.	Exhibits and Financial Statement Schedules	140
Item 16.	Form 10-K Summary	145

PART I

Item 1. Business

The disclosures set forth in this Item 1. Business are qualified by the section captioned “Forward-Looking Statements” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Report and other cautionary statements set forth elsewhere in this Report.

General

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, and insurance. At December 31, 2019, 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 (DBA Tompkins Mahopac Bank), VIST Bank (DBA Tompkins VIST Bank); and a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). The Trust Company provides a full array of trust and 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 118 E. Seneca St., P.O. Box 460, Ithaca, New York, 14850, and its telephone number is (888) 503-5753. The Company’s common stock is traded on the NYSE American under the symbol “TMP.”

Tompkins was organized in 1995, under the laws of the State of New York, as a bank holding company for the Trust Company, a commercial bank that has operated in Ithaca, New York and surrounding communities since 1836.

The Tompkins strategy centers around its core values and a commitment to delivering long-term value to our clients, communities, and shareholders. To achieve this, the Company has a variety of strategic initiatives focused on delivering high quality products and services; a continual focus on improving operational effectiveness, investing in our people through talent management and development, maintaining appropriate risk management programs, and delivering profitable growth across all of our business lines. The Company's growth strategy includes initiatives to grow organically through our current businesses, as well as through possible acquisitions of financial institutions, branches, and financial services businesses. As such, the Company has acquired, and from time to time considers acquiring, banks, thrift institutions, branch offices of banks or thrift institutions, or other businesses 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.  

Although Tompkins is a corporate entity, legally separate and distinct from its affiliates, bank holding companies such as Tompkins are generally required to act as a source of financial strength for their banking subsidiaries. Tompkins’ principal source of income is dividends from its subsidiaries. There are certain regulatory restrictions on the extent to which these subsidiaries can pay dividends or otherwise supply funds to Tompkins. See the section “Supervision and Regulation” for further details.

Narrative Description of Business

The Company has identified three business segments, consisting of banking, insurance and wealth management.

Banking services consist primarily of attracting deposits from the areas served by the Company’s 4 banking subsidiaries’ 64 banking offices (44 offices in New York and 20 offices in Pennsylvania), 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 lending function is managed within the guidelines of a comprehensive Board-approved lending policy. Policies and procedures are reviewed on a regular basis. 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. The Company has an independent third party loan review process that reviews and validates the risk identification and assessment made by the lenders and credit personnel. The results of these reviews are presented to the Board of Directors of each of the Company’s banking subsidiaries, and the Company’s Audit Committee.

The Company’s principal expenses are interest on deposits, interest on borrowings, and operating and general administrative

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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. The Company’s principal source of revenue is interest income on loans and securities.

The Company maintains a portfolio of securities such as obligations of U.S. government agencies and U.S. government sponsored entities, obligations of states and political subdivisions thereof, and equity securities. Management typically invests in securities with short to intermediate average lives in order to better match the interest rate sensitivities of its assets and liabilities. Investment decisions are made within policy guidelines established by the Company’s Board of Directors. The investment policy is based on the asset/liability management goals of the Company, and is monitored by the Company’s Asset/Liability Management Committee. The intent of the policy is to establish a portfolio of high quality diversified securities, which optimizes net interest income within safety and liquidity limits deemed acceptable by the Asset/Liability Management Committee.

The Company has operated its insurance agency subsidiary, Tompkins Insurance Agencies Inc., since 2001. Insurance services include property and casualty insurance, employee benefit consulting, life, long-term care and disability insurance. Tompkins Insurance is headquartered in Batavia, New York. Over the years, Tompkins Insurance has acquired smaller insurance agencies in the market areas served by the Company’s banking subsidiaries and successfully consolidated them into Tompkins Insurance. Tompkins Insurance offers services to customers of the Company’s banking subsidiaries by sharing offices with Tompkins Bank of Castile, the Trust Company, and Tompkins VIST Bank. In addition to these shared offices, Tompkins Insurance has five stand-alone offices in Western New York, and one stand-alone office in Tompkins County, New York.

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 provided under the trade name Tompkins Financial Advisors. Tompkins Financial Advisors has office locations, and services are available, within all four of the Company’s subsidiary banks.

Subsidiaries

The Company operates four banking subsidiaries, and an insurance agency subsidiary. In addition, the Company also owns 100% of the common stock of Sleepy Hollow Capital Trust I, Leesport Capital Trust II, and Madison Statutory Trust I. The Company’s banking subsidiaries operate 64 offices, including 2 limited-service offices, with 44 banking offices located in New York and 20 banking offices located in southeastern Pennsylvania. The decision to operate as four locally managed community banks reflects management’s commitment to community banking as a business strategy. For Tompkins, personal delivery of high quality services, a commitment to the communities in which we operate, and the convergence of a single-source financial service provider characterize management’s community banking approach. The combined resources of the Tompkins organization provide increased capacity for growth and the greater capital resources necessary to make investments in technology and services. Tompkins has a comprehensive suite of products and services in the markets served by all four banking subsidiaries. These services include trust and investment services, insurance, leasing, card services, Internet banking, and remote deposit services.

Tompkins Trust Company (the “Trust Company”) 

The Trust Company is a New York State-chartered commercial bank that has operated in Ithaca, New York and surrounding communities since 1836. The Trust Company provides wealth management services through Tompkins Financial Advisors (“TFA”), a division of Tompkins Trust Company. The Trust Company operates 14 banking offices, including one limited-service banking office in Tompkins County, in New York. The Trust Company’s largest market area is Tompkins County, which has a population of approximately 105,000. Education plays a significant role in the Tompkins County economy with Cornell University and Ithaca College being two of the county’s major employers. The Trust Company has a full-service office in Cortland, New York and a full-service office in Auburn, New York. Both of these offices are located in counties contiguous to Tompkins County. The Trust Company also has a full service branch in Fayetteville, New York which is located in Onondaga County. As of December 31, 2019, the Trust Company had total assets of $2.1 billion, total loans of $1.4 billion and total deposits of $1.6 billion.

Tompkins Bank of Castile  

Tompkins Bank of Castile is a New York State-chartered commercial bank and conducts its operations through its 16 banking offices, in towns situated in and around the areas commonly known as the Genesee Valley region of New York State. The main business office for Tompkins Bank of Castile is located in Batavia, New York and is shared with Tompkins Insurance. Tompkins Bank of Castile serves a six-county market, much of which is rural in nature, but also includes Monroe County (population approximately 748,000), where the city of Rochester is located, and Erie County (population approximately 926,000) located near Buffalo, New York. The population of the counties served by Tompkins Bank of Castile, other than Monroe and Erie, is

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approximately 203,000. As of December 31, 2019, Tompkins Bank of Castile had total assets of $1.5 billion, total loans of $1.2 billion and total deposits of $1.2 billion.

Tompkins Mahopac Bank

Tompkins Mahopac Bank is a New York State-chartered commercial bank that operates 14 banking offices. The 14 banking offices include 5 full-service offices in Putnam County, New York, 3 full-service offices in Dutchess County, New York, and 6 full-service offices in Westchester County, New York. Putnam County has a population of approximately 99,000 and is about 60 miles north of Manhattan. Dutchess County has a population of approximately 296,000, and Westchester County has a population of approximately 980,000. As of December 31, 2019, Tompkins Mahopac Bank had total assets of $1.3 billion, total loans of $1.0 billion and total deposits of $1.0 billion.

Tompkins VIST Bank  

Tompkins VIST Bank is a full service Pennsylvania State-charted commercial bank that operates 20 banking offices in Pennsylvania, including one limited-service office. The 20 banking offices include 12 offices in Berks County, 5 offices in Montgomery County, 1 office in Philadelphia County, 1 office in Delaware County and 1 office in Schuylkill County. The population of the counties served by Tompkins VIST Bank is Philadelphia: 1.6 million, Montgomery: 826,000, Delaware: 565,000, Berks: 418,000 and Schuylkill: 143,000. The main office is located in Wyomissing, Pennsylvania. As of December 31, 2019, Tompkins VIST Bank had total assets of $1.8 billion, total loans of $1.3 billion and total deposits of $1.3 billion.

Tompkins Insurance Agencies, Inc. ("Tompkins Insurance")

Tompkins Insurance is headquartered in Batavia, New York. Insurance services include property and casualty insurance, employee benefit consulting, and life, long-term care and disability insurance. Over the 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. In the second quarter of 2019, Tompkins Insurance acquired the Cali Agency, Inc., an insurance agency located in western New York, in a cash transaction. Tompkins Insurance offers services to customers of the Company's banking subsidiaries by sharing offices with Tompkins Bank of Castile, Trust Company, and Tompkins VIST Bank. In addition to these shared offices, Tompkins Insurance has five stand-alone offices in Western New York, and one stand-alone office in Tompkins County.

Sleepy Hollow Capital Trust I 

Sleepy Hollow Capital Trust I, a Delaware statutory business trust, was formed in 2003 and issued $4.0 million of floating rate (three-month LIBOR plus 3.05%) trust preferred securities. The Company acquired Sleepy Hollow Capital Trust I through the acquisition of Sleepy Hollow Bancorp, Inc. in 2008.

Leesport Capital Trust II 

Leesport Capital Trust II, a Delaware statutory business trust, was formed in 2002 and issued $10.0 million of mandatory redeemable capital securities carrying a floating interest rate of three-month LIBOR plus 3.45%. The Company assumed the rights and obligations of VIST Financial Corporation ("VIST Financial") pertaining to the Leesport Capital Trust II through the Company’s acquisition of VIST Financial in 2012.

Madison Statutory Trust I 

Madison Statutory Trust I, a Connecticut statutory business trust formed in 2003, issued $5.0 million of mandatory redeemable capital securities carrying a floating interest rate of three-month LIBOR plus 3.10%. VIST Financial assumed Madison Statutory Trust I pursuant to the purchase of Madison Bancshares Group, Ltd in 2004. The Company assumed the rights and obligations of VIST Financial pertaining to the Madison Statutory Trust I through the Company’s acquisition of VIST Financial in 2012.

For additional details on the above capital trusts refer to “Note 10 - Trust Preferred Debentures” in the Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

Competition

Competition for commercial banking and other financial services is strong in the Company’s market areas. In one or more aspects of its business, 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 services 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.

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Competition among financial institutions is based upon interest rates offered on deposit accounts, interest rates charged on loans and other credit and service charges, the quality and scope of the services rendered, the convenience of facilities and services, and, in the case of loans to commercial borrowers, relative lending limits. 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. In addition, the Company focuses on providing unparalleled customer service, which includes offering a strong suite of products and services. Although management feels that this business model has caused the Company to grow its customer base in recent years and allows it to compete effectively in the markets it serves, we cannot assure you that such factors will result in future success.

Supervision and Regulation

Regulatory Agencies 

As a registered financial holding company, the Company is regulated under the Bank Holding Company Act of 1956 as amended (“BHC Act”), 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 (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company's activities are also subject to regulation under the Federal Reserve Act, the Federal Deposit Insurance Act, the Dodd-Frank Act, the Truth-in-Lending Act (which governs disclosures of credit terms to consumer borrowers), the Truth-in-Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act (which governs the manner in which consumer debts may be collected by collection agencies), the Home Mortgage Disclosure Act (which requires financial institutions to provide certain information about home mortgage and refinanced loans), the Servicemembers Civil Relief Act, Section 5 of the Federal Trade Commission Act (which prohibits unfair or deceptive acts and practices in or affecting commerce), the Real Estate Settlement Procedures Act, and the Electronic Funds Transfer Act, as well as other federal, state and local laws. The Company’s common stock is traded on the NYSE American under the Symbol “TMP” and as a result the Company is subject to the rules of the NYSE American 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 insurance subsidiary is subject to examination and regulation by the NYSDFS and the Pennsylvania Insurance Department.

The Company’s wealth management subsidiary is subject to examination and regulation by various regulatory agencies. The trust division of Tompkins Trust Company is subject to examination and comprehensive regulation by the FDIC and NYSDFS. 

Federal Home Loan Bank System 

The Company’s banking subsidiaries are also members of the Federal Home Loan Bank (“FHLB”), which provides a central credit facility primarily for member institutions for home mortgage and neighborhood lending. The Company’s banking subsidiaries are subject to the rules and requirements of the FHLB, including the requirement to acquire and hold shares of capital stock in the FHLB in an amount at least equal to the sum of 0.35% of the aggregate principal amount of its unpaid residential mortgage loans and similar obligations at the beginning of each year, up to a maximum of $25.0 million. The Company’s banking subsidiaries were in compliance with FHLB rules and requirements as of December 31, 2019.

Regulatory Reform 

The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) placed U.S. banks and financial services firms under enhanced regulation and oversight. While many provisions of the Dodd- Frank Act are currently effective, certain provisions of the legislation are still subject to further rulemaking, guidance and interpretation by the federal regulatory agencies. In addition, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”), which was enacted on May 24, 2018, amended certain provisions of the Dodd-Frank Act. Key provisions of EGRRCPA and its implementing regulations that are likely to impact the Company, include:

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– A simplified capital rule change that exempts "qualifying community banks" from all risk-based capital requirements, including Basel III, and deems such banks "well capitalized" for purposes of federal "prompt corrective action" capital standards. To qualify for the framework, a community bank must have less than $10 billion in total consolidated assets, limited amounts of off-balance-sheet exposures and trading assets and liabilities, and a leverage ratio greater than nine percent. Under the final rules, effective January 1, 2020, qualifying community banks may elect to adopt the simplifying changes beginning on January 1, 2020. The Company was, as of December 31, 2019, a qualifying community bank.

– Amendment of the Liquidity Coverage Ratio Rule such that all qualifying investment-grade, liquid and readily-marketable municipal securities are treated as level 2B liquid assets;

– Modification of the definition of "high volatility commercial real estate" loans that trigger heightened risk-based capital requirements to ease the burden of those requirements;

– Exemption of certain reciprocal deposits of certain FDIC-insured institutions from being considered "brokered deposits," subject to certain limitations, for institutions meeting minimum capital and exam-rating requirements;

– Exemption of some community banks from mortgage escrow requirements, exempts certain transactions involving real property in rural areas and valued at less than $400,000 from appraisal requirements and implements a "qualified mortgage" exemption for community banks which satisfies, subject to certain limitations, the "ability to repay" requirements in the Truth in Lending Act; and

– Exemption of certain qualifying financial institutions with less than $10 billion in total assets, such as the Company, from the Volcker Rule proprietary trading requirements implemented under the Dodd-Frank Act.

While EGRRCPA improves regulatory conditions for the Company, many provisions of the Dodd-Frank Act and its implementing regulations remain effective and will continue to result in additional operating and compliance costs that could have a material adverse effect on our business, financial condition and results of operation.

Debit-Card Interchange Fees

FRB regulations mandated by the Dodd-Frank Act limit interchange fees on debit cards to a maximum of 21 cents per transaction plus 5 basis points of the transaction amount. Issuers that, together with their affiliates, have less than $10 billion in assets, such as the Company, are exempt from the debit card interchange fee standards. However, FRB regulations prohibit all card issuers, including the Company and its banking subsidiaries, from restricting the number of networks over which electronic debit transactions may be processed to fewer than two unaffiliated networks, or inhibiting a merchant's ability to direct the routing of the electronic debit transaction over any network that the card issuer has enabled to process them.

Volcker Rule

The Dodd-Frank Act required the federal financial regulatory agencies to adopt rules that prohibit banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies (defined as hedge funds and private equity funds). The statutory provision is commonly called the “Volcker Rule.” As of December 31, 2019, the Company had outstanding investments of approximately $600,000 in covered funds (the "Legacy Investments"), which are exempt from the divestiture requirements of the Volcker Rule unless the Company crosses the $10 billion in total asset threshold.

Federal Bank Holding Company Regulation 

We are a bank holding company subject to regulation under the BHC Act and the examination and reporting requirements of the FRB. In general, the BHC Act limits the business of bank holding companies to banking, managing or controlling banks and other activities that the FRB has determined to be so closely related to banking as to be a proper incident thereto. In addition, we qualified for the status of and elected to be a financial holding company under the BHC Act and therefore may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either (i) financial in nature or incidental to such financial activity (as determined by the FRB in consultation with the Secretary of the Treasury) or (ii) complementary to a financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally (as solely determined by the FRB), without prior approval of the FRB.

If a bank holding company seeks to engage in the broader range of activities permitted under the BHC Act for financial holding companies, as we do, (i) the bank holding company and all of its depository institution subsidiaries must be “well-capitalized” and “well-managed,” as defined in the FRB's Regulation Y and (ii) it must file a declaration with the FRB that it elects to be a “financial holding company.” If we cease to meet these requirements, the Company will not be in compliance with the BHC Act’s requirements and the FRB may impose limitations or conditions on the conduct of its activities to encourage compliance. If the Company does not return to compliance within 180 days, the FRB may require divestiture of our depository institutions, among other potential penalties and limitations. To maintain financial holding company status, a financial holding company and all of its depository institution subsidiaries must be “well capitalized” and “well managed.” A depository institution subsidiary is considered to be “well capitalized” if it satisfies the requirements for this status discussed in the section captioned “Capital Adequacy and

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Prompt Corrective Action,” below. A depository institution subsidiary is considered “well managed” if it received a composite rating and management rating of at least “satisfactory” in its most recent examination. A financial holding company’s status will also depend upon it maintaining its status as “well capitalized” and “well managed” under applicable FRB regulations. If a financial holding company ceases to meet these capital and management requirements, the FRB’s regulations provide that the financial holding company must enter into an agreement with the FRB to comply with all applicable capital and management requirements. Until the financial holding company returns to compliance, the FRB may impose limitations or conditions on the conduct of its activities, and the company may not commence any of the broader financial activities permissible for financial holding companies or acquire a company engaged in such financial activities without prior approval of the FRB. If the company does not return to compliance within 180 days, the FRB may require divestiture of the holding company’s depository institutions. Bank holding companies and banks must also be “well-capitalized” and “well-managed” in order to acquire banks located outside their home state.

In order for a financial holding company to commence any new activity permitted by the BHC Act or to acquire a company engaged in any new activity permitted by the BHC Act, each insured depository institution subsidiary of the financial holding company must have received a rating of at least “satisfactory” in its most recent examination under the Community Reinvestment Act (“CRA”). See the section captioned “Community Reinvestment Act”, below.

The FRB has the power to order any bank holding company or its subsidiaries to terminate any activity or to terminate its ownership or control of any subsidiary when the FRB has reasonable grounds to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial soundness, safety or stability of any bank subsidiary of the bank holding company.

Share Repurchases and Dividends 

Under FRB regulations, the Company may not, without providing prior notice to the FRB, purchase or redeem its own common stock if the gross consideration for the purchase or redemption, combined with the net consideration paid for all such purchases or redemptions during the preceding twelve months, is equal to ten percent or more of the Company’s consolidated net worth.

FRB regulations provide that dividends shall not be paid except out of current earnings and unless the prospective rate of earnings retention by the Company appears consistent with its capital needs, asset quality, and overall financial condition. Tompkins’ primary source of funds to pay dividends on its common stock is dividends from its subsidiary banks. The subsidiary banks are subject to regulations that limit the dividends that they may pay to Tompkins. Member banks may not declare or pay a dividend during the current calendar year that exceeds the sum of the bank's net income during the current calendar year and the retained net income of the prior two calendar years, unless approved by the pertinent regulatory agencies.

Transactions with Affiliates and Other Related Parties 

There are Federal laws and regulations that govern transactions between the Company’s non-bank subsidiaries and its banking subsidiaries, including Sections 23A and 23B of the Federal Reserve Act and related regulations. These laws establish certain quantitative limits and other prudent requirements for loans, purchases of assets, and certain other transactions between a member bank and its affiliates. In general, transactions between the Company’s banking subsidiaries and its non-bank subsidiaries must be on terms and conditions, including credit standards, that are substantially the same or at least as favorable to the banking subsidiaries as those prevailing at the time for comparable transactions involving non-affiliated companies. The Dodd-Frank Act significantly expanded the coverage and scope of the limitations on affiliate transactions within a banking organization.

The Company’s authority to extend credit to its directors, executive officers and 10% shareholders, as well as to entities controlled by such persons, is governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O as promulgated by the FRB. Among other things, these provisions require that extensions of credit to insiders (i) be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and (ii) not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank’s capital. In addition, extensions of credit in excess of certain limits must be approved by the Bank’s board of directors.

Mergers and Acquisitions 

The BHC Act, the Bank Merger Act, the Change in Bank Control Act and other federal and state statutes regulate acquisitions of interests in commercial banks. The BHC Act requires the prior approval of the FRB for the direct or indirect acquisition by a bank holding company of more than 5.0% of the voting shares of a commercial bank or its parent holding company and for a person, other than a bank holding company, to acquire 25% or more of any class of voting securities of a bank or bank holding company. Under the Bank Merger Act, the prior approval of the FRB or other appropriate bank regulatory authority is required for a member bank to merge with another bank or purchase the assets or assume the deposits of another bank. In reviewing applications seeking

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approval of merger and acquisition transactions, the bank regulatory authorities will consider, among other things, the competitive effect and public benefits of the transactions, the capital position of the combined organization, the risks to the stability of the U.S. banking or financial system, the applicant’s performance record under the CRA (see the section captioned “Community Reinvestment Act” included elsewhere in this item) and fair housing laws and the effectiveness of the subject organizations in combating money laundering activities.

Source of Strength Doctrine

The Dodd-Frank Act requires bank holding companies to act as a source of financial and managerial strength to their subsidiary banks. Under this requirement, Tompkins is expected to commit resources to support its banking subsidiaries, including at times when it may not be advantageous for Tompkins to do so. Any capital loans by a bank holding company to any of its subsidiary banks are subordinated in right of payment to deposits and to certain other indebtedness of such subsidiary banks. In the event of a bank holding company’s bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment.

Liability of Commonly Controlled Institutions 

FDIC-insured depository institutions can be held liable for any loss incurred, or reasonably expected to be incurred, by the FDIC due to the default of an FDIC-insured depository institution controlled by the same bank holding company, or for any assistance provided by the FDIC to an FDIC-insured depository institution controlled by the same bank holding company that is in danger of default. “Default” means generally the appointment of a conservator or receiver. “In danger of default” means generally the existence of certain conditions indicating that default is likely to occur in the absence of regulatory assistance.

Capital Adequacy and Prompt Corrective Action 

The Basel III Capital Rules were implemented by the FRB in 2013, became effective for Tompkins on January 1, 2015 and were subject to a phase-in period that concluded on January 1, 2019.

The Basel III Capital Rules, among other things, (i) introduced a new capital measure called “Common Equity Tier 1” (“CET1”), (ii) specified that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting specified requirements, (iii) defined CET1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital and (iv) expanded the scope of the deductions/adjustments as compared to existing regulations.

Under Basel III, the Company is required to maintain a “capital conservation buffer” above the minimum risk-based capital requirements. The capital conservation buffer, fully phased in on January 1, 2019, is 2.5%. At December 31, 2019, the Company complied with the capital conservation buffer requirement.

As fully phased in on January 1, 2019, the Basel III Capital Rules require Tompkins to maintain (i) a minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a 2.5% capital conservation buffer (which when fully phased in, effectively results in a minimum ratio of CET1 to risk-weighted assets of at least 7.0%), (ii) a minimum ratio of Tier 1 capital to risk- weighted assets of at least 6.0%, plus the capital conservation buffer (which when fully phased-in, effectively results in a minimum Tier 1 capital ratio of 8.5%), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which when fully phased in, effectively results in a minimum total capital ratio of 10.5%) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets. If we have a ratio of CET1 to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied), we will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.

The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and is not expected to apply to Tompkins for the foreseeable future.

The Basel III Capital Rules imposed stricter regulatory capital deductions from and adjustments to capital, with most deductions and adjustments taken against CET1 capital. These include, for example, the requirement that (i) mortgage servicing assets, net of associated deferred tax liabilities; (ii) deferred tax assets, which cannot be realized through net operating loss carrybacks, net of any relative valuation allowances and net of deferred tax liabilities; and (iii) significant investments (i.e. 10% or greater ownership) in unconsolidated financial institutions be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1. Implementation of the deductions and other adjustments to CET1 began on January 1, 2015. The deductions were phased-in over a four-year period, beginning on January 1, 2015 and concluding on January 1, 2019.

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Under the Basel III Capital Rules, the effect of certain accumulated other comprehensive items are not excluded, which could result in significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of the Company’s securities portfolio. Contained within the rule was a one-time option to permanently opt-out of the inclusion of accumulated other comprehensive income in the capital calculation based upon asset size. Tompkins decided to opt out of this requirement in January 2015.

The Basel III Capital Rules also required the phase-out of certain hybrid securities, such as trust preferred securities, as Tier 1 capital of bank holding companies. However, because the trust preferred securities held by Tompkins were issued prior to May 19, 2010, and because Tompkins’ total consolidated assets were less than $15.0 billion as of December 31, 2009, these trust preferred securities are permanently grandfathered under the final rule and may continue to be included as Tier 1 capital.

In addition, the Basel III Capital Rules provide more advantageous risk weights for derivatives and repurchase-style transactions cleared through a qualifying central counterparty and increase the scope of eligible guarantors and eligible collateral for purposes of credit risk mitigation.

The Standardized Approach Proposal expands the risk-weighting categories from the current four Basel I-derived categories (0%, 20%, 50% and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity exposures, and resulting in higher risk weights for a variety of asset categories, including many residential mortgages and certain commercial real estate loans. Specifics include, among other things:

– Applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans.

– For residential mortgage exposures, the current approach of a 50% risk weight for high-quality seasoned mortgages and a 100% risk-weight for all other mortgages is replaced with a risk weight of between 35% and 200% depending upon the mortgage’s loan-to-value ratio and whether the mortgage is a “category 1” or “category 2” residential mortgage exposure (based on eight criteria that include the term, use of negative amortization, balloon payments and certain rate increases).

– Assigning a 150% risk weight to exposures (other than residential mortgage exposures) that are 90 days past due.

– Providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (currently set at 0%).

– Providing for a risk weight, generally not less than 20% with certain exceptions, for securities lending transactions based on the risk weight category of the underlying collateral securing the transaction.

– Providing for a 100% risk weight for claims on securities firms.

– Eliminating the current 50% cap on the risk weight for OTC derivatives.

Section 38 of the Federal Deposit Insurance Act (“FDIA”) requires federal banking agencies to take “prompt corrective action” (“PCA”) should an insured depository institutions fail to meet certain capital adequacy standards. If an insured depository institution is classified in one of the undercapitalized categories, it is required to submit a capital restoration plan to the appropriate federal banking agency and the holding company must guarantee the performance of that plan. Based upon its capital levels, a bank that is classified as well- capitalized, adequately capitalized or undercapitalized, may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice, warrants such treatment.

With respect to the Company’s banking subsidiaries, the Basel III Capital Rules revised the PCA regulations, by: (i) introducing a CET1 ratio requirement at each PCA category (other than critically undercapitalized), with the required CET1 ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each category, with the minimum Tier 1 capital ratio for well-capitalized status being 8% (as compared to 6%); and (iii) eliminating the provision that permitted a bank with a composite supervisory rating of 1 and a 3% leverage ratio to be considered adequately capitalized. The Basel III Capital Rules did not change the total risk- based capital requirement for any PCA category. Additionally, Bank holding companies and insured depository institutions may also be subject to potential enforcement actions of varying levels of severity for unsafe or unsound practices in conducting their business or for violation of any law, rule, regulation, condition imposed in writing by federal banking agencies or term of a written agreement with such agency. The Company is in compliance, and management believes that the Company will continue to be in compliance, with the targeted capital ratios as such requirements are phased in.

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For further information concerning the regulatory capital requirements, actual capital amounts and the ratios of Tompkins and its bank subsidiaries, see the discussion in “Note 21 - Regulations and Supervision” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

Deposit Insurance  

Substantially all of the deposits of the Company’s banking subsidiaries are insured up to applicable limits by the Deposit Insurance Fund (“DIF”) of the FDIC and are subject to deposit insurance assessments to maintain the DIF. The Dodd-Frank Act permanently increased the maximum amount of deposit insurance to $250,000 per deposit category, per depositor, per institution retroactive to January 1, 2008.

The Company’s banking subsidiaries pay deposit insurance premiums to the FDIC based on assessment rates established by the FDIC. The assessment rates are based upon asset size and other risks the institution poses to the Deposit Insurance Fund, or DIF. Under this assessment system, risk is defined and measured using an institution’s supervisory ratings with other risk measures, including financial ratios. In 2019, the assessment rate for our subsidiary banks was at the lowest risk-based premium available, which was 3.00% of the assessment base per annum.

In October 2010, the FDIC adopted a new Restoration Plan for the DIF to ensure that the fund reserve ratio reaches 1.35% by September 30, 2020, as required by the Dodd-Frank Act. On April 26, 2016, the FDIC adopted a rule amending pricing for deposit insurance for institutions with less than $10 billion in assets effective the quarter after the fund reserve ratio reached 1.15%. The fund reserve ratio reached 1.15% effective as of June 30, 2016. The Dodd-Frank Act required the FDIC to offset the effect of increasing the reserve ratio on insured depository institutions with total consolidated assets of less than $10 billion. In September 2018, the reserve ratio reached 1.36% at which time banks with assets of less than $10 billion were awarded assessment credits for their portion of their assessments that contributed to the growth in the reserve ratio from 1.15% to 1.35%. When the reserve ratio reached 1.40% in June 2019,  the FDIC applied these credits to assessment invoices for banks with assets of less than $10 billion. In 2019, the Company's subsidiary banks applied credits of $1.5 million to offset deposit insurance expense.

Under the FDIA, the FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

FDIC insurance expense totaled $773,000, $2.6 million and $2.5 million in 2019, 2018 and 2017, respectively. The decrease in expense in 2019 from 2018 was due to the deposit insurance credits mentioned above. FDIC insurance expense includes deposit insurance assessments, and Financing Corporation (“FICO”) assessments related to outstanding FICO bonds. FICO is a mixed-ownership government corporation established by the Competitive Equality Banking Act of 1987 whose sole purpose was to function as a financing vehicle for the now defunct Federal Savings & Loan Insurance Corporation.

Depositor Preference 

The FDIA provides that, in the event of the “liquidation or other resolution” of an insured depository institution, such as the Company’s subsidiary banks, the claims of depositors of the institution, including the claims of the FDIC, as subrogee of the insured depositors, and certain claims for administrative expenses of the FDIC as receiver, will have priority over other general unsecured claims against the institution. If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the parent bank holding company, with respect to any extensions of credit they have made to such insured depository institutions.

Community Reinvestment Act 

The CRA and the regulations issued thereunder are intended to encourage banks to help meet the credit needs of their entire service area, including low and moderate income neighborhoods, consistent with the safe and sound operations of such banks. These regulations also provide for regulatory assessment of a bank’s record in meeting the needs of its service area when considering applications to establish branches, merger applications and applications to acquire the assets and assume the liabilities of another bank. As of December 31, 2019, the Company’s subsidiary banks all had ratings of satisfactory or better.

In April 2018, the U.S. Department of Treasury issued a memorandum to the federal banking regulators with recommended changes to the CRA’s implementing regulations to reduce their complexity and associated burden on banks. In December 2019, the OCC and FDIC issued a notice of proposed rulemaking intended to (i) clarify which activities qualify for CRA credit; (ii) update where activities count for CRA credit; (iii) create a more transparent and objective method for measuring CRA performance; and (iv) provide for more transparent, consistent, and timely CRA-related data collection, recordkeeping, and reporting. However, the Federal Reserve has not joined the proposed rulemaking. The Company will continue to evaluate the impact of any changes to the regulations implementing the CRA.

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Federal Securities Laws

The common stock of the Company is registered with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Therefore, the Company is subject to the reporting, information disclosure, proxy solicitation and other requirements imposed on public companies by the SEC under the Exchange Act. Additionally, Company insiders are subject to security trading limitations and are required to file insider ownership reports with the SEC. The SEC and NYSE American have adopted regulations under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the Dodd-Frank Act that apply to the Company as an exchange-traded, public company, which seek to improve corporate governance, accounting, and reporting requirements, provide enhanced penalties for financial reporting improprieties and improve the reliability of disclosures in SEC filings. For example, the Sarbanes-Oxley requirements include: (1) requirements for audit committees, including independence and financial expertise; (2) certification of financial statements by the chief executive officer and chief financial officer of the reporting company; (3) standards for auditors and regulation of audits; (4) disclosure and reporting requirements for the reporting company and directors and executive officers; and (5) a range of civil and criminal penalties for fraud and other violations of securities laws.

Anti-Money Laundering and the USA Patriot Act 

The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA Patriot Act”), the Bank Secrecy Act, the Money Laundering Control Act, and other federal laws, collectively impose obligations on all financial institutions, including the Company, to implement policies, procedures and controls which are reasonably designed to detect and report instances of money laundering and the financing of terrorism. Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Financial Privacy

The Gramm-Leach-Bliley Act of 1999 (“GLBA”) requires that financial institutions implement comprehensive written information security programs that include administrative, technical and physical safeguards designed to protect consumer information. Under the GLBA, federal banking regulators adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to non-affiliated third parties. These limitations require disclosure of privacy policies and certain security breaches to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party. These provisions affect, among other things, how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.

Office of Foreign Assets Control Regulation

The United States has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others. These are known as the “OFAC” rules based on their administration by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”). The OFAC-administered sanctions take many forms. Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on “U.S. persons” engaging in financial transactions relating to making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to a U.S. jurisdiction (including property in the possession or control of U.S. persons). Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences.

Consumer Protection Laws

In connection with their lending and leasing activities, the Company’s banking subsidiaries are subject to a number of federal and state laws designed to protect borrowers and promote lending. These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transaction Act of 2003, Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Truth in Lending Act, the Truth in Savings Act, the Home Mortgage Disclosure Act, and the Real Estate Settlement Procedures Act, and similar laws at the state level. The Company’s failure to comply with any of the consumer financial laws can result in civil actions, regulatory enforcement action by the federal banking agencies and the U.S. Department of Justice.

Additionally, the Dodd-Frank Act established a new Bureau of Consumer Financial Protection (“CFPB”) with broad powers to supervise and enforce consumer protection laws. The CFPB has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The CFPB has examination and enforcement authority over all banks and savings institutions with more than $10 billion

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in assets. The Company and its subsidiaries are required to comply with the rules of the CFPB; however, these rules are generally enforced by our primary regulators, the FRB and the FDIC.

Cybersecurity 

The Company is also subject to data security standards and privacy and data breach notice requirements as established by federal and state regulators. Federal banking agencies, through the Federal Financial Institutions Examination Council, have adopted guidelines to encourage financial institutions to address cybersecurity risks and identify, assess and mitigate these risks, both internally and at critical third party service providers. For example, federal banking regulators have highlighted that financial institutions should establish several lines of defense and design their risk management processes to address the risk posed by compromised customer credentials. Further, financial institutions are expected to maintain sufficient business continuity planning processes designed to facilitate a recovery, resumption and maintenance of the institution’s operations after a cyber-attack.

Additionally, the Company must comply with a NYSDFS rule entitled “Cybersecurity Requirements for Financial Services Companies,” which became effective March 1, 2017, subject to a full phase-in over the following two years, concluding in 2019. This NYSDFS rule requires financial services companies, including Tompkins, to maintain a maintain a cybersecurity program designed to protect the confidentiality, integrity and availability of the company’s information systems, establish cybersecurity policies and procedures, identify persons responsible for implementing and enforcing the cybersecurity program and cybersecurity policies and procedures, and conduct periodic risk assessments of its information systems. See Item 1A. Risk Factors for a further discussion of risks related to cybersecurity.

Incentive Compensation 

The Dodd-Frank Act required the federal bank regulatory agencies and the SEC to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities, such as the Company, having at least $1 billion in total assets that encourage inappropriate risks by providing an executive officer, employee, director or principal shareholder with excessive compensation, fees, or benefits or that could lead to material financial loss to the entity. In addition, these regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements. The agencies proposed such regulations in May 2016. If these or other regulations are adopted in a form similar to that initially proposed, they will impose limitations on the manner in which the Company may structure compensation for its executives. Given the uncertainty at this time whether or when a final rule will be adopted, management cannot determine the potential impact on the Company.

Additionally, the FRB, OCC and FDIC have issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. Management believes the current and past compensation practices of the Company do not encourage excessive risk taking or undermine the safety and soundness of the organization.

The FRB reviews, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not “large, complex banking organizations.” The findings of the supervisory initiatives are included in reports of examination and deficiencies can lead to limitations on the Company’s abilities and even enforcement actions.

The Company is also subject to the NYSDFS rule “Guidance on Incentive Compensation Arrangements,” which directs all New York state regulated banks (including the Trust Company, Tompkins Bank of Castile, and Tompkins Mahopac Bank) to ensure that any employee incentive arrangements do not encourage inappropriate risk-taking or improper sales practices. Under this guidance, incentive compensation based on employee performance indicators may only be paid if the bank has effective risk management, oversight and control systems in place. We believe the Company is compliant with all state and federal regulation regarding incentive compensation

Other Legislative Initiatives 

From time to time, various legislative and regulatory initiatives are introduced in Congress and state legislatures, as well as by regulatory authorities. These initiatives may include proposals to expand or contract the powers of bank holding companies and depository institutions, proposals to change the financial institution regulatory environment, or proposals that affect public companies generally. Such legislation could change banking laws and the operating environment of Tompkins in substantial, but

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unpredictable ways. We cannot predict whether any such legislation will be enacted, and, if enacted, the effect that it, or any implementing regulations would have on our financial condition or results of operations.

Employees

At December 31, 2019, the Company had 1,048 employees, approximately 114 of whom were part-time. No employees are covered by a collective bargaining agreement and the Company believes its employee relations are excellent.

Available Information

The Company maintains a website at www.tompkinsfinancial.com. The Company makes available free of charge through its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, its proxy statements related to its shareholders’ meetings, and amendments to these reports or statements, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after the Company electronically files such material with, or furnishes such material to, the SEC. Copies of these reports are also available at no charge to any person who requests them, with such requests directed to Tompkins Financial Corporation, Investor Relations Department, 118 E. Seneca St., P.O. Box 460, Ithaca, New York 14850, telephone no. (888) 503-5753. The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including material filed by the Company, at www.sec.gov. The information contained on the Company's website is provided for the information of the reader and it is not intended to be active links. The Company is not including the information contained on the Company’s website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K, or into any other report filed with or furnished to the SEC by the Company.

Item 1A. Risk Factors

Our Company's success is dependent on management's ability to identify and manage the risks inherent in our financial services business. These risks include credit risk, market risk, liquidity risk, operational risk, model risk, compliance and legal risk, and strategic and reputation risk. We list below the material risk factors we face. Any of these risks could result in a material adverse impact on our business, operating results, financial condition, liquidity, and cash flow, or may cause our results to vary materially from recent results, or from the results implied by any forward-looking statements made by us.

Risks Related to the Company’s Business

The Company is subject to increased business risk because the Company has a significant concentration of commercial real estate and commercial business loans, repayment of which is often dependent on the cash flows of the borrower.

The Company offers different types of commercial loans to a variety of businesses, and we believe commercial loans will continue to comprise a significant concentration of our loan portfolio in 2020 and beyond. Real estate lending is generally considered to be collateral-based lending with loan amounts based on predetermined loan-to-collateral values. As such, declines in real estate valuations in the Company’s market area would lower the value of the collateral securing these loans. Additionally, the Company has experienced, and expects to continue experiencing, increased competition in commercial real estate lending. This increased competition may inhibit the Company's ability to generate additional commercial real estate loans or maintain its current inventory of commercial real estate loans. The Company’s commercial business loans are made based primarily on the cash flow and creditworthiness of the borrower and secondarily on the underlying collateral provided by the borrower, with liquidation of the underlying real estate collateral being viewed as the primary source of repayment in the event of borrower default. The borrowers’ cash flow may be difficult to predict, and collateral securing these loans may fluctuate in value. Although commercial business loans are often collateralized by equipment, inventory, accounts receivable, or other business assets, the liquidation of collateral in the event of default is often an insufficient source of repayment. As of December 31, 2019, commercial and commercial real estate loans totaled $3.5 billion or 70.2% of total loans.

The Company’s agricultural loans are often dependent upon the health of the agricultural industry in the location of the borrower, and the ability of the borrower to repay may be affected by many factors outside of the borrower’s control. 

As part of the Company’s commercial business lending activities, the Company originates agricultural loans, consisting of agricultural real estate loans and agricultural operating loans. As of December 31, 2019, $290.7 million or 5.9% of the Company’s total loan portfolio consisted of agriculturally-related loans, including $184.9 million in agricultural real estate loans and $105.8 million in agricultural operating loans. Payments on agricultural loans are dependent on the profitable operation or management of the related farm property. The success of the farm may be affected by many factors outside the control of the borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market prices for agricultural products and the impact of governmental regulations and subsidies (including changes in price supports and environmental regulations). Many farms are dependent upon a limited number

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of key individuals whose injury or death may significantly affect the successful operation of the farm. If the cash flow from a farming operation is diminished, the borrower’s ability to repay the loan may be impaired. While agricultural operating loans are generally secured by a blanket lien on the farm’s operating assets, any repossessed collateral in respect of a defaulted loan may not provide an adequate source of repayment of the outstanding balance.

Additionally, the profitable operation or management of the related farm properties, and the value thereof, is impacted by changes in U.S. government trade policies. In 2018 and 2019, the U.S. government implemented tariffs on certain products, and certain countries or entities, such as Mexico, Canada, China and the European Union, have issued or continue to threaten retaliatory tariffs against products from the United States, including agricultural products. Tariffs, retaliatory tariffs or other trade restrictions on products and materials that farm properties related to our agriculturally-related loans import or export could cause the costs of such farm operations and management to increase, could cause the price of products from such farm operations to increase, could cause demand for such products to decrease and could cause the margins on such products to decrease. Such potential adverse effects on related farm property operations and management could reduce the related farm properties’ revenues, financial results and ability to service debt, which, in turn, could adversely affect our financial condition and results of operations. In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate, our business, results of operations and financial condition could be materially and adversely impacted in the future.

Declines in asset values may result in impairment charges and may adversely affect the value of the Company’s results of operations, financial condition and cash flows.

A majority of the Company’s investment portfolio is comprised of securities which are collateralized by residential mortgages. These residential mortgage-backed securities include securities of U.S. government agencies, U.S. government-sponsored entities, and private-label collateralized mortgage obligations. The Company’s securities portfolio also includes obligations of U.S. government-sponsored entities, obligations of states and political subdivisions thereof, U.S. corporate debt securities and equity securities. A more detailed discussion of the investment portfolio, including types of securities held, the carrying and fair values, and contractual maturities is provided in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report. Gains or losses on these instruments may have a direct impact on the results of operations, including higher or lower income and earnings, unless we adequately hedge our positions. The fair value of investments may be affected by factors other than the underlying performance of the issuer or composition of the obligations themselves, such as rating downgrades, adverse changes in the business climate, a lack of liquidity for resale of certain investment securities and changes in interest rates. For example, decreases in interest rates and increases in mortgage prepayment speeds, which are influenced by interest rates and other factors, could adversely impact the value of our securities collateralized by residential mortgages, causing a significant acceleration of purchase premium amortization on our mortgage portfolio because a decline in long-term interest rates shortens the expected lives of the securities. Conversely, increases in interest rates may result in a decrease in residential mortgage loan originations and mortgage prepayment speeds, directly impacting the value of these securities collateralized by residential mortgages. The Company periodically, but not less than quarterly, evaluates investments and other assets for impairment indicators in accordance with U.S. generally accepted accounting principles (“GAAP”). A decline in the fair value of the securities in our investment portfolio could result in an other-than temporary impairment (“OTTI”) write-down that could reduce our earnings. Further, given the significant judgments involved, if we are incorrect in our assessment of OTTI, this error could have a material adverse effect on our results of operation, financial condition, and cash flows.

A decline in the value of our goodwill and other intangible assets could adversely affect our financial condition and results of operations.

As of December 31, 2019, the Company had $98.7 million of goodwill and other intangible assets. The Company is required to test its goodwill and intangible assets for impairment on a periodic basis. A significant decline in the Company’s expected future cash flows, a significant adverse change in business climate, slower growth rates or a significant and sustained decline in the price of the Company’s common stock, may necessitate our taking charges in the future related to the impairment of the Company’s goodwill and intangible assets. If we make an impairment determination in a future reporting period, the Company’s earnings and the book value of these intangible assets would be reduced by the amount of the impairment. Further, a goodwill impairment charge could significantly restrict the ability of our banking subsidiaries to make dividend payments to us without prior regulatory approval, which could have a material adverse effect on our financial condition and results of operations.

Changes in accounting standards could materially impact our financial statements.

Periodically, the Financial Accounting Standards Board (“FASB”) and the SEC change the financial accounting and reporting standards that govern the preparation of our financial statements. These changes can materially impact how we record and report our financial condition and results of operations.

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In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13, effective for the Company as of January 1, 2020, substantially changes the accounting for credit losses on loans, leases and other financial assets held by banks, financial institutions and other organizations. The new standard requires the recognition of credit losses on loans, leases and other financial assets based on an entity's current estimate of expected losses over the lifetime of each loan, lease or other financial asset, referred to as the Current Expected Credit Loss ("CECL") model, as opposed to the existing "incurred loss" model, which required recognition of losses on loans, leases and other financial assets only when those losses were "probable." In December 2018, the bank regulatory agencies approved a final rule modifying the agencies' regulatory capital rules and providing an option to phase in over a period of three years the day-one regulatory capital effects of adoption of the CECL model. The Company expects to recognize a one-time cumulative-effect adjustment to the allowance for credit losses as of the date of adoption of the CECL model. The determination of the one-time cumulative-effect adjustment, and the determination of the allowance for credit losses in future periods, under the CECL model depend significantly upon the Company's assumptions and judgments with respect to a variety of factors, including the performance of the loan and lease portfolio, the weighted-average remaining lives of different classifications of loans and leases within the loan and lease portfolio, and current and forecasted economic conditions, as well as changes in the rate of growth in the loan and lease portfolio and changes in the composition of the loan and lease portfolio. As under the existing incurred loss model, if the Company's assumptions and judgments regarding such matters prove to be inaccurate, its allowance for credit losses might not be sufficient, and additional provisions for credit losses might need to be made. Depending on the amount of such provisions for credit losses, the adverse impact on the Company's earnings could be material.

The Company may be adversely affected by the soundness of other financial institutions.

Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. The Company has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial services industry. The most important counterparty for the Company, in terms of liquidity, is the Federal Home Loan Bank of New York (“FHLBNY”). The Company also has a relationship with the Federal Home Loan Bank of Pittsburgh (“FHLBPITT”). The Company uses FHLBNY as its primary source of overnight funds and also has long-term advances and repurchase agreements with FHLBNY. The Company has placed sufficient collateral in the form of commercial and residential real estate loans at FHLBNY. In addition, the Company is required to hold stock in FHLBNY and FHLBPITT. The amount of borrowed funds and repurchase agreements with the FHLBNY and FHLBPITT, and the amount of FHLBNY and FHLBPITT stock held by the Company, at its most recent fiscal year-end are discussed in Part II, Item 8 of this Report on Form 10-K.

There are 11 branches of the FHLB, including New York and Pittsburgh. The FHLBNY and the FHLBPITT are jointly and severally liable along with the other Federal Home Loan Banks for the consolidated obligations issued on behalf of the Federal Home Loan Banks through the Office of Finance. Dividends on, redemption of, or repurchase of shares of the FHLBNY’s or FHLBPITT’s capital stock cannot occur unless the principal and interest due on all consolidated obligations have been paid in full. If another Federal Home Loan Bank were to default on its obligation to pay principal or interest on any consolidated obligations, the Federal Home Loan Finance Agency (the “Finance Agency”) may allocate the outstanding liability among one or more of the remaining Federal Home Loan Banks on a pro rata basis or on any other basis the Finance Agency may determine. As a result, the FHLBNY’s or FHLBPITT’s ability to pay dividends on, to redeem, or to repurchase shares of capital stock could be affected by the financial condition of one or more of the other Federal Home Loan Banks. Any such adverse effects on the FHLBNY or FHLBPITT could adversely affect our liquidity, the value of our investment in FHLBNY or FHLBPITT common stock, and could negatively impact our results of operations.

Systemic weakness in the FHLB could result in higher costs of FHLB borrowings, reduced value of FHLB stock, and increased demand for alternative sources of liquidity that are more expensive, such as brokered time deposits, the discount window at the Federal Reserve, or lines of credit with correspondent banks. Any of these scenarios could adversely affect our liquidity, the value of our investment in FHLB common stock and our financial condition.

The Company relies on cash dividends from its subsidiaries to fund its operations, and payment of those dividends could be discontinued at any time.

The Company is a financial holding company whose principal assets and sources of income are its wholly-owned subsidiaries. The Company is a separate and distinct legal entity from its subsidiaries, and therefore the Company relies primarily on dividends from these banking and other subsidiaries to meet its obligations and to provide funds for the payment of dividends to the Company’s shareholders, to the extent declared by the Company’s board of directors. Various federal and state laws and regulations limit the amount of dividends that a bank may pay to its parent company and impose regulatory capital and liquidity requirements on the Company and its banking subsidiaries. Further, as a holding company, the Company’s right to participate in a distribution of assets upon the liquidation or reorganization of a subsidiary is subject to the prior claims of the subsidiary’s creditors (including, in the

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case of the Company’s banking subsidiaries, the banks’ depositors). If the Company were unable to receive dividends from its subsidiaries it would materially and adversely affects the Company’s liquidity and its ability to service its debt, pay its other obligations, or pay cash dividends on its common stock.

The Company’s business may be adversely affected by general economic conditions in local and national markets, the possibility of the economy’s return to recessionary conditions and the possibility of further turmoil or volatility in the financial markets.

General economic conditions impact the banking and financial services industry. The U.S. and global economies have experienced volatility in recent years and may continue to do so for the foreseeable future. There can be no assurance that economic conditions will not deteriorate. Unfavorable or uncertain economic conditions can be caused by many macro and micro factors, including declines in economic growth, business activity or investor or business confidence, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, the timing and impact of changing governmental policies and other factors. The Company is particularly affected by U.S domestic economic conditions, including U.S. interest rates, the unemployment rate, housing prices, the level of consumer confidence, changes in consumer spending, the number of personal bankruptcies and other factors. A decline in U.S. domestic business and economic conditions, without rapid recovery, could have adverse effects on our business, including the following:

– consumer and business confidence levels could be lowered and cause declines in credit usage, adverse changes in payment patterns, decreases in demand for loans or other financial products and services and decreases in deposits or investments in accounts with Company;

– the Company’s ability to assess the creditworthiness of its customers may be impaired if the models and approaches the Company uses to select, manage and underwrite its customers become less predictive of future behaviors;

– demand for and income received from the Company's fee-based services, including investment services and insurance commissions and fees, could decline, the cost to the Company to provide any or all products and services could increase and the levels of assets under management could materially impact revenues from our trust and wealth management businesses; and

– the credit quality or value of loans and other assets or collateral securing loans may decrease.

Our business is concentrated in and largely dependent upon the continued growth and welfare of the general geographic markets in which we operate.

Our operations are heavily concentrated in the New York State and, to a lesser extent, Pennsylvania and, as a result, our financial condition, results of operations and cash flows are significantly impacted by changes in the economic conditions in those areas. Therefore, the Company’s financial performance generally, and in particular, the ability of borrowers to pay interest on and repay the principal of outstanding loans and the value of collateral securing these loans, is highly dependent upon the business environment in the markets where the Company operates, particularly New York State and Pennsylvania. Our success depends to a significant extent upon the business activity, population, income levels, deposits and real estate activity in these markets. Although our clients’ business and financial interests may extend well beyond these markets, adverse economic conditions that affect these markets could disproportionately reduce our growth rate, affect the ability of our clients to repay their loans to us, affect the value of collateral underlying loans and generally affect our financial condition and results of operations. Because of our geographic concentration, we are less able than other regional or national financial institutions to diversify our credit risks across multiple markets. For additional information on our market area, see Part I, Item 1, “Business” of this Report on Form 10-K.

Our insurance agency subsidiary’s commission revenues are based on premiums set by insurers and any decreases in these premium rates could adversely affect our operations and revenues.

Our insurance agency subsidiary, Tompkins Insurance, derives the bulk of its revenue from commissions paid by insurance underwriters on the sale of insurance products to clients. Tompkins Insurance does not determine the insurance premiums on which its commissions are based. Insurance premiums are cyclical in nature and may vary widely based on market conditions. As a result, insurance brokerage revenues and profitability can be volatile. Revenue from insurance commissions and fees could be negatively affected by fluctuations in insurance premiums and other factors beyond the Company’s control, including changes in laws and regulations impacting the healthcare and insurance markets. In addition, there have been and may continue to be various trends in the insurance industry toward alternative insurance markets including, among other things, increased use of self-insurance, captives, and risk retention groups. Even if Tompkins Insurance is able to participate in these activities, it is unlikely to realize

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revenues and profitability as favorable as those realized from our traditional brokerage activities. We cannot predict the timing or extent of future changes in premiums and thus commissions. As a result, we cannot predict the effect that future premium rates will have on our operations. Decreases in premium rates could adversely affect our operations and revenues.

The Company’s business and financial performance are impacted significantly by market interest rates and movements in those rates. The monetary, tax and other policies of governmental agencies, including the Federal Reserve, have a significant impact on interest rates and overall financial market performance over which the Company has no control and which the Company may not be able to anticipate adequately.

As a result of the high percentage of the Company’s assets and liabilities that are in the form of interest-bearing or interest-related instruments, changes in interest rates, in the shape of the yield curve or in spreads between different market interest rates, can have a material effect on the Company’s business and profitability and the value of the Company’s assets and liabilities. For example, changes in interest rates or interest rate spreads may:

– affect the difference between the interest that the Company earns on assets and the interest that the Company pays on liabilities, which impacts the Company's overall net interest income and profitability.

– adversely affect the ability of borrowers to meet obligations under variable or adjustable rate loans and other debt instruments, which in turn, affects the Company's loss rates on those assets.

– decrease the demand for interest rate-based products and services, including loans and deposits.

– affect prepayment rates on the Company's loans and securities, which could adversely affect the Company's earnings, financial condition and cash flow.

The monetary, tax and other policies of the Federal government and its agencies, including the Federal Reserve, have a significant impact on interest rates and overall financial market performance. These governmental policies can thus affect the activities and results of operations of banking organizations such as the Company. An important function of the Federal Reserve is to regulate the national supply of bank credit and certain interest rates. The actions of the Federal Reserve influence the rates of interest that the Company charges on loans and that the Company pays on borrowings and interest-bearing deposits and can also affect the value of the Company’s on-balance sheet and off-balance sheet financial instruments. Also, due to the impact on rates for short-term funding, the Federal Reserve’s policies influence, to a significant extent, the Company’s cost of such funding. The Company cannot predict the nature or timing of future changes in monetary, tax and other policies or the effect that they may have on the Company’s business activities, financial condition and results of operations.

For information about how the Company manages its interest rate risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of this Report.

The Company may be adversely impacted by the transition from LIBOR as a reference rate.

In 2017, the United Kingdom’s Financial Conduct Authority announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (“LIBOR”). This announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. Consequently, at this time, it is not possible to predict whether and to what extent banks will continue to provide submissions for the calculation of LIBOR. Similarly, it is not possible to predict whether LIBOR will continue to be viewed as an acceptable market benchmark, what rate or rates may become accepted alternatives to LIBOR, or what the effect of any such changes in views or alternatives may be on the markets for LIBOR-indexed financial instruments or other securities or financial arrangements, given LIBOR's role in determining market interest rates globally.

In particular, regulators, industry groups and certain committees (e.g., the Alternative Reference Rates Committee) have, among other things, published recommended fall-back language for LIBOR-linked financial instruments, identified recommended alternatives for certain LIBOR rates (e.g., the Secured Overnight Financing Rate as the recommended alternative to U.S. Dollar LIBOR), and proposed implementations of the recommended alternatives in floating rate instruments. At this time, it is not possible to predict whether these specific recommendations and proposals will be broadly accepted, whether they will continue to evolve, and what the effect of their implementation may be on the markets for floating-rate financial instruments.

The Company has loans, borrowings and other financial instruments with attributes that are either directly or indirectly dependent on LIBOR. The transition from LIBOR could create costs and additional risk. Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR may adversely affect LIBOR rates and the value of LIBOR-based loans, and securities in our portfolio. If LIBOR rates are no longer available, and we are required to implement substitute indices

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for the calculation of interest rates under our loan agreements with our borrowers, we may experience significant expenses in effecting the transition, and may be subject to disputes or litigation with customers and creditors over the appropriateness or comparability to LIBOR of the substitute indices, which could have an adverse effect on our results of operations. Further, since proposed alternative rates are calculated differently, payments under contracts referencing new rates will differ from those referencing LIBOR. Although we are currently unable to assess what the ultimate impact of the transition from LIBOR will be, failure to adequately manage the transition could have an adverse effect on our business, financial condition and results of operations.

Our funding sources may prove insufficient to replace deposits and support our future growth.

We must maintain sufficient cash flow and liquid assets to satisfy current and future financial obligations, including demand for loans and deposit withdrawals, funding operating costs, and for other corporate purposes.   As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. As we continue to grow, we are likely to become more dependent on these sources, which may include various short-term and long-term wholesale borrowings, including Federal funds purchased and securities sold under agreements to repurchase, brokered certificates of deposit, proceeds from the sale of loans, and borrowings from the FHLBNY and FHLBPITT and others.   We also maintain available lines of credit with the FHLBNY and FHLBPITT that are secured by loans. Adverse operating results or changes in industry conditions could make it difficult or impossible for us to access these additional funding sources and could make our existing funds more volatile. Our financial flexibility could be materially constrained if we are unable to maintain access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates. If we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In that case, our operating margins and profitability would be adversely affected. Further, the volatility inherent in some of these funding sources, particularly including brokered deposits, may increase our exposure to liquidity risk. Any interruption in these sources of liquidity when needed could adversely affect our results of operations, financial condition, cash flow or regulatory capital levels. In addition, reduced liquidity could result from circumstances beyond our control, such as general market disruptions or operational problems that affect us or third parties.  Management’s efforts to closely monitor our liquidity position for compliance with internal policies may not be successful or sufficient to deal with dramatic or unanticipated reductions in liquidity. 

The Company is or may become involved in lawsuits, legal proceedings, information-gathering requests, and investigations by governmental agencies or other parties that may lead to adverse consequences.

The Company’s primary business of financial services involves substantial risk of legal liability. The Company and its subsidiaries are, from time to time, named or threatened to be named as defendants in various lawsuits arising from their respective business activities, including activities of companies they have acquired. In addition, from time to time, the Company is, or may become, the subject of governmental and self-regulatory agency information-gathering requests, reviews, investigations and proceedings and other forms of regulatory inquiry, including by bank regulatory agencies, the SEC and law enforcement authorities. The results of such proceedings could lead to delays in or prohibition to acquire other companies, significant penalties, including monetary penalties, damages, adverse judgments, settlements, fines, injunctions, restrictions on the way in which the Company conducts its business, or reputational harm.

Although the Company establishes accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, the Company does not have accruals for all legal proceedings where it faces a risk of loss. In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, amounts accrued may not represent the ultimate loss to the Company from the legal proceedings in question. Thus, the Company’s ultimate losses may be higher than the amounts accrued for legal loss contingencies, which could adversely affect the Company’s financial condition and results of operations.

The Company operates in a highly regulated environment and may be adversely impacted by current or future laws and regulations due to increased compliance costs, potential fines for noncompliance, and restrictions on our ability to offer products or buy or sell businesses.

The Company is subject to extensive state and federal laws and regulations, supervision and legislation that affect how it conducts its business. The majority of these laws and regulations are for the protection of consumers, depositors and the deposit insurance funds. The regulations influence such things as the Company’s lending practices, capital structure, investment practices, and dividend policy. The Dodd-Frank Act, which established the CFPB, and enacted other reforms, has had, and will continue to have, a significant effect on the entire financial services industry. Compliance with these regulations and other initiatives negatively impacts revenue and increases the cost of doing business on an ongoing basis. New regulatory requirements or changes to existing requirements could necessitate changes to the Company’s businesses, result in increased compliance costs and affect the profitability

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of such businesses. Refer to “Supervision and Regulation” in Part I, Item 1 - “Business” of this Report on Form 10‑K for additional information on material laws and regulations impacting the Company’s business.

Additionally, banking regulators are authorized to take supervisory actions that may restrict or limit a financial institution's activities. Regulatory restrictions on our activities could adversely affect our costs and revenues, and may impair our ability to execute our strategic plans. In addition, if our regulators identify a compliance failure, we may be assessed a fine, prohibited from completing a strategic acquisition or divestiture, or subject to other actions imposed by the regulatory authorities. The recent regulatory activity and increased scrutiny have resulted, and may continue to result, in increases in our costs of doing business, and could result in decreased revenues and net income, reduce our ability to effectively compete to attract and retain customers, or make it less attractive for us to continue providing certain products and services. Any future changes in federal or state law and regulations, as well as the interpretations and implementations, or modifications or repeals, of such laws and regulations, could have a material adverse effect on our business, financial condition or results of operations.

As an organization focused on building comprehensive relationships with clients, employees and the communities we serve, our reputation is critical to our business, and damage to it could have a material adverse effect on our business and prospects.

Our success as a Company relies on maintaining the value of our brand and our good reputation with our current and potential customers and employees. Through our branding, we communicate to the market about our Company and our product and service offerings. Maintaining a positive reputation is critical to our attracting and retaining clients and employees. Accordingly, reputational damage would likely have a materially adverse impact on our business prospects and our ability to execute on our business strategy. Harm to our reputation can arise from many sources, including regulatory actions or fines, improperly handled conflicts of interest, operating system failures or security breaches, customer complaints, litigation, actual or perceived employee misconduct, misconduct by our outsourced service providers or other counterparties, or other unethical or improper behavior conducted by our Company or affiliated service providers or other counterparties could all cause harm to our reputation, impair our ability to attract and retain customers, make it more difficult or expensive to obtain external funding and have other adverse effects on our business, results of operations and financial condition. Negative publicity regarding us or any of our subsidiaries, whether or not accurate, may damage our reputation, which could have a material adverse effect on our assets, business, prospects, financial condition and results of operations.

The Company could be subject to environmental risks and associated costs on real estate properties owned by the Company, real estate properties that collateralize the Company’s loans or real estate properties that the Company obtains title to.

The Company owns various properties used in the operation of its business. In addition, from time to time, the Company forecloses on properties or may be deemed to become involved in the management of its borrowers’ properties. The Company could be subject to environmental liabilities imposed by applicable federal and state laws with respect to any of these properties. For example, we may be held liable to a government entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or may be required to clean up hazardous or toxic substances, or chemical releases, at a property, or may be subject to common law claims by third parties for damages and costs resulting from environmental contamination emanating from the property. Additionally, a significant portion of our loan portfolio at December 31, 2019 was secured by real estate and, if the real estate securing our assets is subject to environmental liability, our collateral position may be substantially weakened. Any such environmental liabilities imposed on the Company could have a material adverse impact on the Company's financial condition or results of operations.

The Company may be exposed to regulatory sanctions or liability if we do not timely detect and report money laundering or other illegal activities.

We are required to comply with anti-money laundering and anti-terrorism laws. These laws and regulations require us, among things, to enact policies and procedures to confirm the identity of our customers, and to report suspicious transactions to regulatory agencies. These laws and regulations are complex and require costly, sophisticated monitoring systems and qualified personnel. The policies and procedures that we have adopted in order to detect and prevent such illegal transactions may not be successful in eliminating all instances of such transactions. To the extent we fail to fully comply with applicable laws and regulations, we face the possibility of fines or other penalties, such as restrictions on our business activities, and we may also suffer reputational harm, all of which could have a material adverse effect on our business, results of operations and financial condition. Refer to “Supervision and Regulation” in Part I, Item 1 - “Business” of this Report on Form 10‑K for additional information on anti-money laundering and anti-terrorism laws impacting the Company’s business.

We will be subject to heightened regulatory requirements if we exceed $10 billion in total consolidated assets.

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Based on our historical growth rates and current size, it is possible that our total assets could exceed $10 billion dollars in the future. Our total consolidated assets on December 31, 2019 were $6.7 billion. The Dodd-Frank Act and its implementing regulations impose enhanced supervisory requirements on bank holding companies with more than $10 billion in total consolidated assets.

In addition to the additional regulatory requirements that we will become subject to upon crossing this asset threshold, federal financial regulators may require the Company to, or the Company may proactively, take actions to prepare for compliance with such increased regulations before we exceed $10 billion in total consolidated assets. We may, therefore, incur significant compliance costs in an effort to ensure compliance before we reach $10 billion in total consolidated assets. These additional compliance costs, if they occur, may adversely affect our business, results of operations and financial condition.

Our future success is dependent on our ability to compete effectively in a highly competitive industry and market areas.

Competition for commercial banking and other financial services is strong in the Company’s market areas. In one or more aspects of its business, 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. In addition, a number of out-of-state financial intermediaries have opened production offices, or otherwise solicit deposits, or have announced plans to do so in the Company’s market areas. Some of these competitors have substantially greater resources and lending capabilities than the Company and may offer services 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. The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Additionally, technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems. Failure to compete effectively to attract new and retain current customers could adversely affect our growth and profitability, which could have a materially adverse effect on our business, financial condition and results of operations.

We continually encounter technological changes and the failure to understand and adapt to these changes could hurt our business.

The financial services industry is continually undergoing rapid technological changes with frequent introductions of new technology-driven products and services which increase efficiency and enable financial institutions to serve customers better and to reduce costs. The Company’s future success depends, in part, upon its ability to leverage technology to increase our operational efficiency as well as address the current and evolving needs of our customers. However, our competitors may have greater resources to invest in technological improvements, we may not always have capital levels which are sufficient to support a robust investment in our technology infrastructure or we may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological changes affecting the financial services industry could have a material adverse effect on the Company’s business and, in turn, the Company’s financial condition and results of operations.

Our success depends on our ability to offer our customers an evolving suite of products and services, and we may not be able to effectively manage the risks inherent in the development of financial products and services.

We continually monitor our suite of products and services, and prioritize new offerings based on our determination of customer demand, within regulatory parameters for financial products. We may invest significant time and resources in new products which become obsolete, or do not generate the revenues we had anticipated, or which are ultimately deemed unacceptable by regulatory authorities. As we expand the range and complexity of our products and services, we are exposed to increasingly complex risks, including potential fraud, and our employees and risk management systems may not be adequate to mitigate such risks effectively. Our failure to effectively identify and manage these risks and uncertainties could have a material adverse effect on our business. 

The Company may be adversely affected by fraud.

As a financial institution, the Company is inherently exposed to operational risk in the form of theft and other fraudulent activity by employees, customers and other third parties targeting the Company and/or the Company’s customers or data. Such activity may take many forms, including check fraud, electronic fraud, wire fraud, phishing, social engineering and other dishonest acts. Although the Company devotes substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the increasing sophistication of possible perpetrators, the Company may experience financial losses or reputational harm as a result of fraud. Fraudulent activity could have a material adverse effect on the Company’s business, financial condition and results of operations.

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Our business requires the collection and retention of large volumes of sensitive data, which is subject to extensive regulation and oversight and exposes our business to additional risks.

In our ordinary course of business, we collect and retain large volumes of customer data, including personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract to provide data services. We also maintain important internal Company data such as personally identifiable information about our employees and information relating to our operations. Our customers and employees have been, and will continue to be, targeted by cybersecurity threats attempting to misappropriate passwords, bank account information or other personal information. Our attempts to mitigate these threats may not be successful as cybercrimes are complex and continue to evolve. Publicized information concerning security and cyber-related problems could cause us to incur reputational harm and discourage our customers from using our electronic or web-based applications or solutions, which could harm their utility as a means of conducting commercial transactions.

Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in breach attempts or other disruptions are constantly evolving and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures. A security breach or other significant disruption of our information systems or those related to our customers, merchants and our third party vendors, including as a result of cyber-attacks, could (i) disrupt the proper functioning of our internal, or our third-party vendors’, networks and systems and therefore our operations and/or those of certain of our customers; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of confidential, sensitive or otherwise valuable information of ours or our customers; (iii) result in a violation of applicable privacy, data breach and other laws, subjecting us to additional regulatory scrutiny and expose the us to civil litigation, governmental fines and possible financial liability; (iv) require significant management attention and resources to remedy the damages that result; or (v) harm our reputation or cause a decrease in the number of customers that choose to do business with us. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

A breach of information or other technological security, including as a result of cyber-attacks, could have a material adverse effect on our business, financial condition and results of operations.

In the ordinary course of business we rely on electronic communications and information systems, both internal and provided by external third parties, to conduct our operations and to store, process, and/or transmit sensitive data on a variety of computing platforms and networks and over the Internet. We cannot be certain that all of our systems, or third-party systems upon which we rely, are free from vulnerability to attack or other technological difficulties or failures. Information security breaches and cybersecurity-related incidents may include attempts to access information, including customer and company information, malicious code, computer viruses, phishing, denial of service attacks and other means of intrusion that could result in unauthorized access, misuse, loss or destruction of data (including confidential customer or employee information), account takeovers, unavailability of service or other events. These types of threats may derive from human error, fraud or malice on the part of external or internal parties, or may result from accidental technological failure. Further, to access our products and services our customers may use computers and mobile devices that are beyond our security control systems. If information security is breached or difficulties or failures occur, despite the controls we and our third party vendors have instituted, information may be lost or misappropriated, resulting in financial loss or costs, reputational harm or damages and litigation, regulatory investigation costs or remediation costs to us or others. While we maintain specific “cyber” insurance coverage, which would apply in the event of many breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be covered under our cyber insurance coverage. Any of these consequences could have a material adverse effect on our financial condition and results of operations.

The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, has significantly increased, in part due to the expansion of new technologies, the increased use of the Internet and mobile services and the increased intensity and sophistication of attempted attacks and intrusions from around the world. The threat from cyber-attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures. Our systems and those of our customers and third-party service providers are under constant threat and it is possible that we could experience a significant event in the future. Our technologies, systems, networks and software, and those of other financial institutions have been, and are likely to continue to be, the target of cybersecurity threats and attacks, which may range from uncoordinated individual attempts to sophisticated and targeted measures directed at us. Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats as well as the expanding use of Internet banking, mobile banking and other technology-based products and services by us and our customers. As cyber threats

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continue to evolve, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate any information security vulnerabilities.

The Company is subject to risks presented by acquisitions, which, if realized, could negatively affect our results of operations and financial condition. 

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 has acquired, and 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. In the second quarter of 2019, the Company's insurance subsidiary, Tompkins Insurance, acquired a small insurance agency, The Cali Agency, which was folded into Tompkins Insurance. Any future acquisitions will be accompanied by the risks commonly encountered in acquisitions. These risks include: the difficulty of integrating operations and personnel, the potential disruption of our ongoing business, the inability of management to realize or maximize anticipated financial and strategic positions, increased operating costs, the inability to maintain uniform standards, controls, procedures and policies, the difficulty and cost of obtaining adequate financing, the potential for litigation risk, the potential loss of members of a key executive management group, the potential reputational damage and the impairment of relationships with employees and customers as a result of changes in ownership and management. Further, the asset quality or other financial characteristics of an acquired company may deteriorate after the acquisition agreement is signed or after the acquisition closes. We cannot provide any assurance that we will be successful in overcoming these risks or any other problems encountered in connection with acquisitions and any of these risks, if realized, could have an adverse effect on our results of operations and financial condition.

The Company's operations may be adversely affected if its external vendors do not perform as expected or if its access to third-party services is interrupted.

The Company relies on certain external vendors to provide products and services necessary to maintain the day-to-day operations of the Company. Some of the products and services provided by vendors include key components of our business infrastructure including data processing and storage and internet connections and network access, among other products and services. Accordingly, the Company’s operations are exposed to the risk that these vendors will not perform in accordance with the contracted arrangements or under service level agreements. The failure of an external vendor to perform in accordance with the contracted arrangements or under service level agreements, because of changes in the vendor’s organizational structure, financial condition, support for existing products and services or strategic focus or for any other reason, could disrupt the Company’s operations. If we are unable to find alternative sources for our vendors’ services and products quickly and cost-effectively, the failures of our vendors could have a material adverse impact on the Company’s business and, in turn, the Company’s financial condition and results of operations.

Additionally, our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions. If sustained or repeated, a system failure or service denial could result in a deterioration of our ability to process new and renewal loans, gather deposits and provide customer service, compromise our ability to operate effectively, damage our reputation, result in a loss of customer business and subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.

Risks Associated with the Company’s Common Stock

The Company’s stock price may be volatile.

The Company’s stock price can fluctuate widely in response to a variety of factors, including: actual or anticipated variations in our operating results; recommendations by securities analysts; significant acquisitions or business combinations; operating and stock price performance of other companies that investors deem comparable to Tompkins; new technology used, or services offered by our competitors; news reports relating to trends, concerns and other issues in the financial services industry; and changes in government regulations. Other factors, including general market fluctuations, industry-wide factors and economic and general political conditions and events, including foreign and national governmental policy decisions, terrorist attacks, economic slowdowns or recessions, interest rate changes, credit loss trends or currency fluctuations, may adversely affect the Company’s stock price even though they do not directly pertain to the Company’s operating results.

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The trading volume in our common stock is less than that of larger financial services companies, which may adversely affect the price of our common stock.

The Company’s common stock is traded on the NYSE American. The trading volume in the Company’s common stock is less than that of larger financial services companies. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. Given the lower trading volume of the Company’s common stock, significant sales of our common stock, or the expectation of these sales, could cause our stock price to fall.

An investment in our common stock is not an insured deposit.

The Company’s common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in the Company’s common stock is inherently risky for the reasons described in this “Risk Factors” section and is subject to the same market forces that affect the price of common stock in any company. As a result, if you acquire the Company’s common stock, you may lose some or all of your investment.

We may not pay, or may reduce, the dividends paid on our common stock.

Holders of Tompkins’ common stock are only entitled to receive such dividends as its board of directors may declare out of funds legally available for such payments. While Tompkins has a long history of paying dividends on its common stock, Tompkins is not required to pay dividends on its common stock and could reduce or eliminate its common stock dividend in the future. This could adversely affect the market price of Tompkins’ common stock. Also, Tompkins is a bank holding company, and its ability to declare and pay dividends is dependent on certain federal regulatory considerations, including the guidelines of the Federal Reserve regarding capital adequacy and dividends. See “Supervision and Regulation” for a description of certain material limitations on the Company’s ability to pay dividends to shareholders.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company’s executive offices are located at 118 East Seneca Street in Ithaca. The Company’s banking subsidiaries have 64 branch offices, of which 34 are owned and 30 are leased at market rents. The Company’s insurance subsidiary has 5 stand-alone offices, of which 3 are owned by the Company and 2 are leased at market rents. The Company’s wealth management and financial planning division has 2 offices which are leased at a market rent, and shares other locations with the Company’s other subsidiaries. Management believes the current facilities are suitable for their present and intended purposes. For additional information about the Company’s facilities, including rental expenses, see “Note 6 Premises and Equipment” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

Item 3. Legal Proceedings

The Company is subject to various claims and legal actions that arise in the ordinary course of conducting business. As of December 31, 2019, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against the Company or its subsidiaries will be material to the Company’s consolidated financial position. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with such legal proceedings. Although the Company does not believe that the outcome of pending litigation will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.

Item 4. Mine Safety Disclosures

Not applicable

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Information About Our Executive Officers

The information concerning the Company’s executive officers is provided below as of March 2, 2020.

Name	Age	Title	Year Joined Company
Stephen S. Romaine	55	President and CEO	January 2000
David S. Boyce	53	Executive Vice President	January 2001
Francis M. Fetsko	55	Executive Vice President, COO, CFO and Treasurer	October 1996
Alyssa H. Fontaine	39	Executive Vice President & General Counsel	January 2016
Scott L. Gruber	63	Executive Vice President	April 2013
Gregory J. Hartz	59	Executive Vice President	August 2002
Brian A. Howard	55	Executive Vice President	July 2016
Gerald J. Klein, Jr.	61	Executive Vice President	January 2000
John M. McKenna	53	Executive Vice President	April 2009
Susan M. Valenti	65	Executive Vice President of Corporate Marketing	March 2012
Steven W. Cribbs	43	Senior Vice President, Chief Risk Officer	June 2018
Bonita N. Lindberg	63	Senior Vice President, Director of Human Resources	December 2015

Business Experience of the Executive Officers:

Stephen S. Romaine was appointed President and Chief Executive Officer of the Company effective January 1, 2007. From 2003 through 2006, he served as President and Chief Executive Officer of Mahopac Bank. Mr. Romaine currently serves on the board of the Federal Home Loan Bank of New York and the New York Bankers Association.

David S. Boyce has been employed by the Company since January 2001 and was promoted to Executive Vice President in April 2004. He was appointed President and Chief Executive Officer of Tompkins Insurance Agencies in 2002. He has been employed by Tompkins Insurance Agencies and a predecessor company to Tompkins Insurance Agencies for 31 years.

Francis M. Fetsko has been employed by the Company since 1996, and has served as Chief Financial Officer since December 2000. He also serves as the Chief Financial Officer for the Company’s four banking subsidiaries. In July 2003, he was promoted to Executive Vice President and he assumed the additional role of Chief Operating Officer in April 2012.

Alyssa H. Fontaine joined the Company in January 2016 as Executive Vice President and General Counsel. She had previously been a partner in the corporate/securities practice group of Harris Beach PLLC, a regional law firm which she joined in 2006. Ms. Fontaine serves on the American Bankers Association General Counsels Committee.

Scott L. Gruber has been employed by the Company since April 2013 and was appointed President & COO of VIST Bank and Executive Vice President of the Company effective April 30, 2013. He was appointed President & CEO of VIST Bank effective January 1, 2014. Before joining VIST Bank, Mr. Gruber spent 16 years at National Penn Bank, most recently as Group Executive Vice President, where he led the Corporate Banking team.

Gregory J. Hartz has been employed by the Company since 2002 and was appointed President and Chief Executive Officer of Tompkins Trust Company and Executive Vice President of the Company effective January 1, 2007. Mr. Hartz is past Chair of the Independent Bankers Association of New York State.

Brian A. Howard has been employed by the Company since July 2016 and was appointed President of Tompkins Financial Advisors and Executive Vice President of the Company effective July 25, 2016. Prior to joining Tompkins, he served as a Senior Vice President, Market Manager for Key Bank covering the Central New York region from May 2012 to July 2016, where he oversaw the bank’s full service wealth management division for high net worth clients.

Gerald J. Klein, Jr. has been employed by the Company since 2000 and was appointed President and Chief Executive Officer of Mahopac Bank and Executive Vice President of the Company effective January 1, 2007. Mr. Klein currently serves on the Board of the Independent Bankers Association of New York (IBANYS) and is as a member of the Community Depository Institutions Advisory Council of the Federal Reserve Bank of NY.

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John M. McKenna has been employed by the Company since April 2009. He was appointed President and CEO of The Bank of Castile effective January 1, 2015. From 2009 to 2014, Mr. McKenna was a senior vice president at The Bank of Castile, concentrating in commercial lending. Mr. McKenna previously served on the New York Bankers Association Political Action Committee (NYBA PAC).

Susan M. Valenti joined Tompkins in March of 2012 as Senior Vice President, Corporate Marketing. She was promoted to Executive Vice President of the Company in June 2014.

Steven W. Cribbs joined Tompkins in June 2018 as Senior Vice President, Chief Risk Officer.  Prior to joining Tompkins, Mr. Cribbs served as Director of Enterprise Risk Management at Customers Bancorp, Inc. from 2016 to 2018 and Senior Vice President and Chief Risk Officer at Metro Bancorp, Inc. from 2012 to 2016. 

Bonita N. Lindberg joined Tompkins in December 2015 as Senior Vice President, Director of Human Resources. Before joining the Company, Ms. Lindberg served as Director of Human Resources at Cortland Regional Medical Center (2014 - 2015); prior to that she served as the Director of Organizational Development at Albany International Corporation. Ms. Lindberg serves on the HR Conference Committee for New York Bankers Association.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Price and Dividend Information 

The Company’s common stock is traded under the symbol “TMP” on the NYSE American.

While the Company has a long history of paying cash dividends on shares of its common stock, the Company's ability to pay dividends is generally limited to earnings from the prior year, although retained earnings and dividends from its subsidiaries may also be used to pay dividends under certain circumstances. The Company's primary source of funds to pay for shareholder dividends is receipt of dividends from its subsidiaries. Future dividend payments to the Company by its subsidiaries will be dependent on a number of factors, including earnings and the financial condition of each subsidiary, and are subject to regulatory limitations discussed in "Supervision and Regulation" in Part I, Item 1 of this Report.

The following table reflects all Company repurchases, including those made pursuant to publicly announced plans or programs, during the quarter ended December 31, 2019. 

Issuer Purchases of Equity Securities
	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
Period	(a)	(b)		(c)	(d)
October 1, 2019 through
October 31, 2019	37,383	$	80.11	35,821	6,996
November 1, 2019 through
November 30, 2019	17,435	$	88.21	0	6,996
December 1, 2019 through
December 31, 2019	0			0	6,996
Total	54,818	$	84.16	35,821	6,996

Included above are 1,562 shares purchased in October 2019, at an average cost of $78.74, and 515 shares purchased in November 2019, at an average cost of $88.37, by the trustee of the rabbi trust established by the Company under the Company’s Stock Retainer Plan For Eligible Directors of Tompkins Financial Corporation and Participating Subsidiaries, which were part of the director deferred compensation under that plan.  In addition, the table includes 16,920 shares delivered to the Company in November 2019 at an average cost of $88.21 to satisfy mandatory tax withholding requirements upon vesting of restricted stock under the Company's 2009 Equity Plan.

On July 19, 2018, the Company’s Board of Directors authorized a share repurchase plan (the “2018 Repurchase Plan”) for the Company to repurchase up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan. The repurchase program could be suspended, modified or terminated by the Board of Directors at any time for any reason. Under the 2018 Repurchase Plan, the Company repurchased 393,004 shares through December 31, 2019, at an average cost of $79.15.

On January 30, 2020, the Company’s Board of Directors authorized a share repurchase plan (the “2020 Repurchase Plan”) for the repurchase of up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan. As with the 2018 Repurchase Plan, shares may be repurchased from time to time under the 2020 Repurchase Plan in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities laws, and the repurchase program may be suspended, modified or terminated by the Board of Directors at any time for any reason.

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Recent Sales of Unregistered Securities

None. 

Performance Graph 

The following graph compares the Company’s cumulative total stockholder return over the five-year period from December 31, 2014 through December 31, 2019, with (1) the total return for the NASDAQ Composite and (2) the total return for SNL Bank Index. The graph assumes $100.00 was invested on December 31, 2014, in the Company’s common stock and the comparison groups and assumes the reinvestment of all cash dividends prior to any tax effect and retention of all stock dividends. 

In accordance with and to the extent permitted by applicable law or regulation, the information set forth below under the heading “Performance Graph” shall not be incorporated by reference into any future filing under the Securities Act or Exchange Act and shall not be deemed to be “soliciting material” or to be “filed” with the SEC under the Securities Act or the Exchange Act, except to the extent that the Company specifically requests that such information be treated as soliciting material or specifically incorporates it by reference into such filings. The performance graph represents past performance and should not be considered an indication of future performance.

	Period Ending
Index	12/31/14	12/31/15	12/31/16	12/31/17	12/31/18	12/31/19
Tompkins Financial Corporation	100.00	104.81	181.32	159.43	150.61	188.29
NASDAQ Composite	100.00	106.96	116.45	150.96	146.67	200.49
SNL Bank	100.00	101.71	128.51	151.75	126.12	170.79

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Item 6. Selected Financial Data

The following consolidated selected financial data is taken from the Company’s audited financial statements as of and for the five years ended December 31, 2019. The following selected financial data should be read in conjunction with the consolidated financial statements and the notes thereto in Part II, Item 8. of this Report. All of the Company’s acquisitions during the five year period were accounted for using the purchase method. Accordingly, the operating results of the acquired companies are included in the Company’s results of operations since their respective acquisition dates.

	Year ended December 31,
(In thousands except per share data)	2019			2018			2017			2016			2015
FINANCIAL STATEMENT HIGHLIGHTS
Assets	$	6,725,623		$	6,758,436		$	6,648,290		$	6,236,756		$	5,689,995
Total loans	4,917,550			4,833,939			4,669,120			4,258,033			3,772,042
Deposits	5,212,921			4,888,959			4,837,807			4,625,139			4,395,306
Other borrowings	658,100			1,076,075			1,071,742			884,815			536,285
Total equity	663,054			620,871			576,202			549,405			516,466
Interest and dividend income	261,378			251,592			226,764			202,739			188,746
Interest expense	50,750			39,792			25,460			22,103			20,365
Net interest income	210,628			211,800			201,304			180,636			168,381
Provision for loan and lease losses	1,366			3,942			4,161			4,321			2,945
Net gains (losses) on securities transactions	645			(466		)	(407		)	926			1,108
Net income attributable to Tompkins
Financial Corporation	81,718			82,308			52,494			59,340			58,421
PER SHARE INFORMATION
Basic earnings per share	5.39			5.39			3.46			3.94			3.91
Diluted earnings per share	5.37			5.35			3.43			3.91			3.87
Adjusted diluted earnings per share1	5.37			5.33			4.42			3.91			3.63
Cash dividends per share	2.02			1.94			1.82			1.77			1.70
Common equity per share	44.17			40.45			37.65			36.20			34.38
SELECTED RATIOS
Return on average assets	1.22		%	1.23		%	0.82		%	1.01		%	1.07		%
Return on average equity	12.55		%	13.93		%	9.09		%	10.85		%	11.51		%
Average shareholders’ equity to average assets	9.75		%	8.83		%	9.04		%	9.28		%	9.31		%
Dividend payout ratio	37.48		%	35.99		%	52.60		%	44.92		%	43.48		%
OTHER SELECTED DATA (in whole numbers, unless otherwise noted)
Employees (average full-time equivalent)	1,047			1,035			1,041			1,019			998
Banking offices	64			66			65			66			63
Bank access centers (ATMs)	87			83			84			85			85
Trust and investment services assets under  management, or custody (In thousands)	$	4,062,325		$	3,806,274		$	4,017,363		$	3,941,484		$	3,852,972

¹  Adjusted diluted earnings per share reflects adjustments made for certain nonrecurring items. Adjustments for nonrecurring items in 2018 included a $2.2 million gain on sale of real estate and a $1.9 million write-down of impaired leases ($0.02 per share). Adjustments in 2017 included a $14.9 million ($0.99 per share) one-time non-cash write-down of net deferred tax assets related to the Tax Cuts and Jobs Act of 2017. Adjustments in 2015 included a $3.6 million ($0.24 per share) after-tax gain on a pension plan curtailment. There were no adjustments in 2019 and 2016. Adjusted diluted earnings per share is a non-GAAP measure. Please see the discussion below under “Results of Operations (Comparison of December 31, 2019 and 2018 results) Non-GAAP Disclosure” for an explanation of why management believes this non-GAAP financial measure is useful and a reconciliation to diluted earnings per share.   

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following analysis is intended to provide the reader with a further understanding of the consolidated financial condition and results of operations of the Company and its operating subsidiaries for the periods shown. This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with other sections of this Report on Form 10-K, including Part I, “Item 1. Business,” Part II, “Item 6. Selected Financial Data,” and Part II, “Item 8. Financial Statements and Supplementary Data.”

Overview

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, and insurance services. At December 31, 2019, 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 (DBA Tompkins Mahopac Bank), VIST Bank (DBA Tompkins VIST Bank); and a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). The trust division of the Trust Company provides a full array of investment services, 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 118 E. Seneca Street, P.O. Box 460, Ithaca, NY, 14850, and its telephone number is (888) 503-5753. The Company’s common stock is traded on the NYSE American under the Symbol “TMP.”

Forward-Looking Statements

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this Report that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements may be identified by use of such words as "may", "will", "estimate", "intend", "continue", "believe", "expect", "plan", or "anticipate", and other similar words. Examples of forward-looking statements may include statements regarding; the asset quality of the Company's loan portfolios; the level of the Company's allowance for loan losses; the sufficiency of liquidity sources; the Company's exposure to changes in interest rates; the impact of changes in accounting standards; the likelihood that deferred tax assets will be realized and plans, prospects, growth and strategies. 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, that could cause actual results of the Company to differ materially from those expressed and/or implied by forward-looking statements. The following factors, in addition to those listed as Risk Factors in Item 1A 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, bank holding companies and/or financial holding companies, such as the Dodd-Frank Act, Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; 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; reliance on large customers; and financial resources in the amounts, at the times and on the terms required to support the Company’s future businesses. 

Critical Accounting Policies

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 our 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 consolidated financial statements. Management considers the accounting policy relating to the allowance for loan and lease losses (“allowance”) to be a critical accounting policy

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because of the uncertainty and subjectivity involved in this policy and the material effect that estimates related to this area can have on the Company’s results of operations.

Allowance for loan and lease losses

Management considers the accounting policy relating to the allowance to be a critical accounting policy because of the high degree of judgment involved, the subjectivity of the assumptions used and the potential changes in the economic environment that could result in changes to the amount of the allowance.

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 includes allowance allocations calculated in accordance with Accounting Standards Codification (“ASC”) Topic 310, Receivables, and allowance allocations calculated in accordance with ASC Topic 450 Contingencies. The model is comprised of evaluating impaired loans, criticized and classified loans, historical losses, and qualitative factors. Management has deemed these components appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at an allowance level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The various factors used in the methodologies are reviewed on a quarterly basis.

Although we believe our process for determining the allowance adequately considers all of the factors that would likely result in credit losses, this evaluation is inherently subjective as it requires material estimates, including expected default probabilities, the loss emergence periods, the amounts and timing of expected future cash flows on impaired loans, and estimated losses based on historical loss experience and current economic conditions. All of these factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional loan loss provisions may be required that would adversely impact earnings for future periods. For example, if historical loan losses significantly worsen, or if current economic conditions significantly deteriorate, an additional provision for loan losses would be required to increase the allowance for loan and lease losses.

All accounting policies are important and the reader of the financial statements should review these policies, described in “Note 1 Summary of Significant Accounting Policies” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Form 10-K, to gain a better understanding of how the Company’s financial performance is reported.

Results of Operations

(Comparison of December 31, 2019 and 2018 results)

General

The Company reported diluted earnings per share of $5.37 in 2019, compared to diluted earnings per share of $5.35 in 2018. Net income for the year ended December 31, 2019, was $81.7 million, a decrease of 0.7% compared to $82.3 million in 2018.

In addition to earnings per share, key performance measurements for the Company include return on average shareholders’ equity (ROE) and return on average assets (ROA). ROE was 12.55% in 2019, compared to 13.93% in 2018, while ROA was 1.22% in 2019 and 1.23% in 2018. Tompkins’ ROE and ROA at September 30, 2019 (the most recent date for which peer data is publicly available) were in the 75^th percentile for ROE and the 49^th percentile for ROA of its peer group. The peer group data is derived from the FRB's "Bank Holding Company Performance Report", which covers banks and bank holding companies with assets between $3.0 billion and $10.0 billion as of September 30, 2019 (the most recent report available). Although the peer group data is presented based upon financial information that is one fiscal quarter behind the financial information included in this report, the Company believes that it is relevant to include certain peer group information for comparison to current period numbers.

Non-GAAP Disclosure

The following table summarizes the Company’s results of operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. The non-GAAP financial measures adjust GAAP measures to exclude the effects of non-operating items, such as acquisition related intangible amortization expense, and significant nonrecurring income or expense on earnings, equity, and capital. In 2018, the Company had nonrecurring gains on the sales of real estate and write-downs of impaired leases related to the completion of the Company's new headquarters building in the second quarter of 2018. 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-

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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 Net Income/Diluted Earnings Per Share (GAAP) to Net Operating Income/Adjusted Diluted Earnings Per Share (Non-GAAP) and Adjusted Operating Return on Average Tangible Common Equity (Non-GAAP)
	For the year ended
	December 31,
(In thousands, except per share data)	2019			2018			2017			2016			2015
Net income attributable to Tompkins Financial Corporation	$	81,718		$	82,308		$	52,494		$	59,340		$	58,421
Less: income attributable to unvested stock-based compensations awards	(1,306		)	(1,315		)	(818		)	(912		)	(834		)
Net income available to common shareholders (GAAP)	80,412			80,993			51,676			58,428			57,587
Diluted earnings per share (GAAP)	5.37			5.35			3.43			3.91			3.87
Adjustments for non-operating income and expense:
Gain on pension plan curtailment	0			0			0			0			(6,003		)
Gain on sale of real estate	0			(2,950		)	0			0			0
Write-down of impaired leases	0			2,536			0			0			0
Remeasurement of deferred taxes	0			0			14,944			0			0
Total adjustments	0			(414		)	14,944			0			(6,003		)
Tax expense	0			102			0			0			2,401
Total adjustments, net of tax	0			(312		)	14,944			0			(3,602		)
Net operating income available to common shareholders (Non-GAAP)	80,412			80,681			66,620			58,428			53,985
Adjusted diluted earnings per share (Non-GAAP)	5.37			5.33			4.42			3.91			3.63
Net operating income available to common shareholders' (Non-GAAP)	80,412			80,681			66,620			58,428			53,985
Amortization of intangibles	1,673			1,771			1,932			2,090			2,013
Tax expense	410			434			773			836			805
Amortization of intangibles, net of tax	1,263			1,337			1,159			1,254			1,208
Adjusted net income available to common shareholders' (Non-GAAP)	81,675			82,018			67,779			59,682			55,193
Average Tompkins Financial Corporation shareholders' common equity	649,871			589,475			575,958			545,545			506,243
Average goodwill and intangibles	98,104			99,999			101,583			104,263			104,837
Average Tompkins Financial Corporation shareholders' tangible common equity (Non-GAAP)	551,767			489,476			474,375			441,282			401,406
Adjusted operating return on average shareholders' tangible common equity (Non-GAAP)	14.80		%	16.76		%	14.29		%	13.52		%	13.75		%

¹  Average goodwill and intangibles excludes mortgage servicing rights.

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Reconciliation of Shareholders' Common Equity/Common Equity Per Share (GAAP) to Tangible Common Equity/Tangible Common Equity Per Share (Non-GAAP)
	As of December 31,
(In thousands, except per share data)	2019	2018
Tompkins Financial Corporations Shareholders' common equity (GAAP)	661,642	619,459
Goodwill and intangibles 1	97,855	99,106
Tangible common equity (Non-GAAP)	563,787	520,353
Common equity per share	44.17	40.45
Tangible common equity per share (Non-GAAP)	37.64	33.98

¹ Goodwill and intangibles excludes mortgage servicing rights.

Segment Reporting

The Company operates in 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 provided by Tompkins Financial Advisors, a division of the Trust Company. All other activities are considered banking. For additional financial information on the Company’s segments, refer to “Note 23 – Segment and Related Information” in the Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

Banking Segment

The banking segment reported net income of $74.5 million for the year ended December 31, 2019, representing a $424,000 or a 0.6% decrease compared to 2018. Net interest income decreased $1.2 million or 0.6% in 2019 compared to 2018. Contributing to the decline from 2018, was a decline in average security balances, which was partially offset by an improved net interest margin in 2019. Interest income increased $9.8 million or 3.9% compared to 2018, while interest expense increased $11.0 million or 27.5%.

The provision for loan and lease losses was $1.4 million in 2019, compared to $3.9 million in the prior year. The reduction in provision was primarily due to a $3.0 million specific reserve on one commercial real estate property at December 31, 2018, which was subsequently charged off in the first quarter of 2019. The provision expense in 2019 also benefited from favorable trends in certain qualitative factors and lower average historical loan loss rates in all loan portfolios except commercial real estate at year-end 2019, compared to year-end 2018.

Noninterest income in the banking segment of $29.1 million in 2019 decreased by $2.7 million or 8.5% when compared to 2018. The negative variance to prior year was mainly due to the $2.9 million gain on the sale of two properties in 2018 related to the completion and move to the Company's new headquarters building and the collection of fees and nonaccrual interest of $2.5 million in 2018 on a loan that was charged off in 2010. This was partially offset by the $500,000 one-time incentive payment received by the Company in the first quarter of 2019 related to the Company's merchant card business, and gains of $645,000 on sales of available-for-sale securities in 2019 compared to net losses on sales of available-for-sale securities of $466,000 in 2018.

Noninterest expenses in 2019 were flat compared to 2018. Salary and wages and employee benefits were up in 2019 over 2018, mainly as a result of an increase in average FTEs, normal annual merit and incentive adjustments and higher health insurance costs. These increases were mainly offset by a decrease in other operating expenses. FDIC insurance expense was down in 2019 compared to 2018, mainly as a result of deposit insurance credits received from the FDIC, which included $1.5 million that were applied in 2019. 2018 operating expenses included write-downs of $2.3 million on leases on space vacated in 2018 following completion of the Company's new headquarters in 2018.

Insurance Segment

The insurance segment reported net income of $4.2 million, up $926,000 or 28.5% when compared to 2018, as a 5.9% increase in noninterest revenue was only partially offset by a 1.9% increase in expenses. This increase included $900,000 or 4.6% of organic growth in property and casualty commissions and a $738,000 or 32.0% increase in contingency revenue over 2018, while life, health and financial services commissions decreased slightly. 

On May 1, 2019, Tompkins Insurance purchased the assets of Cali Agency, Inc. in Warsaw, NY, adding an additional $112,000 in non-interest income for 2019. The increase in expenses was mainly attributed to an increase in salary and wages and employee

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benefits reflecting normal annual merit and incentive adjustments and higher health insurance costs, respectively, over the prior year. 

Wealth Management Segment

The wealth management segment reported net income of $3.1 million for the year ended December 31, 2019, a decrease of $1.1 million or 26.3% compared to 2018. Noninterest income of $17.0 million decreased $1.0 million or 5.5% compared to 2018, mainly a result of estate and terminating trust fees, which were down $1.0 million or 75.4% in 2019 over 2018, as a result of the settlement of a large estate in 2018. Noninterest expenses increased by $331,000 or 2.6% in 2019 compared to 2018, mainly due to changes in staffing and normal merit and incentive adjustments in 2019 compared to 2018. The market value of assets under management or in custody at December 31, 2019 totaled $4.1 billion, an increase of 6.7% compared to year-end 2018. This figure included $1.0 billion at year-end 2019, of Company-owned securities from which no income was recognized as the Trust Company was serving as custodian.

Net Interest Income

Net interest income is the Company’s largest source of revenue, representing 73.6% of total revenues for the year ended December 31, 2019, and 73.2% of total revenues for the year ended December 31, 2018. 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. Table 1 – Average Statements of Condition and Net Interest Analysis shows average interest-earning assets and interest-bearing liabilities, and the corresponding yield or cost associated with each.

Tax-equivalent net interest income for 2019 decreased by $1.3 million or 0.6% from 2018. The decrease is mainly due to the decline in average earning assets and higher funding costs in 2019 compared to 2018. Average total deposits represented 84.4% of average total liabilities in 2019 compared to 79.8% in 2018, while total average borrowings represented 13.9% of average total liabilities in 2019 and 19.1% in 2018.

Tax-equivalent interest income increased $9.7 million or 3.8% in 2019 over 2018. The increase in taxable-equivalent interest income was mainly the result of improved asset yields and an increase in average loan balances. Average loans and leases increased $72.5 million or 1.5% in 2019 compared to 2018. Average loan balances represented 77.1% of average earning assets in 2019 compared to 75.0% in 2018. The average yield on interest earning assets for 2019 was 4.2%, which increased by 20 basis points from 2018. The average yield on loans was 4.72% in 2019, an increase of 19 basis points compared to 4.53% in 2018. Average balances on securities decreased $132.1 million or 8.6% compared to 2018, while the average yield on the securities portfolio increased 5 basis points or 2.2% compared to 2018. The decrease in average securities was mainly due to the sale of approximately $152.1 million of available-for-sale securities in the second quarter of 2019. The proceeds from the sale were mainly used to reduce borrowings.

Interest expense for 2019 increased $11.0 million or 27.5% compared to 2018, reflecting higher rates as average interest bearing liabilities decreased $131.5 million or 2.8% from 2018. The increase in interest expense was the result of the increase in the average rates paid on deposits and interest bearing liabilities in 2019 compared to 2018. The average cost of interest bearing deposits was 0.84% in 2019, up 36 basis points from 0.48% in 2018, while the average costs of interest bearing liabilities increased to 1.12% in 2019 from 0.85% in 2018. Average total deposits were up $216.6 million or 4.4% in 2019 over 2018, with the majority of the growth in average interest bearing deposits. Average interest bearing deposits in 2019 increased $195.8 million or 5.6% compared to 2018. Average noninterest bearing deposit balances in 2019 increased $20.8 million or 1.5% over 2018 and represented 27.6% of average total deposits in 2019 compared to 28.4% in 2018. Average other borrowings decreased by $323.9 million or 29.8% in 2019 from 2018. The decrease in borrowings was due to strong deposit growth during the third quarter of 2019 as well as pay downs resulting from proceeds from sales of $152.1 million of available-for-sale securities in the second quarter of 2019.

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Table 1 - Average Statements of Condition and Net Interest Analysis

	For the year ended December 31,
	2019							2018							2017
(dollar amounts in thousands)	Average Balance (YTD)		Interest			Average Yield/Rate		Average Balance (YTD)		Interest			Average Yield/Rate		Average Balance (YTD)		Interest			Average Yield/Rate
ASSETS
Interest-earning assets
Interest-bearing balances due from banks	$	1,647	$	41		2.49	%	$	2,139	$	31		1.45	%	$	4,599	$	37		0.80	%
Securities1
U.S. Government securities	1,301,813		29,411			2.26	%	1,429,875		31,645			2.21	%	1,471,717		31,006			2.11	%
State and municipal2	93,168		2,547			2.73	%	97,116		2,520			2.59	%	100,595		3,393			3.37	%
Other securities2	3,417		158			4.62	%	3,491		153			4.38	%	3,597		129			3.59	%
Total securities	1,398,398		32,116			2.30	%	1,530,482		34,318			2.24	%	1,575,909		34,528			2.19	%
FHLBNY and FRB stock	38,308		3,003			7.84	%	51,815		3,377			6.52	%	42,465		2,121			4.99	%
Total loans and leases, net of unearned income2,3	4,830,089		227,869			4.72	%	4,757,583		215,648			4.53	%	4,401,205		194,433			4.42	%
Total interest-earning assets	6,268,442		263,029			4.20	%	6,342,019		253,374			4.00	%	6,024,178		231,119			3.84	%
Other assets	411,136							350,659							365,326
Total assets	$	6,679,578						$	6,692,678						$	6,389,504
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market	3,007,221		20,099			0.67	%	2,822,747		9,847			0.35	%	2,674,204		5,141			0.19	%
Time deposits	676,106		10,805			1.60	%	664,788		6,748			1.02	%	827,181		6,992			0.85	%
Total interest-bearing deposits	3,683,327		30,904			0.84	%	3,487,535		16,595			0.48	%	3,501,385		12,133			0.35	%
Federal funds purchased & securities sold under agreements to repurchase	59,825		143			0.24	%	63,472		152			0.24	%	64,888		235			0.36	%
Other borrowings	762,993		18,427			2.42	%	1,086,847		21,818			2.01	%	882,235		11,934			1.35	%
Trust preferred debentures	16,943		1,276			7.53	%	16,771		1,227			7.32	%	18,338		1,158			6.31	%
Total interest-bearing liabilities	4,523,088		50,750			1.12	%	4,654,625		39,792			0.85	%	4,466,846		25,460			0.57	%
Noninterest bearing deposits	1,403,330							1,382,550							1,279,027
Accrued expenses and other liabilities	101,819							64,559							66,185
Total liabilities	6,028,237							6,101,734							5,812,058
Tompkins Financial Corporation Shareholders’ equity	649,871							589,475							575,958
Noncontrolling interest	1,470							1,469							1,488
Total equity	651,341							590,944							577,446
Total liabilities and equity	$	6,679,578						$	6,692,678						$	6,389,504
Interest rate spread						3.07	%						3.14	%						3.27	%
Net interest income /margin on earning assets			212,279			3.39	%			213,582			3.37	%			205,659			3.41	%
Tax Equivalent Adjustment			(1,651		)					(1,782		)					(4,355		)
Net interest income per consolidated financial statements			$	210,628						$	211,800						$	201,304

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 21.0% in 2019 and 2018, and 40% in 2017 to increase tax exempt interest income to taxable-equivalent basis.

³ Nonaccrual loans are included in the average asset totals presented above. Payments received on nonaccrual loans have been recognized as disclosed in Note 1 of the Company’s consolidated financial statements included in Part 1 of this annual report on Form 10-K.

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Table 2 - Analysis of Changes in Net Interest Income

	2019 vs. 2018									2018 vs. 2017
	Increase (Decrease) Due to Change in Average									Increase (Decrease) Due to Change in Average
(In thousands)(taxable equivalent)	Volume			Yield/Rate			Total			Volume			Yield/Rate			Total
INTEREST INCOME:
Certificates of deposit, other banks	$	(10	)	$	20		$	10		$	(28	)	$	22		$	(6	)
Investments1
Taxable	(2,896		)	667			(2,229		)	(931		)	1,594			663
Tax-exempt	(105		)	132			27			(102		)	(771		)	(873		)
FHLB and FRB stock	(970		)	596			(374		)	538			718			1,256
Loans, net1	3,354			8,867			12,221			15,948			5,267			21,215
Total interest income	$	(627	)	$	10,282		$	9,655		$	15,425		$	6,830		$	22,255
INTEREST EXPENSE:
Interest-bearing deposits:
Interest checking, savings and money market	938			9,314			10,252			401			4,305			4,706
Time	148			3,909			4,057			(1,505		)	1,261			(244		)
Federal funds purchased and securities sold under agreements to repurchase	(9		)	0			(9		)	(5		)	(78		)	(83		)
Other borrowings	(7,148		)	3,806			(3,342		)	3,339			6,614			9,953
Total interest expense	$	(6,071	)	$	17,029		$	10,958		$	2,230		$	12,102		$	14,332
Net interest income	$	5,444		$	(6,747	)	$	(1,303	)	$	13,195		$	(5,272	)	$	7,923

¹ Interest income includes the tax effects of taxable-equivalent adjustments using a combined New York State and Federal effective income tax rate of 21.0% in 2019, 21.0% in 2018, and 40% in 2017 to increase tax exempt interest income to taxable-equivalent basis.  

Changes in net interest income occur from a combination of changes in the volume of interest-earning assets and interest-bearing liabilities, and in the rate of interest earned or paid on them. The above table illustrates changes in interest income and interest expense attributable to changes in volume (change in average balance multiplied by prior year rate), changes in rate (change in rate multiplied by prior year volume), and the net change in net interest income. The net change attributable to the combined impact of volume and rate has been allocated to each in proportion to the absolute dollar amounts of the change. In 2019, net interest income decreased by $1.3 million, resulting from an $11.0 million increase in interest expense, offset by a $9.7 million increase in interest income. Higher yields on average earning assets added $10.3 million, while the decrease in average balances on interest-earning assets contributed $627,000 to the decrease in interest income. The increase in interest expense reflects higher rates paid on interest bearing liabilities, both deposits and other borrowings. Higher rates on deposits and borrowings added $17.0 million to interest expense, while lower average balances reduced interest expense by $6.1 million.

Provision for Loan and Lease Losses

The provision for loan and lease losses represents management’s estimate of the expense necessary to maintain the allowance for loan and lease losses at an appropriate level. The provision for loan and lease losses was $1.4 million in 2019, compared to $3.9 million in 2018. The ratio of total allowance to total loans and leases decreased to 0.81% at December 31, 2019 from 0.90% at December 31, 2018. Favorable trends in certain qualitative factors and lower average historical loan loss rates in all loan portfolios except commercial real estate at year-end 2019, compared to year-end 2018, and lower specific reserves for impaired loans, 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. See the section captioned “The Allowance for Loan and Lease Losses” included within “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition” of this Report for further analysis of the Company’s allowance for loan and lease losses.

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Noninterest Income

	Year ended December 31,
(In thousands)	2019		2018			2017
Insurance commissions and fees	$	31,091	$	29,369		$	28,778
Investment services	16,434		17,288			15,665
Service charges on deposit accounts	8,321		8,435			8,437
Card services	10,526		9,693			9,100
Other income	8,416		13,130			7,631
Net gain (loss) on securities transactions	645		(466		)	(407		)
Total	$	75,433	$	77,449		$	69,204

Noninterest income is a significant source of income for the Company, representing 26.4% of total revenues in 2019, and 26.8% in 2018, and is an important factor in the Company’s results of operations.

Insurance commissions and fees increased 5.9% to $31.1 million in 2019, compared to $29.4 million in 2018. This increase included $900,000 or 4.6% of organic growth in property and casualty commissions and a $738,000 or 32.0% increase in contingency revenue over 2018, while life, health and financial services commissions decreased slightly.

Investment services income of $16.4 million decreased $854,000 or 4.9% in 2019 compared to 2018. Investment services income includes trust services, financial planning, and wealth management services. The decrease in income was mainly a result of estate and terminating trust fees being down $1.0 million or 75.4% in 2019 over 2018, due to fees received in 2018 related to the settlement of a large estate. Fees are largely based on the market value and the mix of assets managed, and accordingly, the general direction of the stock market can have a considerable impact on fee income. The market value of assets managed by, or in custody of, the Trust Company was $4.1 billion at December 31, 2019, and $3.8 billion at December 31, 2018. These figures included $1.0 billion in 2019 and 2018 of Company-owned securities from which no income was recognized as the Trust Company was serving as custodian.

Service charges on deposit accounts in 2019 were down $114,000 or 1.4% compared to prior year. Overdraft/insufficient funds charges, the largest component of service charges on deposit accounts, were down $180,000 or 3.2% in 2019 compared to 2018, while service fees on personal and business accounts were up by $36,000 or 1.4% in 2019 compared to 2018.

Card services income increased $833,000 or 8.6% over 2018. The primary components of card services income are fees related to interchange income and transactions fees for debit card transactions, credit card transactions and ATM usage. Card services income for 2019 included a one-time incentive payment of $500,000 related to the Company's merchant card business. Increased revenue was also driven by increased transaction volume in both credit and debit cards.

The Company recognized $645,000 of gains on sales/calls of available-for-sale securities in 2019, compared to $466,000 of losses in 2018. The gains are primarily related to the sales of available-for-sale securities, which are generally the result of general portfolio maintenance and interest rate risk management.

Other income of $8.4 million was down $4.7 million or 35.9% compared to 2018. The primary contributors for the decrease in 2019 over 2018 were $2.9 million of gains on the sale of two properties we sold in 2018 upon completion of the Company's new headquarters building and $2.5 million related to the collection of fees and nonaccrual interest for a credit that was charged off in 2010.

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Noninterest Expense

	Year ended December 31,
(In thousands)	2019		2018		2017
Salaries and wages	$	89,399	$	85,625	$	81,948
Other employee benefits	23,488		22,090		21,458
Net occupancy expense of premises	13,210		13,309		13,214
Furniture and fixture expense	7,815		7,351		7,028
FDIC insurance	773		2,618		2,527
Amortization of intangible assets	1,673		1,771		1,932
Other	45,476		48,303		42,998
Total	$	181,834	$	181,067	$	171,105

Noninterest expense as a percentage of total revenue was 63.6% in 2019, compared to 62.6% in 2018. Expenses associated with salaries and wages and employee benefits are the largest component of total noninterest expense. In 2019, these expenses increased $5.2 million or 4.8% compared to 2018. Salaries and wages increased $3.8 million or 4.4% in 2019 over prior year, mainly as a result of annual merit pay increases. Other employee benefits increased $1.4 million or 6.3% over 2018, mainly in health insurance, which was up $736,000 or 8.9% in 2019 over 2018.

Other operating expenses of $45.5 million decreased by $2.8 million or 5.9% compared to 2018. The primary components of other operating expenses in 2019 were technology expense ($10.7 million), professional fees ($8.9 million), marketing expense ($4.9 million), cardholder expense ($3.2 million) and other miscellaneous expense ($18.3 million). Professional fees and technology related expenses in 2019 were up by $378,000 and $567,000, respectively, over 2018, mainly as a result of investments in strengthening the Company's compliance and information security infrastructure. Other operating expense in 2018 included $2.5 million of write-downs related to two leases on space vacated in 2018.

Noncontrolling Interests

Net income attributable to noncontrolling interests represents the portion of net income in consolidated majority-owned subsidiaries that is attributable to the minority owners of a subsidiary. The Company had net income attributable to noncontrolling interests of $127,000 in 2019 and 2018. The noncontrolling interests relate to three real estate investment trusts, which are substantially owned by the Company’s New York banking subsidiaries.

Income Tax Expense

The provision for income taxes provides for Federal, New York State, Pennsylvania and other miscellaneous state income taxes. The 2019 provision was $21.0 million, which decreased $789,000 or 3.6% compared to the 2018 provision. The effective tax rate for the Company was 20.5% in 2019, down from 20.9% in 2018. The effective rates for 2019 and 2018 differed from the U.S. statutory rate of 21.0% during those periods due to the effect of tax-exempt income from loans, securities, and life insurance assets, investments in tax credits, and excess tax benefits of stock based compensation.

Results of Operations

(Comparison of December 31, 2018 and 2017 results)

General

The Company reported diluted earnings per share of $5.35 in 2018, compared to diluted earnings per share of $3.43 in 2017. Net income for the year ended December 31, 2018, was $82.3 million, an increase of 56.8% compared to $52.5 million in 2017. The 2017 results were impacted by the Tax Cuts and Jobs Act of 2017 (the "TCJA"), resulting in a one-time, non-cash write-down of net deferred tax assets in the amount of $14.9 million. For additional financial information on the impact of the TCJA, refer to "Note 15 - Income Taxes" in the Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

In addition to earnings per share, key performance measurements for the Company included return on average shareholders’ equity (ROE) and return on average assets (ROA). ROE was 13.93% in 2018, compared to 9.09% in 2017, while ROA was 1.23% in 2018 and 0.82% in 2017.

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Segment Reporting

Banking Segment

The banking segment reported net income of $74.9 million for the year ended December 31, 2018, representing a $27.9 million or 59.3% increase compared to 2017. Banking segment earnings in 2018 and 2017 were significantly impacted by the Tax Cuts and Jobs Act of 2017.  Due to this legislation, a one-time, $14.9 million write-down was recorded for the remeasurement of net deferred tax assets and is reflected in the banking segment’s results of operations for the fourth quarter of 2017 as an additional charge to income tax expense. The legislation also decreased the Federal statutory tax rate from 35% in 2017 to 21% in 2018. Net interest income increased $10.5 million or 5.2% in 2018 compared to 2017, due primarily to loan growth, and an increase in average loan yields. Interest income increased $24.8 million or 10.9% compared to 2017, while interest expense increased $14.3 million or 56.3%.

The provision for loan and lease losses was $3.9 million in 2018, compared to $4.2 million in the prior year. The loan growth rate for 2018 was 3.5% compared to 12.8% for 2017, contributing to the year-over-year decrease in provision expense.

Noninterest income in the banking segment of $31.7 million in 2018 increased by $6.2 million or 24.5% when compared to 2017. The increase in noninterest income was mainly due to gain on sale of fixed assets (up $2.9 million), collection of fees and nonaccrual interest on a loan that was charged off in 2010 (up $2.5 million), card services income (up $594,000), net gain on sale of loans (up $408,000) and other fee income (up $281,000). These were partially offset by a decrease in BOLI (down $378,000).

Noninterest expenses increased by $9.3 million or 6.9% compared to 2017. The increase was mainly attributed to an increase in salary and wages and employee benefits reflecting normal annual merit and incentive adjustments and higher health insurance costs over the prior year, write-downs of $2.3 million on leases on space vacated in 2018 following completion of the Company's new headquarters in 2018, total technology expense (up $1.8 million), and professional fees and consulting (up $2.8 million). The increase in technology and professional fees primarily relates to investments in strengthening the Company's compliance and information security infrastructure.

Insurance Segment

The insurance segment reported net income of $3.2 million, up 11.9% when compared to 2017.  The increase in net income is mainly a result of the decrease in the Federal statutory tax rate in 2018 described above. Net income before tax decreased by $269,000 or 5.8%,  as a 2.2% increase in noninterest revenue was offset by a 3.8% increase in expenses.  The increase in expenses was mainly attributed to an increase in salary and wages and employee benefits reflecting normal annual merit and incentive adjustments and higher health insurance costs, respectively, over the prior year. Noninterest income increased $654,000, or 2.2%, when compared to 2017, reflecting increases in all business lines (personal, commercial, and life and health). Revenues for 2017 included a non-recurring gain on the sale of certain customer relationships in the amount of $154,000.

Wealth Management Segment

The wealth management segment reported net income of $4.2 million for the year ended December 31, 2018, an increase of $1.6 million or 62.0% compared to 2017. Noninterest income of $18.0 million increased $1.7 million or 10.1% compared to 2017. Estate and terminating trust fees were up $1.1 million or 661.3% in 2018 over 2017, benefiting from the settlement of a large estate in 2018. Noninterest expenses were flat in 2018 compared to 2017, mainly due to lower staffing levels in 2018 compared to 2017. The market value of assets under management or in custody at December 31, 2018 totaled $3.8 billion, a decrease of 5.3% compared to year-end 2017.

Net Interest Income

Net interest income is the Company’s largest source of revenue, representing 73.2% of total revenues for the year ended December 31, 2018, and 74.4% of total revenues for the year ended December 31, 2017. Net interest income in 2018 increased 5.2% over 2017. 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 Company’s net interest income over the past several years benefited from steady growth in average earning assets, which increased 5.3% in 2018 compared to 2017.

Tax-equivalent interest income increased $22.3 million or 9.6% in 2018 over 2017. The increase in taxable-equivalent interest income reflected a $317.8 million or 5.3% increase in average interest-earning assets and improved yields. The increase in average interest-earning assets was mainly in average loans and leases, which increased $356.4 million or 8.1% in 2018 compared to 2017. Average loan balances represented 75.0% of average earning assets in 2018 compared to 73.1% in 2017. The average yield on interest earning assets for 2018 was 4.0%, which increased by 16 basis points from 2017. The average yield on loans was 4.53%

37

in 2018, an increase of 11 basis points compared to 4.42% in 2017. Average balances on securities decreased $45.4 million or 2.9% compared to 2017, while the average yield on the securities portfolio increased 5 basis points or 2.3% compared to 2017.

Interest expense for 2018 increased $14.3 million or 56.3% compared to 2017, and average interest bearing liabilities increased $187.8 million or 4.2% over 2017. The increase in interest expense was the result of the increase in the average rates paid on deposits and interest bearing liabilities in 2018 compared to 2017, as well as the growth in average borrowings during 2018 when compared to 2017. The average rate paid on interest bearing deposits was 0.48% in 2018, up 13 basis points from 0.35% in 2017, while the average costs of interest bearing liabilities increased to 0.85% in 2018 from 0.57% in 2017. Average other borrowings increased by $204.6 million or 23.2% year over year, mainly due to a higher volume of overnight borrowings with the FHLB in 2018, which were used to support loan growth that exceeded deposit growth in 2018. Average total deposits were up $89.7 million or 1.9% in 2018 over 2017, with the majority of the growth in average noninterest bearing deposits. Average interest bearing deposits in 2018 decreased $13.9 million or 0.4% compared to 2017. Average noninterest bearing deposit balances in 2018 increased $103.5 million or 8.1% over 2017 and represented 28.4% of average total deposits in 2018 compared to 26.8% in 2017.

Provision for Loan and Lease Losses

The provision for loan and lease losses represents management’s estimate of the expense necessary to maintain the allowance for loan and lease losses at an appropriate level. The provision for loan and lease losses was $3.9 million in 2018, compared to $4.2 million in 2017. Loan growth for 2018 was down from 2017, which contributed to the lower provision expense. See the section captioned “The Allowance for Loan and Lease Losses” included within “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition” of this Report for further analysis of the Company’s allowance for loan and lease losses.

Noninterest Income

Noninterest income represented 26.8% of total revenues in 2018, and 25.6% in 2017.

Insurance commissions and fees increased 2.1% to $29.4 million in 2018, compared to $28.8 million in 2017. Insurance revenues increased $654,000, or 2.2%, when compared to 2017, reflecting increases in all business lines (personal, commercial, and life and health). Revenues for 2017 included a non-recurring gain on the sale of certain customer relationships in the amount of $154,000.

Investment services income of $17.3 million in 2018 increased $1.6 million or 10.4% compared to 2017. Investment services income includes trust services, financial planning, and wealth management services. The increase in fees in 2018 over 2017 was mainly in trust and estate fees and included fees related to the settlement of a large estate as well as growth in higher fee accounts such as asset management accounts and an increase in fees on certain products. 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. Global equity markets and the broad market index averages finished generally lower in 2018, when compared to 2017, which had an unfavorable impact on fees. The market value of assets managed by, or in custody of, the Trust Company was $3.8 billion at December 31, 2018, and $4.0 billion at December 31, 2017. These figures included $1.0 billion in 2018 and $1.0 billion in 2017, of Company-owned securities from which no income was recognized as the Trust Company was serving as custodian.

Service charges on deposit accounts in 2018 were flat compared to prior year. Overdraft/insufficient funds charges, the largest component of service charges on deposit accounts, were up $112,000 or 2.1% in 2018 compared to 2017, but were mainly offset by a decrease in service fees on personal and business accounts.

Card services income increased $593,000 or 6.5% over 2017. The primary components of card services income are fees related to interchange income and transactions fees for debit card transactions, credit card transactions and ATM usage. Increased revenue was largely driven by increased transaction volume in both credit and debit cards.

The Company recognized $466,000 of losses on sales/calls of available-for-sale securities in 2018, compared to $407,000 of losses in 2017. The losses are primarily related to the sales of available-for-sale securities, which are generally the result of general portfolio maintenance and interest rate risk management.

Other income of $13.1 million was up $5.5 million or 72.1% compared to 2017. The primary contributors for the increase in 2018 over 2017 were $2.9 million of gains on the sale of two properties we sold upon completion of the Company's new headquarters building and $2.5 million related to the collection of fees and nonaccrual interest for a credit that was charged off in 2010. Other income also included $458,000 of gains on the sales of residential mortgage loans, which were up $408,000 over 2017. These increases were partially offset by a $378,000 decrease in earnings on bank owned life insurance in 2018 when compared to 2017.

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Noninterest Expense

Noninterest expense as a percentage of total revenue was 62.6% in 2018, compared to 63.3% in 2017. Expenses associated with salaries and wages and employee benefits are the largest component of total noninterest expense. In 2018, these expenses increased $4.3 million or 4.2% compared to 2017. Salaries and wages increased $3.7 million or 4.5% in 2018 over prior year, mainly as a result of annual merit pay increases as well as the Company's decision to raise the minimum wage paid to our employees. Other employee benefits increased $632,000 or 2.9% over 2017. The increase over prior year in other employee benefit expenses was mainly in health insurance, which was up $431,000 or 5.5% in 2018 over 2017.

Other operating expenses of $48.3 million increased by $5.3 million or 12.3% compared to 2017. The primary components of other operating expenses in 2018 were technology expense ($10.1 million), marketing expense ($5.5 million), professional fees ($8.6 million), cardholder expense ($3.3 million) and other miscellaneous expense ($20.8 million). Professional fees and technology related expenses in 2018 were up by $2.8 million and $1.8 million, respectively, over 2017, mainly as a result of investments in strengthening the Company's compliance and information security infrastructure. Other operating expenses in 2018 included $2.5 million of write-downs related to two leases on space vacated in 2018. Other operating expense in 2017 included $2.7 million related to a write-off of a historic tax credit investment. The historic tax credit project was placed in service in 2017 resulting in the write-off of $2.7 million and recognition of the $3.3 million of tax credits as a reduction of income tax expense for 2017.

Noncontrolling Interests

The Company had net income attributable to noncontrolling interests of $127,000 in 2018 and $128,000 in 2017. The noncontrolling interests relate to three real estate investment trusts, which are substantially owned by the Company’s New York banking subsidiaries.

Income Tax Expense

The provision for income taxes provides for Federal, New York State and Pennsylvania state income taxes. The 2018 provision was $21.8 million, which decreased $20.8 million or 48.8% compared to the 2017 provision. The effective tax rate for the Company was 20.9% in 2018, down from 44.8% in 2017. The effective rates for 2017 and 2018 differed from the U.S. statutory rate of 35.0% and 21.0% during those periods due to the effect of tax-exempt income from loans, securities, and life insurance assets, investments in tax credits, and excess tax benefits of stock based compensation. The effective rate in 2017 was significantly impacted by a $14.9 million one-time write down of net deferred tax assets due to the required remeasurement of the assets that resulted from the TCJA. The change in the effective rate in 2017 was partially offset by the recognition of $3.3 million of tax credits related to an investment in a historic tax credit. The changes to the tax laws approved in December 2017 reduced the federal statutory tax rate from 35% in 2017, to 21% in 2018 and beyond.

Financial Condition

Total assets were $6.7 billion at December 31, 2019, decreasing by 0.5% or $32.8 million from the previous year end. The decrease in total assets was mainly in the securities portfolio, which at year-end 2019 were down $174.6 million or 11.8% from year-end 2018, and mainly reflects the sale of about $152.1 million of low yielding and short average life securities in June 2019. The securities sold had an average yield of 1.68% and an average life of 2.9 years. The proceeds were used to reduce overnight borrowings with the FHLB.

Loans and leases were 73.1% of total assets at December 31, 2019, compared to 71.5% of total assets at December 31, 2018. A more detailed discussion of the loan portfolio is provided below in this section under the caption “Loans and Leases”.

As of December 31, 2019, total securities comprised 19.3% of total assets, compared to 21.8% of total assets at year-end 2018. The securities portfolio primarily contains mortgage-backed securities, obligations of U.S. Government sponsored entities, and obligations of states and political subdivisions. A more detailed discussion of the securities portfolio is provided below in this section under the caption “Securities”.

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Total deposits increased by $324.0 million or 6.6% compared to December 31, 2018. Noninterest bearing deposits increased by $58.7 million or 4.2%, while time deposit balances increased by $37.7 million or 5.9% compared to 2018 year-end. Checking, savings and money market accounts increased $227.5 million or 8.0% compared to December 31, 2018. Other borrowings, consisting mainly of short term advances with the FHLB, decreased $418.0 million from December 31, 2018, as a result of the securities sales discussed above as well as deposit growth exceeding loan growth during the period. A more detailed discussion of deposits and borrowings is provided below in this section under the caption “Deposits and Other Liabilities”.

Shareholders’ Equity

The Consolidated Statements of Changes in Shareholders’ Equity included in the Consolidated Financial Statements of the Company contained in Part II, Item 8. of this Report, detail changes in equity capital over prior year end. Total shareholders’ equity was up $42.2 million or 6.8% to $663.1 million at December 31, 2019, from $620.9 million at December 31, 2018. Additional paid-in capital decreased by $28.1 million, from $366.6 million at December 31, 2018, to $338.5 million at December 31, 2019. The $28.1 million decrease included the following: a $29.9 million aggregate purchase price related to the Company's repurchase and retirement of 376,021 shares of its common stock in connection with its stock repurchase plan and $2.9 million related to the exercise of stock options and restricted stock activity. These were partially offset by $4.2 million attributed to stock based compensation expense and $377,000 related to shares issued for the Company's director deferred compensation plan. Retained earnings increased by $51.1 million, reflecting net income of $81.7 million, less dividends paid of $30.6 million.

Accumulated other comprehensive loss decreased from $63.2 million at December 31, 2018 to $43.6 million at December 31, 2019, reflecting a $27.6 million increase in unrealized gains on available-for-sale securities due to market interest rates, and an$8.0 million decrease in actuarial loss associated with employee 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 capital ratios.

Total shareholders’ equity was up $44.7 million or 7.8% to $620.9 million at December 31, 2018, from $576.2 million at December 31, 2017. Additional paid-in capital increased by $2.6 million, from $364.0 million at December 31, 2017, to $366.6 million at December 31, 2018. The $2.6 million increase included the following: $3.5 million related to stock-based compensation; $3.1 million related to shares issued for the employee stock ownership plan; and $410,000 related to shares issued for the Company's director deferred compensation plan. These were partially offset by the repurchase of Company stock of $2.4 million; and net payout of $1.4 million and $541,000 from restricted stock activity and stock option exercises, respectively. Retained earnings increased by $54.4 million, reflecting net income of $82.3 million, less dividends paid of $29.6 million.

Accumulated other comprehensive loss increased from $51.3 million at December 31, 2017 to $63.2 million at December 31, 2018; reflecting a $10.6 million increase in unrealized losses on available-for-sale securities due to market interest rates, and a $1.3 million actuarial loss associated with employee benefit plans.

The Company continued its long history of increasing cash dividends with a per share increase of 4.1% in 2019, which followed an increase of 6.6% in 2018. Dividends per share amounted to $2.02 in 2019, compared to $1.94 in 2018, and $1.82 in 2017. Cash dividends paid represented 37.5%, 36.0%, and 52.6% of after-tax net income in 2019, 2018, and 2017, respectively.

On July 19, 2018, the Company’s Board of Directors authorized a stock repurchase plan (the "2018 Repurchase Plan") for the Company to repurchase up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan. The 2018 Repurchase Plan could be suspended, modified or terminated by the Board of Directors at any time for any reason. Through December 31, 2019, the Company had repurchased 393,004 shares under the 2018 Repurchase Plan at an average price of $79.15. The 2018 Repurchase Plan had replaced a repurchase plan authorized by the Company's Board of Directors in July 2016, under which the Company had repurchased an aggregate of 15,500 shares at an average price of $77.85; all of those shares were repurchased in the first quarter of 2018.

On January 30, 2020, the Company’s Board of Directors authorized a stock repurchase plan (the "2020 Repurchase Plan") for the Company to repurchase up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan. As with the 2018 Repurchase Plan, shares may be repurchased from time to time under the 2020 Repurchase Plan in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities laws, and the repurchase program may be suspended, modified or terminated by the Board of Directors at any time for any reason.

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The Company and its subsidiary banks are subject to quantitative capital measures established by regulation to ensure capital adequacy. Consistent with the objective of operating a sound financial organization, the Company and its subsidiary banks maintain capital ratios well above regulatory minimums and meet the requirements to be considered well-capitalized under the regulatory guidelines.

As of December 31, 2019, the capital ratios for the Company’s 4 subsidiary banks exceeded the minimum levels required to be considered well capitalized. Additional information on the Company’s capital ratios and regulatory requirements is provided in “Note 21 - Regulations and Supervision” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report on Form 10-K.

Securities

The Company maintains a portfolio of securities such as U.S. Treasuries, U.S. government sponsored entities securities, U.S. government agencies, non-U.S. Government agencies or sponsored entities mortgage-backed securities, obligations of states and political subdivisions thereof and equity securities. Management typically invests in securities with short to intermediate average lives in order to better match the interest rate sensitivities of its assets and liabilities. Investment decisions are made within policy guidelines established by the Company’s Board of Directors. The investment policy established by the Company’s Board of Directors is based on the asset/liability management goals of the Company, and is monitored by the Company’s Asset/Liability Management Committee. The intent of the policy is to establish a portfolio of high quality diversified securities, which optimizes net interest income within safety and liquidity limits deemed acceptable by the Asset/Liability Management Committee.

The Company classifies its securities at date of purchase as available-for-sale, held-to-maturity or trading.  Securities, other than certain obligations of states and political subdivisions thereof, are generally classified as available-for-sale. Securities available-for-sale may be used to enhance total return, provide additional liquidity, or reduce interest rate risk. The held-to-maturity portfolio consists of obligations of U.S. Government sponsored entities and obligations of state and political subdivisions. The securities in the trading portfolio reflect those securities that the Company elects to account for at fair value, with the adoption of ASC Topic 825, Financial Instruments.

The Company’s total securities portfolio at December 31, 2019 totaled $1.30 billion compared to $1.47 billion at December 31, 2018. The table below shows the composition of the available-for-sale and held-to-maturity securities portfolio as of year-end 2019, 2018 and 2017. The available-for-sale portfolio has decreased over the past two years as maturities, calls and sales have exceeded purchases and reclassifications in the portfolio. In 2019, fair values were favorably impacted by changes in market interest rates.

For held-to-maturity securities, the Company early adopted ASU 2019-04 on November 30, 2019.  Since the Company had already adopted ASUs 2016-01 and 2017-12, the related amendments were effective as of November 30, 2019.  As part of the adoption of ASU 2019-04, the Company reclassified $138.2 million aggregate amortized cost basis of debt securities from held-to-maturity to available-for-sale.  Included in other comprehensive income at December 31, 2019 is an unrealized gain of approximately $3.8 million related to the fair market value versus the cost basis of the portfolio at the time of the transfer.  The Company had not reclassified debt securities from held-to-maturity to available-for-sale upon adoption of the amendments in ASU 2017-12.  Under ASU 2019-04, entities that did not reclassify debt securities from held-to-maturity to available-for-sale upon adoption of the amendments in ASU 2017-12 and elect to reclassify debt securities upon adoption of the amendments in ASU 2019-04 are required to reflect the reclassification as of the date of adoption of that Update. 

Additional information on the securities portfolio is available in “Note 2 Securities” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report, which details the types of securities held, the carrying and fair values, and the contractual maturities as of December 31, 2019 and 2018.

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	As of December 31,
Available-for-Sale Securities	2019				2018					2017
(In thousands)	Amortized Cost		Fair Value			Amortized Cost		Fair Value			Amortized Cost		Fair Value
U.S. Treasuries	$	1,840	$	1,840		$	289	$	289		$	0	$	0
Obligations of U.S. Government sponsored entities	$	367,551	$	372,488		$	493,371	$	485,898		$	507,248	$	504,193
Obligations of U.S. states and political subdivisions	96,668		97,785			86,260		85,440			91,659		91,519
Mortgage-backed securities-residential, issued by
U.S. Government agencies	164,643		164,451			131,831		128,267			139,747		137,735
U.S. Government sponsored entities	660,037		659,590			649,620		630,558			667,767		656,178
Non-U.S. Government agencies or sponsored entities	0		0			31		31			75		75
U.S. corporate debt securities	2,500		2,433			2,500		2,175			2,500		2,162
Total available-for-sale securities	$	1,293,239	$	1,298,587		$	1,363,902	$	1,332,658		$	1,408,996	$	1,391,862

Held-to-Maturity Securities	2019				2018				2017
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Obligations of U.S. Government sponsored entities	$	0	$	0	$	131,306	$	130,108	$	131,707	$	132,720
Obligations of U.S. states and political subdivisions	0		0		9,273		9,269		7,509		7,595
Total held-to-maturity securities	$	0	$	0	$	140,579	$	139,377	$	139,216	$	140,315

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. The Company did not recognize any net credit impairment charge to earnings on investment securities in 2019, 2018, and 2017.

The Company uses a two-step modeling approach to analyze each non-agency CMO issue to determine whether or not the current unrealized losses are due to credit impairment and therefore other-than-temporarily impaired (“OTTI”). Step one in the modeling process applies default and severity credit vectors to each security based on current credit data detailing delinquency, bankruptcy, foreclosure and real estate owned (REO) performance. The results of the credit vector analysis are compared to the security’s current credit support coverage to determine if the security has adequate collateral support. If the security’s current credit support coverage falls below certain predetermined levels, step two is initiated. In step two, the Company uses a third party to assist in calculating the present value of current estimated cash flows to ensure there are no adverse changes in cash flows during the quarter leading to an other-than-temporary-impairment. Management’s assumptions used in step two include default and severity vectors and prepayment assumptions along with various other criteria including: percent decline in fair value; credit rating downgrades; probability of repayment of amounts due, credit support and changes in average life. As a result of the modeling process, the Company does not consider any investment security to be other-than-temporarily impaired at December 31, 2019. 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.

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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 Community Bankers Bank (“ACBB”) 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 $24.3 million, $9.3 million and $95,000 at December 31, 2019, 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. At December 31, 2018, the Company’s holdings of FHLBNY stock, FHLBPITT stock, and ACBB stock totaled $37.4 million, $14.8 million, and $95,000, respectively.

Management’s policy is to purchase investment grade securities that, on average, have relatively short expected durations. This policy helps mitigate interest rate risk and provides sources of liquidity without significant risk to capital. The contractual maturity distribution of debt securities and mortgage-backed securities as of December 31, 2019, along with the weighted average yield of each category, is presented in Table 3-Maturity Distribution below. Balances are shown at amortized cost and weighted average yields are calculated on a fully taxable-equivalent basis. Expected maturities will differ from contractual maturities presented in Table 3-Maturity Distribution below, because issuers may have the right to call or prepay obligations with or without penalty and mortgage-backed securities will pay throughout the periods prior to contractual maturity.

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Table 3 - Maturity Distribution 

	As of December 31, 2019
	Securities Available-for-Sale1				Securities Held-to-Maturity
(dollar amounts in thousands)	Amount		Yield2		Amount		Yield2
U.S. Treasury
Within 1 year	$	1,840	0.00	%	$	0	0.00	%
	$	1,840	0.00	%	$	0	0.00	%
Obligations of U.S. Government sponsored entities
Within 1 year	$	95,765	1.97	%	$	0	0.00	%
Over 1 to 5 years	246,887		2.28	%	0		0.00	%
Over 5 to 10 years	24,899		2.60	%	0		0.00	%
	$	367,551	2.22	%	$	0	0.00	%
Obligations of U.S. state and political subdivisions
Within 1 year	$	10,370	3.09	%	$	0	0.00	%
Over 1 to 5 years	23,590		2.43	%	0		0.00	%
Over 5 to 10 years	50,311		2.99	%	0		0.00	%
Over 10 years	12,397		3.27	%	0		0.00	%
	$	96,668	2.90	%	$	0	0.00	%
Mortgage-backed securities - residential
Within 1 year	$	16	6.76	%	$	0	0.00	%
Over 1 to 5 years	4,378		3.75	%	0		0.00	%
Over 5 to 10 years	154,689		2.22	%	0		0.00	%
Over 10 years	665,597		2.13	%	0		0.00	%
	$	824,680	2.16	%	$	0	0.00	%
Other securities
Over 5 to 10 years	$	2,500	4.70	%	$	0	0.00	%
	$	2,500	4.70	%	$	0	0.00	%
Total securities
Within 1 year	$	107,991	2.04	%	$	0	0.00	%
Over 1 to 5 years	274,854		2.31	%	0		0.00	%
Over 5 to 10 years	232,399		2.45	%	0		0.00	%
Over 10 years	677,995		2.15	%	0		0.00	%
	$	1,293,239	2.24	%	$	0	0.00	%

¹ Balances of available-for-sale securities are shown at 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 24.5% to increase tax exempt interest income to taxable-equivalent basis.  

The average taxable-equivalent yield on the securities portfolio was 2.30% in 2019, 2.24% in 2018 and 2.19% in 2017.

At December 31, 2019, there were no holdings of any one issuer, other than the U.S. Government sponsored entities, in an amount greater than 10% of the Company’s shareholders’ equity.

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Loans and Leases

Table 4 - Composition of Loan and Lease Portfolio

Originated Loans and Leases	As of December 31,
(In thousands)	2019			2018			2017			2016			2015
Commercial and industrial
Agriculture	$	105,786		$	107,494		$	108,608		$	118,247		$	88,299
Commercial and industrial other	863,199			926,429			932,067			847,055			768,024
Subtotal commercial and industrial	968,985			1,033,923			1,040,675			965,302			856,323
Commercial real estate
Construction	212,302			164,285			202,486			135,834			103,037
Agriculture	184,701			170,005			129,712			102,509			86,935
Commercial real estate other	1,899,645			1,827,279			1,660,782			1,431,690			1,167,250
Subtotal commercial real estate	2,296,648			2,161,569			1,992,980			1,670,033			1,357,222
Residential real estate
Home equity	203,894			208,459			212,812			209,277			202,578
Mortgages	1,140,572			1,083,802			1,039,040			947,378			823,841
Subtotal residential real estate	1,344,466			1,292,261			1,251,852			1,156,655			1,026,419
Consumer and other
Indirect	12,964			12,663			12,144			14,835			17,829
Consumer and other	60,661			57,565			50,214			44,393			40,904
Subtotal consumer and other	73,625			70,228			62,358			59,228			58,733
Leases	17,322			14,556			14,467			16,650			14,861
Total loans and leases	4,701,046			4,572,537			4,362,332			3,867,868			3,313,558
Less: unearned income and deferred costs and fees	(3,645		)	(3,796		)	(3,789		)	(3,946		)	(2,790		)
Total originated loans and leases, net of unearned income and deferred costs and fees	$	4,697,401		$	4,568,741		$	4,358,543		$	3,863,922		$	3,310,768
Acquired Loans
Commercial and industrial
Commercial and industrial other	$	39,076		$	43,712		$	50,976		$	79,317		$	84,810
Subtotal commercial and industrial	39,076			43,712			50,976			79,317			84,810
Commercial real estate
Construction	1,335			1,384			1,480			8,936			4,892
Agriculture	197			224			247			267			2,095
Commercial real estate other	145,385			177,484			206,020			241,605			284,952
Subtotal commercial real estate	146,917			179,092			207,747			250,808			291,939
Residential real estate
Home equity	15,351			21,149			28,444			37,737			42,092
Mortgages	18,020			20,484			22,645			25,423			27,491
Subtotal residential real estate	33,371			41,633			51,089			63,160			69,583
Consumer and other
Consumer and other	785			761			765			826			911
Subtotal consumer and other	785			761			765			826			911
Covered loans	0			0			0			0			14,031
Total acquired loans and leases	$	220,149		$	265,198		$	310,577		$	394,111		$	461,274

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Total loans and leases of $4.9 billion at December 31, 2019 were up $83.6 million or 1.7% from December 31, 2018. The growth was mainly due to organic loan growth. On August 1, 2012, the Company acquired $889.3 million of loans in the VIST Financial acquisition. These loans are shown in the table under the acquired loan heading. All other loans, including loans originated by VIST Bank since the acquisition date of August 1, 2012, are considered originated loans. Originated loan balances at December 31, 2019 were up $128.7 million or 2.8% over year-end 2018. The increase in originated loans, over prior year-end, was in all loan categories except commercial and industrial, which was down $64.9 million or 6.3% compared to prior year-end. As of December 31, 2019, total loans and leases represented 73.1% of total assets compared to 71.5% of total assets at December 31, 2018.

Residential real estate loans of $1.4 billion at December 31, 2019, including home equity loans, increased by $43.9 million or 3.3% from $1.3 billion at year-end 2018, and comprised 28.0% of total loans and leases at December 31, 2019. 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.

The Company may sell residential real estate loans in the secondary market based on interest rate considerations. These residential real estate loans are generally sold to Federal Home Loan Mortgage Corporation (“FHLMC”) or State of New York Mortgage Agency (“SONYMA”) without recourse in accordance with standard secondary market loan sale agreements. These residential real estate loans also are 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 representations and warranties.

During 2019, 2018, and 2017, the Company sold residential mortgage loans totaling $16.9 million, $27.7 million, and $4.6 million, respectively, and realized net gains on these sales of $227,000, $458,000, and $50,000, respectively. When residential mortgage loans are sold to FHLMC or SONYMA, the Company typically retains all servicing rights, which provides the Company with a source of fee income. In connection with the sales in 2019, 2018, and 2017, the Company recorded mortgage-servicing assets of $127,000, $207,000, and $38,000, respectively.

The Company originates fixed rate and adjustable rate residential mortgage loans, including loans that have characteristics of both, such as a 7/1 adjustable rate mortgage, which has a fixed rate for the first seven years and then adjusts annually thereafter. The majority of residential mortgage loans originated over the last several years have been fixed rate given the low interest rate environment. Adjustable rate residential real estate loans may be underwritten based upon an initial rate which is below the fully indexed rate; however, the initial rate is generally less than 100 basis points below the fully indexed rate. As such, the Company does not believe that this practice creates any significant credit risk.

Commercial real estate loans totaled $2.4 billion at December 31, 2019, an increase of $102.9 million or 4.4% compared to December 31, 2018, and represented 49.7% of total loans and leases at December 31, 2019, compared to 48.4% at December 31, 2018.

Commercial and industrial loans totaled $1.0 billion at December 31, 2019, which is a decrease of $69.6 million or 6.5% from December 31, 2018. Commercial and industrial loans represented 20.5% of total loans at December 31, 2019 compared to 22.3% at December 31, 2018.

As of December 31, 2019, agriculturally-related loans totaled $290.7 million or 5.9% of total loans and leases compared to $277.7 million or 5.7% of total loans and leases at December 31, 2018. 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 consumer loan portfolio includes personal installment loans, indirect automobile financing, and overdraft lines of credit. Consumer and other loans were $74.4 million at December 31, 2019, compared to $71.0 million at December 31, 2018.

The lease portfolio increased by 19.0% to $17.3 million at December 31, 2019 from $14.6 million at December 31, 2018. As of December 31, 2019, commercial leases and municipal leases represented 100.0% of total leases.

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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). At 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 loans acquired from VIST and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $9.1 million at December 31, 2019, compared to $11.0 million at December 31, 2018 due to normal loan run off. 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, while decreases in expected cash flows are recognized as impairment through a loss provision and an increase in 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 $211.0 million at December 31, 2019 as compared to $254.2 million at December 31, 2018 due to normal loan run off. The fair value of the acquired loans not exhibiting evidence of credit impairment was determined by projecting contractual cash flows discounted at risk-adjusted interest rates.

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.

Purchased performing 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. Such estimated credit losses are recorded as an accretable discount in a manner similar to purchased impaired loans. The fair value discount other than for credit loss is accreted as an adjustment to yield over the estimated lives of the loans. Interest is accrued daily on the outstanding principal balances of purchased performing loans. Fair value adjustments are also accreted into income over the estimated lives of the loans on a level yield basis.

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. There were no significant changes to the Company’s existing policies, underwriting standards and loan review during 2019. 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 4 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.

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Analysis of Past Due and Nonperforming Loans

	As of December 31,
(In thousands)	2019			2018			2017			2016			2015
Loans 90 days past due and accruing1
Commercial real estate	$	0		$	0		$	0		$	0		$	0
Residential real estate	0			0			0			0			58
Consumer and other	0			0			44			0			0
Total loans 90 days past due and accruing	0			0			44			0			58
Nonaccrual loans
Commercial and industrial	2,335			1,883			2,852			738			1,738
Commercial real estate	10,789			8,007			5,948			9,076			6,054
Residential real estate	10,882			12,072			10,363			9,061			9,863
Consumer and other	275			234			354			166			182
Leases	0			0			0			0			0
Total nonaccrual loans and leases	24,281			22,196			19,517			19,041			17,837
Troubled debt restructurings not included above	7,154			4,395			3,449			2,631			3,915
Total nonperforming loans and leases	31,435			26,591			23,010			21,672			21,810
Other real estate owned	428			1,595			2,047			908			2,692
Total nonperforming assets	$	31,863		$	28,186		$	25,057		$	22,580		$	24,502
Total nonperforming loans and leases as a percentage of total loans and leases	0.64		%	0.55		%	0.49		%	0.51		%	0.58		%
Total nonperforming assets as a percentage of total assets	0.47		%	0.42		%	0.38		%	0.36		%	0.43		%
Allowance as a percentage of nonperforming loans and leases	126.90		%	163.25		%	172.84		%	164.98		%	146.74		%

¹ The 2019, 2018, 2017, 2016 and 2015 columns in the above table exclude $794,000, $1.3 million, $1.1 million, $2.6 million, and $2.5 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 the Company can reasonably estimate future cash flows on these acquired loans and the Company expects to fully collect the carrying value of these loans.  Therefore, the Company is accreting the difference between the carrying value of these loans and their expected cash flows into interest income.

The level of nonperforming assets at the past five year-ends is illustrated in the table above. The ratio of nonperforming loans to total loans improved between 2015 and 2017, but was up at year-end 2018 and 2019. The Company’s total nonperforming assets as a percentage of total assets was 0.47% at December 31, 2019, up from 0.42% at December 31, 2018, but continues to compare favorably to its peer group’s most recent ratio of 0.60% at September 30, 2019. 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.

A breakdown of nonperforming loans by portfolio segment is shown above. Nonperforming loans totaled $31.4 million at December 31, 2019 and were up 18.2% from December 31, 2018. Nonperforming loans represented 0.64% of total loans at December 31, 2019, compared to 0.55% of total loans at December 31, 2018, and 0.49% of total loans at December 31, 2017. The increase in nonperforming loans over year-end 2018 was mainly due to the addition of one agriculturally-related commercial mortgage relationship totaling $1.6 million to troubled debt restructuring, and two commercial mortgage relationships totaling $5.7 million to nonaccrual. These additions were partially offset by the $3.1 million write-down of a single commercial real estate relationship during the first quarter of 2019. This relationship had been downgraded and placed on nonaccrual status during the fourth quarter of 2018. At December 31, 2019, other real estate owned was down $1.2 million from prior year-end and represented 1.3% of total nonperforming assets, down from 5.7% at December 31, 2018. The decrease in other real estate owned was mainly a result of sales during 2019.

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Loans are considered modified in a troubled debt restructuring (“TDR”) when, due to a borrower’s financial difficulties, the Company makes a concession(s) to the borrower that the Company would not otherwise consider. When modifications are provided for reasons other than as a result of the financial distress of the borrower, these loans are not classified as TDRs or impaired. 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 have shown a satisfactory period of repayment (generally six consecutive months) and where full collection of all is reasonably assured. At December 31, 2019, the Company had $8.6 million in TDR balances, which are included in the above table, of which $7.2 million are included in the line captioned “Troubled debt restructurings not included above” and the remainder are included within nonaccrual loans.

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 called for by regulatory requirements. 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. For additional financial information on the difference between the interest income that would have been recorded if these loans and leases had been paid in accordance with their original terms and the interest income that was recorded, refer to “Note 3 – Loans and Leases” in the Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

The Company’s recorded investment in originated loans and leases that are considered impaired totaled $19.4 million at December 31, 2019, and $14.2 million at December 31, 2018. 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 loans that are 90 days or more past due. 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.

At December 31, 2019, there were specific reserves of $907,000 on seven commercial loans in the originated loan portfolio, compared to $3.8 million of specific reserves on seven commercial real estate loans at December 31, 2018. The specific reserves at year-end 2018 included a $3.0 million specific reserve added to one loan in the fourth quarter of 2018. This loan was charged off in the first quarter of 2019, thus eliminating the specific reserve, which contributed to the decrease in specific reserves between year-end 2019 and year-end 2018. The majority of the remaining 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 or the loans have been written down to fair value. 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. There was no interest income recognized on impaired loans and leases for 2019, 2018 and 2017.

The ratio of the allowance to nonperforming loans (loans past due 90 days and accruing, nonaccrual loans and restructured troubled debt) was 126.90% at December 31, 2019, compared to 163.25% at December 31, 2018. 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.

Management reviews the loan portfolio 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, through its credit administration function, identified 34 commercial relationships from the originated portfolio and 7 commercial relationships from the acquired portfolio totaling $42.6 million and $1.4 million, respectively at December 31, 2019 that were potential problem loans. At December 31, 2018, there were 29 relationships totaling $33.7 million in the originated portfolio and 6 relationships totaling $1.2 million in the acquired portfolio that were considered potential problem loans.

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Of the 34 commercial relationships from the originated portfolio that were classified as potential problem loans at December 31, 2019, there were 13 relationships that equaled or exceeded $1.0 million, which in aggregate totaled $38.0 million. Of the 7 commercial relationships from the acquired loan portfolio, there were no relationships that equaled or exceeded $1.0 million. The potential problem 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.

The Allowance for Loan and Lease Losses 

Originated loans and leases 

The methodology for determining the allowance is considered by management to be a critical accounting policy due to the high degree of judgment involved, the subjectivity of the assumptions utilized and the potential for changes in the economic environment that could result in changes to the amount of the allowance.  Management’s determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio and of current economic conditions.   

Tompkins' model has been designed with certain key concepts in mind, including: 

– An acknowledgment that arriving at an appropriate allowance requires a high degree of management judgment.

– The allowance should be maintained at a level appropriate to cover estimated losses on loans individually evaluated for impairment, as well as estimated credit losses inherent in the remainder of the portfolio.

– Estimates of credit losses should consider all significant factors that affect the collectability of the portfolio as of the evaluation date.

– Loss emergence period is a critical assumption in the allowance estimate, which represents the average amount of time between when loss events occur for specific loan types and when such problem loans are identified and the related loss amounts are confirmed through charge-offs.

– The allowance should be based on a comprehensive, well-documented, and consistently applied analysis of the loan portfolio.

The model is comprised of four major components that management has deemed appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at a reserve level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The components include:  

– Impaired Loans - Management considers a loan to be impaired if, based on current information, it is probable that the Company will be unable to collect all scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. When a loan is considered to be impaired, the amount of the impairment is measured based on the present value of expected future cash flows discounted at the effective interest rate of the loan or, as a practical expedient, at the observable market price or the fair value of collateral (less costs to sell) if the loan is collateral dependent. Management excludes large groups of smaller balance homogeneous loans such as residential mortgages, consumer loans, and leases, which are collectively evaluated.

– Criticized and Classified Credits – For loans that are not impaired, but are rated special mention or worse, management evaluates credits based on elevated risk characteristics and assigns reserves based upon analysis of historical loss experience of loans with similar risk characteristics.

– Historical Loss Experience - For loans that are not impaired, or reviewed individually, management assigns a reserve based upon historical loss experience over a designated look-back period. Management has evaluated a variety of look-back periods and has determined that an eight year look back period is appropriate to capture a full range of economic cycles.

– Qualitative/Subjective Analysis – The model also includes an analysis of a variety of subjective factors to support the reserve estimate. These subjective factors may include reserve allocations for risks that may not otherwise be fully recognized in other components of the model. Among the subjective factors that are routinely considered as part of this analysis are: growth trends in the portfolio, changes in management and/or polices related to lending activities, trends in classified or past due/nonaccrual loans, concentrations of credit, local and national economic trends, and industry trends.

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Periodically, management conducts an analysis to estimate the loss emergence period for various loan categories based on samples of historical charge-offs. Model output by loan category is reviewed to evaluate the reasonableness of the reserve levels in comparison to the estimated loss emergence period applied to historical loss experience.

In addition to the components discussed above, management reviews the model output for reasonableness by analyzing the results in comparisons to recent trends in the loan/lease portfolio, through back-testing of results from prior models in comparison to actual loss history, and by comparing our reserves and loss history to industry peer results. 

The model results are reviewed by management at the Corporate Credit Policy Committee and at the Audit Committee of the Board of Directors. Additionally, on an annual basis, management conducts a validation process of the model. This validation includes reviewing the appropriateness of model calculations, back testing of model results and appropriateness of key assumptions used in the model.

Although we believe our process for determining the allowance adequately considers all of the factors that would likely result in credit losses, this evaluation is inherently subjective as it requires material estimates, including expected default probabilities, loss emergence periods, the amounts and timing of expected future cash flows on impaired loans, and estimated losses based on historical loss experience and current economic conditions.  All of these factors may be susceptible to significant change.  To the extent that actual results differ from management estimates, additional loan loss provisions may be required that would adversely impact earnings for future periods. Based on its evaluation of the allowance as of December 31, 2019, management considers the allowance to be appropriate. Under adversely or positively different conditions or assumptions, the Company would need to increase or decrease the allowance.

Acquired Loans and Leases 

As part of our determination of the fair value of our acquired loans at the time of acquisition, the Company established a credit mark to provide for expected losses in our acquired loan portfolio. There was no allowance for loan losses carried over from the acquired company. To the extent that credit quality deteriorates subsequent to acquisition, such deterioration would result in the establishment of an allowance for the acquired loan portfolio.

Acquired loans accounted for under ASC 310-30

Acquired loans were accounted for under ASC 310-30, and 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.

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The allocation of the Company’s allowance as of December 31, 2019, and each of the previous four years is illustrated in Table 5- Allocation of the Allowance for Loan and Lease Losses, below.

Table 5 - Allocation of the Allowance for Originated and Acquired Loan and Lease Losses

	As of December 31,
(In thousands)	2019			2018			2017			2016			2015
Originated loans outstanding at end of year	$	4,697,401		$	4,568,741		$	4,358,543		$	3,863,922		$	3,310,768
Allocation of the originated allowance by originated loan type:
Commercial and industrial	$	10,541		$	11,217		$	11,812		$	9,389		$	10,495
Commercial real estate	21,557			23,483			20,412			19,836			15,479
Residential real estate	6,360			7,317			6,161			5,149			4,070
Consumer and other	1,356			1,304			1,301			1,224			1,268
Total	$	39,814		$	43,321		$	39,686		$	35,598		$	31,312
Allocation of the originated allowance as a percentage of total originated allowance:
Commercial and industrial	27		%	26		%	30		%	27		%	34		%
Commercial real estate	54		%	54		%	51		%	56		%	49		%
Residential real estate	16		%	17		%	16		%	14		%	13		%
Consumer and other	3		%	3		%	3		%	3		%	4		%
Total	100		%	100		%	100		%	100		%	100		%
Loan and lease types as a percentage of total originated loans and leases:
Commercial and industrial	21		%	23		%	24		%	25		%	26		%
Commercial real estate	48		%	47		%	46		%	43		%	41		%
Residential real estate	29		%	28		%	29		%	30		%	31		%
Consumer and other	2		%	2		%	1		%	2		%	2		%
Total	100		%	100		%	100		%	100		%	100		%

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	As of December 31,
(In thousands)	2019			2018			2017			2016			2015
Acquired loans outstanding at end of year	$	220,149		$	265,198		$	310,577		$	394,111		$	461,274
Allocation of the acquired allowance by acquired loan type:
Commercial and industrial	$	0		$	55		$	25		$	0		$	433
Commercial real estate	51			0			0			97			61
Residential real estate	21			28			54			54			198
Consumer and other	6			6			6			6			0
Total	$	78		$	89		$	85		$	157		$	692
Allocation of the acquired allowance as a percentage of total acquired allowance:
Commercial and industrial	0		%	62		%	29		%	0		%	62		%
Commercial real estate	65		%	0		%	0		%	62		%	9		%
Residential real estate	27		%	31		%	64		%	34		%	29		%
Consumer and other	8		%	7		%	7		%	4		%	0		%
Total	100		%	100		%	100		%	100		%	100		%
Loan and lease types as a percentage of total acquired loans and leases:
Commercial and industrial	18		%	16		%	16		%	20		%	18		%
Commercial real estate	67		%	68		%	67		%	64		%	64		%
Residential real estate	15		%	16		%	17		%	16		%	15		%
Consumer and other	0		%	0		%	0		%	0		%	0		%
Covered	0		%	0		%	0		%	0		%	3		%
Total	100		%	100		%	100		%	100		%	100		%

The above tables provide, as of the dates indicated, an allocation of the allowance for probable and inherent loan losses by loan type. The allocation is neither indicative of the specific amounts or the loan categories in which future charge-offs may occur, nor is it an indicator of future loss trends. The allocation of the allowance to each category does not restrict the use of the allowance to absorb losses in any category.

The five year trend in the allowance is shown above. Over the four year period between 2015 through 2018, the originated allowance steadily increased driven in large part by growth in originated loans, while the acquired portfolio steadily decreased, reflecting run-off of the acquired portfolio, improving asset quality metrics in the acquired portfolio, and net charge-offs. As of December 31, 2019, the total allowance for loan and lease losses was $39.9 million, which was down $3.5 million or 8.1% from year-end 2018. The decrease was related to a specific reserve of $3.3 million at December 31, 2018, related to one commercial real estate credit that was subsequently charged off in the first quarter of 2019. The year-end allowance for originated loans and leases was down $3.5 million compared to prior year end, and the allowance for acquired loans was down $11,000 from year-end 2018. At December 31, 2019, the total allowance was 126.90% of total nonperforming loans compared to 163.25% at December 31, 2018.

The Company’s allowance for originated loan and lease losses totaled $39.8 million at December 31, 2019, which represented 0.85% of total originated loans, compared to $43.3 million and 0.95% of total originated loans at December 31, 2018. Favorable trends in certain qualitative factors, lower historical loss rates in all loan portfolios except for commercial real estate at year-end 2019 compared to year-end 2018, and lower specific reserves for impaired loans, contributed to the lower allowance level at December 31, 2019 compared to December 31, 2018. Asset quality metrics in the originated portfolio remain favorable at December 31, 2019 but did show some deterioration from December 31, 2018. Originated loans internally-classified as Special Mention and Substandard totaled $87.9 million at December 31, 2019, up from $72.0 million at year-end 2018. Loans classified as Substandard increased by $14.1 million over December 31, 2018, while loans classified as Special Mention were up $1.7 million. Nonaccrual originated loans were $22.5 million as of December 31, 2019, up $3.1 million from year-end 2018. Net charge-offs of originated loans were $4.8 million or 0.11% of average originated loans in 2019 compared to net charge-offs of $262,000 or 0.01% of average originated loans in 2018. The year-over-year increase in net charge-offs was mainly due to the $3.3 million write off of one commercial real estate relationship in the first quarter of 2019.

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The allowance for acquired loans and leases was $78,000 at December 31, 2019, down 12.4% from prior year end. The amount of acquired loans internally-classified as Special Mention and Substandard at December 31, 2019 was down $1.0 million or 28.5% compared to December 31, 2018, reflecting successful workouts and related paydowns and charge-offs during 2019. Net charge-offs of acquired loans totaled $59,000 in 2019 compared to net charge-offs of $41,000 in 2018. Acquired nonaccrual loans totaled $1.8 million at December 31, 2019, compared to $2.9 million at December 31, 2018.

The level of future charge-offs is dependent upon a variety of factors such as national and local economic conditions, trends in, various industries, underwriting characteristics, and conditions unique to each borrower. Given uncertainties surrounding these factors, it is difficult to estimate future losses.

Table 6 - Analysis of the Allowance for Originated and Acquired Loan and Lease Losses 

	December 31,
(In thousands)	2019			2018			2017			2016			2015
Average originated loans outstanding during year	$	4,586,484		$	4,472,682		$	4,051,298		$	3,525,649		$	3,023,456
Balance of allowance at beginning of year	43,321			39,686			35,598			31,312			28,156
Originated loans charged-off:
Commercial and industrial	653			293			291			878			221
Commercial real estate	4,013			60			21			12			363
Residential real estate	90			424			584			263			338
Consumer and other	816			1,350			960			521			1,074
Leases	0			0			0			0			0
Total loans charged-off	$	5,572		$	2,127		$	1,856		$	1,674		$	1,996
Recoveries of originated loans previously charged-off:
Commercial and industrial	70			50			119			576			809
Commercial real estate	100			812			980			859			1,277
Residential real estate	283			324			212			63			112
Consumer and other	294			679			405			325			487
Total loan recoveries	$	747		$	1,865		$	1,716		$	1,823		$	2,685
Net loan charge-offs and (recoveries)	4,825			262			140			(149		)	(689		)
Additions to allowance charged to operations	1,318			3,897			4,228			4,137			2,467
Balance of originated allowance at end of year	$	39,814		$	43,321		$	39,686		$	35,598		$	31,312
Originated allowance as a percentage of originated loans and leases outstanding	0.85		%	0.95		%	0.91		%	0.92		%	0.95		%
Net charge-offs (recoveries) as a percentage of average originated loans and leases outstanding during the year	0.11		%	0.01		%	0.00		%	0.00		%	(0.02		)%

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	December 31,
(In thousands)	2019			2018			2017			2016			2015
Average acquired loans outstanding during year	$	243,607		$	284,901		$	349,915		$	431,572		$	508,490
Balance of allowance at beginning of year	89			85			157			692			841
Acquired loans charged-off:
Commercial and industrial	43			41			74			698			77
Commercial real estate	2			82			159			181			400
Residential real estate	166			190			483			35			302
Consumer and other	7			0			2			121			6
Total loans charged-off	$	218		$	313		$	718		$	1,035		$	785
Recoveries of acquired loans previously charged-off:
Commercial and industrial	33			106			24			20			7
Commercial real estate	74			31			637			268			142
Residential real estate	51			135			44			0			9
Consumer and other	1			0			8			28			0
Total loan recoveries	$	159		$	272		$	713		$	316		$	158
Net loans charged-off	59			41			5			719			627
Additions (reductions) to allowance charged to operations	48			45			(67		)	184			478
Balance of acquired allowance at end of year	$	78		$	89		$	85		$	157		$	692
Acquired allowance as a percentage of acquired loans outstanding	0.03		%	0.03		%	0.02		%	0.04		%	0.14		%
Net charge-offs as a percentage of average acquired loans and leases outstanding during the year	0.02		%	0.01		%	0.00		%	0.17		%	0.12		%
Total net charge-offs as a percentage of average total loans and leases outstanding during the year	0.10		%	0.01		%	0.00		%	0.00		%	0.00		%

The provision for loan and lease losses represents management’s estimate of the expense necessary to maintain the allowance for loan and lease losses at an appropriate level. Net loan charge-offs have been generally favorable over the four year period between 2015 and 2018. The increase in 2019 was related to the charge-off of $3.0 million related to one commercial real estate loan which had a specific reserve in the fourth quarter of 2018. The provision expense for originated loans over the past five years benefited from significant recoveries on two commercial/commercial real estate relationships that resulted in net loan recoveries on originated loans in 2016 and 2015 and smaller net charge-offs in 2018 and 2017. For 2019, favorable trends in certain qualitative factors, lower historical loss rates in all loan portfolios except for commercial real estate at year-end 2019 compared to year-end 2018, and lower specific reserves for impaired loans contributed to the lower allowance level at December 31, 2019 compared to December 31, 2018 and decrease in provision expense in 2019 compared to 2018. 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. Provision expense for the acquired portfolio has remained relatively flat since 2017. Asset quality trends for the acquired portfolio continue to show improvement as evidenced by low net charge-offs and lower Special Mention and Substandard loans.

The ratio of the allowance for originated loan and lease losses as a percentage of total originated loans was 0.85% at year-end 2019 compared to 0.95% at year-end 2018. The allowance coverage to nonperforming loans and leases was 126.90% at December 31, 2019 compared to 163.25% at December 31, 2018. Management believes that, based upon its evaluation as of December 31, 2019, the allowance is appropriate.

Deposits and Other Liabilities 

Total deposits were $5.2 billion at December 31, 2019, up $324.0 million or 6.6% compared to year-end 2018. The increase from year-end 2018 consisted of savings and money market balances, noninterest bearing deposits, and time deposits up $227.5 million, $58.7 million, $37.7 million, respectively.

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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, brokered deposits, municipal money market deposits and reciprocal deposit relationships with municipalities. Core deposits increased by $182.3 million or 4.4% to $4.3 billion at year-end 2019 from $4.1 billion at year-end 2018. Core deposits represented 82.3% of total deposits at December 31, 2019, compared to 84.0% of total deposits at December 31, 2018.

Municipal money market accounts and reciprocal deposit relationships with municipalities totaled $616.2 million at year-end 2019, which increased 8.5% over year-end 2018. 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 receive an additional inflow at the end of March from the electronic deposit of state funds.

Table 1-Average Statements of Condition and Net Interest Analysis, shows the average balance and average rate paid on the Company’s primary deposit categories for the years ended December 31, 2019, 2018, and 2017. Average interest-bearing deposits were up $195.8 million or 5.6% for 2019 when compared to 2018. The average cost of interest-bearing deposits was 0.84% for 2019 and 0.48% for 2018. Average noninterest bearing deposits for 2019 were up $20.8 million or 1.5% over 2018. A maturity schedule of time deposits outstanding at December 31, 2019 is included in “Note 7 Deposits” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

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 $60.3 million at December 31, 2019, and $81.8 million at December 31, 2018. Management generally views local repurchase agreements as an alternative to large time deposits. Refer to “Note 8 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report for further details on the Company’s repurchase agreements.

The Company’s other borrowings totaled $658.1 million at year-end 2019, which was $418.0 million below prior year end. The decrease was attributable to growth in deposits outpacing growth in loans during 2019. The $658.1 million in borrowings at December 31, 2019, included $239.1 million in overnight advances from the FHLB, $415.0 million in term advances from the FHLB and a $4.0 million advance from a third party bank. Borrowings of $1.1 billion at year-end 2018 included $647.1 million in overnight advances from the FHLB, $425.0 million of FHLB term advances, and a $4.0 million advance from a bank. Of the $415.0 million of the FHLB term advances at year-end 2019, $245.0 million are due in over one year. Refer to “Note 9 - Other Borrowings” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report for further details on the Company’s term borrowings with the FHLB.

Liquidity Management

The objective of liquidity management is to ensure the availability of adequate funding sources to satisfy the demand for credit, deposit withdrawals, operating expenses, 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 may also use borrowings as part of a growth strategy. Asset and liability positions are monitored primarily through the Asset/Liability Management Committee of the Company’s subsidiary banks. This Committee reviews periodic reports on the 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, municipal money market deposits, reciprocal deposits, bank borrowings, securities sold under agreements to repurchase, overnight borrowings and term advances from the FHLB and other funding sources. Rates and terms are the primary determinants of the mix of these funding sources.

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Non-core funding sources totaled $1.6 billion at December 31, 2019, a decrease of $297.8 million or 15.4% from $1.9 billion at December 31, 2018. Non-core funding sources decreased year-over-year as the Company experienced sufficient growth in core deposits to fund earning asset growth. Non-core funding sources as a percentage of total liabilities decreased from 31.6% at year-end 2018 to 27.1% at year-end 2019.

Non-core funding sources may require securities to be pledged against the underlying liability. Securities carried at $1.2 billion at December 31, 2019 and 2018, were either pledged or sold under agreements to repurchase. Pledged securities or securities sold under agreements to repurchase represented 89.7% of total securities at December 31, 2019, compared to 77.8% of total securities at December 31, 2018.

Cash and cash equivalents totaled $138.0 million as of December 31, 2019, up from $80.4 million at December 31, 2018. Short-term investments, consisting of securities due in one year or less, increased from $86.8 million at December 31, 2018, to $108.1 million at December 31, 2019.

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 they have monthly principal reductions. Total mortgage-backed securities, at fair value, were $824.0 million at December 31, 2019 compared with $758.9 million at December 31, 2018. Outstanding principal balances of residential mortgage loans, consumer loans, and leases totaled approximately $1.5 billion at December 31, 2019 compared to $1.4 billion at December 31, 2018. Aggregate amortization from monthly payments on these assets provides significant additional cash flow to the Company.

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 December 31, 2019, the unused borrowing capacity on established lines with the FHLB was $1.3 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 December 31, 2019, total unencumbered mortgage loans and securities of the Company were $850.8 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.

Table 7 - Loan Maturity

Remaining maturity of originated loans	December 31, 2019
(In thousands)	Total		Less than 1 year		After 1 year to 5 years		After 5 years
Commercial and industrial	$	968,985	$	237,057	$	289,483	$	442,445
Commercial real estate	2,296,648		113,282		237,165		1,946,201
Residential real estate	1,344,466		111		14,882		1,329,473
Total	$	4,610,099	$	350,450	$	541,530	$	3,718,119

Remaining maturity of acquired loans	December 31, 2019
(In thousands)	Total		Less than 1 year		After 1 year to 5 years		After 5 years
Commercial and industrial	$	39,076	$	19,065	$	3,619	$	16,392
Commercial real estate	146,917		11,867		70,529		64,521
Residential real estate	33,371		2,795		4,179		26,397
Total	$	219,364	$	33,727	$	78,327	$	107,310

Of the loan amounts shown above in Table 7 - Loan Maturity, maturing over 1 year, $2.0 billion have fixed rates and $2.4 billion have adjustable rates.

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Off-Balance Sheet Arrangements

In the normal course of business, the Company is party to certain financial instruments, which in accordance with accounting principles generally accepted in the United States, are not included in its Consolidated Statements of Condition. These transactions include commitments under standby letters of credit, unused portions of lines of credit, and commitments to fund new loans and are undertaken to accommodate the financing needs of the Company’s customers. Loan commitments are agreements by the Company to lend monies at a future date. These loan and letter of credit commitments are subject to the same credit policies and reviews as the Company’s loans. Because most of these loan commitments expire within one year from the date of issue, the total amount of these loan commitments as of December 31, 2019, are not necessarily indicative of future cash requirements. Further information on these commitments and contingent liabilities is provided in “Note 17 Commitments and Contingent Liabilities” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report.

Contractual Obligations

The Company leases land, buildings, and equipment under operating lease arrangements extending to the year 2090. Most leases include options to renew for periods ranging from 5 to 20 years. In addition, the Company has a software contract for its core banking application through June 30, 2024 along with contracts for more specialized software programs through 2020. Further information on the Company’s lease arrangements is provided in “Note 6 Premises and Equipment” in Notes to Consolidated Financial Statements in Part II, Item 8. of this Report. The Company’s contractual obligations as of December 31, 2019, are shown in Table 8-Contractual Obligations and Commitments below.

Table 8 - Contractual Obligations and Commitments

Contractual cash obligations	At December 31, 2019 Payments due within
(In thousands)	Total		1 year		1-3 years		3-5 years		After 5 years
Long-term debt	$	436,320	$	177,017	$	127,092	$	132,211	$	0
Trust Preferred Debentures1	32,472		1,000		2,001		2,001		27,470
Operating leases 2	46,826		4,492		8,221		7,508		26,605
Software contracts	6,731		1,568		2,956		2,207		0
Total contractual cash obligations	$	522,349	$	184,077	$	140,270	$	143,927	$	54,075

¹  Dollar amounts include interest payments and contractual payments due until maturity without conversion to stock or early redemption for the remainder of the Company's Trust Preferred Debentures.

² Operating leases include renewals the Company considers reasonably certain to exercise.

Recently Issued Accounting Standards

Newly Adopted Accounting Standards

ASU No. 2016-02, “Leases.” Under the new guidance, lessees are required to recognize the following for all leases: 1) a lease liability, which is the present value of a lessee’s obligation to make lease payments, and 2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting under the new guidance remains largely unchanged as it is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. Leveraged leases have been eliminated, although lessors can continue to account for existing leveraged leases using the current accounting guidance. Other limited changes were made to align lessor accounting with the lessee accounting model and the new revenue recognition standard. All entities will classify leases to determine how to recognize lease-related revenue and expense. Quantitative and qualitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The intention is to require enough information to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities. ASU No. 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. All entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. As the Company elected the transition option provided in ASU No. 2018-11 (see below), the modified retrospective approach was applied on January 1, 2019. The Company also elected certain relief options offered in ASU 2016-02 including the package of practical expedients, however, the Company has chosen to continue to separate lease and non-lease components instead of accounting for them as a single lease component. The Company did not elect the hindsight practical expedient, which allows entities to use hindsight when determining lease term

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and impairment of right-of-use assets. The Company has several lease agreements, such as leases for branch locations, which are considered operating leases, and therefore, were not previously recognized on the Company’s consolidated statements of condition. The new guidance requires these lease agreements to be recognized on the consolidated statements of condition as a right-of-use asset and a corresponding lease liability. The new guidance did not have a material impact on the consolidated statements of income or the consolidated statements of cash flows. See Note 20 - "Leases" for more information.

ASU No. 2018-11, “Leases - Targeted Improvements” to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU No. 2016-02. Specifically, under the amendments in ASU 2018-11: (1) entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and (2) lessors may elect not to separate lease and non-lease components when certain conditions are met. The amendments have the same effective date as ASU 2016-02 (January 1, 2019 for the Company). The Company adopted ASU 2018-11 on its required effective date of January 1, 2019 and elected both transition options mentioned above. ASU 2018-11 did not have a material impact on the Company’s Consolidated Financial Statements.

ASU No. 2018-20, “Narrow-Scope Improvements for Lessors.” This ASU (1) allows lessors to make an accounting policy election of presenting sales taxes and other similar taxes collected from lessees on a net basis, (2) requires a lessor to exclude lessor costs paid directly by a lessee to third parties on the lessor’s behalf and include lessor costs that are paid by the lessor and reimbursed by the lessee in the measurement of variable lease revenue and the associated expense, and (3) clarifies that when lessors allocate variable payments to lease and non-lease components they are required to follow the recognition guidance in the new leases standard for the lease component and other applicable guidance, such as the new revenue standard, for the non-lease component. The Company adopted ASU 2018-20 on its required effective date of January 1, 2019 and its adoption did not have a material impact on the Company’s Consolidated Financial Statements.

ASU No. 2019-01, “Leases: Codification Improvements.” This ASU (1) states that for lessors that are not manufacturers or dealers, the fair value of the underlying asset is its cost, less any volume or trade discounts, as long as there is not a significant amount of time between acquisition of the asset and lease commencement; (2) clarifies that lessors in the scope of ASC 942 (such as the Company) must classify principal payments received from sales-type and direct financing leases in investing activities in the statement of cash flows; and (3) clarifies the transition guidance related to certain interim disclosures provided in the year of adoption. To coincide with the adoption of ASU No. 2016-02, the Company elected to early adopt ASU 2019-01 effective January 1, 2019. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.

ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments by making targeted improvements to GAAP as follows: (1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (2) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value; (3) eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (4) eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (5) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (6) require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (7) require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (8) clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The Company adopted ASU No. 2016-01 effective January 1, 2018, and recognized a cumulative-effect adjustment of $65,000 for the after-tax impact of the unrealized loss on equity securities. In addition, the Company measures the fair value of its loan portfolio using an exit price notion. Refer to Note 19 - "Fair Value".

ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium to require such premiums to be amortized to the earliest call date unless applicable guidance related to certain pools of securities is applied to consider estimated prepayments. Under prior guidance, entities were generally required to amortize premiums on

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individual, non-pooled callable debt securities as a yield adjustment over the contractual life of the security. ASU 2017-08 does not change the accounting for callable debt securities held at a discount. ASU 2017-08 became effective for us on January 1, 2019 and did not have a significant impact on the Company's Consolidated Financial Statements.

ASU 2017-12, “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 amends the hedge accounting recognition and presentation requirements in ASC 815 to improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities to better align the entity’s financial reporting for hedging relationships with those risk management activities and to reduce the complexity of and simplify the application of hedge accounting. ASU 2017-12 became effective for us on January 1, 2019 and did not have a significant impact on the Company's Consolidated Financial Statements.

ASU 2018-16, “Derivatives and Hedging (Topic 815) - Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.” The amendments in this update permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct U.S. Treasury obligations, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. ASU 2018-16 became effective for us on January 1, 2019 and did not have a significant impact on the Company's Consolidated Financial Statements.

ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” ASU 2019-04 makes clarifications and corrections to the application of the guidance contained in each of the amended topics. The following is not an all-inclusive listing of every Topic affected by ASU 2019-04, but focuses on those Topics related to Investments-Debt and Equity Securities. Regarding Topic 825, the amendments provide scope clarifications for Subtopics 320-10, Investments-Debt and Equity Securities-Overall, and 321-10, Investments-Equity Securities-Overall, held-to maturity debt securities fair value disclosures, and re-measurement of equity securities at historical exchange rates. The Company early adopted ASU 2019-04 on November 30, 2019. Since the Company had already adopted ASU 2016-01 and 2017-12, the related amendments are effective as of November 30, 2019. As part of the adoption, the Company reclassified $138.4 million aggregate amortized cost basis of debt securities held-to-maturity to debt securities available-for-sale. The Company did not reclassify debt securities from held-to-maturity to available-for-sale upon adoption of the amendments in ASU 2017-12. Refer to Note 2 - "Securities".

Accounting Standards Pending Adoption

ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective on January 1, 2020. Upon adoption in the first quarter of 2020, a cumulative effect adjustment for the change in the allowance for credit losses will be recognized in retained earnings.  The cumulative-effect adjustment to retained earnings, net of taxes, will be comprised of the impact to the allowance for credit losses on outstanding loans and leases and the impact to the liability for off-balance sheet commitments.

The Company has evaluated the guidance through a cross-functional committee with members from Finance, Accounting, Risk Management, Internal Audit, and Credit Administration, along with the engagement of a third party for model development and a third party for model validation.  Based on parallel modeling and testing performed in the third and fourth quarter of 2019, as well as implementation analysis utilizing existing exposures and forecasts of macroeconomic conditions as of year end, we currently expect that the adoption of ASU 2016-13 will result in an allowance for credit losses at January 1, 2020, in the range of $34.0 million to $39.0 million.  At December 31, 2019, our allowance for loan and lease losses totaled $39.9 million.  We are currently finalizing the execution of our implementation controls and processes, and the review of our most recent model run and assumptions, including qualitative adjustments and purchase credit deteriorated  loans. Due to these activities still being in a finalization stage, the ultimate impact of the adoption of ASU 2013-13, as of January 1, 2020, could differ from our current expectation.

ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for us on January 1, 2020. Tompkins is currently evaluating the potential impact of ASU 2017-04 on our consolidated financial statements.

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ASU 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 will be effective for us on January 1, 2020, and is not expected to have a significant impact on our consolidated financial statements.

ASU 2018-14, “Compensation - Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20).” ASU 2018-14 amends and modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. ASU 2018-14 will be effective for us on January 1, 2021, with early adoption permitted, and is not expected to have a significant impact on our consolidated financial statements.

ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 clarifies certain aspects of ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which was issued in April 2015. Specifically, ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 does not affect the accounting for the service element of a hosting arrangement that is a service contract. ASU 2018-15 will be effective for us on January 1, 2020. Tompkins is currently evaluating the potential impact of ASU 2018-15 on our consolidated financial statements.

ASU No 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. Tompkins is currently evaluating the potential impact of ASU 2019-12 on our consolidated financial statements.

Fourth Quarter Summary

Net income for the fourth quarter of 2019 was $21.1 million, up $2.2 million over the same period in 2018. Diluted earnings per share of $1.40 for the fourth quarter of 2019 were up from $1.23 in the fourth quarter of 2018.

Net interest income of $53.2 million for the fourth quarter of 2019 was unchanged from the same period in 2018. The net interest margin for the fourth quarter of 2019 was 3.44%, up slightly from the 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 mostly offset by lower funding costs.

Average deposits for the fourth quarter of 2019 increased $357.8 million, or 7.2% compared to the same period in 2018. Included in the growth of average deposits during 2019 was a $40.4 million increase in average noninterest bearing deposits, up 2.8% from the fourth quarter of 2018.

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. The fourth quarter provision expense in 2018 included a specific reserve of $3.5 million related to one large commercial real estate loan.

Noninterest income was $18.0 million for the fourth quarter of 2019, down $1.9 million or 9.5% compared to the same period in 2018. The decrease in noninterest income 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 related to the settlement of a large estate, as well as the collection of nonaccrual interest and fees associated with a loan that was previously charged off.

Noninterest expense was $45.9 million for the fourth quarter of 2019, down $1.3 million or 2.8% over the fourth quarter of 2018. Other expenses for the fourth quarter of 2019 decreased by $2.9 million from the same period in 2018. Of this decrease, $1.3 million represented a decrease in professional fees, primarily related to investments made in 2018 strengthening the Company’s compliance and information security infrastructure.

Income tax expense for the fourth quarter of 2019 was $5.2 million compared to $4.9 million for the fourth quarter of 2018. The Company's effective tax rate was 20.4% in the fourth quarter of 2019, compared to 20.9% for the same period in 2018.

61

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

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 Board-approved levels. The Committee also discusses 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 November 30, 2019, 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 of approximately 3.2% from the base case, while a 100 basis point parallel decline in interest rates over a one-year period would result in a one-year increase in net interest income of approximately 0.25% from the base case. The simulation assumes no balance sheet growth and no management action to address balance sheet mismatches.

The decrease in net interest income in the rising rate scenario is a result of the balance sheet showing a more liability sensitive position over a one year time horizon. As such, in the short-term 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. As intermediate and longer-term assets continue to reprice/adjust into higher rate environment and funding costs stabilize, net interest income is expected to trend upwards.

The down 100 basis point scenario increases net income slightly in the first year as a result of the Company's assets repricing downward to a lesser degree than the rates on the Company's interest-bearing liabilities, mainly deposits and overnight borrowings. Rates on savings and money market accounts have moved up slightly from historically low levels, allowing for some interest expense relief in the first year of a declining rate scenario. In addition, the model assumes that prepayments accelerate in the down interest rate environment resulting in additional pressure on asset yields as proceeds are reinvested at lower rates.

The most recent simulation of a base case scenario, which assumes interest rates remain unchanged from the date of the simulation, reflects a net interest margin that is stable to higher over the next 12 to 18 months.

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 its 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. Table 9-Interest Rate Risk Analysis below is a Condensed Static Gap Report, which illustrates the anticipated repricing intervals of assets and liabilities as of December 31, 2019. The Company’s one-year interest rate gap was a negative $173.6 million or 2.58% of total assets at December 31, 2019, compared with a negative $897.7 million or 13.3% of total assets at December 31, 2018. The change from year-end 2018 to year-end 2019 is mainly due to deposit growth and the resulting decrease in overnight borrowings with the FHLB. 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 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.

62

Table 9 - Interest Rate Risk Analysis

Condensed Static Gap - December 31, 2019
(In thousands)	Total		0-3 months			3-6 months			6-12 months			12 months
Interest-earning assets1	$	6,246,457	$	1,256,500		$	351,806		$	612,716		$	2,221,022
Interest-bearing liabilities	4,491,182		1,967,200			144,863			282,567			2,394,630
Net gap position			(710,700		)	206,943			330,149			(173,608		)
Net gap position as a percentage of total assets			(10.57		)%	3.08		%	4.91		%	(2.58		)%

¹Balances of available-for-sale securities are shown at amortized cost.

63

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64

Item 8. Financial Statements and Supplementary Data

Financial Statements and Supplementary Data consist of the consolidated financial statements as indexed and presented below and the Unaudited Quarterly Financial Data presented in Part II, Item 8. of this Report.

Index to Financial Statements	Page
Management’s Statement of Responsibility	66
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	67
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements	68
Consolidated Statements of Condition – December 31, 2019 and 2018	70
Consolidated Statements of Income – Years ended December 31, 2019, 2018 and 2017	71
Consolidated Statements of Comprehensive Income – Years ended December 31, 2019, 2018 and 2017	72
Consolidated Statements of Cash Flows – Years ended December 31, 2019, 2018 and 2017	73
Consolidated Statements of Changes in Shareholders’ Equity – Years ended December 31, 2019, 2018 and 2017	75
Notes to Consolidated Financial Statements	77
Unaudited Quarterly Financial Data	137

65

Management’s Statement of Responsibility

Management is responsible for preparation of the consolidated financial statements and related financial information contained in all sections of this annual report, including the determination of amounts that must necessarily be based on judgments and estimates. It is the belief of management that the consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

Management establishes and monitors the Company’s system of internal accounting controls to meet its responsibility for reliable financial statements. The system is designed to provide reasonable assurance that assets are safeguarded, and that transactions are executed in accordance with management’s authorization and are properly recorded.

The Audit/Examining Committee of the board of directors, composed solely of outside directors, meets periodically and privately with management, internal auditors, and the independent registered public accounting firm, KPMG LLP, to review matters relating to the quality of financial reporting, internal accounting control, and the nature, extent, and results of audit efforts. The independent registered public accounting firm and internal auditors have unlimited access to the Audit/Examining Committee to discuss all such matters. The consolidated financial statements have been audited by KPMG LLP for the purpose of expressing an opinion on the consolidated financial statements. In addition, KPMG LLP has audited internal control over financial reporting, as of December 31, 2019.

/s/ Stephen S. Romaine	/s/ Francis M. Fetsko	Date:	March 2, 2020
Stephen S. Romaine	Francis M. Fetsko
Chief Executive Officer	Chief Financial Officer
	Chief Operating Officer

66

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Tompkins Financial Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Tompkins Financial Corporation and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of condition of the Company as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements), and our report dated March 2, 2020 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Albany, New York

March 2, 2020

67

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Tompkins Financial Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of condition of Tompkins Financial Corporation and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the years in the three‑year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 2, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of the allowance for originated loan losses related to loans collectively evaluated for impairment

As discussed in Notes 1 and 4 to the consolidated financial statements, the Company’s allowance for originated loan losses related to loans collectively evaluated for impairment (ALLL) was $38.9 million of a total allowance for loan losses of $39.8 million as of December 31, 2019. The ALLL estimate consists of the following components: criticized and classified credits, historical loss experience and qualitative/subjective analysis. The criticized and classified credits component of the ALLL is estimated based upon loss factors assigned by internal risk ratings for commercial loans. The historical loss experience component of the ALLL is estimated using a historical loss methodology based on pooling of loans with similar risk characteristics, including internal risk ratings for commercial loans, the historical loss experience, look-back period, and loss emergence periods. The qualitative/subjective analysis component includes qualitative factors when internal and external factors are identified that are not taken into account by the criticized and classified credits and historical loss experience components of the ALLL.

68

We identified the assessment of the ALLL as a critical audit matter because of the complex and subjective auditor judgment that was involved. Specifically, complex and subjective auditor judgment was required to assess the (1) methodologies for the criticized and classified credits and historical loss experience components of the ALLL, (2) key factors and assumptions, including look-back period, loss emergence periods, and internal risk ratings assigned to commercial loans, and (3) development and evaluation of qualitative factors.

The primary procedures we performed to address the critical audit matter included the following. We tested certain internal controls over the Company’s ALLL process, including controls related to the (1) development of the methodologies including key factors and assumptions, (2) determination of the qualitative factors, and (3) periodic testing of commercial loan internal risk ratings. We tested the relevance of sources of internal and external data and key factors and assumptions, including the look-back period, by evaluating the sufficiency of loss data within the look-back period. We assessed the appropriateness of the loss emergence period assumptions by considering the Company’s credit risk policies and testing observable loss data. We tested the qualitative/subjective analysis component and related qualitative factors by:

– evaluating the relevance of peer group and industry proxy loss data and sources of data and assumptions used to allocate the qualitative factors,

– evaluating fluctuations over the look-back period in criticized and classified loans and basis points applied for the qualitative factors by loan segment,

– analyzing the determination of each qualitative factor and corresponding allowance based on management’s qualitative framework process, basis point adjustment, and supporting documentation, and

– evaluating trends in the ALLL, including the qualitative factors, for consistency with trends in loan portfolio growth and credit performance.

We involved credit risk professionals with specialized industry knowledge and experience, who assisted in evaluating the:

– Company’s ALLL methodology for compliance with U.S. generally accepted accounting principles,

– length of the look-back period assumption,

– methodology used to develop the loss emergence periods,

– internal risk ratings for commercial loans,

– analysis used to develop the resulting qualitative factors and the effect of those factors on the ALLL compared with relevant credit risk factors and credit trends,

– maximum qualitative factor adjustment by considering the stability of the loss emergence period based on consistency in historic loss experience, and

– allocation of the maximum qualitative factor adjustment to each qualitative factor based on consideration of which factors are more relevant in driving losses, and changes in weightings year-over-year.

/s/ KPMG LLP

We have served as the Company's auditor since 1995.

Albany, New York

March 2, 2020

69

TOMPKINS FINANCIAL CORPORATION

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 $915 at December 31, 2019 and $887 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

 See notes to consolidated financial statements. 

70

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

	Year ended December 31,
(In thousands, except per share data)	2019		2018			2017
INTEREST AND DIVIDEND INCOME
Loans	$	226,723	$	214,370		$	191,410
Due from banks	41		31			37
Available-for-sale securities	28,460		30,377			29,721
Held-to-maturity securities	3,151		3,437			3,475
Federal Home Loan Bank stock and Federal Reserve Bank stock	3,003		3,377			2,121
Total Interest and Dividend Income	261,378		251,592			226,764
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	3,095		1,712			1,880
Other deposits	27,809		14,883			10,253
Federal funds purchased and securities sold under agreements to repurchase	143		152			235
Trust preferred debentures	1,276		1,227			1,158
Other borrowings	18,427		21,818			11,934
Total Interest Expense	50,750		39,792			25,460
Net Interest Income	210,628		211,800			201,304
Less: Provision for loan and lease losses	1,366		3,942			4,161
Net Interest Income After Provision for Loan and Lease Losses	209,262		207,858			197,143
NONINTEREST INCOME
Insurance commissions and fees	31,091		29,369			28,778
Investment services income	16,434		17,288			15,665
Service charges on deposit accounts	8,321		8,435			8,437
Card services income	10,526		9,693			9,100
Other income	8,416		13,130			7,631
Net gain (loss) on securities transactions	645		(466		)	(407		)
Total Noninterest Income	75,433		77,449			69,204
NONINTEREST EXPENSES
Salaries and wages	89,399		85,625			81,948
Other employee benefits	23,488		22,090			21,458
Net occupancy expense of premises	13,210		13,309			13,214
Furniture and fixture expense	7,815		7,351			7,028
Amortization of intangible assets	1,673		1,771			1,932
Other operating expenses	46,249		50,921			45,525
Total Noninterest Expenses	181,834		181,067			171,105
Income Before Income Tax Expense	102,861		104,240			95,242
Income Tax Expense	21,016		21,805			42,620
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	81,845		82,435			52,622
Less: Net income attributable to noncontrolling interests	127		127			128
Net Income Attributable to Tompkins Financial Corporation	$	81,718	$	82,308		$	52,494
Basic Earnings Per Share	$	5.39	$	5.39		$	3.46
Diluted Earnings Per Share	$	5.37	$	5.35		$	3.43

See notes to consolidated financial statements.

71

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year ended December 31,
(In thousands)	2019			2018			2017
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$	81,845		$	82,435		$	52,622
Other comprehensive income (loss), net of tax:
Available-for-sale securities:
Change in net unrealized gain (loss) during the period	25,241			(10,981		)	(2,681		)
Unrealized gains on HTM securities transferred to AFS securities	2,852			0			0
Reclassification adjustment for net realized (gain) loss on sale included in available-for-sale securities	(465		)	332			244
Employee benefit plans:
Net retirement plan loss	(7,642		)	(2,594		)	(3,434		)
Net actuarial gain due to curtailment	(302		)	0			0
Net retirement plan prior service (credit) cost	(1,373		)	0			728
Amortization of net retirement plan actuarial gain	1,266			1,298			905
Amortization of net retirement plan prior service cost	24			11			9
Other comprehensive income (loss)	19,601			(11,934		)	(4,229		)
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation	101,446			70,501			48,393
Less: Total comprehensive income attributable to noncontrolling interests	(127		)	(127		)	(128		)
Total comprehensive income attributable to Tompkins Financial Corporation	$	101,319		$	70,374		$	48,265

See notes to consolidated financial statements.

72

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended December 31,
(In thousands)	2019			2018			2017
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$	81,718		$	82,308		$	52,494
Adjustments to reconcile net income attributable to Tompkins Financial Corporation, to net cash provided by operating activities:
Provision for loan and lease losses	1,366			3,942			4,161
Depreciation and amortization of premises, equipment, and software	10,044			9,554			8,269
Accretion related to purchase accounting	(1,448		)	(1,948		)	(2,978		)
Amortization of intangible assets	1,673			1,771			1,932
Earnings from corporate owned life insurance, net	(2,164		)	(1,818		)	(2,196		)
Net amortization on securities	7,435			8,816			10,483
Deferred income tax expense	3,073			2,354			14,598
Net (gain) loss on sale of securities transactions	(645		)	466			407
Net gain on sale of loans	(227		)	(458		)	(50		)
Proceeds from sale of loans	17,122			28,195			4,601
Loans originated for sale	(15,007		)	(30,151		)	(4,831		)
Net gain on sale of bank premises and equipment	(98		)	(2,946		)	(30		)
Net excess tax benefit from stock based compensation	944			680			1,635
Stock-based compensation expense	4,235			3,477			2,956
Increase (decrease) in interest receivable	1,629			(800		)	(2,731		)
Increase in accrued interest payable	78			355			152
Contribution to pension plan	0			0			(1,750		)
Other, net	(8,113		)	3,468			(1,057		)
Net Cash Provided by Operating Activities	101,615			107,265			86,065
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale securities	302,978			151,053			166,625
Proceeds from sales of available-for-sale securities	232,598			70,652			64,106
Proceeds from maturities, calls and principal paydowns of held-to-maturity securities	9,588			6,729			8,068
Purchases of available-for-sale securities	(333,151		)	(185,467		)	(208,502		)
Purchases of held-to-maturity securities	(7,589		)	(8,492		)	(5,556		)
Net increase in loans and leases	(89,582		)	(161,760		)	(411,770		)
Net increase in Federal Home Loan Bank stock	18,567			(1,764		)	(7,365		)
Proceeds from sale of bank premises and equipment	448			3,317			157
Purchases of bank premises, equipment and software	(6,014		)	(18,084		)	(35,290		)
Redemption of corporate owned life insurance	1,370			0			0
Net cash used in acquisitions	(436		)	0			0
Other, net	5,209			216			2,576
Net Cash Provided by (Used in) Investing Activities	133,986			(143,600		)	(426,951		)
FINANCING ACTIVITIES
Net increase in demand, money market, and savings deposits	286,243			162,107			335,207
Net increase (decrease) in time deposits	38,591			(109,732		)	(121,459		)
Net (decrease) increase in securities sold under agreements to repurchase and Federal funds purchased	(21,496		)	6,665			6,115
Increase in other borrowings	526,853			524,492			750,918
Redemption of trust preferred debentures	0			0			(21,161		)
Repayment of other borrowings	(944,828		)	(520,159		)	(563,991		)
Net shares issued related to restricted stock awards	(1,875		)	(1,403		)	(1,294		)
Cash dividends	(30,637		)	(29,634		)	(27,627		)
Repurchase of common stock	(29,867		)	(2,448		)	0
Shares issued for dividend reinvestment plan	0			0			2,872
Shares issued for employee stock ownership plan	0			3,073			2,296
Net proceeds from exercise of stock options	(992		)	(540		)	(641		)
Net Cash Provided by (Used in) Financing Activities	(178,008		)	32,421			361,235
Net Increase (Decrease) Cash and Cash Equivalents	57,593			(3,914		)	20,349
Cash and cash equivalents at beginning of year	80,389			84,303			63,954
Total Cash & Cash Equivalents at End of Year	$	137,982		$	80,389		$	84,303

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TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Supplemental Cash Flow Information

	Year ended December 31,
(In thousands)	2019		2018		2017
Cash paid during the year for - Interest	$	51,545	$	40,660	$	26,387
Cash paid, net of refunds, during the year for - Income taxes	16,727		16,949		31,011
Non-cash investing and financing activities:
Transfer of loans to other real estate owned	803		518		2,886
Transfer of securities from held-to-maturity to available-for-sale	138,206		0		0

See notes to consolidated financial statements.

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TOMPKINS FINANCIAL CORPORATION  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(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 December 31, 2016	$	1,517		$	357,414		$	230,182		$	(37,109	)	$	(4,051	)	$	1,452		$	549,405
Reclassification due to the adoption of ASU No. 2018-02							9,958			(9,958		)							0
Net income attributable to noncontrolling interests and Tompkins Financial Corporation							52,494									128			52,622
Other comprehensive loss										(4,229		)							(4,229		)
Total Comprehensive Income																			48,393
Cash dividends ($1.82 per share)							(27,627		)										(27,627		)
Net exercise of stock options (22,277 shares, net)	2			(643		)													(641		)
Stock-based compensation expense				2,956															2,956
Shares issued for dividend reinvestment plan (34,750 shares)	4			2,868															2,872
Shares issued for employee stock ownership plan (27,412 shares)	3			2,293															2,296
Directors deferred compensation plan (2,808 shares)				441									(441		)				0
Restricted stock activity (45,269 shares)	4			(1,298		)													(1,294		)
Partial repurchase of noncontrolling interest																(30		)	(30		)
Dividend to noncontrolling interests																(128		)	(128		)
Balances at December 31, 2017	$	1,530		$	364,031		$	265,007		$	(51,296	)	$	(4,492	)	$	1,422		$	576,202
Net income attributable to noncontrolling interests and Tompkins Financial Corporation							82,308									127			82,435
Other comprehensive loss										(11,934		)							(11,934		)
Total Comprehensive Income																			70,501
Cash dividends ($1.94 per share)							(29,634		)										(29,634		)
Net exercise of stock options (10,786 shares)	1			(541		)													(540		)
Common stock repurchased and returned to unissued status (32,483 shares)	(3		)	(2,445		)													(2,448		)
Stock-based compensation expense				3,477															3,477
Shares issued for employee stock ownership plan (38,883 shares)	4			3,069															3,073
Directors deferred compensation plan (1,422 shares)				410									(410		)				0
Restricted stock activity (29,577 shares)	3			(1,406		)													(1,403		)
Adoption of Accounting Guidance ASU 2016-01							(65		)	65									0
Adoption of Accounting Guidance ASU 2014-09							1,780												1,780
Partial repurchase of noncontrolling interest																(10		)	(10		)
Dividend to noncontrolling interests																(127		)	(127		)
Balances at December 31, 2018	$	1,535		$	366,595		$	319,396		$	(63,165	)	$	(4,902	)	$	1,412		$	620,871

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TOMPKINS FINANCIAL CORPORATION  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)
(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 December 31, 2018	$	1,535		$	366,595		$	319,396		$	(63,165	)	$	(4,902	)	$	1,412		$	620,871
Net income attributable to noncontrolling interests and Tompkins Financial Corporation							81,718									127			81,845
Other comprehensive income										19,601									19,601
Total Comprehensive Income																			101,446
Cash dividends ($2.02 per share)							(30,637		)										(30,637		)
Net exercise of stock options (18,053 shares)	2			(994		)													(992		)
Common stock repurchased and returned to unissued status (376,021 shares)	(38		)	(29,829		)													(29,867		)
Stock-based compensation expense				4,235															4,235
Directors deferred compensation plan (1,729 shares)				377									(377		)				0
Restricted stock activity (24,180 shares)	2			(1,877		)													(1,875		)
Dividend to noncontrolling interests																(127		)	(127		)
Balances at December 31, 2019	$	1,501		$	338,507		$	370,477		$	(43,564	)	$	(5,279	)	$	1,412		$	663,054

See notes to consolidated financial statements.

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Note 1 Summary of Significant Accounting Policies

Basis Of Presentation

Tompkins Financial Corporation (“Tompkins” or “the Company”) is a registered Financial Holding Company with the Federal Reserve Board pursuant to the Bank Holding Company Act of 1956, as amended, organized under the laws of New York State, and is the parent company of Tompkins Trust Company (the “Trust Company”), The Bank of Castile, Mahopac Bank, VIST Bank, and Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). The Trust Company provides a full array of trust and investment services under the Tompkins Financial Advisors brand. Unless the context otherwise requires, the term “Company” refers to Tompkins Financial Corporation and its subsidiaries.

The consolidated financial information included herein combines the results of operations, the assets, liabilities, and shareholders’ equity (including comprehensive income or loss) of the Company and all entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions are eliminated in consolidation.

The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity under U.S. accounting principles generally accepted. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. The Company consolidates voting interest entities in which it has all, or at least a majority of, the voting interest. As defined in applicable accounting standards, variable interest entities (VIEs) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when the Company has both the power and ability to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Three of the Company’s wholly owned subsidiaries, Sleepy Hollow Capital Trust I, Leesport Capital Trust II, and Madison Statutory Trust I, are VIE’s for which the Company is not the primary beneficiary. Accordingly, the accounts of these entities are not included in the Company’s consolidated financial statements.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclose contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for loan and lease losses, valuation of goodwill and intangible assets, deferred income tax assets, other-than-temporary impairment on investments, and obligations related to employee benefits. Amounts in the prior years’ consolidated financial statements are reclassified when necessary to conform to the current year’s presentation.

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.

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

Cash and Cash Equivalents

Cash and cash equivalents in the Consolidated Statements of Cash Flows include cash and noninterest bearing balances due from banks, interest-bearing balances due from banks, Federal funds sold, 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. Each bank subsidiary is required to maintain reserve balances by the Federal Reserve Bank. At December 31, 2019, and December 31, 2018, the reserve requirements for the Company’s banking subsidiaries totaled $9.5 million and $6.6 million, respectively. The year-over-year increase in the banking subsidiaries' reserves are directly related to the increase in deposits in 2019 compared to 2018.

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Securities

Management determines the appropriate classification of debt and equity securities at the time of purchase. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Debt securities not classified as held-to-maturity and marketable equity securities are classified as either available-for-sale or trading. Available-for-sale securities are stated at fair value with the unrealized gains and losses, net of tax, excluded from earnings and reported as a separate component of accumulated comprehensive income or loss, in shareholders’ equity. Trading securities are stated at fair value, with unrealized gains or losses included in earnings.

Beginning January 1, 2018, upon adoption of ASU 2016-01, equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. For periods prior to January 1, 2018, equity securities were classified as available-for-sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax. Securities with limited marketability or restricted equity securities, such as Federal Home Loan Bank stock and Federal Reserve Bank stock, are carried at cost, less any impairment, if any. At adoption of ASU 2016-01, the Company recognized a cumulative-effect adjustment of $65,000 for the after-tax impact of the unrealized loss on equity securities.

Premiums and discounts are amortized or accreted over the expected life of the related security as an adjustment to yield using the interest method. Dividend and interest income are recognized when earned. Realized gains and losses on the sale of securities are included in net gain (loss) on securities transactions. The cost of securities sold is based on the specific identification method.

At least quarterly, 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. A debt security is considered impaired if the fair value is less than its amortized cost basis 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.

Loans and Leases

Loans are reported at their principal outstanding balance, net of deferred loan origination fees and costs, and unearned income. The Company has the ability and intent to hold its loans for the foreseeable future, except for certain residential real estate loans held-for-sale. The Company provides motor vehicle and equipment financing to its customers through direct financing leases. These leases are carried at the aggregate of lease payments receivable, plus estimated residual values, less unearned income. Unearned income on direct financing leases is amortized over the lease terms, resulting in a level rate of return.

Residential real estate loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value. Fair value is determined on the basis of the rates quoted in the secondary market. Net unrealized losses attributable to changes in market interest rates are recognized through a valuation allowance by charges to income. Loans are generally sold on a non-recourse basis with servicing retained. Any gain or loss on the sale of loans is recognized at the time of sale as the difference between the recorded basis in the loan and the net proceeds from the sale. The Company may use commitments at the time loans are originated or identified for sale to mitigate interest rate risk. The commitments to sell loans and the commitments to originate loans held-for-sale at a set interest rate, if originated, are considered derivatives under ASC Topic 815. The impact of the estimated fair value adjustment was not significant to the consolidated financial statements.

Interest income on loans is accrued and credited to income based upon the principal amount outstanding. Loan origination fees and costs are deferred and recognized over the life of the loan as an adjustment to yield. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans and leases, including impaired loans, are generally classified as nonaccrual if they are past due as to maturity or payment of principal or interest for a period of more than 90 days, unless such loans are well secured and in the process of collection. Loans that are past due less than 90 days may also be classified as nonaccrual if repayment in full of principal or interest is in doubt.

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Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within an acceptable time period, and there is a sustained period (generally six consecutive months) of repayment performance by the borrower in accordance with the contractual terms of the loan agreement. 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.

The Company applies the provisions of ASC Topic 310-10-35, Loan Impairment, to all impaired commercial and commercial real estate loans over $250,000 and to all loans restructured in a troubled debt restructuring. Allowances for loan losses for the remaining loans are recognized in accordance with ASC Topic 450, Contingencies (“ASC Topic 450”). Management considers a loan to be impaired if, based on current information, it is probable that the Company will be unable to collect all scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. When a loan is considered to be impaired, the amount of the impairment is measured based on the present value of expected future cash flows discounted at the effective interest rate of the loan or, as a practical expedient, at the observable market price or the fair value of collateral (less costs to sell) if the loan is collateral dependent. Management excludes large groups of smaller balance homogeneous loans such as residential mortgages, consumer loans, and leases, which are collectively evaluated.

Loans are considered modified in a troubled debt restructuring (“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 and interest caught up over the remaining term of the loan or at maturity. Generally, a nonaccrual loan that has been modified in a TDR remains on non-accrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status.

In general, the principal balance of a loan is charged off in full or in part when management concludes, based on the available facts and circumstances, that collection of principal in full is not probable. For commercial and commercial real estate loans, this conclusion is generally based upon a review of the borrower’s financial condition and cash flow, payment history, economic conditions, and the conditions in the various markets in which the collateral, if any, may be liquidated. In general, consumer loans are charged-off in accordance with regulatory guidelines which provide that such loans be charged-off when the Company becomes aware of the loss, such as from a triggering event that may include new information about a borrower’s intent/ability to repay the loan, bankruptcy, fraud or death, among other things, but in no case will the charge-off exceed specified delinquency timeframes. Such delinquency timeframes state that closed-end retail loans (loans with pre-defined maturity dates, such as real estate mortgages, home equity loans and consumer installment loans) that become past due 120 cumulative days and open-end retail loans (loans that roll-over at the end of each term, such as home equity lines of credit) that become past due 180 cumulative days should be classified as a loss and charged-off. For residential real estate loans, charge-off decisions are based upon past due status, current assessment of collateral value, and general market conditions in the areas where the properties are located.

Acquired Loans and Leases

Loans acquired in acquisitions, subsequent to the effective date of ASC Topic 805, Business Combination, are recorded at fair value and subsequently accounted for in accordance with ASC Topic 310, and there is no carryover of the related allowance for loan and lease losses. Loans acquired with evidence of credit impairment are accounted for under ASC Subtopic 310-30. These loans may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. In the VIST acquisition, 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, while decreases in expected cash flows are recognized as impairment through a loss provision and an increase in 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).

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Acquired loans not exhibiting evidence of credit impairment at the time of acquisition are accounted for under ASC Subtopic 310-20. The Company amortizes/accretes into interest income the premium/discount determined at the date of purchase over the life of the loan on a level yield basis. Subsequent to the acquisition date, the methods used to estimate the appropriate allowance for loan losses are similar to originated loans. These loans are placed on nonaccrual status in accordance with the Company’s policy for originated loans.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon 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. The Company determined at acquisition that it could reasonably estimate future cash flows on acquired loans that were past due 90 days or more and on which the Company expects to fully collect the carrying value of the loans net of the allowance for acquired loan losses. As such, the Company does not consider these loans to be nonaccrual or nonperforming.

Allowance For Loan and Lease Losses

The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan and lease 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 model is comprised of four major components that management has deemed appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at a reserve level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The components include: impaired loans; criticized and classified credits; historical loss experience; and qualitative or subjective analysis. For impaired loans, an allowance is recognized if the fair value of the loan is less than the recorded investment in the loan (recorded investment in the loan is the principal balance plus any accrued interest, net of deferred loan fees or costs and unamortized premium or discount). A loan’s fair value reflects the present value of expected future cash flows discounted at the loan’s effective interest rate, or if the loan is collateral dependent, the fair value of the collateral, less estimated disposal costs. If the loan is collateral dependent, the principal balance of the loan is charged-off in an amount equal to the impairment measurement. The fair value of collateral dependent loans is derived primarily from collateral appraisals performed by independent third-party appraisers. For loans that are not impaired, but are rated special mention or worse, management evaluates credits based on elevated risk characteristics and assigns reserves based upon analysis of historical loss experience of loans with similar risk characteristics. For loans that are not impaired or reviewed individually, management assigns a reserve based upon historical loss experience over a designated look-back period. Management has evaluated a variety of look-back periods and has determined that an eight year look back period is appropriate to capture a full range of economic cycles. Management has also evaluated a variety of statistical methods in analyzing loss history, including averages, weighted averages and loss emergence periods and has determined that by applying a loss emergence period analysis to historical losses over a full economic cycle has resulted in a reasonable estimate of losses inherent in the loan portfolio. The model also includes an analysis of a variety of subjective factors to support the reserve estimate. These subjective factors may include allowance allocations for risks that may not otherwise be fully recognized in other components of the model. Among the subjective factors that are routinely considered as part of this analysis are: growth trends in the portfolio, changes in management and/or polices related to lending activities, trends in classified or nonaccrual loans, concentrations of credit, local and national economic trends, and industry trends.

Periodically, management conducts an analysis to estimate the loss emergence period for various loan categories based on samples of historical charge-offs. Model output by loan category is reviewed to evaluate the reasonableness of the reserve levels in comparison to the estimated loss emergence period applied to historical loss experience.

In addition to the components discussed above, management reviews the model output for reasonableness by analyzing the results in comparisons to recent trends in the loan/lease portfolio, through back-testing of results from prior models in comparison to actual loss history, and by comparing our reserves and loss history to industry peer results.

The model results are reviewed by management at the Corporate Credit Policy Committee and presented to the Board of Directors. Additionally, on an annual basis, management conducts a validation process of the model. This validation includes reviewing the appropriateness of model calculations, back testing of model results and appropriateness of key assumptions used in the model. In addition, various Federal and State regulatory agencies, as part of their examination process, review the Company’s allowance and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

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For acquired credit impaired loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC Topic 310-30”), the Company’s allowance for loan and lease 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.

For acquired non-credit impaired loans accounted for under FASB ASC Topic 310-20, Nonrefundable Fees and Other Costs, (“ASC Topic 310-20”), the Company’s allowance for loan and lease losses is maintained through provisions for loan 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.

Premises and Equipment

Land is carried at cost. Premises and equipment are stated at cost, less allowances for depreciation. The provision for depreciation for financial reporting purposes is computed generally by the straight-line method at rates sufficient to write-off the cost of such assets over their estimated useful lives. Buildings are amortized over a period of 10-39 years, and furniture, fixtures, and equipment are amortized over a period of 2-20 years. Leasehold improvements are generally depreciated over the lesser of the lease term or the estimated lives of the improvements. Maintenance and repairs are charged to expense as incurred. Gains or losses on disposition are reflected in earnings.

Other Real Estate Owned

Other real estate owned consists of properties formerly pledged as collateral to loans, which have been acquired by the Company through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Upon transfer of a loan to foreclosure status, an appraisal is generally obtained and any excess of the loan balance over the fair value, less estimated costs to sell, is charged against the allowance for loan/lease losses. Expenses and subsequent adjustments to the fair value are treated as other operating expense.

Goodwill

Goodwill represents the excess of purchase price over the fair value of assets acquired in a transaction using purchase accounting. Goodwill has an indefinite useful life and is not amortized, but is tested for impairment. Goodwill impairment tests are performed on an annual basis or when events or circumstances dictate. The Company tests goodwill annually as of December 31^st. The Company has the option to perform a qualitative assessment of goodwill, which considers company-specific and economic characteristics that might impact its carrying value. If based on this qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative test (Step 1) is performed, which compares the fair value of the reporting unit to the carrying amount of the reporting unit in order to identify potential impairment. If the estimated fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired. However, if the carrying amount of the reporting unit were to exceed its estimated fair value, a second step (Step 2) would be performed that would compare the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill for the reporting unit. The implied fair value of goodwill is determined in the same manner as goodwill that is recognized in a business combination. Significant judgment and estimates are involved in estimating the fair value of the assets and liabilities of the reporting units.

Other Intangible Assets

Other intangible assets include core deposit intangibles, customer related intangibles, covenants not to compete, and mortgage servicing rights. Core deposit intangibles represent a premium paid to acquire a base of stable, low cost deposits in the acquisition of a bank, or a bank branch, using purchase accounting. The amortization period for core deposit intangible ranges from 5 to 10 years, using an accelerated method. The covenants not to compete are amortized on a straight-line basis over 3 to 6 years, while customer related intangibles are amortized on an accelerated basis over a range of 6 to 15 years. The amortization period is monitored to determine if circumstances require such periods to be revised. The Company periodically reviews its intangible assets for changes in circumstances that may indicate the carrying amount of the asset is impaired. The Company tests its intangible assets for impairment on an annual basis or more frequently if conditions indicate that an impairment loss has more likely than not been incurred.

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Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes are reviewed quarterly and reduced by a valuation allowance if, based upon the information available, it is more likely than not that some or all of the deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that all of the deferred tax assets will be realized. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income.

Tax Credit Investments

The Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under that method, the Company 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. As of December 31, 2019 and 2018, the Company's remaining investment in qualified affordable housing projects, net of amortization totaled $485,000 and $1.0 million, respectively.

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase (repurchase agreements) are agreements in which the Company transfers the underlying securities to a third-party custodian’s account that explicitly recognizes the Company’s interest in the securities. The agreements are accounted for as secured financing transactions provided the Company maintains effective control over the transferred securities and meets other criteria as specified in FASB ASC Topic 860, Transfers and Servicing (“ASC Topic 860”). The Company’s agreements are accounted for as secured financings; accordingly, the transaction proceeds are reflected as liabilities and the securities underlying the agreements continue to be carried in the Company’s securities portfolio.

Treasury Stock

The cost of treasury stock is shown on the Consolidated Statements of Condition as a separate component of shareholders’ equity, and is a reduction to total shareholders’ equity. Shares are released from treasury at fair value, identified on an average cost basis.

Trust and Investment Services

Assets held in fiduciary or agency capacities for customers are not included in the accompanying Consolidated Statements of Condition, since such items are not assets of the Company. Fees associated with providing trust and investment services are included in noninterest income.

Earnings Per Share

Basic earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year, exclusive of shares represented by the unvested portion of restricted stock and restricted stock units. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year plus the dilutive effect of the unvested portion of restricted stock and restricted stock units and stock issuable upon conversion of common stock equivalents (primarily stock options) or certain other contingencies. The Company currently uses authoritative accounting guidance under ASC Topic 260, Earnings Per Share, which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company issues stock-based compensation awards that included restricted stock awards that contain such rights.

Segment Reporting

The Company manages its operations through three reportable business segments in accordance with the standards set forth in FASB ASC Topic 280, “Segment Reporting”. The three segments are: (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 are managed separately from the Bank. Additional information on the segments is presented in Note 23- “Segment and Related Information.”

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Comprehensive Income (Loss)

For the Company, comprehensive income (loss) represents net income plus the net change in unrealized gains or losses on securities available-for-sale for the period (net of taxes), and the actuarial gain or loss and amortization of unrealized amounts in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan (net of taxes), and is presented in the Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Changes in Shareholders’ Equity. Accumulated other comprehensive income (loss) represents the net unrealized gains or losses on securities available-for-sale (net of tax) and unrecognized net actuarial gain or loss, unrecognized prior service costs, and unrecognized net initial obligation (net of tax) in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan.

Pension and Other Employee Benefits

The Company maintains noncontributory defined-benefit and defined contribution plans, which cover substantially all employees of the Company. In addition, the Company also maintains supplemental employee retirement plans for certain executives and a post-retirement life and healthcare plan. These plans are discussed in detail in Note 11 “Employee Benefit Plans”. The Company incurs certain employment-related expenses associated with these plans. In order to measure the expense associated with these plans, various assumptions are made including the discount rate used to value certain liabilities, expected return on plan assets, anticipated mortality rates, and expected future healthcare costs. The assumptions are based on historical experience as well as current facts and circumstances. A third-party actuarial firm is used to assist management in measuring the expense and liability associated with the plans. The Company uses a December 31 measurement date for its plans. As of the measurement date, plan assets are determined based on fair value, generally representing observable market prices. The projected benefit obligation is primarily determined based on the present value of projected benefit distributions at an assumed discount rate.

The expenses associated with these plans are charged to current operating expenses. The Company recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in the Company’s consolidated statements of condition, and recognizes changes in the funded status of these plans in comprehensive income, net of applicable taxes, in the year in which the change occurred.

Fair Value Measurements

The Company accounts for the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”), for financial assets and financial liabilities. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. See Note 19 “Fair Value Measurements”.

In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among others.

Revenue Recognition

Tompkins adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) as of January 1, 2018 using the modified retrospective method for all contracts. Results for reporting periods beginning January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition. The Company recorded a net increase to beginning retained earnings of $1.8 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact on beginning retained earnings was primarily driven by the recognition of $1.8 million of contingency income related to our insurance business segment. Under ASU 2014-09, effective January 1, 2018, the Company adopted new policies related to revenue recognition. In general, for revenue not associated with financial instruments, guarantees and lease contracts, the Company applies the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when a performance obligation is satisfied. Tompkins' contracts with customers are generally short term in nature, typically due within one year or less or cancellable by the Company or the Company's customer upon a short notice period. Performance obligations for the Company's customer contracts are generally satisfied at a single point in time, typically when the transaction is complete, or over time. For performance obligations satisfied over time, Tompkins primarily uses the output method, directly measuring the value of the products/services transferred to the customer, to determine when performance obligations have been satisfied. The Company typically receives payment from customers and recognizes revenue concurrent with the satisfaction of the Company's performance obligations. In most cases, this occurs within a single financial reporting period. For payments received in advance of the satisfaction of performance obligations, revenue recognition is deferred until such time as the performance obligations have been satisfied. In cases where the Company has not received payment despite satisfaction of the Company's performance obligations, the Company

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accrues an estimate of the amount due in the period the Company's performance obligations have been satisfied. For contracts with variable components, only amounts for which collection is probable are accrued. The Company generally acts in a principal capacity, on the Company's own behalf, in most of the Company's contracts with customers. In such transactions, Tompkins recognizes revenue and the related costs to provide the services on a gross basis in the Company's financial statements. In some cases, Tompkins acts in an agent capacity, deriving revenue through assisting other entities in transactions with the Company's customers. In such transactions, Tompkins recognizes revenue and the related costs to provide the services on a net basis in the Company's financial statements. These transactions recognized on a net basis primarily relate to insurance and brokerage commissions and fees derived from the Company's customers' use of various interchange and ATM/debit card networks. Refer to Note 14 "Revenue Recognition" for additional disclosures required by ASC 606.

Note 2 Securities 

Available-for-Sale Securities

The following tables summarize available-for-sale securities held by the Company at December 31, 2019 and 2018:

	Available-for-Sale Securities
December 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	1,840	$	0	$	0	$	1,840
Obligations of U.S. Government sponsored entities	$	367,551	$	5,021	$	84	$	372,488
Obligations of U.S. states and political subdivisions	96,668		1,178		61		97,785
Mortgage-backed securities – residential, issued by
U.S. Government agencies	164,643		1,327		1,519		164,451
U.S. Government sponsored entities	660,037		2,940		3,387		659,590
U.S. corporate debt securities	2,500		0		67		2,433
Total available-for-sale securities	$	1,293,239	$	10,466	$	5,118	$	1,298,587

	Available-for-Sale Securities
December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	289	$	0	$	0	$	289
Obligations of U.S. Government sponsored entities	$	493,371	$	80	$	7,553	$	485,898
Obligations of U.S. states and political subdivisions	86,260		113		933		85,440
Mortgage-backed securities – residential, issued by
U.S. Government agencies	131,831		168		3,732		128,267
U.S. Government sponsored entities	649,620		537		19,599		630,558
Non-U.S. Government agencies or sponsored entities	31		0		0		31
U.S. corporate debt securities	2,500		0		325		2,175
Total available-for-sale securities	$	1,363,902	$	898	$	32,142	$	1,332,658

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Held-to-Maturity Securities 

The Company early adopted ASU 2019-04 on November 30, 2019. Since the Company had already adopted ASUs 2016-01 and 2017-12, the related amendments were effective as of November 30, 2019. As part of the adoption, the Company reclassified $138.2 million aggregate amortized cost basis of debt securities held-to-maturity to debt securities available-for-sale.

The following table summarizes held-to-maturity securities held by the Company at December 31, 2018:

	Held-to-Maturity Securities
December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Obligations of U.S. Government sponsored entities	$	131,306	$	0	$	1,198	$	130,108
Obligations of U.S. states and political subdivisions	9,273		20		24		9,269
Total held-to-maturity debt securities	$	140,579	$	20	$	1,222	$	139,377

The following table sets forth information with regard to sales transactions of securities available-for-sale:

	Year ended December 31,
(In thousands)	2019			2018			2017
Proceeds from sales	$	232,598		$	70,652		$	64,106
Gross realized gains	1,123			327			19
Gross realized losses	(595		)	(767		)	(426		)
Net gains (losses) on sales of available-for-sale securities	$	528		$	(440	)	$	(407	)

The Company's available-for-sale securities portfolio includes callable securities that may be called prior to maturity. In 2019, the Company recognized gains of $88,000 on securities that were called. The Company also recognized gains of $29,000 and $26,000 on equity securities for the twelve months ended December 31, 2019 and 2018, respectively, reflecting the change in fair value.

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2019:

December 31, 2019
Available-for-Sale Securities	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	$	18,654	$	76	$	3,479	$	8	$	22,133	$	84
Obligations of U.S. states and political subdivisions	10,456		54		2,300		7		12,756		61
Mortgage-backed securities – residential, issued by
U.S. Government agencies	54,846		489		45,999		1,030		100,845		1,519
U.S. Government sponsored entities	157,801		752		233,999		2,635		391,800		3,387
U.S. corporate debt securities	0		0		2,433		67		2,433		67
Total available-for-sale securities	$	241,757	$	1,371	$	288,210	$	3,747	$	529,967	$	5,118

There were no held-to-maturity securities at December 31, 2019.

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The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2018: 

December 31, 2018
Available-for-Sale Securities	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	$	21,660	$	183	$	449,141	$	7,370	$	470,801	$	7,553
Obligations of U.S. states and political subdivisions	11,971		19		49,756		914		61,727		933
Mortgage-backed securities – residential, issued by
U.S. Government agencies	16,854		22		96,247		3,710		113,101		3,732
U.S. Government sponsored entities	61,163		662		512,216		18,937		573,379		19,599
U.S. corporate debt securities	0		0		2,175		325		2,175		325
Total available-for-sale securities	$	111,648	$	886	$	1,109,535	$	31,256	$	1,221,183	$	32,142

The following table summarizes held-to-maturity securities that had unrealized losses at December 31, 2018:

December 31, 2018
Held-to-Maturity Securities	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	$	4,980	$	9	$	125,128	$	1,189	$	130,108	$	1,198
Obligations of U.S. sponsored entities	8,127		24		0		0		8,127		24
Total held-to-maturity securities	$	13,107	$	33	$	125,128	$	1,189	$	138,235	$	1,222

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 and 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 the 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 December 31, 2019, and December 31, 2018, management believes the unrealized losses detailed in the tables above are not other-than-temporary. 

The Company did not recognize any net credit impairment charge to earnings on investment securities in 2019 or 2018.

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. 

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December 31, 2019
(In thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	107,975	$	108,089
Due after one year through five years	270,477		274,798
Due after five years through ten years	77,710		79,165
Due after ten years	12,397		12,494
Total	468,559		474,546
Mortgage-backed securities	824,680		824,041
Total available-for-sale debt securities	$	1,293,239	$	1,298,587

December 31, 2018
(In thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	78,160	$	77,930
Due after one year through five years	355,499		350,470
Due after five years through ten years	139,560		136,734
Due after ten years	9,201		8,668
Total	582,420		573,802
Mortgage-backed securities	781,482		758,856
Total available-for-sale debt securities	$	1,363,902	$	1,332,658

December 31, 2018
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	8,850	$	8,832
Due after one year through five years	86,520		85,645
Due after five years through ten years	45,209		44,900
Due after ten years	0		0
Total held-to-maturity debt securities	$	140,579	$	139,377

Trading Securities 

The Company had no securities designated as trading during 2019 or at year-end 2018.

Pledged Securities 

The Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. See “Note 8 - Securities Sold Under Agreements to Repurchase and Federal Funds Purchased” for further discussion. Securities carried of $1.0 billion and $1.2 billion, at December 31, 2019 and 2018, respectively, were either pledged or sold under agreements to repurchase.

Concentrations of Securities 

Except for U.S. government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of shareholders’ equity at December 31, 2019.

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Investment in Small Business Investment Companies 

The Company has equity investments in small business investment companies (“SBIC”) established for the purpose of providing financing to small businesses in market areas served by the Company. These investments totaled $1.5 million at December 31, 2019, and $1.4 million at December 31, 2018, and were included in other assets on the Company’s Consolidated Statements of Condition. These investments are accounted for either under the cost method or the equity method of accounting. As of December 31, 2019, the Company reviewed these investments and determined that there was no impairment.

Federal Home Loan Bank Stock 

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 Community Bankers Bank (“ACBB”) 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 $24.3 million, $9.3 million and $95,000 at December 31, 2019, 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.

Note 3 Loans and Leases

Loans and Leases at December 31, 2019 and December 31, 2018 were as follows:

	December 31, 2019								December 31, 2018
(In thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	105,786		$	0	$	105,786		$	107,494		$	0	$	107,494
Commercial and industrial other	863,199			39,076		902,275			926,429			43,712		970,141
Subtotal commercial and industrial	968,985			39,076		1,008,061			1,033,923			43,712		1,077,635
Commercial real estate
Construction	212,302			1,335		213,637			164,285			1,384		165,669
Agriculture	184,701			197		184,898			170,005			224		170,229
Commercial real estate other	1,899,645			145,385		2,045,030			1,827,279			177,484		2,004,763
Subtotal commercial real estate	2,296,648			146,917		2,443,565			2,161,569			179,092		2,340,661
Residential real estate
Home equity	203,894			15,351		219,245			208,459			21,149		229,608
Mortgages	1,140,572			18,020		1,158,592			1,083,802			20,484		1,104,286
Subtotal residential real estate	1,344,466			33,371		1,377,837			1,292,261			41,633		1,333,894
Consumer and other
Indirect	12,964			0		12,964			12,663			0		12,663
Consumer and other	60,661			785		61,446			57,565			761		58,326
Subtotal consumer and other	73,625			785		74,410			70,228			761		70,989
Leases	17,322			0		17,322			14,556			0		14,556
Total loans and leases	4,701,046			220,149		4,921,195			4,572,537			265,198		4,837,735
Less: unearned income and deferred costs and fees	(3,645		)	0		(3,645		)	(3,796		)	0		(3,796		)
Total loans and leases, net of unearned income and deferred costs and fees	$	4,697,401		$	220,149	$	4,917,550		$	4,568,741		$	265,198	$	4,833,939

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The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the VIST Acquisition were as follows at December 31:

(In thousands)	December 31, 2019		December 31, 2018
Acquired Credit Impaired Loans
Outstanding principal balance	$	10,604	$	12,822
Carrying amount	9,149		11,036
Acquired Non-Credit Impaired Loans
Outstanding principal balance	212,518		256,265
Carrying amount	211,000		254,162
Total Acquired Loans
Outstanding principal balance	$	223,122	$	269,087
Carrying amount	$	220,149	$	265,198

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. There were no significant changes to the Company’s existing lending policies, underwriting standards or loan review procedures during 2019. 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. 

Residential real estate loans 

The Company’s policy is to underwrite residential real estate loans in accordance with secondary market guidelines in effect at the time of origination, including loan-to-value (“LTV”) and documentation requirements. LTVs exceeding 80% for fixed rate loans and 85% for adjustable rate loans require private mortgage insurance to reduce the exposure. The Company verifies applicants’ income, obtains credit reports and independent real estate appraisals in the underwriting process to ensure adequate collateral coverage and that loans are extended to individuals with good credit and income sufficient to repay the loan. In limited circumstances, the Company will make exceptions to secondary market underwriting standards to support community reinvestment activities.

The Company originates fixed rate and adjustable rate residential mortgage loans, including loans that have characteristics of both, such as a 7/1 adjustable rate mortgage, which has a fixed rate for the first seven years and then adjusts annually thereafter. The majority of residential mortgage loans originated over the last several years have been fixed rate loans due to the low interest rate environment. Adjustable rate residential real estate loans may be underwritten based upon an initial rate which is below the fully indexed rate; however, the initial rate is generally less than 100 basis points below the fully indexed rate. As such, the Company does not believe that this practice creates any significant credit risk. 

The Company may sell residential real estate loans in the secondary market based on interest rate considerations. These residential real estate loans are generally sold to Federal Home Loan Mortgage Corporation (“FHLMC”) or State of New York Mortgage Agency (“SONYMA”) without recourse in accordance with standard secondary market loan sale agreements. These residential real estate loan sales are subject to customary representations and warranties, 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.

During 2019, 2018, and 2017, the Company sold residential mortgage loans totaling $16.9 million, $27.7 million, and $4.6 million, respectively, and realized net gains on these sales of $227,000, $458,000, and $50,000, respectively. These residential real estate loans are generally sold without recourse in accordance with standard secondary market loan sale agreements. When residential mortgage loans are sold to FHLMC or SONYMA, the Company typically retains all servicing rights, which provides the Company with a source of fee income. In connection with the sales in 2019, 2018, and 2017, the Company recorded mortgage-servicing assets of $127,000, $207,000, and $38,000, respectively.

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Amortization of mortgage servicing assets amounted to $117,000 in 2019, $69,000 in 2018, and $122,000 in 2017. At December 31, 2019 and 2018, the Company serviced residential mortgage loans aggregating $120.3 million and $120.9 million, including loans securitized and held as available-for-sale securities. Mortgage servicing rights, at amortized basis, totaled $815,000 at December 31, 2019 and $805,000 at December 31, 2018. These mortgage servicing rights were evaluated for impairment at year-end 2019 and 2018 and no impairment was recognized. Loans held for sale, which are included in residential real estate totaled $807,000 and $2.7 million at December 31, 2019 and 2018, respectively.

As members of the FHLB, the Company’s subsidiary banks may use unencumbered mortgage related assets to secure borrowings from the FHLB. At December 31, 2019 and 2018, the Company had $415.0 million and $425.0 million, respectively, of term advances from the FHLB that were secured by residential mortgage loans.

Commercial and industrial loans 

The Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial and industrial loans are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral and personal or government guarantees. The Company’s policy establishes debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial and industrial loans are generally secured by the assets being financed or other business assets such as accounts receivable or inventory. Many of the loans in the commercial portfolio have variable interest rates tied to Prime Rate, FHLBNY borrowing rates, or U.S. Treasury indices.

Commercial real estate 

The Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial real estate loans are primarily made based on identified cash flows of the borrower with consideration given to underlying real estate collateral and personal or government guarantees. The Company’s policy establishes a maximum LTV based on the type of property and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial real estate loans may be fixed or variable rate loans with interest rates tied to Prime Rate, FHLBNY borrowing rates, or U.S. Treasury indices.

Agriculture loans

Agriculturally-related loans include loans to dairy farms, cash and vegetable crop farms and a variety of other livestock and crop producers. 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 Company’s Commercial Loan Policy establishes a maximum LTV of 75% for real estate secured loans and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt, with limited adjustments to consider commodity market cycles. The policy also establishes maximum LTV ratios for non-real estate collateral, such as livestock, commodities/crops, equipment and accounts receivable. Agriculturally-related loans may be fixed or variable rate with interest tied to Prime Rate, FHLBNY borrowing rates, or U.S. Treasury indices.

Consumer and other loans

The consumer loan portfolio includes personal installment loans, direct and indirect automobile financing, and overdraft lines of credit. The majority of the consumer portfolio consists of indirect and direct automobile loans. Consumer loans are generally short-term and have fixed rates of interest that are set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets. The Company's Consumer Loan Underwriting Guidelines Policy establishes maximum debt to income ratios and includes guidelines for verification of applicants’ income and receipt of credit reports.

Leases 

Leases are primarily made to commercial customers and the origination criteria typically includes the value of the underlying assets being financed, the useful life of the assets being financed, and identified cash flows of the borrower. Most leases carry a fixed rate of interest that is set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets. 

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Loan and Lease Customers 

The Company’s loan and lease customers are located primarily in the upstate New York communities served by its three subsidiary banks and in the Pennsylvania communities served by VIST Bank. The Trust Company operates fourteen banking offices in the counties of Tompkins, Cayuga, Cortland, Onondaga and Schuyler, New York. The Bank of Castile operates sixteen banking offices in the counties of Wyoming, Livingston, Genesee, Orleans and Monroe, New York. Mahopac Bank operates fourteen banking offices in the counties of Putnam County, Dutchess County and Westchester, New York. VIST Bank operates twenty offices in the counties of Berks, Montgomery, Philadelphia, Delaware and Schuylkill, Pennsylvania. Other than general economic risks, management is not aware of any material concentrations of credit risk to any industry or individual borrower. 

Loans to Related Parties

Directors and officers of the Company and its affiliated companies were customer of, and had other transactions with, the Company's banking subsidiaries in the ordinary course of business. Such loans and commitments were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons not related to the Company, and did not involve more than normal risk of collectability or present other unfavorable features.

Loan transactions with related parties are summarized as follows:

(In thousands)	December 31, 2019			December 31, 2018
Balance at beginning of year	$	39,595		$	14,503
New Directors/Executive Officers	0			467
New loans and advancements	19,393			30,570
Loan payments	(10,599		)	(5,945		)
Balance at end of year	$	48,389		$	39,595

Nonaccrual Loans and Leases 

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans are placed on nonaccrual status either due to the delinquency status of principal and/or interest (generally when past due 90 or more days) or a judgment by management that the full repayment of principal and interest is unlikely. 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 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 upon 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. The Company has determined that it can reasonably estimate future cash flows on our current portfolio of acquired loans that are past due 90 days or more and on which the Company is accruing interest and expect to fully collect the carrying value of the loans net of the allowance for acquired loan losses. 

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The below table is an aging analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of December 31, 2019 and 2018.

December 31, 2019
(In thousands)	30-89 days		90 days or more		Current Loans			Total Loans			90 days and accruing1		Nonaccrual
Originated Loans and Leases
Commercial and industrial
Agriculture	$	0	$	65	$	105,721		$	105,786		$	0	$	0
Commercial and industrial other	413		2,079		860,707			863,199			0		2,334
Subtotal commercial and industrial	413		2,144		966,428			968,985			0		2,334
Commercial real estate
Construction	0		0		212,302			212,302			0		0
Agriculture	0		0		184,701			184,701			0		0
Commercial real estate other	1,116		10,095		1,888,434			1,899,645			0		10,617
Subtotal commercial real estate	1,116		10,095		2,285,437			2,296,648			0		10,617
Residential real estate
Home equity	290		602		203,002			203,894			0		1,924
Mortgages	1,261		3,314		1,135,997			1,140,572			0		7,335
Subtotal residential real estate	1,551		3,916		1,338,999			1,344,466			0		9,259
Consumer and other
Indirect	312		60		12,592			12,964			0		117
Consumer and other	167		66		60,428			60,661			0		158
Subtotal consumer and other	479		126		73,020			73,625			0		275
Leases	0		0		17,322			17,322			0		0
Total loans and leases	3,559		16,281		4,681,206			4,701,046			0		22,485
Less: unearned income and deferred costs and fees	0		0		(3,645		)	(3,645		)	0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	3,559	$	16,281	$	4,677,561		$	4,697,401		$	0	$	22,485
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	$	0	$	2	$	39,074		$	39,076		$	2	$	1
Subtotal commercial and industrial	0		2		39,074			39,076			2		1
Commercial real estate
Construction	0		0		1,335			1,335			0		0
Agriculture	0		0		197			197			0		0
Commercial real estate other	24		685		144,676			145,385			542		172
Subtotal commercial real estate	24		685		146,208			146,917			542		172
Residential real estate
Home equity	58		125		15,168			15,351			55		872
Mortgages	83		671		17,266			18,020			195		751
Subtotal residential real estate	141		796		32,434			33,371			250		1,623
Consumer and other
Consumer and other	0		0		785			785			0		0
Subtotal consumer and other	0		0		785			785			0		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	165	$	1,483	$	218,501		$	220,149		$	794	$	1,796

 

¹ Includes acquired loans that were recorded at fair value at the acquisition date.

92

December 31, 2018
(In thousands)	30-89 days		90 days or more		Current Loans			Total Loans			90 days and accruing1		Nonaccrual
Originated loans and leases
Commercial and industrial
Agriculture	$	0	$	0	$	107,494		$	107,494		$	0	$	0
Commercial and industrial other	2,367		1,659		922,403			926,429			0		1,861
Subtotal commercial and industrial	2,367		1,659		1,029,897			1,033,923			0		1,861
Commercial real estate
Construction	0		0		164,285			164,285			0		0
Agriculture	71		0		169,934			170,005			0		0
Commercial real estate other	1,201		1,856		1,824,222			1,827,279			0		7,691
Subtotal commercial real estate	1,272		1,856		2,158,441			2,161,569			0		7,691
Residential real estate
Home equity	986		1,026		206,447			208,459			0		1,784
Mortgages	2,693		4,027		1,077,082			1,083,802			0		7,770
Subtotal residential real estate	3,679		5,053		1,283,529			1,292,261			0		9,554
Consumer and other
Indirect	333		59		12,271			12,663			0		155
Consumer and other	187		24		57,354			57,565			0		79
Subtotal consumer and other	520		83		69,625			70,228			0		234
Leases	0		0		14,556			14,556			0		0
Total loans and leases	7,838		8,651		4,556,048			4,572,537			0		19,340
Less: unearned income and deferred costs and fees	0		0		(3,796		)	(3,796		)	0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	7,838	$	8,651	$	4,552,252		$	4,568,741		$	0	$	19,340
Acquired loans and leases
Commercial and industrial
Commercial and industrial other	$	0	$	10	$	43,702		$	43,712		$	10	$	22
Subtotal commercial and industrial	0		10		43,702			43,712			10		22
Commercial real estate
Construction	0		0		1,384			1,384			0		0
Agriculture	0		0		224			224			0		0
Commercial real estate other	0		839		176,645			177,484			525		316
Subtotal commercial real estate	0		839		178,253			179,092			525		316
Residential real estate
Home equity	46		803		20,300			21,149			59		1,414
Mortgages	18		969		19,497			20,484			722		1,104
Subtotal residential real estate	64		1,772		39,797			41,633			781		2,518
Consumer and other
Consumer and other	3		0		758			761			0		0
Subtotal consumer and other	3		0		758			761			0		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	67	$	2,621	$	262,510		$	265,198		$	1,316	$	2,856

 ¹ Includes acquired loans that were recorded at fair value at the acquisition date.

93

The difference between the interest income that would have been recorded if nonaccrual loans and leases had paid in accordance with their original terms and the interest income that was recorded, was $1.2 million for the year ended December 31, 2019 and $1 million for each of the years ended December 31, 2018 and 2017. The Company had no material commitments to make additional advances to borrowers with nonperforming loans.

Note 4 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 model is comprised of four major components that management has deemed appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at a reserve level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The four components include: impaired loans; criticized and classified credits; historical loss experience; and qualitative or subjective analysis. 

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. While management’s evaluation of the allowance as of December 31, 2019, considers the allowance to be appropriate, under different conditions or assumptions, the Company may need to adjust the allowance. 

Acquired Loans and Leases

As part of our determination of the fair value of our acquired loans at the time of acquisition, the Company established a credit mark to provide for future losses in our acquired loan portfolio. To the extent that credit quality deteriorates subsequent to acquisition, such deterioration would result in the establishment of an allowance for the acquired loan portfolio. 

Changes in the allowance for loan and lease losses for the twelve months ended December 31, 2019, 2018 and 2017 are summarized as follows:

(In thousands)	2019			2018			2017
Total allowance at beginning of year	$	43,410		$	39,771		$	35,755
Provisions charged to operations	1,366			3,942			4,161
Recoveries on loans and leases	906			2,137			2,429
Charge-offs on loans and leases	(5,790		)	(2,440		)	(2,574		)
Total allowance at end of year	$	39,892		$	43,410		$	39,771

94

The following tables detail activity in the allowance for originated and acquired loan and lease losses by portfolio segment for the twelve months ended December 31, 2019 and 2018.  

December 31, 2019
(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	$	11,217		$	23,483		$	7,317		$	1,304		$	0	$	43,321
Charge-offs	(653		)	(4,013		)	(90		)	(816		)	0		(5,572		)
Recoveries	70			100			283			294			0		747
Provision	(93		)	1,987			(1,150		)	574			0		1,318
Ending Balance	$	10,541		$	21,557		$	6,360		$	1,356		$	0	$	39,814

December 31, 2019
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for acquired loans:
Beginning balance	$	55		$	0		$	28		$	6		$	0	$	89
Charge-offs	(43		)	(2		)	(166		)	(7		)	0		(218		)
Recoveries	33			74			51			1			0		159
Provision	(45		)	(21		)	108			6			0		48
Ending Balance	$	0		$	51		$	21		$	6		$	0	$	78

December 31, 2018
(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	$	11,812		$	20,412		$	6,161		$	1,301		$	0	$	39,686
Charge-offs	(293		)	(60		)	(424		)	(1,350		)	0		(2,127		)
Recoveries	50			812			324			679			0		1,865
Provision	(352		)	2,319			1,256			674			0		3,897
Ending Balance	$	11,217		$	23,483		$	7,317		$	1,304		$	0	$	43,321

December 31, 2018
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other		Finance Leases		Total
Allowance for acquired loans:
Beginning balance	$	25		$	0		$	54		$	6	$	0	$	85
Charge-offs	(41		)	(82		)	(190		)	0		0		(313		)
Recoveries	106			31			135			0		0		272
Provision	(35		)	51			29			0		0		45
Ending Balance	$	55		$	0		$	28		$	6	$	0	$	89

95

At December 31, 2019 and 2018, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows:

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases:
Individually evaluated for impairment	$	245	$	662	$	0	$	0	$	0	$	907
Collectively evaluated for impairment	10,296		20,895		6,360		1,356		0		38,907
Ending balance	$	10,541	$	21,557	$	6,360	$	1,356	$	0	$	39,814
Allowance for acquired loans:
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	0		51		21		6		0		78
Ending balance	$	0	$	51	$	21	$	6	$	0	$	78

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases:
Individually evaluated for impairment	$	397	$	3,365	$	0	$	0	$	0	$	3,762
Collectively evaluated for impairment	10,820		20,118		7,317		1,304		0		39,559
Ending balance	$	11,217	$	23,483	$	7,317	$	1,304	$	0	$	43,321
Allowance for acquired loans:
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	55		0		28		6		0		89
Ending balance	$	55	$	0	$	28	$	6	$	0	$	89

The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology as of December 31, 2019 and December 31, 2018 was as follows:

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases:
Individually evaluated for impairment	$	2,110	$	13,496	$	3,779	$	0	$	0	$	19,385
Collectively evaluated for impairment	966,875		2,283,152		1,340,687		73,625		17,322		4,681,661
Total	$	968,985	$	2,296,648	$	1,344,466	$	73,625	$	17,322	$	4,701,046

96

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Acquired loans:
Individually evaluated for impairment	$	2	$	714	$	2,114	$	0	$	0	$	2,830
Loans acquired with deteriorated credit quality	173		5,674		3,302		0		0		9,149
Collectively evaluated for impairment	38,901		140,529		27,955		785		0		208,170
Total	$	39,076	$	146,917	$	33,371	$	785	$	0	$	220,149

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases:
Individually evaluated for impairment	$	1,864	$	8,388	$	3,915	$	0	$	0	$	14,167
Collectively evaluated for impairment	1,032,059		2,153,181		1,288,346		70,228		14,556		4,558,370
Total	$	1,033,923	$	2,161,569	$	1,292,261	$	70,228	$	14,556	$	4,572,537

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Acquired loans:
Individually evaluated for impairment	$	32	$	842	$	2,564	$	0	$	0	$	3,438
Loans acquired with deteriorated credit quality	153		5,852		5,031		0		0		11,036
Collectively evaluated for impairment	43,527		172,398		34,038		761		0		250,724
Total	$	43,712	$	179,092	$	41,633	$	761	$	0	$	265,198

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. There was no interest income recognized on impaired loans and leases for 2019, 2018 and 2017. 

97

The recorded investment on impaired loans as of December 31, 2019, and 2018 was as follows:

	December 31, 2019						December 31, 2018
(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	$	1,865	$	1,965	$	0	$	183	$	271	$	0
Commercial real estate
Commercial real estate other	10,205		11,017		0		3,205		3,405		0
Residential real estate
Home equity	3,779		3,992		0		3,915		4,168		0
Subtotal	$	15,849	$	16,974	$	0	$	7,303	$	7,844	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	$	245	$	245	$	245	$	5,183	$	5,183	$	3,365
Commercial real estate
Commercial real estate other	3,291		3,291		662		1,681		1,681		397
Subtotal	3,536		3,536		907		6,864		6,864		3,762
Total	$	19,385	$	20,510	$	907	$	14,167	$	14,708	$	3,762

	December 31, 2019						December 31, 2018
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Acquired loans with no related allowance
Commercial and industrial
Commercial and industrial other	$	2	$	2	$	0	$	32	$	32	$	0
Commercial real estate
Commercial real estate other	714		714		0		842		924		0
Residential real estate
Home equity	2,114		2,217		0		2,564		2,696		0
Total	$	2,830	$	2,933	$	0	$	3,438	$	3,652	$	0

98

The average recorded investment and interest income recognized on impaired originated loans for the twelve months ended December 31, 2019, 2018, and 2017 was as follows:

Twelve Months Ended December 31,
	2019				2018				2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		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	$	1,830	$	0	$	1,979	$	0	$	718	$	0
Commercial real estate
Commercial real estate other	7,552		0		5,165		0		7,287		0
Residential real estate
Home equity	3,943		0		3,983		0		3,551		0
Subtotal	$	13,325	$	0	$	11,127	$	0	$	11,556	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	$	132	$	0	$	1,374	$	0	$	276	$	0
Commercial real estate
Commercial real estate other	1,391		0		1,357		0		0		0
Subtotal	$	1,523	$	0	$	2,731	$	0	$	276	$	0
Total	$	14,848	$	0	$	13,858	$	0	$	11,832	$	0

The average recorded investment and interest income recognized on impaired acquired loans for the twelve months ended December 31, 2019, 2018 and 2017 was as follows:

Twelve Months Ended December 31,
	2019				2018				2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans with no related allowance
Commercial and industrial
Commercial and industrial other	$	21	$	0	$	50	$	0	$	111	$	0
Commercial real estate
Commercial real estate other	822		0		999		0		2,141		0
Residential real estate
Home equity	2,503		0		2,945		0		1,861		0
Subtotal	$	3,346	$	0	$	3,994	$	0	$	4,113	$	0
Acquired loans with related allowance
Commercial and industrial
Commercial and industrial other	$	0	$	0	$	0	$	0	$	10	$	0
Subtotal	$	0	$	0	$	0	$	0	$	10	$	0
Total	$	3,346	$	0	$	3,994	$	0	$	4,123	$	0

99

The average recorded investment in impaired loans was $18.2 million at December 31, 2019, $17.9 million at December 31, 2018, and $15.8 million at December 31, 2017.

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. When modifications are provided for reasons other than as a result of the financial distress of the borrower, these loans are not classified as TDRs or impaired. These modifications primarily 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 and interest caught up over the remaining term of the loan or at maturity, among others.

The following tables present loans by class modified in 2019 and 2018 as troubled debt restructurings.

Troubled Debt Restructuring

December 31, 2019	Twelve months ended
						Defaulted TDRs2
(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	2	604		604		0	0
Commercial real estate
Commercial real estate other1	1	1,577		1,577		0	0
Residential real estate
Home equity1	2	$	181	$	181	1	$	93
Total	5	$	2,362	$	2,362	1	$	93

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

²TDRs that defaulted during the 12 months ended December 31, 2019 that had been restructured in the prior twelve months.

December 31, 2018	Twelve months ended
						Defaulted TDRs2
(In thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans	Post- Modification Outstanding Recorded Investment
Commercial real estate
Commercial real estate other1	1	26		26		0	0
Residential real estate
Home equity1	6	$	507	$	507	0	$	0
Total	7	$	533	$	533	0	$	0

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

²TDRs that defaulted during the 12 months ended December 31, 2018 that had been restructured in the prior twelve months.

The Company recognized TDRs with a balance of $2.4 million during 2019, compared to $533,000 in 2018. At December 31, 2019, the Company was not committed to lend additional amounts to customers with outstanding loans that were classified as TDRs.

100

The following table presents credit quality indicators (internal risk grade) by class of commercial loans, commercial real estate loans and agricultural loans as of December 31, 2019 and 2018.

December 31, 2019
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Originated loans and leases
Internal risk grade:
Pass	$	851,517	$	89,892	$	1,857,142	$	166,888	$	212,302	$	3,177,741
Special Mention	8,306		1,698		16,623		3,173		0		29,800
Substandard	3,376		14,196		25,880		14,640		0		58,092
Total	$	863,199	$	105,786	$	1,899,645	$	184,701	$	212,302	$	3,265,633

December 31, 2019
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Acquired loans
Internal risk grade:
Pass	$	38,879	$	0	$	143,175	$	197	$	1,335	$	183,586
Special Mention	0		0		0		0		0		0
Substandard	197		0		2,210		0		0		2,407
Total	$	39,076	$	0	$	145,385	$	197	$	1,335	$	185,993

December 31, 2018
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Originated loans and leases
Internal risk grade:
Pass	$	910,476	$	93,939	$	1,797,599	$	157,156	$	164,285	$	3,123,455
Special Mention	8,675		4,951		9,484		4,964		0		28,074
Substandard	7,278		8,604		20,196		7,885		0		43,963
Total	$	926,429	$	107,494	$	1,827,279	$	170,005	$	164,285	$	3,195,492

December 31, 2018
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Acquired loans
Internal risk grade:
Pass	$	43,447	$	0	$	174,383	$	224	$	1,384	$	219,438
Special Mention	0		0		452		0		0		452
Substandard	265		0		2,649		0		0		2,914
Total	$	43,712	$	0	$	177,484	$	224	$	1,384	$	222,804

101

The following table presents credit quality indicators by class of residential real estate loans and by class of consumer loans as of December 31, 2019 and 2018. Nonperforming loans include nonaccrual, impaired and loans 90 days past due and accruing interest, all other loans are considered performing.

December 31, 2019
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated loans and leases
Performing	$	201,970	$	1,133,237	$	12,847	$	60,503	$	1,408,557
Nonperforming	1,924		7,335		117		158		9,534
Total	$	203,894	$	1,140,572	$	12,964	$	60,661	$	1,418,091

December 31, 2019
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	14,479	$	17,269	$	0	$	785	$	32,533
Nonperforming	872		751		0		0		1,623
Total	$	15,351	$	18,020	$	0	$	785	$	34,156

December 31, 2018
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated loans and leases
Performing	$	206,675	$	1,076,032	$	12,508	$	57,486	$	1,352,701
Nonperforming	1,784		7,770		155		79		9,788
Total	$	208,459	$	1,083,802	$	12,663	$	57,565	$	1,362,489

December 31, 2018
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired loans
Performing	$	19,735	$	19,380	$	0	$	761	$	39,876
Nonperforming	1,414		1,104		0		0		2,518
Total	$	21,149	$	20,484	$	0	$	761	$	42,394

Note 5 Goodwill and Other Intangible Assets

(In thousands)	Banking		Insurance			Wealth Management		Total
Balance at January 1, 2018	$	64,369	$	19,711		$	8,211	$	92,291
Goodwill related to sale of portion of business unit1	0		(8		)	0		(8		)
Balance at December 31, 2018	$	64,369	$	19,703		$	8,211	$	92,283
Acquisitions	0		164			0		164
Balance at December 31, 2019	$	64,369	$	19,867		$	8,211	$	92,447

¹ The $8,000 reduction of goodwill in 2018, reflects an adjustment related to the sale of a portion of insurance revenues. In 2017, Tompkins Insurance sold a portion of its personal lines insurance revenues, which had been acquired in a previous acquisition, to a third party. In 2018, Tompkins Insurance adjusted the goodwill related to the sale in 2017.

102

In the second quarter of 2019, Tompkins Insurance acquired the Cali Agency, Inc., an insurance agency located in western New York, in a cash transaction. The Company recorded the following intangible assets as a result of the acquisition: goodwill ($164,000), customer related intangible ($171,000) and a covenant-not-to-compete ($87,000). The values of the customer related intangible and covenant-not-to-compete are being amortized over 15 years and 5 years, respectively.

Goodwill is assigned to reporting units. The Company reviews its goodwill and intangible assets annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Based on the Company’s review as of December 31, 2019, there was no impairment of its goodwill or intangible assets. The Company’s impairment testing is highly sensitive to certain assumptions and estimates used. In the event that economic or credit conditions deteriorate significantly, additional interim impairment tests may be required.

Other Intangible Assets

The following table provides information regarding the Company's amortizing intangible assets:

December 31, 2019	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
(In thousands)
Amortized intangible assets:
Core deposit intangible	$	18,774	$	16,404	$	2,370
Customer relationships	9,048		6,405		2,643
Other intangibles	6,197		4,987		1,210
Total intangible assets	$	34,019	$	27,796	$	6,223

December 31, 2018	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
(In thousands)
Amortized intangible assets:
Core deposit intangible	$	18,774	$	15,386	$	3,388
Customer relationships	8,877		5,888		2,989
Other intangibles	5,983		4,732		1,251
Total intangible assets	$	33,634	$	26,006	$	7,628

Amortization expense related to intangible assets totaled $1.7 million in 2019, $1.8 million in 2018 and $1.9 million in 2017. The estimated aggregate future amortization expense for intangible assets remaining as of December 31, 2019 is as follows:

Estimated amortization expense:1
(In thousands)
For the year ended December 31, 2020	$	1,509
For the year ended December 31, 2021	1,342
For the year ended December 31, 2022	897
For the year ended December 31, 2023	334
For the year ended December 31, 2024	294

 ¹Excludes the amortization of mortgage servicing rights.  Amortization of mortgage servicing rights was $117,000 in 2019, $69,000 in 2018 and $122,000 in 2017.

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Note 6 Premises and Equipment

Premises and equipment at December 31 were as follows:

(In thousands)	2019			2018
Land	$	9,195		$	9,348
Premises and equipment	103,631			103,850
Furniture, fixtures, and equipment	77,518			73,013
Accumulated depreciation and amortization	(95,989		)	(89,009		)
Total	$	94,355		$	97,202

Depreciation and amortization expenses in 2019, 2018 and 2017 are included in operating expenses as follows:

(In thousands)	2019		2018		2017
Premises	$	2,809	$	2,989	$	2,527
Furniture, fixtures, and equipment	4,906		4,615		4,297
Total	$	7,715	$	7,604	$	6,824

The Company leases land, buildings and equipment under operating lease arrangements. Total gross rental expense amounted to $4.7 million in 2019, $4.7 million in 2018, and $5.1 million in 2017. Most leases include options to renew for periods ranging from 5 to 20 years. Options to renew are not included in the above future minimum rental commitments.

Note 7 Deposits

Aggregate time deposits of $250,000 or more were $181.4 million at December 31, 2019, and $156.6 million at December 31, 2018. Scheduled maturities of time deposits at December 31, 2019, were as follows:

(In thousands)	Less than $250,000		$250,000 and over		Total
Maturity
Three months or less	$	105,906	$	57,279	$	163,185
Over three through six months	75,507		36,826		112,333
Over six through twelve months	144,920		46,046		190,966
Total due in 2020	$	326,333	$	140,151	$	466,484
2021	98,389		28,416		126,805
2022	57,080		12,584		69,664
2023	7,726		262		7,988
2024	3,886		0		3,886
Thereafter	187		0		187
Total	$	493,601	$	181,413	$	675,014

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Note 8 Securities Sold Under Agreements to Repurchase and Federal Funds Purchased

Information regarding securities sold under agreements to repurchase and Federal funds purchased is detailed in the following tables for the years ended December 31:

Securities Sold Under Agreements to Repurchase	2019			2018			2017
(dollar amounts in thousands)
Total outstanding at December 31	$	60,346		$	81,842		$	75,177
Maximum month-end balance	71,875			81,842			80,326
Average balance during the year	59,742			63,472			64,888
Weighted average rate at December 31	0.22		%	0.22		%	0.23		%
Average interest rate paid during the year	0.24		%	0.24		%	0.36		%
Federal Funds Purchased
Average balance during the year	82			0			0
Weighted average rate at December 31	N/A			N/A			N/A
Average interest rate paid during the year	2.86		%	0.00		%	0.00		%

Securities sold under agreements to repurchase (“repurchase agreements”) are secured borrowings that typically mature within thirty to ninety days, although the Company has entered into repurchase agreements with the Federal Home Loan Bank (“FHLB”) with longer maturities. 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 $60.3 million at December 31, 2019. The Company had no outstanding wholesale repurchase agreements at December 31, 2019.

Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the fair value of the underlying securities.

Federal funds purchased are short-term borrowings that typically mature within one to ninety days. 

Note 9 Other Borrowings

The following table summarized the Company’s borrowings as of December 31:

(In thousands)	2019		2018
Overnight FHLB advances	$	239,100	$	647,075
Term FHLB advances	415,000		425,000
Other	4,000		4,000
Total other borrowings	$	658,100	$	1,076,075

The Company, through its subsidiary banks, had available line-of-credit agreements with correspondent banks permitting borrowings to a maximum of approximately $89.0 million at December 31, 2019 and $98.0 million at December 31, 2018. There were no outstanding advances against those lines at December 31, 2019 and December 31, 2018.

Through its subsidiary banks, the Company has borrowing relationships with the FHLB, which provides secured borrowing capacity, subject to available collateral. The unused borrowing capacity on established lines with the FHLB was $1.3 billion at both December 31, 2019 and December 31, 2018.

105

As members of the FHLB, the Company’s subsidiary banks can use certain unencumbered residential and commercial real estate related assets and investment securities to secure borrowings from the FHLB. At December 31, 2019, total unencumbered residential and commercial real estate related loans and investment securities pledged at the FHLB were $850.8 million. At December 31, 2019, there were $239.1 million in overnight advances and $415.0 million in term advances with the FHLB, with a weighted average rate of 2.12%, compared to $647.1 million in overnight advances and $425.0 million in term advances at December 31, 2018, with a weighted average rate of 2.07%. At December 31, 2019, the term advances with the FHLB include $170.0 million which mature within one year and $245.0 million which mature in over one year. Maturities of advances due in over one year include $30.0 million in 2021, $85.0 million in 2022, $80.0 million in 2023 and $50.0 million in 2024.

The Company had no callable FHLB borrowings at December 31, 2019.

The Company has a $25.0 million line of credit with a bank.  As of December 31, 2019 and 2018, there was $4.0 million outstanding on the line. The line matures in June 2021.

Note 10 Trust Preferred Debentures

The Company has three unconsolidated subsidiary trusts (“the Trusts”): Sleepy Hollow Capital Trust I, Leesport Capital Trust II, and Madison Statutory Trust I. The latter two were acquired in the acquisition of VIST Financial, while Sleepy Hollow Capital Trust I was acquired in a previous acquisition. The Company owns 100% of the common equity of each Trust. The Trusts were formed for the purpose of issuing Company-obligated mandatorily redeemable capital securities to third-party investors and investing the proceeds from the sale in junior subordinated debt securities (subordinated debt) issued by the Company, which are the sole assets of each Trust. Since third-party investors are the primary beneficiaries, the Trusts are not consolidated in the Company’s financial statements. Distributions on the preferred securities issued by the Trusts are payable quarterly at a rate per annum equal to the interest rate being earned by the Trusts on the debenture held by the Trusts and are recorded as interest expense in the consolidated financial statements.

The preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the subordinated debt. The subordinated debt, net of the Company’s investment in the Trusts, qualifies as Tier 1 capital under the Board of Governors of the Federal Reserve System (FRB) guidelines. The Company has entered into agreements which, when taken collectively, fully and unconditionally guarantee the obligations under the preferred securities subject to the terms of each of the guarantees.

The following table provides information relating to the Trusts as of December 31, 2019:

Description	Issuance Date	Par Amount	Interest Rate	Maturity Date
Sleepy Hollow Capital Trust I	August 2003	$4.0 million	3-month LIBOR plus 3.05%	August 2033
Leesport Capital Trust II	September 2002	$10.0 million	3-month LIBOR plus 3.45%	September 2032
Madison Statutory Trust I	June 2003	$5.0 million	3-month LIBOR plus 3.10%	June 2033

Sleepy Hollow Capital Trust I

In August 2003, Sleepy Hollow Capital Trust I issued $4.0 million of floating rate (three-month LIBOR plus 305 basis points) trust preferred securities, which represent beneficial interests in the assets of the trust. The trust preferred securities will mature on August 2033. Distributions on the trust preferred securities are payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. Sleepy Hollow Capital Trust I also issued $100,000 of common equity securities to the Company. The proceeds of the offering were used to acquire the Company’s subordinated debentures that are due concurrently with the trust preferred securities.

106

Leesport Capital Trust II

Leesport Capital Trust II, a Delaware statutory business trust, was formed on September 26, 2002 and issued $10.0 million of mandatory redeemable capital securities carrying a floating interest rate of three month LIBOR plus 3.45%. These debentures are the sole assets of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The obligations under the debentures constitute a full and unconditional guarantee by VIST Financial of the obligations of the Trust under the capital securities. These securities must be redeemed in September 2032, but may be redeemed at anytime. The Company assumed the rights and obligations of VIST Financial pertaining to the Leesport Capital Trust II through the Company’s acquisition of VIST Financial in August 2012.

Madison Statutory Trust I

Madison Statutory Trust, a Connecticut statutory business trust, was formed on June 2003 and issued $5.0 million of mandatory redeemable capital securities carrying a floating interest rate of three month LIBOR plus 3.10%. These debentures are the sole assets of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The obligations under the debentures constitute a full and unconditional guarantee by VIST Financial of the obligations of the Trust under the capital securities. These securities must be redeemed in June 2033, but may be redeemed at any time. The Company assumed the rights and obligations of VIST Financial pertaining to the Madison Statutory Trust I through the Company’s acquisition of VIST Financial in August 2012.

Note 11 Employee Benefit Plans

The Company maintains a noncontributory defined-benefit plan (the "DB Pension Plan") and two noncontributory defined-contribution retirement plans (the "DC Retirement Plan" and "2015 DC Retirement Plan") which cover substantially all employees of the Company.

The DB Pension Plan was closed to new employees at year-end 2009 and was frozen on July 31, 2015. The benefits under the DB Pension Plan are based on years of service, age and percentages of the employees' average final compensation. Assets of the Company's DB Pension Plan are invested in common and preferred stock, mutual funds and cash equivalents. At December 31, 2019 and 2018, DB Pension Plan assets included 41,292 and 42,192 shares of Tompkins' common stock that had a fair value of $3.8 million and $3.2 million, respectively.

The defined-contribution retirement plans cover substantially all employees of the Company who have reached the age of 21 and completed one year of service. For participants in these plans, the Company makes contributions to an account set up in the participant's name. The amount equals a percentage of pay and varies based on the participant's age, service, and tenure with the Company. The defined-contribution retirement plans offer the participant a wide range of investment alternatives from which to choose. Expenses related to the defined-contribution plans totaled $4.0 million in 2019, $3.9 million in 2018, and $4.1 million in 2017.

The Company maintains supplemental employee retirement plans (“SERPs”) for certain executives. In 2016, certain SERPs were amended and restated to reflect changes resulting from the freezing of the DB Pension Plan and the Company entered into additional SERP agreements with certain executives. In 2019, the SERP for the Company's CEO was amended to expand the definition of "Earnings" under the SERP to better align the scope of compensation included in our CEO's retirement benefits with chief executive compensation in a manner that is more consistent with market practice. All benefits provided under the SERPs are unfunded and the Company makes payments to plan participants.

The Company also maintains a post-retirement life and healthcare benefit plan (the “Life and Healthcare Plan”), which was amended in 2005. For employees commencing employment after January 1, 2005, the Company does not contribute towards post-retirement healthcare benefits. Retirees and employees who were eligible to retire when the Life and Healthcare Plan was amended were unaffected. Generally, all other employees were eligible for Health Reimbursement Accounts (“HRA”) with an initial balance equal to the amount of the Company’s estimated then current liability. Contributions to the plan are limited to an annual contribution of 4% of the total HRA defined term. Employees, upon retirement, will be able to utilize their HRA for qualified health costs and deductibles. In 2019, the Retiree Life Benefit program was closed to new entrants, and only employees who attained age 50 as of February 1, 2020 will be eligible to earn this benefit. The amounts related to this change are reflected in the below table as amendments in 2019.

107

The Company engages independent, external actuaries to compute the amounts of liabilities and expenses relating to these plans, subject to the assumptions that the Company selects. The benefit obligation for these plans represents the liability of the Company for current and former employees, and is affected primarily by the following: service cost (benefits attributed to employee service during the period); interest cost (interest on the liability due to the passage of time); actuarial gains/losses (experience during the year different from that assumed and changes in plan assumptions); and benefits paid to participants.

The following table sets forth the changes in the projected benefit obligation for the DB Pension Plan and SERPs and the accumulated post-retirement benefit obligation for the Life and Healthcare Plan; and the respective plan assets, and the plans’ funded status and amounts recognized in the Company’s Consolidated Statements of Condition at December 31, 2019 and 2018 (the measurement dates of the plans).

	DB Pension Plans						Life and Healthcare Plan						SERP Plan
(In thousands)	2019			2018			2019			2018			2019			2018
Change in benefit obligation:
Benefit obligation at beginning of year	$	79,689		$	82,748		$	7,857		$	8,995		$	23,539		$	26,142
Service cost	0			0			159			212			157			160
Interest cost	2,936			2,508			289			270			909			833
Plan participants’ contributions	0			0			87			122			0			0
Amendments	0			0			(203		)	0			2,022			0
Actuarial loss (gain)	10,996			(2,324		)	1,218			(1,337		)	6,128			(2,987		)
Benefits paid	(3,275		)	(3,243		)	(385		)	(405		)	(602		)	(609		)
Benefit obligation at end of year	$	90,346		$	79,689		$	9,022		$	7,857		$	32,153		$	23,539
Change in plan assets:
Fair value of plan assets at beginning of year	$	72,474		$	80,154		$	0		$	0		$	0		$	0
Actual return on plan assets	13,153			(4,437		)	0			0			0			0
Plan participants’ contributions	0			0			87			122			0			0
Employer contributions	0			0			298			283			602			609
Benefits paid	(3,275		)	(3,243		)	(385		)	(405		)	(602		)	(609		)
Fair value of plan assets at end of year	$	82,352		$	72,474		$	0		$	0		$	0		$	0
Unfunded status	$	(7,994	)	$	(7,215	)	$	(9,022	)	$	(7,857	)	$	(32,153	)	$	(23,539	)

The accumulated benefit obligation for the DB Pension Plan for 2019 and 2018 was $90.3 million and $79.7 million, respectively. The accumulated benefit obligation for the Life and Healthcare Plan for 2019 and 2018 was $9.0 million and $7.9 million, respectively. The accumulated benefit obligation for the SERPs for 2019 and 2018 was $32.2 million and $23.5 million, respectively. The unfunded status of the DB Pension Plan, the Life and Healthcare Plan, and SERPs was recognized in other liabilities in the Consolidated Statement of Condition at December 31, 2019 in the amounts of $8.0 million, $9.0 million, and $32.2 million, respectively. The unfunded status of the DB Pension Plan, the Life and Healthcare Plan, and SERPs in the amount of $7.2 million, $7.9 million, and $23.5 million, respectively, was recognized in other liabilities in the Consolidated Statement of Condition at December 31, 2018.

108

Net periodic benefit cost and other comprehensive income (loss) includes the following components:

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
Components of net periodic benefit cost	2019			2018			2017			2019			2018			2017			2019		2018		2017
Service cost	$	0		$	0		$	0		$	159		$	212		$	192		$	157	$	160	$	166
Interest cost	2,936			2,508			2,501			289			270			268			909		833		852
Expected return on plan assets	(4,933		)	(5,648		)	(5,088		)	0			0			0			0		0		0
Amortization of prior service (credit) cost	(10		)	(10		)	(10		)	(62		)	(62		)	(62		)	104		87		87
Recognized net actuarial loss	1,334			1,118			1,075			0			62			34			343		539		399
Recognized net actuarial gain due to curtailments	0			0			0			(399		)	0			0			0		0		0
Net periodic benefit (credit) cost	$	(673	)	$	(2,032	)	$	(1,522	)	$	(13	)	$	482		$	432		$	1,513	$	1,619	$	1,504

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss):

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
	2019			2018			2017			2019			2018			2017			2019			2018			2017
Net actuarial loss (gain)	$	2,776		$	7,761		$	1,434		$	1,218		$	(1,337	)	$	708		$	6,128		$	(2,987	)	$	2,407
Recognized actuarial loss	(1,334		)	(1,118		)	(1,075		)	0			(62		)	(34		)	(343		)	(539		)	(399		)
Prior service credit	0			0			0			(203		)	0			(964		)	2,022			0			0
Recognized prior service cost (credit)	10			10			10			62			62			62			(104		)	(87		)	(87		)
Prior service cost (credit) recognized due to curtailment	0			0			0			399			0			0			0			0			0
Recognized in other comprehensive income (loss)	$	1,452		$	6,653		$	369		$	1,476		$	(1,337	)	$	(228	)	$	7,703		$	(3,613	)	$	1,921
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	779		$	4,621		$	(1,153	)	$	1,463		$	(855	)	$	204		$	9,216		$	(1,994	)	$	3,425

Pre-tax amounts recognized as a component of accumulated other comprehensive income (loss) as of year-end that have not been recognized as a component of the Company’s combined net periodic benefit cost of the Company’s DB Pension Plan, Life and Healthcare Plan and SERPs are presented in the following table.  

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
	2019			2018			2017			2019			2018			2017			2019		2018		2017
Net actuarial loss (gain)	$	48,045		$	46,603		$	39,960		$	1,586		$	368		$	1,767		$	11,345	$	5,560	$	9,086
Prior service cost (credit)	(9		)	(20		)	(30		)	(348		)	(606		)	(668		)	2,433		514		602
Total	$	48,036		$	46,583		$	39,930		$	1,238		$	(238	)	$	1,099		$	13,778	$	6,074	$	9,688

109

The pre-tax amounts included in accumulated other comprehensive income (loss) that are expected to be recognized in net periodic pension cost during the fiscal year ended December 31, 2020 are shown below.

(In thousands)	Pension Plans		Life and Healthcare Plan		SERP Plan
Actuarial loss	1,359		103		796
Prior service cost	(10	)	(61	)	285
Total	1,349		42		1,081

Weighted-average assumptions used in accounting for the plans were as follows:

(In thousands)	DB Pension Plans						Life and Healthcare Plan						SERP Plan
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount Rates
Benefit Cost for Plan Year	4.08	%	3.43	%	3.89	%	4.13	%	3.51	%	3.97	%	4.16	%	3.55	%	4.10	%
Benefit Obligation at End of Plan Year	3.04	%	4.08	%	3.43	%	3.10	%	4.13	%	3.51	%	3.14	%	4.16	%	3.55	%
Expected long-term return on plan assets	7.00	%	7.25	%	7.25	%	N/A		N/A		N/A		N/A		N/A		N/A
Rate of compensation increase
Benefit Cost for Plan Year	N/A		N/A		N/A		4.00	%	5.00	%	5.00	%	5.00	%	5.00	%	5.00	%
Benefit Obligation at End of Plan Year	N/A		N/A		N/A		4.00	%	4.00	%	5.00	%	5.00	%	5.00	%	5.00	%

Tompkins offers post-retirement life and healthcare benefits, although as previously mentioned, has discontinued providing post-retirement healthcare to participants hired after 2004. The weighted average annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) was 5.9% beginning in 2019 and is assumed to decrease gradually to 4.5% in 2026 and beyond. A 1% increase in the assumed health care cost trend rate would increase service and interest costs by approximately $594 and increase the Company’s benefit obligation by approximately $20,000. A 1% decrease in the assumed health care cost trend rate, would decrease service and interest costs by approximately $526 and decrease the Company’s benefit obligation by approximately $18,000.

To develop the expected long-term rate of return on assets assumption for the DB Pension Plan, the Company considered the historical returns and the future expectations for returns for each asset class, as well as target asset allocations of the pension portfolio. Based on this analysis, the Company selected 7.00% as the long-term rate of return on asset assumption.

The discount rates used to determine the Company’s DB Pension Plan and other post-retirement benefit obligations as of December 31, 2019, and December 31, 2018, were determined by matching estimated benefit cash flows to a yield curve derived from Citigroup’s regular bond yield at December 31, 2019 and December 31, 2018.

Based on the Company’s anticipation of future experience under the DB Pension Plan, the mortality tables used to determine future benefit obligations under the plan were updated as of December 31, 2019 to the PRI-2012 Mortality Tables with Mortality Improvement Scale MP 2019. The Company updated this assumption based on the new improvement table released by The Society of Actuaries in October 2019. The appropriateness of the assumptions is reviewed annually.

Cash Flows 

Plan assets are amounts that have been segregated and restricted to provide benefits, and include amounts contributed by the Company and amounts earned from investing contributions, less benefits paid. The Company funds the cost of the SERPs and the Life and Healthcare Plan benefits on a pay-as-you-go basis.

110

The benefits as of December 31, 2019, expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter were as follows:

(In thousands)	DB Pension Plans		Life and Healthcare Plan		SERP Plan
2020	$	4,125	$	557	$	708
2021	4,275		447		700
2022	4,209		436		754
2023	4,386		429		863
2024	4,478		423		846
2025-2029	23,939		2,162		4,949
Total	$	45,412	$	4,454	$	8,820

Plan Assets

The Company’s DB Pension Plan’s weighted-average asset allocations at December 31, 2019 and 2018, respectively, by asset category are as follows:

	2019		2018
Equity securities	62	%	61	%
Debt securities	36	%	38	%
Other	2	%	1	%
Total Allocation	100	%	100	%

It is the policy of the Trustees to invest the Pension Trust Fund (the “Fund”) for total return. The Trustees seek the maximum return consistent with the interests of the participants and beneficiaries and prudent investment management. The management of the Fund’s assets is in compliance with the guidelines established in the Company’s Pension Plan and Trust Investment Policy, which is reviewed and approved annually by the Tompkins Board of Directors, and the Pension Investment Review Committee.

The intention is for the Fund to be prudently diversified. The Fund’s investments will be invested among the fixed income, equity and cash equivalent sectors. The pension committee will designate minimum and maximum positions in any of the sectors. In no case shall more than 10% of the Fund assets consist of qualified securities or real estate of the Company. Unless otherwise approved by the Trustees, the following investments are prohibited:

– Restricted stock, private placements, short positions, calls, puts, or margin transactions;

– Commodities, oil and gas properties, real estate properties, or

– Any investment that would constitute a prohibited transaction as described in the Employee Retirement Income Security Act of 1974 (“ERISA”), section 407, 29 U.S.C. 1106.

In general, the investment in debt securities is limited to readily marketable debt securities having a Standard & Poor’s rating of “A” or Moody’s rating of “A”, securities of, or guaranteed by the United States Government or its agencies, or obligations of banks or their holding companies that are rated in the three highest ratings assigned by Fitch Investor Service, Inc. In addition, investments in equity securities must be listed on the NYSE or traded on the national Over The Counter market or listed on the NASDAQ. Cash equivalents generally may be United States Treasury obligations, commercial paper having a Standard & Poor’s rating of “A-1” or Moody’s National Credit Officer rating of “P-1”or higher.

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The major categories of assets in the Company’s DB Pension Plan as of year-end are presented in the following table. Assets are segregated by the level of valuation inputs within the fair value hierarchy established by ASC Topic 820 utilized to measure fair value (see Note 19-Fair Value Measurements). 

Fair Value Measurements
December 31, 2019
(In thousands)	Fair Value 2019		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	1,367	$	1,367	$	0	$	0
Common stocks	26,574		26,574		0		0
Mutual funds	54,411		54,411		0		0
Total Fair Value of Plan Assets	$	82,352	$	82,352	$	0	$	0

Fair Value Measurements
December 31, 2018
(In thousands)	Fair Value 2018		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	1,018	$	1,018	$	0	$	0
Common stocks	20,648		20,648		0		0
Mutual funds	50,808		50,808		0		0
Total Fair Value of Plan Assets	$	72,474	$	72,474	$	0	$	0

The Company determines the fair value for its pension plan assets using an independent pricing service. The pricing service uses a variety of techniques to determine fair value, including market maker bids, quotes and pricing models. Inputs to the model include recent trades, benchmark interest rates, spreads, and actual and projected cash flows. Based on the inputs used by our independent pricing services, the Company identifies the appropriate level within the fair value hierarchy to report these fair values. U.S. Treasury securities, common stocks and mutual funds are considered Level 1 based on quoted prices in active markets.

The Company has an Employee Stock Ownership Plan (ESOP) and a 401(k) Investment and Stock Ownership Plan (ISOP) covering substantially all employees of the Company. The ESOP allows for Company contributions in the form of common stock of the Company. Annually, the Tompkins Board of Directors determines a profit-sharing payout to its employees in accordance with a performance-based formula. A percentage of the approved amount is paid in Company common stock into the ESOP. Contributions are limited to a maximum amount as stipulated in the ESOP. The remaining percentage is either paid out in cash or deferred into the ISOP at the direction of the employee. Compensation expense related to the profit-sharing totaled $4.4 million in 2019, $4.9 million in 2018, and $5.8 million in 2017.

Under the ISOP, employees may contribute a percentage of their eligible compensation with a Company match of such contributions up to a maximum match of 4%. Participation in the 401(k) Plan is contingent upon certain age and service requirements. The Company’s expense associated with these matching provisions was $2.9 million in 2019, $2.6 million in 2018, and $2.5 million in 2017.

Life insurance benefits are provided to certain officers of the Company. In connection with these policies, the Company reflects life insurance assets on its Consolidated Statements of Condition of $83.0 million at December 31, 2019, and $81.9 million at December 31, 2018. The insurance is carried at its cash surrender value on the Consolidated Statements of Condition. Increases in the cash surrender value of the insurance are reflected as noninterest income, net of any related mortality expense.

The Company provides split dollar life insurance benefits to certain employees. The plan is unfunded and the estimated liability of the plan of $1.6 million and $1.5 million is recorded in other liabilities in the Consolidated Statements of Condition at December 31, 2019 and 2018, respectively. Compensation expense related to the split dollar life insurance was approximately $49,801 in 2019 and $52,000 in 2018.

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Note 12 Stock Plans and Stock Based Compensation

In 2019, the 2009 Tompkins Financial Corporation Equity Plan (“2009 Equity Plan”) expired and was replaced by the new Tompkins Financial Corporation 2019 Equity Plan (“2019 Equity Plan”). Under the 2019 Equity Plan, the Company may grant stock appreciation rights ("SARs"), shares of restricted stock and restricted units and performance share awards covering up to 1,275,000 shares of the Company's common stock to certain officers, employees, and nonemployee directors. Additionally, restricted stock awards and restricted units and performance share awards will reduce the shares available for grant under the 2019 Equity Plan by 4.25 shares for each share subject to an award, resulting in a total number of full-value share awards that may be issued under the 2019 Plan to 300,000. Stock options and SARs are granted at an exercise price equal to the stock’s fair value at the date of grant, may not have a term in excess of ten years, and have vesting periods that range between five and seven years from the grant date. Restricted stock awards have vesting periods that range between five and seven years, and restricted units vest in five years from grant date, and have grant date fair values that equal the closing price of the Company’s common stock on grant date. Prior to the adoption of the 2009 Equity Plan, the Company had similar stock option plans, which remain in effect solely with respect to unexercised options issued under these plans.

The Company granted 62,360 equity awards to its employees in 2019, consisting of 49,365 shares of restricted stock, 4,650 performance share awards and 8,345 restricted stock units. The Company granted 65,785 equity awards to its employees in 2018, consisting of 65,785 shares of restricted stock. The Company granted 59,333 equity awards to its employees in 2017, consisting of 59,333 shares of restricted stock.

The following table presents the activity related to stock options and SARs under all plans for the year ended December 31, 2019.  

	Number of Shares/Rights		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2019	225,375		$	48.02
Granted	0		0.00
Exercised	(64,865	)	43.41
Forfeited	(2,888	)	58.91
Outstanding at December 31, 2019	157,622		$	49.72	4.34	$	6,585,638
Exercisable at December 31, 2019	103,927		$	46.91	3.83	$	4,634,146

Total stock-based compensation expense for stock options and SARs was $235,000 in 2019, $304,000 in 2018, and $367,000 in 2017. As of December 31, 2019, unrecognized compensation cost related to unvested stock options and SARs totaled $375,000. The cost is expected to be recognized over a weighted average period of 2.2 years. Net cash proceeds, tax benefits and intrinsic value related to total stock options, SARs, and restricted stock exercised is as follows: 

(in thousands)	2019			2018			2017
Proceeds from stock option exercises	$	(992	)	$	(540	)	$	(641	)
Tax benefits related to stock option exercises	944			680			1,634
Intrinsic value of stock option exercises	2,460			1,447			3,139

The Company uses the Black-Scholes option-valuation model to determine the fair value of incentive stock options and SARs at the date of grant. The valuation model estimates fair value based on the assumptions listed in the table below. The risk-free rate is the interest rate available on zero-coupon U.S. Treasury instruments with a remaining term equal to the expected term of the share option at the time of grant. The expected dividend yield is based on the dividend trends and the market price of the Company’s stock price at grant. Volatility is largely based on historical volatility of the Company’s stock price. The expected term is based upon historical experience of employee exercises and terminations as the vesting term of the grants. The fair values of the grants are expensed over the vesting periods. There were no stock options or SARs granted in 2019, 2018 and 2017.

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December 31, 2019
Options and SARs Outstanding			Options and SARs Exercisable
Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$35.71-37.50	31,680	1.62	$	37.00	31,680	$	37.00
$37.51-41.00	28,155	3.28	$	40.60	21,500	$	40.60
$41.01-50.00	47,195	4.86	$	49.22	28,226	$	49.22
$50.01-76.90	50,370	6.15	$	63.12	22,410	$	63.87
$76.91-86.18	222	6.89	$	86.18	111	$	86.18
	157,622	4.34	$	49.72	103,927	$	46.91

The following table presents activity related to restricted stock awards for the twelve months ended December 31, 2019. 

	Number of Shares		Weighted Average Fair Value
Unvested at January 1, 2019	255,239		$	66.52
Granted	62,360		89.21
Vested	(61,275	)	60.48
Forfeited	(8,357	)	70.62
Unvested at December 31, 2019	247,967		$	73.66

The Company granted 49,365 restricted stock awards, 8,345 restricted stock units and 4,650 performance share awards in 2019, each at an average grant date fair value of $89.21. The Company granted 65,785 restricted stock awards in 2018 at an average grant date fair value of $75.44. The Company granted 59,333 restricted stock awards in 2017 at an average grant date fair value of $79.51. The grant date fair values were the closing prices of the Company’s common stock on the grant dates. The Company recognized stock-based compensation related to restricted stock awards, restricted stock units, and performance share awards of $4.0 million in 2019, $3.2 million in 2018, and $2.6 million in 2017. Unrecognized compensation costs related to restricted stock and performance awards, and restricted stock units totaled $14.1 million at December 31, 2019 and will be recognized over 3.5 years and 4.9 years, respectively on a weighted average basis.

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Note 13 Other Noninterest Income and Expense

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

	Year ended December 31,
(In thousands)	2019		2018		2017
NONINTEREST INCOME
Other service charges	$	3,166	$	3,263	$	2,982
Increase in cash surrender value of corporate owned life insurance	2,164		1,818		2,196
Net gain on sale of loans	227		458		50
Gain on sale of fixed assets	98		2,954		30
Other miscellaneous income	2,761		4,637		2,373
Total other noninterest income	$	8,416	$	13,130	$	7,631
NONINTEREST EXPENSES
Marketing expense	$	4,856	$	5,495	$	5,013
Professional fees	8,942		8,564		5,725
Technology expense	10,666		10,099		8,332
Cardholder expense	3,238		3,277		3,391
FDIC insurance	773		2,618		2,527
Other miscellaneous expenses	17,774		20,868		20,537
Total other noninterest expenses	$	46,249	$	50,921	$	45,525

Note 14 Revenue Recognition

On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (ASC 606) and all subsequent ASUs that modified ASC 606. As stated in Note 1 - "Summary of Significant Accounting Policies," results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The Company recorded a net increase to beginning retained earnings of $1.8 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact to beginning retained earnings was primarily driven by the recognition of contingency income related to our insurance business segment.

Under ASC 606, the Company made any necessary revisions to its policies related to the new revenue recognition guidance. In general, for revenue not associated with financial instruments, guarantees and lease contracts, we apply the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when performance obligation is satisfied. Our contracts with customers are generally short term in nature, typically due within one year or less or cancellable by us or our customer upon a short notice period. Performance obligations for our customer contracts are generally satisfied at a single point in time, typically when the transaction is complete, or over time. For performance obligations satisfied over time, we primarily use the output method, directly measuring the value of the products/services transferred to the customer, to determine when performance obligations have been satisfied. We typically receive payment from customers and recognize revenue concurrent with the satisfaction of our performance obligations. In most cases, this occurs within a single financial reporting period. For payments received in advance of the satisfaction of performance obligations, revenue recognition is deferred until such time the performance obligations have been satisfied. In cases where we have not received payment despite satisfaction of our performance obligations, we accrue an estimate of the amount due in the period our performance obligations have been satisfied. For contracts with variable components, only amounts for which collection is probable are accrued. We generally act in a principal capacity, on our own behalf, in most of our contracts with customers. In such transactions, we recognize revenue and the related costs to provide our services on a gross basis in our financial statements. In some cases, we act in an agent capacity, deriving revenue through assisting other entities in transactions with our customers. In such transactions, we recognized revenue and the related costs to provide our services on a net basis in our financial statements. These transactions primarily relate to insurance and brokerage commissions.

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ASC 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. ASC 606 is applicable to noninterest revenue streams such as trust and asset management income, deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. However, the recognition of these revenue streams did not change significantly upon adoption of ASC 606.

Insurance Commissions and Fees

Fees are earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. As the Company has historically recognized revenue in this manner, with the noted exception related to installment billing discussed below, the adoption of ASC 606 will not significantly impact the revenue from this source on a quarterly or annual basis.

Installment billing - Agency Bill

Prior to the adoption of ASC 606, commission revenue on policies billed in installments were recognized on the latter of the policy effective date or the date that the premium was billed to the client. As a result of the adoption of ASC 606, revenue associated with the issuance of policies will be recognized upon the effective date of the associated policy regardless of the billing method, meaning that commission revenues billed on an installment basis will be now recognized earlier than they had been previously. Revenue will be accrued based upon the completion of the performance obligation creating a current asset for the unbilled revenue until such time as an invoice is generated, typically not to exceed twelve months. The Company does not expect the overall impact of these changes to be significant, but it will result in slight variances from quarter to quarter.

Contingent commissions

Prior to the adoption of ASC 606, revenue that was not fixed and determinable because a contingency exists was not recognized until the contingency was resolved. Under ASC 606, the Company must use its judgment to estimate the amount of consideration that will be received such that a significant reversal of revenue is not probable. Contingent commissions represent a form of variable consideration associated with the same performance obligation, which is the placement of coverage, for which we earn core commissions. In connection with the new standard, contingent commissions will be estimated with an appropriate constraint applied and accrued relative to the recognition of the corresponding core commissions. The resulting effect on the timing of recognition of contingent commissions will more closely follow a similar pattern as our core commissions with true-ups recognized when payments are received or as additional information that affects the estimate becomes available.

Refund of commissions

The contract with the insurance carrier dictates commissions paid to the Company shall be refunded to the carrier upon cancellation by the policyholder. As a result, the Company has established a liability for the estimated amount of commission for which the Company does not expect to be entitled, and corresponding reduction to the gross commission received or receivable. The refund liability will be updated at the end of each reporting period for changes in circumstances.

Trust & Asset Management

Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.

Mutual Fund & Investment Income

Mutual fund and investment income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, investment advisory fees from the Company’s Strategic Asset Management Services (SAM) wealth management product. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value. Trailer revenue is recorded over time, usually monthly or quarterly, as net asset value is determined. Investment advisor fees from the wealth management product is earned over time and based on an annual percentage rate of the net asset value. The investment advisor fees are charged to the customer’s account in advance on the first month of the quarter, and the revenue is recognized over the following three-month period. The Company does engage a third party, LPL Financial, LLC (LPL), to satisfy part of this performance obligation, and therefore this income is reported net of any corresponding expenses paid to LPL.

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Service Charges on Deposit Accounts

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Card Services Income

Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as MasterCard. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for fees and exchange are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

Other

Other service charges include revenue from processing wire and ACH transfers, lock box service and safe deposit box rental. Both wire transfer fees and lock box services are charged on per item basis. Wire and ACH transfer fees are charged at the time of transfer and charged directly to the customer account. Lock box customers are billed monthly and payments are received in the following month through a direct charge to customers’ accounts. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606, for the years ended December 31, 2019 and 2018.

	Year Ended
(In thousands)	12/31/2019			12/31/2018
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	28,252		$	27,272
Installment Billing		(35	)		6
Refund of Commissions		30			(29	)
Contract Liabilities/Deferred Revenue		(195	)		(181	)
Contingent Commissions		3,039			2,301
Subtotal Insurance Revenues		31,091			29,369
Trust and Asset Management		11,441			11,848
Mutual Fund & Investment Income		4,993			5,440
Subtotal Investment Service Income		16,434			17,288
Service Charges on Deposit Accounts		8,321			8,435
Card Services Income		10,526			9,693
Other		1,183			1,176
Noninterest Income (in-scope of ASC 606)		67,555			65,961
Noninterest Income (out-of-scope of ASC 606)1		7,878			11,488
Total Noninterest Income	$	75,433		$	77,449

¹ The year ended December 31, 2018 includes approximately $2.9 million related to gain on sale of fixed assets.

Contract Balances

Receivables primarily consist of amounts due for insurance and wealth management services performed for which the Company's performance obligations have been fully satisfied. Receivables amounted to $4.7 million and $2.0 million, respectively, at December 31, 2019, compared to $4.3 million and $1.8 million, respectively, at December 31, 2018 and were included in other assets in the Consolidated Statements of Condition.

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A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). The Company’s noninterest revenue streams, excluding some insurance commissions and fees, are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. As of December 31, 2019 and December 31, 2018, the Company did not have any significant contract balances related to this transactional activity.

The transaction price for an insurance entity often includes an element of consideration that is variable or contingent on the outcome of future events, such as volume of business, growth and claims experience. Consideration for this “contingent revenue” is typically paid during the first quarter of the subsequent year. ASC 606 states that variable consideration be estimated using a method that best predicts the amount of consideration to which the entity will be entitled using the approach that it expects will best predict the amount of consideration to which the entity will be entitled. This assessment would consider the terms of the contract and all reasonably available information, including historical, current, and forecast information. As of December 31, 2019 and December 31, 2018, contract assets related to this contingent income were $2.2 million and $1.9 million, respectively.

A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified current or long-term in the Consolidated Statements of Condition based on the timing of when the Company expects to recognize revenue. As of December 31, 2019 and December 31, 2018, contract liabilities were $2.0 million and $1.8 million, respectively, and are included within accrued expenses in the accompanying Consolidated Statements of Condition. The liabilities include premiums due to insurance carriers in addition to unearned commission revenue.

The increase in the contract liability balance during the year ended December 31, 2019 is primarily as a result of billings and cash payments received in advance of satisfying performance obligations, offset by insurance premiums and revenue recognized during the period that was included in the contract liability balance at the date of adoption. The adoption of ASC 606 did not create a change in accounting for insurance commissions and fees as they relate to contract liabilities, however the Company did eliminate the practice of deferring revenue on its larger accounts over the course of the policy period.

Contract Acquisition Costs

In connection with the adoption of ASC 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of ASC 606, the Company did not capitalize any contract acquisition costs.

Note 15 Income Taxes

The income tax expense (benefit) attributable to income from operations is summarized as follows:

(In thousands)	Current		Deferred			Total
2019
Federal	$	15,161	$	2,668		$	17,829
State	2,782		405			3,187
Total	$	17,943	$	3,073		$	21,016
2018
Federal	$	16,391	$	2,281		$	18,672
State	3,060		73			3,133
Total	$	19,451	$	2,354		$	21,805
2017
Federal	$	26,860	$	14,749		$	41,609
State	1,162		(151		)	1,011
Total	$	28,022	$	14,598		$	42,620

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The primary reasons for the differences between income tax expense and the amount computed by applying the statutory federal income tax rate to earnings are as follows:

	2019		2018		2017
Statutory federal income tax rate	21.0	%	21.0	%	35.0	%
State income taxes, net of federal benefit	2.5		2.4		0.7
Tax exempt income	(1.5	)	(1.5	)	(2.6	)
Excess benefits from equity-based compensation	(0.8	)	(0.6	)	(1.6	)
Bank-owned life insurance income	(0.5	)	(0.4	)	(0.8	)
Federal tax credit	(0.7	)	(0.6	)	(2.0	)
Enactment of Federal tax reform	0.0		0.0		15.7
All other	0.5		0.6		0.4
Total	20.5	%	20.9	%	44.8	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows:

(In thousands)	2019			2018
Deferred tax assets:
Allowance for loan and lease losses	$	9,913		$	10,676
Lease liability	8,363			0
Interest income on nonperforming loans	368			384
Compensation and benefits	10,972			10,885
Liabilities held at fair value	4			12
Other	1,842			2,333
Total	$	31,462		$	24,290
Deferred tax liabilities:
Prepaid pension	9,856			8,700
Right of use asset	7,790			0
Depreciation	4,688			4,193
Intangibles	1,128			971
Purchase accounting adjustments	274			328
Leases	2,472			1,790
Other	1,478			1,459
Total deferred tax liabilities	$	27,686		$	17,441
Net deferred tax asset at year-end	$	3,776		$	6,849
Net deferred tax asset at beginning of year	$	6,849		$	9,203
Decrease in net deferred tax asset	(3,073		)	(2,354		)
Federal tax reform remeasurement of AOCI deferred tax asset	$	0		$	0
Deferred tax expense	$	3,073		$	2,354

The above analysis does not include recorded deferred tax assets (liabilities) of $(1.3) million and $7.5 million as of December 31, 2019 and 2018, respectively, related to net unrealized holdings losses/(gains) in the available-for-sale securities portfolio. In addition, the analysis excludes recorded deferred tax assets of $15.5 million and $12.9 million, as of December 31, 2019 and 2018, respectively, related to employee benefit plans.

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Realization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods in which the temporary differences comprising the deferred tax assets will be deductible. Based on its assessment, management determined that no valuation allowance was necessary at December 31, 2019 and 2018.

At December 31, 2019 and December 31, 2018, the Company had no ASC 740-10 unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months. The Company recognizes interest and penalties on unrecognized tax benefits in income tax expense in its Consolidated Statements of Income.

The Company is subject to U.S. federal income tax and income tax in New York and various state jurisdictions. All tax years ending after December 31, 2015 are open to examination by the taxing authorities.

Note 16 Other Comprehensive Income (Loss)

The tax effect allocated to each component of other comprehensive income (loss) were as follows:

December 31, 2019	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized gain during the period	$	33,431		$	(8,190	)	$	25,241
Unrealized gains on HTM securities transferred to AFS securities	3,777			(925		)	2,852
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	(616		)	151			(465		)
Net unrealized gains	36,592			(8,964		)	27,628
Employee benefit plans:
Net retirement plan loss	(10,122		)	2,480			(7,642		)
Net actuarial gain due to curtailment	(399		)	97			(302		)
Net retirement plan prior service credit	(1,819		)	446			(1,373		)
Amortization of net retirement plan actuarial gain	1,677			(411		)	1,266
Amortization of net retirement plan prior service (cost) credit	32			(8		)	24
Employee benefit plans	(10,631		)	2,604			(8,027		)
Other comprehensive income	$	25,961		$	(6,360	)	$	19,601

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December 31, 2018	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized loss during the period	$	(14,550	)	$	3,569		$	(10,981	)
Reclassification adjustment for net realized loss on sale included in available-for-sale securities	440			(108		)	332
Net unrealized losses	(14,110		)	3,461			(10,649		)
Employee benefit plans:
Net retirement plan loss	(3,437		)	843			(2,594		)
Amortization of net retirement plan actuarial gain	1,719			(421		)	1,298
Amortization of net retirement plan prior service (cost) credit	15			(4		)	11
Employee benefit plans	(1,703		)	418			(1,285		)
Other comprehensive loss	$	(15,813	)	$	3,879		$	(11,934	)

December 31, 2017	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized loss during the period	$	(4,442	)	$	1,761		$	(2,681	)
Reclassification adjustment for net realized loss on sale included in available-for-sale securities	407			(163		)	244
Net unrealized losses	(4,035		)	1,598			(2,437		)
Employee benefit plans:
Net retirement plan loss	(4,549		)	1,115			(3,434		)
Net retirement plan prior service credit	964			(236		)	728
Amortization of net retirement plan actuarial loss	1,508			(603		)	905
Amortization of net retirement plan prior service (cost) credit	15			(6		)	9
Employee benefit plans	(2,062		)	270			(1,792		)
Other comprehensive loss	$	(6,097	)	$	1,868		$	(4,229	)

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

(In thousands)	Available-for-Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income (loss)
Balance at January 1, 2017	$	(7,915	)	$	(29,194	)	$	(37,109	)
Other comprehensive loss	(2,437		)	(1,792		)	(4,229		)
Reclassification due to adoption of ASU 2018-02	(2,653		)	(7,305		)	(9,958		)
Balance at December 31, 2017	$	(13,005	)	$	(38,291	)	$	(51,296	)
Balance at January 1, 2018	(13,005		)	(38,291		)	(51,296		)
Other comprehensive loss	(10,649		)	(1,285		)	(11,934		)
Adoption of ASU 2016-01	65			0			65
Balance at December 31, 2018	$	(23,589	)	$	(39,576	)	$	(63,165	)
Balance at January 1, 2019	(23,589		)	(39,576		)	(63,165		)
Other comprehensive income	27,628			(8,027		)	19,601
Balance at December 31, 2019	$	4,039		$	(47,603	)	$	(43,564	)

December 31, 2019
Details about Accumulated other Comprehensive Income Components (in thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss)1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	616		Net (loss) gain on securities transactions
	(151		)	Tax expense
	465			Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial gain	(1,677		)	Other operating expense
Net retirement plan prior service credit	(32		)	Other operating expense
	(1,709		)	Total before tax
	419			Tax benefit
	(1,290		)	Net of tax

122

December 31, 2018
Details about Accumulated other Comprehensive Income Components (in thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss)1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	(440	)	Net (loss) gain on securities transactions
	108			Tax benefit
	(332		)	Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial gain	(1,719		)	Other operating expense
Net retirement plan prior service credit	(15		)	Other operating expense
	(1,734		)	Total before tax
	425			Tax benefit
	(1,309		)	Net of tax

¹ Amounts in parentheses indicate debits in income statement.

² The accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (See Note 11 - “Employee Benefit Plans”).

Note 17 Commitments and Contingent Liabilities

The Company, in the normal course of business, is a party to financial instruments with off-balance-sheet risk to meet the financial needs of its customers. These financial instruments include loan commitments, standby letters of credit, and unused portions of lines of credit. The contract, or notional amount, of these instruments represents the Company’s involvement in particular classes of financial instruments. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the Consolidated Statements of Condition.

The Company’s maximum potential obligations to extend credit for loan commitments (unfunded loans, unused lines of credit, and standby letters of credit) outstanding on December 31 were as follows:

(In thousands)	2019		2018
Loan commitments	$	149,397	$	156,111
Standby letters of credit	30,460		21,685
Undisbursed portion of lines of credit	800,316		819,252
Total	$	980,173	$	997,048

Commitments to extend credit (including lines of credit) are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments to guarantee the performance of a customer to a third party. 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 December 31, 2019, the Company’s maximum potential obligation under standby letters of credit was $30.5 million. Management uses the same credit policies in making commitments to extend credit and standby letters of credit as are used for on-balance-sheet lending decisions. Based upon management’s evaluation of the counterparty, the Company may require collateral to support commitments to extend credit and standby letters of credit. The credit risk amounts are equal to the contractual amounts, assuming the amounts are fully advanced and collateral or other security is of no value. The Company does not anticipate losses as a result of these transactions. These commitments also have off-balance-sheet interest-rate risk, in that the interest rate at which these commitments were made may not be at market rates on the date the commitments are fulfilled. Since some commitments and standby letters of credit are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements.

123

At December 31, 2019, the Company had rate lock agreements associated with mortgage loans to be sold in the secondary market (certain of which relate to loan applications for which no formal commitment has been made) amounting to approximately $1.8 million. In order to limit the interest rate risk associated with rate lock agreements, as well as the interest rate risk associated with mortgages held for sale, if any, the Company enters into agreements to sell loans in the secondary market to unrelated investors on a loan-by-loan basis. At December 31, 2019, the Company had approximately $807,000 of commitments to sell mortgages to unrelated investors on a loan-by-loan basis.

In the normal course of business, the Company is involved in various legal proceedings, investigations, and administrative proceedings. Private, civil litigations may range from individual actions involving a single plaintiff to putative class action lawsuits with potentially thousands of class members. Investigations may involve both formal and informal proceedings, by both government agencies and self-regulatory bodies. Based on information presently known to us, we do not believe there is any matter to which we are a party, or involving any of our properties that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on our financial statements.

Note 18 Earnings Per Share

Calculation of basic earnings per share (Basic EPS) and diluted earnings per share (Diluted EPS) is shown below.

	Year ended December 31,
(In thousands, except share and per share data)	2019			2018			2017
Basic
Net income available to common shareholders	$	81,718		$	82,308		$	52,494
Less: income attributable to unvested stock-based compensation awards	(1,306		)	(1,315		)	(818		)
Net earnings allocated to common shareholders	80,412			80,993			51,676
Weighted average shares outstanding, including unvested stock-based compensation awards	15,149,535			15,283,914			15,193,438
Less: average unvested stock-based compensation awards	(242,478		)	(244,685		)	(243,006		)
Weighted average shares outstanding - Basic	14,907,057			15,039,229			14,950,432
Diluted
Net earnings allocated to common shareholders	80,412			80,993			51,676
Weighted average shares outstanding - Basic	14,907,057			15,039,229			14,950,432
Plus: incremental shares from assumed conversion of stock-based compensation awards	66,894			93,028			122,823
Weighted average shares outstanding - Diluted	14,973,951			15,132,257			15,073,255
Basic EPS	$	5.39		$	5.39		$	3.46
Diluted EPS	$	5.37		$	5.35		$	3.43

Stock-based compensation awards representing 14,982, 10,013, and 20,789 common shares for 2019, 2018, and 2017, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.

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Note 19 Fair Value Measurements

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).

The three levels of the fair value hierarchy 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 December 31, 2019 and 2018 segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements

December 31, 2019

(In thousands)	Fair Value 12/31/2019		(Level 1)		(Level 2)		(Level 3)
Available-for-sale securities
U.S. Treasuries	$	1,840	$	0	$	1,840	$	0
Obligations of U.S. Government sponsored entities	372,488		0		372,488		0
Obligations of U.S. states and political subdivisions	97,785		0		97,785		0
Mortgage-backed securities - residential
U.S. Government agencies	164,451		0		164,451		0
U.S. Government sponsored entities	659,590		0		659,590		0
Non-U.S. Government agencies or sponsored entities	0		0		0		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale securities	1,298,587		0		1,298,587		0
Equity securities	915		0		0		915

The change in the fair value of the $915,000 of available-for-sale securities valued using significant unobservable inputs (level 3), between January 1, 2019 and December 31, 2019 was immaterial.

125

Recurring Fair Value Measurements

December 31, 2018

(In thousands)	Fair Value 12/31/2018		(Level 1)		(Level 2)		(Level 3)
Available-for-sale securities
U.S. Treasuries	$	289	$	0	$	289	$	0
Obligations of U.S. Government sponsored entities	485,898		0		485,898		0
Obligations of U.S. states and political subdivisions	85,440		0		85,440		0
Mortgage-backed securities - residential
U.S. Government agencies	128,267		0		128,267		0
U.S. Government sponsored entities	630,558		0		630,558		0
Non-U.S. Government agencies or sponsored entities	31		0		31		0
U.S. corporate debt securities	2,175		0		2,175		0
Total Available-for-sale securities	1,332,658		0		1,332,658		0
Equity securities	887		0		0		887

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 pricing service uses a variety of techniques to determine fair value, including market maker bids, quotes and pricing models. Inputs to the model include recent trades, benchmark interest rates, spreads, and actual and projected cash flows. The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company’s investment portfolio consists of traditional investments, nearly all of which are U.S. Treasury obligations, federal agency bullet or mortgage pass-through securities, or general obligation municipal bonds. Pricing for such instruments is fairly generic and is easily obtained. At least annually, the Company will validate prices supplied by the independent pricing service by comparing to prices obtained from a second third-party source. Based on the inputs used by our independent pricing services, the Company identifies the appropriate level within the fair value hierarchy to report these fair values.

Certain assets are measured at fair value on a nonrecurring basis, that is, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. For the Company, these include loans held for sale, collateral dependent impaired loans, other real estate owned, goodwill and other intangible assets. During 2019, certain collateral dependent impaired loans and other real estate owned at December 31, 2019, were adjusted down to fair value. Collateral values are estimated using Level 2 inputs based upon observable market data. Real estate values are generally valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally available in the market.

(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Twelve months ended
Assets:	12/31/2019		(Level 1)		(Level 2)		(Level 3)		12/31/2019
Impaired loans	$	14,050	$	0	$	14,050	$	0	$	(4,184	)
Other real estate owned	315		0		315		0		(94		)

126

(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Twelve months ended
Assets:	12/31/2018		(Level 1)		(Level 2)		(Level 3)		12/31/2018
Impaired loans	$	6,500	$	0	$	6,500	$	0	$	(173	)
Other real estate owned	1,594		0		1,594		0		(211		)

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2019 and 2018. 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 does 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
December 31, 2019
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	137,982	$	137,982	$	137,982	$	0	$	0
Securities - held-to-maturity	0		0		0		0		0
FHLB and FRB stock	33,695		33,695		0		33,695		0
Accrued interest receivable	19,293		19,293		0		19,293		0
Loans and leases, net1	4,877,658		4,798,268		0		14,050		4,784,218
Financial Liabilities:
Time deposits	$	675,014	$	677,205	$	0	$	677,205	$	0
Other deposits	4,537,907		4,537,907		0		4,537,907		0
Securities sold under agreements to repurchase	60,346		60,346		0		60,346		0
Other borrowings	658,100		659,895		0		659,895		0
Trust preferred debentures	17,035		21,904		0		21,904		0
Accrued interest payable	2,486		2,486		0		2,486		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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Estimated Fair Value of Financial Instruments
December 31, 2018
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	80,389	$	80,389	$	80,389	$	0	$	0
Securities - held-to-maturity	140,579		139,377		0		139,377		0
FHLB and FRB stock	52,262		52,262		0		52,262		0
Accrued interest receivable	20,922		20,922		0		20,922		0
Loans and leases, net1	4,790,529		4,649,308		0		6,500		4,642,808
Financial Liabilities:
Time deposits	$	637,295	$	631,489	$	0	$	631,489	$	0
Other deposits	4,251,664		4,251,664		0		4,251,664		0
Securities sold under agreements to repurchase	81,842		81,842		0		81,842		0
Other borrowings	1,076,075		1,074,081		0		1,074,081		0
Trust preferred debentures	16,863		21,921		0		21,921		0
Accrued interest payable	2,408		2,408		0		2,408		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. For miscellaneous equity securities, carrying value is cost. These securities are reviewed periodically to determine if there are any events or changes in circumstances that would adversely affect their value.

FHLB and FRB Stock

The carrying amount of FHLB and FRB stock approximates fair value. If the stock is redeemed, the Company will receive an amount equal to the par value of the stock.

Loans and Leases

Fair value for loans are calculated using an exit price notion. The Company's valuation methodology takes into account factors such as estimated cash flows, including contractual cash flow and assumptions for prepayments; liquidity risk; and credit risk. The fair values of residential loans were estimated using discounted cash flow analyses, based upon available market benchmarks for rates and prepayment assumptions. The fair values of commercial and consumer loans were estimated using discounted cash flow analyses, based upon interest rates currently offered for loans and leases with similar terms and credit quality. The fair values of loans held for sale were determined based upon contractual prices for loans with similar characteristics.

Accrued Interest Receivable and Accrued Interest Payable

The carrying amount of these short term instruments approximate fair value.

128

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.

Note 20 Leases

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and subsequent amendments, which replaced existing lease guidance in GAAP and requires lessees to recognize right-of-use (ROU) assets and lease liabilities on the Consolidated Statement of Condition for leases greater than twelve months and disclose key information about leasing arrangements. We adopted the standard on January 1, 2019 using the modified retrospective method and used the effective date as our date of initial application. Financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. There were no adjustments to “Retained earnings” on adoption. The new standard provides a number of optional practical expedients for transition. We elected the package of practical expedients under the transition guidance which permitted us not to reassess under the new standard our prior conclusions for lease identification and lease classification on expired or existing contracts and whether initial direct costs previously capitalized would qualify for capitalization under FASB Accounting Standards Codification (ASC) 842. We did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases.

The new standard also provides practical expedients and recognition exemptions for an entity’s ongoing accounting policy elections. We are committed under short and long-term lease agreements for branch and ATM locations. Some of these agreements contain variable payment provisions that depend on an index or rate, initially measured using the index or rate at the lease commencement date, and are therefore not included in our future minimum lease payments. These variable lease agreements include usage-based payments for utilities, taxes, janitorial services and building maintenance. Our long-term lease agreements do not contain any material restrictive covenants.

Our property leases have remaining terms of less than 1 to 23 years. Some of these leases may include options to extend the leases for up to 29 years, and some may include options to terminate the leases within 30 days. For each lease containing a renewal option, the Company considers the likelihood that the option will be exercised.  Only renewal options that are reasonably assured of being exercised are included in the calculation of the ROU asset and lease liability.

Operating lease amounts included in the Consolidated Statement of Condition are as follows:

(In thousands)		December 31, 2019
Assets	Classification
ROU assets	Other assets	$	33,501
Liabilities
Current lease liabilities	Other liabilities	3,256
Non-current lease liabilities	Other liabilities	32,666
Total lease liabilities		$	35,922

129

The components of operating lease expense, primarily included in “Net occupancy expense of premises,” were as follows:

(In thousands)	Year Ended December 31, 2019
Lease Costs
Operating lease cost	$	4,683
Variable lease cost	466
Short-term lease cost	1
Sublease income	(35		)
Total lease cost	$	5,115

At December 31, 2019, we did not have any material finance lease assets or liabilities.

Other information related to operating leases was as follows:

(In thousands)	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$4,680
Weighted-average remaining lease term on operating leases	13.85
Weighted-average discount rates on operating leases	3.53	%
ROU assets obtained in exchange for lease liabilities	$39,508

Future minimum lease payments under operating leases were as follows:

(In thousands)	Operating Leases
2020	$	4,454
2021	4,106
2022	4,059
2023	3,816
2024	3,684
2025 and subsequent years	26,605
Total lease payments	$	46,724
Less: Interest	(10,802		)
Present value of lease liabilities	$	35,922

At December 31, 2018, operating lease commitments under lessee arrangements were $4.8 million, $4.0 million, $3.6 million, $3.4 million, and $3.4 million for 2019 through 2023, respectively, and $13.0 million in aggregate for all years thereafter. These amounts include lease options to renew ranging from 5 to 20 years.

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Note 21 Regulations and Supervision

Capital Requirements:

The Company and its subsidiary banks are subject to various regulatory capital requirements administered by Federal bank regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on the Company’s business, results of operation and financial condition. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (PCA), banks must meet specific guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classifications of the Company and its subsidiary banks are also subject to qualitative judgments by regulators concerning components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of common equity Tier I capital, total capital and Tier 1 capital to risk-weighted assets (as defined in the regulation), and of Tier 1 capital to average assets (as defined in the regulation). Management believes that the Company and its subsidiary banks meet all capital adequacy requirements to which they are subject.

At year end 2017, the Company early adopted ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". ASU 2018-02 permits a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate associated with the enactment of the Tax Cuts and Jobs Act in December 2017. The amount of the reclassification was the difference between the historical corporate income tax rate of 35 percent and the newly enacted 21 percent corporate income tax rate. The adoption resulted in the reclassification from accumulated other comprehensive income (loss) to retained earnings totaling $10.0 million, reflected in the Consolidated Statements of Changes in Shareholders' Equity.

As of December 31, 2019, the most recent notifications from Federal bank regulatory agencies categorized Tompkins Trust Company, The Bank of Castile, Mahopac Bank, and VIST Bank as “well capitalized” under the regulatory framework for PCA. To be categorized as well capitalized, the Company and its subsidiary banks must maintain total risk-based, Tier 1 risk-based, common equity Tier 1 capital and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the capital category of the Company or its subsidiary banks.

The following table presents actual and required capital ratios as of December 31, 2019 and December 31, 2018 for Tompkins and its four banking subsidiaries. The minimum required capital amounts presented include the minimum required capital levels as of January 1, 2020. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

131

Actual capital amounts and ratios of the Company and its subsidiary banks are as follows:

	Actual	Minimum Capital Required- Basel III Fully-Phased-In	Required to be Considered Well Capitalized
(dollar amounts in thousands)	Amount/Ratio	Amount/Ratio	Amount/Ratio
December 31, 2019
Total Capital (to risk-weighted assets)
The Company (consolidated)	$666,106 /13.5%	$517,039 />10.5%	$492,418 />10.0%
Trust Company	$197,660/14.1%	$147,405 />10.5%	$140,386 />10.0%
Castile	$145,669/12.2%	$125,493 />10.5%	$119,517 />10.0%
Mahopac	$128,238/13.0%	$103,800 />10.5%	$98,857 />10.0%
VIST	$161,559/12.2%	$139,235 />10.5%	$132,605 />10.0%
Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$607,290/12.3%	$344,692 />7.0%	$320,072 />6.5%
Trust Company	$185,499/13.2%	$98,270 />7.0%	$91,251 />6.5%
Castile	$136,342/11.4%	$83,662 />7.0%	$77,686 />6.5%
Mahopac	$116,953/11.8%	$69,200 />7.0%	$64,257 />6.5%
VIST	$152,550/11.5%	$92,823 />7.0%	$86,193 />6.5%
Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$624,325/12.7%	$418,555 />8.5%	$393,934 />8.0%
Trust Company	$185,499/13.2%	$119,328 />8.5%	$112,309 />8.0%
Castile	$136,342/11.4%	$101,589 />8.5%	$95,614 />8.0%
Mahopac	$116,953/11.8%	$84,029 />8.5%	$79,086 />8.0%
VIST	$152,550/11.5%	$112,714 />8.5%	$106,084 />8.0%
Tier 1 Capital (to average assets)
The Company (consolidated)	$624,325/9.6%	$259,903 />4.0%	$324,879 />5.0%
Trust Company	$185,499/9.2%	$81,001 />4.0%	$101,252 />5.0%
Castile	$136,342/9.2%	$59,239 />4.0%	$74,049 />5.0%
Mahopac	$116,953/8.9%	$52,469 />4.0%	$65,586 />5.0%
VIST	$152,550/8.7%	$70,228 />4.0%	$87,785 />5.0%
December 31, 2018
Total Capital (to risk-weighted assets)
The Company (consolidated)	$645,891 /13.1%	$517,500 />10.5%	$492,857 />10.0%
Trust Company	$191,872/13.9%	$144,822 />10.5%	$137,926 />10.0%
Castile	$138,816/11.7%	$124,738 />10.5%	$118,798 />10.0%
Mahopac	$126,342/12.7%	$104,146 />10.5%	$99,186 />10.0%
VIST	$158,557/11.7%	$142,048 />10.5%	$135,284 />10.0%
Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$583,458/11.8%	$345,000 />7.0%	$320,357 />6.5%
Trust Company	$180,077/13.1%	$96,548 />7.0%	$89,652 />6.5%
Castile	$129,482/10.9%	$83,159 />7.0%	$77,219 />6.5%
Mahopac	$114,327/11.5%	$69,431 />7.0%	$64,471 />6.5%
VIST	$146,131/10.8%	$94,699 />7.0%	$87,934 />6.5%
Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$600,321/12.2%	$418,929 />8.5%	$394,286 />8.0%
Trust Company	$180,077/13.1%	$117,237 />8.5%	$110,341 />8.0%
Castile	$129,482/10.9%	$100,978 />8.5%	$95,038 />8.0%
Mahopac	$114,327/11.5%	$84,309 />8.5%	$79,349 />8.0%
VIST	$146,131/10.8%	$114,991 />8.5%	$108,227 />8.0%
Tier 1 Capital (to average assets)
The Company (consolidated)	$600,321/9.1%	$265,465 />4.0%	$331,832 />5.0%
Trust Company	$180,077/8.5%	$84,592 />4.0%	$105,740 />5.0%
Castile	$129,482/8.6%	$60,368 />4.0%	$75,460 />5.0%
Mahopac	$114,327/8.4%	$54,219 />4.0%	$67,773 />5.0%
VIST	$146,131/8.8%	$66,282 />4.0%	$82,853 />5.0%

132

Note 22 Condensed Parent Company Only Financial Statements

Condensed financial statements for Tompkins (the Parent Company) as of December 31,2019, 2018 and 2017 are presented below. 

Condensed Statements of Condition
(In thousands)	2019		2018
Assets
Cash	$	14,631	$	6,235
Investment in subsidiaries, at equity	664,775		625,193
Other	3,873		9,416
Total Assets	$	683,279	$	640,844
Liabilities and Shareholders’ Equity
Borrowings	4,000		4,000
Trust preferred debentures issued to non-consolidated subsidiary	17,035		16,863
Other liabilities	602		522
Tompkins Financial Corporation Shareholders’ Equity	661,642		619,459
Total Liabilities and Shareholders’ Equity	$	683,279	$	640,844

Condensed Statements of Income
(In thousands)	2019		2018		2017
Dividends received from subsidiaries	$	72,827	$	44,518	$	33,522
Other income	240		332		281
Total Operating Income	$	73,067	$	44,850	$	33,803
Interest expense	1,450		1,468		1,550
Other expenses	8,409		7,222		6,120
Total Operating Expenses	$	9,859	$	8,690	$	7,670
Income Before Taxes and Equity in Undistributed
Earnings of Subsidiaries	63,208		36,160		26,133
Income tax benefit	2,085		1,687		1,867
Equity in undistributed earnings of subsidiaries	16,425		44,461		24,494
Net Income	$	81,718	$	82,308	$	52,494

133

Condensed Statements of Cash Flows
(In thousands)	2019			2018			2017
Operating activities
Net income	$	81,718		$	82,308		$	52,494
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings of subsidiaries	(16,425		)	(44,461		)	(24,494		)
Other, net	3,209			1,014			(1,569		)
Net Cash Provided by Operating Activities	68,502			38,861			26,431
Investing activities
Other, net	3,265			0			1,052
Net Cash Provided by Investing Activities	3,265			0			1,052
Financing activities
Borrowings, net	0			(5,000		)	(28,161		)
Cash dividends	(30,637		)	(29,634		)	(27,627		)
Repurchase of common shares	(29,867		)	(2,448		)	0
Net proceeds from restricted stock awards	(1,875		)	(1,403		)	(1,294		)
Shares issued for dividend reinvestment plans	0			0			2,872
Shares issued for employee stock ownership plan	0			3,073			2,296
Net proceeds from exercise of stock options	(992		)	(540		)	(641		)
Net Cash Used in Financing Activities	(63,371		)	(35,952		)	(52,555		)
Net increase (decrease) in cash	8,396			2,909			(25,072		)
Cash at beginning of year	6,235			3,326			28,398
Cash at End of Year	$	14,631		$	6,235		$	3,326

A Statement of Changes in Shareholders’ Equity has not been presented since it is the same as the Consolidated Statement of Changes in Shareholders’ Equity previously presented.

Note 23 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 16 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.

134

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.

135

As of and for the year ended December 31, 2019
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	261,378	$	3	$	0	$	(3	)	$	261,378
Interest expense	50,753		0		0		(3		)	50,750
Net interest income	210,625		3		0		0			210,628
Provision for loan and lease losses	1,366		0		0		0			1,366
Noninterest income	29,054		31,501		17,001		(2,123		)	75,433
Noninterest expense	145,102		25,908		12,947		(2,123		)	181,834
Income before income tax expense	93,211		5,596		4,054		0			102,861
Income tax expense	18,598		1,426		992		0			21,016
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	74,613		4,170		3,062		0			81,845
Less: Net income attributable to noncontrolling interests	127		0		0		0			127
Net Income attributable to Tompkins Financial Corporation	$	74,486	$	4,170	$	3,062	$	0		$	81,718
Depreciation and amortization	$	9,778	$	225	$	41	$	0		$	10,044
Assets	6,671,409		41,841		24,313		(11,940		)	6,725,623
Goodwill	64,370		19,866		8,211		0			92,447
Other intangibles, net	3,215		2,860		148		0			6,223
Net loans and leases	4,877,658		0		0		0			4,877,658
Deposits	5,223,893		0		0		(10,972		)	5,212,921
Total equity	608,901		32,204		21,949		0			663,054

As of and for the year ended December 31, 2018
(In thousands)	Banking		Insurance		Wealth Management		Intercompany & Merger			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

136

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

Unaudited Quarterly Financial Data
	2019
(in thousands)	First		Second		Third		Fourth
Interest and dividend income	$	64,927	$	66,093	$	65,775	$	64,583
Interest expense	13,013		13,775		12,619		11,343
Net interest income	51,914		52,318		53,156		53,240
Provision for loan and lease losses	445		601		1,320		(1,000		)
Income before income taxes	26,667		24,167		25,715		26,312
Net income	21,040		19,392		20,206		21,080
Net income per common share (basic)	1.37		1.28		1.34		1.41
Net income per common share (diluted)	1.37		1.27		1.34		1.40

 

Unaudited Quarterly Financial Data
	2018
(in thousands)	First		Second		Third		Fourth
Interest and dividend income	$	60,140	$	62,143	$	63,984	$	65,325
Interest expense	7,453		9,429		10,821		12,089
Net interest income	52,687		52,714		53,163		53,236
Provision for loan and lease losses	567		1,045		272		2,058
Income before income taxes	26,229		27,842		26,361		23,808
Net income	20,436		22,059		20,902		18,911
Net income per common share (basic)	1.34		1.44		1.37		1.24
Net income per common share (diluted)	1.33		1.43		1.36		1.23

137

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, including its 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 Exchange Act) as of December 31, 2019. 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 Form 10-K, the Company’s disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. As of December 31, 2019, management evaluated the effectiveness of the Company’s internal control over financial reporting based on the framework for effective internal control over financial reporting established in “Internal Control - Integrated Framework (2013),” issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based on its evaluation under the COSO framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2019. The results of management’s assessment were reviewed with the Company’s Audit Committee of its Board of Directors. The independent registered public accounting firm that audited the Company’s consolidated financial statements included in this report has issued an attestation report on the Company’s internal controls over financial reporting, which is included in Part II, Item 8 of this Report.

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 December 31, 2019, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

On February 28, 2020, the Compensation Committee of the Company’s Board of Directors (the “Board”) and the full Board approved certain modifications to the compensation payable to Stephen S. Romaine, the Company’s President and Chief Executive Officer; Francis M. Fetsko, the Company’s Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer; and David S. Boyce, Executive Vice President and President of Tompkins Insurance Agencies. The Compensation Committee had determined that the existing cap on the benefits currently included in the Officer Group Term Replacement Plan provided by the Company for each such executive (such arrangement with respect to each such executive, the “Plan”) should be modified in order to better reflect the compensation arrangement that was previously agreed upon between the Company and each such executive. In order to better align the death benefits available to those executives with the arrangements contemplated by the parties when the Plans were put in place, the Compensation Committee and the full Board approved an amendment to the Plan for each of Messrs. Romaine, Fetsko and Boyce, which would establish a minimum death benefit payable to each executive under his Plan and eliminate the dollar value cap on the death benefit, and replace it with a maximum payment equal to the lesser of (a) four times the executive’s Base Annual Salary (as defined in the Plan), or (b) the death benefit or benefits available under the Policy or Policies (as defined in the Plan) maintained as of the date of such executive’s death. A copy of the amendments are filed with this Annual Report on Form 10‑K as Exhibits 10.31, 10.32, and 10.33.

138

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated herein by reference to the material under the captions “Proposal No. 1 – Election of Directors”, the discussion of the Company’s code of ethics under “Corporate Governance Matters”, and the discussion of the Audit/Examining Committee under “Matters Relating to the Board of Directors - Board of Directors: Committee Membership” all in the Company’s proxy statement relating to its 2020 annual meeting of shareholders (the “Proxy Statement”), which the Company intends to file with the Securities and Exchange Commission on or about March 27, 2020; and the material captioned “ Information About Our Executive Officers” in Part I of this Report on Form 10-K.

Item 11. Executive Compensation

The information called for by this item is incorporated herein by reference to the material under the captions, “Executive Compensation,”, “Matters Relating to the Board of Directors - Director Compensation”, “Executive Compensation – Compensation Committee Interlocks and Insider Participation”, “Executive Compensation – Compensation Committee Report”, and “Corporate Governance Matters - Risk and Influence on Compensation Programs” in the Proxy Statement.

The material incorporated herein by reference to the material under the caption “Executive Compensation - Compensation Committee Report” in the Proxy Statement is deemed “furnished” within this Report on Form 10-K and shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A, or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into such filing.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information regarding security ownership of management and certain beneficial owners is incorporated by reference to the information under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.

Information regarding stock-based compensation awards outstanding and available for future grant as of December 31, 2019 is presented in the table below.

Equity Compensation Plan Information
Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights	Weighted Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (excluding Securities in Column (a))
	(a)	(b)		(c)
Equity Compensation Plans Approved by Security Holders	157,622	$	49.72	237,800 1
Equity Compensation Plans Not Approved by Security Holders	0	0.00		0

¹ Represents shares that are available for issuance under the 2019 Equity Incentive Plan, which was effective May 7, 2019.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information called for by this item is incorporated herein by reference to the material under the captions “Corporate Governance Matters - Affirmative Determination of Director Independence” and “Transactions with Related Persons” in the Proxy Statement.

139

Item 14. Principal Accounting Fees and Services

The information called for by this item is incorporated herein by reference to the material under the caption “Independent Registered Public Accounting Firm” in the Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) The following financial statements and Reports of KPMG LLP are included in this Annual Report on Form 10-K:

Reports of KPMG LLP, Independent Registered Public Accounting Firm on Consolidated Financial Statements and Internal Control over Financial Reporting

Consolidated Statements of Condition as of December 31, 2019 and 2018

Consolidated Statements of Income for the years ended December 31, 2019, 2018, and 2017

Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018, and 2017

Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018, and 2017

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2019, 2018, and 2017

Notes to Consolidated Financial Statements

Unaudited Quarterly Financial Data

(a)(2) List of Financial Statement Schedules

Not Applicable.

 

140

(a)(3)	Exhibits
The following exhibits are filed as a part of this report:
Item No.		Description
2.1		Agreement and Plan of Reorganization, dated as of March 14, 1995, among the Bank, the Company and the Interim Bank, incorporated herein by reference to Exhibit 2 to the Company’s Registration Statement on From 8-A (No. 0-38625), filed with the Commission on January 22, 1996.
2.2		Agreement and Plan of Reorganization, dated as of July 30, 1999, between the Company and Letchworth, incorporated herein by reference to Annex A to the Company’s Registration Statement on Form S-4 (Registration No. 333-90411), filed with the Commission on November 5, 1999.
2.3		Agreement and Plan of Merger, dated January 25, 2012, by and among the Company, TMP Mergeco, Inc. and VIST Financial Corp., incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 26, 2012.
2.4		First Amendment to the Agreement and Plan of Merger, dated July 31, 2012, by and among the Company, TMP Mergeco, Inc. and VIST Financial Corp., incorporated herein by reference to Exhibit 10.1 to the Company’s Amended Quarterly Report on Form 10-Q/A, filed with the Commission on September 7, 2012.
3.1		Amended and Restated Certificate of Incorporation of the Company, incorporated herein by reference to Exhibit 3(i) to the Company’s Form 10-Q, filed with the Commission on August 11, 2008.
3.2		Second Amended and Restated Bylaws of the Company, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 31, 2011.
4.1		Form of Specimen Common Stock Certificate of the Company, incorporated herein by reference to Exhibit 4 to the Company’s Registration Statement on Form 8-A (No. 0-27514), filed with the Commission on December 29, 1995.
4.2		Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934, filed herewith.
10.1*		Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and Scott L. Gruber, incorporated herein by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q, as filed with the Commission on November 9, 2016.
10.2*		Amended and Restated Retainer Plan for Eligible Directors of Tompkins Financial Corporation and Its Wholly-owned Subsidiaries incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 16, 2009.
10.3*		Form of Director Deferred Compensation Agreement, incorporated herein by reference to Exhibit 10.4 to the Company’s Registration Statement on Form 8-A (No. 0-27514), filed with the Commission on December 29, 1995.
10.4*		Deferred Compensation Plan for Senior Officers, incorporated herein by reference to Exhibit 10.5 to the Company’s Registration Statement on Form 8-A (No. 0-27514), filed with the Commission on December 29, 1995.
10.6*		2001 Stock Option Plan, incorporated herein by reference to Exhibit 99 to the Company’s Registration Statement on Form S-8 (No. 333-75822), filed with the Commission on December 21, 2001.
10.7*		Supplemental Executive Retirement Agreement between James W. Fulmer and Tompkins Trustco, Inc., dated December 28, 2005, incorporated herein by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 16, 2006.

141

10.8*	Amendment to Supplemental Executive Retirement Agreement between James W. Fulmer and the Company (formerly known as Tompkins Trustco, Inc.) dated as of September 2, 2014, incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on November 10, 2014.
10.9*	Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and Stephen S. Romaine, incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, as filed with the Commission on November 9, 2016.
10.10*	Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and Francis M. Fetsko, incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.11*	Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and David S. Boyce, incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.12*	Form of Officer Group Term Life Replacement Plan (the “Plan”) among Tompkins Trust Company and the Participants in the Plan, incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 16, 2006.
10.13*	Tompkins Trustco, Inc. Officer Group Term Life Replacement Plan, as amended on June 26, 2006, incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on August 9, 2006.
10.14*	2009 Equity Plan, incorporated herein by reference to Exhibit 99 to the Company’s Registration Statement on Form S-8 (No. 333-160738), filed with the Commission on July 22, 2009.
10.15*	Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and Gregory J. Hartz, incorporated herein by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.16*	Form of Award Agreement under 2009 Equity Plan (Restricted Stock), incorporated herein by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.17*	Form of Award Agreement under 2009 Equity Plan (Stock-Settled Stock Appreciation Right), incorporated herein by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.18	Standard Form of Agreement Between Owner and Construction Manager for Construction dated as of May 27, 2016 by and between Tompkins Trust Company and LeChase Construction Services, LLC, incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on August 9, 2016.
10.19	General Conditions of the Contract for Construction dated as of May 27, 2016 by and between Tompkins Trust Company and LeChase Construction Services, LLC, incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on August 9, 2016.

142

10.20*	Form of Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and each of Stephen S. Romaine, David S. Boyce, and Francis M. Fetsko, incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.21*	Form of Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and each of Alyssa Hochberg Fontaine, Scott L. Gruber, Gregory J. Hartz, Gerald J. Klein, Jr., and John M. McKenna, incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.22*	Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and Gerald J. Klein, Jr., incorporated herein by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.23*	Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and Alyssa Hochberg Fontaine, incorporated herein by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.24*	Amended and Restated Supplemental Executive Retirement Agreement, dated November 9, 2016, between Tompkins Financial Corporation and John M. McKenna, incorporated herein by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2016.
10.25*	Amendment No. 1 to Amended and Restated Retainer Plan for Eligible Directors of Tompkins Financial Corporation and Its Wholly-owned Subsidiaries, dated January 1, 2018 incorporated herein by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K, filed with the commission on March 1, 2018.
10.26*	Amendment No. 1 to the 2009 Equity Plan, incorporated herein by reference to Appendix A to the Company's Proxy Statement for the 2016 Annual Meeting of Shareholders, filed with the Commission on April 1, 2016.
10.27*	Form of Performance Share Award Agreement under Tompkins Financial Corporation 2019 Equity Plan, incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly report on Form 10-Q filed with the commission on November 12, 2019.
10.28*	Form of Award Agreement (Time-Based Restricted Stock) under Tompkins Financial Corporation 2019 Equity Plan, incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed with the commission on November 12, 2019.
10.29*	Amendment No. 1 to Supplemental Executive Retirement Agreement by and between the Company and Stephen S. Romaine, effective November 12, 2019, incorporated herein by reference to Exhibit 10.3 to the Company' s Quarterly Report on Form 10-Q filed with the commission on November 12, 2019.
10.30*	Form of Supplemental Executive Retirement Agreement, dated November 12, 2019, between the Company and Brian Howard, incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed with the commission on November 12, 2019.
10.31*	Amendment to the TFC Officer Group Term Replacement Plan by and between the Company and Stephen S. Romaine, dated as of February 28, 2020, filed herewith.
10.32*	Amendment to the TFC Officer Group Term Replacement Plan by and between the Company and Francis M. Fetsko, dated as of February 28, 2020, filed herewith.

143

10.33*	Amendment to the TFC Officer Group Term Replacement Plan by and between the Company and David S. Boyce, dated as of February 28, 2020, filed herewith.
21	Subsidiaries of Registrant, incorporated herein by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 17, 2014.
23	Consent of Independent Registered Public Accounting Firm (filed herewith)
24	Power of Attorney, included on signature page of this Report on Form 10-K.
31.1	Certification of the Chief Executive Officer as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of the Chief Financial Officer as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101 INS**	The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101 SCH**	Inline XBRL Taxonomy Extension Schema Document
101 CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101 DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document
101 LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document
101 PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the interactive date file because its XBRL tags are embedded with the inline XBRL document.
** Attached as Exhibit 101 to this report are the following formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Condition as of December 31, 2019 and December 31, 2018; (ii) Condensed Consolidated Statements of Income as of December 31, 2019; (iii) Condensed Consolidated Statements of Comprehensive Income as of December 31, 2019; (iv) Condensed Consolidated Statements of Cash Flows as of December 31, 2019; (v) Condensed Consolidated Statements of Changes in Shareholders' Equity as of December 31, 2019; and (vi Notes to Unaudited Condensed Consolidated Financial Statements.

*Denotes management contract or compensatory plan or arrangement

144

Item 16. Form 10-K Summary.

None.

145

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	TOMPKINS FINANCIAL CORPORATION
/S/ Stephen S. Romaine
By:	Stephen S. Romaine
	President and Chief Executive Officer
	(Principal Executive Officer)
	Date: March 2, 2020

146

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints, jointly and severally, Stephen S. Romaine and Francis M. Fetsko, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution, for him or her, and in his or her name, place and stead, in any and all capacities, to sign any amendments to this Report on Form 10-K, and to file the same, with Exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Date	Capacity	Signature	Date	Capacity
/S/Thomas R. Rochon	3/2/2020	Chairman of the Board	/S/Jennifer R. Tegan	3/2/2020	Director
Thomas R. Rochon		Director	Jennifer R. Tegan
/S/Stephen S. Romaine	3/2/2020	President and Chief Executive	/S/Patricia A. Johnson	3/2/2020	Director
Stephen S. Romaine		Officer (Principal Executive Officer)	Patricia A. Johnson
		Director
			/S/Frank C. Milewski	3/2/2020	Director
/S/James W. Fulmer	3/2/2020	Vice Chairman, Director	Frank C. Milewski
James W. Fulmer
			/S/Michael H. Spain	3/2/2020	Director
/S/Francis M. Fetsko	3/2/2020	Executive Vice President and	Michael H. Spain
Francis M. Fetsko		Chief Financial Officer
		(Principal Financial Officer)	/S/Alfred J. Weber	3/2/2020	Director
		(Principal Accounting	Alfred J. Weber
		Officer)
/S/John E. Alexander	3/2/2020	Director	/S/Craig Yunker	3/2/2020	Director
John E. Alexander			Craig Yunker
/S/Paul J. Battaglia	3/2/2020	Director
Paul J. Battaglia
/S/Daniel J. Fessenden	3/2/2020	Director
Daniel J. Fessenden

147

118 E. Seneca Street, P.O. Box 460, Ithaca, New York 14851

(607) 273-3210

www.tompkinsfinancial.com

148

EX-4.2

Exhibit 4.2

Description of Securities Registered

Under Section 12 of the Securities Exchange Act of 1934

The authorized capital stock of Tompkins consists of 25,000,000 shares of common stock, par value $0.10 per share, and 3,000,000 shares of preferred stock, par value $0.01 per share, which may be issued in series with such powers, designations and rights as may be established from time to time by our Board of Directors. As of February 18, 2020, there were 14,979,825 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding.

Description of Common Stock

General

Each share of our common stock has the same relative rights as, and is identical in all respects to, each other share of our common stock. Our common stock is traded on the NYSE American LLC under the symbol “TMP.” All of the outstanding shares of common stock are fully paid and nonassessable.

The transfer agent and registrar for our common stock is American Stock Transfer & Transfer Company, 59 Maiden Lane, Plaza Level, New York, New York 10038.

Dividends

The holders of Tompkins common stock are entitled to share ratably in dividends when and as declared by the Board of Directors out of legally available funds therefor. The Company’s Certificate of Incorporation permits the Board of Directors to issue preferred stock with terms set by the Board, which terms may include the right to receive dividends ahead of the holders of common stock. Tompkins has no shares of preferred stock presently outstanding.

Liquidation Rights

In the event of any liquidation, dissolution, or winding up of Tompkins, the holders of shares of Tompkins common stock will be entitled to receive, after payment of all the Company’s debts and liabilities and after satisfaction of all liquidation preferences applicable to the preferred stock, all remaining assets of the Company available for distribution in cash or in kind.

Voting Rights

The holders of the Company’s common stock have one vote for each share held on any matter presented for consideration at a shareholder meeting. The holders of Tompkins common stock are not entitled to cumulative voting in the election of directors.

No Preemptive Rights; Redemption and Assessment

Holders of shares of our common stock will not be entitled to preemptive rights with respect to any shares that may be issued. Our common stock is not subject to redemption or any sinking fund and the outstanding shares are fully paid and non-assessable.

Securities Are Not Insured by the FDIC

Investments in our securities will not qualify as deposits or savings accounts and will not be insured or guaranteed by the FDIC or any other governmental agency and are subject to investment risk, including the possible loss of principal.

Material Provisions of our Certificate of Incorporation and Bylaws and New York Law

General.Our Certificate of Incorporation and Bylaws contain certain provisions designed to enhance the ability of our Board of Directors to deal with attempts to acquire control of the Company. These provisions, and the ability to set the voting rights, preferences and other terms of any series of preferred stock that may be issued, may be deemed to have an anti-takeover effect and may discourage takeovers (which certain stockholders may deem to be in their best interest). To the extent that such takeover attempts are discouraged, temporary fluctuations in the market price of our common stock resulting from actual or rumored takeover attempts may be inhibited. These provisions also could discourage or make more difficult a merger, tender offer or proxy contest, even though such transaction may be favorable to the interests of stockholders, and could potentially adversely affect the market price of our common stock.

The following briefly summarizes protective provisions that are contained in our Certificate of Incorporation and Bylaws. This summary is necessarily general and is not intended to be a complete description of all the features and consequences of those provisions, and is qualified in its entirety by reference to our Certificate of Incorporation and Bylaws.

Certificate of Incorporation. Our Certificate of Incorporation provides that any business combination that would result in the disposition of all or substantially all of our assets requires the affirmative vote of 80% of our outstanding common shares in the case of a business combination involving a person that is the beneficial owner of at least 20% of our common shares, unless (1) such business combination has been approved by a majority of the disinterested directors, or (2) a fair price is offered for the Company’s shares, the calculation of which is described in greater detail in Article VII of our Certificate of Incorporation. The foregoing provisions may not be amended, altered, changed or repealed without the affirmative vote of at least 80% of the outstanding capital stock entitled to vote.

Statutory Restrictions. New York’s Business Corporation Law (the “BCL”) restricts certain business combinations. The statute prohibits certain New York corporations from engaging in a merger or other business combination with a holder of 20% or more of the corporation’s outstanding voting stock (“interested shareholder”) for a period of five years following acquisition of the stock unless the merger or other business combination, or the acquisition of the stock, is approved by the corporation’s board of directors prior to the date of the stock acquisition. If the combination was not previously approved, the interested shareholder may effect a combination after the five-year period only if a majority of the shares not owned by the 20% shareholder vote in favor of the combination or the aggregate amount of the offer meets certain fair price criteria. The provisions of Section 912 of the BCL apply if and for so long as a New York corporation has a class of securities registered under Section 12 of the Exchange Act unless the corporation opts out of the application of Section 912. We have not elected to opt out of these provisions of the BCL.

Omission of Cumulative Voting. The omission of cumulative voting from the Company’s Certificate of Incorporation may be considered anti-takeover in nature. Cumulative voting entitles each stockholder to as many votes as equal the number of shares owned by him or her multiplied by the number of directors to be elected. A stockholder may cast all these votes for one candidate or distribute them among any two or more candidates. Cumulative voting is optional under the BCL.

Advance Notice; No Action by Written Consent; Preferred Stock. The Company’s Bylaws contain restrictions that may discourage other persons from attempting to acquire control of the Company, including, without limitation, prohibitions on shareholder action by written consent and advance notice requirements with respect to matters to be voted upon at all shareholders’ meetings. In addition, the Company’s Certificate of Incorporation authorizes the issuance of up to 3,000,000 shares of preferred stock. The rights and preferences for any series of preferred stock may be set by the Board of Directors, in its sole discretion and without stockholder approval, and the rights and preferences of any such preferred stock may be superior to those of the common stock and thus may adversely affect the rights of holders of the common stock.

The overall effect of the Certificate of Incorporation and Bylaw provisions described above may be to deter a future tender offer or other takeover attempt that some stockholders might view to be in their best interests as the offer might include a premium over the market price of the Company’s common stock at that time. In addition, these provisions may have the effect of assisting the Company’s current management in retaining its position and place it in a better position to resist changes which some shareholders may want to make if dissatisfied with the conduct of the Company’s business. In addition, the existence of Supplemental Executive Retirement Plans for certain executive officers (which plans include change in control provisions) could add to the cost of a takeover of the Company. There are no other anti-takeover provisions in the Certificate of Incorporation or Bylaws, and there are no present plans to adopt other anti-takeover provisions.

Description of Preferred Stock

General

As of the date of this report, 3,000,000 shares of preferred stock, par value $0.01 per share, are authorized, of which none are issued and outstanding. Our Board of Directors may authorize the issuance of one or more additional series of preferred stock and may establish and designate series and the number of shares and the relative rights, preferences and limitations of the respective series of the preferred stock.

The terms of particular series of preferred stock may differ, among other things, in:

• designation;

• number of shares that constitute the series;

• dividends (which may be cumulative or noncumulative), the dividend rate, or the method of calculating the dividend rate;

• dividend periods, or the method of calculating the dividend periods;

• redemption provisions, including whether, on what terms and at what prices the shares will be subject to redemption at our option and whether a sinking fund will be established;

• voting rights;

• preferences and rights upon liquidation or winding up;

• whether and on what terms the shares will be convertible into or exchangeable for shares of any other class, series or security of ours or any other corporation or any other property (including whether the conversion or exchange is mandatory, at the option of the holder or at our option, the period during which conversion or exchange may occur, the initial conversion or exchange price or rate and the circumstances or manner in which the amount of common or preferred stock or other securities issuable upon conversion or exchange may be adjusted);

• for preferred stock convertible into our common stock, the number of shares of common stock to be reserved in connection with, and issued upon conversion of, the preferred stock (including whether the conversion or exchange is mandatory, the initial conversion or exchange price or rate and the circumstances or manner in which the amount of common stock issuable upon conversion or exchange may be adjusted) at the option of the holder or our option and the period during which conversion or exchange may occur; and

• other rights and privileges and any qualifications, limitations or restrictions of those rights or privileges.

The shares of preferred stock, when issued and sold, will be fully paid and nonassessable.

Dividends

Dividends will be payable when and as declared by our Board of Directors at such time or times as it elects, out of funds legally available therefor,and no holder of preferred stock will have any right to receive any dividend unless and until that dividend has been declared by the Board of Directors. The stated annual dividend may be declared and paid in increments during each calendar year and may or may not be cumulative.

In the event that dividends are declared on the preferred stock, the Board of Directors or the committee will fix a record date for any such payment of dividends, which will be paid on the preferred stock to the holders of record on that record date.

Conversion and Exchange

The shares of any future series of preferred stock may be convertible into or exchangeable for shares of any other class, series or security of the Company, upon such terms as our Board of Directors may establish (including whether the conversion or exchange is mandatory, at the option of the holder or at our option, the period during which conversion or exchange may occur, the initial conversion or exchange price or rate and the circumstances or manner in which the amount of common or preferred stock or other securities issuable upon conversion or exchange may be adjusted).

Redemption

Our Board of Directors also will determine whether, and on what terms, shares of any future series of preferred stock will be subject to mandatory redemption or a sinking fund provision, as well as whether, and on what terms, including the date on or after which redemption may occur, we may redeem shares of a series of the preferred stock.

Liquidation Rights

In the event of any liquidation, dissolution or winding up of the Company, the holders of shares of preferred stock will be entitled to receive liquidating distributions out of the Company’s assets available for distribution to shareholders. Any such liquidating distribution may be required to be made before any distribution is made to holders of any class or series of capital stock that ranks junior to the preferred stock as to rights upon liquidation, dissolution or winding up, including our common stock.

Voting Rights

Unless otherwise determined by our Board of Directors, holders of the preferred stock will not have any voting rights except as from time to time required by law. Our Board of Directors may provide that certain actions may not be taken without the consent of the holders of at least a specified percentage of the shares of preferred stock, or of a particular series of the preferred stock, outstanding at the time, voting together as one class.

EX-10.31

Exhibit 10.31

Amendment to the TFC Officer Group Term Replacement Plan

Reference is hereby made to the undersigned’s Officer Group Term Replacement Plan (the “Plan”), dated on or about December 13, 2005. The parties agree that the Plan is hereby amended as set forth below. All other sections of the Plan shall continue in full force and effect except as expressly amended hereby.

1.Article 1 (General Definitions), definitions of “Change in Control,” “Disability,” and “Terminated for Cause” are hereby amended and superseded in their entirety as follows:

1.1 “Change in Control” is defined by reference to the definition used in the Tompkins Financial Corporation 2019 Equity Plan, as amended, restated, or otherwise replaced by a successor plan which contains a definition of Change in Control.

1.3 “Disability” is defined by reference to the definition used in the Insured’s Amended and Restated Supplemental Executive Retirement Agreement (dated on or about November 9, 2016), as the same as further amended, restated, or otherwise replaced by a successor plan which contains a definition of Disability.

1.13 “Terminated for Cause” means that the Company has terminated the Participant’s employment for Cause, as defined by reference to the definition used in the Insured’s Amended and Restated Supplemental Executive Retirement Agreement (dated on or about November 9, 2016), as the same as further amended, restated, or otherwise replaced by a successor plan which contains a definition of Cause.

2.Article 2 (Participation) - Section 2.5 (Retirement), is hereby amended and restated in its entirety as follows.

2.5 Retirement. So long as Participant retires on or following the earliest age set forth on the vesting schedule attached hereto as Exhibit C, then upon such retirement of the Participant, the Company shall maintain the Policy in full force and effect and in no event shall the Company amend, terminate, or otherwise abrogate the Participant’s interest in the Policy, provided, however that at all time the Policy shall be subject to the claims of the Company’s creditors. The Participant’s interest in the Policy shall be subject to the vesting schedule attached hereto as Exhibit C.

3.Exhibit D – Section entitled “BENEFICIARIES,” is hereby amended and restated in its entirety as follows:

BENEFICIARES.

The following provisions are expressly subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, which Plan shall control over any contrary or conflicting provisions in this section:

1.Upon the death of the Insured during employment with Tompkins Financial Corporation, the beneficiary designated by the Insured, or his/her transferee, shall be the beneficiary of:

(i) Four (4) times the Participant’s Base Annual Salary, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

If the Bank has not acquired and maintained a policy or policies of life insurance providing death benefits to the Bank sufficient to pay the benefits otherwise provided under subsection (i), as applicable, the benefit otherwise payable under subsection (i), as applicable, shall be reduced to the level of the death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death which is in excess of the booked asset of such policy or policies as reflected in the financial statements of the Bank as of the Executive’s date of death.

Notwithstanding the above, but subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, the minimum benefit payable under this Section 1 shall be $1,892,196, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

2.Subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, upon the death of the Insured after retirement from Tompkins Financial Corporation, the beneficiary designated by the Insured, or his/her transferee, shall be the beneficiary of:

(ii) The amount of death benefit based on the Vesting Schedule attached hereto as Exhibit C, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

If the Bank has not acquired and maintained a policy or policies of life insurance providing death benefits to the Bank sufficient to pay the benefits otherwise provided under subsection (ii), as applicable, the benefit otherwise payable under subsection (ii), as applicable, shall be reduced to the level of the death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death which is in excess of the booked asset of such policy or policies as reflected in the financial statements of the Bank as of the Executive’s date of death.

Notwithstanding the above, If the Insured’s retirement occurs on or after the attainment of age 62, the minimum benefit payable under this Section 2 shall be $1,892,196, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

3. The beneficiary of any remaining death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death shall be Tompkins Financial Corporation (the “Company”).

IN WITNESS WHEREOF, the parties have executed this Amendment as of the last date written below:

TOMPKINS FINANCIAL CORPORATION    PARTICIPANT

(f/k/a Tompkins Trustco, Inc.)

By: /S/ Bonita N. Lindberg     /S/ Stephen S. Romaine        

Name/Title: Bonita N. Lindberg,                Name:Stephen S. Romaine,as

SVP, Dir. of HR    Participant

Date: February 28, 2020    Date: February 28, 2020        

EX-10.32

Exhibit 10.32

Amendment to the TFC Officer Group Term Replacement Plan

Reference is hereby made to the undersigned’s Officer Group Term Replacement Plan (the “Plan”), dated on or about January 16, 2002. The parties agree that the Plan is hereby amended as set forth below. All other sections of the Plan shall continue in full force and effect except as expressly amended hereby.

1.Article 1 (General Definitions), definitions of “Change in Control,” “Disability,” and “Terminated for Cause” are hereby amended and superseded in their entirety as follows:

1.2 “Change in Control” is defined by reference to the definition used in the Tompkins Financial Corporation 2019 Equity Plan, as amended, restated, or otherwise replaced by a successor plan which contains a definition of Change in Control.

1.5 “Disability” is defined by reference to the definition used in the Insured’s Amended and Restated Supplemental Executive Retirement Agreement (dated on or about November 9, 2016), as the same as further amended, restated, or otherwise replaced by a successor plan which contains a definition of Disability.

1.17 “Terminated for Cause” means that the Company has terminated the Participant’s employment for Cause, as defined by reference to the definition used in the Insured’s Amended and Restated Supplemental Executive Retirement Agreement (dated on or about November 9, 2016), as the same as further amended, restated, or otherwise replaced by a successor plan which contains a definition of Cause.

2.Article 2 (Participation) ‐ Section 2.5 (Retirement), is hereby amended and restated in its entirety as follows.

2.5 Retirement. So long as Participant retires on or following the earliest age set forth on the vesting schedule attached hereto as Exhibit C, then upon such retirement of the Participant, the Company shall maintain the Policy in full force and effect and in no event shall the Company amend, terminate, or otherwise abrogate the Participant’s interest in the Policy, provided, however that at all time the Policy shall be subject to the claims of the Company’s creditors. The Participant’s interest in the Policy shall be subject to the vesting schedule attached hereto as Exhibit C.

3.Exhibit D – Section entitled “BENEFICIARIES,” is hereby amended and restated in its entirety as follows:

BENEFICIARIES.

The following provisions are expressly subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, which Plan shall control over any contrary or conflicting provisions in this section:

1.Upon the death of the Insured during employment with Tompkins Financial Corporation, the beneficiary designated by the Insured, or his/her transferee, shall be the beneficiary of:

(i) Four (4) times the Participant’s Base Annual Salary, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

If the Bank has not acquired and maintained a policy or policies of life insurance providing death benefits to the Bank sufficient to pay the benefits otherwise provided under subsection (i), as applicable, the benefit otherwise payable under subsection (i), as applicable, shall be reduced to the level of the death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death which is in excess of the booked asset of such policy or policies as reflected in the financial statements of the Bank as of the Executive’s date of death.

Notwithstanding the above, but subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, the minimum benefit payable under this Section 1 shall be $1,700,000, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

2.Subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, upon the death of the Insured after retirement from Tompkins Financial Corporation, the beneficiary designated by the Insured, or his/her transferee, shall be the beneficiary of:

(ii) The amount of death benefit based on the Vesting Schedule attached hereto as Exhibit C, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

If the Bank has not acquired and maintained a policy or policies of life insurance providing death benefits to the Bank sufficient to pay the benefits otherwise provided under subsection (ii), as applicable, the benefit otherwise payable under subsection (ii), as applicable, shall be reduced to the level of the death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death which is in excess of the booked asset of such policy or policies as reflected in the financial statements of the Bank as of the Executive’s date of death.

Notwithstanding the above, If the Insured’s retirement occurs on or after the attainment of age 62, the minimum benefit payable under this Section 2 shall be $1,700,000, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

3. The beneficiary of any remaining death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death shall be Tompkins Financial Corporation (the “Company”).

IN WITNESS WHEREOF, the parties have executed this Amendment as of the last date written below:

TOMPKINS FINANCIAL CORPORATION    PARTICIPANT

(f/k/a Tompkins Trustco, Inc.)

By: /S/ Bonita N. Lindberg     /S/ Francis M. Fetsko        

Name/Title: Bonita N. Lindberg,                Name:Francis M. Fetsko, as Participant

SVP, Dir. of HR    Date: February 28, 2020        

Date: February 28, 2020    

EX-10.33

Exhibit 10.33

Amendment to the TFC Officer Group Term Replacement Plan

Reference is hereby made to the undersigned’s Officer Group Term Replacement Plan (the “Plan”), dated on or about December 13, 2005. The parties agree that the Plan is hereby amended as set forth below. All other sections of the Plan shall continue in full force and effect except as expressly amended hereby.

1.Article 1 (General Definitions), definitions of “Change in Control,” “Disability,” and “Terminated for Cause” are hereby amended and superseded in their entirety as follows:

1.1 “Change in Control” is defined by reference to the definition used in the Tompkins Financial Corporation 2019 Equity Plan, as amended, restated, or otherwise replaced by a successor plan which contains a definition of Change in Control.

1.3 “Disability” is defined by reference to the definition used in the Insured’s Amended and Restated Supplemental Executive Retirement Agreement (dated on or about November 9, 2016), as the same as further amended, restated, or otherwise replaced by a successor plan which contains a definition of Disability.

1.13 “Terminated for Cause” means that the Company has terminated the Participant’s employment for Cause, as defined by reference to the definition used in the Insured’s Amended and Restated Supplemental Executive Retirement Agreement (dated on or about November 9, 2016), as the same as further amended, restated, or otherwise replaced by a successor plan which contains a definition of Cause.

2.Article 2 (Participation) - Section 2.5 (Retirement), is hereby amended and restated in its entirety as follows.

2.5 Retirement. So long as Participant retires on or following the earliest age set forth on the vesting schedule attached hereto as Exhibit C, then upon such retirement of the Participant, the Company shall maintain the Policy in full force and effect and in no event shall the Company amend, terminate, or otherwise abrogate the Participant’s interest in the Policy, provided, however that at all time the Policy shall be subject to the claims of the Company’s creditors. The Participant’s interest in the Policy shall be subject to the vesting schedule attached hereto as Exhibit C.

3.Exhibit D – Section entitled “BENEFICIARIES,” is hereby amended and restated in its entirety as follows:

BENEFICIARIES.

The following provisions are expressly subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, which Plan shall control over any contrary or conflicting provisions in this section:

1.Upon the death of the Insured during employment with Tompkins Financial Corporation, the beneficiary designated by the Insured, or his/her transferee, shall be the beneficiary of:

(i) Four (4) times the Participant’s Base Annual Salary, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

If the Bank has not acquired and maintained a policy or policies of life insurance providing death benefits to the Bank sufficient to pay the benefits otherwise provided under subsection (i), as applicable, the benefit otherwise payable under subsection (i), as applicable, shall be reduced to the level of the death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death which is in excess of the booked asset of such policy or policies as reflected in the financial statements of the Bank as of the Executive’s date of death.

Notwithstanding the above, but subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, the minimum benefit payable under this Section 1 shall be $1,502,583, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

2.Subject to Articles 2 (Participation) and 3 (Policy Ownership/Interests) of the Plan, upon the death of the Insured after retirement from Tompkins Financial Corporation, the beneficiary designated by the Insured, or his/her transferee, shall be the beneficiary of:

(ii) The amount of death benefit based on the Vesting Schedule attached hereto as Exhibit C, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

If the Bank has not acquired and maintained a policy or policies of life insurance providing death benefits to the Bank sufficient to pay the benefits otherwise provided under subsection (ii), as applicable, the benefit otherwise payable under subsection (ii), as applicable, shall be reduced to the level of the death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death which is in excess of the booked asset of such policy or policies as reflected in the financial statements of the Bank as of the Executive’s date of death.

Notwithstanding the above, If the Insured’s retirement occurs on or after the attainment of age 62, the minimum benefit payable under this Section 2 shall be $1,502,583, less all sums as are payable by reason of any Other Group Term coverage on the life of the Participant.

3. The beneficiary of any remaining death benefits payable under the policy or policies the Bank acquired and maintained as of the Executive’s date of death shall be Tompkins Financial Corporation (the “Company”).

IN WITNESS WHEREOF, the parties have executed this Amendment as of the last date written below:

TOMPKINS FINANCIAL CORPORATION    PARTICIPANT

(f/k/a Tompkins Trustco, Inc.)

By: /S/ Bonita N. Lindberg     /S/ David S. Boyce        

Name/Title: Bonita N. Lindberg,                Name: David S. Boyce    , as Participant

SVP, Director of HRDate: February 28, 2020        

Date: February 28, 2020        

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Tompkins Financial Corporation:

We consent to the incorporation by reference in the registration statements (No. 333‑231413, 333-212636, and 333‑229469) on Forms S‑8 and in the registration statements (No. 333‑219427 and 333‑226312) on Forms S‑3 of Tompkins Financial Corporation and subsidiaries (the “Company”) of our reports dated March 2, 2020 with respect to the consolidated statements of condition of the Company as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the years in the three‑year period ended December 31, 2019, and the related notes (collectively, the “consolidated financial statements”), and the effectiveness of internal control over financial reporting as of December 31, 2019, which reports appear in the December 31, 2019 annual report on Form 10‑K of the Company.

/s/ KPMG LLP

Albany, New York

March 2, 2020

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

I, Stephen S. Romaine, certify that:

1. I have reviewed this annual report on Form 10-K 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: March 2, 2020

/s/ Stephen S. Romaine

Stephen S. Romaine

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

I, Francis M. Fetsko, certify that:

1. I have reviewed this annual report on Form 10-K 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: March 2, 2020

/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

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (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.

March 2, 2020

/s/ Stephen S. Romaine

Stephen S. Romaine

President and Chief

Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (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.

March 2, 2020

/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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Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

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).

The three levels of the fair value hierarchy 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 December 31, 2019 and 2018 segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements

December 31, 2019

(In thousands)	Fair Value 12/31/2019		(Level 1)		(Level 2)		(Level 3)
Available-for-sale securities
U.S. Treasuries	$	1,840	$	0	$	1,840	$	0
Obligations of U.S. Government sponsored entities	372,488		0		372,488		0
Obligations of U.S. states and political subdivisions	97,785		0		97,785		0
Mortgage-backed securities - residential
U.S. Government agencies	164,451		0		164,451		0
U.S. Government sponsored entities	659,590		0		659,590		0
Non-U.S. Government agencies or sponsored entities	0		0		0		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale securities	1,298,587		0		1,298,587		0
Equity securities	915		0		0		915

The change in the fair value of the $915,000 of available-for-sale securities valued using significant unobservable inputs (level 3), between January 1, 2019 and December 31, 2019 was immaterial.

Recurring Fair Value Measurements

December 31, 2018

(In thousands)	Fair Value 12/31/2018		(Level 1)		(Level 2)		(Level 3)
Available-for-sale securities
U.S. Treasuries	$	289	$	0	$	289	$	0
Obligations of U.S. Government sponsored entities	485,898		0		485,898		0
Obligations of U.S. states and political subdivisions	85,440		0		85,440		0
Mortgage-backed securities - residential
U.S. Government agencies	128,267		0		128,267		0
U.S. Government sponsored entities	630,558		0		630,558		0
Non-U.S. Government agencies or sponsored entities	31		0		31		0
U.S. corporate debt securities	2,175		0		2,175		0
Total Available-for-sale securities	1,332,658		0		1,332,658		0
Equity securities	887		0		0		887

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 pricing service uses a variety of techniques to determine fair value, including market maker bids, quotes and pricing models. Inputs to the model include recent trades, benchmark interest rates, spreads, and actual and projected cash flows. The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company’s investment portfolio consists of traditional investments, nearly all of which are U.S. Treasury obligations, federal agency bullet or mortgage pass-through securities, or general obligation municipal bonds. Pricing for such instruments is fairly generic and is easily obtained. At least annually, the Company will validate prices supplied by the independent pricing service by comparing to prices obtained from a second third-party source. Based on the inputs used by our independent pricing services, the Company identifies the appropriate level within the fair value hierarchy to report these fair values.

Certain assets are measured at fair value on a nonrecurring basis, that is, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. For the Company, these include loans held for sale, collateral dependent impaired loans, other real estate owned, goodwill and other intangible assets. During 2019, certain collateral dependent impaired loans and other real estate owned at December 31, 2019, were adjusted down to fair value. Collateral values are estimated using Level 2 inputs based upon observable market data. Real estate values are generally valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally available in the market.

(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Twelve months ended
Assets:	12/31/2019		(Level 1)		(Level 2)		(Level 3)		12/31/2019
Impaired loans	$	14,050	$	0	$	14,050	$	0	$	(4,184	)
Other real estate owned	315		0		315		0		(94		)

(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Twelve months ended
Assets:	12/31/2018		(Level 1)		(Level 2)		(Level 3)		12/31/2018
Impaired loans	$	6,500	$	0	$	6,500	$	0	$	(173	)
Other real estate owned	1,594		0		1,594		0		(211		)

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2019 and 2018. 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 does 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
December 31, 2019
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	137,982	$	137,982	$	137,982	$	0	$	0
Securities - held-to-maturity	0		0		0		0		0
FHLB and FRB stock	33,695		33,695		0		33,695		0
Accrued interest receivable	19,293		19,293		0		19,293		0
Loans and leases, net1	4,877,658		4,798,268		0		14,050		4,784,218
Financial Liabilities:
Time deposits	$	675,014	$	677,205	$	0	$	677,205	$	0
Other deposits	4,537,907		4,537,907		0		4,537,907		0
Securities sold under agreements to repurchase	60,346		60,346		0		60,346		0
Other borrowings	658,100		659,895		0		659,895		0
Trust preferred debentures	17,035		21,904		0		21,904		0
Accrued interest payable	2,486		2,486		0		2,486		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.

Estimated Fair Value of Financial Instruments
December 31, 2018
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	80,389	$	80,389	$	80,389	$	0	$	0
Securities - held-to-maturity	140,579		139,377		0		139,377		0
FHLB and FRB stock	52,262		52,262		0		52,262		0
Accrued interest receivable	20,922		20,922		0		20,922		0
Loans and leases, net1	4,790,529		4,649,308		0		6,500		4,642,808
Financial Liabilities:
Time deposits	$	637,295	$	631,489	$	0	$	631,489	$	0
Other deposits	4,251,664		4,251,664		0		4,251,664		0
Securities sold under agreements to repurchase	81,842		81,842		0		81,842		0
Other borrowings	1,076,075		1,074,081		0		1,074,081		0
Trust preferred debentures	16,863		21,921		0		21,921		0
Accrued interest payable	2,408		2,408		0		2,408		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. For miscellaneous equity securities, carrying value is cost. These securities are reviewed periodically to determine if there are any events or changes in circumstances that would adversely affect their value.

FHLB and FRB Stock

The carrying amount of FHLB and FRB stock approximates fair value. If the stock is redeemed, the Company will receive an amount equal to the par value of the stock.

Loans and Leases

Fair value for loans are calculated using an exit price notion. The Company's valuation methodology takes into account factors such as estimated cash flows, including contractual cash flow and assumptions for prepayments; liquidity risk; and credit risk. The fair values of residential loans were estimated using discounted cash flow analyses, based upon available market benchmarks for rates and prepayment assumptions. The fair values of commercial and consumer loans were estimated using discounted cash flow analyses, based upon interest rates currently offered for loans and leases with similar terms and credit quality. The fair values of loans held for sale were determined based upon contractual prices for loans with similar characteristics.

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.

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Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income tax expense (benefit) attributable to income from operations is summarized as follows:

(In thousands)	Current		Deferred			Total
2019
Federal	$	15,161	$	2,668		$	17,829
State	2,782		405			3,187
Total	$	17,943	$	3,073		$	21,016
2018
Federal	$	16,391	$	2,281		$	18,672
State	3,060		73			3,133
Total	$	19,451	$	2,354		$	21,805
2017
Federal	$	26,860	$	14,749		$	41,609
State	1,162		(151		)	1,011
Total	$	28,022	$	14,598		$	42,620

The primary reasons for the differences between income tax expense and the amount computed by applying the statutory federal income tax rate to earnings are as follows:

	2019		2018		2017
Statutory federal income tax rate	21.0	%	21.0	%	35.0	%
State income taxes, net of federal benefit	2.5		2.4		0.7
Tax exempt income	(1.5	)	(1.5	)	(2.6	)
Excess benefits from equity-based compensation	(0.8	)	(0.6	)	(1.6	)
Bank-owned life insurance income	(0.5	)	(0.4	)	(0.8	)
Federal tax credit	(0.7	)	(0.6	)	(2.0	)
Enactment of Federal tax reform	0.0		0.0		15.7
All other	0.5		0.6		0.4
Total	20.5	%	20.9	%	44.8	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows:

(In thousands)	2019			2018
Deferred tax assets:
Allowance for loan and lease losses	$	9,913		$	10,676
Lease liability	8,363			0
Interest income on nonperforming loans	368			384
Compensation and benefits	10,972			10,885
Liabilities held at fair value	4			12
Other	1,842			2,333
Total	$	31,462		$	24,290
Deferred tax liabilities:
Prepaid pension	9,856			8,700
Right of use asset	7,790			0
Depreciation	4,688			4,193
Intangibles	1,128			971
Purchase accounting adjustments	274			328
Leases	2,472			1,790
Other	1,478			1,459
Total deferred tax liabilities	$	27,686		$	17,441
Net deferred tax asset at year-end	$	3,776		$	6,849
Net deferred tax asset at beginning of year	$	6,849		$	9,203
Decrease in net deferred tax asset	(3,073		)	(2,354		)
Federal tax reform remeasurement of AOCI deferred tax asset	$	0		$	0
Deferred tax expense	$	3,073		$	2,354

The above analysis does not include recorded deferred tax assets (liabilities) of $(1.3) million and $7.5 million as of December 31, 2019 and 2018, respectively, related to net unrealized holdings losses/(gains) in the available-for-sale securities portfolio. In addition, the analysis excludes recorded deferred tax assets of $15.5 million and $12.9 million, as of December 31, 2019 and 2018, respectively, related to employee benefit plans.

Realization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods in which the temporary differences comprising the deferred tax assets will be deductible. Based on its assessment, management determined that no valuation allowance was necessary at December 31, 2019 and 2018.

At December 31, 2019 and December 31, 2018, the Company had no ASC 740-10 unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months. The Company recognizes interest and penalties on unrecognized tax benefits in income tax expense in its Consolidated Statements of Income.

The Company is subject to U.S. federal income tax and income tax in New York and various state jurisdictions. All tax years ending after December 31, 2015 are open to examination by the taxing authorities.

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Allowance for Loan and Lease Losses - Allowance for Originated and Acquired Loan and Lease Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				$ 43,410					$ 43,410
Provision for loan and lease losses	$ (1,000)	$ 1,320	$ 601	445	$ 2,058	$ 272	$ 1,045	$ 567	1,366	$ 3,942	$ 4,161
Ending Balance	39,892				43,410				39,892	43,410
Originated Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				43,321				39,686	43,321	39,686
Charge-offs									(5,572)	(2,127)
Recoveries									747	1,865
Provision for loan and lease losses									1,318	3,897
Ending Balance	39,814				43,321				39,814	43,321	39,686
Acquired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				89				85	89	85
Charge-offs									(218)	(313)
Recoveries									159	272
Provision for loan and lease losses									48	45
Ending Balance	78				89				78	89	85
Commercial and industrial | Originated Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				11,217				11,812	11,217	11,812
Charge-offs									(653)	(293)
Recoveries									70	50
Provision for loan and lease losses									(93)	(352)
Ending Balance	10,541				11,217				10,541	11,217	11,812
Commercial and industrial | Acquired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				55				25	55	25
Charge-offs									(43)	(41)
Recoveries									33	106
Provision for loan and lease losses									(45)	(35)
Ending Balance	0				55				0	55	25
Commercial real estate | Originated Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				23,483				20,412	23,483	20,412
Charge-offs									(4,013)	(60)
Recoveries									100	812
Provision for loan and lease losses									1,987	2,319
Ending Balance	21,557				23,483				21,557	23,483	20,412
Commercial real estate | Acquired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				0				0	0	0
Charge-offs									(2)	(82)
Recoveries									74	31
Provision for loan and lease losses									(21)	51
Ending Balance	51				0				51	0	0
Residential real estate | Originated Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				7,317				6,161	7,317	6,161
Charge-offs									(90)	(424)
Recoveries									283	324
Provision for loan and lease losses									(1,150)	1,256
Ending Balance	6,360				7,317				6,360	7,317	6,161
Residential real estate | Acquired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				28				54	28	54
Charge-offs									(166)	(190)
Recoveries									51	135
Provision for loan and lease losses									108	29
Ending Balance	21				28				21	28	54
Consumer and other | Originated Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				1,304				1,301	1,304	1,301
Charge-offs									(816)	(1,350)
Recoveries									294	679
Provision for loan and lease losses									574	674
Ending Balance	1,356				1,304				1,356	1,304	1,301
Consumer and other | Acquired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				6				6	6	6
Charge-offs									(7)	0
Recoveries									1	0
Provision for loan and lease losses									6	0
Ending Balance	6				6				6	6	6
Finance leases | Originated Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				0				0	0	0
Charge-offs									0	0
Recoveries									0	0
Provision for loan and lease losses									0	0
Ending Balance	0				0				0	0	0
Finance leases | Acquired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				$ 0				$ 0	0	0
Charge-offs									0	0
Recoveries									0	0
Provision for loan and lease losses									0	0
Ending Balance	$ 0				$ 0				$ 0	$ 0	$ 0

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Stock Plans and Stock Based Compensation - Net Cash Proceeds, Tax Benefits and Intrinsic Value Related to Stock Options, SARs, and Restricted Stock (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Payment Arrangement [Abstract]
Proceeds from stock option exercises	$ (992)	$ (540)	$ (641)
Tax benefits related to stock option exercises	944	680	1,634
Intrinsic value of stock option exercises	$ 2,460	$ 1,447	$ 3,139

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Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net increase to beginning retained earnings	$ 370,477	$ 319,396
Revenue, performance obligation, description of timing	one year or less
Contract liabilities	$ 2,000	1,800
Insurance
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract assets	4,700	4,300
Wealth management services
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract assets	2,000	1,800
ASC 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net increase to beginning retained earnings			$ 1,800
ASC 606 | Difference between Revenue Guidance in Effect before and after Topic 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net increase to beginning retained earnings			$ 1,800
Contingent income
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract assets	$ 2,200	$ 1,900

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Employee Benefit Plans - Pension Plan Weighted-Average Asset Allocations (Details) - DB Pension Plans	Dec. 31, 2019	Dec. 31, 2018
Defined Contribution Plan Disclosure [Line Items]
Weighted-average asset allocations	100.00%	100.00%
Equity securities
Defined Contribution Plan Disclosure [Line Items]
Weighted-average asset allocations	62.00%	61.00%
Debt securities
Defined Contribution Plan Disclosure [Line Items]
Weighted-average asset allocations	36.00%	38.00%
Other
Defined Contribution Plan Disclosure [Line Items]
Weighted-average asset allocations	2.00%	1.00%

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Loans and Leases - Narrative (Details)	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) banking_office	Dec. 31, 2019 USD ($) subsidiary_bank	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Initial rate below the fully indexed rate, percent (less than)		1.00%
Sale of residential mortgage loans	$ 16,900,000				$ 27,700,000	$ 4,600,000
Net gains on sale of residential mortgage loans	227,000				458,000	50,000
Mortgage servicing assets added during the period	127,000				207,000	38,000
Amortization of mortgage servicing assets	117,000				69,000	122,000
Residential mortgage loans serviced	120,300,000				120,900,000
Mortgage servicing rights, amortized cost	815,000	$ 815,000	$ 815,000	$ 815,000	805,000
Mortgage servicing rights (MSR) impairment	0				0
Loans held for sale	807,000	807,000	807,000	807,000	2,700,000
Residential mortgage loans used to secure advances from FHLB	415,000,000.0	415,000,000.0	$ 415,000,000.0	$ 415,000,000.0	425,000,000.0
Number of subsidiary banks (banking office)			4	4
Interest income on nonaccrual loans	1,200,000				$ 1,000,000	$ 1,000,000
Loans and leases receivable, impaired, commitments to lend to nonperforming loans	$ 0	$ 0	$ 0	$ 0
NEW YORK
Business Acquisition [Line Items]
Number of subsidiary banks (banking office) | subsidiary_bank				3
Tompkins, Cayuga, Cortland and Schuyler Counties, New York
Business Acquisition [Line Items]
Number of banking offices | banking_office			14
Wyoming, Livingston, Genessee, Orleans and Monroe, New York
Business Acquisition [Line Items]
Number of banking offices | banking_office			16
Putnam Country, Dutchess Country and Westchester, New York
Business Acquisition [Line Items]
Number of banking offices | banking_office			14
Berks, Montgomery, Philadelphia, Deleware and Schuylkill, Pennsylvania
Business Acquisition [Line Items]
Number of banking offices | banking_office			20
LTV 80 to 100 Percent
Business Acquisition [Line Items]
Loan to value - fixed rate loans	80.00%	80.00%	80.00%	80.00%
Loan to value - adjusted rate loans	85.00%	85.00%	85.00%	85.00%
Agriculture | Commercial real estate
Business Acquisition [Line Items]
Loan to value - debt service coverage ratio	75.00%	75.00%	75.00%	75.00%

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Securities - Amortized Cost and Estimated Fair Value of Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Amortized Cost
Amortized Cost	$ 1,293,239	$ 1,363,902
Fair Value
Total available-for-sale debt securities	1,298,587	1,332,658
Debt securities
Amortized Cost
Due in one year or less	107,975	78,160
Due after one year through five years	270,477	355,499
Due after five years through ten years	77,710	139,560
Due after ten years	12,397	9,201
Amortized Cost	468,559	582,420
Fair Value
Due in one year or less	108,089	77,930
Due after one year through five years	274,798	350,470
Due after five years through ten years	79,165	136,734
Due after ten years	12,494	8,668
Total available-for-sale debt securities	474,546	573,802
Mortgage-backed securities
Amortized Cost
Amortized Cost	824,680	781,482
Fair Value
Total available-for-sale debt securities	$ 824,041	$ 758,856

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Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Allowance for loan and lease losses	$ 9,913	$ 10,676
Lease liability	8,363
Interest income on nonperforming loans	368	384
Compensation and benefits	10,972	10,885
Liabilities held at fair value	4	12
Other	1,842	2,333
Total	31,462	24,290
Deferred tax liabilities:
Prepaid pension	9,856	8,700
Right of use asset	7,790
Depreciation	4,688	4,193
Intangibles	1,128	971
Purchase accounting adjustments	274	328
Leases	2,472	1,790
Other	1,478	1,459
Total deferred tax liabilities	27,686	17,441
Net deferred tax asset at year-end	3,776	6,849	$ 9,203
Net deferred tax asset at beginning of year	6,849	9,203
Decrease in net deferred tax asset	(3,073)	(2,354)
Federal tax reform remeasurement of AOCI deferred tax asset	0	0
Deferred tax expense	$ 3,073	$ 2,354	$ 14,598

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Employee Benefit Plans - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Components of net periodic benefit cost
Recognized net actuarial gain due to curtailments	$ 302	$ 0	$ 0
DB Pension Plans
Components of net periodic benefit cost
Service cost	0	0	0
Interest cost	2,936	2,508	2,501
Expected return on plan assets	(4,933)	(5,648)	(5,088)
Amortization of prior service (credit) cost	(10)	(10)	(10)
Recognized net actuarial loss	1,334	1,118	1,075
Recognized net actuarial gain due to curtailments	0	0	0
Net periodic benefit (credit) cost	(673)	(2,032)	(1,522)
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss)
Net actuarial loss (gain)	2,776	7,761	1,434
Recognized actuarial loss	(1,334)	(1,118)	(1,075)
Prior service credit	0	0	0
Recognized prior service cost (credit)	10	10	10
Prior service cost (credit) recognized due to curtailment	0	0	0
Recognized in other comprehensive income (loss)	1,452	6,653	369
Total recognized in net periodic benefit cost and other comprehensive income (loss)	779	4,621	(1,153)
Life and Healthcare Plan
Components of net periodic benefit cost
Service cost	159	212	192
Interest cost	289	270	268
Expected return on plan assets	0	0	0
Amortization of prior service (credit) cost	(62)	(62)	(62)
Recognized net actuarial loss	0	62	34
Recognized net actuarial gain due to curtailments	(399)	0	0
Net periodic benefit (credit) cost	(13)	482	432
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss)
Net actuarial loss (gain)	1,218	(1,337)	708
Recognized actuarial loss	0	(62)	(34)
Prior service credit	(203)	0	(964)
Recognized prior service cost (credit)	62	62	62
Prior service cost (credit) recognized due to curtailment	399	0	0
Recognized in other comprehensive income (loss)	1,476	(1,337)	(228)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	1,463	(855)	204
SERP Plan
Components of net periodic benefit cost
Service cost	157	160	166
Interest cost	909	833	852
Expected return on plan assets	0	0	0
Amortization of prior service (credit) cost	104	87	87
Recognized net actuarial loss	343	539	399
Recognized net actuarial gain due to curtailments	0	0	0
Net periodic benefit (credit) cost	1,513	1,619	1,504
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss)
Net actuarial loss (gain)	6,128	(2,987)	2,407
Recognized actuarial loss	(343)	(539)	(399)
Prior service credit	2,022	0	0
Recognized prior service cost (credit)	(104)	(87)	(87)
Prior service cost (credit) recognized due to curtailment	0	0	0
Recognized in other comprehensive income (loss)	7,703	(3,613)	1,921
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$ 9,216	$ (1,994)	$ 3,425

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Segment and Related Information - Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting [Abstract]
Interest and dividend income	$ 64,583	$ 65,775	$ 66,093	$ 64,927	$ 65,325	$ 63,984	$ 62,143	$ 60,140	$ 261,378	$ 251,592	$ 226,764
Interest expense	11,343	12,619	13,775	13,013	12,089	10,821	9,429	7,453	50,750	39,792	25,460
Net Interest Income	53,240	53,156	52,318	51,914	53,236	53,163	52,714	52,687	210,628	211,800	201,304
Provision for loan and lease losses	(1,000)	1,320	601	445	2,058	272	1,045	567	1,366	3,942	4,161
Income before income taxes	26,312	25,715	24,167	26,667	23,808	26,361	27,842	26,229	102,861	104,240	95,242
Net income	$ 21,080	$ 20,206	$ 19,392	$ 21,040	$ 18,911	$ 20,902	$ 22,059	$ 20,436	$ 81,718	$ 82,308	$ 52,494
Net income per common share (basic) (in dollars per share)	$ 1.41	$ 1.34	$ 1.28	$ 1.37	$ 1.24	$ 1.37	$ 1.44	$ 1.34	$ 5.39	$ 5.39	$ 3.46
Net income per common share (diluted) (in dollars per share)	$ 1.40	$ 1.34	$ 1.27	$ 1.37	$ 1.23	$ 1.36	$ 1.43	$ 1.33	$ 5.37	$ 5.35	$ 3.43

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Condensed Parent Company Only Financial Statements - Condensed Statement of Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Condensed Income Statements, Captions [Line Items]
Interest expense	$ 11,343	$ 12,619	$ 13,775	$ 13,013	$ 12,089	$ 10,821	$ 9,429	$ 7,453	$ 50,750	$ 39,792	$ 25,460
Income Before Taxes and Equity in Undistributed Earnings of Subsidiaries	26,312	25,715	24,167	26,667	23,808	26,361	27,842	26,229	102,861	104,240	95,242
Income tax benefit									(21,016)	(21,805)	(42,620)
Net Income Attributable to Tompkins Financial Corporation	$ 21,080	$ 20,206	$ 19,392	$ 21,040	$ 18,911	$ 20,902	$ 22,059	$ 20,436	81,718	82,308	52,494
Tompkins (the Parent Company)
Condensed Income Statements, Captions [Line Items]
Dividends received from subsidiaries									72,827	44,518	33,522
Other income									240	332	281
Total Operating Income									73,067	44,850	33,803
Interest expense									1,450	1,468	1,550
Other expenses									8,409	7,222	6,120
Total Operating Expenses									9,859	8,690	7,670
Income Before Taxes and Equity in Undistributed Earnings of Subsidiaries									63,208	36,160	26,133
Income tax benefit									2,085	1,687	1,867
Equity in undistributed earnings of subsidiaries									16,425	44,461	24,494
Net Income Attributable to Tompkins Financial Corporation									$ 81,718	$ 82,308	$ 52,494

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Schedule of changes in the projected benefit obligations

The following table sets forth the changes in the projected benefit obligation for the DB Pension Plan and SERPs and the accumulated post-retirement benefit obligation for the Life and Healthcare Plan; and the respective plan assets, and the plans’ funded status and amounts recognized in the Company’s Consolidated Statements of Condition at December 31, 2019 and 2018 (the measurement dates of the plans).

	DB Pension Plans						Life and Healthcare Plan						SERP Plan
(In thousands)	2019			2018			2019			2018			2019			2018
Change in benefit obligation:
Benefit obligation at beginning of year	$	79,689		$	82,748		$	7,857		$	8,995		$	23,539		$	26,142
Service cost	0			0			159			212			157			160
Interest cost	2,936			2,508			289			270			909			833
Plan participants’ contributions	0			0			87			122			0			0
Amendments	0			0			(203		)	0			2,022			0
Actuarial loss (gain)	10,996			(2,324		)	1,218			(1,337		)	6,128			(2,987		)
Benefits paid	(3,275		)	(3,243		)	(385		)	(405		)	(602		)	(609		)
Benefit obligation at end of year	$	90,346		$	79,689		$	9,022		$	7,857		$	32,153		$	23,539
Change in plan assets:
Fair value of plan assets at beginning of year	$	72,474		$	80,154		$	0		$	0		$	0		$	0
Actual return on plan assets	13,153			(4,437		)	0			0			0			0
Plan participants’ contributions	0			0			87			122			0			0
Employer contributions	0			0			298			283			602			609
Benefits paid	(3,275		)	(3,243		)	(385		)	(405		)	(602		)	(609		)
Fair value of plan assets at end of year	$	82,352		$	72,474		$	0		$	0		$	0		$	0
Unfunded status	$	(7,994	)	$	(7,215	)	$	(9,022	)	$	(7,857	)	$	(32,153	)	$	(23,539	)

Schedule of net periodic benefit cost and other comprehensive income

Net periodic benefit cost and other comprehensive income (loss) includes the following components:

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
Components of net periodic benefit cost	2019			2018			2017			2019			2018			2017			2019		2018		2017
Service cost	$	0		$	0		$	0		$	159		$	212		$	192		$	157	$	160	$	166
Interest cost	2,936			2,508			2,501			289			270			268			909		833		852
Expected return on plan assets	(4,933		)	(5,648		)	(5,088		)	0			0			0			0		0		0
Amortization of prior service (credit) cost	(10		)	(10		)	(10		)	(62		)	(62		)	(62		)	104		87		87
Recognized net actuarial loss	1,334			1,118			1,075			0			62			34			343		539		399
Recognized net actuarial gain due to curtailments	0			0			0			(399		)	0			0			0		0		0
Net periodic benefit (credit) cost	$	(673	)	$	(2,032	)	$	(1,522	)	$	(13	)	$	482		$	432		$	1,513	$	1,619	$	1,504

Schedule of pre-tax amounts recognized as a component of accumulated other comprehensive income

Pre-tax amounts recognized as a component of accumulated other comprehensive income (loss) as of year-end that have not been recognized as a component of the Company’s combined net periodic benefit cost of the Company’s DB Pension Plan, Life and Healthcare Plan and SERPs are presented in the following table.  

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
	2019			2018			2017			2019			2018			2017			2019		2018		2017
Net actuarial loss (gain)	$	48,045		$	46,603		$	39,960		$	1,586		$	368		$	1,767		$	11,345	$	5,560	$	9,086
Prior service cost (credit)	(9		)	(20		)	(30		)	(348		)	(606		)	(668		)	2,433		514		602
Total	$	48,036		$	46,583		$	39,930		$	1,238		$	(238	)	$	1,099		$	13,778	$	6,074	$	9,688

Schedule of pre-tax amounts expected to be recognized

The pre-tax amounts included in accumulated other comprehensive income (loss) that are expected to be recognized in net periodic pension cost during the fiscal year ended December 31, 2020 are shown below.

(In thousands)	Pension Plans		Life and Healthcare Plan		SERP Plan
Actuarial loss	1,359		103		796
Prior service cost	(10	)	(61	)	285
Total	1,349		42		1,081

Schedule of weighted-average assumptions

Weighted-average assumptions used in accounting for the plans were as follows:

(In thousands)	DB Pension Plans						Life and Healthcare Plan						SERP Plan
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount Rates
Benefit Cost for Plan Year	4.08	%	3.43	%	3.89	%	4.13	%	3.51	%	3.97	%	4.16	%	3.55	%	4.10	%
Benefit Obligation at End of Plan Year	3.04	%	4.08	%	3.43	%	3.10	%	4.13	%	3.51	%	3.14	%	4.16	%	3.55	%
Expected long-term return on plan assets	7.00	%	7.25	%	7.25	%	N/A		N/A		N/A		N/A		N/A		N/A
Rate of compensation increase
Benefit Cost for Plan Year	N/A		N/A		N/A		4.00	%	5.00	%	5.00	%	5.00	%	5.00	%	5.00	%
Benefit Obligation at End of Plan Year	N/A		N/A		N/A		4.00	%	4.00	%	5.00	%	5.00	%	5.00	%	5.00	%

Schedule of expected benefits to be paid in each of next five years

The benefits as of December 31, 2019, expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter were as follows:

(In thousands)	DB Pension Plans		Life and Healthcare Plan		SERP Plan
2020	$	4,125	$	557	$	708
2021	4,275		447		700
2022	4,209		436		754
2023	4,386		429		863
2024	4,478		423		846
2025-2029	23,939		2,162		4,949
Total	$	45,412	$	4,454	$	8,820

Schedule of weighted average asset allocation of plans

The Company’s DB Pension Plan’s weighted-average asset allocations at December 31, 2019 and 2018, respectively, by asset category are as follows:

	2019		2018
Equity securities	62	%	61	%
Debt securities	36	%	38	%
Other	2	%	1	%
Total Allocation	100	%	100	%

Schedule of fair value measurement of pension plan

The major categories of assets in the Company’s DB Pension Plan as of year-end are presented in the following table. Assets are segregated by the level of valuation inputs within the fair value hierarchy established by ASC Topic 820 utilized to measure fair value (see Note 19-Fair Value Measurements). 

Fair Value Measurements
December 31, 2019
(In thousands)	Fair Value 2019		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	1,367	$	1,367	$	0	$	0
Common stocks	26,574		26,574		0		0
Mutual funds	54,411		54,411		0		0
Total Fair Value of Plan Assets	$	82,352	$	82,352	$	0	$	0

Fair Value Measurements
December 31, 2018
(In thousands)	Fair Value 2018		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	1,018	$	1,018	$	0	$	0
Common stocks	20,648		20,648		0		0
Mutual funds	50,808		50,808		0		0
Total Fair Value of Plan Assets	$	72,474	$	72,474	$	0	$	0

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of income tax (benefit) expense attributable to income from operations

The income tax expense (benefit) attributable to income from operations is summarized as follows:

(In thousands)	Current		Deferred			Total
2019
Federal	$	15,161	$	2,668		$	17,829
State	2,782		405			3,187
Total	$	17,943	$	3,073		$	21,016
2018
Federal	$	16,391	$	2,281		$	18,672
State	3,060		73			3,133
Total	$	19,451	$	2,354		$	21,805
2017
Federal	$	26,860	$	14,749		$	41,609
State	1,162		(151		)	1,011
Total	$	28,022	$	14,598		$	42,620

Schedule of effective income tax rate reconciliation

The primary reasons for the differences between income tax expense and the amount computed by applying the statutory federal income tax rate to earnings are as follows:

	2019		2018		2017
Statutory federal income tax rate	21.0	%	21.0	%	35.0	%
State income taxes, net of federal benefit	2.5		2.4		0.7
Tax exempt income	(1.5	)	(1.5	)	(2.6	)
Excess benefits from equity-based compensation	(0.8	)	(0.6	)	(1.6	)
Bank-owned life insurance income	(0.5	)	(0.4	)	(0.8	)
Federal tax credit	(0.7	)	(0.6	)	(2.0	)
Enactment of Federal tax reform	0.0		0.0		15.7
All other	0.5		0.6		0.4
Total	20.5	%	20.9	%	44.8	%

Schedule of deferred tax assets and liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows:

(In thousands)	2019			2018
Deferred tax assets:
Allowance for loan and lease losses	$	9,913		$	10,676
Lease liability	8,363			0
Interest income on nonperforming loans	368			384
Compensation and benefits	10,972			10,885
Liabilities held at fair value	4			12
Other	1,842			2,333
Total	$	31,462		$	24,290
Deferred tax liabilities:
Prepaid pension	9,856			8,700
Right of use asset	7,790			0
Depreciation	4,688			4,193
Intangibles	1,128			971
Purchase accounting adjustments	274			328
Leases	2,472			1,790
Other	1,478			1,459
Total deferred tax liabilities	$	27,686		$	17,441
Net deferred tax asset at year-end	$	3,776		$	6,849
Net deferred tax asset at beginning of year	$	6,849		$	9,203
Decrease in net deferred tax asset	(3,073		)	(2,354		)
Federal tax reform remeasurement of AOCI deferred tax asset	$	0		$	0
Deferred tax expense	$	3,073		$	2,354

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Leases - Schedule of Other Information Related to Operating Leases (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 4,680
Weighted-average remaining lease term on operating leases	13 years 10 months 6 days
Weighted-average discount rates on operating leases	3.53%
ROU assets obtained in exchange for lease liabilities	$ 39,508

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Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Accumulated depreciation and amortization	$ (95,989)	$ (89,009)
Total	94,355	97,202
Land
Property, Plant and Equipment [Line Items]
Premise and equipment, gross	9,195	9,348
Premises
Property, Plant and Equipment [Line Items]
Premise and equipment, gross	103,631	103,850
Furniture, fixtures, and equipment
Property, Plant and Equipment [Line Items]
Premise and equipment, gross	$ 77,518	$ 73,013

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Fair Value Measurements - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial Assets:
Securities - held-to-maturity	$ 0	$ 139,377
FHLB and FRB stock	33,695	52,262
Financial Liabilities:
Time deposits	675,014	637,295
Securities sold under agreements to repurchase	60,346	81,842
Other borrowings	658,100	1,076,075
Trust preferred debentures	17,035	16,863
(Level 1)
Financial Assets:
Cash and cash equivalents	137,982	80,389
Securities - held-to-maturity	0	0
FHLB and FRB stock	0	0
Accrued interest receivable	0	0
Loans and leases, net	0	0
Financial Liabilities:
Time deposits	0	0
Other deposits	0	0
Securities sold under agreements to repurchase	0	0
Other borrowings	0	0
Trust preferred debentures	0	0
Accrued interest payable	0	0
(Level 2)
Financial Assets:
Cash and cash equivalents	0	0
Securities - held-to-maturity	0	139,377
FHLB and FRB stock	33,695	52,262
Accrued interest receivable	19,293	20,922
Loans and leases, net	14,050	6,500
Financial Liabilities:
Time deposits	677,205	631,489
Other deposits	4,537,907	4,251,664
Securities sold under agreements to repurchase	60,346	81,842
Other borrowings	659,895	1,074,081
Trust preferred debentures	21,904	21,921
Accrued interest payable	2,486	2,408
(Level 3)
Financial Assets:
Cash and cash equivalents	0	0
Securities - held-to-maturity	0	0
FHLB and FRB stock	0	0
Accrued interest receivable	0	0
Loans and leases, net	4,784,218	4,642,808
Financial Liabilities:
Time deposits	0	0
Other deposits	0	0
Securities sold under agreements to repurchase	0	0
Other borrowings	0	0
Trust preferred debentures	0	0
Accrued interest payable	0	0
Carrying Amount
Financial Assets:
Cash and cash equivalents	137,982	80,389
Securities - held-to-maturity	0	140,579
FHLB and FRB stock	33,695	52,262
Accrued interest receivable	19,293	20,922
Loans and leases, net	4,877,658	4,790,529
Financial Liabilities:
Time deposits	675,014	637,295
Other deposits	4,537,907	4,251,664
Securities sold under agreements to repurchase	60,346	81,842
Other borrowings	658,100	1,076,075
Trust preferred debentures	17,035	16,863
Accrued interest payable	2,486	2,408
Fair Value
Financial Assets:
Cash and cash equivalents	137,982	80,389
Securities - held-to-maturity	0	139,377
FHLB and FRB stock	33,695	52,262
Accrued interest receivable	19,293	20,922
Loans and leases, net	4,798,268	4,649,308
Financial Liabilities:
Time deposits	677,205	631,489
Other deposits	4,537,907	4,251,664
Securities sold under agreements to repurchase	60,346	81,842
Other borrowings	659,895	1,074,081
Trust preferred debentures	21,904	21,921
Accrued interest payable	$ 2,486	$ 2,408

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Allowance for Loan and Lease Losses - Allocation of Allowance For Loan and Lease Losses (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Ending balance	$ 39,892	$ 43,410
Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	907	3,762
Collectively evaluated for impairment	38,907	39,559
Ending balance	39,814	43,321	$ 39,686
Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	78	89
Ending balance	78	89	85
Commercial and industrial | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	245	397
Collectively evaluated for impairment	10,296	10,820
Ending balance	10,541	11,217	11,812
Commercial and industrial | Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	0	55
Ending balance	0	55	25
Commercial real estate | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	662	3,365
Collectively evaluated for impairment	20,895	20,118
Ending balance	21,557	23,483	20,412
Commercial real estate | Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	51	0
Ending balance	51	0	0
Residential real estate | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	6,360	7,317
Ending balance	6,360	7,317	6,161
Residential real estate | Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	21	28
Ending balance	21	28	54
Consumer and other | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	1,356	1,304
Ending balance	1,356	1,304	1,301
Consumer and other | Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	6	6
Ending balance	6	6	6
Finance leases | Originated Loans and Leases
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
Finance leases | Acquired Loans and Leases
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

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Allowance for Loan and Lease Losses - Loans by Class Modified as Troubled Debt Restructurings (Details) - Originated Loans and Leases $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | loan	5	7
Pre-Modification Outstanding Recorded Investment	$ 2,362	$ 533
Post- Modification Outstanding Recorded Investment	$ 2,362	$ 533
Number of Loans Defaulted TDRs | loan	1	0
Post- Modification Outstanding Recorded Investment TDRs	$ 93	$ 0
Commercial and industrial | Other
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | loan	2
Pre-Modification Outstanding Recorded Investment	$ 604
Post- Modification Outstanding Recorded Investment	$ 604
Number of Loans Defaulted TDRs | loan	0
Post- Modification Outstanding Recorded Investment TDRs	$ 0
Commercial real estate | Other
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | loan	1	1
Pre-Modification Outstanding Recorded Investment	$ 1,577	$ 26
Post- Modification Outstanding Recorded Investment	$ 1,577	$ 26
Number of Loans Defaulted TDRs | loan	0	0
Post- Modification Outstanding Recorded Investment TDRs	$ 0	$ 0
Residential real estate | Home equity
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | loan	2	6
Pre-Modification Outstanding Recorded Investment	$ 181	$ 507
Post- Modification Outstanding Recorded Investment	$ 181	$ 507
Number of Loans Defaulted TDRs | loan	1	0
Post- Modification Outstanding Recorded Investment TDRs	$ 93	$ 0

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Deposits - Scheduled Maturities of Time Deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Maturity
Three months or less	$ 163,185
Over three through six months	112,333
Over six through twelve months	190,966
Total due in 2020	466,484
2021	126,805
2022	69,664
2023	7,988
2024	3,886
Thereafter	187
Total	675,014	$ 637,295
Less than $250,000
Maturity
Three months or less	105,906
Over three through six months	75,507
Over six through twelve months	144,920
Total due in 2020	326,333
2021	98,389
2022	57,080
2023	7,726
2024	3,886
Thereafter	187
Total	493,601
$250,000 and over
Maturity
Three months or less	57,279
Over three through six months	36,826
Over six through twelve months	46,046
Total due in 2020	140,151
2021	28,416
2022	12,584
2023	262
2024	0
Thereafter	0
Total	$ 181,413

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Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Loss Contingencies [Line Items]
Maximum potential obligations to extend credit for loan commitments	$ 980,173	$ 997,048
Rate lock agreements	1,800
Commitments to sell mortgages to unrelated investors on a loan-by-loan basis	807
Loan commitments
Loss Contingencies [Line Items]
Maximum potential obligations to extend credit for loan commitments	149,397	156,111
Standby letters of credit
Loss Contingencies [Line Items]
Maximum potential obligations to extend credit for loan commitments	30,460	21,685
Undisbursed portion of lines of credit
Loss Contingencies [Line Items]
Maximum potential obligations to extend credit for loan commitments	$ 800,316	$ 819,252

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Trust Preferred Debentures (Details)		1 Months Ended		12 Months Ended
	Sep. 26, 2002 USD ($)	Aug. 31, 2003 USD ($)	Jun. 30, 2003 USD ($)	Dec. 31, 2019 USD ($) subsidiary_trust
Debt Instrument [Line Items]
Number of unconsolidated subsidiary trusts | subsidiary_trust				3
Sleepy Hollow Capital Trust I
Debt Instrument [Line Items]
Par Amount		$ 4,000,000.0		$ 4,000,000.0
Floating interest rate		3.05%
Common equity securities issued to the Company		$ 100,000
Sleepy Hollow Capital Trust I | LIBOR
Debt Instrument [Line Items]
Floating interest rate				3.05%
Leesport Capital Trust II
Debt Instrument [Line Items]
Par Amount	$ 10,000,000.0			$ 10,000,000.0
Leesport Capital Trust II | LIBOR
Debt Instrument [Line Items]
Floating interest rate	3.45%
Madison Statutory Trust I
Debt Instrument [Line Items]
Par Amount			$ 5,000,000.0	$ 5,000,000.0
Madison Statutory Trust I | LIBOR
Debt Instrument [Line Items]
Floating interest rate			3.10%
Sleepy Hollow Capital Trust I | Tompkins Capital Trust I | Unconsolidated subsidiary
Debt Instrument [Line Items]
Ownership percentage by parent				100.00%
Leesport Capital Trust II | Leesport Capital Trust II | Unconsolidated subsidiary
Debt Instrument [Line Items]
Ownership percentage by parent				100.00%
Madison Statutory Trust I | Madison Statutory Trust I | Unconsolidated subsidiary
Debt Instrument [Line Items]
Ownership percentage by parent				100.00%

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Goodwill and Other Intangible Assets - Schedule of Amortizing Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 34,019	$ 33,634
Accumulated Amortization	27,796	26,006
Net Carrying Amount	6,223	7,628
Amortization of intangible assets	1,673	1,771	$ 1,932
Core deposit intangible
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	18,774	18,774
Accumulated Amortization	16,404	15,386
Net Carrying Amount	2,370	3,388
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	9,048	8,877
Accumulated Amortization	6,405	5,888
Net Carrying Amount	2,643	2,989
Other intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	6,197	5,983
Accumulated Amortization	4,987	4,732
Net Carrying Amount	$ 1,210	$ 1,251

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Securities - Held-to-Maturity Securities Held by Company (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Schedule of Held-to-maturity Securities [Line Items]
Transfer of securities from held-to-maturity to available-for-sale		$ 138,206	$ 0	$ 0
Amortized Cost			140,579
Gross Unrealized Gains			20
Gross Unrealized Losses			1,222
Fair Value		$ 0	139,377
Obligations of U.S. Government sponsored entities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost			131,306
Gross Unrealized Gains			0
Gross Unrealized Losses			1,198
Fair Value			130,108
Obligations of U.S. states and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost			9,273
Gross Unrealized Gains			20
Gross Unrealized Losses			24
Fair Value			$ 9,269
ASU 2019-04
Schedule of Held-to-maturity Securities [Line Items]
Transfer of securities from held-to-maturity to available-for-sale	$ 138,200

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Condensed Parent Company Only Financial Statements (Tables)

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule of condensed statements of condition

Condensed financial statements for Tompkins (the Parent Company) as of December 31,2019, 2018 and 2017 are presented below. 

Condensed Statements of Condition
(In thousands)	2019		2018
Assets
Cash	$	14,631	$	6,235
Investment in subsidiaries, at equity	664,775		625,193
Other	3,873		9,416
Total Assets	$	683,279	$	640,844
Liabilities and Shareholders’ Equity
Borrowings	4,000		4,000
Trust preferred debentures issued to non-consolidated subsidiary	17,035		16,863
Other liabilities	602		522
Tompkins Financial Corporation Shareholders’ Equity	661,642		619,459
Total Liabilities and Shareholders’ Equity	$	683,279	$	640,844

Schedule of condensed statements of income

Condensed Statements of Income
(In thousands)	2019		2018		2017
Dividends received from subsidiaries	$	72,827	$	44,518	$	33,522
Other income	240		332		281
Total Operating Income	$	73,067	$	44,850	$	33,803
Interest expense	1,450		1,468		1,550
Other expenses	8,409		7,222		6,120
Total Operating Expenses	$	9,859	$	8,690	$	7,670
Income Before Taxes and Equity in Undistributed
Earnings of Subsidiaries	63,208		36,160		26,133
Income tax benefit	2,085		1,687		1,867
Equity in undistributed earnings of subsidiaries	16,425		44,461		24,494
Net Income	$	81,718	$	82,308	$	52,494

Schedule of condensed statements of cash flows

Condensed Statements of Cash Flows
(In thousands)	2019			2018			2017
Operating activities
Net income	$	81,718		$	82,308		$	52,494
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings of subsidiaries	(16,425		)	(44,461		)	(24,494		)
Other, net	3,209			1,014			(1,569		)
Net Cash Provided by Operating Activities	68,502			38,861			26,431
Investing activities
Other, net	3,265			0			1,052
Net Cash Provided by Investing Activities	3,265			0			1,052
Financing activities
Borrowings, net	0			(5,000		)	(28,161		)
Cash dividends	(30,637		)	(29,634		)	(27,627		)
Repurchase of common shares	(29,867		)	(2,448		)	0
Net proceeds from restricted stock awards	(1,875		)	(1,403		)	(1,294		)
Shares issued for dividend reinvestment plans	0			0			2,872
Shares issued for employee stock ownership plan	0			3,073			2,296
Net proceeds from exercise of stock options	(992		)	(540		)	(641		)
Net Cash Used in Financing Activities	(63,371		)	(35,952		)	(52,555		)
Net increase (decrease) in cash	8,396			2,909			(25,072		)
Cash at beginning of year	6,235			3,326			28,398
Cash at End of Year	$	14,631		$	6,235		$	3,326

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$ 81,718	$ 82,308	$ 52,494
Adjustments to reconcile net income attributable to Tompkins Financial Corporation, to net cash provided by operating activities:
Provision for loan and lease losses	1,366	3,942	4,161
Depreciation and amortization of premises, equipment, and software	10,044	9,554	8,269
Accretion related to purchase accounting	(1,448)	(1,948)	(2,978)
Amortization of intangible assets	1,673	1,771	1,932
Earnings from corporate owned life insurance, net	(2,164)	(1,818)	(2,196)
Net amortization on securities	7,435	8,816	10,483
Deferred income tax expense	3,073	2,354	14,598
Net (gain) loss on sale of securities transactions	(645)	466	407
Net gain on sale of loans	(227)	(458)	(50)
Proceeds from sale of loans	17,122	28,195	4,601
Loans originated for sale	(15,007)	(30,151)	(4,831)
Net gain on sale of bank premises and equipment	(98)	(2,946)	(30)
Net excess tax benefit from stock based compensation	944	680	1,635
Stock-based compensation expense	4,235	3,477	2,956
Increase (decrease) in interest receivable	1,629	(800)	(2,731)
Increase in accrued interest payable	78	355	152
Contribution to pension plan	0	0	(1,750)
Other, net	(8,113)	3,468	(1,057)
Net Cash Provided by Operating Activities	101,615	107,265	86,065
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale securities	302,978	151,053	166,625
Proceeds from sales of available-for-sale securities	232,598	70,652	64,106
Proceeds from maturities, calls and principal paydowns of held-to-maturity securities	9,588	6,729	8,068
Purchases of available-for-sale securities	(333,151)
Purchases of available-for-sale securities		(185,467)	(208,502)
Purchases of held-to-maturity securities	(7,589)	(8,492)	(5,556)
Net increase in loans and leases	(89,582)	(161,760)	(411,770)
Net increase in Federal Home Loan Bank stock	18,567	(1,764)	(7,365)
Proceeds from sale of bank premises and equipment	448	3,317	157
Purchases of bank premises, equipment and software	(6,014)	(18,084)	(35,290)
Redemption of corporate owned life insurance	1,370	0	0
Net cash used in acquisitions	(436)	0	0
Other, net	5,209	216	2,576
Net Cash Provided by (Used in) Investing Activities	133,986	(143,600)	(426,951)
FINANCING ACTIVITIES
Net increase in demand, money market, and savings deposits	286,243	162,107	335,207
Net increase (decrease) in time deposits	38,591	(109,732)	(121,459)
Net (decrease) increase in securities sold under agreements to repurchase and Federal funds purchased	(21,496)	6,665	6,115
Increase in other borrowings	526,853	524,492	750,918
Redemption of trust preferred debentures	0	0	(21,161)
Repayment of other borrowings	(944,828)	(520,159)	(563,991)
Net shares issued related to restricted stock awards	(1,875)	(1,403)	(1,294)
Cash dividends	(30,637)	(29,634)	(27,627)
Repurchase of common stock	(29,867)	(2,448)	0
Shares issued for dividend reinvestment plan	0	0	2,872
Shares issued for employee stock ownership plan	0	3,073	2,296
Net proceeds from exercise of stock options	(992)	(540)	(641)
Net Cash Used in Financing Activities	(178,008)	32,421	361,235
Net Increase (Decrease) Cash and Cash Equivalents	57,593	(3,914)	20,349
Cash and cash equivalents at beginning of year	80,389	84,303	63,954
Total Cash & Cash Equivalents at End of Year	137,982	80,389	84,303
Supplemental Cash Flow Information
Cash paid during the year for - Interest	51,545	40,660	26,387
Cash paid, net of refunds, during the year for - Income taxes	16,727	16,949	31,011
Non-cash investing and financing activities:
Transfer of loans to other real estate owned	803	518	2,886
Transfer of securities from held-to-maturity to available-for-sale	$ 138,206	$ 0	$ 0

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis Of Presentation

Basis Of Presentation

Tompkins Financial Corporation (“Tompkins” or “the Company”) is a registered Financial Holding Company with the Federal Reserve Board pursuant to the Bank Holding Company Act of 1956, as amended, organized under the laws of New York State, and is the parent company of Tompkins Trust Company (the “Trust Company”), The Bank of Castile, Mahopac Bank, VIST Bank, and Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). The Trust Company provides a full array of trust and investment services under the Tompkins Financial Advisors brand. Unless the context otherwise requires, the term “Company” refers to Tompkins Financial Corporation and its subsidiaries.

The consolidated financial information included herein combines the results of operations, the assets, liabilities, and shareholders’ equity (including comprehensive income or loss) of the Company and all entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions are eliminated in consolidation.

The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity under U.S. accounting principles generally accepted. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. The Company consolidates voting interest entities in which it has all, or at least a majority of, the voting interest. As defined in applicable accounting standards, variable interest entities (VIEs) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when the Company has both the power and ability to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Three of the Company’s wholly owned subsidiaries, Sleepy Hollow Capital Trust I, Leesport Capital Trust II, and Madison Statutory Trust I, are VIE’s for which the Company is not the primary beneficiary. Accordingly, the accounts of these entities are not included in the Company’s consolidated financial statements.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclose contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for loan and lease losses, valuation of goodwill and intangible assets, deferred income tax assets, other-than-temporary impairment on investments, and obligations related to employee benefits. Amounts in the prior years’ consolidated financial statements are reclassified when necessary to conform to the current year’s presentation.

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.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents in the Consolidated Statements of Cash Flows include cash and noninterest bearing balances due from banks, interest-bearing balances due from banks, Federal funds sold, 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. Each bank subsidiary is required to maintain reserve balances by the Federal Reserve Bank.

Securities

Securities

Management determines the appropriate classification of debt and equity securities at the time of purchase. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Debt securities not classified as held-to-maturity and marketable equity securities are classified as either available-for-sale or trading. Available-for-sale securities are stated at fair value with the unrealized gains and losses, net of tax, excluded from earnings and reported as a separate component of accumulated comprehensive income or loss, in shareholders’ equity. Trading securities are stated at fair value, with unrealized gains or losses included in earnings.

Beginning January 1, 2018, upon adoption of ASU 2016-01, equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. For periods prior to January 1, 2018, equity securities were classified as available-for-sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax. Securities with limited marketability or restricted equity securities, such as Federal Home Loan Bank stock and Federal Reserve Bank stock, are carried at cost, less any impairment, if any. At adoption of ASU 2016-01, the Company recognized a cumulative-effect adjustment of $65,000 for the after-tax impact of the unrealized loss on equity securities.

Premiums and discounts are amortized or accreted over the expected life of the related security as an adjustment to yield using the interest method. Dividend and interest income are recognized when earned. Realized gains and losses on the sale of securities are included in net gain (loss) on securities transactions. The cost of securities sold is based on the specific identification method.

At least quarterly, 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. A debt security is considered impaired if the fair value is less than its amortized cost basis 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.

Loans and Leases

Loans and Leases

Loans are reported at their principal outstanding balance, net of deferred loan origination fees and costs, and unearned income. The Company has the ability and intent to hold its loans for the foreseeable future, except for certain residential real estate loans held-for-sale. The Company provides motor vehicle and equipment financing to its customers through direct financing leases. These leases are carried at the aggregate of lease payments receivable, plus estimated residual values, less unearned income. Unearned income on direct financing leases is amortized over the lease terms, resulting in a level rate of return.

Residential real estate loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value. Fair value is determined on the basis of the rates quoted in the secondary market. Net unrealized losses attributable to changes in market interest rates are recognized through a valuation allowance by charges to income. Loans are generally sold on a non-recourse basis with servicing retained. Any gain or loss on the sale of loans is recognized at the time of sale as the difference between the recorded basis in the loan and the net proceeds from the sale. The Company may use commitments at the time loans are originated or identified for sale to mitigate interest rate risk. The commitments to sell loans and the commitments to originate loans held-for-sale at a set interest rate, if originated, are considered derivatives under ASC Topic 815. The impact of the estimated fair value adjustment was not significant to the consolidated financial statements.

Interest income on loans is accrued and credited to income based upon the principal amount outstanding. Loan origination fees and costs are deferred and recognized over the life of the loan as an adjustment to yield. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans and leases, including impaired loans, are generally classified as nonaccrual if they are past due as to maturity or payment of principal or interest for a period of more than 90 days, unless such loans are well secured and in the process of collection. Loans that are past due less than 90 days may also be classified as nonaccrual if repayment in full of principal or interest is in doubt.

Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within an acceptable time period, and there is a sustained period (generally six consecutive months) of repayment performance by the borrower in accordance with the contractual terms of the loan agreement. 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.

The Company applies the provisions of ASC Topic 310-10-35, Loan Impairment, to all impaired commercial and commercial real estate loans over $250,000 and to all loans restructured in a troubled debt restructuring. Allowances for loan losses for the remaining loans are recognized in accordance with ASC Topic 450, Contingencies (“ASC Topic 450”). Management considers a loan to be impaired if, based on current information, it is probable that the Company will be unable to collect all scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. When a loan is considered to be impaired, the amount of the impairment is measured based on the present value of expected future cash flows discounted at the effective interest rate of the loan or, as a practical expedient, at the observable market price or the fair value of collateral (less costs to sell) if the loan is collateral dependent. Management excludes large groups of smaller balance homogeneous loans such as residential mortgages, consumer loans, and leases, which are collectively evaluated.

Loans are considered modified in a troubled debt restructuring (“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 and interest caught up over the remaining term of the loan or at maturity. Generally, a nonaccrual loan that has been modified in a TDR remains on non-accrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status.

In general, the principal balance of a loan is charged off in full or in part when management concludes, based on the available facts and circumstances, that collection of principal in full is not probable. For commercial and commercial real estate loans, this conclusion is generally based upon a review of the borrower’s financial condition and cash flow, payment history, economic conditions, and the conditions in the various markets in which the collateral, if any, may be liquidated. In general, consumer loans are charged-off in accordance with regulatory guidelines which provide that such loans be charged-off when the Company becomes aware of the loss, such as from a triggering event that may include new information about a borrower’s intent/ability to repay the loan, bankruptcy, fraud or death, among other things, but in no case will the charge-off exceed specified delinquency timeframes. Such delinquency timeframes state that closed-end retail loans (loans with pre-defined maturity dates, such as real estate mortgages, home equity loans and consumer installment loans) that become past due 120 cumulative days and open-end retail loans (loans that roll-over at the end of each term, such as home equity lines of credit) that become past due 180 cumulative days should be classified as a loss and charged-off. For residential real estate loans, charge-off decisions are based upon past due status, current assessment of collateral value, and general market conditions in the areas where the properties are located.

Acquired Loans and Leases

Acquired Loans and Leases

Loans acquired in acquisitions, subsequent to the effective date of ASC Topic 805, Business Combination, are recorded at fair value and subsequently accounted for in accordance with ASC Topic 310, and there is no carryover of the related allowance for loan and lease losses. Loans acquired with evidence of credit impairment are accounted for under ASC Subtopic 310-30. These loans may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. In the VIST acquisition, 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, while decreases in expected cash flows are recognized as impairment through a loss provision and an increase in 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).

Acquired loans not exhibiting evidence of credit impairment at the time of acquisition are accounted for under ASC Subtopic 310-20. The Company amortizes/accretes into interest income the premium/discount determined at the date of purchase over the life of the loan on a level yield basis. Subsequent to the acquisition date, the methods used to estimate the appropriate allowance for loan losses are similar to originated loans. These loans are placed on nonaccrual status in accordance with the Company’s policy for originated loans.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon 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. The Company determined at acquisition that it could reasonably estimate future cash flows on acquired loans that were past due 90 days or more and on which the Company expects to fully collect the carrying value of the loans net of the allowance for acquired loan losses. As such, the Company does not consider these loans to be nonaccrual or nonperforming.

Allowance For Loan and Lease Losses

Allowance For Loan and Lease Losses

The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan and lease 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 model is comprised of four major components that management has deemed appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at a reserve level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The components include: impaired loans; criticized and classified credits; historical loss experience; and qualitative or subjective analysis. For impaired loans, an allowance is recognized if the fair value of the loan is less than the recorded investment in the loan (recorded investment in the loan is the principal balance plus any accrued interest, net of deferred loan fees or costs and unamortized premium or discount). A loan’s fair value reflects the present value of expected future cash flows discounted at the loan’s effective interest rate, or if the loan is collateral dependent, the fair value of the collateral, less estimated disposal costs. If the loan is collateral dependent, the principal balance of the loan is charged-off in an amount equal to the impairment measurement. The fair value of collateral dependent loans is derived primarily from collateral appraisals performed by independent third-party appraisers. For loans that are not impaired, but are rated special mention or worse, management evaluates credits based on elevated risk characteristics and assigns reserves based upon analysis of historical loss experience of loans with similar risk characteristics. For loans that are not impaired or reviewed individually, management assigns a reserve based upon historical loss experience over a designated look-back period. Management has evaluated a variety of look-back periods and has determined that an eight year look back period is appropriate to capture a full range of economic cycles. Management has also evaluated a variety of statistical methods in analyzing loss history, including averages, weighted averages and loss emergence periods and has determined that by applying a loss emergence period analysis to historical losses over a full economic cycle has resulted in a reasonable estimate of losses inherent in the loan portfolio. The model also includes an analysis of a variety of subjective factors to support the reserve estimate. These subjective factors may include allowance allocations for risks that may not otherwise be fully recognized in other components of the model. Among the subjective factors that are routinely considered as part of this analysis are: growth trends in the portfolio, changes in management and/or polices related to lending activities, trends in classified or nonaccrual loans, concentrations of credit, local and national economic trends, and industry trends.

Periodically, management conducts an analysis to estimate the loss emergence period for various loan categories based on samples of historical charge-offs. Model output by loan category is reviewed to evaluate the reasonableness of the reserve levels in comparison to the estimated loss emergence period applied to historical loss experience.

In addition to the components discussed above, management reviews the model output for reasonableness by analyzing the results in comparisons to recent trends in the loan/lease portfolio, through back-testing of results from prior models in comparison to actual loss history, and by comparing our reserves and loss history to industry peer results.

The model results are reviewed by management at the Corporate Credit Policy Committee and presented to the Board of Directors. Additionally, on an annual basis, management conducts a validation process of the model. This validation includes reviewing the appropriateness of model calculations, back testing of model results and appropriateness of key assumptions used in the model. In addition, various Federal and State regulatory agencies, as part of their examination process, review the Company’s allowance and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

For acquired credit impaired loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC Topic 310-30”), the Company’s allowance for loan and lease 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.

For acquired non-credit impaired loans accounted for under FASB ASC Topic 310-20, Nonrefundable Fees and Other Costs, (“ASC Topic 310-20”), the Company’s allowance for loan and lease losses is maintained through provisions for loan 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.

Premises and Equipment

Premises and Equipment

Land is carried at cost. Premises and equipment are stated at cost, less allowances for depreciation. The provision for depreciation for financial reporting purposes is computed generally by the straight-line method at rates sufficient to write-off the cost of such assets over their estimated useful lives. Buildings are amortized over a period of 10-39 years, and furniture, fixtures, and equipment are amortized over a period of 2-20 years. Leasehold improvements are generally depreciated over the lesser of the lease term or the estimated lives of the improvements. Maintenance and repairs are charged to expense as incurred. Gains or losses on disposition are reflected in earnings.

Other Real Estate Owned

Other Real Estate Owned

Other real estate owned consists of properties formerly pledged as collateral to loans, which have been acquired by the Company through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Upon transfer of a loan to foreclosure status, an appraisal is generally obtained and any excess of the loan balance over the fair value, less estimated costs to sell, is charged against the allowance for loan/lease losses. Expenses and subsequent adjustments to the fair value are treated as other operating expense.

Goodwill

Goodwill

Goodwill represents the excess of purchase price over the fair value of assets acquired in a transaction using purchase accounting. Goodwill has an indefinite useful life and is not amortized, but is tested for impairment. Goodwill impairment tests are performed on an annual basis or when events or circumstances dictate. The Company tests goodwill annually as of December 31^st. The Company has the option to perform a qualitative assessment of goodwill, which considers company-specific and economic characteristics that might impact its carrying value. If based on this qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative test (Step 1) is performed, which compares the fair value of the reporting unit to the carrying amount of the reporting unit in order to identify potential impairment. If the estimated fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired. However, if the carrying amount of the reporting unit were to exceed its estimated fair value, a second step (Step 2) would be performed that would compare the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill for the reporting unit. The implied fair value of goodwill is determined in the same manner as goodwill that is recognized in a business combination. Significant judgment and estimates are involved in estimating the fair value of the assets and liabilities of the reporting units.

Other Intangible Assets

Other Intangible Assets

Other intangible assets include core deposit intangibles, customer related intangibles, covenants not to compete, and mortgage servicing rights. Core deposit intangibles represent a premium paid to acquire a base of stable, low cost deposits in the acquisition of a bank, or a bank branch, using purchase accounting. The amortization period for core deposit intangible ranges from 5 to 10 years, using an accelerated method. The covenants not to compete are amortized on a straight-line basis over 3 to 6 years, while customer related intangibles are amortized on an accelerated basis over a range of 6 to 15 years. The amortization period is monitored to determine if circumstances require such periods to be revised. The Company periodically reviews its intangible assets for changes in circumstances that may indicate the carrying amount of the asset is impaired. The Company tests its intangible assets for impairment on an annual basis or more frequently if conditions indicate that an impairment loss has more likely than not been incurred.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes are reviewed quarterly and reduced by a valuation allowance if, based upon the information available, it is more likely than not that some or all of the deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that all of the deferred tax assets will be realized. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income.

Tax Credit Investments

Tax Credit Investments

The Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under that method, the Company 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.

Securities Sold Under Agreements to Repurchase

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase (repurchase agreements) are agreements in which the Company transfers the underlying securities to a third-party custodian’s account that explicitly recognizes the Company’s interest in the securities. The agreements are accounted for as secured financing transactions provided the Company maintains effective control over the transferred securities and meets other criteria as specified in FASB ASC Topic 860, Transfers and Servicing (“ASC Topic 860”). The Company’s agreements are accounted for as secured financings; accordingly, the transaction proceeds are reflected as liabilities and the securities underlying the agreements continue to be carried in the Company’s securities portfolio.

Treasury Stock

Treasury Stock

The cost of treasury stock is shown on the Consolidated Statements of Condition as a separate component of shareholders’ equity, and is a reduction to total shareholders’ equity. Shares are released from treasury at fair value, identified on an average cost basis.

Trust and Investment Services

Trust and Investment Services

Assets held in fiduciary or agency capacities for customers are not included in the accompanying Consolidated Statements of Condition, since such items are not assets of the Company. Fees associated with providing trust and investment services are included in noninterest income.

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year, exclusive of shares represented by the unvested portion of restricted stock and restricted stock units. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year plus the dilutive effect of the unvested portion of restricted stock and restricted stock units and stock issuable upon conversion of common stock equivalents (primarily stock options) or certain other contingencies. The Company currently uses authoritative accounting guidance under ASC Topic 260, Earnings Per Share, which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company issues stock-based compensation awards that included restricted stock awards that contain such rights.

Segment Reporting

Segment Reporting

The Company manages its operations through three reportable business segments in accordance with the standards set forth in FASB ASC Topic 280, “Segment Reporting”. The three segments are: (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 are managed separately from the Bank.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

For the Company, comprehensive income (loss) represents net income plus the net change in unrealized gains or losses on securities available-for-sale for the period (net of taxes), and the actuarial gain or loss and amortization of unrealized amounts in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan (net of taxes), and is presented in the Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Changes in Shareholders’ Equity. Accumulated other comprehensive income (loss) represents the net unrealized gains or losses on securities available-for-sale (net of tax) and unrecognized net actuarial gain or loss, unrecognized prior service costs, and unrecognized net initial obligation (net of tax) in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan.

Pension and Other Employee Benefits

Pension and Other Employee Benefits

The Company maintains noncontributory defined-benefit and defined contribution plans, which cover substantially all employees of the Company. In addition, the Company also maintains supplemental employee retirement plans for certain executives and a post-retirement life and healthcare plan. These plans are discussed in detail in Note 11 “Employee Benefit Plans”. The Company incurs certain employment-related expenses associated with these plans. In order to measure the expense associated with these plans, various assumptions are made including the discount rate used to value certain liabilities, expected return on plan assets, anticipated mortality rates, and expected future healthcare costs. The assumptions are based on historical experience as well as current facts and circumstances. A third-party actuarial firm is used to assist management in measuring the expense and liability associated with the plans. The Company uses a December 31 measurement date for its plans. As of the measurement date, plan assets are determined based on fair value, generally representing observable market prices. The projected benefit obligation is primarily determined based on the present value of projected benefit distributions at an assumed discount rate.

The expenses associated with these plans are charged to current operating expenses. The Company recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in the Company’s consolidated statements of condition, and recognizes changes in the funded status of these plans in comprehensive income, net of applicable taxes, in the year in which the change occurred.

Fair Value Measurements

Fair Value Measurements

The Company accounts for the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”), for financial assets and financial liabilities. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. See Note 19 “Fair Value Measurements”.

In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among others.

Revenue Recognition

Revenue Recognition

Tompkins adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) as of January 1, 2018 using the modified retrospective method for all contracts. Results for reporting periods beginning January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition. The Company recorded a net increase to beginning retained earnings of $1.8 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact on beginning retained earnings was primarily driven by the recognition of $1.8 million of contingency income related to our insurance business segment. Under ASU 2014-09, effective January 1, 2018, the Company adopted new policies related to revenue recognition. In general, for revenue not associated with financial instruments, guarantees and lease contracts, the Company applies the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when a performance obligation is satisfied. Tompkins' contracts with customers are generally short term in nature, typically due within one year or less or cancellable by the Company or the Company's customer upon a short notice period. Performance obligations for the Company's customer contracts are generally satisfied at a single point in time, typically when the transaction is complete, or over time. For performance obligations satisfied over time, Tompkins primarily uses the output method, directly measuring the value of the products/services transferred to the customer, to determine when performance obligations have been satisfied. The Company typically receives payment from customers and recognizes revenue concurrent with the satisfaction of the Company's performance obligations. In most cases, this occurs within a single financial reporting period. For payments received in advance of the satisfaction of performance obligations, revenue recognition is deferred until such time as the performance obligations have been satisfied. In cases where the Company has not received payment despite satisfaction of the Company's performance obligations, the Company

accrues an estimate of the amount due in the period the Company's performance obligations have been satisfied. For contracts with variable components, only amounts for which collection is probable are accrued. The Company generally acts in a principal capacity, on the Company's own behalf, in most of the Company's contracts with customers. In such transactions, Tompkins recognizes revenue and the related costs to provide the services on a gross basis in the Company's financial statements. In some cases, Tompkins acts in an agent capacity, deriving revenue through assisting other entities in transactions with the Company's customers. In such transactions, Tompkins recognizes revenue and the related costs to provide the services on a net basis in the Company's financial statements. These transactions recognized on a net basis primarily relate to insurance and brokerage commissions and fees derived from the Company's customers' use of various interchange and ATM/debit card networks.

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CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
ASSETS
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 $915 at December 31, 2019 and $887 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
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
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

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

(In thousands)	Banking		Insurance			Wealth Management		Total
Balance at January 1, 2018	$	64,369	$	19,711		$	8,211	$	92,291
Goodwill related to sale of portion of business unit1	0		(8		)	0		(8		)
Balance at December 31, 2018	$	64,369	$	19,703		$	8,211	$	92,283
Acquisitions	0		164			0		164
Balance at December 31, 2019	$	64,369	$	19,867		$	8,211	$	92,447

¹ The $8,000 reduction of goodwill in 2018, reflects an adjustment related to the sale of a portion of insurance revenues. In 2017, Tompkins Insurance sold a portion of its personal lines insurance revenues, which had been acquired in a previous acquisition, to a third party. In 2018, Tompkins Insurance adjusted the goodwill related to the sale in 2017.

Schedule of amortizing intangible assets

The following table provides information regarding the Company's amortizing intangible assets:

December 31, 2019	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
(In thousands)
Amortized intangible assets:
Core deposit intangible	$	18,774	$	16,404	$	2,370
Customer relationships	9,048		6,405		2,643
Other intangibles	6,197		4,987		1,210
Total intangible assets	$	34,019	$	27,796	$	6,223

December 31, 2018	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
(In thousands)
Amortized intangible assets:
Core deposit intangible	$	18,774	$	15,386	$	3,388
Customer relationships	8,877		5,888		2,989
Other intangibles	5,983		4,732		1,251
Total intangible assets	$	33,634	$	26,006	$	7,628

Schedule of estimated amortization expense

The estimated aggregate future amortization expense for intangible assets remaining as of December 31, 2019 is as follows:

Estimated amortization expense:1
(In thousands)
For the year ended December 31, 2020	$	1,509
For the year ended December 31, 2021	1,342
For the year ended December 31, 2022	897
For the year ended December 31, 2023	334
For the year ended December 31, 2024	294

 ¹Excludes the amortization of mortgage servicing rights.  Amortization of mortgage servicing rights was $117,000 in 2019, $69,000 in 2018 and $122,000 in 2017.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The Company maintains a noncontributory defined-benefit plan (the "DB Pension Plan") and two noncontributory defined-contribution retirement plans (the "DC Retirement Plan" and "2015 DC Retirement Plan") which cover substantially all employees of the Company.

The DB Pension Plan was closed to new employees at year-end 2009 and was frozen on July 31, 2015. The benefits under the DB Pension Plan are based on years of service, age and percentages of the employees' average final compensation. Assets of the Company's DB Pension Plan are invested in common and preferred stock, mutual funds and cash equivalents. At December 31, 2019 and 2018, DB Pension Plan assets included 41,292 and 42,192 shares of Tompkins' common stock that had a fair value of $3.8 million and $3.2 million, respectively.

The defined-contribution retirement plans cover substantially all employees of the Company who have reached the age of 21 and completed one year of service. For participants in these plans, the Company makes contributions to an account set up in the participant's name. The amount equals a percentage of pay and varies based on the participant's age, service, and tenure with the Company. The defined-contribution retirement plans offer the participant a wide range of investment alternatives from which to choose. Expenses related to the defined-contribution plans totaled $4.0 million in 2019, $3.9 million in 2018, and $4.1 million in 2017.

The Company maintains supplemental employee retirement plans (“SERPs”) for certain executives. In 2016, certain SERPs were amended and restated to reflect changes resulting from the freezing of the DB Pension Plan and the Company entered into additional SERP agreements with certain executives. In 2019, the SERP for the Company's CEO was amended to expand the definition of "Earnings" under the SERP to better align the scope of compensation included in our CEO's retirement benefits with chief executive compensation in a manner that is more consistent with market practice. All benefits provided under the SERPs are unfunded and the Company makes payments to plan participants.

The Company also maintains a post-retirement life and healthcare benefit plan (the “Life and Healthcare Plan”), which was amended in 2005. For employees commencing employment after January 1, 2005, the Company does not contribute towards post-retirement healthcare benefits. Retirees and employees who were eligible to retire when the Life and Healthcare Plan was amended were unaffected. Generally, all other employees were eligible for Health Reimbursement Accounts (“HRA”) with an initial balance equal to the amount of the Company’s estimated then current liability. Contributions to the plan are limited to an annual contribution of 4% of the total HRA defined term. Employees, upon retirement, will be able to utilize their HRA for qualified health costs and deductibles. In 2019, the Retiree Life Benefit program was closed to new entrants, and only employees who attained age 50 as of February 1, 2020 will be eligible to earn this benefit. The amounts related to this change are reflected in the below table as amendments in 2019.

The Company engages independent, external actuaries to compute the amounts of liabilities and expenses relating to these plans, subject to the assumptions that the Company selects. The benefit obligation for these plans represents the liability of the Company for current and former employees, and is affected primarily by the following: service cost (benefits attributed to employee service during the period); interest cost (interest on the liability due to the passage of time); actuarial gains/losses (experience during the year different from that assumed and changes in plan assumptions); and benefits paid to participants.

The following table sets forth the changes in the projected benefit obligation for the DB Pension Plan and SERPs and the accumulated post-retirement benefit obligation for the Life and Healthcare Plan; and the respective plan assets, and the plans’ funded status and amounts recognized in the Company’s Consolidated Statements of Condition at December 31, 2019 and 2018 (the measurement dates of the plans).

	DB Pension Plans						Life and Healthcare Plan						SERP Plan
(In thousands)	2019			2018			2019			2018			2019			2018
Change in benefit obligation:
Benefit obligation at beginning of year	$	79,689		$	82,748		$	7,857		$	8,995		$	23,539		$	26,142
Service cost	0			0			159			212			157			160
Interest cost	2,936			2,508			289			270			909			833
Plan participants’ contributions	0			0			87			122			0			0
Amendments	0			0			(203		)	0			2,022			0
Actuarial loss (gain)	10,996			(2,324		)	1,218			(1,337		)	6,128			(2,987		)
Benefits paid	(3,275		)	(3,243		)	(385		)	(405		)	(602		)	(609		)
Benefit obligation at end of year	$	90,346		$	79,689		$	9,022		$	7,857		$	32,153		$	23,539
Change in plan assets:
Fair value of plan assets at beginning of year	$	72,474		$	80,154		$	0		$	0		$	0		$	0
Actual return on plan assets	13,153			(4,437		)	0			0			0			0
Plan participants’ contributions	0			0			87			122			0			0
Employer contributions	0			0			298			283			602			609
Benefits paid	(3,275		)	(3,243		)	(385		)	(405		)	(602		)	(609		)
Fair value of plan assets at end of year	$	82,352		$	72,474		$	0		$	0		$	0		$	0
Unfunded status	$	(7,994	)	$	(7,215	)	$	(9,022	)	$	(7,857	)	$	(32,153	)	$	(23,539	)

The accumulated benefit obligation for the DB Pension Plan for 2019 and 2018 was $90.3 million and $79.7 million, respectively. The accumulated benefit obligation for the Life and Healthcare Plan for 2019 and 2018 was $9.0 million and $7.9 million, respectively. The accumulated benefit obligation for the SERPs for 2019 and 2018 was $32.2 million and $23.5 million, respectively. The unfunded status of the DB Pension Plan, the Life and Healthcare Plan, and SERPs was recognized in other liabilities in the Consolidated Statement of Condition at December 31, 2019 in the amounts of $8.0 million, $9.0 million, and $32.2 million, respectively. The unfunded status of the DB Pension Plan, the Life and Healthcare Plan, and SERPs in the amount of $7.2 million, $7.9 million, and $23.5 million, respectively, was recognized in other liabilities in the Consolidated Statement of Condition at December 31, 2018.

Net periodic benefit cost and other comprehensive income (loss) includes the following components:

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
Components of net periodic benefit cost	2019			2018			2017			2019			2018			2017			2019		2018		2017
Service cost	$	0		$	0		$	0		$	159		$	212		$	192		$	157	$	160	$	166
Interest cost	2,936			2,508			2,501			289			270			268			909		833		852
Expected return on plan assets	(4,933		)	(5,648		)	(5,088		)	0			0			0			0		0		0
Amortization of prior service (credit) cost	(10		)	(10		)	(10		)	(62		)	(62		)	(62		)	104		87		87
Recognized net actuarial loss	1,334			1,118			1,075			0			62			34			343		539		399
Recognized net actuarial gain due to curtailments	0			0			0			(399		)	0			0			0		0		0
Net periodic benefit (credit) cost	$	(673	)	$	(2,032	)	$	(1,522	)	$	(13	)	$	482		$	432		$	1,513	$	1,619	$	1,504

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss):

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
	2019			2018			2017			2019			2018			2017			2019			2018			2017
Net actuarial loss (gain)	$	2,776		$	7,761		$	1,434		$	1,218		$	(1,337	)	$	708		$	6,128		$	(2,987	)	$	2,407
Recognized actuarial loss	(1,334		)	(1,118		)	(1,075		)	0			(62		)	(34		)	(343		)	(539		)	(399		)
Prior service credit	0			0			0			(203		)	0			(964		)	2,022			0			0
Recognized prior service cost (credit)	10			10			10			62			62			62			(104		)	(87		)	(87		)
Prior service cost (credit) recognized due to curtailment	0			0			0			399			0			0			0			0			0
Recognized in other comprehensive income (loss)	$	1,452		$	6,653		$	369		$	1,476		$	(1,337	)	$	(228	)	$	7,703		$	(3,613	)	$	1,921
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	779		$	4,621		$	(1,153	)	$	1,463		$	(855	)	$	204		$	9,216		$	(1,994	)	$	3,425

Pre-tax amounts recognized as a component of accumulated other comprehensive income (loss) as of year-end that have not been recognized as a component of the Company’s combined net periodic benefit cost of the Company’s DB Pension Plan, Life and Healthcare Plan and SERPs are presented in the following table.  

(In thousands)	DB Pension Plans									Life and Healthcare Plan									SERP Plan
	2019			2018			2017			2019			2018			2017			2019		2018		2017
Net actuarial loss (gain)	$	48,045		$	46,603		$	39,960		$	1,586		$	368		$	1,767		$	11,345	$	5,560	$	9,086
Prior service cost (credit)	(9		)	(20		)	(30		)	(348		)	(606		)	(668		)	2,433		514		602
Total	$	48,036		$	46,583		$	39,930		$	1,238		$	(238	)	$	1,099		$	13,778	$	6,074	$	9,688

The pre-tax amounts included in accumulated other comprehensive income (loss) that are expected to be recognized in net periodic pension cost during the fiscal year ended December 31, 2020 are shown below.

(In thousands)	Pension Plans		Life and Healthcare Plan		SERP Plan
Actuarial loss	1,359		103		796
Prior service cost	(10	)	(61	)	285
Total	1,349		42		1,081

Weighted-average assumptions used in accounting for the plans were as follows:

(In thousands)	DB Pension Plans						Life and Healthcare Plan						SERP Plan
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount Rates
Benefit Cost for Plan Year	4.08	%	3.43	%	3.89	%	4.13	%	3.51	%	3.97	%	4.16	%	3.55	%	4.10	%
Benefit Obligation at End of Plan Year	3.04	%	4.08	%	3.43	%	3.10	%	4.13	%	3.51	%	3.14	%	4.16	%	3.55	%
Expected long-term return on plan assets	7.00	%	7.25	%	7.25	%	N/A		N/A		N/A		N/A		N/A		N/A
Rate of compensation increase
Benefit Cost for Plan Year	N/A		N/A		N/A		4.00	%	5.00	%	5.00	%	5.00	%	5.00	%	5.00	%
Benefit Obligation at End of Plan Year	N/A		N/A		N/A		4.00	%	4.00	%	5.00	%	5.00	%	5.00	%	5.00	%

Tompkins offers post-retirement life and healthcare benefits, although as previously mentioned, has discontinued providing post-retirement healthcare to participants hired after 2004. The weighted average annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) was 5.9% beginning in 2019 and is assumed to decrease gradually to 4.5% in 2026 and beyond. A 1% increase in the assumed health care cost trend rate would increase service and interest costs by approximately $594 and increase the Company’s benefit obligation by approximately $20,000. A 1% decrease in the assumed health care cost trend rate, would decrease service and interest costs by approximately $526 and decrease the Company’s benefit obligation by approximately $18,000.

To develop the expected long-term rate of return on assets assumption for the DB Pension Plan, the Company considered the historical returns and the future expectations for returns for each asset class, as well as target asset allocations of the pension portfolio. Based on this analysis, the Company selected 7.00% as the long-term rate of return on asset assumption.

The discount rates used to determine the Company’s DB Pension Plan and other post-retirement benefit obligations as of December 31, 2019, and December 31, 2018, were determined by matching estimated benefit cash flows to a yield curve derived from Citigroup’s regular bond yield at December 31, 2019 and December 31, 2018.

Based on the Company’s anticipation of future experience under the DB Pension Plan, the mortality tables used to determine future benefit obligations under the plan were updated as of December 31, 2019 to the PRI-2012 Mortality Tables with Mortality Improvement Scale MP 2019. The Company updated this assumption based on the new improvement table released by The Society of Actuaries in October 2019. The appropriateness of the assumptions is reviewed annually.

Cash Flows 

Plan assets are amounts that have been segregated and restricted to provide benefits, and include amounts contributed by the Company and amounts earned from investing contributions, less benefits paid. The Company funds the cost of the SERPs and the Life and Healthcare Plan benefits on a pay-as-you-go basis.

The benefits as of December 31, 2019, expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter were as follows:

(In thousands)	DB Pension Plans		Life and Healthcare Plan		SERP Plan
2020	$	4,125	$	557	$	708
2021	4,275		447		700
2022	4,209		436		754
2023	4,386		429		863
2024	4,478		423		846
2025-2029	23,939		2,162		4,949
Total	$	45,412	$	4,454	$	8,820

Plan Assets

The Company’s DB Pension Plan’s weighted-average asset allocations at December 31, 2019 and 2018, respectively, by asset category are as follows:

	2019		2018
Equity securities	62	%	61	%
Debt securities	36	%	38	%
Other	2	%	1	%
Total Allocation	100	%	100	%

It is the policy of the Trustees to invest the Pension Trust Fund (the “Fund”) for total return. The Trustees seek the maximum return consistent with the interests of the participants and beneficiaries and prudent investment management. The management of the Fund’s assets is in compliance with the guidelines established in the Company’s Pension Plan and Trust Investment Policy, which is reviewed and approved annually by the Tompkins Board of Directors, and the Pension Investment Review Committee.

The intention is for the Fund to be prudently diversified. The Fund’s investments will be invested among the fixed income, equity and cash equivalent sectors. The pension committee will designate minimum and maximum positions in any of the sectors. In no case shall more than 10% of the Fund assets consist of qualified securities or real estate of the Company. Unless otherwise approved by the Trustees, the following investments are prohibited:

– Restricted stock, private placements, short positions, calls, puts, or margin transactions;

– Commodities, oil and gas properties, real estate properties, or

– Any investment that would constitute a prohibited transaction as described in the Employee Retirement Income Security Act of 1974 (“ERISA”), section 407, 29 U.S.C. 1106.

In general, the investment in debt securities is limited to readily marketable debt securities having a Standard & Poor’s rating of “A” or Moody’s rating of “A”, securities of, or guaranteed by the United States Government or its agencies, or obligations of banks or their holding companies that are rated in the three highest ratings assigned by Fitch Investor Service, Inc. In addition, investments in equity securities must be listed on the NYSE or traded on the national Over The Counter market or listed on the NASDAQ. Cash equivalents generally may be United States Treasury obligations, commercial paper having a Standard & Poor’s rating of “A-1” or Moody’s National Credit Officer rating of “P-1”or higher.

The major categories of assets in the Company’s DB Pension Plan as of year-end are presented in the following table. Assets are segregated by the level of valuation inputs within the fair value hierarchy established by ASC Topic 820 utilized to measure fair value (see Note 19-Fair Value Measurements). 

Fair Value Measurements
December 31, 2019
(In thousands)	Fair Value 2019		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	1,367	$	1,367	$	0	$	0
Common stocks	26,574		26,574		0		0
Mutual funds	54,411		54,411		0		0
Total Fair Value of Plan Assets	$	82,352	$	82,352	$	0	$	0

Fair Value Measurements
December 31, 2018
(In thousands)	Fair Value 2018		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	1,018	$	1,018	$	0	$	0
Common stocks	20,648		20,648		0		0
Mutual funds	50,808		50,808		0		0
Total Fair Value of Plan Assets	$	72,474	$	72,474	$	0	$	0

The Company determines the fair value for its pension plan assets using an independent pricing service. The pricing service uses a variety of techniques to determine fair value, including market maker bids, quotes and pricing models. Inputs to the model include recent trades, benchmark interest rates, spreads, and actual and projected cash flows. Based on the inputs used by our independent pricing services, the Company identifies the appropriate level within the fair value hierarchy to report these fair values. U.S. Treasury securities, common stocks and mutual funds are considered Level 1 based on quoted prices in active markets.

The Company has an Employee Stock Ownership Plan (ESOP) and a 401(k) Investment and Stock Ownership Plan (ISOP) covering substantially all employees of the Company. The ESOP allows for Company contributions in the form of common stock of the Company. Annually, the Tompkins Board of Directors determines a profit-sharing payout to its employees in accordance with a performance-based formula. A percentage of the approved amount is paid in Company common stock into the ESOP. Contributions are limited to a maximum amount as stipulated in the ESOP. The remaining percentage is either paid out in cash or deferred into the ISOP at the direction of the employee. Compensation expense related to the profit-sharing totaled $4.4 million in 2019, $4.9 million in 2018, and $5.8 million in 2017.

Under the ISOP, employees may contribute a percentage of their eligible compensation with a Company match of such contributions up to a maximum match of 4%. Participation in the 401(k) Plan is contingent upon certain age and service requirements. The Company’s expense associated with these matching provisions was $2.9 million in 2019, $2.6 million in 2018, and $2.5 million in 2017.

Life insurance benefits are provided to certain officers of the Company. In connection with these policies, the Company reflects life insurance assets on its Consolidated Statements of Condition of $83.0 million at December 31, 2019, and $81.9 million at December 31, 2018. The insurance is carried at its cash surrender value on the Consolidated Statements of Condition. Increases in the cash surrender value of the insurance are reflected as noninterest income, net of any related mortality expense.

The Company provides split dollar life insurance benefits to certain employees. The plan is unfunded and the estimated liability of the plan of $1.6 million and $1.5 million is recorded in other liabilities in the Consolidated Statements of Condition at December 31, 2019 and 2018, respectively. Compensation expense related to the split dollar life insurance was approximately $49,801 in 2019 and $52,000 in 2018.

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Deposits

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Deposits

Deposits

Aggregate time deposits of $250,000 or more were $181.4 million at December 31, 2019, and $156.6 million at December 31, 2018. Scheduled maturities of time deposits at December 31, 2019, were as follows:

(In thousands)	Less than $250,000		$250,000 and over		Total
Maturity
Three months or less	$	105,906	$	57,279	$	163,185
Over three through six months	75,507		36,826		112,333
Over six through twelve months	144,920		46,046		190,966
Total due in 2020	$	326,333	$	140,151	$	466,484
2021	98,389		28,416		126,805
2022	57,080		12,584		69,664
2023	7,726		262		7,988
2024	3,886		0		3,886
Thereafter	187		0		187
Total	$	493,601	$	181,413	$	675,014

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Loans and Leases

12 Months Ended

Dec. 31, 2019

Loans and Leases Receivable Disclosure [Abstract]

Loans and Leases

Loans and Leases

Loans and Leases at December 31, 2019 and December 31, 2018 were as follows:

	December 31, 2019								December 31, 2018
(In thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	105,786		$	0	$	105,786		$	107,494		$	0	$	107,494
Commercial and industrial other	863,199			39,076		902,275			926,429			43,712		970,141
Subtotal commercial and industrial	968,985			39,076		1,008,061			1,033,923			43,712		1,077,635
Commercial real estate
Construction	212,302			1,335		213,637			164,285			1,384		165,669
Agriculture	184,701			197		184,898			170,005			224		170,229
Commercial real estate other	1,899,645			145,385		2,045,030			1,827,279			177,484		2,004,763
Subtotal commercial real estate	2,296,648			146,917		2,443,565			2,161,569			179,092		2,340,661
Residential real estate
Home equity	203,894			15,351		219,245			208,459			21,149		229,608
Mortgages	1,140,572			18,020		1,158,592			1,083,802			20,484		1,104,286
Subtotal residential real estate	1,344,466			33,371		1,377,837			1,292,261			41,633		1,333,894
Consumer and other
Indirect	12,964			0		12,964			12,663			0		12,663
Consumer and other	60,661			785		61,446			57,565			761		58,326
Subtotal consumer and other	73,625			785		74,410			70,228			761		70,989
Leases	17,322			0		17,322			14,556			0		14,556
Total loans and leases	4,701,046			220,149		4,921,195			4,572,537			265,198		4,837,735
Less: unearned income and deferred costs and fees	(3,645		)	0		(3,645		)	(3,796		)	0		(3,796		)
Total loans and leases, net of unearned income and deferred costs and fees	$	4,697,401		$	220,149	$	4,917,550		$	4,568,741		$	265,198	$	4,833,939

The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the VIST Acquisition were as follows at December 31:

(In thousands)	December 31, 2019		December 31, 2018
Acquired Credit Impaired Loans
Outstanding principal balance	$	10,604	$	12,822
Carrying amount	9,149		11,036
Acquired Non-Credit Impaired Loans
Outstanding principal balance	212,518		256,265
Carrying amount	211,000		254,162
Total Acquired Loans
Outstanding principal balance	$	223,122	$	269,087
Carrying amount	$	220,149	$	265,198

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. There were no significant changes to the Company’s existing lending policies, underwriting standards or loan review procedures during 2019. 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. 

Residential real estate loans 

The Company’s policy is to underwrite residential real estate loans in accordance with secondary market guidelines in effect at the time of origination, including loan-to-value (“LTV”) and documentation requirements. LTVs exceeding 80% for fixed rate loans and 85% for adjustable rate loans require private mortgage insurance to reduce the exposure. The Company verifies applicants’ income, obtains credit reports and independent real estate appraisals in the underwriting process to ensure adequate collateral coverage and that loans are extended to individuals with good credit and income sufficient to repay the loan. In limited circumstances, the Company will make exceptions to secondary market underwriting standards to support community reinvestment activities.

The Company originates fixed rate and adjustable rate residential mortgage loans, including loans that have characteristics of both, such as a 7/1 adjustable rate mortgage, which has a fixed rate for the first seven years and then adjusts annually thereafter. The majority of residential mortgage loans originated over the last several years have been fixed rate loans due to the low interest rate environment. Adjustable rate residential real estate loans may be underwritten based upon an initial rate which is below the fully indexed rate; however, the initial rate is generally less than 100 basis points below the fully indexed rate. As such, the Company does not believe that this practice creates any significant credit risk. 

The Company may sell residential real estate loans in the secondary market based on interest rate considerations. These residential real estate loans are generally sold to Federal Home Loan Mortgage Corporation (“FHLMC”) or State of New York Mortgage Agency (“SONYMA”) without recourse in accordance with standard secondary market loan sale agreements. These residential real estate loan sales are subject to customary representations and warranties, 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.

During 2019, 2018, and 2017, the Company sold residential mortgage loans totaling $16.9 million, $27.7 million, and $4.6 million, respectively, and realized net gains on these sales of $227,000, $458,000, and $50,000, respectively. These residential real estate loans are generally sold without recourse in accordance with standard secondary market loan sale agreements. When residential mortgage loans are sold to FHLMC or SONYMA, the Company typically retains all servicing rights, which provides the Company with a source of fee income. In connection with the sales in 2019, 2018, and 2017, the Company recorded mortgage-servicing assets of $127,000, $207,000, and $38,000, respectively.

Amortization of mortgage servicing assets amounted to $117,000 in 2019, $69,000 in 2018, and $122,000 in 2017. At December 31, 2019 and 2018, the Company serviced residential mortgage loans aggregating $120.3 million and $120.9 million, including loans securitized and held as available-for-sale securities. Mortgage servicing rights, at amortized basis, totaled $815,000 at December 31, 2019 and $805,000 at December 31, 2018. These mortgage servicing rights were evaluated for impairment at year-end 2019 and 2018 and no impairment was recognized. Loans held for sale, which are included in residential real estate totaled $807,000 and $2.7 million at December 31, 2019 and 2018, respectively.

As members of the FHLB, the Company’s subsidiary banks may use unencumbered mortgage related assets to secure borrowings from the FHLB. At December 31, 2019 and 2018, the Company had $415.0 million and $425.0 million, respectively, of term advances from the FHLB that were secured by residential mortgage loans.

Commercial and industrial loans 

The Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial and industrial loans are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral and personal or government guarantees. The Company’s policy establishes debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial and industrial loans are generally secured by the assets being financed or other business assets such as accounts receivable or inventory. Many of the loans in the commercial portfolio have variable interest rates tied to Prime Rate, FHLBNY borrowing rates, or U.S. Treasury indices.

Commercial real estate 

The Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial real estate loans are primarily made based on identified cash flows of the borrower with consideration given to underlying real estate collateral and personal or government guarantees. The Company’s policy establishes a maximum LTV based on the type of property and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial real estate loans may be fixed or variable rate loans with interest rates tied to Prime Rate, FHLBNY borrowing rates, or U.S. Treasury indices.

Agriculture loans

Agriculturally-related loans include loans to dairy farms, cash and vegetable crop farms and a variety of other livestock and crop producers. 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 Company’s Commercial Loan Policy establishes a maximum LTV of 75% for real estate secured loans and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt, with limited adjustments to consider commodity market cycles. The policy also establishes maximum LTV ratios for non-real estate collateral, such as livestock, commodities/crops, equipment and accounts receivable. Agriculturally-related loans may be fixed or variable rate with interest tied to Prime Rate, FHLBNY borrowing rates, or U.S. Treasury indices.

Consumer and other loans

The consumer loan portfolio includes personal installment loans, direct and indirect automobile financing, and overdraft lines of credit. The majority of the consumer portfolio consists of indirect and direct automobile loans. Consumer loans are generally short-term and have fixed rates of interest that are set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets. The Company's Consumer Loan Underwriting Guidelines Policy establishes maximum debt to income ratios and includes guidelines for verification of applicants’ income and receipt of credit reports.

Leases 

Leases are primarily made to commercial customers and the origination criteria typically includes the value of the underlying assets being financed, the useful life of the assets being financed, and identified cash flows of the borrower. Most leases carry a fixed rate of interest that is set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets. 

Loan and Lease Customers 

The Company’s loan and lease customers are located primarily in the upstate New York communities served by its three subsidiary banks and in the Pennsylvania communities served by VIST Bank. The Trust Company operates fourteen banking offices in the counties of Tompkins, Cayuga, Cortland, Onondaga and Schuyler, New York. The Bank of Castile operates sixteen banking offices in the counties of Wyoming, Livingston, Genesee, Orleans and Monroe, New York. Mahopac Bank operates fourteen banking offices in the counties of Putnam County, Dutchess County and Westchester, New York. VIST Bank operates twenty offices in the counties of Berks, Montgomery, Philadelphia, Delaware and Schuylkill, Pennsylvania. Other than general economic risks, management is not aware of any material concentrations of credit risk to any industry or individual borrower. 

Loans to Related Parties

Directors and officers of the Company and its affiliated companies were customer of, and had other transactions with, the Company's banking subsidiaries in the ordinary course of business. Such loans and commitments were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons not related to the Company, and did not involve more than normal risk of collectability or present other unfavorable features.

Loan transactions with related parties are summarized as follows:

(In thousands)	December 31, 2019			December 31, 2018
Balance at beginning of year	$	39,595		$	14,503
New Directors/Executive Officers	0			467
New loans and advancements	19,393			30,570
Loan payments	(10,599		)	(5,945		)
Balance at end of year	$	48,389		$	39,595

Nonaccrual Loans and Leases 

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans are placed on nonaccrual status either due to the delinquency status of principal and/or interest (generally when past due 90 or more days) or a judgment by management that the full repayment of principal and interest is unlikely. 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 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 upon 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. The Company has determined that it can reasonably estimate future cash flows on our current portfolio of acquired loans that are past due 90 days or more and on which the Company is accruing interest and expect to fully collect the carrying value of the loans net of the allowance for acquired loan losses. 

The below table is an aging analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of December 31, 2019 and 2018.

December 31, 2019
(In thousands)	30-89 days		90 days or more		Current Loans			Total Loans			90 days and accruing1		Nonaccrual
Originated Loans and Leases
Commercial and industrial
Agriculture	$	0	$	65	$	105,721		$	105,786		$	0	$	0
Commercial and industrial other	413		2,079		860,707			863,199			0		2,334
Subtotal commercial and industrial	413		2,144		966,428			968,985			0		2,334
Commercial real estate
Construction	0		0		212,302			212,302			0		0
Agriculture	0		0		184,701			184,701			0		0
Commercial real estate other	1,116		10,095		1,888,434			1,899,645			0		10,617
Subtotal commercial real estate	1,116		10,095		2,285,437			2,296,648			0		10,617
Residential real estate
Home equity	290		602		203,002			203,894			0		1,924
Mortgages	1,261		3,314		1,135,997			1,140,572			0		7,335
Subtotal residential real estate	1,551		3,916		1,338,999			1,344,466			0		9,259
Consumer and other
Indirect	312		60		12,592			12,964			0		117
Consumer and other	167		66		60,428			60,661			0		158
Subtotal consumer and other	479		126		73,020			73,625			0		275
Leases	0		0		17,322			17,322			0		0
Total loans and leases	3,559		16,281		4,681,206			4,701,046			0		22,485
Less: unearned income and deferred costs and fees	0		0		(3,645		)	(3,645		)	0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	3,559	$	16,281	$	4,677,561		$	4,697,401		$	0	$	22,485
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	$	0	$	2	$	39,074		$	39,076		$	2	$	1
Subtotal commercial and industrial	0		2		39,074			39,076			2		1
Commercial real estate
Construction	0		0		1,335			1,335			0		0
Agriculture	0		0		197			197			0		0
Commercial real estate other	24		685		144,676			145,385			542		172
Subtotal commercial real estate	24		685		146,208			146,917			542		172
Residential real estate
Home equity	58		125		15,168			15,351			55		872
Mortgages	83		671		17,266			18,020			195		751
Subtotal residential real estate	141		796		32,434			33,371			250		1,623
Consumer and other
Consumer and other	0		0		785			785			0		0
Subtotal consumer and other	0		0		785			785			0		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	165	$	1,483	$	218,501		$	220,149		$	794	$	1,796

 

¹ Includes acquired loans that were recorded at fair value at the acquisition date.

December 31, 2018
(In thousands)	30-89 days		90 days or more		Current Loans			Total Loans			90 days and accruing1		Nonaccrual
Originated loans and leases
Commercial and industrial
Agriculture	$	0	$	0	$	107,494		$	107,494		$	0	$	0
Commercial and industrial other	2,367		1,659		922,403			926,429			0		1,861
Subtotal commercial and industrial	2,367		1,659		1,029,897			1,033,923			0		1,861
Commercial real estate
Construction	0		0		164,285			164,285			0		0
Agriculture	71		0		169,934			170,005			0		0
Commercial real estate other	1,201		1,856		1,824,222			1,827,279			0		7,691
Subtotal commercial real estate	1,272		1,856		2,158,441			2,161,569			0		7,691
Residential real estate
Home equity	986		1,026		206,447			208,459			0		1,784
Mortgages	2,693		4,027		1,077,082			1,083,802			0		7,770
Subtotal residential real estate	3,679		5,053		1,283,529			1,292,261			0		9,554
Consumer and other
Indirect	333		59		12,271			12,663			0		155
Consumer and other	187		24		57,354			57,565			0		79
Subtotal consumer and other	520		83		69,625			70,228			0		234
Leases	0		0		14,556			14,556			0		0
Total loans and leases	7,838		8,651		4,556,048			4,572,537			0		19,340
Less: unearned income and deferred costs and fees	0		0		(3,796		)	(3,796		)	0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	7,838	$	8,651	$	4,552,252		$	4,568,741		$	0	$	19,340
Acquired loans and leases
Commercial and industrial
Commercial and industrial other	$	0	$	10	$	43,702		$	43,712		$	10	$	22
Subtotal commercial and industrial	0		10		43,702			43,712			10		22
Commercial real estate
Construction	0		0		1,384			1,384			0		0
Agriculture	0		0		224			224			0		0
Commercial real estate other	0		839		176,645			177,484			525		316
Subtotal commercial real estate	0		839		178,253			179,092			525		316
Residential real estate
Home equity	46		803		20,300			21,149			59		1,414
Mortgages	18		969		19,497			20,484			722		1,104
Subtotal residential real estate	64		1,772		39,797			41,633			781		2,518
Consumer and other
Consumer and other	3		0		758			761			0		0
Subtotal consumer and other	3		0		758			761			0		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	67	$	2,621	$	262,510		$	265,198		$	1,316	$	2,856

 ¹ Includes acquired loans that were recorded at fair value at the acquisition date.

The difference between the interest income that would have been recorded if nonaccrual loans and leases had paid in accordance with their original terms and the interest income that was recorded, was $1.2 million for the year ended December 31, 2019 and $1 million for each of the years ended December 31, 2018 and 2017. The Company had no material commitments to make additional advances to borrowers with nonperforming loans.

XML

Employee Benefit Plans - Narrative (Details)	12 Months Ended
	Dec. 31, 2019 USD ($) pension_plan shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($)
Defined Contribution Plan Disclosure [Line Items]
Number of non-contributory defined-contribution retirement plans | pension_plan	2
Number of shares issued | shares	15,014,499	15,348,287
Fair value of shares issued	$ 1,501,000	$ 1,535,000
Expenses related to defined-contribution plans	4,000,000.0	3,900,000	$ 4,100,000
Compensation expense related to the profit-sharing	$ 4,400,000	4,900,000	5,800,000
Maximum match (as a percent)	4.00%
Expense associated with matching provisions	$ 2,900,000	2,600,000	$ 2,500,000
Life insurance assets	$ 82,961,000	$ 81,928,000
DB Pension Plans
Defined Contribution Plan Disclosure [Line Items]
Number of shares issued | shares	41,292	42,192
Fair value of shares issued	$ 3,800,000	$ 3,200,000
Accumulated benefit obligation	90,300,000	79,700,000
Unfunded status	7,994,000	$ 7,215,000
Increase in service and interest costs	594,000
Increase in benefit obligation amount	20,000
Decrease in service and interest costs	526,000
Decrease in benefit obligation, amount	$ 18,000
Expected long-term rate of return	7.00%	7.25%	7.25%
DB Pension Plans | Maximum
Defined Contribution Plan Disclosure [Line Items]
Rate of compensation increase (as a percent)	5.90%
DB Pension Plans | Minimum
Defined Contribution Plan Disclosure [Line Items]
Rate of compensation increase (as a percent)	4.50%
DC Retirement Plan
Defined Contribution Plan Disclosure [Line Items]
Requisite service period	1 year
Annual contribution limit (as a percent)	4.00%
Accumulated benefit obligation	$ 9,000,000.0	$ 7,900,000
Unfunded status	$ 9,022,000	$ 7,857,000
Rate of compensation increase (as a percent)	4.00%	4.00%	5.00%
SERP Plan
Defined Contribution Plan Disclosure [Line Items]
Accumulated benefit obligation	$ 32,200,000	$ 23,500,000
Unfunded status	$ 32,153,000	$ 23,539,000
Rate of compensation increase (as a percent)	5.00%	5.00%	5.00%
Split dollar life insurance benefits
Defined Contribution Plan Disclosure [Line Items]
Estimated liability	$ 1,600,000	$ 1,500,000
Compensation expense related to the split dollar life insurance	$ 49,801	$ 52,000

XML

Goodwill and Other Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Estimated amortization expense:
For the year ended December 31, 2020	$ 1,509
For the year ended December 31, 2021	1,342
For the year ended December 31, 2022	897
For the year ended December 31, 2023	334
For the year ended December 31, 2024	294
Amortization of mortgage servicing assets	$ 117	$ 69	$ 122

XML

Premises and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 7,715	$ 7,604	$ 6,824
Premises
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	2,809	2,989	2,527
Furniture, fixtures, and equipment
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 4,906	$ 4,615	$ 4,297

XML

Leases - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Renewal term	29 years
Termination period	30 days
2019		$ 4.8
2020		4.0
2021		3.6
2022		3.4
2023		3.4
Thereafter		$ 13.0
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Operating lease renewal term		5 years
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	23 years
Operating lease renewal term		20 years

XML

Allowance for Loan and Lease Losses - Investment in Loans and Leases (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 4,921,195,000	$ 4,837,735,000
Interest income on impaired loans and leases	0	0	$ 0
Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	19,385,000	14,167,000
Collectively evaluated for impairment	4,681,661,000	4,558,370,000
Total Loans	4,701,046,000	4,572,537,000
Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	2,830,000	3,438,000
Loans acquired with deteriorated credit quality	9,149,000	11,036,000
Collectively evaluated for impairment	208,170,000	250,724,000
Total Loans	220,149,000	265,198,000
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,008,061,000	1,077,635,000
Commercial and industrial | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	2,110,000	1,864,000
Collectively evaluated for impairment	966,875,000	1,032,059,000
Total Loans	968,985,000	1,033,923,000
Commercial and industrial | Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	2,000	32,000
Loans acquired with deteriorated credit quality	173,000	153,000
Collectively evaluated for impairment	38,901,000	43,527,000
Total Loans	39,076,000	43,712,000
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	2,443,565,000	2,340,661,000
Commercial real estate | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	13,496,000	8,388,000
Collectively evaluated for impairment	2,283,152,000	2,153,181,000
Total Loans	2,296,648,000	2,161,569,000
Commercial real estate | Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	714,000	842,000
Loans acquired with deteriorated credit quality	5,674,000	5,852,000
Collectively evaluated for impairment	140,529,000	172,398,000
Total Loans	146,917,000	179,092,000
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,377,837,000	1,333,894,000
Residential real estate | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	3,779,000	3,915,000
Collectively evaluated for impairment	1,340,687,000	1,288,346,000
Total Loans	1,344,466,000	1,292,261,000
Residential real estate | Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	2,114,000	2,564,000
Loans acquired with deteriorated credit quality	3,302,000	5,031,000
Collectively evaluated for impairment	27,955,000	34,038,000
Total Loans	33,371,000	41,633,000
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	74,410,000	70,989,000
Consumer and other | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	73,625,000	70,228,000
Total Loans	73,625,000	70,228,000
Consumer and other | Acquired Loans and Leases
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	785,000	761,000
Total Loans	785,000	761,000
Finance leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	17,322,000	14,556,000
Finance leases | Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	17,322,000	14,556,000
Total Loans	17,322,000	14,556,000
Finance leases | Acquired Loans and Leases
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	0	0
Total Loans	$ 0	$ 0

XML

Allowance for Loan and Lease Losses - Credit Quality Indicators by Class of Commercial Real Estate (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	$ 3,265,633	$ 3,195,492
Originated Loans and Leases | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	3,177,741	3,123,455
Originated Loans and Leases | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	29,800	28,074
Originated Loans and Leases | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	58,092	43,963
Originated Loans and Leases | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	863,199	926,429
Originated Loans and Leases | Commercial and industrial | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	851,517	910,476
Originated Loans and Leases | Commercial and industrial | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	8,306	8,675
Originated Loans and Leases | Commercial and industrial | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	3,376	7,278
Originated Loans and Leases | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	105,786	107,494
Originated Loans and Leases | Commercial and industrial | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	89,892	93,939
Originated Loans and Leases | Commercial and industrial | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	1,698	4,951
Originated Loans and Leases | Commercial and industrial | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	14,196	8,604
Originated Loans and Leases | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	1,899,645	1,827,279
Originated Loans and Leases | Commercial real estate | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	1,857,142	1,797,599
Originated Loans and Leases | Commercial real estate | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	16,623	9,484
Originated Loans and Leases | Commercial real estate | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	25,880	20,196
Originated Loans and Leases | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	184,701	170,005
Originated Loans and Leases | Commercial real estate | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	166,888	157,156
Originated Loans and Leases | Commercial real estate | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	3,173	4,964
Originated Loans and Leases | Commercial real estate | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	14,640	7,885
Originated Loans and Leases | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	212,302	164,285
Originated Loans and Leases | Commercial real estate | Construction | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	212,302	164,285
Originated Loans and Leases | Commercial real estate | Construction | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Originated Loans and Leases | Commercial real estate | Construction | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	185,993	222,804
Acquired Loans and Leases | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	183,586	219,438
Acquired Loans and Leases | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	452
Acquired Loans and Leases | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	2,407	2,914
Acquired Loans and Leases | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	39,076	43,712
Acquired Loans and Leases | Commercial and industrial | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	38,879	43,447
Acquired Loans and Leases | Commercial and industrial | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial and industrial | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	197	265
Acquired Loans and Leases | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial and industrial | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial and industrial | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial and industrial | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	145,385	177,484
Acquired Loans and Leases | Commercial real estate | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	143,175	174,383
Acquired Loans and Leases | Commercial real estate | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	452
Acquired Loans and Leases | Commercial real estate | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	2,210	2,649
Acquired Loans and Leases | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	197	224
Acquired Loans and Leases | Commercial real estate | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	197	224
Acquired Loans and Leases | Commercial real estate | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial real estate | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	1,335	1,384
Acquired Loans and Leases | Commercial real estate | Construction | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	1,335	1,384
Acquired Loans and Leases | Commercial real estate | Construction | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	0	0
Acquired Loans and Leases | Commercial real estate | Construction | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	$ 0	$ 0

XML

Securities Sold Under Agreements to Repurchase and Federal Funds Purchased (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Retail Repurchase Agreements
Repurchase Agreement Counterparty [Line Items]
Outstanding agreements to repurchase	$ 60,300,000
Wholesale Repurchase Agreements
Repurchase Agreement Counterparty [Line Items]
Outstanding agreements to repurchase	0
Securities Sold Under Agreements to Repurchase
Repurchase Agreement Counterparty [Line Items]
Outstanding agreements to repurchase	60,346,000	$ 81,842,000	$ 75,177,000
Maximum month-end balance	71,875,000	81,842,000	80,326,000
Average balance during the year	$ 59,742,000	$ 63,472,000	$ 64,888,000
Weighted average rate at December 31	0.22%	0.22%	0.23%
Average interest rate paid during the year	0.24%	0.24%	0.36%
Federal Funds Purchased
Repurchase Agreement Counterparty [Line Items]
Average balance during the year	$ 82,000	$ 0	$ 0
Average interest rate paid during the year	2.86%	0.00%	0.00%

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Basic
Net income available to common shareholders	$ 21,080	$ 20,206	$ 19,392	$ 21,040	$ 18,911	$ 20,902	$ 22,059	$ 20,436	$ 81,718	$ 82,308	$ 52,494
Less: income attributable to unvested stock-based compensation awards									(1,306)	(1,315)	(818)
Net earnings allocated to common shareholders									$ 80,412	$ 80,993	$ 51,676
Weighted average shares outstanding, including unvested stock-based compensation awards (in shares)									15,149,535	15,283,914	15,193,438
Less: average unvested stock-based compensation awards (in shares)									(242,478)	(244,685)	(243,006)
Weighted average shares outstanding - Basic (in shares)									14,907,057	15,039,229	14,950,432
Diluted
Net earnings allocated to common shareholders									$ 80,412	$ 80,993	$ 51,676
Weighted average shares outstanding - Basic (in shares)									14,907,057	15,039,229	14,950,432
Plus: incremental shares from assumed conversion of stock-based compensation awards (in shares)									66,894	93,028	122,823
Weighted average shares outstanding - Diluted (in shares)									14,973,951	15,132,257	15,073,255
Basic EPS (in dollars per share)	$ 1.41	$ 1.34	$ 1.28	$ 1.37	$ 1.24	$ 1.37	$ 1.44	$ 1.34	$ 5.39	$ 5.39	$ 3.46
Diluted EPS (in dollars per share)	$ 1.40	$ 1.34	$ 1.27	$ 1.37	$ 1.23	$ 1.36	$ 1.43	$ 1.33	$ 5.37	$ 5.35	$ 3.43
Antidilutive securities excluded from computation of earning per share (in shares)									14,982	10,013	20,789

XML

Securities - Available-for-Sale Securities Held by Company (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,293,239	$ 1,363,902
Gross Unrealized Gains	10,466	898
Gross Unrealized Losses	5,118	32,142
Fair Value	1,298,587	1,332,658
U.S. Treasuries
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,840	289
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	1,840	289
Obligations of U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	367,551	493,371
Gross Unrealized Gains	5,021	80
Gross Unrealized Losses	84	7,553
Fair Value	372,488	485,898
Obligations of U.S. states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	96,668	86,260
Gross Unrealized Gains	1,178	113
Gross Unrealized Losses	61	933
Fair Value	97,785	85,440
U.S. Government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	164,643	131,831
Gross Unrealized Gains	1,327	168
Gross Unrealized Losses	1,519	3,732
Fair Value	164,451	128,267
U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	660,037	649,620
Gross Unrealized Gains	2,940	537
Gross Unrealized Losses	3,387	19,599
Fair Value	659,590	630,558
Non-U.S. Government agencies or sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		31
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Fair Value		31
U.S. corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,500	2,500
Gross Unrealized Gains	0	0
Gross Unrealized Losses	67	325
Fair Value	$ 2,433	$ 2,175

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Regulations and Supervision (Tables)

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Schedule of capital amounts and ratios

Actual capital amounts and ratios of the Company and its subsidiary banks are as follows:

	Actual	Minimum Capital Required- Basel III Fully-Phased-In	Required to be Considered Well Capitalized
(dollar amounts in thousands)	Amount/Ratio	Amount/Ratio	Amount/Ratio
December 31, 2019
Total Capital (to risk-weighted assets)
The Company (consolidated)	$666,106 /13.5%	$517,039 />10.5%	$492,418 />10.0%
Trust Company	$197,660/14.1%	$147,405 />10.5%	$140,386 />10.0%
Castile	$145,669/12.2%	$125,493 />10.5%	$119,517 />10.0%
Mahopac	$128,238/13.0%	$103,800 />10.5%	$98,857 />10.0%
VIST	$161,559/12.2%	$139,235 />10.5%	$132,605 />10.0%
Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$607,290/12.3%	$344,692 />7.0%	$320,072 />6.5%
Trust Company	$185,499/13.2%	$98,270 />7.0%	$91,251 />6.5%
Castile	$136,342/11.4%	$83,662 />7.0%	$77,686 />6.5%
Mahopac	$116,953/11.8%	$69,200 />7.0%	$64,257 />6.5%
VIST	$152,550/11.5%	$92,823 />7.0%	$86,193 />6.5%
Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$624,325/12.7%	$418,555 />8.5%	$393,934 />8.0%
Trust Company	$185,499/13.2%	$119,328 />8.5%	$112,309 />8.0%
Castile	$136,342/11.4%	$101,589 />8.5%	$95,614 />8.0%
Mahopac	$116,953/11.8%	$84,029 />8.5%	$79,086 />8.0%
VIST	$152,550/11.5%	$112,714 />8.5%	$106,084 />8.0%
Tier 1 Capital (to average assets)
The Company (consolidated)	$624,325/9.6%	$259,903 />4.0%	$324,879 />5.0%
Trust Company	$185,499/9.2%	$81,001 />4.0%	$101,252 />5.0%
Castile	$136,342/9.2%	$59,239 />4.0%	$74,049 />5.0%
Mahopac	$116,953/8.9%	$52,469 />4.0%	$65,586 />5.0%
VIST	$152,550/8.7%	$70,228 />4.0%	$87,785 />5.0%
December 31, 2018
Total Capital (to risk-weighted assets)
The Company (consolidated)	$645,891 /13.1%	$517,500 />10.5%	$492,857 />10.0%
Trust Company	$191,872/13.9%	$144,822 />10.5%	$137,926 />10.0%
Castile	$138,816/11.7%	$124,738 />10.5%	$118,798 />10.0%
Mahopac	$126,342/12.7%	$104,146 />10.5%	$99,186 />10.0%
VIST	$158,557/11.7%	$142,048 />10.5%	$135,284 />10.0%
Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$583,458/11.8%	$345,000 />7.0%	$320,357 />6.5%
Trust Company	$180,077/13.1%	$96,548 />7.0%	$89,652 />6.5%
Castile	$129,482/10.9%	$83,159 />7.0%	$77,219 />6.5%
Mahopac	$114,327/11.5%	$69,431 />7.0%	$64,471 />6.5%
VIST	$146,131/10.8%	$94,699 />7.0%	$87,934 />6.5%
Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$600,321/12.2%	$418,929 />8.5%	$394,286 />8.0%
Trust Company	$180,077/13.1%	$117,237 />8.5%	$110,341 />8.0%
Castile	$129,482/10.9%	$100,978 />8.5%	$95,038 />8.0%
Mahopac	$114,327/11.5%	$84,309 />8.5%	$79,349 />8.0%
VIST	$146,131/10.8%	$114,991 />8.5%	$108,227 />8.0%
Tier 1 Capital (to average assets)
The Company (consolidated)	$600,321/9.1%	$265,465 />4.0%	$331,832 />5.0%
Trust Company	$180,077/8.5%	$84,592 />4.0%	$105,740 />5.0%
Castile	$129,482/8.6%	$60,368 />4.0%	$75,460 />5.0%
Mahopac	$114,327/8.4%	$54,219 />4.0%	$67,773 />5.0%
VIST	$146,131/8.8%	$66,282 />4.0%	$82,853 />5.0%

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Non- controlling Interests
Balances at beginning at Dec. 31, 2016	$ 549,405	$ 1,517	$ 357,414	$ 230,182	$ (37,109)	$ (4,051)	$ 1,452
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	52,622			52,494			128
Other comprehensive loss	(4,229)				(4,229)
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation	48,393
Cash dividends	(27,627)			(27,627)
Net exercise of stock options	(641)	2	(643)
Stock-based compensation expense	2,956		2,956
Shares issued for dividend reinvestment plan	2,872	4	2,868
Shares issued for employee stock ownership plan	2,296	3	2,293
Directors deferred compensation plan	0		441			(441)
Restricted stock activity	(1,294)	4	(1,298)
Partial repurchase of noncontrolling interest	(30)						(30)
Dividend to noncontrolling interests	(128)						(128)
Balances at ending at Dec. 31, 2017	576,202	1,530	364,031	265,007	(51,296)	(4,492)	1,422
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	82,435			82,308			127
Other comprehensive loss	(11,934)				(11,934)
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation	70,501
Cash dividends	(29,634)			(29,634)
Net exercise of stock options	(540)	1	(541)
Common stock repurchased and returned to unissued status	(2,448)	(3)	(2,445)
Stock-based compensation expense	3,477		3,477
Shares issued for employee stock ownership plan	3,073	4	3,069
Directors deferred compensation plan	0		410			(410)
Restricted stock activity	(1,403)	3	(1,406)
Partial repurchase of noncontrolling interest	(10)						(10)
Dividend to noncontrolling interests	(127)						(127)
Balances at ending at Dec. 31, 2018	620,871	1,535	366,595	319,396	(63,165)	(4,902)	1,412
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	81,845			81,718			127
Other comprehensive loss	19,601				19,601
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation	101,446
Cash dividends	(30,637)			(30,637)
Net exercise of stock options	(992)	2	(994)
Common stock repurchased and returned to unissued status	(29,867)	(38)	(29,829)
Stock-based compensation expense	4,235		4,235
Directors deferred compensation plan	0		377			(377)
Restricted stock activity	(1,875)	2	(1,877)
Dividend to noncontrolling interests	(127)						(127)
Balances at ending at Dec. 31, 2019	$ 663,054	$ 1,501	$ 338,507	$ 370,477	$ (43,564)	$ (5,279)	$ 1,412

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Securities (Tables)

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Schedule of available for sale, debt securities

The following tables summarize available-for-sale securities held by the Company at December 31, 2019 and 2018:

	Available-for-Sale Securities
December 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	1,840	$	0	$	0	$	1,840
Obligations of U.S. Government sponsored entities	$	367,551	$	5,021	$	84	$	372,488
Obligations of U.S. states and political subdivisions	96,668		1,178		61		97,785
Mortgage-backed securities – residential, issued by
U.S. Government agencies	164,643		1,327		1,519		164,451
U.S. Government sponsored entities	660,037		2,940		3,387		659,590
U.S. corporate debt securities	2,500		0		67		2,433
Total available-for-sale securities	$	1,293,239	$	10,466	$	5,118	$	1,298,587

	Available-for-Sale Securities
December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	289	$	0	$	0	$	289
Obligations of U.S. Government sponsored entities	$	493,371	$	80	$	7,553	$	485,898
Obligations of U.S. states and political subdivisions	86,260		113		933		85,440
Mortgage-backed securities – residential, issued by
U.S. Government agencies	131,831		168		3,732		128,267
U.S. Government sponsored entities	649,620		537		19,599		630,558
Non-U.S. Government agencies or sponsored entities	31		0		0		31
U.S. corporate debt securities	2,500		0		325		2,175
Total available-for-sale securities	$	1,363,902	$	898	$	32,142	$	1,332,658

Schedule of held to maturity securities

The following table summarizes held-to-maturity securities held by the Company at December 31, 2018:

	Held-to-Maturity Securities
December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Obligations of U.S. Government sponsored entities	$	131,306	$	0	$	1,198	$	130,108
Obligations of U.S. states and political subdivisions	9,273		20		24		9,269
Total held-to-maturity debt securities	$	140,579	$	20	$	1,222	$	139,377

Schedule of sales transactions of available-for-sale securities

The following table sets forth information with regard to sales transactions of securities available-for-sale:

	Year ended December 31,
(In thousands)	2019			2018			2017
Proceeds from sales	$	232,598		$	70,652		$	64,106
Gross realized gains	1,123			327			19
Gross realized losses	(595		)	(767		)	(426		)
Net gains (losses) on sales of available-for-sale securities	$	528		$	(440	)	$	(407	)

Schedule of debt securities, available for sale with unrealized losses

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2019:

December 31, 2019
Available-for-Sale Securities	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	$	18,654	$	76	$	3,479	$	8	$	22,133	$	84
Obligations of U.S. states and political subdivisions	10,456		54		2,300		7		12,756		61
Mortgage-backed securities – residential, issued by
U.S. Government agencies	54,846		489		45,999		1,030		100,845		1,519
U.S. Government sponsored entities	157,801		752		233,999		2,635		391,800		3,387
U.S. corporate debt securities	0		0		2,433		67		2,433		67
Total available-for-sale securities	$	241,757	$	1,371	$	288,210	$	3,747	$	529,967	$	5,118

Schedule of available for sale securities with unrealized losses

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2018: 

December 31, 2018
Available-for-Sale Securities	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	$	21,660	$	183	$	449,141	$	7,370	$	470,801	$	7,553
Obligations of U.S. states and political subdivisions	11,971		19		49,756		914		61,727		933
Mortgage-backed securities – residential, issued by
U.S. Government agencies	16,854		22		96,247		3,710		113,101		3,732
U.S. Government sponsored entities	61,163		662		512,216		18,937		573,379		19,599
U.S. corporate debt securities	0		0		2,175		325		2,175		325
Total available-for-sale securities	$	111,648	$	886	$	1,109,535	$	31,256	$	1,221,183	$	32,142

Schedule held-to-maturity securities with unrealized losses

The following table summarizes held-to-maturity securities that had unrealized losses at December 31, 2018:

December 31, 2018
Held-to-Maturity Securities	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	$	4,980	$	9	$	125,128	$	1,189	$	130,108	$	1,198
Obligations of U.S. sponsored entities	8,127		24		0		0		8,127		24
Total held-to-maturity securities	$	13,107	$	33	$	125,128	$	1,189	$	138,235	$	1,222

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. 

December 31, 2019
(In thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	107,975	$	108,089
Due after one year through five years	270,477		274,798
Due after five years through ten years	77,710		79,165
Due after ten years	12,397		12,494
Total	468,559		474,546
Mortgage-backed securities	824,680		824,041
Total available-for-sale debt securities	$	1,293,239	$	1,298,587

December 31, 2018
(In thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	78,160	$	77,930
Due after one year through five years	355,499		350,470
Due after five years through ten years	139,560		136,734
Due after ten years	9,201		8,668
Total	582,420		573,802
Mortgage-backed securities	781,482		758,856
Total available-for-sale debt securities	$	1,363,902	$	1,332,658

December 31, 2018
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	8,850	$	8,832
Due after one year through five years	86,520		85,645
Due after five years through ten years	45,209		44,900
Due after ten years	0		0
Total held-to-maturity debt securities	$	140,579	$	139,377

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CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Available-for-sale securities, amortized cost	$ 1,293,239	$ 1,363,902
Held-to-maturity securities, fair value	0	139,377
Equity securities, amortized cost	$ 915	$ 887
Common Stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common Stock, authorized (in shares)	25,000,000	25,000,000
Common Stock, issued (in shares)	15,014,499	15,348,287
Treasury stock, shares (in shares)	(123,956)	(122,227)

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Schedule of premise and equipment

Premises and equipment at December 31 were as follows:

(In thousands)	2019			2018
Land	$	9,195		$	9,348
Premises and equipment	103,631			103,850
Furniture, fixtures, and equipment	77,518			73,013
Accumulated depreciation and amortization	(95,989		)	(89,009		)
Total	$	94,355		$	97,202

Schedule of depreciation and amortization

Depreciation and amortization expenses in 2019, 2018 and 2017 are included in operating expenses as follows:

(In thousands)	2019		2018		2017
Premises	$	2,809	$	2,989	$	2,527
Furniture, fixtures, and equipment	4,906		4,615		4,297
Total	$	7,715	$	7,604	$	6,824

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Premises and Equipment

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Premises and Equipment

Premises and Equipment

Premises and equipment at December 31 were as follows:

(In thousands)	2019			2018
Land	$	9,195		$	9,348
Premises and equipment	103,631			103,850
Furniture, fixtures, and equipment	77,518			73,013
Accumulated depreciation and amortization	(95,989		)	(89,009		)
Total	$	94,355		$	97,202

Depreciation and amortization expenses in 2019, 2018 and 2017 are included in operating expenses as follows:

(In thousands)	2019		2018		2017
Premises	$	2,809	$	2,989	$	2,527
Furniture, fixtures, and equipment	4,906		4,615		4,297
Total	$	7,715	$	7,604	$	6,824

The Company leases land, buildings and equipment under operating lease arrangements. Total gross rental expense amounted to $4.7 million in 2019, $4.7 million in 2018, and $5.1 million in 2017. Most leases include options to renew for periods ranging from 5 to 20 years. Options to renew are not included in the above future minimum rental commitments.

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Securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Securities

Securities 

Available-for-Sale Securities

The following tables summarize available-for-sale securities held by the Company at December 31, 2019 and 2018:

	Available-for-Sale Securities
December 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	1,840	$	0	$	0	$	1,840
Obligations of U.S. Government sponsored entities	$	367,551	$	5,021	$	84	$	372,488
Obligations of U.S. states and political subdivisions	96,668		1,178		61		97,785
Mortgage-backed securities – residential, issued by
U.S. Government agencies	164,643		1,327		1,519		164,451
U.S. Government sponsored entities	660,037		2,940		3,387		659,590
U.S. corporate debt securities	2,500		0		67		2,433
Total available-for-sale securities	$	1,293,239	$	10,466	$	5,118	$	1,298,587

	Available-for-Sale Securities
December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	289	$	0	$	0	$	289
Obligations of U.S. Government sponsored entities	$	493,371	$	80	$	7,553	$	485,898
Obligations of U.S. states and political subdivisions	86,260		113		933		85,440
Mortgage-backed securities – residential, issued by
U.S. Government agencies	131,831		168		3,732		128,267
U.S. Government sponsored entities	649,620		537		19,599		630,558
Non-U.S. Government agencies or sponsored entities	31		0		0		31
U.S. corporate debt securities	2,500		0		325		2,175
Total available-for-sale securities	$	1,363,902	$	898	$	32,142	$	1,332,658

Held-to-Maturity Securities 

The Company early adopted ASU 2019-04 on November 30, 2019. Since the Company had already adopted ASUs 2016-01 and 2017-12, the related amendments were effective as of November 30, 2019. As part of the adoption, the Company reclassified $138.2 million aggregate amortized cost basis of debt securities held-to-maturity to debt securities available-for-sale.

The following table summarizes held-to-maturity securities held by the Company at December 31, 2018:

	Held-to-Maturity Securities
December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Obligations of U.S. Government sponsored entities	$	131,306	$	0	$	1,198	$	130,108
Obligations of U.S. states and political subdivisions	9,273		20		24		9,269
Total held-to-maturity debt securities	$	140,579	$	20	$	1,222	$	139,377

The following table sets forth information with regard to sales transactions of securities available-for-sale:

	Year ended December 31,
(In thousands)	2019			2018			2017
Proceeds from sales	$	232,598		$	70,652		$	64,106
Gross realized gains	1,123			327			19
Gross realized losses	(595		)	(767		)	(426		)
Net gains (losses) on sales of available-for-sale securities	$	528		$	(440	)	$	(407	)

The Company's available-for-sale securities portfolio includes callable securities that may be called prior to maturity. In 2019, the Company recognized gains of $88,000 on securities that were called. The Company also recognized gains of $29,000 and $26,000 on equity securities for the twelve months ended December 31, 2019 and 2018, respectively, reflecting the change in fair value.

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2019:

December 31, 2019
Available-for-Sale Securities	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	$	18,654	$	76	$	3,479	$	8	$	22,133	$	84
Obligations of U.S. states and political subdivisions	10,456		54		2,300		7		12,756		61
Mortgage-backed securities – residential, issued by
U.S. Government agencies	54,846		489		45,999		1,030		100,845		1,519
U.S. Government sponsored entities	157,801		752		233,999		2,635		391,800		3,387
U.S. corporate debt securities	0		0		2,433		67		2,433		67
Total available-for-sale securities	$	241,757	$	1,371	$	288,210	$	3,747	$	529,967	$	5,118

There were no held-to-maturity securities at December 31, 2019.

The following table summarizes available-for-sale securities that had unrealized losses at December 31, 2018: 

December 31, 2018
Available-for-Sale Securities	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	$	21,660	$	183	$	449,141	$	7,370	$	470,801	$	7,553
Obligations of U.S. states and political subdivisions	11,971		19		49,756		914		61,727		933
Mortgage-backed securities – residential, issued by
U.S. Government agencies	16,854		22		96,247		3,710		113,101		3,732
U.S. Government sponsored entities	61,163		662		512,216		18,937		573,379		19,599
U.S. corporate debt securities	0		0		2,175		325		2,175		325
Total available-for-sale securities	$	111,648	$	886	$	1,109,535	$	31,256	$	1,221,183	$	32,142

The following table summarizes held-to-maturity securities that had unrealized losses at December 31, 2018:

December 31, 2018
Held-to-Maturity Securities	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	$	4,980	$	9	$	125,128	$	1,189	$	130,108	$	1,198
Obligations of U.S. sponsored entities	8,127		24		0		0		8,127		24
Total held-to-maturity securities	$	13,107	$	33	$	125,128	$	1,189	$	138,235	$	1,222

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 and 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 the 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 December 31, 2019, and December 31, 2018, management believes the unrealized losses detailed in the tables above are not other-than-temporary. 

The Company did not recognize any net credit impairment charge to earnings on investment securities in 2019 or 2018.

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. 

December 31, 2019
(In thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	107,975	$	108,089
Due after one year through five years	270,477		274,798
Due after five years through ten years	77,710		79,165
Due after ten years	12,397		12,494
Total	468,559		474,546
Mortgage-backed securities	824,680		824,041
Total available-for-sale debt securities	$	1,293,239	$	1,298,587

December 31, 2018
(In thousands)	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	78,160	$	77,930
Due after one year through five years	355,499		350,470
Due after five years through ten years	139,560		136,734
Due after ten years	9,201		8,668
Total	582,420		573,802
Mortgage-backed securities	781,482		758,856
Total available-for-sale debt securities	$	1,363,902	$	1,332,658

December 31, 2018
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity securities:
Due in one year or less	$	8,850	$	8,832
Due after one year through five years	86,520		85,645
Due after five years through ten years	45,209		44,900
Due after ten years	0		0
Total held-to-maturity debt securities	$	140,579	$	139,377

Trading Securities 

The Company had no securities designated as trading during 2019 or at year-end 2018.

Pledged Securities 

The Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. See “Note 8 - Securities Sold Under Agreements to Repurchase and Federal Funds Purchased” for further discussion. Securities carried of $1.0 billion and $1.2 billion, at December 31, 2019 and 2018, respectively, were either pledged or sold under agreements to repurchase.

Concentrations of Securities 

Except for U.S. government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of shareholders’ equity at December 31, 2019.

Investment in Small Business Investment Companies 

The Company has equity investments in small business investment companies (“SBIC”) established for the purpose of providing financing to small businesses in market areas served by the Company. These investments totaled $1.5 million at December 31, 2019, and $1.4 million at December 31, 2018, and were included in other assets on the Company’s Consolidated Statements of Condition. These investments are accounted for either under the cost method or the equity method of accounting. As of December 31, 2019, the Company reviewed these investments and determined that there was no impairment.

Federal Home Loan Bank Stock 

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 Community Bankers Bank (“ACBB”) 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 $24.3 million, $9.3 million and $95,000 at December 31, 2019, 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.

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Trust Preferred Debentures

12 Months Ended

Dec. 31, 2019

Trust Preferred Debentures

Trust Preferred Debentures

Trust Preferred Debentures

The Company has three unconsolidated subsidiary trusts (“the Trusts”): Sleepy Hollow Capital Trust I, Leesport Capital Trust II, and Madison Statutory Trust I. The latter two were acquired in the acquisition of VIST Financial, while Sleepy Hollow Capital Trust I was acquired in a previous acquisition. The Company owns 100% of the common equity of each Trust. The Trusts were formed for the purpose of issuing Company-obligated mandatorily redeemable capital securities to third-party investors and investing the proceeds from the sale in junior subordinated debt securities (subordinated debt) issued by the Company, which are the sole assets of each Trust. Since third-party investors are the primary beneficiaries, the Trusts are not consolidated in the Company’s financial statements. Distributions on the preferred securities issued by the Trusts are payable quarterly at a rate per annum equal to the interest rate being earned by the Trusts on the debenture held by the Trusts and are recorded as interest expense in the consolidated financial statements.

The preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the subordinated debt. The subordinated debt, net of the Company’s investment in the Trusts, qualifies as Tier 1 capital under the Board of Governors of the Federal Reserve System (FRB) guidelines. The Company has entered into agreements which, when taken collectively, fully and unconditionally guarantee the obligations under the preferred securities subject to the terms of each of the guarantees.

The following table provides information relating to the Trusts as of December 31, 2019:

Description	Issuance Date	Par Amount	Interest Rate	Maturity Date
Sleepy Hollow Capital Trust I	August 2003	$4.0 million	3-month LIBOR plus 3.05%	August 2033
Leesport Capital Trust II	September 2002	$10.0 million	3-month LIBOR plus 3.45%	September 2032
Madison Statutory Trust I	June 2003	$5.0 million	3-month LIBOR plus 3.10%	June 2033

Sleepy Hollow Capital Trust I

In August 2003, Sleepy Hollow Capital Trust I issued $4.0 million of floating rate (three-month LIBOR plus 305 basis points) trust preferred securities, which represent beneficial interests in the assets of the trust. The trust preferred securities will mature on August 2033. Distributions on the trust preferred securities are payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. Sleepy Hollow Capital Trust I also issued $100,000 of common equity securities to the Company. The proceeds of the offering were used to acquire the Company’s subordinated debentures that are due concurrently with the trust preferred securities.

Leesport Capital Trust II

Leesport Capital Trust II, a Delaware statutory business trust, was formed on September 26, 2002 and issued $10.0 million of mandatory redeemable capital securities carrying a floating interest rate of three month LIBOR plus 3.45%. These debentures are the sole assets of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The obligations under the debentures constitute a full and unconditional guarantee by VIST Financial of the obligations of the Trust under the capital securities. These securities must be redeemed in September 2032, but may be redeemed at anytime. The Company assumed the rights and obligations of VIST Financial pertaining to the Leesport Capital Trust II through the Company’s acquisition of VIST Financial in August 2012.

Madison Statutory Trust I

Madison Statutory Trust, a Connecticut statutory business trust, was formed on June 2003 and issued $5.0 million of mandatory redeemable capital securities carrying a floating interest rate of three month LIBOR plus 3.10%. These debentures are the sole assets of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The obligations under the debentures constitute a full and unconditional guarantee by VIST Financial of the obligations of the Trust under the capital securities. These securities must be redeemed in June 2033, but may be redeemed at any time. The Company assumed the rights and obligations of VIST Financial pertaining to the Madison Statutory Trust I through the Company’s acquisition of VIST Financial in August 2012.

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Earnings Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Calculation of basic earnings per share (Basic EPS) and diluted earnings per share (Diluted EPS) is shown below.

	Year ended December 31,
(In thousands, except share and per share data)	2019			2018			2017
Basic
Net income available to common shareholders	$	81,718		$	82,308		$	52,494
Less: income attributable to unvested stock-based compensation awards	(1,306		)	(1,315		)	(818		)
Net earnings allocated to common shareholders	80,412			80,993			51,676
Weighted average shares outstanding, including unvested stock-based compensation awards	15,149,535			15,283,914			15,193,438
Less: average unvested stock-based compensation awards	(242,478		)	(244,685		)	(243,006		)
Weighted average shares outstanding - Basic	14,907,057			15,039,229			14,950,432
Diluted
Net earnings allocated to common shareholders	80,412			80,993			51,676
Weighted average shares outstanding - Basic	14,907,057			15,039,229			14,950,432
Plus: incremental shares from assumed conversion of stock-based compensation awards	66,894			93,028			122,823
Weighted average shares outstanding - Diluted	14,973,951			15,132,257			15,073,255
Basic EPS	$	5.39		$	5.39		$	3.46
Diluted EPS	$	5.37		$	5.35		$	3.43

Stock-based compensation awards representing 14,982, 10,013, and 20,789 common shares for 2019, 2018, and 2017, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.

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Revenue Recognition

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (ASC 606) and all subsequent ASUs that modified ASC 606. As stated in Note 1 - "Summary of Significant Accounting Policies," results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The Company recorded a net increase to beginning retained earnings of $1.8 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact to beginning retained earnings was primarily driven by the recognition of contingency income related to our insurance business segment.

Under ASC 606, the Company made any necessary revisions to its policies related to the new revenue recognition guidance. In general, for revenue not associated with financial instruments, guarantees and lease contracts, we apply the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when performance obligation is satisfied. Our contracts with customers are generally short term in nature, typically due within one year or less or cancellable by us or our customer upon a short notice period. Performance obligations for our customer contracts are generally satisfied at a single point in time, typically when the transaction is complete, or over time. For performance obligations satisfied over time, we primarily use the output method, directly measuring the value of the products/services transferred to the customer, to determine when performance obligations have been satisfied. We typically receive payment from customers and recognize revenue concurrent with the satisfaction of our performance obligations. In most cases, this occurs within a single financial reporting period. For payments received in advance of the satisfaction of performance obligations, revenue recognition is deferred until such time the performance obligations have been satisfied. In cases where we have not received payment despite satisfaction of our performance obligations, we accrue an estimate of the amount due in the period our performance obligations have been satisfied. For contracts with variable components, only amounts for which collection is probable are accrued. We generally act in a principal capacity, on our own behalf, in most of our contracts with customers. In such transactions, we recognize revenue and the related costs to provide our services on a gross basis in our financial statements. In some cases, we act in an agent capacity, deriving revenue through assisting other entities in transactions with our customers. In such transactions, we recognized revenue and the related costs to provide our services on a net basis in our financial statements. These transactions primarily relate to insurance and brokerage commissions.

ASC 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. ASC 606 is applicable to noninterest revenue streams such as trust and asset management income, deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. However, the recognition of these revenue streams did not change significantly upon adoption of ASC 606.

Insurance Commissions and Fees

Fees are earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. As the Company has historically recognized revenue in this manner, with the noted exception related to installment billing discussed below, the adoption of ASC 606 will not significantly impact the revenue from this source on a quarterly or annual basis.

Installment billing - Agency Bill

Prior to the adoption of ASC 606, commission revenue on policies billed in installments were recognized on the latter of the policy effective date or the date that the premium was billed to the client. As a result of the adoption of ASC 606, revenue associated with the issuance of policies will be recognized upon the effective date of the associated policy regardless of the billing method, meaning that commission revenues billed on an installment basis will be now recognized earlier than they had been previously. Revenue will be accrued based upon the completion of the performance obligation creating a current asset for the unbilled revenue until such time as an invoice is generated, typically not to exceed twelve months. The Company does not expect the overall impact of these changes to be significant, but it will result in slight variances from quarter to quarter.

Contingent commissions

Prior to the adoption of ASC 606, revenue that was not fixed and determinable because a contingency exists was not recognized until the contingency was resolved. Under ASC 606, the Company must use its judgment to estimate the amount of consideration that will be received such that a significant reversal of revenue is not probable. Contingent commissions represent a form of variable consideration associated with the same performance obligation, which is the placement of coverage, for which we earn core commissions. In connection with the new standard, contingent commissions will be estimated with an appropriate constraint applied and accrued relative to the recognition of the corresponding core commissions. The resulting effect on the timing of recognition of contingent commissions will more closely follow a similar pattern as our core commissions with true-ups recognized when payments are received or as additional information that affects the estimate becomes available.

Refund of commissions

The contract with the insurance carrier dictates commissions paid to the Company shall be refunded to the carrier upon cancellation by the policyholder. As a result, the Company has established a liability for the estimated amount of commission for which the Company does not expect to be entitled, and corresponding reduction to the gross commission received or receivable. The refund liability will be updated at the end of each reporting period for changes in circumstances.

Trust & Asset Management

Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.

Mutual Fund & Investment Income

Mutual fund and investment income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, investment advisory fees from the Company’s Strategic Asset Management Services (SAM) wealth management product. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value. Trailer revenue is recorded over time, usually monthly or quarterly, as net asset value is determined. Investment advisor fees from the wealth management product is earned over time and based on an annual percentage rate of the net asset value. The investment advisor fees are charged to the customer’s account in advance on the first month of the quarter, and the revenue is recognized over the following three-month period. The Company does engage a third party, LPL Financial, LLC (LPL), to satisfy part of this performance obligation, and therefore this income is reported net of any corresponding expenses paid to LPL.

Service Charges on Deposit Accounts

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Card Services Income

Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as MasterCard. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for fees and exchange are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

Other

Other service charges include revenue from processing wire and ACH transfers, lock box service and safe deposit box rental. Both wire transfer fees and lock box services are charged on per item basis. Wire and ACH transfer fees are charged at the time of transfer and charged directly to the customer account. Lock box customers are billed monthly and payments are received in the following month through a direct charge to customers’ accounts. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606, for the years ended December 31, 2019 and 2018.

	Year Ended
(In thousands)	12/31/2019			12/31/2018
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	28,252		$	27,272
Installment Billing		(35	)		6
Refund of Commissions		30			(29	)
Contract Liabilities/Deferred Revenue		(195	)		(181	)
Contingent Commissions		3,039			2,301
Subtotal Insurance Revenues		31,091			29,369
Trust and Asset Management		11,441			11,848
Mutual Fund & Investment Income		4,993			5,440
Subtotal Investment Service Income		16,434			17,288
Service Charges on Deposit Accounts		8,321			8,435
Card Services Income		10,526			9,693
Other		1,183			1,176
Noninterest Income (in-scope of ASC 606)		67,555			65,961
Noninterest Income (out-of-scope of ASC 606)1		7,878			11,488
Total Noninterest Income	$	75,433		$	77,449

¹ The year ended December 31, 2018 includes approximately $2.9 million related to gain on sale of fixed assets.

Contract Balances

Receivables primarily consist of amounts due for insurance and wealth management services performed for which the Company's performance obligations have been fully satisfied. Receivables amounted to $4.7 million and $2.0 million, respectively, at December 31, 2019, compared to $4.3 million and $1.8 million, respectively, at December 31, 2018 and were included in other assets in the Consolidated Statements of Condition.

A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). The Company’s noninterest revenue streams, excluding some insurance commissions and fees, are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. As of December 31, 2019 and December 31, 2018, the Company did not have any significant contract balances related to this transactional activity.

The transaction price for an insurance entity often includes an element of consideration that is variable or contingent on the outcome of future events, such as volume of business, growth and claims experience. Consideration for this “contingent revenue” is typically paid during the first quarter of the subsequent year. ASC 606 states that variable consideration be estimated using a method that best predicts the amount of consideration to which the entity will be entitled using the approach that it expects will best predict the amount of consideration to which the entity will be entitled. This assessment would consider the terms of the contract and all reasonably available information, including historical, current, and forecast information. As of December 31, 2019 and December 31, 2018, contract assets related to this contingent income were $2.2 million and $1.9 million, respectively.

A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified current or long-term in the Consolidated Statements of Condition based on the timing of when the Company expects to recognize revenue. As of December 31, 2019 and December 31, 2018, contract liabilities were $2.0 million and $1.8 million, respectively, and are included within accrued expenses in the accompanying Consolidated Statements of Condition. The liabilities include premiums due to insurance carriers in addition to unearned commission revenue.

The increase in the contract liability balance during the year ended December 31, 2019 is primarily as a result of billings and cash payments received in advance of satisfying performance obligations, offset by insurance premiums and revenue recognized during the period that was included in the contract liability balance at the date of adoption. The adoption of ASC 606 did not create a change in accounting for insurance commissions and fees as they relate to contract liabilities, however the Company did eliminate the practice of deferring revenue on its larger accounts over the course of the policy period.

Contract Acquisition Costs

In connection with the adoption of ASC 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of ASC 606, the Company did not capitalize any contract acquisition costs.

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Other Noninterest Income and Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Other Income and Expenses [Abstract]
Reporting threshold for other income and operating expenses (percent, greater than)	1.00%
NONINTEREST INCOME
Other service charges	$ 3,166	$ 3,263	$ 2,982
Increase in cash surrender value of corporate owned life insurance	2,164	1,818	2,196
Net gain on sale of loans	227	458	50
Gain on sale of fixed assets	98	2,954	30
Other miscellaneous income	2,761	4,637	2,373
Total other noninterest income	8,416	13,130	7,631
NONINTEREST EXPENSES
Marketing expense	4,856	5,495	5,013
Professional fees	8,942	8,564	5,725
Technology expense	10,666	10,099	8,332
Cardholder expense	3,238	3,277	3,391
FDIC insurance	773	2,618	2,527
Other miscellaneous expenses	17,774	20,868	20,537
Total other noninterest expenses	$ 46,249	$ 50,921	$ 45,525

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Employee Benefit Plans - Benefits Expected to be Paid Next Five Years (Details) $ in Thousands	Dec. 31, 2019 USD ($)
DB Pension Plans
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
2020	$ 4,125
2021	4,275
2022	4,209
2023	4,386
2024	4,478
2025-2029	23,939
Total	45,412
Life and Healthcare Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
2020	557
2021	447
2022	436
2023	429
2024	423
2025-2029	2,162
Total	4,454
SERP Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
2020	708
2021	700
2022	754
2023	863
2024	846
2025-2029	4,949
Total	$ 8,820

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Loans and Leases - Outstanding Principal Balance and Related Carrying Amount of Loans Acquired in VIST Acquisition (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Total Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	$ 2,933	$ 3,652
Carrying amount	2,830	3,438
VIST | Acquired Credit Impaired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	10,604	12,822
Carrying amount	9,149	11,036
VIST | Acquired Non-Credit Impaired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	212,518	256,265
Carrying amount	211,000	254,162
VIST | Total Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	223,122	269,087
Carrying amount	$ 220,149	$ 265,198

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Securities - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Recognized gains on called available-for-sale securities	$ 88,000
Recognized gains on equity securities	29,000	$ 26,000
Securities pledged or sold under agreements to repurchase	1,000,000,000.0	1,200,000,000
Equity method investments	1,500,000	$ 1,400,000
Equity method investment, other than temporary Impairment	0
Federal Home Loan Bank New York (FHLBNY)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal home loan bank, advances, branch of FHLB bank, amount of advances	24,300,000
Federal Home Loan Bank Pittsburgh (FHLBPITT)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal home loan bank, advances, branch of FHLB bank, amount of advances	9,300,000
Atlantic Central Bankers Bank (ACBB)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal home loan bank, advances, branch of FHLB bank, amount of advances	$ 95,000

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Income Taxes - Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Statutory federal income tax rate	21.00%	21.00%	35.00%
State income taxes, net of federal benefit	2.50%	2.40%	0.70%
Tax exempt income	(1.50%)	(1.50%)	(2.60%)
Excess benefits from equity-based compensation	(0.80%)	(0.60%)	(1.60%)
Bank-owned life insurance income	(0.50%)	(0.40%)	(0.80%)
Federal tax credit	(0.70%)	(0.60%)	(2.00%)
Enactment of Federal tax reform	0.000	0.000	0.157
All other	0.50%	0.60%	0.40%
Total	20.50%	20.90%	44.80%

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Employee Benefit Plans - Changes in Projected Benefit Obligation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
DB Pension Plans
Change in benefit obligation:
Benefit obligation at beginning of year	$ 79,689	$ 82,748
Service cost	0	0	$ 0
Interest cost	2,936	2,508	2,501
Plan participants’ contributions	0	0
Amendments	0	0
Actuarial loss (gain)	10,996	(2,324)
Benefits paid	(3,275)	(3,243)
Benefit obligation at end of year	90,346	79,689	82,748
Change in plan assets:
Fair value of plan assets at beginning of year	72,474	80,154
Actual return on plan assets	13,153	(4,437)
Plan participants’ contributions	0	0
Employer contributions	0	0
Benefits paid	(3,275)	(3,243)
Fair value of plan assets at end of year	82,352	72,474	80,154
Unfunded status	(7,994)	(7,215)
Life and Healthcare Plan
Change in benefit obligation:
Benefit obligation at beginning of year	7,857	8,995
Service cost	159	212	192
Interest cost	289	270	268
Plan participants’ contributions	87	122
Amendments	(203)	0
Actuarial loss (gain)	1,218	(1,337)
Benefits paid	(385)	(405)
Benefit obligation at end of year	9,022	7,857	8,995
Change in plan assets:
Fair value of plan assets at beginning of year	0	0
Actual return on plan assets	0	0
Plan participants’ contributions	87	122
Employer contributions	298	283
Benefits paid	(385)	(405)
Fair value of plan assets at end of year	0	0	0
Unfunded status	(9,022)	(7,857)
SERP Plan
Change in benefit obligation:
Benefit obligation at beginning of year	23,539	26,142
Service cost	157	160	166
Interest cost	909	833	852
Plan participants’ contributions	0	0
Amendments	2,022	0
Actuarial loss (gain)	6,128	(2,987)
Benefits paid	(602)	(609)
Benefit obligation at end of year	32,153	23,539	26,142
Change in plan assets:
Fair value of plan assets at beginning of year	0	0
Actual return on plan assets	0	0
Plan participants’ contributions	0	0
Employer contributions	602	609
Benefits paid	(602)	(609)
Fair value of plan assets at end of year	0	0	$ 0
Unfunded status	$ (32,153)	$ (23,539)

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Allowance for Loan and Lease Losses - Changes in Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Movement in allowance for Loan and Lease Losses:
Total allowance at beginning of year				$ 43,410				$ 39,771	$ 43,410	$ 39,771	$ 35,755
Provisions charged to operations	$ (1,000)	$ 1,320	$ 601	$ 445	$ 2,058	$ 272	$ 1,045	$ 567	1,366	3,942	4,161
Recoveries on loans and leases									906	2,137	2,429
Charge-offs on loans and leases									(5,790)	(2,440)	(2,574)
Total allowance at end of year	$ 39,892				$ 43,410				$ 39,892	$ 43,410	$ 39,771

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Stock Plans and Stock Based Compensation - Activity Related to Stock Options and SARs Under All Plans (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of Shares/Rights
Granted (in shares)	62,360	65,785	59,333
Outstanding, ending balance (in shares)	157,622
Exercisable, ending balance (in shares)	103,927
Weighted Average Exercise Price
Outstanding, ending balance (in dollars per share)	$ 49.72
Exercisable, ending balance (in dollars per share)	$ 46.91
Weighted Average Remaining Contractual Term
Outstanding (term)	4 years 4 months 2 days
Stock options and SARs
Number of Shares/Rights
Outstanding, beginning balance (in shares)	225,375
Granted (in shares)	0
Exercised (in shares)	(64,865)
Forfeited (in shares)	(2,888)
Outstanding, ending balance (in shares)	157,622	225,375
Exercisable, ending balance (in shares)	103,927
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 48.02
Granted (in dollars per share)	0.00
Exercised (in dollars per share)	43.41
Forfeited (in dollars per share)	58.91
Outstanding, ending balance (in dollars per share)	49.72	$ 48.02
Exercisable, ending balance (in dollars per share)	$ 46.91
Weighted Average Remaining Contractual Term
Outstanding (term)	4 years 4 months 2 days
Exercisable (term)	3 years 9 months 29 days
Aggregate Intrinsic Value
Outstanding	$ 6,585,638
Exercisable	$ 4,634,146

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Condensed Parent Company Only Financial Statements - Condensed Cash Flow Statements (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating activities
Net income	$ 21,080	$ 20,206	$ 19,392	$ 21,040	$ 18,911	$ 20,902	$ 22,059	$ 20,436	$ 81,718	$ 82,308	$ 52,494
Adjustments to reconcile net income to net cash provided by operating activities
Other, net									(8,113)	3,468	(1,057)
Net Cash Provided by Operating Activities									101,615	107,265	86,065
Investing activities
Other, net									5,209	216	2,576
Net Cash Provided by (Used in) Investing Activities									133,986	(143,600)	(426,951)
Financing activities
Cash dividends									(30,637)	(29,634)	(27,627)
Repurchase of common shares									(29,867)	(2,448)	0
Shares issued for dividend reinvestment plans									0	0	2,872
Shares issued for employee stock ownership plan									0	3,073	2,296
Net proceeds from exercise of stock options									(992)	(540)	(641)
Net Cash Used in Financing Activities									(178,008)	32,421	361,235
Net Increase (Decrease) Cash and Cash Equivalents									57,593	(3,914)	20,349
Cash and cash equivalents at beginning of year				80,389				84,303	80,389	84,303	63,954
Total Cash & Cash Equivalents at End of Year	137,982				80,389				137,982	80,389	84,303
Tompkins (the Parent Company)
Operating activities
Net income									81,718	82,308	52,494
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings of subsidiaries									(16,425)	(44,461)	(24,494)
Other, net									3,209	1,014	(1,569)
Net Cash Provided by Operating Activities									68,502	38,861	26,431
Investing activities
Other, net									3,265	0	1,052
Net Cash Provided by (Used in) Investing Activities									3,265	0	1,052
Financing activities
Borrowings, net									0	(5,000)	(28,161)
Cash dividends									(30,637)	(29,634)	(27,627)
Repurchase of common shares									(29,867)	(2,448)	0
Net proceeds from restricted stock awards									(1,875)	(1,403)	(1,294)
Shares issued for dividend reinvestment plans									0	0	2,872
Shares issued for employee stock ownership plan									0	3,073	2,296
Net proceeds from exercise of stock options									(992)	(540)	(641)
Net Cash Used in Financing Activities									(63,371)	(35,952)	(52,555)
Net Increase (Decrease) Cash and Cash Equivalents									8,396	2,909	(25,072)
Cash and cash equivalents at beginning of year				$ 6,235				$ 3,326	6,235	3,326	28,398
Total Cash & Cash Equivalents at End of Year	$ 14,631				$ 6,235				$ 14,631	$ 6,235	$ 3,326

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Stock Plans and Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of stock options and stock appreciation rights

The following table presents the activity related to stock options and SARs under all plans for the year ended December 31, 2019.  

	Number of Shares/Rights		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2019	225,375		$	48.02
Granted	0		0.00
Exercised	(64,865	)	43.41
Forfeited	(2,888	)	58.91
Outstanding at December 31, 2019	157,622		$	49.72	4.34	$	6,585,638
Exercisable at December 31, 2019	103,927		$	46.91	3.83	$	4,634,146

Schedule of intrinsic value of options, SARs, and restricted stock

Net cash proceeds, tax benefits and intrinsic value related to total stock options, SARs, and restricted stock exercised is as follows: 

(in thousands)	2019			2018			2017
Proceeds from stock option exercises	$	(992	)	$	(540	)	$	(641	)
Tax benefits related to stock option exercises	944			680			1,634
Intrinsic value of stock option exercises	2,460			1,447			3,139

Schedule of total stock options exercised

Net cash proceeds, tax benefits and intrinsic value related to total stock options, SARs, and restricted stock exercised is as follows: 

(in thousands)	2019			2018			2017
Proceeds from stock option exercises	$	(992	)	$	(540	)	$	(641	)
Tax benefits related to stock option exercises	944			680			1,634
Intrinsic value of stock option exercises	2,460			1,447			3,139

Schedule of options outstanding

December 31, 2019
Options and SARs Outstanding			Options and SARs Exercisable
Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$35.71-37.50	31,680	1.62	$	37.00	31,680	$	37.00
$37.51-41.00	28,155	3.28	$	40.60	21,500	$	40.60
$41.01-50.00	47,195	4.86	$	49.22	28,226	$	49.22
$50.01-76.90	50,370	6.15	$	63.12	22,410	$	63.87
$76.91-86.18	222	6.89	$	86.18	111	$	86.18
	157,622	4.34	$	49.72	103,927	$	46.91

Schedule of restricted stock awards

The following table presents activity related to restricted stock awards for the twelve months ended December 31, 2019. 

	Number of Shares		Weighted Average Fair Value
Unvested at January 1, 2019	255,239		$	66.52
Granted	62,360		89.21
Vested	(61,275	)	60.48
Forfeited	(8,357	)	70.62
Unvested at December 31, 2019	247,967		$	73.66

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Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2019

Stockholders' Equity Note [Abstract]

Schedule of tax effect allocated to each component of other comprehensive income

The tax effect allocated to each component of other comprehensive income (loss) were as follows:

December 31, 2019	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized gain during the period	$	33,431		$	(8,190	)	$	25,241
Unrealized gains on HTM securities transferred to AFS securities	3,777			(925		)	2,852
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	(616		)	151			(465		)
Net unrealized gains	36,592			(8,964		)	27,628
Employee benefit plans:
Net retirement plan loss	(10,122		)	2,480			(7,642		)
Net actuarial gain due to curtailment	(399		)	97			(302		)
Net retirement plan prior service credit	(1,819		)	446			(1,373		)
Amortization of net retirement plan actuarial gain	1,677			(411		)	1,266
Amortization of net retirement plan prior service (cost) credit	32			(8		)	24
Employee benefit plans	(10,631		)	2,604			(8,027		)
Other comprehensive income	$	25,961		$	(6,360	)	$	19,601

December 31, 2018	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized loss during the period	$	(14,550	)	$	3,569		$	(10,981	)
Reclassification adjustment for net realized loss on sale included in available-for-sale securities	440			(108		)	332
Net unrealized losses	(14,110		)	3,461			(10,649		)
Employee benefit plans:
Net retirement plan loss	(3,437		)	843			(2,594		)
Amortization of net retirement plan actuarial gain	1,719			(421		)	1,298
Amortization of net retirement plan prior service (cost) credit	15			(4		)	11
Employee benefit plans	(1,703		)	418			(1,285		)
Other comprehensive loss	$	(15,813	)	$	3,879		$	(11,934	)

December 31, 2017	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized loss during the period	$	(4,442	)	$	1,761		$	(2,681	)
Reclassification adjustment for net realized loss on sale included in available-for-sale securities	407			(163		)	244
Net unrealized losses	(4,035		)	1,598			(2,437		)
Employee benefit plans:
Net retirement plan loss	(4,549		)	1,115			(3,434		)
Net retirement plan prior service credit	964			(236		)	728
Amortization of net retirement plan actuarial loss	1,508			(603		)	905
Amortization of net retirement plan prior service (cost) credit	15			(6		)	9
Employee benefit plans	(2,062		)	270			(1,792		)
Other comprehensive loss	$	(6,097	)	$	1,868		$	(4,229	)

Schedule of accumulated other comprehensive income

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

(In thousands)	Available-for-Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income (loss)
Balance at January 1, 2017	$	(7,915	)	$	(29,194	)	$	(37,109	)
Other comprehensive loss	(2,437		)	(1,792		)	(4,229		)
Reclassification due to adoption of ASU 2018-02	(2,653		)	(7,305		)	(9,958		)
Balance at December 31, 2017	$	(13,005	)	$	(38,291	)	$	(51,296	)
Balance at January 1, 2018	(13,005		)	(38,291		)	(51,296		)
Other comprehensive loss	(10,649		)	(1,285		)	(11,934		)
Adoption of ASU 2016-01	65			0			65
Balance at December 31, 2018	$	(23,589	)	$	(39,576	)	$	(63,165	)
Balance at January 1, 2019	(23,589		)	(39,576		)	(63,165		)
Other comprehensive income	27,628			(8,027		)	19,601
Balance at December 31, 2019	$	4,039		$	(47,603	)	$	(43,564	)

December 31, 2019
Details about Accumulated other Comprehensive Income Components (in thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss)1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	616		Net (loss) gain on securities transactions
	(151		)	Tax expense
	465			Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial gain	(1,677		)	Other operating expense
Net retirement plan prior service credit	(32		)	Other operating expense
	(1,709		)	Total before tax
	419			Tax benefit
	(1,290		)	Net of tax

December 31, 2018
Details about Accumulated other Comprehensive Income Components (in thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss)1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	(440	)	Net (loss) gain on securities transactions
	108			Tax benefit
	(332		)	Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial gain	(1,719		)	Other operating expense
Net retirement plan prior service credit	(15		)	Other operating expense
	(1,734		)	Total before tax
	425			Tax benefit
	(1,309		)	Net of tax

¹ Amounts in parentheses indicate debits in income statement.

² The accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (See Note 11 - “Employee Benefit Plans”).

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Leases - Schedule of Future Minimum Lease Payments under Operating Leases (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Leases [Abstract]
2020	$ 4,454
2021	4,106
2022	4,059
2023	3,816
2024	3,684
2025 and subsequent years	26,605
Total lease payments	46,724
Less: Interest	(10,802)
Present value of lease liabilities	$ 35,922

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Securities - Sales Transactions of Securities Available-for-Sale (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 232,598	$ 70,652	$ 64,106
Proceeds from sales			64,106
Gross realized gains	1,123	327
Gross realized gains			19
Gross realized losses	(595)	(767)
Gross realized losses			(426)
Net gains (losses) on sales of available-for-sale securities	$ 528	$ (440)
Net gains (losses) on sales of available-for-sale securities			$ (407)

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Segment and Related Information (Tables)

12 Months Ended

Dec. 31, 2019

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 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, 2019
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	261,378	$	3	$	0	$	(3	)	$	261,378
Interest expense	50,753		0		0		(3		)	50,750
Net interest income	210,625		3		0		0			210,628
Provision for loan and lease losses	1,366		0		0		0			1,366
Noninterest income	29,054		31,501		17,001		(2,123		)	75,433
Noninterest expense	145,102		25,908		12,947		(2,123		)	181,834
Income before income tax expense	93,211		5,596		4,054		0			102,861
Income tax expense	18,598		1,426		992		0			21,016
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	74,613		4,170		3,062		0			81,845
Less: Net income attributable to noncontrolling interests	127		0		0		0			127
Net Income attributable to Tompkins Financial Corporation	$	74,486	$	4,170	$	3,062	$	0		$	81,718
Depreciation and amortization	$	9,778	$	225	$	41	$	0		$	10,044
Assets	6,671,409		41,841		24,313		(11,940		)	6,725,623
Goodwill	64,370		19,866		8,211		0			92,447
Other intangibles, net	3,215		2,860		148		0			6,223
Net loans and leases	4,877,658		0		0		0			4,877,658
Deposits	5,223,893		0		0		(10,972		)	5,212,921
Total equity	608,901		32,204		21,949		0			663,054

As of and for the year ended December 31, 2018
(In thousands)	Banking		Insurance		Wealth Management		Intercompany & Merger			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

Quarterly financial information

Unaudited Quarterly Financial Data
	2019
(in thousands)	First		Second		Third		Fourth
Interest and dividend income	$	64,927	$	66,093	$	65,775	$	64,583
Interest expense	13,013		13,775		12,619		11,343
Net interest income	51,914		52,318		53,156		53,240
Provision for loan and lease losses	445		601		1,320		(1,000		)
Income before income taxes	26,667		24,167		25,715		26,312
Net income	21,040		19,392		20,206		21,080
Net income per common share (basic)	1.37		1.28		1.34		1.41
Net income per common share (diluted)	1.37		1.27		1.34		1.40

 

Unaudited Quarterly Financial Data
	2018
(in thousands)	First		Second		Third		Fourth
Interest and dividend income	$	60,140	$	62,143	$	63,984	$	65,325
Interest expense	7,453		9,429		10,821		12,089
Net interest income	52,687		52,714		53,163		53,236
Provision for loan and lease losses	567		1,045		272		2,058
Income before income taxes	26,229		27,842		26,361		23,808
Net income	20,436		22,059		20,902		18,911
Net income per common share (basic)	1.34		1.44		1.37		1.24
Net income per common share (diluted)	1.33		1.43		1.36		1.23

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

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

Recurring Fair Value Measurements

December 31, 2018

(In thousands)	Fair Value 12/31/2018		(Level 1)		(Level 2)		(Level 3)
Available-for-sale securities
U.S. Treasuries	$	289	$	0	$	289	$	0
Obligations of U.S. Government sponsored entities	485,898		0		485,898		0
Obligations of U.S. states and political subdivisions	85,440		0		85,440		0
Mortgage-backed securities - residential
U.S. Government agencies	128,267		0		128,267		0
U.S. Government sponsored entities	630,558		0		630,558		0
Non-U.S. Government agencies or sponsored entities	31		0		31		0
U.S. corporate debt securities	2,175		0		2,175		0
Total Available-for-sale securities	1,332,658		0		1,332,658		0
Equity securities	887		0		0		887

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018 segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements

December 31, 2019

(In thousands)	Fair Value 12/31/2019		(Level 1)		(Level 2)		(Level 3)
Available-for-sale securities
U.S. Treasuries	$	1,840	$	0	$	1,840	$	0
Obligations of U.S. Government sponsored entities	372,488		0		372,488		0
Obligations of U.S. states and political subdivisions	97,785		0		97,785		0
Mortgage-backed securities - residential
U.S. Government agencies	164,451		0		164,451		0
U.S. Government sponsored entities	659,590		0		659,590		0
Non-U.S. Government agencies or sponsored entities	0		0		0		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale securities	1,298,587		0		1,298,587		0
Equity securities	915		0		0		915

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

(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Twelve months ended
Assets:	12/31/2019		(Level 1)		(Level 2)		(Level 3)		12/31/2019
Impaired loans	$	14,050	$	0	$	14,050	$	0	$	(4,184	)
Other real estate owned	315		0		315		0		(94		)

(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Twelve months ended
Assets:	12/31/2018		(Level 1)		(Level 2)		(Level 3)		12/31/2018
Impaired loans	$	6,500	$	0	$	6,500	$	0	$	(173	)
Other real estate owned	1,594		0		1,594		0		(211		)

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 December 31, 2019 and 2018. 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 does 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
December 31, 2019
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	137,982	$	137,982	$	137,982	$	0	$	0
Securities - held-to-maturity	0		0		0		0		0
FHLB and FRB stock	33,695		33,695		0		33,695		0
Accrued interest receivable	19,293		19,293		0		19,293		0
Loans and leases, net1	4,877,658		4,798,268		0		14,050		4,784,218
Financial Liabilities:
Time deposits	$	675,014	$	677,205	$	0	$	677,205	$	0
Other deposits	4,537,907		4,537,907		0		4,537,907		0
Securities sold under agreements to repurchase	60,346		60,346		0		60,346		0
Other borrowings	658,100		659,895		0		659,895		0
Trust preferred debentures	17,035		21,904		0		21,904		0
Accrued interest payable	2,486		2,486		0		2,486		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.

Estimated Fair Value of Financial Instruments
December 31, 2018
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	80,389	$	80,389	$	80,389	$	0	$	0
Securities - held-to-maturity	140,579		139,377		0		139,377		0
FHLB and FRB stock	52,262		52,262		0		52,262		0
Accrued interest receivable	20,922		20,922		0		20,922		0
Loans and leases, net1	4,790,529		4,649,308		0		6,500		4,642,808
Financial Liabilities:
Time deposits	$	637,295	$	631,489	$	0	$	631,489	$	0
Other deposits	4,251,664		4,251,664		0		4,251,664		0
Securities sold under agreements to repurchase	81,842		81,842		0		81,842		0
Other borrowings	1,076,075		1,074,081		0		1,074,081		0
Trust preferred debentures	16,863		21,921		0		21,921		0
Accrued interest payable	2,408		2,408		0		2,408		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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Leases - Schedule of Components of Operating Lease Expense (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Leases [Abstract]
Operating lease cost	$ 4,683
Variable lease cost	466
Short-term lease cost	1
Sublease income	(35)
Total lease cost	$ 5,115

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Fair Value Measurements - Fair Value Measurements at Reporting Date and Gain (Losses) from Fair Value Changes. (Details) - Non-Recurring - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 14,050	$ 6,500
Other real estate owned	315	1,594
Gain (losses) from fair value changes, Impaired loans	(4,184)	(173)
Gain (losses) from fair value changes, Other real estate owned	(94)	(211)
(Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other real estate owned	0	0
(Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	14,050	6,500
Other real estate owned	315	1,594
(Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other real estate owned	$ 0	$ 0

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Deposits - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Banking and Thrift [Abstract]
Time deposits, greater than $250,000	$ 181.4	$ 156.6

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Allowance for Loan and Lease Losses - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 18,200	$ 17,900	$ 15,800
Originated Loans and Leases
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	13,325	11,127	11,556
Interest Income Recognized With No Related Allowance	0	0	0
Average Recorded Investment With Related Allowance	1,523	2,731	276
Interest Income Recognized With Related Allowance	0	0	0
Average Recorded Investment	14,848	13,858	11,832
Interest Income Recognized	0	0	0
Originated Loans and Leases | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	1,830	1,979	718
Interest Income Recognized With No Related Allowance	0	0	0
Average Recorded Investment With Related Allowance	132	1,374	276
Interest Income Recognized With Related Allowance	0	0	0
Originated Loans and Leases | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	7,552	5,165	7,287
Interest Income Recognized With No Related Allowance	0	0	0
Average Recorded Investment With Related Allowance	1,391	1,357	0
Interest Income Recognized With Related Allowance	0	0	0
Originated Loans and Leases | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	3,943	3,983	3,551
Interest Income Recognized With No Related Allowance	0	0	0
Acquired Loans and Leases
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	3,346	3,994	4,113
Interest Income Recognized With No Related Allowance	0	0	0
Average Recorded Investment With Related Allowance	0	0	10
Interest Income Recognized With Related Allowance	0	0	0
Average Recorded Investment	3,346	3,994	4,123
Interest Income Recognized	0	0	0
Acquired Loans and Leases | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	21	50	111
Interest Income Recognized With No Related Allowance	0	0	0
Average Recorded Investment With Related Allowance	0	0	10
Interest Income Recognized With Related Allowance	0	0	0
Acquired Loans and Leases | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	822	999	2,141
Interest Income Recognized With No Related Allowance	0	0	0
Acquired Loans and Leases | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	2,503	2,945	1,861
Interest Income Recognized With No Related Allowance	$ 0	$ 0	$ 0

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Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Goodwill [Roll Forward]
Balance at the beginning of the period		$ 92,283,000	$ 92,291,000
Goodwill related to sale of portion of business unit			(8,000)
Acquisitions		164,000
Balance at the end of the period		92,447,000	92,283,000
Reduction of goodwill			8,000
Impairment of goodwill and intangible assets		0
Banking
Goodwill [Roll Forward]
Balance at the beginning of the period		64,369,000	64,369,000
Goodwill related to sale of portion of business unit			0
Acquisitions		0
Balance at the end of the period		64,369,000	64,369,000
Reduction of goodwill			0
Insurance
Goodwill [Roll Forward]
Balance at the beginning of the period		19,703,000	19,711,000
Goodwill related to sale of portion of business unit			(8,000)
Acquisitions		164,000
Balance at the end of the period		19,867,000	19,703,000
Reduction of goodwill			8,000
Wealth Management
Goodwill [Roll Forward]
Balance at the beginning of the period		8,211,000	8,211,000
Goodwill related to sale of portion of business unit			0
Acquisitions		0
Balance at the end of the period		$ 8,211,000	8,211,000
Reduction of goodwill			$ 0
The Cali Agency, Inc.
Goodwill [Roll Forward]
Balance at the end of the period	$ 164,000
Customer related intangible | The Cali Agency, Inc.
Goodwill [Roll Forward]
Intangibles recorded as a result of acquisition	$ 171,000
Amortization period	15 years
Covenant-not-to-compete | The Cali Agency, Inc.
Goodwill [Roll Forward]
Intangibles recorded as a result of acquisition	$ 87,000
Amortization period	5 years

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Other Comprehensive Income (Loss) - Details about Accumulated Other Comprehensive Income (Loss) Components (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other operating expense									$ (46,249)	$ (50,921)	$ (45,525)
Net (loss) gain on securities transactions	$ 26,312	$ 25,715	$ 24,167	$ 26,667	$ 23,808	$ 26,361	$ 27,842	$ 26,229	102,861	104,240	95,242
Tax expense									(21,016)	(21,805)	(42,620)
Net Income Attributable to Tompkins Financial Corporation	$ 21,080	$ 20,206	$ 19,392	$ 21,040	$ 18,911	$ 20,902	$ 22,059	$ 20,436	81,718	82,308	$ 52,494
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains and losses on available-for-sale securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net (loss) gain on securities transactions									616	(440)
Tax expense									(151)	108
Net Income Attributable to Tompkins Financial Corporation									465	(332)
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Employee benefit plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net (loss) gain on securities transactions									(1,709)	(1,734)
Tax expense									419	425
Net Income Attributable to Tompkins Financial Corporation									(1,290)	(1,309)
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Net retirement plan actuarial gain
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other operating expense									(1,677)	(1,719)
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Net retirement plan prior service credit
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other operating expense									$ (32)	$ (15)

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Other Borrowings - Narrative (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 25,000,000.0
Outstanding advances	0	$ 0
Unused borrowing capacity	1,300,000,000	1,300,000,000
Unencumbered residential and commercial real estate loans and investment securities pledged	850,800,000
Overnight advances	239,100,000	647,075,000
Term advances	$ 415,000,000	$ 425,000,000
Weighted average interest rate	2.12%	2.07%
Term advances mature within one year	$ 170,000,000.0
Term advances maturing after one year	245,000,000.0
Maturities of advances due in 2021	30,000,000.0
Maturities of advances due in 2022	85,000,000.0
Maturities of advances due in 2023	80,000,000.0
Maturities of advances due in 2024	50,000,000.0
Callable FHLB borrowings	0
Outstanding on line of credit with bank	4,000,000.0	$ 4,000,000
Subsidiaries
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 89,000,000.0	$ 98,000,000.0

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Securities Sold Under Agreements to Repurchase and Federal Funds Purchased

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Securities Sold Under Agreements to Repurchase and Federal Funds Purchased

Securities Sold Under Agreements to Repurchase and Federal Funds Purchased

Information regarding securities sold under agreements to repurchase and Federal funds purchased is detailed in the following tables for the years ended December 31:

Securities Sold Under Agreements to Repurchase	2019			2018			2017
(dollar amounts in thousands)
Total outstanding at December 31	$	60,346		$	81,842		$	75,177
Maximum month-end balance	71,875			81,842			80,326
Average balance during the year	59,742			63,472			64,888
Weighted average rate at December 31	0.22		%	0.22		%	0.23		%
Average interest rate paid during the year	0.24		%	0.24		%	0.36		%
Federal Funds Purchased
Average balance during the year	82			0			0
Weighted average rate at December 31	N/A			N/A			N/A
Average interest rate paid during the year	2.86		%	0.00		%	0.00		%

Securities sold under agreements to repurchase (“repurchase agreements”) are secured borrowings that typically mature within thirty to ninety days, although the Company has entered into repurchase agreements with the Federal Home Loan Bank (“FHLB”) with longer maturities. 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 $60.3 million at December 31, 2019. The Company had no outstanding wholesale repurchase agreements at December 31, 2019.

Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the fair value of the underlying securities.

Federal funds purchased are short-term borrowings that typically mature within one to ninety days.

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Allowance for Loan and Lease Losses

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Allowance for Loan and Lease Losses

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 model is comprised of four major components that management has deemed appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at a reserve level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The four components include: impaired loans; criticized and classified credits; historical loss experience; and qualitative or subjective analysis. 

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. While management’s evaluation of the allowance as of December 31, 2019, considers the allowance to be appropriate, under different conditions or assumptions, the Company may need to adjust the allowance. 

Acquired Loans and Leases

As part of our determination of the fair value of our acquired loans at the time of acquisition, the Company established a credit mark to provide for future losses in our acquired loan portfolio. To the extent that credit quality deteriorates subsequent to acquisition, such deterioration would result in the establishment of an allowance for the acquired loan portfolio. 

Changes in the allowance for loan and lease losses for the twelve months ended December 31, 2019, 2018 and 2017 are summarized as follows:

(In thousands)	2019			2018			2017
Total allowance at beginning of year	$	43,410		$	39,771		$	35,755
Provisions charged to operations	1,366			3,942			4,161
Recoveries on loans and leases	906			2,137			2,429
Charge-offs on loans and leases	(5,790		)	(2,440		)	(2,574		)
Total allowance at end of year	$	39,892		$	43,410		$	39,771

The following tables detail activity in the allowance for originated and acquired loan and lease losses by portfolio segment for the twelve months ended December 31, 2019 and 2018.  

December 31, 2019
(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	$	11,217		$	23,483		$	7,317		$	1,304		$	0	$	43,321
Charge-offs	(653		)	(4,013		)	(90		)	(816		)	0		(5,572		)
Recoveries	70			100			283			294			0		747
Provision	(93		)	1,987			(1,150		)	574			0		1,318
Ending Balance	$	10,541		$	21,557		$	6,360		$	1,356		$	0	$	39,814

December 31, 2019
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for acquired loans:
Beginning balance	$	55		$	0		$	28		$	6		$	0	$	89
Charge-offs	(43		)	(2		)	(166		)	(7		)	0		(218		)
Recoveries	33			74			51			1			0		159
Provision	(45		)	(21		)	108			6			0		48
Ending Balance	$	0		$	51		$	21		$	6		$	0	$	78

December 31, 2018
(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	$	11,812		$	20,412		$	6,161		$	1,301		$	0	$	39,686
Charge-offs	(293		)	(60		)	(424		)	(1,350		)	0		(2,127		)
Recoveries	50			812			324			679			0		1,865
Provision	(352		)	2,319			1,256			674			0		3,897
Ending Balance	$	11,217		$	23,483		$	7,317		$	1,304		$	0	$	43,321

December 31, 2018
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other		Finance Leases		Total
Allowance for acquired loans:
Beginning balance	$	25		$	0		$	54		$	6	$	0	$	85
Charge-offs	(41		)	(82		)	(190		)	0		0		(313		)
Recoveries	106			31			135			0		0		272
Provision	(35		)	51			29			0		0		45
Ending Balance	$	55		$	0		$	28		$	6	$	0	$	89

At December 31, 2019 and 2018, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows:

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases:
Individually evaluated for impairment	$	245	$	662	$	0	$	0	$	0	$	907
Collectively evaluated for impairment	10,296		20,895		6,360		1,356		0		38,907
Ending balance	$	10,541	$	21,557	$	6,360	$	1,356	$	0	$	39,814
Allowance for acquired loans:
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	0		51		21		6		0		78
Ending balance	$	0	$	51	$	21	$	6	$	0	$	78

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases:
Individually evaluated for impairment	$	397	$	3,365	$	0	$	0	$	0	$	3,762
Collectively evaluated for impairment	10,820		20,118		7,317		1,304		0		39,559
Ending balance	$	11,217	$	23,483	$	7,317	$	1,304	$	0	$	43,321
Allowance for acquired loans:
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	55		0		28		6		0		89
Ending balance	$	55	$	0	$	28	$	6	$	0	$	89

The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology as of December 31, 2019 and December 31, 2018 was as follows:

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases:
Individually evaluated for impairment	$	2,110	$	13,496	$	3,779	$	0	$	0	$	19,385
Collectively evaluated for impairment	966,875		2,283,152		1,340,687		73,625		17,322		4,681,661
Total	$	968,985	$	2,296,648	$	1,344,466	$	73,625	$	17,322	$	4,701,046

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Acquired loans:
Individually evaluated for impairment	$	2	$	714	$	2,114	$	0	$	0	$	2,830
Loans acquired with deteriorated credit quality	173		5,674		3,302		0		0		9,149
Collectively evaluated for impairment	38,901		140,529		27,955		785		0		208,170
Total	$	39,076	$	146,917	$	33,371	$	785	$	0	$	220,149

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases:
Individually evaluated for impairment	$	1,864	$	8,388	$	3,915	$	0	$	0	$	14,167
Collectively evaluated for impairment	1,032,059		2,153,181		1,288,346		70,228		14,556		4,558,370
Total	$	1,033,923	$	2,161,569	$	1,292,261	$	70,228	$	14,556	$	4,572,537

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Acquired loans:
Individually evaluated for impairment	$	32	$	842	$	2,564	$	0	$	0	$	3,438
Loans acquired with deteriorated credit quality	153		5,852		5,031		0		0		11,036
Collectively evaluated for impairment	43,527		172,398		34,038		761		0		250,724
Total	$	43,712	$	179,092	$	41,633	$	761	$	0	$	265,198

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. There was no interest income recognized on impaired loans and leases for 2019, 2018 and 2017. 

The recorded investment on impaired loans as of December 31, 2019, and 2018 was as follows:

	December 31, 2019						December 31, 2018
(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	$	1,865	$	1,965	$	0	$	183	$	271	$	0
Commercial real estate
Commercial real estate other	10,205		11,017		0		3,205		3,405		0
Residential real estate
Home equity	3,779		3,992		0		3,915		4,168		0
Subtotal	$	15,849	$	16,974	$	0	$	7,303	$	7,844	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	$	245	$	245	$	245	$	5,183	$	5,183	$	3,365
Commercial real estate
Commercial real estate other	3,291		3,291		662		1,681		1,681		397
Subtotal	3,536		3,536		907		6,864		6,864		3,762
Total	$	19,385	$	20,510	$	907	$	14,167	$	14,708	$	3,762

	December 31, 2019						December 31, 2018
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Acquired loans with no related allowance
Commercial and industrial
Commercial and industrial other	$	2	$	2	$	0	$	32	$	32	$	0
Commercial real estate
Commercial real estate other	714		714		0		842		924		0
Residential real estate
Home equity	2,114		2,217		0		2,564		2,696		0
Total	$	2,830	$	2,933	$	0	$	3,438	$	3,652	$	0

The average recorded investment and interest income recognized on impaired originated loans for the twelve months ended December 31, 2019, 2018, and 2017 was as follows:

Twelve Months Ended December 31,
	2019				2018				2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		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	$	1,830	$	0	$	1,979	$	0	$	718	$	0
Commercial real estate
Commercial real estate other	7,552		0		5,165		0		7,287		0
Residential real estate
Home equity	3,943		0		3,983		0		3,551		0
Subtotal	$	13,325	$	0	$	11,127	$	0	$	11,556	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	$	132	$	0	$	1,374	$	0	$	276	$	0
Commercial real estate
Commercial real estate other	1,391		0		1,357		0		0		0
Subtotal	$	1,523	$	0	$	2,731	$	0	$	276	$	0
Total	$	14,848	$	0	$	13,858	$	0	$	11,832	$	0

The average recorded investment and interest income recognized on impaired acquired loans for the twelve months ended December 31, 2019, 2018 and 2017 was as follows:

Twelve Months Ended December 31,
	2019				2018				2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans with no related allowance
Commercial and industrial
Commercial and industrial other	$	21	$	0	$	50	$	0	$	111	$	0
Commercial real estate
Commercial real estate other	822		0		999		0		2,141		0
Residential real estate
Home equity	2,503		0		2,945		0		1,861		0
Subtotal	$	3,346	$	0	$	3,994	$	0	$	4,113	$	0
Acquired loans with related allowance
Commercial and industrial
Commercial and industrial other	$	0	$	0	$	0	$	0	$	10	$	0
Subtotal	$	0	$	0	$	0	$	0	$	10	$	0
Total	$	3,346	$	0	$	3,994	$	0	$	4,123	$	0

The average recorded investment in impaired loans was $18.2 million at December 31, 2019, $17.9 million at December 31, 2018, and $15.8 million at December 31, 2017.

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. When modifications are provided for reasons other than as a result of the financial distress of the borrower, these loans are not classified as TDRs or impaired. These modifications primarily 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 and interest caught up over the remaining term of the loan or at maturity, among others.

The following tables present loans by class modified in 2019 and 2018 as troubled debt restructurings.

Troubled Debt Restructuring

December 31, 2019	Twelve months ended
						Defaulted TDRs2
(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	2	604		604		0	0
Commercial real estate
Commercial real estate other1	1	1,577		1,577		0	0
Residential real estate
Home equity1	2	$	181	$	181	1	$	93
Total	5	$	2,362	$	2,362	1	$	93

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

²TDRs that defaulted during the 12 months ended December 31, 2019 that had been restructured in the prior twelve months.

December 31, 2018	Twelve months ended
						Defaulted TDRs2
(In thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans	Post- Modification Outstanding Recorded Investment
Commercial real estate
Commercial real estate other1	1	26		26		0	0
Residential real estate
Home equity1	6	$	507	$	507	0	$	0
Total	7	$	533	$	533	0	$	0

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

²TDRs that defaulted during the 12 months ended December 31, 2018 that had been restructured in the prior twelve months.

The Company recognized TDRs with a balance of $2.4 million during 2019, compared to $533,000 in 2018. At December 31, 2019, the Company was not committed to lend additional amounts to customers with outstanding loans that were classified as TDRs.

The following table presents credit quality indicators (internal risk grade) by class of commercial loans, commercial real estate loans and agricultural loans as of December 31, 2019 and 2018.

December 31, 2019
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Originated loans and leases
Internal risk grade:
Pass	$	851,517	$	89,892	$	1,857,142	$	166,888	$	212,302	$	3,177,741
Special Mention	8,306		1,698		16,623		3,173		0		29,800
Substandard	3,376		14,196		25,880		14,640		0		58,092
Total	$	863,199	$	105,786	$	1,899,645	$	184,701	$	212,302	$	3,265,633

December 31, 2019
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Acquired loans
Internal risk grade:
Pass	$	38,879	$	0	$	143,175	$	197	$	1,335	$	183,586
Special Mention	0		0		0		0		0		0
Substandard	197		0		2,210		0		0		2,407
Total	$	39,076	$	0	$	145,385	$	197	$	1,335	$	185,993

December 31, 2018
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Originated loans and leases
Internal risk grade:
Pass	$	910,476	$	93,939	$	1,797,599	$	157,156	$	164,285	$	3,123,455
Special Mention	8,675		4,951		9,484		4,964		0		28,074
Substandard	7,278		8,604		20,196		7,885		0		43,963
Total	$	926,429	$	107,494	$	1,827,279	$	170,005	$	164,285	$	3,195,492

December 31, 2018
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Acquired loans
Internal risk grade:
Pass	$	43,447	$	0	$	174,383	$	224	$	1,384	$	219,438
Special Mention	0		0		452		0		0		452
Substandard	265		0		2,649		0		0		2,914
Total	$	43,712	$	0	$	177,484	$	224	$	1,384	$	222,804

The following table presents credit quality indicators by class of residential real estate loans and by class of consumer loans as of December 31, 2019 and 2018. Nonperforming loans include nonaccrual, impaired and loans 90 days past due and accruing interest, all other loans are considered performing.

December 31, 2019
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated loans and leases
Performing	$	201,970	$	1,133,237	$	12,847	$	60,503	$	1,408,557
Nonperforming	1,924		7,335		117		158		9,534
Total	$	203,894	$	1,140,572	$	12,964	$	60,661	$	1,418,091

December 31, 2019
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	14,479	$	17,269	$	0	$	785	$	32,533
Nonperforming	872		751		0		0		1,623
Total	$	15,351	$	18,020	$	0	$	785	$	34,156

December 31, 2018
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated loans and leases
Performing	$	206,675	$	1,076,032	$	12,508	$	57,486	$	1,352,701
Nonperforming	1,784		7,770		155		79		9,788
Total	$	208,459	$	1,083,802	$	12,663	$	57,565	$	1,362,489

December 31, 2018
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired loans
Performing	$	19,735	$	19,380	$	0	$	761	$	39,876
Nonperforming	1,414		1,104		0		0		2,518
Total	$	21,149	$	20,484	$	0	$	761	$	42,394

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Segment and Related Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment and Related Information

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 16 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, 2019
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	261,378	$	3	$	0	$	(3	)	$	261,378
Interest expense	50,753		0		0		(3		)	50,750
Net interest income	210,625		3		0		0			210,628
Provision for loan and lease losses	1,366		0		0		0			1,366
Noninterest income	29,054		31,501		17,001		(2,123		)	75,433
Noninterest expense	145,102		25,908		12,947		(2,123		)	181,834
Income before income tax expense	93,211		5,596		4,054		0			102,861
Income tax expense	18,598		1,426		992		0			21,016
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	74,613		4,170		3,062		0			81,845
Less: Net income attributable to noncontrolling interests	127		0		0		0			127
Net Income attributable to Tompkins Financial Corporation	$	74,486	$	4,170	$	3,062	$	0		$	81,718
Depreciation and amortization	$	9,778	$	225	$	41	$	0		$	10,044
Assets	6,671,409		41,841		24,313		(11,940		)	6,725,623
Goodwill	64,370		19,866		8,211		0			92,447
Other intangibles, net	3,215		2,860		148		0			6,223
Net loans and leases	4,877,658		0		0		0			4,877,658
Deposits	5,223,893		0		0		(10,972		)	5,212,921
Total equity	608,901		32,204		21,949		0			663,054

As of and for the year ended December 31, 2018
(In thousands)	Banking		Insurance		Wealth Management		Intercompany & Merger			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

Unaudited Quarterly Financial Data
	2019
(in thousands)	First		Second		Third		Fourth
Interest and dividend income	$	64,927	$	66,093	$	65,775	$	64,583
Interest expense	13,013		13,775		12,619		11,343
Net interest income	51,914		52,318		53,156		53,240
Provision for loan and lease losses	445		601		1,320		(1,000		)
Income before income taxes	26,667		24,167		25,715		26,312
Net income	21,040		19,392		20,206		21,080
Net income per common share (basic)	1.37		1.28		1.34		1.41
Net income per common share (diluted)	1.37		1.27		1.34		1.40

 

Unaudited Quarterly Financial Data
	2018
(in thousands)	First		Second		Third		Fourth
Interest and dividend income	$	60,140	$	62,143	$	63,984	$	65,325
Interest expense	7,453		9,429		10,821		12,089
Net interest income	52,687		52,714		53,163		53,236
Provision for loan and lease losses	567		1,045		272		2,058
Income before income taxes	26,229		27,842		26,361		23,808
Net income	20,436		22,059		20,902		18,911
Net income per common share (basic)	1.34		1.44		1.37		1.24
Net income per common share (diluted)	1.33		1.43		1.36		1.23

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$ 81,845	$ 82,435	$ 52,622
Available-for-sale securities:
Change in net unrealized gain (loss) during the period	25,241	(10,981)	(2,681)
Unrealized gains on HTM securities transferred to AFS securities	2,852	0	0
Reclassification adjustment for net realized (gain) loss on sale included in available-for-sale securities	(465)	332	244
Employee benefit plans:
Net retirement plan loss	(7,642)	(2,594)	(3,434)
Net actuarial gain due to curtailment	(302)	0	0
Net retirement plan prior service (credit) cost	(1,373)	0	728
Amortization of net retirement plan actuarial gain	1,266	1,298	905
Amortization of net retirement plan prior service cost	24	11	9
Other comprehensive income (loss)	19,601	(11,934)	(4,229)
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation	101,446	70,501	48,393
Less: Total comprehensive income attributable to noncontrolling interests	(127)	(127)	(128)
Total comprehensive income attributable to Tompkins Financial Corporation	$ 101,319	$ 70,374	$ 48,265

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Allowance for Loan and Lease Losses (Tables)

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Schedule of originated and acquired loan and lease losses by portfolio segment

Changes in the allowance for loan and lease losses for the twelve months ended December 31, 2019, 2018 and 2017 are summarized as follows:

(In thousands)	2019			2018			2017
Total allowance at beginning of year	$	43,410		$	39,771		$	35,755
Provisions charged to operations	1,366			3,942			4,161
Recoveries on loans and leases	906			2,137			2,429
Charge-offs on loans and leases	(5,790		)	(2,440		)	(2,574		)
Total allowance at end of year	$	39,892		$	43,410		$	39,771

The following tables detail activity in the allowance for originated and acquired loan and lease losses by portfolio segment for the twelve months ended December 31, 2019 and 2018.  

December 31, 2019
(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	$	11,217		$	23,483		$	7,317		$	1,304		$	0	$	43,321
Charge-offs	(653		)	(4,013		)	(90		)	(816		)	0		(5,572		)
Recoveries	70			100			283			294			0		747
Provision	(93		)	1,987			(1,150		)	574			0		1,318
Ending Balance	$	10,541		$	21,557		$	6,360		$	1,356		$	0	$	39,814

December 31, 2019
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for acquired loans:
Beginning balance	$	55		$	0		$	28		$	6		$	0	$	89
Charge-offs	(43		)	(2		)	(166		)	(7		)	0		(218		)
Recoveries	33			74			51			1			0		159
Provision	(45		)	(21		)	108			6			0		48
Ending Balance	$	0		$	51		$	21		$	6		$	0	$	78

December 31, 2018
(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	$	11,812		$	20,412		$	6,161		$	1,301		$	0	$	39,686
Charge-offs	(293		)	(60		)	(424		)	(1,350		)	0		(2,127		)
Recoveries	50			812			324			679			0		1,865
Provision	(352		)	2,319			1,256			674			0		3,897
Ending Balance	$	11,217		$	23,483		$	7,317		$	1,304		$	0	$	43,321

December 31, 2018
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other		Finance Leases		Total
Allowance for acquired loans:
Beginning balance	$	25		$	0		$	54		$	6	$	0	$	85
Charge-offs	(41		)	(82		)	(190		)	0		0		(313		)
Recoveries	106			31			135			0		0		272
Provision	(35		)	51			29			0		0		45
Ending Balance	$	55		$	0		$	28		$	6	$	0	$	89

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

At December 31, 2019 and 2018, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows:

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases:
Individually evaluated for impairment	$	245	$	662	$	0	$	0	$	0	$	907
Collectively evaluated for impairment	10,296		20,895		6,360		1,356		0		38,907
Ending balance	$	10,541	$	21,557	$	6,360	$	1,356	$	0	$	39,814
Allowance for acquired loans:
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	0		51		21		6		0		78
Ending balance	$	0	$	51	$	21	$	6	$	0	$	78

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases:
Individually evaluated for impairment	$	397	$	3,365	$	0	$	0	$	0	$	3,762
Collectively evaluated for impairment	10,820		20,118		7,317		1,304		0		39,559
Ending balance	$	11,217	$	23,483	$	7,317	$	1,304	$	0	$	43,321
Allowance for acquired loans:
Individually evaluated for impairment	$	0	$	0	$	0	$	0	$	0	$	0
Collectively evaluated for impairment	55		0		28		6		0		89
Ending balance	$	55	$	0	$	28	$	6	$	0	$	89

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 December 31, 2019 and December 31, 2018 was as follows:

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases:
Individually evaluated for impairment	$	2,110	$	13,496	$	3,779	$	0	$	0	$	19,385
Collectively evaluated for impairment	966,875		2,283,152		1,340,687		73,625		17,322		4,681,661
Total	$	968,985	$	2,296,648	$	1,344,466	$	73,625	$	17,322	$	4,701,046

December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Acquired loans:
Individually evaluated for impairment	$	2	$	714	$	2,114	$	0	$	0	$	2,830
Loans acquired with deteriorated credit quality	173		5,674		3,302		0		0		9,149
Collectively evaluated for impairment	38,901		140,529		27,955		785		0		208,170
Total	$	39,076	$	146,917	$	33,371	$	785	$	0	$	220,149

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Originated loans and leases:
Individually evaluated for impairment	$	1,864	$	8,388	$	3,915	$	0	$	0	$	14,167
Collectively evaluated for impairment	1,032,059		2,153,181		1,288,346		70,228		14,556		4,558,370
Total	$	1,033,923	$	2,161,569	$	1,292,261	$	70,228	$	14,556	$	4,572,537

December 31, 2018
(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Acquired loans:
Individually evaluated for impairment	$	32	$	842	$	2,564	$	0	$	0	$	3,438
Loans acquired with deteriorated credit quality	153		5,852		5,031		0		0		11,036
Collectively evaluated for impairment	43,527		172,398		34,038		761		0		250,724
Total	$	43,712	$	179,092	$	41,633	$	761	$	0	$	265,198

Schedule of recorded investments in impaired loans

The recorded investment on impaired loans as of December 31, 2019, and 2018 was as follows:

	December 31, 2019						December 31, 2018
(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	$	1,865	$	1,965	$	0	$	183	$	271	$	0
Commercial real estate
Commercial real estate other	10,205		11,017		0		3,205		3,405		0
Residential real estate
Home equity	3,779		3,992		0		3,915		4,168		0
Subtotal	$	15,849	$	16,974	$	0	$	7,303	$	7,844	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	$	245	$	245	$	245	$	5,183	$	5,183	$	3,365
Commercial real estate
Commercial real estate other	3,291		3,291		662		1,681		1,681		397
Subtotal	3,536		3,536		907		6,864		6,864		3,762
Total	$	19,385	$	20,510	$	907	$	14,167	$	14,708	$	3,762

	December 31, 2019						December 31, 2018
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Acquired loans with no related allowance
Commercial and industrial
Commercial and industrial other	$	2	$	2	$	0	$	32	$	32	$	0
Commercial real estate
Commercial real estate other	714		714		0		842		924		0
Residential real estate
Home equity	2,114		2,217		0		2,564		2,696		0
Total	$	2,830	$	2,933	$	0	$	3,438	$	3,652	$	0

The average recorded investment and interest income recognized on impaired originated loans for the twelve months ended December 31, 2019, 2018, and 2017 was as follows:

Twelve Months Ended December 31,
	2019				2018				2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		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	$	1,830	$	0	$	1,979	$	0	$	718	$	0
Commercial real estate
Commercial real estate other	7,552		0		5,165		0		7,287		0
Residential real estate
Home equity	3,943		0		3,983		0		3,551		0
Subtotal	$	13,325	$	0	$	11,127	$	0	$	11,556	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	$	132	$	0	$	1,374	$	0	$	276	$	0
Commercial real estate
Commercial real estate other	1,391		0		1,357		0		0		0
Subtotal	$	1,523	$	0	$	2,731	$	0	$	276	$	0
Total	$	14,848	$	0	$	13,858	$	0	$	11,832	$	0

The average recorded investment and interest income recognized on impaired acquired loans for the twelve months ended December 31, 2019, 2018 and 2017 was as follows:

Twelve Months Ended December 31,
	2019				2018				2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Acquired loans with no related allowance
Commercial and industrial
Commercial and industrial other	$	21	$	0	$	50	$	0	$	111	$	0
Commercial real estate
Commercial real estate other	822		0		999		0		2,141		0
Residential real estate
Home equity	2,503		0		2,945		0		1,861		0
Subtotal	$	3,346	$	0	$	3,994	$	0	$	4,113	$	0
Acquired loans with related allowance
Commercial and industrial
Commercial and industrial other	$	0	$	0	$	0	$	0	$	10	$	0
Subtotal	$	0	$	0	$	0	$	0	$	10	$	0
Total	$	3,346	$	0	$	3,994	$	0	$	4,123	$	0

Schedule of troubled debt restructurings

The following tables present loans by class modified in 2019 and 2018 as troubled debt restructurings.

Troubled Debt Restructuring

December 31, 2019	Twelve months ended
						Defaulted TDRs2
(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	2	604		604		0	0
Commercial real estate
Commercial real estate other1	1	1,577		1,577		0	0
Residential real estate
Home equity1	2	$	181	$	181	1	$	93
Total	5	$	2,362	$	2,362	1	$	93

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

²TDRs that defaulted during the 12 months ended December 31, 2019 that had been restructured in the prior twelve months.

December 31, 2018	Twelve months ended
						Defaulted TDRs2
(In thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans	Post- Modification Outstanding Recorded Investment
Commercial real estate
Commercial real estate other1	1	26		26		0	0
Residential real estate
Home equity1	6	$	507	$	507	0	$	0
Total	7	$	533	$	533	0	$	0

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

²TDRs that defaulted during the 12 months ended December 31, 2018 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 table presents credit quality indicators (internal risk grade) by class of commercial loans, commercial real estate loans and agricultural loans as of December 31, 2019 and 2018.

December 31, 2019
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Originated loans and leases
Internal risk grade:
Pass	$	851,517	$	89,892	$	1,857,142	$	166,888	$	212,302	$	3,177,741
Special Mention	8,306		1,698		16,623		3,173		0		29,800
Substandard	3,376		14,196		25,880		14,640		0		58,092
Total	$	863,199	$	105,786	$	1,899,645	$	184,701	$	212,302	$	3,265,633

December 31, 2019
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Acquired loans
Internal risk grade:
Pass	$	38,879	$	0	$	143,175	$	197	$	1,335	$	183,586
Special Mention	0		0		0		0		0		0
Substandard	197		0		2,210		0		0		2,407
Total	$	39,076	$	0	$	145,385	$	197	$	1,335	$	185,993

December 31, 2018
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Originated loans and leases
Internal risk grade:
Pass	$	910,476	$	93,939	$	1,797,599	$	157,156	$	164,285	$	3,123,455
Special Mention	8,675		4,951		9,484		4,964		0		28,074
Substandard	7,278		8,604		20,196		7,885		0		43,963
Total	$	926,429	$	107,494	$	1,827,279	$	170,005	$	164,285	$	3,195,492

December 31, 2018
(In thousands)	Commercial and Industrial Other		Commercial and Industrial Agriculture		Commercial Real Estate Other		Commercial Real Estate Agriculture		Commercial Real Estate Construction		Total
Acquired loans
Internal risk grade:
Pass	$	43,447	$	0	$	174,383	$	224	$	1,384	$	219,438
Special Mention	0		0		452		0		0		452
Substandard	265		0		2,649		0		0		2,914
Total	$	43,712	$	0	$	177,484	$	224	$	1,384	$	222,804

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

The following table presents credit quality indicators by class of residential real estate loans and by class of consumer loans as of December 31, 2019 and 2018. Nonperforming loans include nonaccrual, impaired and loans 90 days past due and accruing interest, all other loans are considered performing.

December 31, 2019
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated loans and leases
Performing	$	201,970	$	1,133,237	$	12,847	$	60,503	$	1,408,557
Nonperforming	1,924		7,335		117		158		9,534
Total	$	203,894	$	1,140,572	$	12,964	$	60,661	$	1,418,091

December 31, 2019
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired Loans and Leases
Performing	$	14,479	$	17,269	$	0	$	785	$	32,533
Nonperforming	872		751		0		0		1,623
Total	$	15,351	$	18,020	$	0	$	785	$	34,156

December 31, 2018
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Originated loans and leases
Performing	$	206,675	$	1,076,032	$	12,508	$	57,486	$	1,352,701
Nonperforming	1,784		7,770		155		79		9,788
Total	$	208,459	$	1,083,802	$	12,663	$	57,565	$	1,362,489

December 31, 2018
(In thousands)	Residential Home Equity		Residential Mortgages		Consumer Indirect		Consumer Other		Total
Acquired loans
Performing	$	19,735	$	19,380	$	0	$	761	$	39,876
Nonperforming	1,414		1,104		0		0		2,518
Total	$	21,149	$	20,484	$	0	$	761	$	42,394

XML

Cover Page - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2019	Feb. 18, 2020	Jun. 30, 2019
Cover page.
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity Central Index Key	0001005817
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019
Entity File Number	1-12709
Entity Registrant Name	Tompkins Financial Corp
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	16-1482357
Entity Address, Address Line One	118 E. Seneca Street
Entity Address, Address Line Two	P.O. Box 460
Entity Address, City or Town	Ithaca
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	14851
City Area Code	888
Local Phone Number	503-5753
Title of 12(b) Security	Common Stock ($.10 Par Value Per Share)
Trading Symbol	TMP
Security Exchange Name	NYSEAMER
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 1.0
Entity Common Stock, Shares Outstanding		14,979,825
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement relating to its 2020 Annual Meeting of stockholders, to be held on May 5, 2020, are incorporated by reference into Part III of this Form 10-K where indicated.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis Of Presentation

Tompkins Financial Corporation (“Tompkins” or “the Company”) is a registered Financial Holding Company with the Federal Reserve Board pursuant to the Bank Holding Company Act of 1956, as amended, organized under the laws of New York State, and is the parent company of Tompkins Trust Company (the “Trust Company”), The Bank of Castile, Mahopac Bank, VIST Bank, and Tompkins Insurance Agencies, Inc. (“Tompkins Insurance”). The Trust Company provides a full array of trust and investment services under the Tompkins Financial Advisors brand. Unless the context otherwise requires, the term “Company” refers to Tompkins Financial Corporation and its subsidiaries.

The consolidated financial information included herein combines the results of operations, the assets, liabilities, and shareholders’ equity (including comprehensive income or loss) of the Company and all entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions are eliminated in consolidation.

The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity under U.S. accounting principles generally accepted. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. The Company consolidates voting interest entities in which it has all, or at least a majority of, the voting interest. As defined in applicable accounting standards, variable interest entities (VIEs) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when the Company has both the power and ability to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Three of the Company’s wholly owned subsidiaries, Sleepy Hollow Capital Trust I, Leesport Capital Trust II, and Madison Statutory Trust I, are VIE’s for which the Company is not the primary beneficiary. Accordingly, the accounts of these entities are not included in the Company’s consolidated financial statements.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclose contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for loan and lease losses, valuation of goodwill and intangible assets, deferred income tax assets, other-than-temporary impairment on investments, and obligations related to employee benefits. Amounts in the prior years’ consolidated financial statements are reclassified when necessary to conform to the current year’s presentation.

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.

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

Cash and Cash Equivalents

Cash and cash equivalents in the Consolidated Statements of Cash Flows include cash and noninterest bearing balances due from banks, interest-bearing balances due from banks, Federal funds sold, 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. Each bank subsidiary is required to maintain reserve balances by the Federal Reserve Bank. At December 31, 2019, and December 31, 2018, the reserve requirements for the Company’s banking subsidiaries totaled $9.5 million and $6.6 million, respectively. The year-over-year increase in the banking subsidiaries' reserves are directly related to the increase in deposits in 2019 compared to 2018.

Securities

Management determines the appropriate classification of debt and equity securities at the time of purchase. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Debt securities not classified as held-to-maturity and marketable equity securities are classified as either available-for-sale or trading. Available-for-sale securities are stated at fair value with the unrealized gains and losses, net of tax, excluded from earnings and reported as a separate component of accumulated comprehensive income or loss, in shareholders’ equity. Trading securities are stated at fair value, with unrealized gains or losses included in earnings.

Beginning January 1, 2018, upon adoption of ASU 2016-01, equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. For periods prior to January 1, 2018, equity securities were classified as available-for-sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax. Securities with limited marketability or restricted equity securities, such as Federal Home Loan Bank stock and Federal Reserve Bank stock, are carried at cost, less any impairment, if any. At adoption of ASU 2016-01, the Company recognized a cumulative-effect adjustment of $65,000 for the after-tax impact of the unrealized loss on equity securities.

Premiums and discounts are amortized or accreted over the expected life of the related security as an adjustment to yield using the interest method. Dividend and interest income are recognized when earned. Realized gains and losses on the sale of securities are included in net gain (loss) on securities transactions. The cost of securities sold is based on the specific identification method.

At least quarterly, 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. A debt security is considered impaired if the fair value is less than its amortized cost basis 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.

Loans and Leases

Loans are reported at their principal outstanding balance, net of deferred loan origination fees and costs, and unearned income. The Company has the ability and intent to hold its loans for the foreseeable future, except for certain residential real estate loans held-for-sale. The Company provides motor vehicle and equipment financing to its customers through direct financing leases. These leases are carried at the aggregate of lease payments receivable, plus estimated residual values, less unearned income. Unearned income on direct financing leases is amortized over the lease terms, resulting in a level rate of return.

Residential real estate loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value. Fair value is determined on the basis of the rates quoted in the secondary market. Net unrealized losses attributable to changes in market interest rates are recognized through a valuation allowance by charges to income. Loans are generally sold on a non-recourse basis with servicing retained. Any gain or loss on the sale of loans is recognized at the time of sale as the difference between the recorded basis in the loan and the net proceeds from the sale. The Company may use commitments at the time loans are originated or identified for sale to mitigate interest rate risk. The commitments to sell loans and the commitments to originate loans held-for-sale at a set interest rate, if originated, are considered derivatives under ASC Topic 815. The impact of the estimated fair value adjustment was not significant to the consolidated financial statements.

Interest income on loans is accrued and credited to income based upon the principal amount outstanding. Loan origination fees and costs are deferred and recognized over the life of the loan as an adjustment to yield. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans and leases, including impaired loans, are generally classified as nonaccrual if they are past due as to maturity or payment of principal or interest for a period of more than 90 days, unless such loans are well secured and in the process of collection. Loans that are past due less than 90 days may also be classified as nonaccrual if repayment in full of principal or interest is in doubt.

Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within an acceptable time period, and there is a sustained period (generally six consecutive months) of repayment performance by the borrower in accordance with the contractual terms of the loan agreement. 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.

The Company applies the provisions of ASC Topic 310-10-35, Loan Impairment, to all impaired commercial and commercial real estate loans over $250,000 and to all loans restructured in a troubled debt restructuring. Allowances for loan losses for the remaining loans are recognized in accordance with ASC Topic 450, Contingencies (“ASC Topic 450”). Management considers a loan to be impaired if, based on current information, it is probable that the Company will be unable to collect all scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. When a loan is considered to be impaired, the amount of the impairment is measured based on the present value of expected future cash flows discounted at the effective interest rate of the loan or, as a practical expedient, at the observable market price or the fair value of collateral (less costs to sell) if the loan is collateral dependent. Management excludes large groups of smaller balance homogeneous loans such as residential mortgages, consumer loans, and leases, which are collectively evaluated.

Loans are considered modified in a troubled debt restructuring (“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 and interest caught up over the remaining term of the loan or at maturity. Generally, a nonaccrual loan that has been modified in a TDR remains on non-accrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status.

In general, the principal balance of a loan is charged off in full or in part when management concludes, based on the available facts and circumstances, that collection of principal in full is not probable. For commercial and commercial real estate loans, this conclusion is generally based upon a review of the borrower’s financial condition and cash flow, payment history, economic conditions, and the conditions in the various markets in which the collateral, if any, may be liquidated. In general, consumer loans are charged-off in accordance with regulatory guidelines which provide that such loans be charged-off when the Company becomes aware of the loss, such as from a triggering event that may include new information about a borrower’s intent/ability to repay the loan, bankruptcy, fraud or death, among other things, but in no case will the charge-off exceed specified delinquency timeframes. Such delinquency timeframes state that closed-end retail loans (loans with pre-defined maturity dates, such as real estate mortgages, home equity loans and consumer installment loans) that become past due 120 cumulative days and open-end retail loans (loans that roll-over at the end of each term, such as home equity lines of credit) that become past due 180 cumulative days should be classified as a loss and charged-off. For residential real estate loans, charge-off decisions are based upon past due status, current assessment of collateral value, and general market conditions in the areas where the properties are located.

Acquired Loans and Leases

Loans acquired in acquisitions, subsequent to the effective date of ASC Topic 805, Business Combination, are recorded at fair value and subsequently accounted for in accordance with ASC Topic 310, and there is no carryover of the related allowance for loan and lease losses. Loans acquired with evidence of credit impairment are accounted for under ASC Subtopic 310-30. These loans may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. In the VIST acquisition, 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, while decreases in expected cash flows are recognized as impairment through a loss provision and an increase in 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).

Acquired loans not exhibiting evidence of credit impairment at the time of acquisition are accounted for under ASC Subtopic 310-20. The Company amortizes/accretes into interest income the premium/discount determined at the date of purchase over the life of the loan on a level yield basis. Subsequent to the acquisition date, the methods used to estimate the appropriate allowance for loan losses are similar to originated loans. These loans are placed on nonaccrual status in accordance with the Company’s policy for originated loans.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon 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. The Company determined at acquisition that it could reasonably estimate future cash flows on acquired loans that were past due 90 days or more and on which the Company expects to fully collect the carrying value of the loans net of the allowance for acquired loan losses. As such, the Company does not consider these loans to be nonaccrual or nonperforming.

Allowance For Loan and Lease Losses

The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan and lease 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 model is comprised of four major components that management has deemed appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at a reserve level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The components include: impaired loans; criticized and classified credits; historical loss experience; and qualitative or subjective analysis. For impaired loans, an allowance is recognized if the fair value of the loan is less than the recorded investment in the loan (recorded investment in the loan is the principal balance plus any accrued interest, net of deferred loan fees or costs and unamortized premium or discount). A loan’s fair value reflects the present value of expected future cash flows discounted at the loan’s effective interest rate, or if the loan is collateral dependent, the fair value of the collateral, less estimated disposal costs. If the loan is collateral dependent, the principal balance of the loan is charged-off in an amount equal to the impairment measurement. The fair value of collateral dependent loans is derived primarily from collateral appraisals performed by independent third-party appraisers. For loans that are not impaired, but are rated special mention or worse, management evaluates credits based on elevated risk characteristics and assigns reserves based upon analysis of historical loss experience of loans with similar risk characteristics. For loans that are not impaired or reviewed individually, management assigns a reserve based upon historical loss experience over a designated look-back period. Management has evaluated a variety of look-back periods and has determined that an eight year look back period is appropriate to capture a full range of economic cycles. Management has also evaluated a variety of statistical methods in analyzing loss history, including averages, weighted averages and loss emergence periods and has determined that by applying a loss emergence period analysis to historical losses over a full economic cycle has resulted in a reasonable estimate of losses inherent in the loan portfolio. The model also includes an analysis of a variety of subjective factors to support the reserve estimate. These subjective factors may include allowance allocations for risks that may not otherwise be fully recognized in other components of the model. Among the subjective factors that are routinely considered as part of this analysis are: growth trends in the portfolio, changes in management and/or polices related to lending activities, trends in classified or nonaccrual loans, concentrations of credit, local and national economic trends, and industry trends.

Periodically, management conducts an analysis to estimate the loss emergence period for various loan categories based on samples of historical charge-offs. Model output by loan category is reviewed to evaluate the reasonableness of the reserve levels in comparison to the estimated loss emergence period applied to historical loss experience.

In addition to the components discussed above, management reviews the model output for reasonableness by analyzing the results in comparisons to recent trends in the loan/lease portfolio, through back-testing of results from prior models in comparison to actual loss history, and by comparing our reserves and loss history to industry peer results.

The model results are reviewed by management at the Corporate Credit Policy Committee and presented to the Board of Directors. Additionally, on an annual basis, management conducts a validation process of the model. This validation includes reviewing the appropriateness of model calculations, back testing of model results and appropriateness of key assumptions used in the model. In addition, various Federal and State regulatory agencies, as part of their examination process, review the Company’s allowance and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

For acquired credit impaired loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC Topic 310-30”), the Company’s allowance for loan and lease 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.

For acquired non-credit impaired loans accounted for under FASB ASC Topic 310-20, Nonrefundable Fees and Other Costs, (“ASC Topic 310-20”), the Company’s allowance for loan and lease losses is maintained through provisions for loan 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.

Premises and Equipment

Land is carried at cost. Premises and equipment are stated at cost, less allowances for depreciation. The provision for depreciation for financial reporting purposes is computed generally by the straight-line method at rates sufficient to write-off the cost of such assets over their estimated useful lives. Buildings are amortized over a period of 10-39 years, and furniture, fixtures, and equipment are amortized over a period of 2-20 years. Leasehold improvements are generally depreciated over the lesser of the lease term or the estimated lives of the improvements. Maintenance and repairs are charged to expense as incurred. Gains or losses on disposition are reflected in earnings.

Other Real Estate Owned

Other real estate owned consists of properties formerly pledged as collateral to loans, which have been acquired by the Company through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Upon transfer of a loan to foreclosure status, an appraisal is generally obtained and any excess of the loan balance over the fair value, less estimated costs to sell, is charged against the allowance for loan/lease losses. Expenses and subsequent adjustments to the fair value are treated as other operating expense.

Goodwill

Goodwill represents the excess of purchase price over the fair value of assets acquired in a transaction using purchase accounting. Goodwill has an indefinite useful life and is not amortized, but is tested for impairment. Goodwill impairment tests are performed on an annual basis or when events or circumstances dictate. The Company tests goodwill annually as of December 31^st. The Company has the option to perform a qualitative assessment of goodwill, which considers company-specific and economic characteristics that might impact its carrying value. If based on this qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative test (Step 1) is performed, which compares the fair value of the reporting unit to the carrying amount of the reporting unit in order to identify potential impairment. If the estimated fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired. However, if the carrying amount of the reporting unit were to exceed its estimated fair value, a second step (Step 2) would be performed that would compare the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill for the reporting unit. The implied fair value of goodwill is determined in the same manner as goodwill that is recognized in a business combination. Significant judgment and estimates are involved in estimating the fair value of the assets and liabilities of the reporting units.

Other Intangible Assets

Other intangible assets include core deposit intangibles, customer related intangibles, covenants not to compete, and mortgage servicing rights. Core deposit intangibles represent a premium paid to acquire a base of stable, low cost deposits in the acquisition of a bank, or a bank branch, using purchase accounting. The amortization period for core deposit intangible ranges from 5 to 10 years, using an accelerated method. The covenants not to compete are amortized on a straight-line basis over 3 to 6 years, while customer related intangibles are amortized on an accelerated basis over a range of 6 to 15 years. The amortization period is monitored to determine if circumstances require such periods to be revised. The Company periodically reviews its intangible assets for changes in circumstances that may indicate the carrying amount of the asset is impaired. The Company tests its intangible assets for impairment on an annual basis or more frequently if conditions indicate that an impairment loss has more likely than not been incurred.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes are reviewed quarterly and reduced by a valuation allowance if, based upon the information available, it is more likely than not that some or all of the deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that all of the deferred tax assets will be realized. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income.

Tax Credit Investments

The Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under that method, the Company 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. As of December 31, 2019 and 2018, the Company's remaining investment in qualified affordable housing projects, net of amortization totaled $485,000 and $1.0 million, respectively.

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase (repurchase agreements) are agreements in which the Company transfers the underlying securities to a third-party custodian’s account that explicitly recognizes the Company’s interest in the securities. The agreements are accounted for as secured financing transactions provided the Company maintains effective control over the transferred securities and meets other criteria as specified in FASB ASC Topic 860, Transfers and Servicing (“ASC Topic 860”). The Company’s agreements are accounted for as secured financings; accordingly, the transaction proceeds are reflected as liabilities and the securities underlying the agreements continue to be carried in the Company’s securities portfolio.

Treasury Stock

The cost of treasury stock is shown on the Consolidated Statements of Condition as a separate component of shareholders’ equity, and is a reduction to total shareholders’ equity. Shares are released from treasury at fair value, identified on an average cost basis.

Trust and Investment Services

Assets held in fiduciary or agency capacities for customers are not included in the accompanying Consolidated Statements of Condition, since such items are not assets of the Company. Fees associated with providing trust and investment services are included in noninterest income.

Earnings Per Share

Basic earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year, exclusive of shares represented by the unvested portion of restricted stock and restricted stock units. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year plus the dilutive effect of the unvested portion of restricted stock and restricted stock units and stock issuable upon conversion of common stock equivalents (primarily stock options) or certain other contingencies. The Company currently uses authoritative accounting guidance under ASC Topic 260, Earnings Per Share, which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company issues stock-based compensation awards that included restricted stock awards that contain such rights.

Segment Reporting

The Company manages its operations through three reportable business segments in accordance with the standards set forth in FASB ASC Topic 280, “Segment Reporting”. The three segments are: (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 are managed separately from the Bank. Additional information on the segments is presented in Note 23- “Segment and Related Information.”

Comprehensive Income (Loss)

For the Company, comprehensive income (loss) represents net income plus the net change in unrealized gains or losses on securities available-for-sale for the period (net of taxes), and the actuarial gain or loss and amortization of unrealized amounts in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan (net of taxes), and is presented in the Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Changes in Shareholders’ Equity. Accumulated other comprehensive income (loss) represents the net unrealized gains or losses on securities available-for-sale (net of tax) and unrecognized net actuarial gain or loss, unrecognized prior service costs, and unrecognized net initial obligation (net of tax) in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan.

Pension and Other Employee Benefits

The Company maintains noncontributory defined-benefit and defined contribution plans, which cover substantially all employees of the Company. In addition, the Company also maintains supplemental employee retirement plans for certain executives and a post-retirement life and healthcare plan. These plans are discussed in detail in Note 11 “Employee Benefit Plans”. The Company incurs certain employment-related expenses associated with these plans. In order to measure the expense associated with these plans, various assumptions are made including the discount rate used to value certain liabilities, expected return on plan assets, anticipated mortality rates, and expected future healthcare costs. The assumptions are based on historical experience as well as current facts and circumstances. A third-party actuarial firm is used to assist management in measuring the expense and liability associated with the plans. The Company uses a December 31 measurement date for its plans. As of the measurement date, plan assets are determined based on fair value, generally representing observable market prices. The projected benefit obligation is primarily determined based on the present value of projected benefit distributions at an assumed discount rate.

The expenses associated with these plans are charged to current operating expenses. The Company recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in the Company’s consolidated statements of condition, and recognizes changes in the funded status of these plans in comprehensive income, net of applicable taxes, in the year in which the change occurred.

Fair Value Measurements

The Company accounts for the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”), for financial assets and financial liabilities. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. See Note 19 “Fair Value Measurements”.

In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among others.

Revenue Recognition

Tompkins adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) as of January 1, 2018 using the modified retrospective method for all contracts. Results for reporting periods beginning January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition. The Company recorded a net increase to beginning retained earnings of $1.8 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact on beginning retained earnings was primarily driven by the recognition of $1.8 million of contingency income related to our insurance business segment. Under ASU 2014-09, effective January 1, 2018, the Company adopted new policies related to revenue recognition. In general, for revenue not associated with financial instruments, guarantees and lease contracts, the Company applies the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when a performance obligation is satisfied. Tompkins' contracts with customers are generally short term in nature, typically due within one year or less or cancellable by the Company or the Company's customer upon a short notice period. Performance obligations for the Company's customer contracts are generally satisfied at a single point in time, typically when the transaction is complete, or over time. For performance obligations satisfied over time, Tompkins primarily uses the output method, directly measuring the value of the products/services transferred to the customer, to determine when performance obligations have been satisfied. The Company typically receives payment from customers and recognizes revenue concurrent with the satisfaction of the Company's performance obligations. In most cases, this occurs within a single financial reporting period. For payments received in advance of the satisfaction of performance obligations, revenue recognition is deferred until such time as the performance obligations have been satisfied. In cases where the Company has not received payment despite satisfaction of the Company's performance obligations, the Company

accrues an estimate of the amount due in the period the Company's performance obligations have been satisfied. For contracts with variable components, only amounts for which collection is probable are accrued. The Company generally acts in a principal capacity, on the Company's own behalf, in most of the Company's contracts with customers. In such transactions, Tompkins recognizes revenue and the related costs to provide the services on a gross basis in the Company's financial statements. In some cases, Tompkins acts in an agent capacity, deriving revenue through assisting other entities in transactions with the Company's customers. In such transactions, Tompkins recognizes revenue and the related costs to provide the services on a net basis in the Company's financial statements. These transactions recognized on a net basis primarily relate to insurance and brokerage commissions and fees derived from the Company's customers' use of various interchange and ATM/debit card networks. Refer to Note 14 "Revenue Recognition" for additional disclosures required by ASC 606.

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Securities Sold Under Agreements to Repurchase and Federal Funds Purchased (Tables)

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Schedule of securities sold under agreements to repurchase

Information regarding securities sold under agreements to repurchase and Federal funds purchased is detailed in the following tables for the years ended December 31:

Securities Sold Under Agreements to Repurchase	2019			2018			2017
(dollar amounts in thousands)
Total outstanding at December 31	$	60,346		$	81,842		$	75,177
Maximum month-end balance	71,875			81,842			80,326
Average balance during the year	59,742			63,472			64,888
Weighted average rate at December 31	0.22		%	0.22		%	0.23		%
Average interest rate paid during the year	0.24		%	0.24		%	0.36		%
Federal Funds Purchased
Average balance during the year	82			0			0
Weighted average rate at December 31	N/A			N/A			N/A
Average interest rate paid during the year	2.86		%	0.00		%	0.00		%

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Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

Leases

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and subsequent amendments, which replaced existing lease guidance in GAAP and requires lessees to recognize right-of-use (ROU) assets and lease liabilities on the Consolidated Statement of Condition for leases greater than twelve months and disclose key information about leasing arrangements. We adopted the standard on January 1, 2019 using the modified retrospective method and used the effective date as our date of initial application. Financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. There were no adjustments to “Retained earnings” on adoption. The new standard provides a number of optional practical expedients for transition. We elected the package of practical expedients under the transition guidance which permitted us not to reassess under the new standard our prior conclusions for lease identification and lease classification on expired or existing contracts and whether initial direct costs previously capitalized would qualify for capitalization under FASB Accounting Standards Codification (ASC) 842. We did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases.

The new standard also provides practical expedients and recognition exemptions for an entity’s ongoing accounting policy elections. We are committed under short and long-term lease agreements for branch and ATM locations. Some of these agreements contain variable payment provisions that depend on an index or rate, initially measured using the index or rate at the lease commencement date, and are therefore not included in our future minimum lease payments. These variable lease agreements include usage-based payments for utilities, taxes, janitorial services and building maintenance. Our long-term lease agreements do not contain any material restrictive covenants.

Our property leases have remaining terms of less than 1 to 23 years. Some of these leases may include options to extend the leases for up to 29 years, and some may include options to terminate the leases within 30 days. For each lease containing a renewal option, the Company considers the likelihood that the option will be exercised.  Only renewal options that are reasonably assured of being exercised are included in the calculation of the ROU asset and lease liability.

Operating lease amounts included in the Consolidated Statement of Condition are as follows:

(In thousands)		December 31, 2019
Assets	Classification
ROU assets	Other assets	$	33,501
Liabilities
Current lease liabilities	Other liabilities	3,256
Non-current lease liabilities	Other liabilities	32,666
Total lease liabilities		$	35,922

The components of operating lease expense, primarily included in “Net occupancy expense of premises,” were as follows:

(In thousands)	Year Ended December 31, 2019
Lease Costs
Operating lease cost	$	4,683
Variable lease cost	466
Short-term lease cost	1
Sublease income	(35		)
Total lease cost	$	5,115

At December 31, 2019, we did not have any material finance lease assets or liabilities.

Other information related to operating leases was as follows:

(In thousands)	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$4,680
Weighted-average remaining lease term on operating leases	13.85
Weighted-average discount rates on operating leases	3.53	%
ROU assets obtained in exchange for lease liabilities	$39,508

Future minimum lease payments under operating leases were as follows:

(In thousands)	Operating Leases
2020	$	4,454
2021	4,106
2022	4,059
2023	3,816
2024	3,684
2025 and subsequent years	26,605
Total lease payments	$	46,724
Less: Interest	(10,802		)
Present value of lease liabilities	$	35,922

At December 31, 2018, operating lease commitments under lessee arrangements were $4.8 million, $4.0 million, $3.6 million, $3.4 million, and $3.4 million for 2019 through 2023, respectively, and $13.0 million in aggregate for all years thereafter. These amounts include lease options to renew ranging from 5 to 20 years.

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Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2019

Stockholders' Equity Note [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The tax effect allocated to each component of other comprehensive income (loss) were as follows:

December 31, 2019	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized gain during the period	$	33,431		$	(8,190	)	$	25,241
Unrealized gains on HTM securities transferred to AFS securities	3,777			(925		)	2,852
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	(616		)	151			(465		)
Net unrealized gains	36,592			(8,964		)	27,628
Employee benefit plans:
Net retirement plan loss	(10,122		)	2,480			(7,642		)
Net actuarial gain due to curtailment	(399		)	97			(302		)
Net retirement plan prior service credit	(1,819		)	446			(1,373		)
Amortization of net retirement plan actuarial gain	1,677			(411		)	1,266
Amortization of net retirement plan prior service (cost) credit	32			(8		)	24
Employee benefit plans	(10,631		)	2,604			(8,027		)
Other comprehensive income	$	25,961		$	(6,360	)	$	19,601

December 31, 2018	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized loss during the period	$	(14,550	)	$	3,569		$	(10,981	)
Reclassification adjustment for net realized loss on sale included in available-for-sale securities	440			(108		)	332
Net unrealized losses	(14,110		)	3,461			(10,649		)
Employee benefit plans:
Net retirement plan loss	(3,437		)	843			(2,594		)
Amortization of net retirement plan actuarial gain	1,719			(421		)	1,298
Amortization of net retirement plan prior service (cost) credit	15			(4		)	11
Employee benefit plans	(1,703		)	418			(1,285		)
Other comprehensive loss	$	(15,813	)	$	3,879		$	(11,934	)

December 31, 2017	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale securities:
(In thousands)
Change in net unrealized loss during the period	$	(4,442	)	$	1,761		$	(2,681	)
Reclassification adjustment for net realized loss on sale included in available-for-sale securities	407			(163		)	244
Net unrealized losses	(4,035		)	1,598			(2,437		)
Employee benefit plans:
Net retirement plan loss	(4,549		)	1,115			(3,434		)
Net retirement plan prior service credit	964			(236		)	728
Amortization of net retirement plan actuarial loss	1,508			(603		)	905
Amortization of net retirement plan prior service (cost) credit	15			(6		)	9
Employee benefit plans	(2,062		)	270			(1,792		)
Other comprehensive loss	$	(6,097	)	$	1,868		$	(4,229	)

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

(In thousands)	Available-for-Sale Securities			Employee Benefit Plans			Accumulated Other Comprehensive Income (loss)
Balance at January 1, 2017	$	(7,915	)	$	(29,194	)	$	(37,109	)
Other comprehensive loss	(2,437		)	(1,792		)	(4,229		)
Reclassification due to adoption of ASU 2018-02	(2,653		)	(7,305		)	(9,958		)
Balance at December 31, 2017	$	(13,005	)	$	(38,291	)	$	(51,296	)
Balance at January 1, 2018	(13,005		)	(38,291		)	(51,296		)
Other comprehensive loss	(10,649		)	(1,285		)	(11,934		)
Adoption of ASU 2016-01	65			0			65
Balance at December 31, 2018	$	(23,589	)	$	(39,576	)	$	(63,165	)
Balance at January 1, 2019	(23,589		)	(39,576		)	(63,165		)
Other comprehensive income	27,628			(8,027		)	19,601
Balance at December 31, 2019	$	4,039		$	(47,603	)	$	(43,564	)

December 31, 2019
Details about Accumulated other Comprehensive Income Components (in thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss)1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	616		Net (loss) gain on securities transactions
	(151		)	Tax expense
	465			Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial gain	(1,677		)	Other operating expense
Net retirement plan prior service credit	(32		)	Other operating expense
	(1,709		)	Total before tax
	419			Tax benefit
	(1,290		)	Net of tax

December 31, 2018
Details about Accumulated other Comprehensive Income Components (in thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss)1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale securities:
Unrealized gains and losses on available-for-sale securities	$	(440	)	Net (loss) gain on securities transactions
	108			Tax benefit
	(332		)	Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial gain	(1,719		)	Other operating expense
Net retirement plan prior service credit	(15		)	Other operating expense
	(1,734		)	Total before tax
	425			Tax benefit
	(1,309		)	Net of tax

¹ Amounts in parentheses indicate debits in income statement.

² The accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (See Note 11 - “Employee Benefit Plans”).

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Stock Plans and Stock Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock Plans and Stock Based Compensation

Stock Plans and Stock Based Compensation

In 2019, the 2009 Tompkins Financial Corporation Equity Plan (“2009 Equity Plan”) expired and was replaced by the new Tompkins Financial Corporation 2019 Equity Plan (“2019 Equity Plan”). Under the 2019 Equity Plan, the Company may grant stock appreciation rights ("SARs"), shares of restricted stock and restricted units and performance share awards covering up to 1,275,000 shares of the Company's common stock to certain officers, employees, and nonemployee directors. Additionally, restricted stock awards and restricted units and performance share awards will reduce the shares available for grant under the 2019 Equity Plan by 4.25 shares for each share subject to an award, resulting in a total number of full-value share awards that may be issued under the 2019 Plan to 300,000. Stock options and SARs are granted at an exercise price equal to the stock’s fair value at the date of grant, may not have a term in excess of ten years, and have vesting periods that range between five and seven years from the grant date. Restricted stock awards have vesting periods that range between five and seven years, and restricted units vest in five years from grant date, and have grant date fair values that equal the closing price of the Company’s common stock on grant date. Prior to the adoption of the 2009 Equity Plan, the Company had similar stock option plans, which remain in effect solely with respect to unexercised options issued under these plans.

The Company granted 62,360 equity awards to its employees in 2019, consisting of 49,365 shares of restricted stock, 4,650 performance share awards and 8,345 restricted stock units. The Company granted 65,785 equity awards to its employees in 2018, consisting of 65,785 shares of restricted stock. The Company granted 59,333 equity awards to its employees in 2017, consisting of 59,333 shares of restricted stock.

The following table presents the activity related to stock options and SARs under all plans for the year ended December 31, 2019.  

	Number of Shares/Rights		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2019	225,375		$	48.02
Granted	0		0.00
Exercised	(64,865	)	43.41
Forfeited	(2,888	)	58.91
Outstanding at December 31, 2019	157,622		$	49.72	4.34	$	6,585,638
Exercisable at December 31, 2019	103,927		$	46.91	3.83	$	4,634,146

Total stock-based compensation expense for stock options and SARs was $235,000 in 2019, $304,000 in 2018, and $367,000 in 2017. As of December 31, 2019, unrecognized compensation cost related to unvested stock options and SARs totaled $375,000. The cost is expected to be recognized over a weighted average period of 2.2 years. Net cash proceeds, tax benefits and intrinsic value related to total stock options, SARs, and restricted stock exercised is as follows: 

(in thousands)	2019			2018			2017
Proceeds from stock option exercises	$	(992	)	$	(540	)	$	(641	)
Tax benefits related to stock option exercises	944			680			1,634
Intrinsic value of stock option exercises	2,460			1,447			3,139

The Company uses the Black-Scholes option-valuation model to determine the fair value of incentive stock options and SARs at the date of grant. The valuation model estimates fair value based on the assumptions listed in the table below. The risk-free rate is the interest rate available on zero-coupon U.S. Treasury instruments with a remaining term equal to the expected term of the share option at the time of grant. The expected dividend yield is based on the dividend trends and the market price of the Company’s stock price at grant. Volatility is largely based on historical volatility of the Company’s stock price. The expected term is based upon historical experience of employee exercises and terminations as the vesting term of the grants. The fair values of the grants are expensed over the vesting periods. There were no stock options or SARs granted in 2019, 2018 and 2017.

December 31, 2019
Options and SARs Outstanding			Options and SARs Exercisable
Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$35.71-37.50	31,680	1.62	$	37.00	31,680	$	37.00
$37.51-41.00	28,155	3.28	$	40.60	21,500	$	40.60
$41.01-50.00	47,195	4.86	$	49.22	28,226	$	49.22
$50.01-76.90	50,370	6.15	$	63.12	22,410	$	63.87
$76.91-86.18	222	6.89	$	86.18	111	$	86.18
	157,622	4.34	$	49.72	103,927	$	46.91

The following table presents activity related to restricted stock awards for the twelve months ended December 31, 2019. 

	Number of Shares		Weighted Average Fair Value
Unvested at January 1, 2019	255,239		$	66.52
Granted	62,360		89.21
Vested	(61,275	)	60.48
Forfeited	(8,357	)	70.62
Unvested at December 31, 2019	247,967		$	73.66

The Company granted 49,365 restricted stock awards, 8,345 restricted stock units and 4,650 performance share awards in 2019, each at an average grant date fair value of $89.21. The Company granted 65,785 restricted stock awards in 2018 at an average grant date fair value of $75.44. The Company granted 59,333 restricted stock awards in 2017 at an average grant date fair value of $79.51. The grant date fair values were the closing prices of the Company’s common stock on the grant dates. The Company recognized stock-based compensation related to restricted stock awards, restricted stock units, and performance share awards of $4.0 million in 2019, $3.2 million in 2018, and $2.6 million in 2017. Unrecognized compensation costs related to restricted stock and performance awards, and restricted stock units totaled $14.1 million at December 31, 2019 and will be recognized over 3.5 years and 4.9 years, respectively on a weighted average basis.

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Segment and Related Information - Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Interest income	$ 64,583	$ 65,775	$ 66,093	$ 64,927	$ 65,325	$ 63,984	$ 62,143	$ 60,140	$ 261,378	$ 251,592	$ 226,764
Interest expense	11,343	12,619	13,775	13,013	12,089	10,821	9,429	7,453	50,750	39,792	25,460
Net Interest Income	53,240	53,156	52,318	51,914	53,236	53,163	52,714	52,687	210,628	211,800	201,304
Provision for loan and lease losses	(1,000)	1,320	601	445	2,058	272	1,045	567	1,366	3,942	4,161
Noninterest income									75,433	77,449	69,204
Noninterest expense									181,834	181,067	171,105
Income Before Income Tax Expense	26,312	25,715	24,167	26,667	23,808	26,361	27,842	26,229	102,861	104,240	95,242
Income tax expense									21,016	21,805	42,620
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation									81,845	82,435	52,622
Less: Net income attributable to noncontrolling interests									127	127	128
Net Income Attributable to Tompkins Financial Corporation	21,080	$ 20,206	$ 19,392	$ 21,040	18,911	$ 20,902	$ 22,059	$ 20,436	81,718	82,308	52,494
Depreciation and amortization									10,044	9,554	8,269
Assets	6,725,623				6,758,436				6,725,623	6,758,436	6,648,290
Goodwill	92,447				92,283				92,447	92,283	92,291
Other intangibles, net	6,223				7,628				6,223	7,628	9,263
Net loans and leases	4,877,658				4,790,529				4,877,658	4,790,529	4,629,349
Deposits	5,212,921				4,888,959				5,212,921	4,888,959	4,837,807
Total equity	663,054				620,871				663,054	620,871	576,202	$ 549,405
Banking
Segment Reporting Information [Line Items]
Goodwill	64,369				64,369				64,369	64,369	64,369
Insurance
Segment Reporting Information [Line Items]
Goodwill	19,867				19,703				19,867	19,703	19,711
Wealth Management
Segment Reporting Information [Line Items]
Goodwill	8,211				8,211				8,211	8,211	8,211
Operating Segments | Banking
Segment Reporting Information [Line Items]
Interest income									261,378	251,592	226,764
Interest expense									50,753	39,795	25,462
Net Interest Income									210,625	211,797	201,302
Provision for loan and lease losses									1,366	3,942	4,161
Noninterest income									29,054	31,738	25,498
Noninterest expense									145,102	145,070	135,750
Income Before Income Tax Expense									93,211	94,523	86,889
Income tax expense									18,598	19,486	39,731
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation									74,613	75,037	47,158
Less: Net income attributable to noncontrolling interests									127	127	128
Net Income Attributable to Tompkins Financial Corporation									74,486	74,910	47,030
Depreciation and amortization									9,778	9,194	7,927
Assets	6,671,409				6,707,625				6,671,409	6,707,625	6,602,242
Goodwill	64,370				64,370				64,370	64,370	64,369
Other intangibles, net	3,215				4,224				3,215	4,224	5,170
Net loans and leases	4,877,658				4,790,529				4,877,658	4,790,529	4,629,349
Deposits	5,223,893				4,900,464				5,223,893	4,900,464	4,848,654
Total equity	608,901				568,988				608,901	568,988	530,386
Operating Segments | Insurance
Segment Reporting Information [Line Items]
Interest income									3	3	2
Interest expense									0	0	0
Net Interest Income									3	3	2
Provision for loan and lease losses									0	0	0
Noninterest income									31,501	29,760	29,106
Noninterest expense									25,908	25,427	24,503
Income Before Income Tax Expense									5,596	4,336	4,605
Income tax expense									1,426	1,092	1,705
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation									4,170	3,244	2,900
Less: Net income attributable to noncontrolling interests									0	0	0
Net Income Attributable to Tompkins Financial Corporation									4,170	3,244	2,900
Depreciation and amortization									225	230	285
Assets	41,841				42,088				41,841	42,088	39,599
Goodwill	19,866				19,702				19,866	19,702	19,711
Other intangibles, net	2,860				3,192				2,860	3,192	3,812
Net loans and leases	0				0				0	0	0
Deposits	0				0				0	0	0
Total equity	32,204				32,996				32,204	32,996	31,083
Operating Segments | Wealth Management
Segment Reporting Information [Line Items]
Interest income									0	0	0
Interest expense									0	0	0
Net Interest Income									0	0	0
Provision for loan and lease losses									0	0	0
Noninterest income									17,001	17,997	16,345
Noninterest expense									12,947	12,616	12,597
Income Before Income Tax Expense									4,054	5,381	3,748
Income tax expense									992	1,227	1,184
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation									3,062	4,154	2,564
Less: Net income attributable to noncontrolling interests									0	0	0
Net Income Attributable to Tompkins Financial Corporation									3,062	4,154	2,564
Depreciation and amortization									41	130	57
Assets	24,313				21,365				24,313	21,365	17,779
Goodwill	8,211				8,211				8,211	8,211	8,211
Other intangibles, net	148				212				148	212	281
Net loans and leases	0				0				0	0	0
Deposits	0				0				0	0	0
Total equity	21,949				18,887				21,949	18,887	14,733
Intercompany
Segment Reporting Information [Line Items]
Interest income									(3)	(3)	(2)
Interest expense									(3)	(3)	(2)
Net Interest Income									0	0	0
Provision for loan and lease losses									0	0	0
Noninterest income									(2,123)	(2,046)	(1,745)
Noninterest expense									(2,123)	(2,046)	(1,745)
Income Before Income Tax Expense									0	0	0
Income tax expense									0	0	0
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation									0	0	0
Less: Net income attributable to noncontrolling interests									0	0	0
Net Income Attributable to Tompkins Financial Corporation									0	0	0
Depreciation and amortization									0	0	0
Assets	(11,940)				(12,642)				(11,940)	(12,642)	(11,330)
Goodwill	0				0				0	0	0
Other intangibles, net	0				0				0	0	0
Net loans and leases	0				0				0	0	0
Deposits	(10,972)				(11,505)				(10,972)	(11,505)	(10,847)
Total equity	$ 0				$ 0				$ 0	$ 0	$ 0

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Trust Preferred Debentures (Tables)

12 Months Ended

Dec. 31, 2019

Trust Preferred Debentures

Schedule of information related to trusts

The following table provides information relating to the Trusts as of December 31, 2019:

Description	Issuance Date	Par Amount	Interest Rate	Maturity Date
Sleepy Hollow Capital Trust I	August 2003	$4.0 million	3-month LIBOR plus 3.05%	August 2033
Leesport Capital Trust II	September 2002	$10.0 million	3-month LIBOR plus 3.45%	September 2032
Madison Statutory Trust I	June 2003	$5.0 million	3-month LIBOR plus 3.10%	June 2033

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Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of noninterest income

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606, for the years ended December 31, 2019 and 2018.

	Year Ended
(In thousands)	12/31/2019			12/31/2018
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	28,252		$	27,272
Installment Billing		(35	)		6
Refund of Commissions		30			(29	)
Contract Liabilities/Deferred Revenue		(195	)		(181	)
Contingent Commissions		3,039			2,301
Subtotal Insurance Revenues		31,091			29,369
Trust and Asset Management		11,441			11,848
Mutual Fund & Investment Income		4,993			5,440
Subtotal Investment Service Income		16,434			17,288
Service Charges on Deposit Accounts		8,321			8,435
Card Services Income		10,526			9,693
Other		1,183			1,176
Noninterest Income (in-scope of ASC 606)		67,555			65,961
Noninterest Income (out-of-scope of ASC 606)1		7,878			11,488
Total Noninterest Income	$	75,433		$	77,449

¹ The year ended December 31, 2018 includes approximately $2.9 million related to gain on sale of fixed assets.

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Condensed Parent Company Only Financial Statements - Condensed Statements of Condition (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assets
Investment in subsidiaries, at equity	$ 1,500	$ 1,400
Total Assets	6,725,623	6,758,436	$ 6,648,290
Liabilities and Shareholders’ Equity
Trust preferred debentures issued to non-consolidated subsidiary	17,035	16,863
Other liabilities	114,167	73,826
Tompkins Financial Corporation Shareholders’ Equity	661,642	619,459
Total Liabilities and Equity	6,725,623	6,758,436
Tompkins (the Parent Company)
Assets
Cash	14,631	6,235
Investment in subsidiaries, at equity	664,775	625,193
Other	3,873	9,416
Total Assets	683,279	640,844
Liabilities and Shareholders’ Equity
Borrowings	4,000	4,000
Trust preferred debentures issued to non-consolidated subsidiary	17,035	16,863
Other liabilities	602	522
Tompkins Financial Corporation Shareholders’ Equity	661,642	619,459
Total Liabilities and Equity	$ 683,279	$ 640,844

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

Calculation of basic earnings per share (Basic EPS) and diluted earnings per share (Diluted EPS) is shown below.

	Year ended December 31,
(In thousands, except share and per share data)	2019			2018			2017
Basic
Net income available to common shareholders	$	81,718		$	82,308		$	52,494
Less: income attributable to unvested stock-based compensation awards	(1,306		)	(1,315		)	(818		)
Net earnings allocated to common shareholders	80,412			80,993			51,676
Weighted average shares outstanding, including unvested stock-based compensation awards	15,149,535			15,283,914			15,193,438
Less: average unvested stock-based compensation awards	(242,478		)	(244,685		)	(243,006		)
Weighted average shares outstanding - Basic	14,907,057			15,039,229			14,950,432
Diluted
Net earnings allocated to common shareholders	80,412			80,993			51,676
Weighted average shares outstanding - Basic	14,907,057			15,039,229			14,950,432
Plus: incremental shares from assumed conversion of stock-based compensation awards	66,894			93,028			122,823
Weighted average shares outstanding - Diluted	14,973,951			15,132,257			15,073,255
Basic EPS	$	5.39		$	5.39		$	3.46
Diluted EPS	$	5.37		$	5.35		$	3.43

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Employee Benefit Plans - Major Categories of Assets in Pension Plan (Details) - DB Pension Plans - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	$ 82,352	$ 72,474	$ 80,154
(Level 1)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	82,352	72,474
(Level 2)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	0	0
(Level 3)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	0	0
Cash and cash equivalents
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	1,367	1,018
Cash and cash equivalents | (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	1,367	1,018
Cash and cash equivalents | (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	0	0
Cash and cash equivalents | (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	0	0
Common stocks
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	26,574	20,648
Common stocks | (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	26,574	20,648
Common stocks | (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	0	0
Common stocks | (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	0	0
Mutual funds
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	54,411	50,808
Mutual funds | (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	54,411	50,808
Mutual funds | (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	0	0
Mutual funds | (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Total Fair Value of Plan Assets	$ 0	$ 0

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Stock Plans and Stock Based Compensation - Options and SARs Outstanding and Exercisable (Details)	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number Outstanding (in shares) | shares	157,622
Weighted Average Remaining Contractual Life	4 years 4 months 2 days
Weighted Average Exercise Price (in dollars per share)	$ 49.72
Number Exercisable (in shares) | shares	103,927
Weighted Average Exercise Price (in dollars per share)	$ 46.91
$35.71-37.50
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	35.71
Range of exercise prices, upper range (in dollars per share)	$ 37.50
Number Outstanding (in shares) | shares	31,680
Weighted Average Remaining Contractual Life	1 year 7 months 13 days
Weighted Average Exercise Price (in dollars per share)	$ 37.00
Number Exercisable (in shares) | shares	31,680
Weighted Average Exercise Price (in dollars per share)	$ 37.00
$37.51-41.00
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	37.51
Range of exercise prices, upper range (in dollars per share)	$ 41.0
Number Outstanding (in shares) | shares	28,155
Weighted Average Remaining Contractual Life	3 years 3 months 10 days
Weighted Average Exercise Price (in dollars per share)	$ 40.60
Number Exercisable (in shares) | shares	21,500
Weighted Average Exercise Price (in dollars per share)	$ 40.60
$41.01-50.00
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	41.01
Range of exercise prices, upper range (in dollars per share)	$ 50.00
Number Outstanding (in shares) | shares	47,195
Weighted Average Remaining Contractual Life	4 years 10 months 9 days
Weighted Average Exercise Price (in dollars per share)	$ 49.22
Number Exercisable (in shares) | shares	28,226
Weighted Average Exercise Price (in dollars per share)	$ 49.22
$50.01-76.90
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	50.01
Range of exercise prices, upper range (in dollars per share)	$ 76.90
Number Outstanding (in shares) | shares	50,370
Weighted Average Remaining Contractual Life	6 years 1 month 24 days
Weighted Average Exercise Price (in dollars per share)	$ 63.12
Number Exercisable (in shares) | shares	22,410
Weighted Average Exercise Price (in dollars per share)	$ 63.87
$76.91-86.18
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	76.91
Range of exercise prices, upper range (in dollars per share)	$ 86.18
Number Outstanding (in shares) | shares	222
Weighted Average Remaining Contractual Life	6 years 10 months 20 days
Weighted Average Exercise Price (in dollars per share)	$ 86.18
Number Exercisable (in shares) | shares	111
Weighted Average Exercise Price (in dollars per share)	$ 86.18

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Loans and Leases - Loans to Related Parties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Loans and Leases Receivable, Related Parties [Roll Forward]
Balance at beginning of year	$ 39,595	$ 14,503
New Directors/Executive Officers	0	467
New loans and advancements	19,393	30,570
Loan payments	(10,599)	(5,945)
Balance at end of year	$ 48,389	$ 39,595

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Securities - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Amortized Cost
Due in one year or less		$ 8,850
Due after one year through five years		86,520
Due after five years through ten years		45,209
Due after ten years		0
Total held-to-maturity debt securities	$ 0	140,579
Fair Value
Due in one year or less		8,832
Due after one year through five years		85,645
Due after five years through ten years		44,900
Due after ten years		0
Total held-to-maturity debt securities	$ 0	$ 139,377

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Employee Benefit Plans - Pre-Tax Amounts Recognized as Component of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
DB Pension Plans
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Net actuarial loss (gain)	$ 48,045	$ 46,603	$ 39,960
Prior service cost (credit)	(9)	(20)	(30)
Total	48,036	46,583	39,930
Actuarial loss	1,359
Prior service cost	(10)
Total	1,349
Life and Healthcare Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Net actuarial loss (gain)	1,586	368	1,767
Prior service cost (credit)	(348)	(606)	(668)
Total	1,238	(238)	1,099
Actuarial loss	103
Prior service cost	(61)
Total	42
SERP Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Net actuarial loss (gain)	11,345	5,560	9,086
Prior service cost (credit)	2,433	514	602
Total	13,778	$ 6,074	$ 9,688
Actuarial loss	796
Prior service cost	285
Total	$ 1,081

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Revenue Recognition - Schedule of Disaggregation of Noninterest Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 67,555	$ 65,961
Noninterest Income (out-of-scope of ASC 606)	7,878	11,488
Total Noninterest Income	75,433	77,449	$ 69,204
Noninterest income related to gain on sale of fixed assets		2,900
Commissions and Fees
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	28,252	27,272
Installment Billing
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(35)	6
Refund of Commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	30	(29)
Contract Liabilities/Deferred Revenue
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(195)	(181)
Contingent Commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	3,039	2,301
Subtotal Insurance Revenues
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	31,091	29,369
Trust and Asset Management
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	11,441	11,848
Mutual Fund & Investment Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	4,993	5,440
Subtotal Investment Service Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	16,434	17,288
Service Charges on Deposit Accounts
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	8,321	8,435
Card Services Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	10,526	9,693
Other
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 1,183	$ 1,176

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Income Taxes - Narrative (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Deferred tax assets (liabilities) related to net unrealized holdings losses/(gains) in the available-for-sale securities portfolio	$ (1,300,000)	$ 7,500,000
Deferred tax assets related to employee benefit plans	15,500,000	12,900,000
Valuation allowance	0	0
Unrecognized tax benefits	$ 0	$ 0

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Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

Commitments and Contingent Liabilities

The Company, in the normal course of business, is a party to financial instruments with off-balance-sheet risk to meet the financial needs of its customers. These financial instruments include loan commitments, standby letters of credit, and unused portions of lines of credit. The contract, or notional amount, of these instruments represents the Company’s involvement in particular classes of financial instruments. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the Consolidated Statements of Condition.

The Company’s maximum potential obligations to extend credit for loan commitments (unfunded loans, unused lines of credit, and standby letters of credit) outstanding on December 31 were as follows:

(In thousands)	2019		2018
Loan commitments	$	149,397	$	156,111
Standby letters of credit	30,460		21,685
Undisbursed portion of lines of credit	800,316		819,252
Total	$	980,173	$	997,048

Commitments to extend credit (including lines of credit) are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments to guarantee the performance of a customer to a third party. 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 December 31, 2019, the Company’s maximum potential obligation under standby letters of credit was $30.5 million. Management uses the same credit policies in making commitments to extend credit and standby letters of credit as are used for on-balance-sheet lending decisions. Based upon management’s evaluation of the counterparty, the Company may require collateral to support commitments to extend credit and standby letters of credit. The credit risk amounts are equal to the contractual amounts, assuming the amounts are fully advanced and collateral or other security is of no value. The Company does not anticipate losses as a result of these transactions. These commitments also have off-balance-sheet interest-rate risk, in that the interest rate at which these commitments were made may not be at market rates on the date the commitments are fulfilled. Since some commitments and standby letters of credit are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements.

At December 31, 2019, the Company had rate lock agreements associated with mortgage loans to be sold in the secondary market (certain of which relate to loan applications for which no formal commitment has been made) amounting to approximately $1.8 million. In order to limit the interest rate risk associated with rate lock agreements, as well as the interest rate risk associated with mortgages held for sale, if any, the Company enters into agreements to sell loans in the secondary market to unrelated investors on a loan-by-loan basis. At December 31, 2019, the Company had approximately $807,000 of commitments to sell mortgages to unrelated investors on a loan-by-loan basis.

In the normal course of business, the Company is involved in various legal proceedings, investigations, and administrative proceedings. Private, civil litigations may range from individual actions involving a single plaintiff to putative class action lawsuits with potentially thousands of class members. Investigations may involve both formal and informal proceedings, by both government agencies and self-regulatory bodies. Based on information presently known to us, we do not believe there is any matter to which we are a party, or involving any of our properties that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on our financial statements.

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Other Noninterest Income and Expense

12 Months Ended

Dec. 31, 2019

Other Income and Expenses [Abstract]

Other Noninterest Income and Expense

Other Noninterest Income and Expense

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

	Year ended December 31,
(In thousands)	2019		2018		2017
NONINTEREST INCOME
Other service charges	$	3,166	$	3,263	$	2,982
Increase in cash surrender value of corporate owned life insurance	2,164		1,818		2,196
Net gain on sale of loans	227		458		50
Gain on sale of fixed assets	98		2,954		30
Other miscellaneous income	2,761		4,637		2,373
Total other noninterest income	$	8,416	$	13,130	$	7,631
NONINTEREST EXPENSES
Marketing expense	$	4,856	$	5,495	$	5,013
Professional fees	8,942		8,564		5,725
Technology expense	10,666		10,099		8,332
Cardholder expense	3,238		3,277		3,391
FDIC insurance	773		2,618		2,527
Other miscellaneous expenses	17,774		20,868		20,537
Total other noninterest expenses	$	46,249	$	50,921	$	45,525

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Regulations and Supervision

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Regulations and Supervision

Regulations and Supervision

Capital Requirements:

The Company and its subsidiary banks are subject to various regulatory capital requirements administered by Federal bank regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on the Company’s business, results of operation and financial condition. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (PCA), banks must meet specific guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classifications of the Company and its subsidiary banks are also subject to qualitative judgments by regulators concerning components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of common equity Tier I capital, total capital and Tier 1 capital to risk-weighted assets (as defined in the regulation), and of Tier 1 capital to average assets (as defined in the regulation). Management believes that the Company and its subsidiary banks meet all capital adequacy requirements to which they are subject.

At year end 2017, the Company early adopted ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". ASU 2018-02 permits a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate associated with the enactment of the Tax Cuts and Jobs Act in December 2017. The amount of the reclassification was the difference between the historical corporate income tax rate of 35 percent and the newly enacted 21 percent corporate income tax rate. The adoption resulted in the reclassification from accumulated other comprehensive income (loss) to retained earnings totaling $10.0 million, reflected in the Consolidated Statements of Changes in Shareholders' Equity.

As of December 31, 2019, the most recent notifications from Federal bank regulatory agencies categorized Tompkins Trust Company, The Bank of Castile, Mahopac Bank, and VIST Bank as “well capitalized” under the regulatory framework for PCA. To be categorized as well capitalized, the Company and its subsidiary banks must maintain total risk-based, Tier 1 risk-based, common equity Tier 1 capital and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the capital category of the Company or its subsidiary banks.

The following table presents actual and required capital ratios as of December 31, 2019 and December 31, 2018 for Tompkins and its four banking subsidiaries. The minimum required capital amounts presented include the minimum required capital levels as of January 1, 2020. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

Actual capital amounts and ratios of the Company and its subsidiary banks are as follows:

	Actual	Minimum Capital Required- Basel III Fully-Phased-In	Required to be Considered Well Capitalized
(dollar amounts in thousands)	Amount/Ratio	Amount/Ratio	Amount/Ratio
December 31, 2019
Total Capital (to risk-weighted assets)
The Company (consolidated)	$666,106 /13.5%	$517,039 />10.5%	$492,418 />10.0%
Trust Company	$197,660/14.1%	$147,405 />10.5%	$140,386 />10.0%
Castile	$145,669/12.2%	$125,493 />10.5%	$119,517 />10.0%
Mahopac	$128,238/13.0%	$103,800 />10.5%	$98,857 />10.0%
VIST	$161,559/12.2%	$139,235 />10.5%	$132,605 />10.0%
Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$607,290/12.3%	$344,692 />7.0%	$320,072 />6.5%
Trust Company	$185,499/13.2%	$98,270 />7.0%	$91,251 />6.5%
Castile	$136,342/11.4%	$83,662 />7.0%	$77,686 />6.5%
Mahopac	$116,953/11.8%	$69,200 />7.0%	$64,257 />6.5%
VIST	$152,550/11.5%	$92,823 />7.0%	$86,193 />6.5%
Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$624,325/12.7%	$418,555 />8.5%	$393,934 />8.0%
Trust Company	$185,499/13.2%	$119,328 />8.5%	$112,309 />8.0%
Castile	$136,342/11.4%	$101,589 />8.5%	$95,614 />8.0%
Mahopac	$116,953/11.8%	$84,029 />8.5%	$79,086 />8.0%
VIST	$152,550/11.5%	$112,714 />8.5%	$106,084 />8.0%
Tier 1 Capital (to average assets)
The Company (consolidated)	$624,325/9.6%	$259,903 />4.0%	$324,879 />5.0%
Trust Company	$185,499/9.2%	$81,001 />4.0%	$101,252 />5.0%
Castile	$136,342/9.2%	$59,239 />4.0%	$74,049 />5.0%
Mahopac	$116,953/8.9%	$52,469 />4.0%	$65,586 />5.0%
VIST	$152,550/8.7%	$70,228 />4.0%	$87,785 />5.0%
December 31, 2018
Total Capital (to risk-weighted assets)
The Company (consolidated)	$645,891 /13.1%	$517,500 />10.5%	$492,857 />10.0%
Trust Company	$191,872/13.9%	$144,822 />10.5%	$137,926 />10.0%
Castile	$138,816/11.7%	$124,738 />10.5%	$118,798 />10.0%
Mahopac	$126,342/12.7%	$104,146 />10.5%	$99,186 />10.0%
VIST	$158,557/11.7%	$142,048 />10.5%	$135,284 />10.0%
Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$583,458/11.8%	$345,000 />7.0%	$320,357 />6.5%
Trust Company	$180,077/13.1%	$96,548 />7.0%	$89,652 />6.5%
Castile	$129,482/10.9%	$83,159 />7.0%	$77,219 />6.5%
Mahopac	$114,327/11.5%	$69,431 />7.0%	$64,471 />6.5%
VIST	$146,131/10.8%	$94,699 />7.0%	$87,934 />6.5%
Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$600,321/12.2%	$418,929 />8.5%	$394,286 />8.0%
Trust Company	$180,077/13.1%	$117,237 />8.5%	$110,341 />8.0%
Castile	$129,482/10.9%	$100,978 />8.5%	$95,038 />8.0%
Mahopac	$114,327/11.5%	$84,309 />8.5%	$79,349 />8.0%
VIST	$146,131/10.8%	$114,991 />8.5%	$108,227 />8.0%
Tier 1 Capital (to average assets)
The Company (consolidated)	$600,321/9.1%	$265,465 />4.0%	$331,832 />5.0%
Trust Company	$180,077/8.5%	$84,592 />4.0%	$105,740 />5.0%
Castile	$129,482/8.6%	$60,368 />4.0%	$75,460 />5.0%
Mahopac	$114,327/8.4%	$54,219 />4.0%	$67,773 />5.0%
VIST	$146,131/8.8%	$66,282 />4.0%	$82,853 />5.0%

XML

Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of maximum potential obligations to extend credit for loan commitments

The Company’s maximum potential obligations to extend credit for loan commitments (unfunded loans, unused lines of credit, and standby letters of credit) outstanding on December 31 were as follows:

(In thousands)	2019		2018
Loan commitments	$	149,397	$	156,111
Standby letters of credit	30,460		21,685
Undisbursed portion of lines of credit	800,316		819,252
Total	$	980,173	$	997,048

XML

Segment and Related Information - Narrative (Details) - 12 months ended Dec. 31, 2019	segment	banking_office	subsidiary_bank	office
Segment Reporting Information [Line Items]
Number of reportable business segments | segment	3
Number of subsidiary banks (banking office)		4	4
Ithaca, NY
Segment Reporting Information [Line Items]
Number of banking offices		14
Genesee Valley Region
Segment Reporting Information [Line Items]
Number of banking offices		16
Counties North of New York City
Segment Reporting Information [Line Items]
Number of banking offices		14
Southeastern Pennsylvania
Segment Reporting Information [Line Items]
Number of banking offices		20
Western New York
Segment Reporting Information [Line Items]
Nature of operations, number of offices | office				5

XML

Other Borrowings (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Schedule of borrowings

The following table summarized the Company’s borrowings as of December 31:

(In thousands)	2019		2018
Overnight FHLB advances	$	239,100	$	647,075
Term FHLB advances	415,000		425,000
Other	4,000		4,000
Total other borrowings	$	658,100	$	1,076,075

XML

Other Noninterest Income and Expense (Tables)

12 Months Ended

Dec. 31, 2019

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%, and other significant items, of the aggregate of total other noninterest income and total other noninterest expenses for any of the years presented below are stated separately. 

	Year ended December 31,
(In thousands)	2019		2018		2017
NONINTEREST INCOME
Other service charges	$	3,166	$	3,263	$	2,982
Increase in cash surrender value of corporate owned life insurance	2,164		1,818		2,196
Net gain on sale of loans	227		458		50
Gain on sale of fixed assets	98		2,954		30
Other miscellaneous income	2,761		4,637		2,373
Total other noninterest income	$	8,416	$	13,130	$	7,631
NONINTEREST EXPENSES
Marketing expense	$	4,856	$	5,495	$	5,013
Professional fees	8,942		8,564		5,725
Technology expense	10,666		10,099		8,332
Cardholder expense	3,238		3,277		3,391
FDIC insurance	773		2,618		2,527
Other miscellaneous expenses	17,774		20,868		20,537
Total other noninterest expenses	$	46,249	$	50,921	$	45,525

XML

Regulations and Supervision (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) banking_office	Dec. 31, 2019 USD ($) subsidiary_bank	Dec. 31, 2018 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Reclassification from accumulated other comprehensive income (loss) to retained earnings	$ 0			$ 0
Number of subsidiary banks (banking office)		4	4
Castile
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual Amount	$ 145,669	$ 145,669	$ 145,669	$ 138,816
Total Capital (to risk-weighted assets), Actual Ratio	12.20%	12.20%	12.20%	11.70%
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 125,493	$ 125,493	$ 125,493	$ 124,738
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	10.50%	10.50%	10.50%	10.50%
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 119,517	$ 119,517	$ 119,517	$ 118,798
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	10.00%	10.00%	10.00%	10.00%
Common EquityTier 1 Capital (to risk-weighted assets)
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 136,342	$ 136,342	$ 136,342	$ 129,482
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Ratio	11.40%	11.40%	11.40%	10.90%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 83,662	$ 83,662	$ 83,662	$ 83,159
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	7.00%	7.00%	7.00%	7.00%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 77,686	$ 77,686	$ 77,686	$ 77,219
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	6.50%	6.50%	6.50%	6.50%
Tier 1 Capital (to risk-weighted assets)
Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 136,342	$ 136,342	$ 136,342	$ 129,482
Tier 1 Capital (to risk-weighted assets), Actual Ratio	11.40%	11.40%	11.40%	10.90%
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 101,589	$ 101,589	$ 101,589	$ 100,978
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	8.50%	8.50%	8.50%	8.50%
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 95,614	$ 95,614	$ 95,614	$ 95,038
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	8.00%	8.00%	8.00%	8.00%
Tier 1 Capital (to average assets)
Tier 1 Capital (to average assets), Actual Amount	$ 136,342	$ 136,342	$ 136,342	$ 129,482
Tier 1 Capital (to average assets), Actual Ratio	9.20%	9.20%	9.20%	8.60%
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Amount	$ 59,239	$ 59,239	$ 59,239	$ 60,368
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Ratio	4.00%	4.00%	4.00%	4.00%
Tier 1 Capital (to average assets), Required to be Well Capitalized, Amount	$ 74,049	$ 74,049	$ 74,049	$ 75,460
Tier 1 Capital (to average assets), Required to be Well Capitalized, Ratio	5.00%	5.00%	5.00%	5.00%
Mahopac
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual Amount	$ 128,238	$ 128,238	$ 128,238	$ 126,342
Total Capital (to risk-weighted assets), Actual Ratio	13.00%	13.00%	13.00%	12.70%
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 103,800	$ 103,800	$ 103,800	$ 104,146
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	10.50%	10.50%	10.50%	10.50%
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 98,857	$ 98,857	$ 98,857	$ 99,186
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	10.00%	10.00%	10.00%	10.00%
Common EquityTier 1 Capital (to risk-weighted assets)
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 116,953	$ 116,953	$ 116,953	$ 114,327
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Ratio	11.80%	11.80%	11.80%	11.50%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 69,200	$ 69,200	$ 69,200	$ 69,431
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	7.00%	7.00%	7.00%	7.00%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 64,257	$ 64,257	$ 64,257	$ 64,471
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	6.50%	6.50%	6.50%	6.50%
Tier 1 Capital (to risk-weighted assets)
Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 116,953	$ 116,953	$ 116,953	$ 114,327
Tier 1 Capital (to risk-weighted assets), Actual Ratio	11.80%	11.80%	11.80%	11.50%
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 84,029	$ 84,029	$ 84,029	$ 84,309
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	8.50%	8.50%	8.50%	8.50%
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 79,086	$ 79,086	$ 79,086	$ 79,349
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	8.00%	8.00%	8.00%	8.00%
Tier 1 Capital (to average assets)
Tier 1 Capital (to average assets), Actual Amount	$ 116,953	$ 116,953	$ 116,953	$ 114,327
Tier 1 Capital (to average assets), Actual Ratio	8.90%	8.90%	8.90%	8.40%
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Amount	$ 52,469	$ 52,469	$ 52,469	$ 54,219
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Ratio	4.00%	4.00%	4.00%	4.00%
Tier 1 Capital (to average assets), Required to be Well Capitalized, Amount	$ 65,586	$ 65,586	$ 65,586	$ 67,773
Tier 1 Capital (to average assets), Required to be Well Capitalized, Ratio	5.00%	5.00%	5.00%	5.00%
VIST
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual Amount	$ 161,559	$ 161,559	$ 161,559	$ 158,557
Total Capital (to risk-weighted assets), Actual Ratio	12.20%	12.20%	12.20%	11.70%
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 139,235	$ 139,235	$ 139,235	$ 142,048
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	10.50%	10.50%	10.50%	10.50%
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 132,605	$ 132,605	$ 132,605	$ 135,284
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	10.00%	10.00%	10.00%	10.00%
Common EquityTier 1 Capital (to risk-weighted assets)
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 152,550	$ 152,550	$ 152,550	$ 146,131
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Ratio	11.50%	11.50%	11.50%	10.80%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 92,823	$ 92,823	$ 92,823	$ 94,699
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	7.00%	7.00%	7.00%	7.00%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 86,193	$ 86,193	$ 86,193	$ 87,934
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	6.50%	6.50%	6.50%	6.50%
Tier 1 Capital (to risk-weighted assets)
Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 152,550	$ 152,550	$ 152,550	$ 146,131
Tier 1 Capital (to risk-weighted assets), Actual Ratio	11.50%	11.50%	11.50%	10.80%
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 112,714	$ 112,714	$ 112,714	$ 114,991
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	8.50%	8.50%	8.50%	8.50%
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 106,084	$ 106,084	$ 106,084	$ 108,227
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	8.00%	8.00%	8.00%	8.00%
Tier 1 Capital (to average assets)
Tier 1 Capital (to average assets), Actual Amount	$ 152,550	$ 152,550	$ 152,550	$ 146,131
Tier 1 Capital (to average assets), Actual Ratio	8.70%	8.70%	8.70%	8.80%
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Amount	$ 70,228	$ 70,228	$ 70,228	$ 66,282
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Ratio	4.00%	4.00%	4.00%	4.00%
Tier 1 Capital (to average assets), Required to be Well Capitalized, Amount	$ 87,785	$ 87,785	$ 87,785	$ 82,853
Tier 1 Capital (to average assets), Required to be Well Capitalized, Ratio	5.00%	5.00%	5.00%	5.00%
The Company (consolidated)
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual Amount	$ 666,106	$ 666,106	$ 666,106	$ 645,891
Total Capital (to risk-weighted assets), Actual Ratio	13.50%	13.50%	13.50%	13.10%
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 517,039	$ 517,039	$ 517,039	$ 517,500
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	10.50%	10.50%	10.50%	10.50%
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 492,418	$ 492,418	$ 492,418	$ 492,857
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	10.00%	10.00%	10.00%	10.00%
Common EquityTier 1 Capital (to risk-weighted assets)
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 607,290	$ 607,290	$ 607,290	$ 583,458
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Ratio	12.30%	12.30%	12.30%	11.80%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 344,692	$ 344,692	$ 344,692	$ 345,000
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	7.00%	7.00%	7.00%	7.00%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 320,072	$ 320,072	$ 320,072	$ 320,357
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	6.50%	6.50%	6.50%	6.50%
Tier 1 Capital (to risk-weighted assets)
Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 624,325	$ 624,325	$ 624,325	$ 600,321
Tier 1 Capital (to risk-weighted assets), Actual Ratio	12.70%	12.70%	12.70%	12.20%
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 418,555	$ 418,555	$ 418,555	$ 418,929
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	8.50%	8.50%	8.50%	8.50%
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 393,934	$ 393,934	$ 393,934	$ 394,286
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	8.00%	8.00%	8.00%	8.00%
Tier 1 Capital (to average assets)
Tier 1 Capital (to average assets), Actual Amount	$ 624,325	$ 624,325	$ 624,325	$ 600,321
Tier 1 Capital (to average assets), Actual Ratio	9.60%	9.60%	9.60%	9.10%
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Amount	$ 259,903	$ 259,903	$ 259,903	$ 265,465
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Ratio	4.00%	4.00%	4.00%	4.00%
Tier 1 Capital (to average assets), Required to be Well Capitalized, Amount	$ 324,879	$ 324,879	$ 324,879	$ 331,832
Tier 1 Capital (to average assets), Required to be Well Capitalized, Ratio	5.00%	5.00%	5.00%	5.00%
Trust Company
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual Amount	$ 197,660	$ 197,660	$ 197,660	$ 191,872
Total Capital (to risk-weighted assets), Actual Ratio	14.10%	14.10%	14.10%	13.90%
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 147,405	$ 147,405	$ 147,405	$ 144,822
Total Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	10.50%	10.50%	10.50%	10.50%
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 140,386	$ 140,386	$ 140,386	$ 137,926
Total Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	10.00%	10.00%	10.00%	10.00%
Common EquityTier 1 Capital (to risk-weighted assets)
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 185,499	$ 185,499	$ 185,499	$ 180,077
Common Equity Tier 1 Capital (to risk-weighted assets), Actual Ratio	13.20%	13.20%	13.20%	13.10%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 98,270	$ 98,270	$ 98,270	$ 96,548
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	7.00%	7.00%	7.00%	7.00%
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 91,251	$ 91,251	$ 91,251	$ 89,652
Common Equity Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	6.50%	6.50%	6.50%	6.50%
Tier 1 Capital (to risk-weighted assets)
Tier 1 Capital (to risk-weighted assets), Actual Amount	$ 185,499	$ 185,499	$ 185,499	$ 180,077
Tier 1 Capital (to risk-weighted assets), Actual Ratio	13.20%	13.20%	13.20%	13.10%
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Amount	$ 119,328	$ 119,328	$ 119,328	$ 117,237
Tier 1 Capital (to risk-weighted assets), Required to be Adequately Capitalized, Ratio	8.50%	8.50%	8.50%	8.50%
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Amount	$ 112,309	$ 112,309	$ 112,309	$ 110,341
Tier 1 Capital (to risk-weighted assets), Required to be Well Capitalized, Ratio	8.00%	8.00%	8.00%	8.00%
Tier 1 Capital (to average assets)
Tier 1 Capital (to average assets), Actual Amount	$ 185,499	$ 185,499	$ 185,499	$ 180,077
Tier 1 Capital (to average assets), Actual Ratio	9.20%	9.20%	9.20%	8.50%
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Amount	$ 81,001	$ 81,001	$ 81,001	$ 84,592
Tier 1 Capital (to average assets), Required to be Adequately Capitalized, Ratio	4.00%	4.00%	4.00%	4.00%
Tier 1 Capital (to average assets), Required to be Well Capitalized, Amount	$ 101,252	$ 101,252	$ 101,252	$ 105,740
Tier 1 Capital (to average assets), Required to be Well Capitalized, Ratio	5.00%	5.00%	5.00%	5.00%
Retained Earnings
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Reclassification from accumulated other comprehensive income (loss) to retained earnings	$ 10,000

XML

Other Comprehensive Income (Loss) - Tax Effect Allocated to Each Component of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Before-Tax Amount
Other Comprehensive Income, Net unrealized losses	$ 25,961	$ (15,813)	$ (6,097)
Tax (Expense) Benefit
Other Comprehensive Income, Net unrealized losses	(6,360)	3,879	1,868
Net of Tax
Unrealized gains on HTM securities transferred to AFS securities	2,852	0	0
Other comprehensive income (loss)	19,601	(11,934)	(4,229)
Available-for-sale securities
Before-Tax Amount
Other comprehensive gain (loss), before reclassifications	33,431	(14,550)	(4,442)
Unrealized gains on HTM securities transferred to AFS securities	3,777
Reclassification adjustment	(616)	440	407
Other Comprehensive Income, Net unrealized losses	36,592	(14,110)	(4,035)
Tax (Expense) Benefit
Other comprehensive gain (loss), before reclassifications	(8,190)	3,569	1,761
Unrealized gains on HTM securities transferred to AFS securities	(925)
Reclassification adjustment	151	(108)	(163)
Other Comprehensive Income, Net unrealized losses	(8,964)	3,461	1,598
Net of Tax
Other comprehensive gain (loss), before reclassifications	25,241	(10,981)	(2,681)
Unrealized gains on HTM securities transferred to AFS securities	2,852
Reclassification adjustment	(465)	332	244
Other comprehensive income (loss)	27,628	(10,649)	(2,437)
Net retirement plan actuarial (loss) gain
Before-Tax Amount
Other comprehensive gain (loss), before reclassifications	(10,122)	(3,437)	(4,549)
Reclassification adjustment	1,677	1,719	1,508
Tax (Expense) Benefit
Other comprehensive gain (loss), before reclassifications	2,480	843	1,115
Reclassification adjustment	(411)	(421)	(603)
Net of Tax
Other comprehensive gain (loss), before reclassifications	(7,642)	(2,594)	(3,434)
Reclassification adjustment	1,266	1,298	905
Gain due to curtailment
Before-Tax Amount
Other comprehensive gain (loss), before reclassifications	(399)
Tax (Expense) Benefit
Other comprehensive gain (loss), before reclassifications	97
Net of Tax
Other comprehensive gain (loss), before reclassifications	(302)
Net retirement plan prior service credit
Before-Tax Amount
Other comprehensive gain (loss), before reclassifications	(1,819)		964
Reclassification adjustment	32	15	15
Tax (Expense) Benefit
Other comprehensive gain (loss), before reclassifications	446		(236)
Reclassification adjustment	(8)	(4)	(6)
Net of Tax
Other comprehensive gain (loss), before reclassifications	(1,373)		728
Reclassification adjustment	24	11	9
Employee benefit plans
Before-Tax Amount
Other Comprehensive Income, Net unrealized losses	(10,631)	(1,703)	(2,062)
Tax (Expense) Benefit
Other Comprehensive Income, Net unrealized losses	2,604	418	270
Net of Tax
Other comprehensive income (loss)	$ (8,027)	$ (1,285)	$ (1,792)

XML

Label	Element	Value
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 9,958,000
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	1,780,000
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (65,000)

XML

Stock Plans and Stock Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	62,360	65,785	59,333
Stock-based compensation expense | $	$ 4,235	$ 3,477	$ 2,956
Average grant date fair value (in dollars per share) | $ / shares	$ 89.21
Stock options and SARs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	0
Stock-based compensation expense | $	$ 235	$ 304	$ 367
Unrecognized compensation cost stock option awards | $	$ 375
Weighted average period for recognition	2 years 2 months 12 days
Awards granted during period (in shares)	0	0	0
Stock options and SARs | 2009 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award term (no more than)	10 years
SARs, shares of restricted stock and restricted units and performance share awards | 2019 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized number of awards (in shares)	1,275,000
Restricted stock awards and restricted units and performance share awards | 2019 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reduction to shares available for grant (ratio)	4.25
Restricted stock awards and restricted units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense | $	$ 4,000	$ 3,200	$ 2,600
Unrecognized compensation cost for non-option awards | $	$ 14,100
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	49,365	65,785	59,333
Weighted average period for recognition	3 years 6 months
Average grant date fair value (in dollars per share) | $ / shares		$ 75.44	$ 79.51
Restricted units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	8,345
Weighted average period for recognition	4 years 10 months 24 days
Restricted units | 2009 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	5 years
Performance shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	4,650
Full-value share awards | 2019 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized number of awards (in shares)	300,000
Minimum | Stock options and SARs | 2009 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	5 years
Minimum | Restricted stock | 2009 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	5 years
Maximum | Stock options and SARs | 2009 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	7 years
Maximum | Restricted stock | 2009 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	7 years

XML

Stock Plans and Stock Based Compensation - Activity Related to Restricted Stock Awards (Details)	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Number of Shares
Unvested, beginning of year (in shares) | shares	255,239
Granted (in shares) | shares	62,360
Vested (in shares) | shares	(61,275)
Forfeited (in shares) | shares	(8,357)
Unvested, end of year (in shares) | shares	247,967
Weighted Average Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 66.52
Granted (in dollars per share) | $ / shares	89.21
Vested (in dollars per share) | $ / shares	60.48
Forfeited (in dollars per share) | $ / shares	70.62
Ending balance (in dollars per share) | $ / shares	$ 73.66

XML

Loans and Leases - Aging Analysis of Past Due Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Past Due [Line Items]
Total Loans	$ 4,921,195	$ 4,837,735
Less: unearned income and deferred costs and fees	(3,645)	(3,796)
Total originated loans and leases, net of unearned income and deferred costs and fees	4,917,550	4,833,939
Commercial and industrial
Financing Receivable, Past Due [Line Items]
Total Loans	1,008,061	1,077,635
Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Total Loans	105,786	107,494
Commercial and industrial | Other
Financing Receivable, Past Due [Line Items]
Total Loans	902,275	970,141
Commercial real estate
Financing Receivable, Past Due [Line Items]
Total Loans	2,443,565	2,340,661
Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Total Loans	184,898	170,229
Commercial real estate | Other
Financing Receivable, Past Due [Line Items]
Total Loans	2,045,030	2,004,763
Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Total Loans	213,637	165,669
Residential real estate
Financing Receivable, Past Due [Line Items]
Total Loans	1,377,837	1,333,894
Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Total Loans	219,245	229,608
Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Total Loans	1,158,592	1,104,286
Consumer and other
Financing Receivable, Past Due [Line Items]
Total Loans	74,410	70,989
Consumer and other | Other
Financing Receivable, Past Due [Line Items]
Total Loans	61,446	58,326
Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Total Loans	12,964	12,663
Leases
Financing Receivable, Past Due [Line Items]
Total Loans	17,322	14,556
Originated Loans and Leases
Financing Receivable, Past Due [Line Items]
Current Loans	4,681,206	4,556,048
Total Loans	4,701,046	4,572,537
90 days and accruing	0	0
Nonaccrual	22,485	19,340
Less: unearned income and deferred costs and fees	(3,645)	(3,796)
Less: unearned income and deferred costs and fees, current	(3,645)	(3,796)
Less: unearned income and deferred costs and fees, 90 days and accruing	0	0
Less: unearned income and deferred costs and fees, nonaccrual	0	0
Total originated loans and leases, net of unearned income and deferred costs and fees	4,697,401	4,568,741
Total originated loans and leases, net of unearned income and deferred costs and fees, current	4,677,561	4,552,252
Originated Loans and Leases | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	3,559	7,838
Less: unearned income and deferred costs and fees	0	0
Total originated loans and leases, net of unearned income and deferred costs and fees	3,559	7,838
Originated Loans and Leases | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	16,281	8,651
Less: unearned income and deferred costs and fees	0	0
Total originated loans and leases, net of unearned income and deferred costs and fees	16,281	8,651
Originated Loans and Leases | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Current Loans	966,428	1,029,897
Total Loans	968,985	1,033,923
90 days and accruing	0	0
Nonaccrual	2,334	1,861
Originated Loans and Leases | Commercial and industrial | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	413	2,367
Originated Loans and Leases | Commercial and industrial | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	2,144	1,659
Originated Loans and Leases | Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Current Loans	105,721	107,494
Total Loans	105,786	107,494
90 days and accruing	0	0
Nonaccrual	0	0
Originated Loans and Leases | Commercial and industrial | Agriculture | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	0
Originated Loans and Leases | Commercial and industrial | Agriculture | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	65	0
Originated Loans and Leases | Commercial and industrial | Other
Financing Receivable, Past Due [Line Items]
Current Loans	860,707	922,403
Total Loans	863,199	926,429
90 days and accruing	0	0
Nonaccrual	2,334	1,861
Originated Loans and Leases | Commercial and industrial | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	413	2,367
Originated Loans and Leases | Commercial and industrial | Other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	2,079	1,659
Originated Loans and Leases | Commercial real estate
Financing Receivable, Past Due [Line Items]
Current Loans	2,285,437	2,158,441
Total Loans	2,296,648	2,161,569
90 days and accruing	0	0
Nonaccrual	10,617	7,691
Originated Loans and Leases | Commercial real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	1,116	1,272
Originated Loans and Leases | Commercial real estate | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	10,095	1,856
Originated Loans and Leases | Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Current Loans	184,701	169,934
Total Loans	184,701	170,005
90 days and accruing	0	0
Nonaccrual	0	0
Originated Loans and Leases | Commercial real estate | Agriculture | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	71
Originated Loans and Leases | Commercial real estate | Agriculture | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	0	0
Originated Loans and Leases | Commercial real estate | Other
Financing Receivable, Past Due [Line Items]
Current Loans	1,888,434	1,824,222
Total Loans	1,899,645	1,827,279
90 days and accruing	0	0
Nonaccrual	10,617	7,691
Originated Loans and Leases | Commercial real estate | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	1,116	1,201
Originated Loans and Leases | Commercial real estate | Other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	10,095	1,856
Originated Loans and Leases | Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Current Loans	212,302	164,285
Total Loans	212,302	164,285
90 days and accruing	0	0
Nonaccrual	0	0
Originated Loans and Leases | Commercial real estate | Construction | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	0
Originated Loans and Leases | Commercial real estate | Construction | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	0	0
Originated Loans and Leases | Residential real estate
Financing Receivable, Past Due [Line Items]
Current Loans	1,338,999	1,283,529
Total Loans	1,344,466	1,292,261
90 days and accruing	0	0
Nonaccrual	9,259	9,554
Originated Loans and Leases | Residential real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	1,551	3,679
Originated Loans and Leases | Residential real estate | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	3,916	5,053
Originated Loans and Leases | Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Current Loans	203,002	206,447
Total Loans	203,894	208,459
90 days and accruing	0	0
Nonaccrual	1,924	1,784
Originated Loans and Leases | Residential real estate | Home equity | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	290	986
Originated Loans and Leases | Residential real estate | Home equity | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	602	1,026
Originated Loans and Leases | Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Current Loans	1,135,997	1,077,082
Total Loans	1,140,572	1,083,802
90 days and accruing	0	0
Nonaccrual	7,335	7,770
Originated Loans and Leases | Residential real estate | Mortgages | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	1,261	2,693
Originated Loans and Leases | Residential real estate | Mortgages | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	3,314	4,027
Originated Loans and Leases | Consumer and other
Financing Receivable, Past Due [Line Items]
Current Loans	73,020	69,625
Total Loans	73,625	70,228
90 days and accruing	0	0
Nonaccrual	275	234
Originated Loans and Leases | Consumer and other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	479	520
Originated Loans and Leases | Consumer and other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	126	83
Originated Loans and Leases | Consumer and other | Other
Financing Receivable, Past Due [Line Items]
Current Loans	60,428	57,354
Total Loans	60,661	57,565
90 days and accruing	0	0
Nonaccrual	158	79
Originated Loans and Leases | Consumer and other | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	167	187
Originated Loans and Leases | Consumer and other | Other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	66	24
Originated Loans and Leases | Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Current Loans	12,592	12,271
Total Loans	12,964	12,663
90 days and accruing	0	0
Nonaccrual	117	155
Originated Loans and Leases | Consumer and other | Indirect | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	312	333
Originated Loans and Leases | Consumer and other | Indirect | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	60	59
Originated Loans and Leases | Leases
Financing Receivable, Past Due [Line Items]
Current Loans	17,322	14,556
Total Loans	17,322	14,556
90 days and accruing	0	0
Nonaccrual	0	0
Originated Loans and Leases | Leases | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	0
Originated Loans and Leases | Leases | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases
Financing Receivable, Past Due [Line Items]
Current Loans	218,501	262,510
Total Loans	220,149	265,198
90 days and accruing	794	1,316
Nonaccrual	1,796	2,856
Less: unearned income and deferred costs and fees	0	0
Total originated loans and leases, net of unearned income and deferred costs and fees	220,149	265,198
Acquired Loans and Leases | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	165	67
Acquired Loans and Leases | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	1,483	2,621
Acquired Loans and Leases | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Current Loans	39,074	43,702
Total Loans	39,076	43,712
90 days and accruing	2	10
Nonaccrual	1	22
Acquired Loans and Leases | Commercial and industrial | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Commercial and industrial | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	2	10
Acquired Loans and Leases | Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Total Loans	0	0
Acquired Loans and Leases | Commercial and industrial | Other
Financing Receivable, Past Due [Line Items]
Current Loans	39,074	43,702
Total Loans	39,076	43,712
90 days and accruing	2	10
Nonaccrual	1	22
Acquired Loans and Leases | Commercial and industrial | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Commercial and industrial | Other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	2	10
Acquired Loans and Leases | Commercial real estate
Financing Receivable, Past Due [Line Items]
Current Loans	146,208	178,253
Total Loans	146,917	179,092
90 days and accruing	542	525
Nonaccrual	172	316
Acquired Loans and Leases | Commercial real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	24	0
Acquired Loans and Leases | Commercial real estate | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	685	839
Acquired Loans and Leases | Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Current Loans	197	224
Total Loans	197	224
90 days and accruing	0	0
Nonaccrual	0	0
Acquired Loans and Leases | Commercial real estate | Agriculture | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Commercial real estate | Agriculture | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Commercial real estate | Other
Financing Receivable, Past Due [Line Items]
Current Loans	144,676	176,645
Total Loans	145,385	177,484
90 days and accruing	542	525
Nonaccrual	172	316
Acquired Loans and Leases | Commercial real estate | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	24	0
Acquired Loans and Leases | Commercial real estate | Other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	685	839
Acquired Loans and Leases | Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Current Loans	1,335	1,384
Total Loans	1,335	1,384
90 days and accruing	0	0
Nonaccrual	0	0
Acquired Loans and Leases | Commercial real estate | Construction | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Commercial real estate | Construction | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Residential real estate
Financing Receivable, Past Due [Line Items]
Current Loans	32,434	39,797
Total Loans	33,371	41,633
90 days and accruing	250	781
Nonaccrual	1,623	2,518
Acquired Loans and Leases | Residential real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	141	64
Acquired Loans and Leases | Residential real estate | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	796	1,772
Acquired Loans and Leases | Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Current Loans	15,168	20,300
Total Loans	15,351	21,149
90 days and accruing	55	59
Nonaccrual	872	1,414
Acquired Loans and Leases | Residential real estate | Home equity | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	58	46
Acquired Loans and Leases | Residential real estate | Home equity | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	125	803
Acquired Loans and Leases | Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Current Loans	17,266	19,497
Total Loans	18,020	20,484
90 days and accruing	195	722
Nonaccrual	751	1,104
Acquired Loans and Leases | Residential real estate | Mortgages | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	83	18
Acquired Loans and Leases | Residential real estate | Mortgages | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	671	969
Acquired Loans and Leases | Consumer and other
Financing Receivable, Past Due [Line Items]
Current Loans	785	758
Total Loans	785	761
90 days and accruing	0	0
Nonaccrual	0	0
Acquired Loans and Leases | Consumer and other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	3
Acquired Loans and Leases | Consumer and other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Consumer and other | Other
Financing Receivable, Past Due [Line Items]
Current Loans	785	758
Total Loans	785	761
90 days and accruing	0	0
Nonaccrual	0	0
Acquired Loans and Leases | Consumer and other | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past due	0	3
Acquired Loans and Leases | Consumer and other | Other | 90 days or more
Financing Receivable, Past Due [Line Items]
Past due	0	0
Acquired Loans and Leases | Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Total Loans	0	0
Acquired Loans and Leases | Leases
Financing Receivable, Past Due [Line Items]
Total Loans	$ 0	$ 0

XML

Loans and Leases - Schedule of Loans and Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 4,921,195	$ 4,837,735
Less: unearned income and deferred costs and fees	(3,645)	(3,796)
Total originated loans and leases, net of unearned income and deferred costs and fees	4,917,550	4,833,939
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,008,061	1,077,635
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	105,786	107,494
Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	902,275	970,141
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,443,565	2,340,661
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	184,898	170,229
Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,045,030	2,004,763
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	213,637	165,669
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,377,837	1,333,894
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	219,245	229,608
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	74,410	70,989
Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	61,446	58,326
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	12,964	12,663
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	17,322	14,556
Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	4,701,046	4,572,537
Less: unearned income and deferred costs and fees	(3,645)	(3,796)
Total originated loans and leases, net of unearned income and deferred costs and fees	4,697,401	4,568,741
Originated Loans and Leases | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	968,985	1,033,923
Originated Loans and Leases | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	105,786	107,494
Originated Loans and Leases | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	863,199	926,429
Originated Loans and Leases | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,296,648	2,161,569
Originated Loans and Leases | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	184,701	170,005
Originated Loans and Leases | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,899,645	1,827,279
Originated Loans and Leases | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	212,302	164,285
Originated Loans and Leases | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,344,466	1,292,261
Originated Loans and Leases | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	203,894	208,459
Originated Loans and Leases | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	73,625	70,228
Originated Loans and Leases | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	60,661	57,565
Originated Loans and Leases | Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	12,964	12,663
Originated Loans and Leases | Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	17,322	14,556
Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	220,149	265,198
Less: unearned income and deferred costs and fees	0	0
Total originated loans and leases, net of unearned income and deferred costs and fees	220,149	265,198
Acquired Loans and Leases | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	39,076	43,712
Acquired Loans and Leases | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	39,076	43,712
Acquired Loans and Leases | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	146,917	179,092
Acquired Loans and Leases | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	197	224
Acquired Loans and Leases | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	145,385	177,484
Acquired Loans and Leases | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,335	1,384
Acquired Loans and Leases | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	33,371	41,633
Acquired Loans and Leases | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	15,351	21,149
Acquired Loans and Leases | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	785	761
Acquired Loans and Leases | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	785	761
Acquired Loans and Leases | Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	0
Acquired Loans and Leases | Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 0	$ 0

XML

Employee Benefit Plans - Weighed Average Assumptions Used (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
DB Pension Plans
Discount Rates
Benefit Cost for Plan Year	4.08%	3.43%	3.89%
Benefit Obligation at End of Plan Year	3.04%	4.08%	3.43%
Expected long-term return on plan assets	7.00%	7.25%	7.25%
Life and Healthcare Plan
Discount Rates
Benefit Cost for Plan Year	4.13%	3.51%	3.97%
Benefit Obligation at End of Plan Year	3.10%	4.13%	3.51%
Rate of compensation increase
Benefit Cost for Plan Year	4.00%	5.00%	5.00%
Benefit Obligation at End of Plan Year	4.00%	4.00%	5.00%
SERP Plan
Discount Rates
Benefit Cost for Plan Year	4.16%	3.55%	4.10%
Benefit Obligation at End of Plan Year	3.14%	4.16%	3.55%
Rate of compensation increase
Benefit Cost for Plan Year	5.00%	5.00%	5.00%
Benefit Obligation at End of Plan Year	5.00%	5.00%	5.00%

XML

Income Taxes - Income Tax Expense (Benefit) Attributable to Income from Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current
Federal	$ 15,161	$ 16,391	$ 26,860
State	2,782	3,060	1,162
Total	17,943	19,451	28,022
Deferred
Federal	2,668	2,281	14,749
State	405	73	(151)
Deferred tax expense	3,073	2,354	14,598
Federal Total	17,829	18,672	41,609
State Total	3,187	3,133	1,011
Tax expense (benefit)	$ 21,016	$ 21,805	$ 42,620

XML

Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) segment	Dec. 31, 2018 USD ($)	Jan. 01, 2018 USD ($)	Jan. 01, 2017 USD ($)
Property, Plant and Equipment [Line Items]
Reserve requirements for banking subsidiaries	$ 9,500	$ 6,600
Adoption of ASU 2016-01				$ 0
Investment in qualified affordable housing projects	$ 485	1,000
Number of reportable business segments | segment	3
Retained earnings	$ 370,477	$ 319,396
Minimum | Core deposit intangible
Property, Plant and Equipment [Line Items]
Amortization period for other intangible assets (in years)	5 years
Minimum | Covenants not to compete
Property, Plant and Equipment [Line Items]
Amortization period for other intangible assets (in years)	3 years
Minimum | Customer relationships
Property, Plant and Equipment [Line Items]
Amortization period for other intangible assets (in years)	6 years
Maximum | Core deposit intangible
Property, Plant and Equipment [Line Items]
Amortization period for other intangible assets (in years)	10 years
Maximum | Covenants not to compete
Property, Plant and Equipment [Line Items]
Amortization period for other intangible assets (in years)	6 years
Maximum | Customer relationships
Property, Plant and Equipment [Line Items]
Amortization period for other intangible assets (in years)	15 years
Building | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful (in years)	10 years
Building | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful (in years)	39 years
Furniture, fixtures, and equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful (in years)	2 years
Furniture, fixtures, and equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful (in years)	20 years
Accounting Standards Update 2016-01
Property, Plant and Equipment [Line Items]
Adoption of ASU 2016-01			$ 0
Accounting Standards Update 2014-09
Property, Plant and Equipment [Line Items]
Adoption of ASU 2016-01			1,780
Retained earnings			1,800
Accumulated Other Comprehensive (Loss) Income
Property, Plant and Equipment [Line Items]
Adoption of ASU 2016-01				$ (9,958)
Accumulated Other Comprehensive (Loss) Income | Accounting Standards Update 2016-01
Property, Plant and Equipment [Line Items]
Adoption of ASU 2016-01			$ 65

XML

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Schedule of operating lease amounts included in consolidated statement of condition and other information related to operating leases

Operating lease amounts included in the Consolidated Statement of Condition are as follows:

(In thousands)		December 31, 2019
Assets	Classification
ROU assets	Other assets	$	33,501
Liabilities
Current lease liabilities	Other liabilities	3,256
Non-current lease liabilities	Other liabilities	32,666
Total lease liabilities		$	35,922

Other information related to operating leases was as follows:

(In thousands)	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$4,680
Weighted-average remaining lease term on operating leases	13.85
Weighted-average discount rates on operating leases	3.53	%
ROU assets obtained in exchange for lease liabilities	$39,508

Schedule of components of operating lease expense

The components of operating lease expense, primarily included in “Net occupancy expense of premises,” were as follows:

(In thousands)	Year Ended December 31, 2019
Lease Costs
Operating lease cost	$	4,683
Variable lease cost	466
Short-term lease cost	1
Sublease income	(35		)
Total lease cost	$	5,115

Schedule of future minimum lease payments

Future minimum lease payments under operating leases were as follows:

(In thousands)	Operating Leases
2020	$	4,454
2021	4,106
2022	4,059
2023	3,816
2024	3,684
2025 and subsequent years	26,605
Total lease payments	$	46,724
Less: Interest	(10,802		)
Present value of lease liabilities	$	35,922

XML

Securities - Unrealized Losses on Available-for-Sale and Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Fair Value
Less than 12 Months	$ 241,757	$ 111,648
12 Months or Longer	288,210	1,109,535
Total	529,967	1,221,183
Unrealized Losses
Less than 12 Months	1,371	886
12 Months or Longer	3,747	31,256
Total	5,118	32,142
Fair Value
Less than 12 Months		13,107
12 Months or Longer		125,128
Total		138,235
Unrealized Losses
Less than 12 Months		33
12 Months or Longer		1,189
Total		1,222
Obligations of U.S. Government sponsored entities
Fair Value
Less than 12 Months	18,654	21,660
12 Months or Longer	3,479	449,141
Total	22,133	470,801
Unrealized Losses
Less than 12 Months	76	183
12 Months or Longer	8	7,370
Total	84	7,553
Fair Value
Less than 12 Months		4,980
12 Months or Longer		125,128
Total		130,108
Unrealized Losses
Less than 12 Months		9
12 Months or Longer		1,189
Total		1,198
Obligations of U.S. states and political subdivisions
Fair Value
Less than 12 Months	10,456	11,971
12 Months or Longer	2,300	49,756
Total	12,756	61,727
Unrealized Losses
Less than 12 Months	54	19
12 Months or Longer	7	914
Total	61	933
U.S. Government agencies
Fair Value
Less than 12 Months	54,846	16,854
12 Months or Longer	45,999	96,247
Total	100,845	113,101
Unrealized Losses
Less than 12 Months	489	22
12 Months or Longer	1,030	3,710
Total	1,519	3,732
U.S. Government sponsored entities
Fair Value
Less than 12 Months	157,801	61,163
12 Months or Longer	233,999	512,216
Total	391,800	573,379
Unrealized Losses
Less than 12 Months	752	662
12 Months or Longer	2,635	18,937
Total	3,387	19,599
U.S. corporate debt securities
Fair Value
Less than 12 Months	0	0
12 Months or Longer	2,433	2,175
Total	2,433	2,175
Unrealized Losses
Less than 12 Months	0	0
12 Months or Longer	67	325
Total	$ 67	325
Obligations of U.S. sponsored entities
Fair Value
Less than 12 Months		8,127
12 Months or Longer		0
Total		8,127
Unrealized Losses
Less than 12 Months		24
12 Months or Longer		0
Total		$ 24

XML

Fair Value Measurements - Financial Assets and Financial Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 1,298,587	$ 1,332,658
Equity securities	915	887
U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	1,840	289
Obligations of U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	372,488	485,898
Obligations of U.S. states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	97,785	85,440
Mortgage-backed securities - residential, U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	164,451	128,267
Mortgage-backed securities - residential, U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	659,590	630,558
Non-U.S. Government agencies or sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value		31
U.S. corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	2,433	2,175
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	1,298,587	1,332,658
Recurring | U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	1,840	289
Recurring | Obligations of U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	372,488	485,898
Recurring | Obligations of U.S. states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	97,785	85,440
Recurring | Mortgage-backed securities - residential, U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	164,451	128,267
Recurring | Mortgage-backed securities - residential, U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	659,590	630,558
Recurring | Non-U.S. Government agencies or sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	31
Recurring | U.S. corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	2,433	2,175
Recurring | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	915	887
Recurring | (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | Obligations of U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | Obligations of U.S. states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | Mortgage-backed securities - residential, U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | Mortgage-backed securities - residential, U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | Non-U.S. Government agencies or sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | U.S. corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 1) | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	1,298,587	1,332,658
Recurring | (Level 2) | U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	1,840	289
Recurring | (Level 2) | Obligations of U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	372,488	485,898
Recurring | (Level 2) | Obligations of U.S. states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	97,785	85,440
Recurring | (Level 2) | Mortgage-backed securities - residential, U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	164,451	128,267
Recurring | (Level 2) | Mortgage-backed securities - residential, U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	659,590	630,558
Recurring | (Level 2) | Non-U.S. Government agencies or sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	31
Recurring | (Level 2) | U.S. corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	2,433	2,175
Recurring | (Level 2) | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | Obligations of U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | Obligations of U.S. states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | Mortgage-backed securities - residential, U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | Mortgage-backed securities - residential, U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | Non-U.S. Government agencies or sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | U.S. corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Recurring | (Level 3) | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	$ 915	$ 887

XML

Premises and Equipment - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Gross rental expense	$ 4.7	$ 4.7	$ 5.1
Minimum
Property, Plant and Equipment [Line Items]
Renewal option (in years)	5 years
Maximum
Property, Plant and Equipment [Line Items]
Renewal option (in years)	20 years

XML

Allowance for Loan and Lease Losses - Recorded Investment on Impaired Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Originated Loans and Leases
Financing Receivable, Impaired [Line Items]
Recorded investment with no related allowance	$ 15,849	$ 7,303
Unpaid principal balance with no related allowance	16,974	7,844
Recorded investment with related allowance	3,536	6,864
Unpaid principal balance with related allowance	3,536	6,864
Related Allowance	907	3,762
Recorded investment	19,385	14,167
Unpaid principal balance	20,510	14,708
Originated Loans and Leases | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Recorded investment with no related allowance	1,865	183
Unpaid principal balance with no related allowance	1,965	271
Recorded investment with related allowance	245	5,183
Unpaid principal balance with related allowance	245	5,183
Related Allowance	245	3,365
Originated Loans and Leases | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Recorded investment with no related allowance	10,205	3,205
Unpaid principal balance with no related allowance	11,017	3,405
Recorded investment with related allowance	3,291	1,681
Unpaid principal balance with related allowance	3,291	1,681
Related Allowance	662	397
Originated Loans and Leases | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Recorded investment with no related allowance	3,779	3,915
Unpaid principal balance with no related allowance	3,992	4,168
Acquired Loans and Leases
Financing Receivable, Impaired [Line Items]
Recorded investment	2,830	3,438
Unpaid principal balance	2,933	3,652
Acquired Loans and Leases | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Recorded investment with no related allowance	2	32
Unpaid principal balance with no related allowance	2	32
Acquired Loans and Leases | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Recorded investment with no related allowance	714	842
Unpaid principal balance with no related allowance	714	924
Acquired Loans and Leases | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Recorded investment with no related allowance	2,114	2,564
Unpaid principal balance with no related allowance	$ 2,217	$ 2,696

XML

Allowance for Loan and Lease Losses - Credit Quality Indicators by Class of Residential Real Estate (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Originated Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	$ 1,418,091	$ 1,362,489
Originated Loans and Leases | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	1,408,557	1,352,701
Originated Loans and Leases | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	9,534	9,788
Originated Loans and Leases | Residential real estate | Residential Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	203,894	208,459
Originated Loans and Leases | Residential real estate | Residential Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	1,140,572	1,083,802
Originated Loans and Leases | Residential real estate | Performing | Residential Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	201,970	206,675
Originated Loans and Leases | Residential real estate | Performing | Residential Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	1,133,237	1,076,032
Originated Loans and Leases | Residential real estate | Nonperforming | Residential Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	1,924	1,784
Originated Loans and Leases | Residential real estate | Nonperforming | Residential Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	7,335	7,770
Originated Loans and Leases | Consumer and other | Consumer Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	12,964	12,663
Originated Loans and Leases | Consumer and other | Consumer Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	60,661	57,565
Originated Loans and Leases | Consumer and other | Performing | Consumer Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	12,847	12,508
Originated Loans and Leases | Consumer and other | Performing | Consumer Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	60,503	57,486
Originated Loans and Leases | Consumer and other | Nonperforming | Consumer Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	117	155
Originated Loans and Leases | Consumer and other | Nonperforming | Consumer Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	158	79
Acquired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	34,156	42,394
Acquired Loans and Leases | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	32,533	39,876
Acquired Loans and Leases | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	1,623	2,518
Acquired Loans and Leases | Residential real estate | Residential Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	15,351	21,149
Acquired Loans and Leases | Residential real estate | Residential Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	18,020	20,484
Acquired Loans and Leases | Residential real estate | Performing | Residential Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	14,479	19,735
Acquired Loans and Leases | Residential real estate | Performing | Residential Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	17,269	19,380
Acquired Loans and Leases | Residential real estate | Nonperforming | Residential Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	872	1,414
Acquired Loans and Leases | Residential real estate | Nonperforming | Residential Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	751	1,104
Acquired Loans and Leases | Consumer and other | Consumer Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	0	0
Acquired Loans and Leases | Consumer and other | Consumer Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	785	761
Acquired Loans and Leases | Consumer and other | Performing | Consumer Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	0	0
Acquired Loans and Leases | Consumer and other | Performing | Consumer Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	785	761
Acquired Loans and Leases | Consumer and other | Nonperforming | Consumer Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	0	0
Acquired Loans and Leases | Consumer and other | Nonperforming | Consumer Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, gross	$ 0	$ 0

XML

Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2018	Jan. 01, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at beginning	$ 620,871	$ 576,202	$ 549,405
Adoption of ASU 2016-01					$ 0
Balances at ending	663,054	620,871	576,202
Available-for-Sale Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at beginning	(23,589)	(13,005)	(7,915)
Other comprehensive income (loss)	27,628	(10,649)	(2,437)
Balances at ending	4,039	(23,589)	(13,005)
Employee Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at beginning	(39,576)	(38,291)	(29,194)
Other comprehensive income (loss)	(8,027)	(1,285)	(1,792)
Balances at ending	(47,603)	(39,576)	(38,291)
Accumulated Other Comprehensive Income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at beginning	(63,165)	(51,296)	(37,109)
Other comprehensive income (loss)	19,601	(11,934)	(4,229)
Adoption of ASU 2016-01					$ (9,958)
Balances at ending	$ (43,564)	$ (63,165)	(51,296)
Accounting Standards Update 2018-02 | Available-for-Sale Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Reclassification due to adoption of ASU			(2,653)
Accounting Standards Update 2018-02 | Employee Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Reclassification due to adoption of ASU			(7,305)
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Reclassification due to adoption of ASU			$ (9,958)
Accounting Standards Update 2016-01
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Adoption of ASU 2016-01				$ 0
Accounting Standards Update 2016-01 | Available-for-Sale Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Adoption of ASU 2016-01				65
Accounting Standards Update 2016-01 | Employee Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Adoption of ASU 2016-01				0
Accounting Standards Update 2016-01 | Accumulated Other Comprehensive Income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Adoption of ASU 2016-01				$ 65

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Other Borrowings - Schedule of Company's Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Overnight FHLB advances	$ 239,100	$ 647,075
Term FHLB advances	415,000	425,000
Other	4,000	4,000
Total other borrowings	$ 658,100	$ 1,076,075

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Leases - Schedule of Operating Lease Amounts Included in Consolidated Statement of Condition (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Leases [Abstract]
ROU assets	$ 33,501
Current lease liabilities	3,256
Non-current lease liabilities	32,666
Total lease liabilities	$ 35,922

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Other Borrowings

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Other Borrowings

Other Borrowings

The following table summarized the Company’s borrowings as of December 31:

(In thousands)	2019		2018
Overnight FHLB advances	$	239,100	$	647,075
Term FHLB advances	415,000		425,000
Other	4,000		4,000
Total other borrowings	$	658,100	$	1,076,075

The Company, through its subsidiary banks, had available line-of-credit agreements with correspondent banks permitting borrowings to a maximum of approximately $89.0 million at December 31, 2019 and $98.0 million at December 31, 2018. There were no outstanding advances against those lines at December 31, 2019 and December 31, 2018.

Through its subsidiary banks, the Company has borrowing relationships with the FHLB, which provides secured borrowing capacity, subject to available collateral. The unused borrowing capacity on established lines with the FHLB was $1.3 billion at both December 31, 2019 and December 31, 2018.

As members of the FHLB, the Company’s subsidiary banks can use certain unencumbered residential and commercial real estate related assets and investment securities to secure borrowings from the FHLB. At December 31, 2019, total unencumbered residential and commercial real estate related loans and investment securities pledged at the FHLB were $850.8 million. At December 31, 2019, there were $239.1 million in overnight advances and $415.0 million in term advances with the FHLB, with a weighted average rate of 2.12%, compared to $647.1 million in overnight advances and $425.0 million in term advances at December 31, 2018, with a weighted average rate of 2.07%. At December 31, 2019, the term advances with the FHLB include $170.0 million which mature within one year and $245.0 million which mature in over one year. Maturities of advances due in over one year include $30.0 million in 2021, $85.0 million in 2022, $80.0 million in 2023 and $50.0 million in 2024.

The Company had no callable FHLB borrowings at December 31, 2019.

The Company has a $25.0 million line of credit with a bank.  As of December 31, 2019 and 2018, there was $4.0 million outstanding on the line. The line matures in June 2021.

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(In thousands)	Banking		Insurance			Wealth Management		Total
Balance at January 1, 2018	$	64,369	$	19,711		$	8,211	$	92,291
Goodwill related to sale of portion of business unit1	0		(8		)	0		(8		)
Balance at December 31, 2018	$	64,369	$	19,703		$	8,211	$	92,283
Acquisitions	0		164			0		164
Balance at December 31, 2019	$	64,369	$	19,867		$	8,211	$	92,447

¹ The $8,000 reduction of goodwill in 2018, reflects an adjustment related to the sale of a portion of insurance revenues. In 2017, Tompkins Insurance sold a portion of its personal lines insurance revenues, which had been acquired in a previous acquisition, to a third party. In 2018, Tompkins Insurance adjusted the goodwill related to the sale in 2017.

In the second quarter of 2019, Tompkins Insurance acquired the Cali Agency, Inc., an insurance agency located in western New York, in a cash transaction. The Company recorded the following intangible assets as a result of the acquisition: goodwill ($164,000), customer related intangible ($171,000) and a covenant-not-to-compete ($87,000). The values of the customer related intangible and covenant-not-to-compete are being amortized over 15 years and 5 years, respectively.

Goodwill is assigned to reporting units. The Company reviews its goodwill and intangible assets annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Based on the Company’s review as of December 31, 2019, there was no impairment of its goodwill or intangible assets. The Company’s impairment testing is highly sensitive to certain assumptions and estimates used. In the event that economic or credit conditions deteriorate significantly, additional interim impairment tests may be required.

Other Intangible Assets

The following table provides information regarding the Company's amortizing intangible assets:

December 31, 2019	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
(In thousands)
Amortized intangible assets:
Core deposit intangible	$	18,774	$	16,404	$	2,370
Customer relationships	9,048		6,405		2,643
Other intangibles	6,197		4,987		1,210
Total intangible assets	$	34,019	$	27,796	$	6,223

December 31, 2018	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
(In thousands)
Amortized intangible assets:
Core deposit intangible	$	18,774	$	15,386	$	3,388
Customer relationships	8,877		5,888		2,989
Other intangibles	5,983		4,732		1,251
Total intangible assets	$	33,634	$	26,006	$	7,628

Amortization expense related to intangible assets totaled $1.7 million in 2019, $1.8 million in 2018 and $1.9 million in 2017. The estimated aggregate future amortization expense for intangible assets remaining as of December 31, 2019 is as follows:

Estimated amortization expense:1
(In thousands)
For the year ended December 31, 2020	$	1,509
For the year ended December 31, 2021	1,342
For the year ended December 31, 2022	897
For the year ended December 31, 2023	334
For the year ended December 31, 2024	294

 ¹Excludes the amortization of mortgage servicing rights.  Amortization of mortgage servicing rights was $117,000 in 2019, $69,000 in 2018 and $122,000 in 2017.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 2.02	$ 1.94	$ 1.82
Net exercise of stock options (in shares)	18,053	10,786	22,277
Shares issued for dividend reinvestment plan (in shares)			34,750
Common stock repurchased and returned to unissued status (in shares)	376,021	32,483
Shares issued for employee stock ownership plan (in shares)		38,883	27,412
Directors deferred compensation plan (in shares)	1,729	1,422	2,808
Restricted stock activity (in shares)	24,180	29,577	45,269

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Deposits (Tables)

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Schedule of maturities of time deposits

Scheduled maturities of time deposits at December 31, 2019, were as follows:

(In thousands)	Less than $250,000		$250,000 and over		Total
Maturity
Three months or less	$	105,906	$	57,279	$	163,185
Over three through six months	75,507		36,826		112,333
Over six through twelve months	144,920		46,046		190,966
Total due in 2020	$	326,333	$	140,151	$	466,484
2021	98,389		28,416		126,805
2022	57,080		12,584		69,664
2023	7,726		262		7,988
2024	3,886		0		3,886
Thereafter	187		0		187
Total	$	493,601	$	181,413	$	675,014

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Condensed Parent Company Only Financial Statements

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Parent Company Only Financial Statements

Condensed Parent Company Only Financial Statements

Condensed financial statements for Tompkins (the Parent Company) as of December 31,2019, 2018 and 2017 are presented below. 

Condensed Statements of Condition
(In thousands)	2019		2018
Assets
Cash	$	14,631	$	6,235
Investment in subsidiaries, at equity	664,775		625,193
Other	3,873		9,416
Total Assets	$	683,279	$	640,844
Liabilities and Shareholders’ Equity
Borrowings	4,000		4,000
Trust preferred debentures issued to non-consolidated subsidiary	17,035		16,863
Other liabilities	602		522
Tompkins Financial Corporation Shareholders’ Equity	661,642		619,459
Total Liabilities and Shareholders’ Equity	$	683,279	$	640,844

Condensed Statements of Income
(In thousands)	2019		2018		2017
Dividends received from subsidiaries	$	72,827	$	44,518	$	33,522
Other income	240		332		281
Total Operating Income	$	73,067	$	44,850	$	33,803
Interest expense	1,450		1,468		1,550
Other expenses	8,409		7,222		6,120
Total Operating Expenses	$	9,859	$	8,690	$	7,670
Income Before Taxes and Equity in Undistributed
Earnings of Subsidiaries	63,208		36,160		26,133
Income tax benefit	2,085		1,687		1,867
Equity in undistributed earnings of subsidiaries	16,425		44,461		24,494
Net Income	$	81,718	$	82,308	$	52,494

Condensed Statements of Cash Flows
(In thousands)	2019			2018			2017
Operating activities
Net income	$	81,718		$	82,308		$	52,494
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings of subsidiaries	(16,425		)	(44,461		)	(24,494		)
Other, net	3,209			1,014			(1,569		)
Net Cash Provided by Operating Activities	68,502			38,861			26,431
Investing activities
Other, net	3,265			0			1,052
Net Cash Provided by Investing Activities	3,265			0			1,052
Financing activities
Borrowings, net	0			(5,000		)	(28,161		)
Cash dividends	(30,637		)	(29,634		)	(27,627		)
Repurchase of common shares	(29,867		)	(2,448		)	0
Net proceeds from restricted stock awards	(1,875		)	(1,403		)	(1,294		)
Shares issued for dividend reinvestment plans	0			0			2,872
Shares issued for employee stock ownership plan	0			3,073			2,296
Net proceeds from exercise of stock options	(992		)	(540		)	(641		)
Net Cash Used in Financing Activities	(63,371		)	(35,952		)	(52,555		)
Net increase (decrease) in cash	8,396			2,909			(25,072		)
Cash at beginning of year	6,235			3,326			28,398
Cash at End of Year	$	14,631		$	6,235		$	3,326

A Statement of Changes in Shareholders’ Equity has not been presented since it is the same as the Consolidated Statement of Changes in Shareholders’ Equity previously presented.

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
INTEREST AND DIVIDEND INCOME
Loans	$ 226,723	$ 214,370	$ 191,410
Due from banks	41	31	37
Available-for-sale securities	28,460	30,377
Available-for-sale securities			29,721
Held-to-maturity securities	3,151	3,437	3,475
Federal Home Loan Bank stock and Federal Reserve Bank stock	3,003	3,377	2,121
Total Interest and Dividend Income	261,378	251,592	226,764
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	3,095	1,712	1,880
Other deposits	27,809	14,883	10,253
Federal funds purchased and securities sold under agreements to repurchase	143	152	235
Trust preferred debentures	1,276	1,227	1,158
Other borrowings	18,427	21,818	11,934
Total Interest Expense	50,750	39,792	25,460
Net Interest Income	210,628	211,800	201,304
Less: Provision for loan and lease losses	1,366	3,942	4,161
Net Interest Income After Provision for Loan and Lease Losses	209,262	207,858	197,143
NONINTEREST INCOME
Insurance commissions and fees	31,091	29,369	28,778
Investment services income	16,434	17,288	15,665
Service charges on deposit accounts	8,321	8,435	8,437
Card services income	10,526	9,693	9,100
Other income	8,416	13,130	7,631
Net gain (loss) on securities transactions	645	(466)	(407)
Total Noninterest Income	75,433	77,449	69,204
NONINTEREST EXPENSES
Salaries and wages	89,399	85,625	81,948
Other employee benefits	23,488	22,090	21,458
Net occupancy expense of premises	13,210	13,309	13,214
Furniture and fixture expense	7,815	7,351	7,028
Amortization of intangible assets	1,673	1,771	1,932
Other operating expenses	46,249	50,921	45,525
Total Noninterest Expenses	181,834	181,067	171,105
Income Before Income Tax Expense	102,861	104,240	95,242
Income Tax Expense	21,016	21,805	42,620
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	81,845	82,435	52,622
Less: Net income attributable to noncontrolling interests	127	127	128
Net Income Attributable to Tompkins Financial Corporation	$ 81,718	$ 82,308	$ 52,494
Basic Earnings Per Share (in dollars per share)	$ 5.39	$ 5.39	$ 3.46
Diluted Earnings Per Share (in dollars per share)	$ 5.37	$ 5.35	$ 3.43

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Loans and Leases (Tables)

12 Months Ended

Dec. 31, 2019

Loans and Leases Receivable Disclosure [Abstract]

Schedule of loans and leases

Loans and Leases at December 31, 2019 and December 31, 2018 were as follows:

	December 31, 2019								December 31, 2018
(In thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	105,786		$	0	$	105,786		$	107,494		$	0	$	107,494
Commercial and industrial other	863,199			39,076		902,275			926,429			43,712		970,141
Subtotal commercial and industrial	968,985			39,076		1,008,061			1,033,923			43,712		1,077,635
Commercial real estate
Construction	212,302			1,335		213,637			164,285			1,384		165,669
Agriculture	184,701			197		184,898			170,005			224		170,229
Commercial real estate other	1,899,645			145,385		2,045,030			1,827,279			177,484		2,004,763
Subtotal commercial real estate	2,296,648			146,917		2,443,565			2,161,569			179,092		2,340,661
Residential real estate
Home equity	203,894			15,351		219,245			208,459			21,149		229,608
Mortgages	1,140,572			18,020		1,158,592			1,083,802			20,484		1,104,286
Subtotal residential real estate	1,344,466			33,371		1,377,837			1,292,261			41,633		1,333,894
Consumer and other
Indirect	12,964			0		12,964			12,663			0		12,663
Consumer and other	60,661			785		61,446			57,565			761		58,326
Subtotal consumer and other	73,625			785		74,410			70,228			761		70,989
Leases	17,322			0		17,322			14,556			0		14,556
Total loans and leases	4,701,046			220,149		4,921,195			4,572,537			265,198		4,837,735
Less: unearned income and deferred costs and fees	(3,645		)	0		(3,645		)	(3,796		)	0		(3,796		)
Total loans and leases, net of unearned income and deferred costs and fees	$	4,697,401		$	220,149	$	4,917,550		$	4,568,741		$	265,198	$	4,833,939

Schedule of outstanding principal and carrying amount of loans acquired

The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the VIST Acquisition were as follows at December 31:

(In thousands)	December 31, 2019		December 31, 2018
Acquired Credit Impaired Loans
Outstanding principal balance	$	10,604	$	12,822
Carrying amount	9,149		11,036
Acquired Non-Credit Impaired Loans
Outstanding principal balance	212,518		256,265
Carrying amount	211,000		254,162
Total Acquired Loans
Outstanding principal balance	$	223,122	$	269,087
Carrying amount	$	220,149	$	265,198

Schedule of loans to related parties

Loan transactions with related parties are summarized as follows:

(In thousands)	December 31, 2019			December 31, 2018
Balance at beginning of year	$	39,595		$	14,503
New Directors/Executive Officers	0			467
New loans and advancements	19,393			30,570
Loan payments	(10,599		)	(5,945		)
Balance at end of year	$	48,389		$	39,595

Schedule of age analysis of past due loans

The below table is an aging analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of December 31, 2019 and 2018.

December 31, 2019
(In thousands)	30-89 days		90 days or more		Current Loans			Total Loans			90 days and accruing1		Nonaccrual
Originated Loans and Leases
Commercial and industrial
Agriculture	$	0	$	65	$	105,721		$	105,786		$	0	$	0
Commercial and industrial other	413		2,079		860,707			863,199			0		2,334
Subtotal commercial and industrial	413		2,144		966,428			968,985			0		2,334
Commercial real estate
Construction	0		0		212,302			212,302			0		0
Agriculture	0		0		184,701			184,701			0		0
Commercial real estate other	1,116		10,095		1,888,434			1,899,645			0		10,617
Subtotal commercial real estate	1,116		10,095		2,285,437			2,296,648			0		10,617
Residential real estate
Home equity	290		602		203,002			203,894			0		1,924
Mortgages	1,261		3,314		1,135,997			1,140,572			0		7,335
Subtotal residential real estate	1,551		3,916		1,338,999			1,344,466			0		9,259
Consumer and other
Indirect	312		60		12,592			12,964			0		117
Consumer and other	167		66		60,428			60,661			0		158
Subtotal consumer and other	479		126		73,020			73,625			0		275
Leases	0		0		17,322			17,322			0		0
Total loans and leases	3,559		16,281		4,681,206			4,701,046			0		22,485
Less: unearned income and deferred costs and fees	0		0		(3,645		)	(3,645		)	0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	3,559	$	16,281	$	4,677,561		$	4,697,401		$	0	$	22,485
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	$	0	$	2	$	39,074		$	39,076		$	2	$	1
Subtotal commercial and industrial	0		2		39,074			39,076			2		1
Commercial real estate
Construction	0		0		1,335			1,335			0		0
Agriculture	0		0		197			197			0		0
Commercial real estate other	24		685		144,676			145,385			542		172
Subtotal commercial real estate	24		685		146,208			146,917			542		172
Residential real estate
Home equity	58		125		15,168			15,351			55		872
Mortgages	83		671		17,266			18,020			195		751
Subtotal residential real estate	141		796		32,434			33,371			250		1,623
Consumer and other
Consumer and other	0		0		785			785			0		0
Subtotal consumer and other	0		0		785			785			0		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	165	$	1,483	$	218,501		$	220,149		$	794	$	1,796

 

¹ Includes acquired loans that were recorded at fair value at the acquisition date.

December 31, 2018
(In thousands)	30-89 days		90 days or more		Current Loans			Total Loans			90 days and accruing1		Nonaccrual
Originated loans and leases
Commercial and industrial
Agriculture	$	0	$	0	$	107,494		$	107,494		$	0	$	0
Commercial and industrial other	2,367		1,659		922,403			926,429			0		1,861
Subtotal commercial and industrial	2,367		1,659		1,029,897			1,033,923			0		1,861
Commercial real estate
Construction	0		0		164,285			164,285			0		0
Agriculture	71		0		169,934			170,005			0		0
Commercial real estate other	1,201		1,856		1,824,222			1,827,279			0		7,691
Subtotal commercial real estate	1,272		1,856		2,158,441			2,161,569			0		7,691
Residential real estate
Home equity	986		1,026		206,447			208,459			0		1,784
Mortgages	2,693		4,027		1,077,082			1,083,802			0		7,770
Subtotal residential real estate	3,679		5,053		1,283,529			1,292,261			0		9,554
Consumer and other
Indirect	333		59		12,271			12,663			0		155
Consumer and other	187		24		57,354			57,565			0		79
Subtotal consumer and other	520		83		69,625			70,228			0		234
Leases	0		0		14,556			14,556			0		0
Total loans and leases	7,838		8,651		4,556,048			4,572,537			0		19,340
Less: unearned income and deferred costs and fees	0		0		(3,796		)	(3,796		)	0		0
Total originated loans and leases, net of unearned income and deferred costs and fees	$	7,838	$	8,651	$	4,552,252		$	4,568,741		$	0	$	19,340
Acquired loans and leases
Commercial and industrial
Commercial and industrial other	$	0	$	10	$	43,702		$	43,712		$	10	$	22
Subtotal commercial and industrial	0		10		43,702			43,712			10		22
Commercial real estate
Construction	0		0		1,384			1,384			0		0
Agriculture	0		0		224			224			0		0
Commercial real estate other	0		839		176,645			177,484			525		316
Subtotal commercial real estate	0		839		178,253			179,092			525		316
Residential real estate
Home equity	46		803		20,300			21,149			59		1,414
Mortgages	18		969		19,497			20,484			722		1,104
Subtotal residential real estate	64		1,772		39,797			41,633			781		2,518
Consumer and other
Consumer and other	3		0		758			761			0		0
Subtotal consumer and other	3		0		758			761			0		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	67	$	2,621	$	262,510		$	265,198		$	1,316	$	2,856

 ¹ Includes acquired loans that were recorded at fair value at the acquisition date.