10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2020

OR

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

For the transition period from _____ to ______

Commission File Number 1-12709

  

Tompkins Financial Corporation

(Exact name of registrant as specified in its charter)

New York	16-1482357
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 are value	TMP	NYSE American, LLC

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 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 non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated 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 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 ☒.

Indicate the number of shares of the Registrant's Common Stock outstanding as of the latest practicable date: 14,907,286 shares as of April 30, 2020.

TOMPKINS FINANCIAL CORPORATION

FORM 10-Q

INDEX

PART I -FINANCIAL INFORMATION
			PAGE
	Item 1 –	Condensed Consolidated Financial Statements Consolidated Statements of Condition as of March 31, 2020 (Unaudited) and December 31, 2019 (Audited)	1
		Consolidated Statements of Income for the three months ended March 31, 2020 and 2019 (Unaudited)	2
		Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019 (Unaudited)	3
		Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 (Unaudited)	4
		Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2020 and 2019 (Unaudited)	6
		Notes to Unaudited Condensed Consolidated Financial Statements	7
	Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
	Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	61
	Item 4 -	Controls and Procedures	63
PART II - OTHER INFORMATION
	Item 1 –	Legal Proceedings	63
	Item 1A – Risk Factors		63
	Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds	65
	Item 3 -	Defaults Upon Senior Securities	65
	Item 4 -	Mine Safety Disclosures	65
	Item 5 -	Other Information	65
	Item 6 -	Exhibit Index	65
SIGNATURES			67

TOMPKINS FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data) (Unaudited)	As of			As of
ASSETS	3/31/2020			12/31/2019
	(unaudited)			(audited)
Cash and noninterest bearing balances due from banks	$	110,998		$	136,010
Interest bearing balances due from banks	4,265			1,972
Cash and Cash Equivalents	115,263			137,982
Available-for-sale debt securities, at fair value (amortized cost of $1,318,416 at March 31, 2020 and $1,293,239 at December 31, 2019)	1,352,637			1,298,587
Equity securities, at fair value (amortized cost $930 at March 31, 2020 and $915 at December 31, 2019)	930			915
Originated loans and leases, net of unearned income and deferred costs and fees	4,724,277			4,697,401
Acquired loans	213,545			220,149
Less: Allowance for credit losses	52,404			39,892
Net Loans and Leases	4,885,418			4,877,658
Federal Home Loan Bank and other stock	24,212			33,695
Bank premises and equipment, net	93,604			94,355
Corporate owned life insurance	82,872			82,961
Goodwill	92,447			92,447
Other intangible assets, net	5,847			6,223
Accrued interest and other assets	89,884			100,800
Total Assets	$	6,743,114		$	6,725,623
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market	3,273,813			3,080,686
Time	708,933			675,014
Noninterest bearing	1,426,617			1,457,221
Total Deposits	5,409,363			5,212,921
Federal funds purchased and securities sold under agreements to repurchase	68,993			60,346
Other borrowings	457,983			658,100
Trust preferred debentures	17,078			17,035
Other liabilities	107,100			114,167
Total Liabilities	$	6,060,517		$	6,062,569
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,943,857 at March 31, 2020; and 15,014,499 at December 31, 2019	1,494			1,501
Additional paid-in capital	333,662			338,507
Retained earnings	372,344			370,477
Accumulated other comprehensive loss	(21,271		)	(43,564		)
Treasury stock, at cost – 117,940 shares at March 31, 2020, and 123,956 shares at December 31, 2019	(5,076		)	(5,279		)
Total Tompkins Financial Corporation Shareholders’ Equity	681,153			661,642
Noncontrolling interests	1,444			1,412
Total Equity	$	682,597		$	663,054
Total Liabilities and Equity	$	6,743,114		$	6,725,623

See notes to unaudited condensed consolidated financial statements.

1

TOMPKINS FINANCIAL CORPORATION

 CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

	Three Months Ended
(In thousands, except per share data) (Unaudited)	3/31/2020		3/31/2019
INTEREST AND DIVIDEND INCOME
Loans	$	55,614	$	55,324
Due from banks	6		10
Available-for-sale debt securities	7,144		7,858
Held-to-maturity securities	0		858
Federal Home Loan Bank and other stock	435		878
Total Interest and Dividend Income	63,199		64,928
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	843		586
Other deposits	6,356		6,011
Federal funds purchased and securities sold under agreements to repurchase	36		44
Trust preferred debentures	289		329
Other borrowings	2,706		6,044
Total Interest Expense	10,230		13,014
Net Interest Income	52,969		51,914
Less: Provision for credit loss expense	16,294		445
Net Interest Income After Provision for Credit Loss Expense	36,675		51,469
NONINTEREST INCOME
Insurance commissions and fees	8,045		8,045
Investment services income	4,202		4,084
Service charges on deposit accounts	1,983		1,998
Card services income	2,183		2,790
Other income	2,104		2,478
Net gain on securities transactions	443		12
Total Noninterest Income	18,960		19,407
NONINTEREST EXPENSE
Salaries and wages	22,494		21,101
Other employee benefits	5,684		5,611
Net occupancy expense of premises	3,328		3,601
Furniture and fixture expense	1,985		1,979
Amortization of intangible assets	374		412
Other operating expense	11,875		11,505
Total Noninterest Expenses	45,740		44,209
Income Before Income Tax Expense	9,895		26,667
Income Tax Expense	1,909		5,595
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	7,986		21,072
Less: Net Income Attributable to Noncontrolling Interests	37		32
Net Income Attributable to Tompkins Financial Corporation	$	7,949	$	21,040
Basic Earnings Per Share	$	0.53	$	1.37
Diluted Earnings Per Share	$	0.53	$	1.37

See notes to unaudited condensed consolidated financial statements.

2

TOMPKINS FINANCIAL CORPORATION

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

	Three Months Ended
(In thousands) (Unaudited)	3/31/2020			3/31/2019
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$	7,986		$	21,072
Other comprehensive income (loss), net of tax:
Available-for-sale debt securities:
Change in net unrealized gain/(loss) during the period	22,123			11,894
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	(324		)	0
Employee benefit plans:
Amortization of net retirement plan actuarial loss	454			318
Amortization of net retirement plan prior service cost	40			3
Other comprehensive income	22,293			12,215
Subtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation	30,279			33,287
Less: Net income attributable to noncontrolling interests	(37		)	(32		)
Total comprehensive income attributable to Tompkins Financial Corporation	$	30,242		$	33,255

See notes to unaudited condensed consolidated financial statements.

3

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
(In thousands) (Unaudited)	3/31/2020			3/31/2019
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$	7,949		$	21,040
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit loss expense	16,294			445
Depreciation and amortization of premises, equipment, and software	2,554			2,480
Amortization of intangible assets	374			412
Earnings from corporate owned life insurance	(324		)	(643		)
Net amortization on securities	1,937			1,786
Amortization/accretion related to purchase accounting	(372		)	(369		)
Net gain on securities transactions	(443		)	(12		)
Net gain on sale of loans originated for sale	(176		)	(94		)
Proceeds from sale of loans originated for sale	4,260			8,586
Loans originated for sale	(4,514		)	(6,059		)
Net (gain) loss on sale of bank premises and equipment	(3		)	7
Net excess tax benefit from stock based compensation	118			139
Stock-based compensation expense	1,180			985
Decrease (increase) in accrued interest receivable	1,286			(3,068		)
Decrease in accrued interest payable	(242		)	(274		)
Other, net	(5,735		)	(8,923		)
Net Cash Provided by Operating Activities	24,143			16,438
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale debt securities	156,834			51,409
Proceeds from sales of available-for-sale debt securities	42,584			0
Proceeds from maturities, calls and principal paydowns of held-to-maturity securities	0			3,821
Purchases of available-for-sale debt securities	(226,103		)	(48,293		)
Purchases of held-to-maturity securities	0			(2,985		)
Net (increase) decrease in loans	(20,879		)	38,424
Proceeds from redemption/sale of Federal Home Loan Bank and other stock	34,088			35,293
Purchases of Federal Home Loan Bank and other stock	(24,605		)	(28,119		)
Proceeds from sale of bank premises and equipment	4			40
Purchases of bank premises, equipment and software	(909		)	(1,641		)
Other, net	548			0
Net Cash (Used in) Provided by Investing Activities	(38,438		)	47,949
FINANCING ACTIVITIES
Net increase in demand, money market, and savings deposits	162,523			76,549
Net increase in time deposits	34,141			24,697
Net increase (decrease) in Federal funds purchased and securities sold under agreements to repurchase	8,647			(14,924		)
Increase in other borrowings	74,583			13,752
Repayment of other borrowings	(274,700		)	(166,400		)
Cash dividends	(7,789		)	(7,657		)
Repurchase of common stock	(5,620		)	0
Net proceeds from exercise of stock options	(209		)	(219		)
Net Cash Used in Financing Activities	(8,424		)	(74,202		)
Net Decrease in Cash and Cash Equivalents	(22,719		)	(9,815		)
Cash and cash equivalents at beginning of period	137,982			80,389
Total Cash and Cash Equivalents at End of Period	$	115,263		$	70,574

 

See notes to unaudited condensed consolidated financial statements.

4

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
(In thousands) (Unaudited)	3/31/2020		3/31/2019
Supplemental Information:
Cash paid during the year for  - Interest	$	10,694	$	13,568
Cash paid during the year for  - Taxes	1,214		54
Transfer of loans to other real estate owned	104		0

See notes to unaudited condensed consolidated financial statements.

5

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands except share and per share data)(Unaudited)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Non- controlling Interests			Total
Balances at January 1, 2019	$	1,535		$	366,595		$	319,396		$	(63,165	)	$	(4,902	)	$	1,412		$	620,871
Net income attributable to noncontrolling interests and Tompkins Financial Corporation							21,040									32			21,072
Other comprehensive income										12,215									12,215
Total Comprehensive Income																			33,287
Cash dividends ($0.50 per share)							(7,657		)										(7,657		)
Net exercise of stock options (4,996 shares)				(219		)													(219		)
Stock-based compensation expense				985															985
Directors deferred compensation plan ((4,770) shares)				(116		)							116						0
Restricted stock activity ((3,295) shares)																			0
Balances at March 31, 2019	$	1,535		$	367,245		$	332,779		$	(50,950	)	$	(4,786	)	$	1,444		$	647,267
Balances at January 1, 2020	$	1,501		$	338,507		$	370,477		$	(43,564	)	$	(5,279	)	$	1,412		$	663,054
Net income attributable to noncontrolling interests and Tompkins Financial Corporation							7,949									37			7,986
Other comprehensive income										22,293									22,293
Total Comprehensive Income																			30,279
Cash dividends ($0.52 per share)							(7,789		)										(7,789		)
Net exercise of stock options (3,011 shares)				(209		)													(209		)
Common stock repurchased and returned to unissued status (71,288 shares)	(7		)	(5,613		)													(5,620		)
Stock-based compensation expense				1,180															1,180
Directors deferred compensation plan (6,016 shares)				(203		)							203						0
Restricted stock activity (2,365 shares)																			0
Impact of adoption of ASU 2016-13							1,707												1,707
Partial repurchase of noncontrolling interest																(5		)	(5		)
Balances at March 31, 2020	$	1,494		$	333,662		$	372,344		$	(21,271	)	$	(5,076	)	$	1,444		$	682,597

See notes to unaudited condensed consolidated financial statements.

6

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Business

Tompkins Financial Corporation (“Tompkins” or the “Company”) is headquartered in Ithaca, New York and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company is a locally oriented, community-based financial services organization that offers a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, and insurance services. At March 31, 2020, 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 Street, 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.”

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

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

2. Basis of Presentation

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

In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year ended December 31, 2020. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Effective January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 makes significant changes to the accounting for credit losses on financial instruments presented on an amortized cost basis and disclosures about them. These changes are discussed below, under "Impact of Adoption of ASU 2016-13".

7

Other than the changes resulting from the adoption of ASU 2016-13, there have been no significant changes to the Company’s accounting policies from those presented in the 2019 Annual Report on Form 10-K. Refer to MD&A under "Recently Issued Accounting Standards" of this Report for a discussion of recently issued accounting guidelines.

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

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

The consolidated financial information included herein combines the results of operations, the assets, liabilities, and shareholders’ equity of the Company and its subsidiaries. Amounts in the prior periods’ unaudited condensed consolidated financial statements are reclassified when necessary to conform to the current periods’ presentation. All significant intercompany balances and transactions are eliminated in consolidation.

Impact of Adoption of ASU 2016-13

Securities

For available for sale debt securities in an unrealized loss position, the Company evaluates the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit-related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) on the Statement of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company intends to sell an impaired available- for-sale debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount must be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the ACL when management believes the uncollectability of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable is excluded from the estimate of credit losses.

Acquired Loans

Acquired loans are recorded at fair value at the date of acquisition based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Certain larger purchased loans are individually evaluated while certain purchased loans are grouped together according to similar risk characteristics and are treated in the aggregate when applying various valuation techniques. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

Prior to January 1, 2020, loans acquired in a business combination that had evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that the Company would be unable to collect all contractually required payments receivable were considered purchased credit impaired (“PCI”). PCI loans were individually evaluated and recorded at fair value at the date of acquisition with no initial valuation allowance based on a discounted cash flow methodology that considered various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’ assessment of risk inherent in the cash flow estimates. The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield,” was recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference,” were not recognized on the Statement of Condition and did not result in any yield adjustments, loss accruals or valuation allowances. Increases in expected cash flows, including prepayments, subsequent to the initial investment were recognized prospectively through adjustment of the yield on the loan over its remaining life. Decreases in expected cash flows were recognized as impairment. Valuation allowances on PCI loans reflected only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately were not to be received).

8

Subsequent to January 1, 2020 in connection with the Company's adoption of ASU 2016-13, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date.

The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

Allowance for Credit Losses – Loans

Under the current expected credit loss model, the ACL on loans is a valuation allowance estimated at each balance sheet date in accordance with U.S. GAAP that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.

The Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL.

Expected credit losses are reflected in the ACL through a charge to the provision for credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the ACL is reduced by the same amount. 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. Subsequent recoveries, if any, are credited to the ACL when received.

The Company measures expected credit losses of financial assets at the loan level by segment, by pooling loans when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company uses a discounted cash flow (“DCF”) method to estimate expected credit losses. Allowance on loans that do not share risk characteristics are evaluated on an individual basis. The Company assigns a credit risk rating to all commercial and commercial real estate loans. The Company reviews commercial and commercial real estate loans rated Substandard or worse, on nonaccrual and greater than $250,000 for loss potential and when deemed appropriate assigns an allowance based on an individual evaluation.

The Company’s methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. The Company’s methodologies revert back to average historical loss information on a straight line basis over eight quarters when it can no longer develop reasonable and supportable forecasts.

The Company has identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses: commercial, commercial real estate, residential, home equity, consumer and leases. This segmentation was selected based on the differences in the risk profile of each of these categories and aligns well with regulatory reporting categories. This segmentation separates borrower type, collateral type and the nature of the loan. The differences in risk profiles of these segments enables the ACL to be more precise in its allocation due to the inherent risk in these specific portfolios.

Discounted Cash Flow Method

The Company uses the discounted cash flow method to estimate expected credit losses for the commercial, commercial real estate, residential, home equity, and consumer loan pools. For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.

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The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method, management utilizes and forecasts one or both of the following economic factors; national unemployment and gross domestic product as loss drivers.

For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. Management leverages economic projections from an independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. The model considers a base case forecast and two alternative forecasts and assigns weightings to these three scenarios based on current conditions and expectations for future conditions.

The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows (“NPV”). An ACL is established for the difference between the instrument’s NPV and amortized cost basis.

The model also considers the need to qualitatively adjust expected loss estimates for information not already captured in the loss estimation process. These qualitative factors include those suggested by the Interagency Policy Statement on Allowances for Credit Losses. These qualitative factor adjustments may increase or decrease the Company's estimate of expected credit losses.

Collateral Dependent Financial Assets

Loans that do not share common risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral less cost to sell, and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring.

Troubled Debt Restructuring

A loan that has been modified or renewed is considered a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. The Company’s ACL reflects all effects of a TDR when an individual asset is specifically identified as a reasonably expected TDR. The Company has determined that a TDR is reasonably expected no later than the point when the lender concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession from the lender to avoid a default. Reasonably expected TDRs and executed non-performing TDRs are evaluated individually to determine the required ACL. TDRs performing in accordance with their modified contractual terms for a reasonable period of time may be included in the Company’s existing pools based on the underlying risk characteristics of the loan to measure the ACL. In accordance with the provisions of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and related interagency guidance issued by Federal banking regulators, we are not designating eligible loan modifications or deferrals due to impacts of the coronavirus ("COVID-19") pandemic as TDRs.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans, unused lines of credit and commercial letters of credit, issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

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The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to the provision for credit loss expense for off-balance sheet credit exposures included in other noninterest expense in the Company’s consolidated statements of income. The ACL on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using similar methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in other liabilities on the Company’s statements of condition.

3. Securities

Available-for-Sale Debt Securities

The following table summarizes available-for-sale debt securities held by the Company at March 31, 2020:

	Available-for-Sale Debt Securities
March 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	1,745	$	5	$	0	$	1,750
Obligations of U.S. Government sponsored entities	302,086		11,384		42		313,428
Obligations of U.S. states and political subdivisions	101,452		1,159		127		102,484
Mortgage-backed securities – residential, issued by
U.S. Government agencies	171,500		3,469		454		174,515
U.S. Government sponsored entities	739,133		19,013		119		758,027
U.S. corporate debt securities	2,500		0		67		2,433
Total available-for-sale debt securities	$	1,318,416	$	35,030	$	809	$	1,352,637

 The following table summarizes available-for-sale debt securities held by the Company at December 31, 2019:  

	Available-for-Sale Debt 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 debt securities	$	1,293,239	$	10,466	$	5,118	$	1,298,587

The Company may from time to time sell investment securities from its available-for-sale portfolio. Realized gains on sales of available-for-sale debt securities were $178,000 for the three months ended March 31, 2020 and $0 for the same period during 2019. Realized losses on sales of available-for-sale debt securities were $0 for the three months ended March 31, 2020 and 2019. The sales of available-for-sale investment securities were the result of general investment portfolio and interest rate risk management. The Company's available-for-sale portfolio includes callable securities that may be called prior to maturity. Realized gains on called available-for-sale debt securities were $251,000 for the three months ended March 31, 2020 and $0 for the three months ended March 31, 2019. The Company also recognized gains of $14,000 and $12,000 for the three months ended March 31, 2020, and March 31, 2019 on equity securities, reflecting the change in fair value.

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The following table summarizes available-for-sale debt securities that had unrealized losses at March 31, 2020:  

	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	$	24,209	$	42	$	0	$	0	$	24,209	$	42
Obligations of U.S. states and political subdivisions	18,179		127		0		0		18,179		127
Mortgage-backed securities – residential, issued by
U.S. Government agencies	38,813		340		6,618		114		45,431		454
U.S. Government sponsored entities	4,435		10		11,038		109		15,473		119
U.S. corporate debt securities	0		0		2,433		67		2,433		67
Total available-for-sale debt securities	$	85,636	$	519	$	20,089	$	290	$	105,725	$	809

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

	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 debt securities	$	241,757	$	1,371	$	288,210	$	3,747	$	529,967	$	5,118

The Company evaluates available-for-sale debt securities in unrealized loss positions at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense.

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

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

• The extent to which the fair value is less than the amortized cost basis;

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

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

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

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

At January 1, 2020 and March 31, 2020, the Company determined that all impaired available-for-sale debt securities experienced a decline in fair value below the amortized cost basis due to noncredit-related factors. In addition, the Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized

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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. Therefore, the Company carried no ACL at those respective dates and there was no credit loss expense recognized by the Company during the three months ended March 31, 2020.

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.

March 31, 2020
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	63,817	$	64,031
Due after one year through five years	222,678		232,268
Due after five years through ten years	81,418		83,920
Due after ten years	39,870		39,876
Total	407,783		420,095
Mortgage-backed securities	910,633		932,542
Total available-for-sale debt securities	$	1,318,416	$	1,352,637

December 31, 2019
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt 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

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 stock ("ACBB"), 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 $15.6 million, $8.5 million and $95,000 at March 31, 2020, respectively. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue to pay dividends and repurchase stock. Quarterly, we evaluate our investment in the FHLB for impairment. We evaluate recent and long-term operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history and impact of legislative and regulatory changes. Based on our most recent evaluation, as of March 31, 2020, we have determined that no impairment write-downs are currently required.

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4. Loans and Leases

Loans and Leases at March 31, 2020 and December 31, 2019 were as follows:

	3/31/2020								12/31/2019
(In thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	95,385		$	0	$	95,385		$	105,786		$	0	$	105,786
Commercial and industrial other	849,273			38,570		887,843			863,199			39,076		902,275
Subtotal commercial and industrial	944,658			38,570		983,228			968,985			39,076		1,008,061
Commercial real estate
Construction	167,139			1,311		168,450			212,302			1,335		213,637
Agriculture	186,870			191		187,061			184,701			197		184,898
Commercial real estate other	1,980,264			140,675		2,120,939			1,899,645			145,385		2,045,030
Subtotal commercial real estate	2,334,273			142,177		2,476,450			2,296,648			146,917		2,443,565
Residential real estate
Home equity	201,231			14,509		215,740			203,894			15,351		219,245
Mortgages	1,158,544			17,429		1,175,973			1,140,572			18,020		1,158,592
Subtotal residential real estate	1,359,775			31,938		1,391,713			1,344,466			33,371		1,377,837
Consumer and other
Indirect	11,871			0		11,871			12,964			0		12,964
Consumer and other	60,301			860		61,161			60,661			785		61,446
Subtotal consumer and other	72,172			860		73,032			73,625			785		74,410
Leases	17,046			0		17,046			17,322			0		17,322
Total loans and leases	4,727,924			213,545		4,941,469			4,701,046			220,149		4,921,195
Less: unearned income and deferred costs and fees	(3,647		)	0		(3,647		)	(3,645		)	0		(3,645		)
Total loans and leases, net of unearned income and deferred costs and fees	$	4,724,277		$	213,545	$	4,937,822		$	4,697,401		$	220,149	$	4,917,550

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 4 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes in these policies and guidelines since the date of that report. As such, these policies are reflective of new originations as well as those balances held at March 31, 2020. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan origination, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Generally loans are placed on nonaccrual status if principal or interest payments become 90 days or more contractually past due and/or management deems the collectability of the principal and/or interest to be in question as well as when required by regulatory agencies. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan. Loans are generally returned to accrual status when all the principal and interest amounts contractually due are brought current, the borrower has established a payment history, and future payments are reasonably assured. When management determines that the collection of principal in full is not probable, 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.

The below table is an age analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of March 31, 2020 and December 31, 2019.

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March 31, 2020
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans			Total Loans
Originated Loans and Leases
Commercial and industrial
Agriculture	$	538	$	0	$	0	$	538	$	94,847		$	95,385
Commercial and industrial other	1,039		1,750		1,770		4,559		844,714			849,273
Subtotal commercial and industrial	1,577		1,750		1,770		5,097		939,561			944,658
Commercial real estate
Construction	0		0		0		0		167,139			167,139
Agriculture	141		0		0		141		186,729			186,870
Commercial real estate other	3,400		0		6,285		9,685		1,970,579			1,980,264
Subtotal commercial real estate	3,541		0		6,285		9,826		2,324,447			2,334,273
Residential real estate
Home equity	410		0		615		1,025		200,206			201,231
Mortgages	1,148		43		4,183		5,374		1,153,170			1,158,544
Subtotal residential real estate	1,558		43		4,798		6,399		1,353,376			1,359,775
Consumer and other
Indirect	148		54		83		285		11,586			11,871
Consumer and other	175		107		93		375		59,926			60,301
Subtotal consumer and other	323		161		176		660		71,512			72,172
Leases	0		0		0		0		17,046			17,046
Total loans and leases	6,999		1,954		13,029		21,982		4,705,942			4,727,924
Less: unearned income and deferred costs and fees	0		0		0		0		(3,647		)	(3,647		)
Total originated loans and leases, net of unearned income and deferred costs and fees	$	6,999	$	1,954	$	13,029	$	21,982	$	4,702,295		$	4,724,277
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	0		0		2		2		38,568			38,570
Subtotal commercial and industrial	0		0		2		2		38,568			38,570
Commercial real estate
Construction	0		0		0		0		1,311			1,311
Agriculture	0		0		0		0		191			191
Commercial real estate other	15		0		35		50		140,625			140,675
Subtotal commercial real estate	15		0		35		50		142,127			142,177
Residential real estate
Home equity	283		9		225		517		13,992			14,509
Mortgages	68		0		681		749		16,680			17,429
Subtotal residential real estate	351		9		906		1,266		30,672			31,938
Consumer and other
Consumer and other	0		0		0		0		860			860
Subtotal consumer and other	0		0		0		0		860			860
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	366	$	9	$	943	$	1,318	$	212,227		$	213,545

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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.

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The following table presents the amortized cost basis of loans on nonaccrual status and the amortized cost basis of loans on nonaccrual status for which there was no related allowance for credit losses. The below table is an age analysis of nonaccrual loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of March 31, 2020.

(In thousands)	Nonaccrual Loans with no Allowance for Credit Losses		Nonaccrual Loans		Loans Past Due Over 89 Days and Accruing
Originated Loans and Leases
Commercial and industrial
Commercial and industrial other	$	1,030	$	2,047	$	0
Subtotal commercial and industrial	1,030		2,047		0
Commercial real estate
Commercial real estate other	7,309		9,532		0
Subtotal commercial real estate	7,309		9,532		0
Residential real estate
Home equity	264		1,870		0
Mortgages	922		7,758		0
Subtotal residential real estate	1,186		9,628		0
Consumer and other
Indirect	0		147		0
Consumer and other	0		118		0
Subtotal consumer and other	0		265		0
Total loans and leases	9,525		21,472		0
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	0		2		0
Subtotal commercial and industrial	0		2		0
Commercial real estate
Commercial real estate other	0		166		0
Subtotal commercial real estate	0		166		0
Residential real estate
Home equity	0		847		0
Mortgages	0		1,069		0
Subtotal residential real estate	0		1,916		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	0	$	2,084	$	0

The Company recognized $0 of interest income on nonaccrual loans during the three months ended March 31, 2020.

5. Allowance for Credit Losses

Management reviews the appropriateness of the allowance for credit losses (“allowance” or "ACL") 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 credit 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. 119, Measurement of Credit Losses on Financial Instruments ("CECL"), and Financial Instruments - Credit Losses and ASC Topic 326, Financial Instruments - Credit Losses.

17

The Company uses a discounted cash flow ("DCF") method to estimate expected credit losses for all loan segments. For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, recovery lag probability of default, and loss give default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on internal historical data.

The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loans utilizing the DCF method, management utilizes and forecasts national unemployment and a one year percentage change in national gross domestic product as loss drivers in the model.

For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.

The combination of adjustments for credit expectations and timing expectations produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce a net present value of expected cash flows ("NPV"). An ACL is established for the difference between the NPV and amortized cost basis.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets purchased with credit deterioration ("PCD") that were previously classified as purchased credit impaired ("PCI") and accounted for under ASC 310-30. In accordance with the standard, the Company did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The remaining discount on the PCD assets will be accreted into interest income on a level-yield method over the life of the loans.

Since the methodology is based upon historical experience and trends, current conditions, and reasonable and supportable forecasts, as well as management’s judgment, factors may arise that result in different estimates. While management’s evaluation of the allowance as of March 31, 2020, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans, and commercial letters of credit. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to credit loss expense for off-balance sheet credit exposures included in other noninterest expense in the Company's consolidated statements of income.

The following table details activity in the allowance for credit losses on loans for the three months ended March 31, 2020 and 2019. The Company adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach. Results for the periods beginning after January 1, 2020 are presented under ASC 326, while prior period amounts continue to be reported in accordance with previously applicable U.S. GAAP. The transition adjustment includes a decrease in the allowance of $2.5 million. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

18

Three Months Ended March 31, 2020
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for credit losses:
Beginning balance, prior to adoption of ASC 326	$	10,541		$	21,608		$	6,381		$	1,362		$	0		$	39,892
Impact of adopting ASC 326	(2,008		)	(5,917		)	4,459			850			82			(2,534		)
Charge-offs	(1		)	(1,290		)	(2		)	(137		)	0			(1,430		)
Recoveries	16			18			79			69			0			182
Provision for credit loss expense	3,117			8,027			5,413			(261		)	(2		)	16,294
Ending Balance	$	11,665		$	22,446		$	16,330		$	1,883		$	80		$	52,404

Three Months Ended March 31, 2019
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for credit losses
Beginning balance	$	11,272		$	23,483		$	7,345		$	1,310		$	0	43,410
Charge-offs	(380		)	(3,343		)	(18		)	(180		)	0		(3,921		)
Recoveries	59			7			233			95			0		394
Provision (credit)	572			923			(1,098		)	48			0		445
Ending Balance	$	11,523		$	21,070		$	6,462		$	1,273		$	0	$	40,328

 The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans:

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
March 31, 2020
Commercial and Industrial	$	0	$	631	$	93	$	724	$	131
Commercial Real Estate	7,705		0		60		7,765		225
Commercial Real Estate - Agriculture	1,559		0		0		1,559		0
Residential - Mortgages	46		0		0		46		0
Total	$	9,310	$	631	$	153	$	10,094	$	356

19

The following table presents information pertaining to the allocation of the allowance for loan and lease losses as of December 31, 2019, as determined in accordance with ASC 310, prior to the adoption of ASU 2016-13: 

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
December 31, 2019
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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for acquired loans
December 31, 2019
Collectively evaluated for impairment	$	0	$	51	$	21	$	6	$	0	$	78
Ending balance	$	0	$	51	$	21	$	6	$	0	$	78

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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer  and Other		Finance Leases		Total
Originated loans and leases
December 31, 2019
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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer  and Other		Finance Leases		Total
Acquired loans
December 31, 2019
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

20

Prior to the adoption of ASC 326, a loan was considered impaired when, based on current information and events, it was probable that we would be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans consisted of non-homogenous nonaccrual loans, and all loans restructured in a troubled debt restructuring (TDR). Specific reserves on individually identified impaired loans that were not collateral dependent were measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that were collateral dependent, impairment was measured based on the fair value of the collateral less estimated selling costs, and such impaired amounts were generally charged off. The majority of impaired loans were collateral dependent impaired loans that had 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.

Impaired loans at December 31, 2019 were as follows:

 

	December 31, 2019
(In thousands)	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
Commercial real estate
Commercial real estate other	10,205		11,017		0
Residential real estate
Home equity	3,779		3,992		0
Subtotal	$	15,849	$	16,974	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	245		245		245
Commercial real estate
Commercial real estate other	3,291		3,291		662
Subtotal	$	3,536	$	3,536	$	907
Total	$	19,385	$	20,510	$	907

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

21

The following table presents average impaired loans, as determined in accordance with ASC 310, prior to the adoption of ASU 2016-13, and interest recognized on such loans, for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
(In thousands)	Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	1,468	$	0
Commercial real estate
Commercial real estate other	6,099		0
Residential real estate
Home equity	3,981		0
Subtotal	$	11,548	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	581		0
Commercial real estate
Commercial real estate other	445		0
Subtotal	$	1,026	$	0
Total	$	12,574	$	0

	Three Months Ended March 31, 2019
(In thousands)	Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	22	$	0
Commercial real estate
Commercial real estate other	855		0
Residential real estate
Home equity	2,577		0
Subtotal	$	3,454	$	0
Total	$	3,454	$	0

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

22

The following tables present information on loans modified in troubled debt restructuring during the periods indicated and their balances immediately prior to the modification date and post-modification as of March 31, 2020 and 2019.

March 31, 2020	Three 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	0	$	0	$	0	1	$	37
Residential real estate
Home equity1	2	121		121		1	87
Total	2	$	121	$	121	2	$	124

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

² TDRs that defaulted during the three months ended March 31, 2020 that were restructured in the prior twelve months.

March 31, 2019	Three 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
Residential real estate
Home equity1	1	$	168	$	168	0	$	0
Total	1	$	168	$	168	0	$	0

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

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

For customers affected by COVID-19, the Company implemented a loan payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. The current program allows for deferral of payments of principal and interest for up to 90 days and customers will be able to request a payment deferral through the middle of May 2020. The provisions of the CARES Act and recently issued interagency guidance issued by Federal banking regulators provided guidance and clarification related to modifications and deferral programs to assist borrowers who are negatively impacted by the COVID-19 national emergency. The guidance and clarifications detail certain provisions whereby banks are permitted to make deferrals and modifications to the terms of a loan which would not require the loan to be reported as a troubled debt restructuring. In accordance with the CARES Act and the interagency guidance, the Company elected to adopt the provisions to not report eligible loan modifications as troubled debt restructurings.

23

The following table presents credit quality indicators by total loans amortized cost basis by origination year as of March 31, 2020.

(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	42,295	$	83,851	$	71,313	$	88,343	$	46,007	$	283,285	$	260,678	$	655	$	876,427
Special Mention	0		104		263		1,178		2,821		136		540		0		5,042
Substandard	0		112		1,240		286		626		866		3,244		0		6,374
Total Commercial and Industrial - Other	$	42,295	$	84,067	$	72,816	$	89,807	$	49,454	$	284,286	$	264,462	$	655	$	887,843
Commercial and Industrial - Agriculture:
Internal risk grade:
Pass	$	1,520	$	13,214	$	14,996	$	8,135	$	5,170	$	2,395	$	38,484	$	0	$	83,914
Special Mention	0		80		127		109		0		0		435		0		751
Substandard	100		107		3		894		35		2,310		7,271		0		10,720
Total Commercial and Industrial - Agriculture	$	1,620	$	13,401	$	15,126	$	9,138	$	5,205	$	4,705	$	46,190	$	0	$	95,385
Commercial Real Estate
Internal risk grade:
Pass	$	99,145	$	247,630	$	239,644	$	258,039	$	340,595	$	505,182	$	381,049	$	2,752	$	2,074,036
Special Mention	0		0		2,728		2,400		5,503		9,253		3,048		0		22,932
Substandard	0		1,700		764		3,334		349		9,717		8,107		0		23,971
Total Commercial Real Estate	$	99,145	$	249,330	$	243,136	$	263,773	$	346,447	$	524,152	$	392,204	$	2,752	$	2,120,939
Commercial Real Estate - Agriculture:
Internal risk grade:
Pass	$	2,028	$	30,493	$	42,366	$	23,728	$	14,147	$	39,835	$	16,842	$	448	$	169,887
Special Mention	1,510		0		2,418		120		1,264		361		11		0		5,684
Substandard	0		1,618		558		3,169		4,356		912		877		0		11,490
Total Commercial Real Estate - Agriculture	$	3,538	$	32,111	$	45,342	$	27,017	$	19,767	$	41,108	$	17,730	$	448	$	187,061
Commercial Real Estate - Construction
Internal risk grade:
Pass	$	1,194	$	22,565	$	9,552	$	3,011	$	2,165	$	4,169	$	121,760	$	983	$	165,399
Special Mention	0		0		0		0		0		603		2,109		0		2,712
Substandard	0		0		0		0		0		339		0		0		339
Total Commercial Real Estate - Construction	$	1,194	$	22,565	$	9,552	$	3,011	$	2,165	$	5,111	$	123,869	$	983	$	168,450

24

The following table presents credit quality indicators by total loans amortized cost basis by origination year as of March 31, 2020, continued.

(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Residential - Home Equity
Performing	$	3,948	$	28,694	$	23,181	$	25,332	$	21,014	$	40,444	$	70,006	$	406	$	213,025
Nonperforming	0		19		67		0		0		528		2,101		0		2,715
Total Residential - Home Equity	$	3,948	$	28,713	$	23,248	$	25,332	$	21,014	$	40,972	$	72,107	$	406	$	215,740
Residential - Mortgages
Performing	$	56,373	$	205,326	$	146,568	$	191,872	$	207,389	$	159,262	$	200,151	$	204	$	1,167,145
Nonperforming	0		266		406		453		1,291		2,385		4,027		0		8,828
Total Residential - Mortgages	$	56,373	$	205,592	$	146,974	$	192,325	$	208,680	$	161,647	$	204,178	$	204	$	1,175,973
Consumer - Direct
Performing	$	4,186	$	16,392	$	10,746	$	9,326	$	4,812	$	11,230	$	4,350	$	0	$	61,042
Nonperforming	0		47		44		10		0		18		0		0		119
Total Consumer - Direct	$	4,186	$	16,439	$	10,790	$	9,336	$	4,812	$	11,248	$	4,350	$	0	$	61,161
Consumer - Indirect
Performing	$	616	$	2,904	$	4,886	$	2,001	$	895	$	422	$	0	$	0	$	11,724
Nonperforming	0		57		25		6		39		20		0		0		147
Total Consumer Indirect	$	616	$	2,961	$	4,911	$	2,007	$	934	$	442	$	0	$	0	$	11,871

The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of December 31, 2019.

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

25

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 and Leases
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

The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of December 31, 2019. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing.

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

6. Earnings Per Share

Earnings per share in the table below, for the three month periods ended March 31, 2020 and 2019 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share. ASC 260 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company has issued restricted stock awards that contain such rights and are therefore considered participating securities. Basic earnings per common share are calculated by dividing net income allocable to common stock by the weighted average number of common shares, excluding participating securities, during the period. Diluted earnings per common share include the dilutive effect of participating securities.

26

 

	Three Months Ended
(In thousands, except share and per share data)	3/31/2020			3/31/2019
Basic
Net income available to common shareholders	$	7,949		$	21,040
Less: income attributable to unvested stock-based compensation awards	(99		)	(349		)
Net earnings allocated to common shareholders	7,850			20,691
Weighted average shares outstanding, including unvested stock-based compensation awards	14,904,067			15,313.635
Less: unvested stock-based compensation awards	(185,119		)	(253,460		)
Weighted average shares outstanding - Basic	14,718,948			15,060,175
Diluted
Net earnings allocated to common shareholders	7,850			20,691
Weighted average shares outstanding - Basic	14,718.948			15,060.175
Plus:  incremental shares from assumed conversion of stock-based compensation awards	55,321			76,348
Weighted average shares outstanding - Diluted	14,774,269			15,136,523
Basic EPS	$	0.53		$	1.37
Diluted EPS	$	0.53		$	1.37

Stock-based compensation awards representing 17,956 and 18,886 of common shares during the three months ended March 31, 2020 and 2019, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been anti-dilutive.

7. Other Comprehensive Income (Loss)

The following tables present reclassifications out of the accumulated other comprehensive income (loss) for the three month periods ended March 31, 2020 and 2019.

	Three Months Ended March 31, 2020
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale debt securities:
Change in net unrealized gain/loss during the period	$	29,302		$	(7,179	)	$	22,123
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	(429		)	105			(324		)
Net unrealized gains/losses	28,873			(7,074		)	21,799
Employee benefit plans:
Amortization of net retirement plan actuarial gain	601			(147		)	454
Amortization of net retirement plan prior service cost	53			(13		)	40
Employee benefit plans	654			(160		)	494
Other comprehensive income	$	29,527		$	(7,234	)	$	22,293

27

	Three Months Ended March 31, 2019
(In thousands)	Before-Tax Amount		Tax (Expense) Benefit			Net of Tax
Available-for-sale debt securities:
Change in net unrealized gain/loss during the period	$	15,756	$	(3,862	)	$	11,894
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	0		0			0
Net unrealized gains/losses	15,756		(3,862		)	11,894
Employee benefit plans:
Amortization of net retirement plan actuarial gain	421		(103		)	318
Amortization of net retirement plan prior service cost	4		(1		)	3
Employee benefit plans	425		(104		)	321
Other comprehensive income	$	16,181	$	(3,966	)	$	12,215

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

(In thousands)	Available-for- Sale Debt Securities			Employee Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance at January 1, 2020	$	4,039		$	(47,603	)	$	(43,564	)
Other comprehensive income (loss) before reclassifications	22,123			0			22,123
Amounts reclassified from accumulated other comprehensive (loss) income	(324		)	494			170
Net current-period other comprehensive income	21,799			494			22,293
Balance at March 31, 2020	$	25,838		$	(47,109	)	$	(21,271	)
Balance at January 1, 2019	$	(23,589	)	$	(39,576	)	$	(63,165	)
Other comprehensive income (loss) before reclassifications	11,894			0			11,894
Amounts reclassified from accumulated other comprehensive (loss) income	0			321			321
Net current-period other comprehensive income	11,894			321			12,215
Balance at March 31, 2019	$	(11,695	)	$	(39,255	)	$	(50,950	)

28

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three months ended March 31, 2020 and 2019. 

Three Months Ended March 31, 2020
Details about Accumulated other Comprehensive Income (Loss) Components (In thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss) Income1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale debt securities:
Unrealized gains and losses on available-for-sale debt securities	$	429		Net gain on securities transactions
	(105		)	Tax expense
	324			Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(601		)	Other operating expense
Net retirement plan prior service cost	(53		)	Other operating expense
	(654		)	Total before tax
	160			Tax benefit
	$	(494	)	Net of tax

Three Months Ended March 31, 2019
Details about Accumulated other Comprehensive Income (Loss) Components (In thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss) Income1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale debt securities:
Unrealized gains and losses on available-for-sale debt securities	$	0		Net gain on securities transactions
	0			Tax expense
	0			Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(421		)	Other operating expense
Net retirement plan prior service cost	(4		)	Other operating expense
	(425		)	Total before tax
	104			Tax benefit
	$	(321	)	Net of tax

¹ Amounts in parentheses indicated debits in income statement.

² The accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost (See Note 8 - “Employee Benefit Plan”).

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8. Employee Benefit Plan

The following table sets forth the amount of the net periodic benefit cost recognized by the Company for the Company’s pension plan, post-retirement plan (Life and Health), and supplemental employee retirement plans (“SERP”) including the following components: service cost, interest cost, expected return on plan assets for the period, amortization of net retirement plan actuarial loss, and prior service cost recognized.

Components of Net Periodic Benefit Cost

	Pension Benefits Three Months Ended						Life and Health Three Months Ended						SERP Benefits Three Months Ended
(In thousands)	3/31/2020			3/31/2019			3/31/2020			3/31/2019			3/31/2020		3/31/2019
Service cost	$	0		$	0		$	41		$	50		$	46	$	37
Interest cost	641			745			64			73			240		229
Expected return on plan assets	(1,355		)	(1,234		)	0			0			0		0
Amortization of net retirement plan actuarial loss	350			337			26			0			225		85
Amortization of net retirement plan prior service (credit) cost	(3		)	(3		)	(15		)	(15		)	71		22
Net periodic benefit (income) cost	$	(367	)	$	(155	)	$	116		$	108		$	582	$	373

 The service component of net periodic benefit cost for the Company's benefit plans is recorded as a part of salaries and wages in the consolidated statements of income. All other components are recorded as part of other operating expenses in the consolidated statements of income.

The Company realized approximately $494,000 and $321,000, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive (loss) income, for the three months ended March 31, 2020 and 2019, respectively.

The Company is not required to contribute to the pension plan in 2020, but it may make voluntary contributions. The Company did not contribute to the pension plan in the first three months of 2020 and 2019.

9. Other Income and Operating Expense

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

	Three Months Ended
(In thousands)	3/31/2020		3/31/2019
Noninterest Income
Other service charges	$	805	$	893
Increase in cash surrender value of corporate owned life insurance	324		643
Net gain on sale of loans	176		94
Other income	799		848
Total other income	$	2,104	$	2,478
Noninterest Expenses
Marketing expense	$	941	$	1,162
Professional fees	1,835		1,916
Legal fees	222		303
Technology expense	2,863		2,580
Cardholder expense	829		957
Other expenses	5,185		4,587
Total other operating expense	$	11,875	$	11,505

 

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10. Revenue Recognition

In addition to revenue from loans and securities, the Company also generates revenues from other services provided as described below.

Insurance Commissions and Fees

Fees are earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. The Company has historically recognized revenue in this manner, with the noted exception related to installment billing discussed below.

Installment Billing - Agency Bill

Revenue associated with the issuance of policies is recognized upon the effective date of the associated policy regardless of the billing method. Revenue is 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.

Contingent Commissions

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. Contingent commissions are 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 the level of commissions paid to the Company that will 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 to which the Company does not expect to be entitled, and a corresponding reduction to the gross commission received or receivable. This is 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 the customer's account. 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.

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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, for the three months ended March 31, 2020 and 2019.

	Three Months Ended
(In thousands)	03/31/2020			03/31/2019
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	7,385		$	7,099
Installment Billing		(30	)		(71	)
Refund of Commissions		(127	)		(12	)
Contract Liabilities/Deferred Revenue		(4	)		0
Contingent Commissions		821			1,029
Subtotal Insurance Revenues		8,045			8,045
Trust and Asset Management		2,943			2,850
Mutual Fund & Investment Income		1,259			1,234
Subtotal Investment Service Income		4,202			4,084
Service Charges on Deposit Accounts		1,983			1,998
Card Services Income		2,183			2,790
Other		314			307
Noninterest Income (in-scope of ASC 606)		16,727			17,224
Noninterest Income (out-of-scope of ASC 606)1		2,233			2,183
Total Noninterest Income	$	18,960		$	19,407

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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 $3.9 million and $1.8 million, respectively, at March 31, 2020, compared to $4.7 million and $2.0 million, respectively, at December 31, 2019 and were included in other assets in the Condensed 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. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of March 31, 2020 and December 31, 2019, the Company did not have any significant contract balances.

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 Condensed Consolidated Statements of Condition based on the timing of when the Company expects to recognize revenue. As of March 31, 2020 and December 31, 2019, contract liabilities were $629,000 and $2,000,000, respectively, and are included within accrued expenses in the accompanying Condensed Consolidated Statements of Condition. The liabilities include premiums due to insurance carriers in addition to unearned commission revenue.

The decrease in the contract liability balance during the three-month period ended March 31, 2020 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.

Contract Acquisition Costs

The Company 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.

11. Financial Guarantees

The Company currently does not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit. The Company extends standby letters of credit to its customers in the normal course of business. The standby letters of credit are generally short-term. As of March 31, 2020, the Company’s maximum potential obligation under standby letters of credit was $33.1 million compared to $30.5 million at December 31, 2019. Management uses the same credit policies to extend standby letters of credit that it uses for on-balance sheet lending decisions and may require collateral to support standby letters of credit based upon its evaluation of the counterparty. Management does not anticipate any significant losses as a result of these transactions, and has determined that the fair value of standby letters of credit is not significant.

12. Segment and Related Information

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

Banking

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

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Insurance

 The Company provides property and casualty insurance services and employee benefits consulting through Tompkins Insurance Agencies, Inc., a 100% wholly-owned subsidiary of the Company, headquartered in Batavia, New York. Tompkins Insurance is an independent insurance agency, representing many major insurance carriers and provides employee benefit consulting to employers in Western and Central New York and Southeastern Pennsylvania, assisting them with their medical, group life insurance and group disability insurance. 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, insurance and wealth management services segments. The Company accounts for intercompany fees and services at an estimated fair value according to regulatory requirements for the services provided. Intercompany items relate primarily to the use of human resources, information systems, accounting and marketing services provided by any of the banks and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the 2019 Annual Report on Form 10-K.

As of and for the three months ended March 31, 2020
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	63,199	$	1	$	0	$	(1	)	$	63,199
Interest expense	10,231		0		0		(1		)	10,230
Net interest income	52,968		1		0		0			52,969
Provision for credit loss expense	16,294		0		0		0			16,294
Noninterest income	6,992		8,150		4,374		(556		)	18,960
Noninterest expense	36,689		6,562		3,045		(556		)	45,740
Income before income tax expense	6,977		1,589		1,329		0			9,895
Income tax expense	1,157		430		322		0			1,909
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	5,820		1,159		1,007		0			7,986
Less:  Net income attributable to noncontrolling interests	37		0		0		0			37
Net Income attributable to Tompkins Financial Corporation	$	5,783	$	1,159	$	1,007	$	0		$	7,949
Depreciation and amortization	$	2,485	$	59	$	10	$	0		$	2,554
Assets	6,690,574		41,444		24,562		(13,466		)	6,743,114
Goodwill	64,585		19,866		7,996		0			92,447
Other intangibles, net	2,972		2,741		134		0			5,847
Net loans and leases	4,885,418		0		0		0			4,885,418
Deposits	5,422,258		0		0		(12,895		)	5,409,363
Total Equity	627,223		32,632		22,742		0			682,597

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As of and for the three months ended March 31, 2019
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	64,929	$	1	$	0	$	(2	)	$	64,928
Interest expense	13,016		0		0		(2		)	13,014
Net interest income	51,913		1		0		0			51,914
Provision for credit loss expense	445		0		0		0			445
Noninterest income	7,568		8,148		4,198		(507		)	19,407
Noninterest expense	35,327		6,277		3,112		(507		)	44,209
Income before income tax expense	23,709		1,872		1,086		0			26,667
Income tax expense	4,834		490		271		0			5,595
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	18,875		1,382		815		0			21,072
Less:  Net income attributable to noncontrolling interests	32		0		0		0			32
Net Income attributable to Tompkins Financial  Corporation	$	18,843	$	1,382	$	815	$	0		$	21,040
Depreciation and amortization	$	2,414	$	56	$	10	$	0		$	2,480
Assets	6,689,882		41,156		21,573		(13,892		)	6,738,719
Goodwill	64,370		19,702		8,211		0			92,283
Other intangibles, net	4,019		3,051		196		0			7,266
Net loans and leases	4,749,372		0		0		0			4,749,372
Deposits	5,003,696		0		0		(13,771		)	4,989,925
Total Equity	593,791		33,774		19,702		0			647,267

13. 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). Transfers between levels, when determined to be appropriate, are recognized at the end of each reporting period.  

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

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

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

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

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The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements
March 31, 2020
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	1,750	$	0	$	1,750	$	0
Obligations of U.S. Government sponsored entities	313,428		0		313,428		0
Obligations of U.S. states and political subdivisions	102,484		0		102,484		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	174,515		0		174,515		0
U.S. Government sponsored entities	758,027		0		758,027		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale debt securities	$	1,352,637	$	0	$	1,352,637	$	0
Equity securities, at fair value	$	930	$	0	$	0	$	930

Recurring Fair Value Measurements
December 31, 2019
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt 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, issued by:
U.S. Government agencies	164,451		0		164,451		0
U.S. Government sponsored entities	659,590		0		659,590		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale debt securities	$	1,298,587	$	0	$	1,298,587	$	0
Equity securities, at fair value	$	915	$	0	$	0	$	915

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

The change in the fair value of equity securities valued using significant unobservable inputs (level 3), between December 31, 2019 and March 31, 2020, was immaterial.

There were no transfers between Levels 1, 2 and 3 for the three months ended March 31, 2020.

The Company determines fair value for its available-for-sale debt securities using an independent bond pricing service for identical assets or very similar securities.  The Company determines fair value for its equity securities based on the underlying equity fund’s pricing and valuation procedures which consider recent sales price, market quotations from a pricing service, or market quotes from an independent broker-dealer.  The Company has reviewed the pricing sources, including methodologies used, and finds them to be fairly stated.

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Certain assets are measured at fair value on a nonrecurring basis. For the Company, these include loans held for sale, collateral dependent evaluated loans, and other real estate owned (“OREO”). During the first quarter of 2020, certain collateral dependent evaluated loans were remeasured and reported at fair value through a specific valuation allowance and/or partial charge-offs for credit losses based upon the fair value of the underlying collateral. Collateral values are estimated using Level 2 inputs based upon observable market data. In addition to collateral dependent evaluated loans, certain other real estate owned were remeasured and reported at fair value based upon the fair value of the underlying collateral. The fair values of other real estate owned are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. In general, the fair values of other real estate owned are based upon appraisals, with discounts made to reflect estimated costs to sell the real estate. Upon initial recognition, fair value write-downs are taken through a charge-off to the allowance for credit losses. Subsequent fair value write-downs on other real estate owned are reported in other noninterest expense.

Three months ended March 31, 2020
(in thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2020		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2020
Individually evaluated	$	4,893	$	0	$	4,893	$	0	$	(1,290	)
Other real estate owned	220		0		220		0		(52		)

Three months ended March 31, 2019
(in thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2019		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2019
Individually evaluated	$	4,786	$	0	$	4,786	$	0	$	(3,571	)
Other real estate owned	0		0		0		0		0

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at March 31, 2020 and December 31, 2019. 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 U.S. GAAP and should be read in conjunction with the financial statements and notes included herein.

For collateral dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. For real estate loans, fair value of the loan’s collateral is determined by third party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods

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being the predominant approach. The Company reviews the third party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5% to 8% of the appraised value. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.

Estimated Fair Value of Financial Instruments
March 31, 2020
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	115,263	$	115,263	$	115,263	$	0	$	0
FHLB and other stock	24,212		24,212		0		24,212		0
Accrued interest receivable	18,007		18,007		0		18,007		0
Loans/leases, net1	4,885,418		4,834,400		0		4,893		4,829,507
Financial Liabilities:
Time deposits	$	708,933	$	716,275	$	0	$	716,275	$	0
Other deposits	4,700,430		4,700,430		0		4,700,430		0
Fed funds purchased and securities sold
under agreements to repurchase	68,993		68,993		0		68,993		0
Other borrowings	457,983		466,974		0		466,974		0
Trust preferred debentures	17,078		20,138		0		20,138		0
Accrued interest payable	2,244		2,244		0		2,244		0

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
FHLB and other stock	33,695		33,695		0		33,695		0
Accrued interest receivable	19,293		19,293		0		19,293		0
Loans/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
Fed funds purchased and 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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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.

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.

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

Accrued Interest Receivable and Accrued Interest Payable: The carrying amount of these short term instruments approximate fair value.

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

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

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

Fair values of borrowings are estimated using Level 2 inputs based upon observable market data. The Company determines fair value for its borrowings using a discounted cash flow technique based upon expected cash flows and current spreads on FHLB advances with the same structure and terms. The Company also receives pricing information from third parties, including the FHLB. The pricing obtained is considered representative of the transfer price if the liabilities were assumed by a third party.

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.

14. Leasing

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. 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.

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Our property leases have remaining terms of less than 1 year to 22 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. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term 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)		March 31, 2020		December 31, 2019
Assets	Classification
ROU assets	Other assets	$	33,231	$	33,501
Liabilities
Current lease liabilities	Other liabilities	$	3,188	$	3,256
Non-current lease liabilities	Other liabilities	32,450		32,666
Total lease liabilities		$	35,638	$	35,922

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

(In thousands)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Lease Costs
Operating lease cost	$	1,174		$	1,142
Variable lease cost	164			96
Short-term lease cost	0			0
Sublease income	(8		)	(8		)
Total lease cost	$	1,330		$	1,230

At March 31, 2020, we did not have any material finance lease assets or liabilities.

Other information related to operating leases was as follows:

(In thousands)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,189		$	1,159
Weighted-average remaining lease term on operating leases	13.72 years			14.12 years
Weighted-average discount rates on operating leases	3.53		%	3.53		%
ROU assets obtained in exchange for lease liabilities	549			35,706

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Future minimum lease payments under operating leases were as follows:

(In thousands)	Operating Leases
Nine Months 2020	$	3,326
2021	4,163
2022	4,117
2023	3,876
2024	3,742
2025 and subsequent years	26,979
Total lease payments	$	46,203
Less: Interest	(10,565		)
Present value of lease liabilities	$	35,638

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

BUSINESS

Corporate Overview and Strategic Initiatives

Tompkins Financial Corporation (“Tompkins” or the “Company”) is headquartered in Ithaca, New York and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company is a locally oriented, community-based financial services organization that offers a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, and insurance services. At March 31, 2020, 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, 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.”

The Tompkins strategy centers around our core values and a commitment to delivering long-term value to our clients, communities, and shareholders. To achieve this, the Company has developed 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.

Business Segments

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

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 by the Trust Company under the trade name Tompkins Financial Advisors. Tompkins Financial Advisors has office locations, and services are available to all customers at the Company's four subsidiary banks.

Insurance services include property and casualty insurance, employee benefit consulting, and life, long-term care and disability insurance. Tompkins Insurance is headquartered in Batavia, New York. Over the 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. The Company recorded the following intangible assets as a result of the acquisition: goodwill ($0.2 million), customer related intangible ($0.2 million) and a covenant-not-to-compete ($0.1 million). The values of the customer-related intangible and covenant-not-to-compete are being amortized over 15 years and 5 years, respectively. The goodwill is not being amortized but will be evaluated at least annually for impairment. Tompkins Insurance offers services to customers of the Company’s banking subsidiaries by sharing offices with The Bank of Castile, Trust Company, and VIST Bank. In addition to these shared offices, Tompkins Insurance has five stand-alone offices in Western New York, and one stand-alone office in Tompkins County, New York.

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

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Competition

Competition for commercial banking and other financial services is strong in the Company’s market areas. In one or more aspects of its businesses, the Company’s subsidiaries compete with other commercial banks, savings and loan associations, credit unions, finance companies, Internet-based financial services companies, mutual funds, insurance companies, brokerage and investment banking companies, and other financial intermediaries. Some of these competitors have substantially greater resources and lending capabilities and may offer 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.

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.

Regulation

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

OTHER IMPORTANT INFORMATION

The following discussion is intended to provide an understanding of the consolidated financial condition and results of operations of the Company for the three months ended March 31, 2020. It should be read in conjunction with the Company’s Audited Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and the Unaudited Condensed Consolidated Financial Statements and notes thereto included in Part I of this Quarterly Report on Form 10-Q.

In this Report, there are comparisons of the Company’s performance to that of a peer group, which is comprised of the group of 148 domestic bank holding companies with $3 billion to $10 billion in total assets as defined in the Federal Reserve’s “Bank Holding Company Performance Report” for December 31, 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 quarter numbers.

Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 credit losses; the sufficiency of liquidity sources; the Company's exposure to changes in interest rates; the impact of changes in accounting standards; and trends, 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 of our Annual Report on Form 10-K for the year ended December 31, 2019, and Item 1A in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, 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 severity and duration of the COVID-19 outbreak and the impact of the outbreak (including the government’s response to the outbreak) on economic and financial markets, potential regulatory actions, and modifications to our operations, products, and services relating

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thereto; disruptions in our and our customers’ operations and loss of revenue due to pandemics, epidemics, widespread health emergencies, government-imposed travel/business restrictions, or outbreaks of infectious diseases such as the COVID-19, and the associated adverse impact on our financial position, liquidity, and our customers’ abilities to repay their obligations to us or willingness to obtain financial services products from the Company; 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 and Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; legislative and regulatory changes in response to COVID-19 with which we and our subsidiaries must comply, including the CARES Act and the rules and regulations promulgated thereunder, and state and local government mandates; 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

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

Management considers accounting estimates to be critical to reported financial results if (i) the accounting estimates require management to make assumptions about matters that are highly uncertain, and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on the Company’s financial statements. Management considers the accounting policy relating to the allowance for credit losses (“allowance” or "ACL"), to be a critical accounting policy 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. On January 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which created material changes to the Company’s existing critical accounting policy that existed at December 31, 2019.

The Company’s methodology for estimating the allowance considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. Refer to “Allowance for Credit Losses” below, Note 5 - Allowance for Credit Losses, and Note 2 – Basis of Presentation in the accompanying notes to the unaudited condensed consolidated financial statements elsewhere in this report for further discussion of the allowance.

For information on the Company's significant accounting policies and to gain a greater understanding of how the Company’s financial performance is reported, refer to Note 1 – “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Refer to "Recently Issued Accounting Standards" in Management's Discussion and Analysis included in Part I of this Quarterly Report on Form 10-Q for a discussion of recent accounting updates.

IMPACT OF, AND RESPONSE TO, COVID-19 PANDEMIC

Economic Environment

In December 2019, a novel coronavirus (COVID-19) was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. On March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has led to government-mandated closures and stay at home orders across the nation, which have resulted in deteriorating economic conditions throughout the U.S. The various government orders issued in response to the pandemic are significantly impacting the U.S. labor market, consumer spending and business investments. During March 2020, in response to the deteriorating economic conditions, the Federal Reserve reduced the federal funds rate 1.5 percentage points, to .00 to .25 percent. The Federal Reserve also provided a pandemic-related stimulus package estimated at $4.0 trillion, in order to ease the stress on financial markets. In addition, the United States Congress passed the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), which would provide approximately $2.5 trillion of support to U.S. citizens and businesses affected by COVID-19.

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Company Response

The Company has designated a Pandemic Planning Committee, which includes key individuals across the Company as well as members of Senior Management, to oversee the Company’s response to COVID-19. The Company implemented a number of risk mitigation measures designed to protect our employees and customers, while maintaining services for our customers and community. These measures included restrictions on business travel and establishment of a remote work environment for most non-customer facing employees. The Company also implemented drive-up only or by appointment only operations across its branch network. Currently, over 85% of our workforce is working remotely and we have imposed social distancing restrictions and provided premium pay for those employees who are required to be on premise to complete essential to on-site functions. However, due to the significant uncertainty of the current economic climate, and the Company's ongoing response to the pandemic and related shutdowns, annual pay increases for our Company's executive officers (which is comprised of our Senior Leadership Team members) have been deferred indefinitely.

We incurred limited expense, mainly in technology equipment and software, in transition to and maintaining a remote work environment. We have adopted technological and workflow processes which are designed to mitigate the operations, fraud, and cybersecurity risks related to our remote work environment, and to date we are not aware of any materially negative impacts arising from these risks nor on our internal controls.

Tompkins has initiated and participated in a number of credit initiatives to support employees and customers who have been impacted by the shutdown associated with the COVID-19 pandemic. For non-executive employees affected by COVID-19, the Company implemented a low interest loan program. The Company also implemented a payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. Our standard program allows for the deferral of loan payments for up to 90 days and customers will be able to request a payment deferral until the middle of May 2020; in certain cases and/or where required by applicable law or regulation we will extend additional deferrals or other accommodations. As of March 31, 2020, total deferrals attributed to COVID-19 were $377.8 million, representing 994 borrowers or 7.7% of the total loan portfolio. As of April 20, 2020, total deferrals attributed to COVID-19 were $1.5 billion, representing 2,778 borrowers or 29.9% of the total loan portfolio. Of that total, 1,139 were retail customers representing $176.5 million, or 3.6% of total loans, and 1,639 were commercial customers representing $1.3 billion, or 26.3% of total loans. Loans in deferment status will continue to accrue interest during the deferment period unless otherwise classified as nonperforming. The provisions of the CARES Act and recently issued interagency guidance issued by Federal banking regulators provided guidance and clarification related to modifications and deferral programs to assist borrowers who are negatively impacted by the COVID-19 national emergency. The guidance and clarifications detail certain provisions whereby banks are permitted to make deferrals and modifications to the terms of a loan which would not require the loan to be reported as a troubled debt restructuring. In accordance with the CARES Act and the interagency guidance, the Company elected to adopt the provisions to not report eligible loan modifications as troubled debt restructurings.

The Company is participating in the U.S. Small Business Administration (SBA) Paycheck Protection Program (“PPP”). This program provides borrower guarantees for lenders, and envisions a certain amount of loan forgiveness for loan recipients who properly utilize funds, all in accordance with the rules and regulations established by the SBA for the PPP. The SBA's rules, regulations and guidance with respect to PPP have evolved since the program's inception in early April, and as of May 7, 2020, the SBA has not yet released final guidance with respect to loan forgiveness. Borrowers with loan balances which are not forgiven are obligated to repay such balances over a 2-year term at a rate of 1% interest, with principal and interest payments deferred for the first six months. The SBA has stated that it will pay participating lenders fees for processing PPP loans in the following amounts: 5% for loans of not more than $350,000; 3% for loans of more than $350,000 and less than $2,000,000; and 1% for loans of at least $2,000,000. The SBA has also announced that, under limited circumstances described in the current SBA guidance, these fees will not be paid, even if the participating lender has approved and processed the PPP loan. The fees are generally amortized as interest income over the life of the loan, and would be recognized net of origination costs. The Company began accepting applications for PPP loans on April 3, 2020, and as of May 10, 2020, has approved over 2,900 loans totaling about $500 million.

The impact of the COVID-19 pandemic on our results of operation for the three months ended March 31, 2020 was mainly reflected in our provision for credit losses. While the Company has not yet experienced any charge-offs related to COVID-19, our allowance calculation and resulting provision for credit loss expense are significantly impacted by changes in forecasted economic conditions. Should economic conditions worsen, the Company could experience further increases in its required allowance and record additional credit loss expense. The Company did see some slowdown toward the end of the first quarter in other areas of our business, including reduced transaction volumes in our card services business, a decrease in wealth management fees due to the decline in financial markets, and decreases in certain other fee related income.

As of March 31, 2020, we believe Tompkins was well positioned with a strong balance sheet and asset quality, capital ratios well above regulatory requirements, and strong liquidity position. Asset quality measures were strong and generally in line with

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December 31, 2019, with total nonaccrual loans down 2.4%, and total nonperforming assets down 2.2%. There was limited impact of COVID-19 reflected in first quarter numbers, although it is uncertain what the impact on the second and future quarters will be. As mentioned above, the Company is working with its customers and implemented a loan deferral program and participates in the PPP. As of March 31, 2020, the Company had not experienced any significant impact to our liquidity or funding capabilities as a result of COVID-19. The Company’s participation as a lender in the PPP has been and will continue to be a use of liquidity; however, the Federal Reserve Bank has provided a lending facility that may be used by banks to obtain funding specifically for PPP loans. PPP loans would be pledged as collateral on a bank's borrowings under the Federal Reserve Bank's designated PPP lending facility.

The extent to which the COVID-19 pandemic will affect our business, results of operation and financial condition going forward is difficult to predict and depends on numerous evolving factors. There is currently a great deal of uncertainty regarding the length of the COVID-19 pandemic and the efficacy of the extraordinary measures being put in place to address it. The fair value of certain assets could be impacted by the effects of COVID-19. The carrying value of goodwill, right-of-use lease assets, and other real estate owned could decrease, resulting in future impairment losses. Management will continue to evaluate current economic conditions to determine if a triggering event would impact the current valuations for these assets. If efforts to contain COVID-19 are not as successful as anticipated, if restrictions on movement last into the third quarter or beyond, or if the federal government's economic stimulus packages are ineffective or delayed, the current economic downturn will likely be much longer and much more severe. The deeper the economic downturn is, and the longer it lasts, the more it will damage consumer fundamentals and sentiment. Similarly, an extended global recession due to COVID-19 would weaken the U.S. recovery and damage business fundamentals. As a result, the pandemic and its consequences, including responsive measures to manage it, have negatively impacted, and continue to negatively impact, demand for and profitability of our products and services, the valuation of our assets, the ability of borrowers to satisfy obligations, and our ability to meet the needs of our customers, all of which could have a material adverse effect on our business and financial performance.

RESULTS OF OPERATION

Performance Summary

Net income for the first quarter of 2020 was $7.9 million or $0.53 diluted earnings per share, compared to $21.0 million or $1.37 diluted earnings per share for the same period in 2019. The decrease in net income was primarily due to the $15.8 million increase in provision for credit loss expense in the first quarter of 2020. The provision expense for the first quarter of 2020 was $16.3 million, increasing the allowance for credit losses to $52.4 million at March 31, 2020. The increase in the first quarter of 2020 is not a direct result of specific credit risks currently identified in the loan portfolio; rather, the increase is mainly driven by current and projected economic conditions resulting from the ongoing COVID-19 pandemic and related market and economic impacts, as well as normal adjustments for loan growth, changing loan portfolio and segment mix, and the adoption of ASU 2016-13.

Return on average assets (“ROA”) for the quarter ended March 31, 2020 was 0.48%, compared to 1.27% for the quarter ended March 31, 2019. Return on average shareholders’ equity (“ROE”) for the first quarter of 2020 was 4.71%, compared to 13.53% for the same period in 2019.

Segment Reporting

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

Banking Segment

The banking segment reported net income of $5.8 million for the first quarter of 2020, down $13.1 million or 69.3% from net income of $18.9 million for the same period in 2019.

Net interest income of $53.0 million for the first quarter of 2020 was up $1.1 million or 2.0% from the same period in 2019. The increase in net interest income was mainly a result of a decrease in interest expense resulting from lower market interest rates and a shift in funding mix from borrowings to deposits. Interest income also benefited from loan growth and an asset mix consisting of a greater percentage of loans to total assets.

The provision for credit losses was $16.3 million for the three months ended March 31, 2020, which was up $15.8 million compared to the same period in 2019. The increase in provision for credit losses in the first quarter is most notably due to the rapidly changing economic environment related to the COVID-19 pandemic and reflects the calculation of the allowance for credit losses in accordance with ASU 2016-13.

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Noninterest income of $7.0 million for the three months ended March 31, 2020 was down $576,000 or 7.6% compared to the same period in 2019. The decrease in the three months ended March 31, 2020 over the same period in 2019 was mainly in card services income, due to a decrease in transaction volume in the first quarter of 2020, and a one-time incentive payment of $500,000 related to the Company's merchant card business that was received in the first quarter of 2019.

Noninterest expense of $36.7 million for the first quarter of 2020 was up $1.4 million or 3.9% from the same period in 2019. The increase was mainly attributable to increases in salaries and wages reflecting merit increases awarded in 2019, higher health insurance costs, and higher post-retirement benefit costs.

Insurance Segment

The insurance segment reported net income of $1.2 million for the three months ended March 31, 2020, which was down $223,000 or 16.1% compared to the first quarter of 2019. Noninterest income was in line compared to the same period in 2019, as growth in personal and commercial lines were mainly offset by lower contingency revenues. Noninterest expenses were up $285,000 or 4.5% compared to the first quarter of 2019. The increase was mainly in salaries and wages and reflects merit increases awarded in 2019, and an increase in employees.

Wealth Management Segment

The wealth management segment reported net income of $1.0 million for the three months ended March 31, 2020, which was up $192,000 or 23.6% compared to the first quarter of 2019. The increase in net income for the three month period ended March 31, 2020, was attributable to an increase in advisory income and estate and terminating trust fees. Noninterest expense for the first quarter of 2020 was down 2.2% compared to the same period in 2019. The decrease was mainly in salary and wages, primarily due to open positions and a decrease in other incentives.

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Net Interest Income

The following table shows average interest-earning assets and interest-bearing liabilities, and the corresponding yield or cost associated with each for the three month periods ended March 31, 2020 and 2019.

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Quarter Ended							Quarter Ended
	March 31, 2020							March 31, 2019
	Average							Average
	Balance							Balance					Average
(Dollar amounts in thousands)	(QTD)		Interest					(QTD)		Interest			Yield/Rate
ASSETS
Interest-earning assets
Interest-bearing balances due from banks	$	1,525	$	6		1.58	%	$	2,334	$	10		1.74	%
Securities (1)
U.S. Government securities	1,194,754		6,576			2.21	%	1,409,305		8,172			2.35	%
State and municipal (2)	97,480		666			2.75	%	94,609		626			2.68	%
Other securities (2)	3,422		36			4.23	%	3,415		41			4.87	%
Total securities	1,295,656		7,278			2.26	%	1,507,329		8,839			2.38	%
FHLBNY and FRB stock	26,558		435			6.59	%	48,055		878			7.41	%
Total loans and leases, net of unearned income (2)(3)	4,914,034		55,906			4.58	%	4,792,607		55,614			4.71	%
Total interest-earning assets	6,237,773		63,625			4.10	%	6,350,325		65,341			4.17	%
Other assets	435,175							393,035
Total assets	$	6,672,948						$	6,743,360
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings,  & money market	3,212,543		4,366			0.55	%	2,940,416		4,470			0.62	%
Time deposits	680,248		2,833			1.68	%	645,144		2,127			1.34	%
Total interest-bearing deposits	3,892,791		7,199			0.74	%	3,585,560		6,597			0.75	%
Federal funds purchased & securities sold under agreements to repurchase	63,528		36			0.23	%	72,664		44			0.25	%
Other borrowings	498,428		2,706			2.18	%	993,773		6,044			2.47	%
Trust preferred debentures	17,050		289			6.82	%	16,878		329			7.90	%
Total interest-bearing liabilities	4,471,797		10,230			0.92	%	4,668,875		13,014			1.13	%
Noninterest bearing deposits	1,409,661							1,338,623
Accrued expenses and other liabilities	112,673							105,131
Total liabilities	5,994,131							6,112,629
Tompkins Financial Corporation Shareholders’ equity	677,394							629,305
Noncontrolling interest	1,423							1,426
Total equity	678,817							630,731
Total liabilities and equity	$	6,672,948						$	6,743,360
Interest rate spread						3.18	%						3.04	%
Net interest income/margin on earning assets			53,395			3.44	%			52,327			3.34	%
Tax Equivalent Adjustment			(426		)					(413		)
Net interest income per consolidated financial statements			$	52,969						$	51,914

¹  Average balances and yields on available-for-sale debt securities are based on historical amortized cost

²  Interest income includes the tax effects of taxable-equivalent adjustments using an effective income tax rate of 21% in 2020 and 2019 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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.    

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Net Interest Income 

Net interest income is the Company’s largest source of revenue, representing 73.6% of total revenues for the three months ended March 31, 2020, compared to 72.8% for the same period in 2019. Net interest income is dependent on the volume and composition of interest-earning assets and interest-bearing liabilities and the level of market interest rates. The above table shows average interest-earning assets and interest-bearing liabilities, and the corresponding yield or cost associated with each.

Taxable-equivalent net interest income for the three months ended March 31, 2020, was up $1.1 million or 2.0% over the same period in 2019. The increase compared to the prior year was mainly due to lower interest expense in the first three months of 2020, driven by lower market interest rates and deposit growth, which contributed to a reduction in other borrowings. Additionally, net interest income benefited from a shift in the composition of average earning assets, with loans, which carry higher average yields than securities, comprising an increased percentage of average earning assets. For the three months ended March 31, 2020, average loans represented 78.8% of average earning assets compared to 75.5% for the same period in 2019. Net interest margin for the three months ended March 31, 2020 was 3.44% compared to 3.34% for the same period in 2019.

Taxable-equivalent interest income for the three months ended March 31, 2020, was $63.6 million, down 2.6% compared to the same period in 2019. The decrease in taxable-equivalent interest income was mainly the result of a $112.6 million or 1.8% decrease in average earnings assets and a decrease in the yield on average earning assets for the three months ended March 31, 2020 compared to the same period in 2019. Asset yields in the first quarter of 2020 were impacted by lower market interest rates. The decrease in average earning assets was mainly in average securities and was mainly a result of the sale of $152.1 million of securities in the second quarter of 2019. Average securities balances for the three months ended March 31, 2020, were down $211.7 million or 14.0%, while the average yield on securities decreased 12 basis points compared to the same period in 2019. Average loan balances for the three months ended March 31, 2020, were up $121.4 million or 2.5% over the first quarter of 2019, however the average yield on loans for the first quarter of 2020 decreased 13 basis points compared to the first quarter of 2019.

Interest expense for the three months ended March 31, 2020, decreased by $2.8 million or 21.4% compared to the same period in 2019, driven mainly by lower market interest rates, an increase in average deposit balances and a decrease of average other borrowings. Average interest bearing deposits for the first quarter of 2020 were up $307.2 million or 8.6% compared to the same period in 2019. Average other borrowings for the three months ended March 31, 2020 were down $495.3 million or 49.8% compared to the same period in 2019, mainly due to the increase in deposit balances. The average cost of interest bearing deposits was 0.74% for the first quarter of 2020, compared to 0.75% for the first quarter of 2019. The average cost of interest bearing liabilities decreased to 0.92% for the first quarter of 2020 from 1.13% for the first quarter of 2019.

Provision for Credit Losses 

The provision for credit losses represents management’s estimate of the amount necessary to maintain the allowance for credit losses at an appropriate level. The provision for credit losses for the three months ended March 31, 2020 was $16.3 million which was up $15.8 million compared to the same period in 2019. The increase in the first quarter of 2020 is not a direct result of specific credit risks currently identified in the loan portfolio; rather, the increase is mainly driven by current and projected economic conditions resulting from the ongoing COVID-19 pandemic and related market and economic impacts, as well as normal adjustments for loan growth, and changing loan portfolio and segment mix, and is due to the calculation of the allowance for credit losses in accordance with ASU 2016-13. The section captioned “Financial Condition – The Allowance for Credit Losses” below has further details on the allowance for credit losses and asset quality metrics.

Noninterest Income 

Noninterest income was $19.0 million for the first quarter of 2020, which was down 2.3% compared to the same period prior year. Noninterest income represented 26.4% of total revenue for the three months ended March 31, 2020, compared to 27.2% for the same period in 2019.

Insurance commissions and fees were $8.0 million for the first quarter of 2020, which is in line with the same period prior year. For the three months ended March 31, 2020, growth in commercial and personal business lines were offset by lower contingency income compared to the same period in 2019.

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Investment services income of $4.2 million in the first quarter of 2020 was up $118,000 or 2.9% compared to the first quarter of 2019. Investment services income includes trust services, financial planning, wealth management services, and brokerage related services. With fees largely based on the market value and the mix of assets managed, the general direction of the stock market can have a considerable impact on fee income. For the first quarter of 2020, the increase in investment services income was mainly attributable to an increase in advisory income, as the Company has experienced a higher mix of managed accounts that carry higher fees and a decrease in lower fee custody account balances, as well as an increase in estate and terminating trust fees. The fair value of assets managed by, or in custody of, Tompkins was $3.9 billion at March 31, 2020, compared to $4.0 billion for the same period in 2019. The fair value at March 31, 2020 includes $1.2 billion of Company-owned securities where Tompkins Trust Company is custodian.

Card services income of $2.2 million in the first quarter of 2020 was down $607,000 or 21.7% compared to the same period in 2019. Contributing to the decrease from the prior year was a one-time incentive payment of $500,000 (pre-tax) related to our merchant card business received in the first quarter of 2019, and a decrease in transaction volume.

The Company recognized $443,000 of gains on sales/calls of available-for-sale debt securities in the first quarter of 2020, compared to $12,000 of gains in the first three months of 2019. The gains include $178,000 of gains on the sales of available-for-sale debt securities, $251,000 of gains on securities called during the quarter and $14,000 of realized gains from the change in the fair value of equity securities. The sales of available-for-sale debt securities were generally the result of routine portfolio maintenance and interest rate risk management.

Other income of $2.1 million in the first quarter of 2020 was down 15.1% compared to the same period in 2019. The decrease in the first quarter of 2020 compared to the first quarter of 2019 was mainly a result of a decrease in the cash surrender value of bank owned life insurance, which was down $291,000. The decrease was mainly related to variable life insurance policies; the market value of the securities underlying these policies was adversely affected by the downturn in equities markets driven by COVID-19 in the first quarter of 2020.

Noninterest Expense 

Noninterest expense was $45.7 million for the first quarter of 2020, up 3.5% compared to the same period in 2019. Noninterest expense as a percentage of total revenue for the first quarter of 2020 was 63.6% compared to 62.0% for the same period in 2019.

Expenses associated with salaries and wages and employee benefits are the largest component of noninterest expense, representing 61.6% of total noninterest expense for the three months ended March 31, 2020 and 60.4% for the three months ended March 31, 2019. Salaries and wages expense for the three months ended March 31, 2020 was up 6.6% compared to the same period in 2019 driven mainly by an increase in employees, merit increases awarded in 2019, and other incentives. Other employee benefits expense was relatively flat compared to the same period in 2019.

Other expense categories, not related to compensation and benefits, for the three months ended March 31, 2020, were in line with the same period in 2019. The significant components of other expense are professional fees, technology, and marketing expenses. Technology expense for the first quarter of 2020 was up $283,000 or 11.0% over the same period in the prior year, mainly as a result of investments in strengthening the Company's compliance and information security infrastructure. Marketing expenses were down $221,000, while professional fees for the first quarter of 2020 were in line with prior year.

Income Tax Expense 

The provision for income taxes was $1.9 million for an effective rate of 19.3% for the first quarter of 2020, compared to tax expense of $5.6 million and an effective rate of 21.0% for the same quarter in 2019. The effective rates differ from the U.S. statutory rate primarily due to the effect of tax-exempt income from loans, securities and life insurance assets, and the income tax effects associated with stock based compensation.

FINANCIAL CONDITION

Total assets were $6.7 billion at March 31, 2020, which were in line with December 31, 2019. Total originated loan balances were $4.7 billion at March 31, 2020 unchanged from year-end 2019. Total acquired loans of $213.5 million were down $6.6 million or 3.0% from December 31, 2019, due to expected run-off in the acquired portfolio. Total deposits were up $196.4 million or 3.8% from December 31, 2019. Other borrowings decreased $200.1 million or 30.4% from December 31, 2019, as a result of deposit growth outpacing loan growth in the period.

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Securities

As of March 31, 2020, the Company’s securities portfolio was $1.4 billion or 20.07% of total assets, compared to $1.3 billion or 19.3% of total assets at year-end 2019. The following table details the composition of available-for-sale debt securities.

Available-for-Sale Debt Securities
	March 31, 2020				December 31, 2019
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasuries	$	1,745	$	1,750	1,840		1,840
Obligations of U.S. Government sponsored entities	302,086		313,428		367,551		372,488
Obligations of U.S. states and political subdivisions	101,452		102,484		96,668		97,785
Mortgage-backed securities - residential, issued by
U.S. Government agencies	171,500		174,515		164,643		164,451
U.S. Government sponsored entities	739,133		758,027		660,037		659,590
U.S. corporate debt securities	2,500		2,433		2,500		2,433
Total available-for-sale debt securities	$	1,318,416	$	1,352,637	$	1,293,239	$	1,298,587

The increase in unrealized gains, which reflects the amount that fair value exceeds amortized cost, related to the available-for-sale debt portfolio was due primarily to changes in market interest rates during the first three months of 2020. Management’s policy is to purchase investment grade securities that on average have relatively short duration, which helps mitigate interest rate risk and provides sources of liquidity without significant risk to capital.

The Company evaluates available-for-sale debt securities in unrealized loss positions at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense.

The Company determined that at March 31, 2020, all impaired available-for-sale debt securities experienced a decline in fair value below the amortized cost basis due to noncredit-related factors. In addition, the Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities, before recovery of their amortized cost basis, which may be at maturity. Therefore, the Company carried no ACL at March 31, 2020 and there was no credit loss expense recognized by the Company with respect to the securities portfolio during the three months ended March 31, 2020.

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Loans and Leases
Loans and leases as of the end of the first quarter and prior year-end periods were as follows:
	March 31, 2020								December 31, 2019
(In thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	95,385		$	0	$	95,385		$	105,786		$	0	$	105,786
Commercial and industrial other	849,273			38,570		887,843			863,199			39,076		902,275
Subtotal commercial and industrial	944,658			38,570		983,228			968,985			39,076		1,008,061
Commercial real estate
Construction	167,139			1,311		168,450			212,302			1,335		213,637
Agriculture	186,870			191		187,061			184,701			197		184,898
Commercial real estate other	1,980,264			140,675		2,120,939			1,899,645			145,385		2,045,030
Subtotal commercial real estate	2,334,273			142,177		2,476,450			2,296,648			146,917		2,443,565
Residential real estate
Home equity	201,231			14,509		215,740			203,894			15,351		219,245
Mortgages	1,158,544			17,429		1,175,973			1,140,572			18,020		1,158,592
Subtotal residential real estate	1,359,775			31,938		1,391,713			1,344,466			33,371		1,377,837
Consumer and other
Indirect	11,871			0		11,871			12,964			0		12,964
Consumer and other	60,301			860		61,161			60,661			785		61,446
Subtotal consumer and other	72,172			860		73,032			73,625			785		74,410
Leases	17,046			0		17,046			17,322			0		17,322
Total loans and leases	4,727,924			213,545		4,941,469			4,701,046			220,149		4,921,195
Less: unearned income and deferred costs and fees	(3,647		)	0		(3,647		)	(3,645		)	0		(3,645		)
Total loans and leases, net of unearned income and deferred costs and fees	$	4,724,277		$	213,545	$	4,937,822		$	4,697,401		$	220,149	$	4,917,550

Total loans and leases of $4.9 billion at March 31, 2020 were up $20.3 million or 0.4% from December 31, 2019. Originated loan balances at March 31, 2020 were up $26.9 million or 0.6% from year-end 2019. As of March 31, 2020, total loans and leases represented 73.2% of total assets compared to 73.1% of total assets at December 31, 2019.

Residential real estate loans, including home equity loans were $1.4 billion at March 31, 2020, up $13.9 million or 1.0% compared to December 31, 2019, and comprised 28.2% of total loans and leases at March 31, 2020. Changes in residential loan balances are 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 the first three months of 2020 and 2019, the Company retained the vast majority of residential mortgage loans originated, selling $4.1 million and $8.5 million, respectively, recognizing gains on these sales of $176,000 and $94,000, respectively. These residential real estate loans were sold without recourse in accordance with standard secondary market loan sale agreements. When residential mortgage loans are sold, the Company typically retains all servicing rights, which provides the Company with a source of fee income. Mortgage servicing rights totaled $813,000 at March 31, 2020 and $805,000 at December 31, 2019. 

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Commercial real estate loans and commercial and industrial loans totaled $2.5 billion and $1.0 billion, respectively, and represented 50.2% and 19.9%, respectively of total loans as of March 31, 2020. The commercial real estate portfolio was up 1.3% over year end 2019, while commercial and industrial loans were down 2.5%. As of March 31, 2020, agriculturally-related loans totaled $282.4 million or 5.7% of total loans and leases, compared to $290.7 million or 5.9% of total loans and leases at December 31, 2019. Agriculturally-related loans include loans to dairy farms and 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 Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 4 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes in these policies and guidelines since the date of that report. Therefore, both new originations as well as those balances held at March 31, 2020, reflect these policies and guidelines. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan originations, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans. 

The Company’s loan and lease customers are located primarily in the New York and Pennsylvania communities served by its four subsidiary banks. Although operating in numerous communities in New York State and Pennsylvania, the Company is still dependent on the general economic conditions of these states and the local economic conditions of the communities within those states in which the Company does business. The suspension of business activities in our market area has led to a significant increase in unemployment rates and has had a negative effect on our market area, and there is a great deal of uncertainty regarding how long those conditions will continue to exist. Because these developments commenced late in the first quarter of 2020, and because the public health effects of COVID-19 are generally expected to peak later this year in the communities in which we operate, the economic consequences of the pandemic on our market area generally and on the Company in particular are difficult to quantify.

Allowance for Credit Losses

During the first quarter of 2020, the Company adopted ASU No. 2016-13 - Financial Instruments - Credit Losses, also known as CECL. The below tables represents the allowance for credit losses calculated under the new accounting guidance as of March 31, 2020, and the prior period tables use the incurred loss methodology calculation used prior to adoption. The tables provide, as of the dates indicated, an allocation of the allowance for credit losses for inherent loan losses by 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 for credit losses to each category does not restrict the use of the allowance to absorb losses in any category.

 

(In thousands)	3/31/2020
Allowance for credit losses
Commercial and industrial	$	11,665
Commercial real estate	22,446
Residential real estate	16,330
Consumer and other	1,883
Finance leases	80
Total	$	52,404

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(In thousands)	12/31/2019
Allowance for originated loans and leases
Commercial and industrial	$	10,541
Commercial real estate	21,557
Residential real estate	6,360
Consumer and other	1,356
Total	$	39,814
Allowance for acquired loans
Commercial and industrial	$	0
Commercial real estate	51
Residential real estate	21
Consumer and other	6
Total	$	78

As a result of the adoption of ASC 326, the Company recorded a net cumulative-effect adjustment reducing the allowance for credit losses by $2.5 million from $39.9 million at December 31, 2019, to $37.4 million at January 1, 2020. As of March 31, 2020, the total allowance for credit losses was $52.4 million. The $15.0 million increase in the allowance at March 31, 2020, compared to January 1, 2020 was mainly due to a $16.3 million increase in the provision expense driven by changes in economic conditions and forecasts related to the impact of COVID-19, including forecasts of significantly slower economic growth and higher unemployment. The Company had net charge-offs of $1.2 million in the first quarter of 2020, which included a write-down on one large credit in the commercial real estate portfolio.

Asset quality metrics remained favorable at March 31, 2020, with lower levels of nonperforming loans and leases than at December 31, 2019. Loans internally-classified Special Mention or Substandard were flat compared to December 31, 2019. Nonperforming loans and leases were down $742,000 or 2.4% from year end 2019 and represented 0.62% of total loans at March 31, 2020 compared to 0.64% at December 31, 2019. The allowance for credit losses covered 170.74% of nonperforming loans and leases as of March 31, 2020, compared to 126.90% at December 31, 2019.

The Company’s allowance for credit losses totaled $52.4 million at March 31, 2020, which represented 1.06% of total loans, up compared to 0.81% at December 31, 2019, and 0.84% at March 31, 2019.

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Activity in the Company’s allowance for credit losses during the first three months of 2020 and 2019 is illustrated in the table below.

Analysis of the Allowance for Credit Losses
(In thousands)	3/31/2020			3/31/2019
Average loans outstanding during period	$	4,914,035		$	4,792,607
Allowance at December 31, 2019	39,892			43,410
Impact of adopting ASC 326	(2,534		)	0
Balance of allowance at beginning of year	37,358			0
LOANS CHARGED-OFF:
Commercial and industrial	1			380
Commercial real estate	1,290			3,343
Residential real estate	2			18
Consumer and other	137			0
Finance leases	0			180
Total loans charged-off	$	1,430		$	3,921
RECOVERIES OF LOANS PREVIOUSLY CHARGED-OFF:
Commercial and industrial	16			59
Commercial real estate	18			7
Residential real estate	79			233
Consumer and other	69			95
Finance Leases	0			0
Total loans recoveries	$	182		$	394
Net loans charged-off	1,248			3,527
Additions to allowance for credit losses charged to operations	16,294			445
Balance of allowance at end of period	$	52,404		$	40,328
Allowance for credit losses as a percentage of total loans and leases	1.06		%	0.84		%
Annualized net charge-offs on loans to average total loans and leases during the period	0.10		%	0.30		%

Net loan and lease charge-offs for the quarter ended March 31, 2020 were $1.2 million compared to $3.5 million at March 31, 2019. The first quarter of 2020 included a write-down on one credit in the commercial real estate portfolio for $1.2 million, compared to the first quarter of 2019, which included a $3.1 million write-down on one credit, also in the commercial real estate portfolio.

The provision for credit losses was $16.3 million for the three months ended March 31, 2020, compared to $445,000 for the same period in 2019. The provision expense for credit losses is based upon the Company's quarterly evaluation of the appropriateness of the allowance for credit losses. The increase in the provision expense over March 31, 2019 is mainly a result of the economic forecasts and other model assumptions impacted by the current economic shut down related to the COVID-19 pandemic.

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Analysis of Past Due and Nonperforming Loans
(In thousands)	3/31/2020			12/31/2019			3/31/2019
Loans 90 days past due and accruing
Commercial and industrial	$	0		$	0		$	0
Consumer and other	0			0			0
Total loans 90 days past due and accruing	$	0		$	0		$	0
Nonaccrual loans
Commercial and industrial	2,049			2,335			1,933
Commercial real estate	9,698			10,789			3,742
Residential real estate	11,544			10,882			11,833
Consumer and other	265			275			236
Total nonaccrual loans	$	23,556		$	24,281		$	17,744
Troubled debt restructurings not included above	7,137			7,154			5,234
Total nonperforming loans and leases	$	30,693		$	31,435		$	22,978
Other real estate owned	466			428			1,595
Total nonperforming assets	$	31,159		$	31,863		$	24,573
Allowance as a percentage of nonperforming loans and leases	170.74		%	126.90		%	175.51		%
Total nonperforming loans and leases as percentage of total loans and leases	0.62		%	0.64		%	0.48		%
Total nonperforming assets as percentage of total assets	0.46		%	0.47		%	0.36		%

¹ The December 31, 2019, and March 31, 2019 columns in the above table exclude $794,000, and $1.2 million, respectively, of acquired loans that are 90 days past due and accruing interest.  At December 31, 2019 and March 31, 2019, purchased credit-impaired ("PCI") loans were excluded from past due and non-accrual loans reported because they continued to earn interest income from the accretable yield at the pool level. The PCI loan pools are accounted for as PCD loans (on a loan level basis with a related allowance for credit losses) under the CECL standard adopted at January 1, 2020 and reported in the past due loans and non-accrual loans in the table above at March 31, 2020.

Nonperforming assets include nonaccrual loans, troubled debt restructurings (“TDR”), and foreclosed real estate/other real estate owned. Total nonperforming assets of $31.2 million at March 31, 2020 were down $704,000 or 2.2% compared to December 31, 2019, and up $6.6 million or 26.8% compared to March 31, 2019. Nonperforming assets represented 0.46% of total assets at March 31, 2020, down from 0.47% at December 31, 2019, and up from 0.36% at March 31, 2019. The Company’s ratio of nonperforming assets to total assets continues to compare favorably to our peer group’s most recent ratio of 0.56% at December 31, 2019.

Loans are considered modified in a TDR when, due to a borrower’s financial difficulties, the Company makes a concession(s) to the borrower that it would not otherwise consider and the borrower could not obtain elsewhere. These modifications may include, among others, an extension of the term of the loan, and granting a period when interest-only payments can be made, with the principal payments made over the remaining term of the loan or at maturity. TDRs are included in the above table within the following categories: “loans 90 days past due and accruing”, “nonaccrual loans”, or “troubled debt restructurings not included above”. Loans in the latter category include loans that meet the definition of a TDR but are performing in accordance with the modified terms and therefore classified as accruing loans. At March 31, 2020, the Company had $8.2 million in TDRs, and of that total $1.1 million were reported as nonaccrual and $7.1 million were considered performing and included in the table above.

For customers affected by COVID-19, the Company implemented a loan payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. The current program allows for deferral of payments of principal and interest for up to 90 days and customers will be able to request a payment deferral through the middle of May 2020; in certain cases and/or where required by applicable law or regulation, we will permit additional deferrals or other accommodation. The provisions of the CARES Act and recently issued interagency guidance issued by Federal banking regulators provided guidance and clarification related to modifications and deferral programs to assist borrowers who are negatively impacted by the COVID-19 national emergency. The guidance and clarifications detail certain provisions whereby banks are permitted to make deferrals and modifications to the terms of a loan which would not require the loan to be reported as a troubled debt restructuring. In accordance with the CARES Act and the interagency guidance, the Company elected to adopt the provisions to not report eligible loan modifications as troubled debt restructurings.”

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

The ratio of the allowance to nonperforming loans and leases (loans past due 90 days and accruing, nonaccrual loans and restructured troubled debt) was 170.74% at March 31, 2020, compared to 126.90% at December 31, 2019, and 175.51% at March 31, 2019. The Company’s nonperforming loans and leases are mostly made up of collateral dependent impaired loans with limited exposure or loans that require limited specific reserve due to the level of collateral available with respect to these loans and/or previous charge-offs.

Management reviews the loan portfolio continuously for evidence of potential problem loans and leases. Potential problem loans and leases are loans and leases that are currently performing in accordance with contractual terms, but where known information about possible credit problems of the related borrowers causes management to have doubt as to the ability of such borrowers to comply with the present loan payment terms and may result in such loans and leases becoming nonperforming at some time in the future. Management considers loans and leases classified as Substandard, which continue to accrue interest, to be potential problem loans and leases.

The Company, through its internal loan review function, identified 32 commercial relationships from the originated portfolio and 5 commercial relationships from the acquired portfolio totaling $38.9 million and $469,000, respectively at March 31, 2020 that were potential problem loans. At December 31, 2019, the Company had identified 34 relationships totaling $42.6 million in the originated portfolio and 7 relationships totaling $1.4 million in the acquired portfolio that were potential problem loans. Of the 32 commercial relationships in the originated portfolio at March 31, 2020 that were Substandard, there were 12 relationships that equaled or exceeded $1.0 million, which in aggregate totaled $34.7 million, the largest of which was $8.7 million. Of the 5 commercial relationships from the acquired loan portfolio at March 31, 2020 that were Substandard, there were no relationships that equaled or exceeded $1.0 million. The Company continues to monitor these potential problem relationships; however, management cannot predict the extent to which continued weak economic conditions or other factors may further impact borrowers. These loans remain in a performing status due to a variety of factors, including payment history, the value of collateral supporting the credits, and personal or government guarantees. These factors, when considered in the aggregate, give management reason to believe that the current risk exposure on these loans does not warrant accounting for these loans as nonperforming. However, these loans do exhibit certain risk factors, which have the potential to cause them to become nonperforming. Accordingly, management’s attention is focused on these credits, which are reviewed on at least a quarterly basis. 

Capital

Total equity was $682.6 million at March 31, 2020, an increase of $19.5 million or 3.0% from December 31, 2019. The increase reflects a decline in accumulated other comprehensive losses partially offset by a decrease in additional paid-in capital.

Additional paid-in capital declined from $338.5 million at December 31, 2019, to $333.7 million at March 31, 2020. The decrease was primarily attributable to a $5.6 million aggregate purchase price related to the Company's repurchase and retirement of 71,288 shares of its common stock during the first quarter of 2020 pursuant to its publicly announced stock repurchase plan and $1.2 million related to stock based compensation, partially offset by $0.2 million related to the exercise of stock options and $0.2 million related to the Company's director deferred compensation plan. Retained earnings increased by $1.8 million from $370.5 million at December 31, 2019, to $372.3 million at March 31, 2020, reflecting net income of $8.0 million less dividends paid of $7.8 million and the net cumulative effect adjustment related to the adoption of ASU 2016-13 of $1.7 million. Accumulated other comprehensive loss decreased from a net loss of $43.6 million at December 31, 2019, to a net loss of $21.3 million at March 31, 2020, reflecting a $21.8 million increase in unrealized gains on available-for-sale debt securities due to changes in market rates coupled with a $0.5 million decrease related to post-retirement benefit plans.

In connection with the effectiveness of the Basel III Capital Rules on January 1, 2015, the Company elected to opt-out of the requirement to include most components of other comprehensive income in regulatory capital. Accordingly, amounts reported as accumulated other comprehensive income/loss related to net unrealized gain or loss on available-for-sale debt securities and the funded status of the Company’s defined benefit post-retirement benefit plans do not increase or reduce regulatory capital and are not included in the calculation of risk-based capital and leverage ratios.

Cash dividends paid in the first three months of 2020 totaled approximately $7.8 million or $0.52 per common share, representing 98.0% of year to date 2020 earnings through March 31, 2020, and were up 4.0% over cash dividends of $7.7 million or $0.50 per common share paid in the first three months of 2019.

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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 of common equity Tier 1 capital, Total capital and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. Management believes that the Company and its subsidiary banks meet all capital adequacy requirements to which they are subject.

In addition to setting higher minimum capital ratios, the Basel III Capital Rules introduced a capital conservation buffer, which must be added to each of the minimum capital ratios and is designed to absorb losses during periods of economic stress. The capital conservation buffer was phased in over a 3-year period that began on January 1, 2016, and was fully phased-in on January 1, 2019 at 2.5%.

The following table provides a summary of the Company’s capital ratios as of March 31, 2020. 

REGULATORY CAPITAL ANALYSIS
March 31, 2020	Actual				Minimum Capital Required - Basel III Fully Phased-In				Well Capitalized Requirement
(dollar amounts in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to risk weighted assets)	$	677,746	13.62	%	$	522,370	10.50	%	$	497,495	10.00	%
Tier 1 Capital (to risk weighted assets)	624,220		12.55	%	422,871		8.50	%	397,996		8.00	%
Tier 1 Common Equity (to risk weighted assets)	607,142		12.20	%	348,246		7.00	%	323,372		6.50	%
Tier 1 Capital (to average assets)	624,220		9.53	%	262,070		4.00	%	327,587		5.00	%

As of March 31, 2020, the Company’s capital ratios exceeded the minimum required capital ratios plus the fully phased-in capital conservation buffer, and the minimum required capital ratios for well capitalized institutions. The capital levels required to be considered well capitalized, presented in the above table, are based upon prompt corrective action regulations, as amended to reflect the changes under Basel III Capital Rules.

Total capital as a percent of risk weighted assets increased to 13.6% at March 31, 2020, compared with 13.5% as of December 31, 2019. Tier 1 capital as a percent of risk weighted assets decreased from 12.7% at the end of 2019 to 12.6% as of March 31, 2020. Tier 1 capital as a percent of average assets was 9.5% at March 31, 2020, which is down from 9.6% at December 31, 2019. Common equity tier 1 capital was 12.2% at the end of the first quarter of 2020, down from 12.3% at the end of 2019.

As of March 31, 2020, the capital ratios for the Company’s subsidiary banks also exceeded the minimum required capital ratios plus the required conservation buffer, the minimum required capital ratios plus the fully phased-in capital conservation buffer, and the minimum required capital ratios for well capitalized institutions.

In the first quarter of 2020, U.S. Federal regulatory authorities issued an interim final rule that provides banking organizations that adopt CECL during the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay (i.e., a five-year transition in total). In connection with our adoption of CECL on January 1, 2020, we have elected to utilize the five-year CECL transition.

Deposits and Other Liabilities

Total deposits of $5.4 billion at March 31, 2020 were up $196.4 million or 3.8% from December 31, 2019. The increase from year-end was primarily in checking, money market and savings balances, which collectively were up $193.1 million or 6.3% from year end 2019. The majority of the increase was in municipal money market deposit balances. Noninterest bearing deposits and time deposits were down $30.6 million or 2.1% and up $33.9 million or 5.0%, respectively, from year-end 2019.

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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 and municipal money market deposits and reciprocal deposit relationships with municipalities. Core deposits were up by $38.8 million or 0.90% from year-end 2019, to $4.3 billion at March 31, 2020. Core deposits represented 80.0% of total deposits at March 31, 2020, compared to 82.3% of total deposits at December 31, 2019.

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 $69.0 million at March 31, 2020, and $60.3 million at December 31, 2019. Management generally views local repurchase agreements as an alternative to large time deposits.

The Company’s other borrowings totaled $458.0 million at March 31, 2020, down $200.1 million or 30.4% from $658.1 million at December 31, 2019. Borrowings decreased primarily due to seasonal deposit growth from year-end 2019. Borrowings at March 31, 2020 included $29.0 million in FHLB overnight advances, $415.0 million of FHLB term advances, and a $14.0 million advance from a bank. Borrowings at year-end 2019 included $239.1 million in overnight advances from FHLB, $415.0 million of FHLB term advances, and a $4.0 million advance from a bank. Of the $415.0 million in FHLB term advances at March 31, 2020, $265.0 million is due in over one year.

Liquidity

As of March 31, 2020, the Company had not experienced any significant impact to our liquidity or funding capabilities as a result of the COVID-19 pandemic. The Company is participating in the PPP under the CARES Act. The Federal Reserve Bank has provided a lending facility that may be used by banks to obtain funding specifically for PPP loans. PPP loans would be pledged as collateral on any of the Bank's borrowings under the Federal Reserve Bank's PPP lending facility. In April 2020, the Company had an increase in deposits and actively increased liquid assets to further strengthen the Company's position so that the Company can continue to serve our customers during these uncertain times. The Company has a long-standing liquidity plan in place that is designed to ensure that appropriate liquidity resources are available to fund the balance sheet. Additionally, given the uncertainties related to the impact of the COVID-19 crisis on liquidity, the Company has confirmed the availability of funds at the FHLB of NY and FHLB of Pittsburgh, completed actions required to activate participation in the Federal Reserve Bank PPP lending facility, and confirmed availability of Federal Fund lines with correspondent bank partners.

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

Core deposits, discussed above under “Deposits and Other Liabilities”, are a primary and low cost funding source obtained primarily through the Company’s branch network. In addition to core deposits, the Company uses non-core funding sources to support asset growth. These non-core funding sources include time deposits of $250,000 or more, brokered deposits, municipal money market deposits, reciprocal deposits, bank borrowings, securities sold under agreements to repurchase, overnight and term advances from the FHLB and other funding sources. Rates and terms are the primary determinants of the mix of these funding sources. Non-core funding sources of $1.6 billion at March 31, 2020 decreased $33.8 million or 2.1% as compared to year end 2019. The decrease in non-core funding sources reflects mainly a decrease in overnight borrowings with the FHLB compared to year-end 2019. Non-core funding sources, as a percentage of total liabilities, were 26.5% at March 31, 2020, compared to 27.1% at December 31, 2019. 

Non-core funding sources may require securities to be pledged against the underlying liability. Securities carried at $1.1 billion at March 31, 2020 and at $1.2 billion at December 31, 2019, were either pledged or sold under agreements to repurchase. Pledged securities represented 81.2% of total securities at March 31, 2020, compared to 89.7% of total securities at December 31, 2019.

Cash and cash equivalents totaled $115.3 million as of March 31, 2020 which decreased from $138.0 million at December 31, 2019. Short-term investments, consisting of securities due in one year or less, decreased from $108.1 million at December 31, 2019, to $64.0 million at March 31, 2020.

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Cash flow from the loan and investment portfolios provides a significant source of liquidity. These assets may have stated maturities in excess of one year, but have monthly principal reductions. Total mortgage-backed securities, at fair value, were $932.5 million at March 31, 2020 compared with $824.0 million at December 31, 2019. Outstanding principal balances of residential mortgage loans, consumer loans, and leases totaled approximately $1.5 billion at March 31, 2020, down $12.2 million or 0.8% compared with year end 2019. Aggregate amortization from monthly payments on these assets provides significant additional cash flow to the Company.

The Company's liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, 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 March 31, 2020, the unused borrowing capacity on established lines with the FHLB was $1.5 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 March 31, 2020, total unencumbered residential mortgage loans and securities were $1.0 billion. Additional assets may also qualify as collateral for FHLB advances upon approval of the FHLB.

Newly Adopted Accounting Standards

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 was effective for the Company on January 1, 2020. Upon adoption, a cumulative effect adjustment for the change in the allowance for credit losses was recognized in retained earnings.  The cumulative-effect adjustment to retained earnings, net of taxes, is 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 adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach. Results for the periods beginning after January 1, 2020 are presented under Accounting Standards Codification (“ASC”) 326, while prior period amounts continue to be reported in accordance with previously applicable US GAAP. The Company recorded a net increase of retained earnings of $1.7 million, upon adoption. The transition adjustment includes a decrease in the allowance for credit losses on loans of $2.5 million, and an increase in the allowance for credit losses on off-balance sheet credit exposures of $0.4 million, net of the corresponding decrease in deferred tax assets of $0.4 million.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with the standard, the Company did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The remaining discount on the PCD assets was determined to be related to noncredit factors and will be accreted into interest income on a level-yield method over the life of the loans.

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 was effective for the Company on January 1, 2020 and did not have a material impact on our consolidated financial statements.

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 was effective for the Company on January 1, 2020, and did not 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

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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 was effective for the Company on January 1, 2020, and did not have a significant impact on our consolidated financial statements.

Accounting Standards Pending Adoption

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 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.

ASU 2020-03 "Codification Improvements to Financial Instruments." ASU 2020-03 revised a wide variety of topics in the Codification with the intent to make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications. ASU 2020-03 was effective immediately upon its release in March 2020 and did not have a significant impact on our consolidated financial statements.

ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. Tompkins is currently evaluating the potential impact of ASU 2020-04 on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

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

The Company’s Board of Directors has set a policy that interest rate risk exposure will remain within a range whereby net interest income will not decline by more than 10% in one year as a result of a 100 basis point parallel change in rates. Based upon the simulation analysis performed as of February 29, 2020, a 200 basis point parallel upward change in interest rates over a one-year time frame would result in a one-year decrease in net interest income from the base case of approximately 3.6%, while a 100 basis point parallel decline in interest rates over a one-year period would result in an increase in one-year net interest income from the base case of 1.6%. 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 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.

In the down 100 rate scenario increases net interest 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 from the historically low levels, allowing for some interest rate relief

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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 declining slightly 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 the Company’s interest rate risk exposure. The Company’s current liquidity profile, capital position, and growth prospects, offer a level of flexibility for management to take actions that could offset some of the negative effects of unfavorable movements in interest rates. Management believes the current exposure to changes in interest rates is not significant in relation to the earnings and capital strength of the Company.

In addition to the simulation analysis, management uses an interest rate gap measure. The table below is a Condensed Static Gap Report, which illustrates the anticipated repricing intervals of assets and liabilities as of March 31, 2020. The Company’s one-year net interest rate gap was a negative $117.4 million or 1.74% of total assets at March 31, 2020, compared with a negative $173.6 million or 2.58% of total assets at December 31, 2019. A negative gap position exists when the amount of interest-bearing liabilities maturing or repricing exceeds the amount of interest-earning assets maturing or repricing within a particular time period. This analysis suggests that the Company’s net interest income is moderately more vulnerable to an increasing rate environment than it is to a prolonged declining interest rate environment. An interest rate gap measure could be significantly affected by external factors such as a rise or decline in interest rates, loan or securities prepayments, and deposit withdrawals.

Condensed Static Gap - March 31, 2020						Repricing Interval
(In thousands)	Total		0-3 months			3-6 months			6-12 months			Cumulative 12 months
Interest-earning assets1	$	6,284,715	$	1,223,201		$	367,865		$	661,051		$	2,252,117
Interest-bearing liabilities	4,526,801		1,944,740			200,208			224,563			2,369,511
Net gap position			(721,539		)	167,657			436,488			(117,394		)
Net gap position as a percentage of total assets			(10.70		)%	2.49		%	6.47		%	(1.74		)%

 ¹ Balances of available securities are shown at amortized cost 

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2020.

Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Report on Form 10-Q, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

The Company adopted ASU No. 2016-13, "Financial Instruments: Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" on January 1, 2020. The Company implemented new controls and modified existing controls as part of the adoption. The new controls were implemented to account for the additional complexity of the expected credit loss model, review of economic forecasts, and other assumptions used in the estimation of the model. There were no other changes in the Company's internal control over financial reporting that occurred during the quarter ended March 31, 2020, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to various claims and legal actions that arise in the ordinary course of conducting business. As of March 31, 2020, 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 1A. Risk Factors

Except as set forth below, there have been no material changes in the risk factors previously disclosed under Item 1A. of the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2019:

The economic impact of the novel COVID-19 outbreak has had, and likely will continue to have, a material adverse effect on our business, financial condition, liquidity, and results of operations.

In December 2019, a novel coronavirus (COVID-19) was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. On March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation in the United States as many state and local governments have ordered non-essential businesses to close and residents to shelter in place at home. The extent to which COVID-19 and measures taken in response thereto impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict. COVID-19 has had and is likely to continue to have a material adverse impact on our results of operations and financial condition. Moreover, COVID-19 is likely to heighten or make more likely to occur many of our known risks, which are previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

The COVID-19 pandemic, and the actions taken by federal, state and local authorities in response thereto, have resulted, and will likely continue to result in, an unprecedented slow-down in economic activity, including the following:

• A dramatic increase in unemployment, including more than 30 million people in the U.S. filing claims for unemployment since the start of the COVID-19 outbreak.

• Stock markets generally, and bank stocks in particular, have significantly declined in value.

• The Federal Reserve Board has reduced the benchmark fed funds rate to a target range of 0% to 0.25%, and the yields on 10 and 30-year treasury notes have declined to historic lows.

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• Various state governments and federal agencies are requiring lenders to provide forbearance and other relief to borrowers (e.g., waiving late payment and other fees). The federal banking agencies have recently issued guidance providing relief from reporting loan classifications due to modifications related to the COVID-19 outbreak.

Certain industries have been particularly hard-hit, including the travel and hospitality industry, the restaurant industry and the retail industry. Finally, the spread of the coronavirus has caused us to modify our business practices, including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences. we may take further actions as may be required by government authorities or that we determine are in the best interest of our employees, customers and business partners.

As a result of the COVID-19 pandemic and the elated adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations:

• demand for our products and services may decline, making it difficult to grow assets and income;

• if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;

• collateral for loans, especially real estate, may decline in value, which could cause credit losses to increase;

• we may face a decline in the value of our goodwill and other intangible assets;

• our allowance for credit losses may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect our net income;

• the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us;

• the decline in the Federal Reserve Board’s target federal funds rate may cause the yield on our assets to decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and thereby reducing our net income;

• a material decrease in net income or a net loss over several quarters could result in a further decrease in the rate of our quarterly cash dividend;

• our wealth management and trust revenues may decline with continuing market turmoil;

• a prolonged weakness in economic conditions resulting in a reduction of future projected earnings could result in our recording a valuation allowance against our current outstanding deferred tax assets;

• our cybersecurity and fraud risks may increase due to our transition to a remote work environment;

• the unavailability of a third party vendor, whom we rely on for certain services, could cause a lapse in a critical service; and

• Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs.

Moreover, our future success and profitability substantially depends on the management skills of our executive officers and directors, many of whom have held officer and director positions with us for many years. The unanticipated loss or unavailability of key employees due to the outbreak could harm our ability to operate our business or execute our business strategy. We may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including the scope and duration of the pandemic and the successfulness of efforts to abate it; the continued effectiveness of our business continuity plan; the direct and indirect impact of the pandemic on our employees, customers, clients, counterparties and service providers, as well as other market participants; and actions taken by governmental authorities and other third parties in response to the pandemic, including when, how and to what extent the economy may be reopened.

64

Any one or a combination of the factors identified above could negatively impact our business, financial condition and results of operations and prospects.

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

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  of Shares that May Yet Be Purchased Under the Plans or Programs
	(a)	(b)		(c)	(d)
January 1, 2020 through January 31, 2020	1,260	$	90.50	0	400,000
February 1, 2020 through February 29, 2020	31,163	78.21		30,650	369,350
March 1, 2020 through March 31, 2020	40,638	74.68		40,638	328,712
Total	73,061	$	76.46	71,288	328,712

Included above are 1,260 shares purchased in January 2020, at an average cost of $90.50, and 486 shares purchased in February 2020, at an average cost of $87.41, 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 27 shares delivered to the Company in February 2020 at an average cost of $88.10 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. Under the 2020 Repurchase Plan, the Company repurchased 71,288 shares through March 31, 2020, at an average cost of $76.13. On March 19, 2020, following the announcement of the national emergency related to the COVID-19 pandemic, the Company suspended the purchase of shares under the Company's share repurchase program.

Recent Sales of Unregistered Securities

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

65

Item 6. Exhibits

EXHIBIT INDEX

Exhibit Number	Description	Pages
31.1	Certification of Principal Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350
32.2	Certification of Principal Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350
101 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.
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in XBRL (eXtensible Business Reporting Language):  (i) Condensed Consolidated Statements of Condition as of March 31, 2020 and December 31, 2019; (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2020 and 2019; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019; (v) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2020 and 2019; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.

** 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 March 31, 2020 and December 31, 2019; (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2020 and 2019; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019; (v) Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2020 and 2019; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.

66

SIGNATURES

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

Date: May 11, 2020

TOMPKINS FINANCIAL CORPORATION

By:	/s/ Stephen S. Romaine
	Stephen S. Romaine
	President and Chief Executive Officer
	(Principal Executive Officer)

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

67

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Stephen S. Romaine, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:	May 11, 2020
/s/ Stephen S. Romaine
Stephen S. Romaine
President and Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I,  Francis M. Fetsko, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:	May 11, 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

In connection with the filing of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020 (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.

May 11, 2020
	/s/ Stephen S. Romaine
	Stephen S. Romaine
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION

In connection with the filing of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020 (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.

May 11, 2020
	/s/ Francis M. Fetsko
	Francis M. Fetsko
	Executive Vice President,
	Chief Financial Officer, and Chief Operating Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 0.52	$ 0.5
Net exercise of stock options and related tax benefit (in shares)	3,011	4,996
Common stock repurchased and returned to unissued status (in shares)	71,288
Directors deferred compensation plan (in shares)	6,016	4,770
Restricted stock activity (in shares)	2,365	3,295

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
INTEREST AND DIVIDEND INCOME
Loans	$ 55,614	$ 55,324
Due from banks	6	10
Available-for-sale debt securities	7,144	7,858
Held-to-maturity securities	0	858
Federal Home Loan Bank and other stock	435	878
Total Interest and Dividend Income	63,199	64,928
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	843	586
Other deposits	6,356	6,011
Federal funds purchased and securities sold under agreements to repurchase	36	44
Trust preferred debentures	289	329
Other borrowings	2,706	6,044
Total Interest Expense	10,230	13,014
Net Interest Income	52,969	51,914
Less: Provision for credit loss expense	16,294	445
Net Interest Income After Provision for Credit Loss Expense	36,675	51,469
NONINTEREST INCOME
Insurance commissions and fees	8,045	8,045
Investment services income	4,202	4,084
Service charges on deposit accounts	1,983	1,998
Card services income	2,183	2,790
Other income	2,104	2,478
Net gain on securities transactions	443	12
Total Noninterest Income	18,960	19,407
NONINTEREST EXPENSE
Salaries and wages	22,494	21,101
Other employee benefits	5,684	5,611
Net occupancy expense of premises	3,328	3,601
Furniture and fixture expense	1,985	1,979
Amortization of intangible assets	374	412
Other operating expense	11,875	11,505
Total Noninterest Expenses	45,740	44,209
Income Before Income Tax Expense	9,895	26,667
Income Tax Expense	1,909	5,595
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	7,986	21,072
Less: Net Income Attributable to Noncontrolling Interests	37	32
Net Income Attributable to Tompkins Financial Corporation	$ 7,949	$ 21,040
Basic Earnings Per Share (in dollars per share)	$ 0.53	$ 1.37
Diluted Earnings Per Share (in dollars per share)	$ 0.53	$ 1.37

XML

Securities - Schedule of Available-for-Sales Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,318,416	$ 1,293,239
Gross Unrealized Gains	35,030	10,466
Gross Unrealized Losses	809	5,118
Fair Value	1,352,637	1,298,587
U.S. Treasuries
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,745	1,840
Gross Unrealized Gains	5	0
Gross Unrealized Losses	0	0
Fair Value	1,750	1,840
Obligations of U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	302,086	367,551
Gross Unrealized Gains	11,384	5,021
Gross Unrealized Losses	42	84
Fair Value	313,428	372,488
Obligations of U.S. states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	101,452	96,668
Gross Unrealized Gains	1,159	1,178
Gross Unrealized Losses	127	61
Fair Value	102,484	97,785
U.S. Government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	171,500	164,643
Gross Unrealized Gains	3,469	1,327
Gross Unrealized Losses	454	1,519
Fair Value	174,515	164,451
U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	739,133	660,037
Gross Unrealized Gains	19,013	2,940
Gross Unrealized Losses	119	3,387
Fair Value	758,027	659,590
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	67
Fair Value	$ 2,433	$ 2,433

XML

Segment and Related Information (Table)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Schedule of segment and related information

Summarized financial information concerning the Company’s reportable segments and the reconciliation to the Company’s consolidated results is shown in the following table. Investment in subsidiaries is netted out of the presentations below. The “Intercompany” column identifies the intercompany activities of revenues, expenses and other assets between the banking, insurance and wealth management services segments. The Company accounts for intercompany fees and services at an estimated fair value according to regulatory requirements for the services provided. Intercompany items relate primarily to the use of human resources, information systems, accounting and marketing services provided by any of the banks and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the 2019 Annual Report on Form 10-K.

As of and for the three months ended March 31, 2020
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	63,199	$	1	$	0	$	(1	)	$	63,199
Interest expense	10,231		0		0		(1		)	10,230
Net interest income	52,968		1		0		0			52,969
Provision for credit loss expense	16,294		0		0		0			16,294
Noninterest income	6,992		8,150		4,374		(556		)	18,960
Noninterest expense	36,689		6,562		3,045		(556		)	45,740
Income before income tax expense	6,977		1,589		1,329		0			9,895
Income tax expense	1,157		430		322		0			1,909
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	5,820		1,159		1,007		0			7,986
Less:  Net income attributable to noncontrolling interests	37		0		0		0			37
Net Income attributable to Tompkins Financial Corporation	$	5,783	$	1,159	$	1,007	$	0		$	7,949
Depreciation and amortization	$	2,485	$	59	$	10	$	0		$	2,554
Assets	6,690,574		41,444		24,562		(13,466		)	6,743,114
Goodwill	64,585		19,866		7,996		0			92,447
Other intangibles, net	2,972		2,741		134		0			5,847
Net loans and leases	4,885,418		0		0		0			4,885,418
Deposits	5,422,258		0		0		(12,895		)	5,409,363
Total Equity	627,223		32,632		22,742		0			682,597

As of and for the three months ended March 31, 2019
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	64,929	$	1	$	0	$	(2	)	$	64,928
Interest expense	13,016		0		0		(2		)	13,014
Net interest income	51,913		1		0		0			51,914
Provision for credit loss expense	445		0		0		0			445
Noninterest income	7,568		8,148		4,198		(507		)	19,407
Noninterest expense	35,327		6,277		3,112		(507		)	44,209
Income before income tax expense	23,709		1,872		1,086		0			26,667
Income tax expense	4,834		490		271		0			5,595
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	18,875		1,382		815		0			21,072
Less:  Net income attributable to noncontrolling interests	32		0		0		0			32
Net Income attributable to Tompkins Financial  Corporation	$	18,843	$	1,382	$	815	$	0		$	21,040
Depreciation and amortization	$	2,414	$	56	$	10	$	0		$	2,480
Assets	6,689,882		41,156		21,573		(13,892		)	6,738,719
Goodwill	64,370		19,702		8,211		0			92,283
Other intangibles, net	4,019		3,051		196		0			7,266
Net loans and leases	4,749,372		0		0		0			4,749,372
Deposits	5,003,696		0		0		(13,771		)	4,989,925
Total Equity	593,791		33,774		19,702		0			647,267

XML

Financial Guarantees

3 Months Ended

Mar. 31, 2020

Guarantees [Abstract]

Financial Guarantees

Financial Guarantees

The Company currently does not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit. The Company extends standby letters of credit to its customers in the normal course of business. The standby letters of credit are generally short-term. As of March 31, 2020, the Company’s maximum potential obligation under standby letters of credit was $33.1 million compared to $30.5 million at December 31, 2019. Management uses the same credit policies to extend standby letters of credit that it uses for on-balance sheet lending decisions and may require collateral to support standby letters of credit based upon its evaluation of the counterparty. Management does not anticipate any significant losses as a result of these transactions, and has determined that the fair value of standby letters of credit is not significant.

XML

Securities

3 Months Ended

Mar. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

Available-for-Sale Debt Securities

The following table summarizes available-for-sale debt securities held by the Company at March 31, 2020:

	Available-for-Sale Debt Securities
March 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	1,745	$	5	$	0	$	1,750
Obligations of U.S. Government sponsored entities	302,086		11,384		42		313,428
Obligations of U.S. states and political subdivisions	101,452		1,159		127		102,484
Mortgage-backed securities – residential, issued by
U.S. Government agencies	171,500		3,469		454		174,515
U.S. Government sponsored entities	739,133		19,013		119		758,027
U.S. corporate debt securities	2,500		0		67		2,433
Total available-for-sale debt securities	$	1,318,416	$	35,030	$	809	$	1,352,637

 The following table summarizes available-for-sale debt securities held by the Company at December 31, 2019:  

	Available-for-Sale Debt 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 debt securities	$	1,293,239	$	10,466	$	5,118	$	1,298,587

The Company may from time to time sell investment securities from its available-for-sale portfolio. Realized gains on sales of available-for-sale debt securities were $178,000 for the three months ended March 31, 2020 and $0 for the same period during 2019. Realized losses on sales of available-for-sale debt securities were $0 for the three months ended March 31, 2020 and 2019. The sales of available-for-sale investment securities were the result of general investment portfolio and interest rate risk management. The Company's available-for-sale portfolio includes callable securities that may be called prior to maturity. Realized gains on called available-for-sale debt securities were $251,000 for the three months ended March 31, 2020 and $0 for the three months ended March 31, 2019. The Company also recognized gains of $14,000 and $12,000 for the three months ended March 31, 2020, and March 31, 2019 on equity securities, reflecting the change in fair value.

The following table summarizes available-for-sale debt securities that had unrealized losses at March 31, 2020:  

	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	$	24,209	$	42	$	0	$	0	$	24,209	$	42
Obligations of U.S. states and political subdivisions	18,179		127		0		0		18,179		127
Mortgage-backed securities – residential, issued by
U.S. Government agencies	38,813		340		6,618		114		45,431		454
U.S. Government sponsored entities	4,435		10		11,038		109		15,473		119
U.S. corporate debt securities	0		0		2,433		67		2,433		67
Total available-for-sale debt securities	$	85,636	$	519	$	20,089	$	290	$	105,725	$	809

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

	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 debt securities	$	241,757	$	1,371	$	288,210	$	3,747	$	529,967	$	5,118

The Company evaluates available-for-sale debt securities in unrealized loss positions at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense.

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

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

• The extent to which the fair value is less than the amortized cost basis;

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

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

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

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

At January 1, 2020 and March 31, 2020, the Company determined that all impaired available-for-sale debt securities experienced a decline in fair value below the amortized cost basis due to noncredit-related factors. In addition, the Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized

losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities, before recovery of their amortized cost basis, which may be at maturity. Therefore, the Company carried no ACL at those respective dates and there was no credit loss expense recognized by the Company during the three months ended March 31, 2020.

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.

March 31, 2020
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	63,817	$	64,031
Due after one year through five years	222,678		232,268
Due after five years through ten years	81,418		83,920
Due after ten years	39,870		39,876
Total	407,783		420,095
Mortgage-backed securities	910,633		932,542
Total available-for-sale debt securities	$	1,318,416	$	1,352,637

December 31, 2019
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt 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

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 stock ("ACBB"), 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 $15.6 million, $8.5 million and $95,000 at March 31, 2020, respectively. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue to pay dividends and repurchase stock. Quarterly, we evaluate our investment in the FHLB for impairment. We evaluate recent and long-term operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history and impact of legislative and regulatory changes. Based on our most recent evaluation, as of March 31, 2020, we have determined that no impairment write-downs are currently required.

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Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The following tables present reclassifications out of the accumulated other comprehensive income (loss) for the three month periods ended March 31, 2020 and 2019.

	Three Months Ended March 31, 2020
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale debt securities:
Change in net unrealized gain/loss during the period	$	29,302		$	(7,179	)	$	22,123
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	(429		)	105			(324		)
Net unrealized gains/losses	28,873			(7,074		)	21,799
Employee benefit plans:
Amortization of net retirement plan actuarial gain	601			(147		)	454
Amortization of net retirement plan prior service cost	53			(13		)	40
Employee benefit plans	654			(160		)	494
Other comprehensive income	$	29,527		$	(7,234	)	$	22,293

	Three Months Ended March 31, 2019
(In thousands)	Before-Tax Amount		Tax (Expense) Benefit			Net of Tax
Available-for-sale debt securities:
Change in net unrealized gain/loss during the period	$	15,756	$	(3,862	)	$	11,894
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	0		0			0
Net unrealized gains/losses	15,756		(3,862		)	11,894
Employee benefit plans:
Amortization of net retirement plan actuarial gain	421		(103		)	318
Amortization of net retirement plan prior service cost	4		(1		)	3
Employee benefit plans	425		(104		)	321
Other comprehensive income	$	16,181	$	(3,966	)	$	12,215

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

(In thousands)	Available-for- Sale Debt Securities			Employee Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance at January 1, 2020	$	4,039		$	(47,603	)	$	(43,564	)
Other comprehensive income (loss) before reclassifications	22,123			0			22,123
Amounts reclassified from accumulated other comprehensive (loss) income	(324		)	494			170
Net current-period other comprehensive income	21,799			494			22,293
Balance at March 31, 2020	$	25,838		$	(47,109	)	$	(21,271	)
Balance at January 1, 2019	$	(23,589	)	$	(39,576	)	$	(63,165	)
Other comprehensive income (loss) before reclassifications	11,894			0			11,894
Amounts reclassified from accumulated other comprehensive (loss) income	0			321			321
Net current-period other comprehensive income	11,894			321			12,215
Balance at March 31, 2019	$	(11,695	)	$	(39,255	)	$	(50,950	)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three months ended March 31, 2020 and 2019. 

Three Months Ended March 31, 2020
Details about Accumulated other Comprehensive Income (Loss) Components (In thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss) Income1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale debt securities:
Unrealized gains and losses on available-for-sale debt securities	$	429		Net gain on securities transactions
	(105		)	Tax expense
	324			Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(601		)	Other operating expense
Net retirement plan prior service cost	(53		)	Other operating expense
	(654		)	Total before tax
	160			Tax benefit
	$	(494	)	Net of tax

Three Months Ended March 31, 2019
Details about Accumulated other Comprehensive Income (Loss) Components (In thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss) Income1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale debt securities:
Unrealized gains and losses on available-for-sale debt securities	$	0		Net gain on securities transactions
	0			Tax expense
	0			Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(421		)	Other operating expense
Net retirement plan prior service cost	(4		)	Other operating expense
	(425		)	Total before tax
	104			Tax benefit
	$	(321	)	Net of tax

¹ Amounts in parentheses indicated debits in income statement.

² The accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost (See Note 8 - “Employee Benefit Plan”).

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Leasing - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease cost	$ 1,174	$ 1,142
Variable lease cost	164	96
Short-term lease cost	0	0
Sublease income	(8)	(8)
Total lease cost	$ 1,330	$ 1,230

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Earnings Per Share - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earning per share (in shares)	17,956	18,886

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Employee Benefit Plan - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Pension Plan
Components of net periodic benefit cost
Service cost	$ 0	$ 0
Interest cost	641	745
Expected return on plan assets	(1,355)	(1,234)
Amortization of net retirement plan actuarial loss	350	337
Amortization of net retirement plan prior service (credit) cost	(3)	(3)
Net periodic benefit (income) cost	(367)	(155)
Life and Health
Components of net periodic benefit cost
Service cost	41	50
Interest cost	64	73
Expected return on plan assets	0	0
Amortization of net retirement plan actuarial loss	26	0
Amortization of net retirement plan prior service (credit) cost	(15)	(15)
Net periodic benefit (income) cost	116	108
SERP Benefits
Components of net periodic benefit cost
Service cost	46	37
Interest cost	240	229
Expected return on plan assets	0	0
Amortization of net retirement plan actuarial loss	225	85
Amortization of net retirement plan prior service (credit) cost	71	22
Net periodic benefit (income) cost	$ 582	$ 373

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Leasing - Operating Lease Amounts in Statement of Condition (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
ROU assets	$ 33,231	$ 33,501
Current lease liabilities	3,188	3,256
Non-current lease liabilities	32,450	32,666
Total lease liabilities	$ 35,638	$ 35,922

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Revenue Recognition - Schedule of Disaggregation of Noninterest Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 16,727	$ 17,224
Noninterest Income (out-of-scope of ASC 606)1	2,233	2,183
Total Noninterest Income	18,960	19,407
Commissions and Fees
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	7,385	7,099
Installment Billing
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(30)	(71)
Refund of Commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(127)	(12)
Contract Liabilities/Deferred Revenue
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(4)	0
Contingent commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	821	1,029
Subtotal Insurance Revenues
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	8,045	8,045
Trust and Asset Management
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	2,943	2,850
Mutual Fund & Investment Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	1,259	1,234
Subtotal Investment Service Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	4,202	4,084
Service Charges on Deposit Accounts
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	1,983	1,998
Card Services Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	2,183	2,790
Other
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 314	$ 307

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Fair Value Measurements - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	$ 1,352,637	$ 1,298,587
Equity securities, at fair value	930	915
U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	1,750	1,840
Obligations of U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	313,428	372,488
Obligations of U.S. states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	102,484	97,785
U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	174,515	164,451
U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	758,027	659,590
U.S. corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	2,433	2,433
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	1,352,637	1,298,587
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. Treasuries | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. Treasuries | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	1,750	1,840
Recurring | U.S. Treasuries | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | Obligations of U.S. Government sponsored entities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | Obligations of U.S. Government sponsored entities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	313,428	372,488
Recurring | Obligations of U.S. Government sponsored entities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | Obligations of U.S. states and political subdivisions | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | Obligations of U.S. states and political subdivisions | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	102,484	97,785
Recurring | Obligations of U.S. states and political subdivisions | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. Government agencies | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. Government agencies | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	174,515	164,451
Recurring | U.S. Government agencies | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. Government sponsored entities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. Government sponsored entities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	758,027	659,590
Recurring | U.S. Government sponsored entities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. corporate debt securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | U.S. corporate debt securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	2,433	2,433
Recurring | U.S. corporate debt securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	0	0
Recurring | Equity securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	0	0
Recurring | Equity securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	0	0
Recurring | Equity securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	930	915
Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	1,352,637	1,298,587
Recurring | Fair Value | U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	1,750	1,840
Recurring | Fair Value | Obligations of U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	313,428	372,488
Recurring | Fair Value | Obligations of U.S. states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	102,484	97,785
Recurring | Fair Value | U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	174,515	164,451
Recurring | Fair Value | U.S. Government sponsored entities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	758,027	659,590
Recurring | Fair Value | U.S. corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	2,433	2,433
Recurring | Fair Value | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	$ 930	$ 915

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Allowance for Loan and Lease Losses - Recorded Investment in Loans and Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 10,094
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	724
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 7,765
Originated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		$ 19,385
Collectively evaluated for impairment		4,681,661
Total		4,701,046
Originated | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		2,110
Collectively evaluated for impairment		966,875
Total		968,985
Originated | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		13,496
Collectively evaluated for impairment		2,283,152
Total		2,296,648
Originated | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		3,779
Collectively evaluated for impairment		1,340,687
Total		1,344,466
Originated | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Collectively evaluated for impairment		73,625
Total		73,625
Originated | Finance Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Collectively evaluated for impairment		17,322
Total		17,322
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		2,830
Loans acquired with deteriorated credit quality		9,149
Collectively evaluated for impairment		208,170
Total		220,149
Acquired | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		2
Loans acquired with deteriorated credit quality		173
Collectively evaluated for impairment		38,901
Total		39,076
Acquired | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		714
Loans acquired with deteriorated credit quality		5,674
Collectively evaluated for impairment		140,529
Total		146,917
Acquired | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		2,114
Loans acquired with deteriorated credit quality		3,302
Collectively evaluated for impairment		27,955
Total		33,371
Acquired | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Loans acquired with deteriorated credit quality		0
Collectively evaluated for impairment		785
Total		785
Acquired | Finance Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Loans acquired with deteriorated credit quality		0
Collectively evaluated for impairment		0
Total		$ 0

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Loans and Leases - Nonaccrual Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest on nonaccrual loans	$ 0
Originated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	9,525
Nonaccrual Loans	21,472	$ 22,485
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	1,030
Nonaccrual Loans	2,047	2,334
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		0
Originated | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	1,030
Nonaccrual Loans	2,047	2,334
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	7,309
Nonaccrual Loans	9,532	10,617
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		0
Originated | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	7,309
Nonaccrual Loans	9,532	10,617
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		0
Originated | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	1,186
Nonaccrual Loans	9,628	9,259
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	264
Nonaccrual Loans	1,870	1,924
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	922
Nonaccrual Loans	7,758	7,335
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	265	275
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	118	158
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	147	117
Loans Past Due Over 89 Days and Accruing	0	0
Originated | Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		0
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	2,084	1,796
Loans Past Due Over 89 Days and Accruing	0	794
Acquired | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	2	1
Loans Past Due Over 89 Days and Accruing	0	2
Acquired | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	2	1
Loans Past Due Over 89 Days and Accruing	0	2
Acquired | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	166	172
Loans Past Due Over 89 Days and Accruing	0	542
Acquired | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		0
Acquired | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	166	172
Loans Past Due Over 89 Days and Accruing	0	542
Acquired | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		0
Acquired | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	1,916	1,623
Loans Past Due Over 89 Days and Accruing	0	250
Acquired | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	847	872
Loans Past Due Over 89 Days and Accruing	0	55
Acquired | Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans with no Allowance for Credit Losses	0
Nonaccrual Loans	1,069	751
Loans Past Due Over 89 Days and Accruing	$ 0	195
Acquired | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		0
Acquired | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans		0
Loans Past Due Over 89 Days and Accruing		$ 0

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

New Adopted Accounting Standards and Accounting Standards Pending Adoption

Impact of Adoption of ASU 2016-13

Securities

For available for sale debt securities in an unrealized loss position, the Company evaluates the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit-related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) on the Statement of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company intends to sell an impaired available- for-sale debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount must be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the ACL when management believes the uncollectability of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable is excluded from the estimate of credit losses.

Acquired Loans

Acquired loans are recorded at fair value at the date of acquisition based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Certain larger purchased loans are individually evaluated while certain purchased loans are grouped together according to similar risk characteristics and are treated in the aggregate when applying various valuation techniques. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

Prior to January 1, 2020, loans acquired in a business combination that had evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that the Company would be unable to collect all contractually required payments receivable were considered purchased credit impaired (“PCI”). PCI loans were individually evaluated and recorded at fair value at the date of acquisition with no initial valuation allowance based on a discounted cash flow methodology that considered various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’ assessment of risk inherent in the cash flow estimates. The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield,” was recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference,” were not recognized on the Statement of Condition and did not result in any yield adjustments, loss accruals or valuation allowances. Increases in expected cash flows, including prepayments, subsequent to the initial investment were recognized prospectively through adjustment of the yield on the loan over its remaining life. Decreases in expected cash flows were recognized as impairment. Valuation allowances on PCI loans reflected only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately were not to be received).

Subsequent to January 1, 2020 in connection with the Company's adoption of ASU 2016-13, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date.

The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

Allowance for Credit Losses – Loans

Under the current expected credit loss model, the ACL on loans is a valuation allowance estimated at each balance sheet date in accordance with U.S. GAAP that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.

The Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL.

Expected credit losses are reflected in the ACL through a charge to the provision for credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the ACL is reduced by the same amount. 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. Subsequent recoveries, if any, are credited to the ACL when received.

The Company measures expected credit losses of financial assets at the loan level by segment, by pooling loans when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company uses a discounted cash flow (“DCF”) method to estimate expected credit losses. Allowance on loans that do not share risk characteristics are evaluated on an individual basis. The Company assigns a credit risk rating to all commercial and commercial real estate loans. The Company reviews commercial and commercial real estate loans rated Substandard or worse, on nonaccrual and greater than $250,000 for loss potential and when deemed appropriate assigns an allowance based on an individual evaluation.

The Company’s methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. The Company’s methodologies revert back to average historical loss information on a straight line basis over eight quarters when it can no longer develop reasonable and supportable forecasts.

The Company has identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses: commercial, commercial real estate, residential, home equity, consumer and leases. This segmentation was selected based on the differences in the risk profile of each of these categories and aligns well with regulatory reporting categories. This segmentation separates borrower type, collateral type and the nature of the loan. The differences in risk profiles of these segments enables the ACL to be more precise in its allocation due to the inherent risk in these specific portfolios.

Discounted Cash Flow Method

The Company uses the discounted cash flow method to estimate expected credit losses for the commercial, commercial real estate, residential, home equity, and consumer loan pools. For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.

The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method, management utilizes and forecasts one or both of the following economic factors; national unemployment and gross domestic product as loss drivers.

For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. Management leverages economic projections from an independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. The model considers a base case forecast and two alternative forecasts and assigns weightings to these three scenarios based on current conditions and expectations for future conditions.

The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows (“NPV”). An ACL is established for the difference between the instrument’s NPV and amortized cost basis.

The model also considers the need to qualitatively adjust expected loss estimates for information not already captured in the loss estimation process. These qualitative factors include those suggested by the Interagency Policy Statement on Allowances for Credit Losses. These qualitative factor adjustments may increase or decrease the Company's estimate of expected credit losses.

Collateral Dependent Financial Assets

Loans that do not share common risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral less cost to sell, and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring.

Troubled Debt Restructuring

A loan that has been modified or renewed is considered a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. The Company’s ACL reflects all effects of a TDR when an individual asset is specifically identified as a reasonably expected TDR. The Company has determined that a TDR is reasonably expected no later than the point when the lender concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession from the lender to avoid a default. Reasonably expected TDRs and executed non-performing TDRs are evaluated individually to determine the required ACL. TDRs performing in accordance with their modified contractual terms for a reasonable period of time may be included in the Company’s existing pools based on the underlying risk characteristics of the loan to measure the ACL. In accordance with the provisions of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and related interagency guidance issued by Federal banking regulators, we are not designating eligible loan modifications or deferrals due to impacts of the coronavirus ("COVID-19") pandemic as TDRs.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans, unused lines of credit and commercial letters of credit, issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to the provision for credit loss expense for off-balance sheet credit exposures included in other noninterest expense in the Company’s consolidated statements of income. The ACL on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using similar methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in other liabilities on the Company’s statements of condition.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

Earnings per share in the table below, for the three month periods ended March 31, 2020 and 2019 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share. ASC 260 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company has issued restricted stock awards that contain such rights and are therefore considered participating securities. Basic earnings per common share are calculated by dividing net income allocable to common stock by the weighted average number of common shares, excluding participating securities, during the period. Diluted earnings per common share include the dilutive effect of participating securities.

 

	Three Months Ended
(In thousands, except share and per share data)	3/31/2020			3/31/2019
Basic
Net income available to common shareholders	$	7,949		$	21,040
Less: income attributable to unvested stock-based compensation awards	(99		)	(349		)
Net earnings allocated to common shareholders	7,850			20,691
Weighted average shares outstanding, including unvested stock-based compensation awards	14,904,067			15,313.635
Less: unvested stock-based compensation awards	(185,119		)	(253,460		)
Weighted average shares outstanding - Basic	14,718,948			15,060,175
Diluted
Net earnings allocated to common shareholders	7,850			20,691
Weighted average shares outstanding - Basic	14,718.948			15,060.175
Plus:  incremental shares from assumed conversion of stock-based compensation awards	55,321			76,348
Weighted average shares outstanding - Diluted	14,774,269			15,136,523
Basic EPS	$	0.53		$	1.37
Diluted EPS	$	0.53		$	1.37

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Revenue Recognition - Narrative (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract with customer, liability	$ 629,000	$ 2,000,000
Insurance
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract with customer, asset, net	3,900,000	4,700,000
Wealth Management
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract with customer, asset, net	$ 1,800,000	$ 2,000,000.0

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Segment and Related Information - Schedule of Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Interest income	$ 63,199	$ 64,928
Interest expense	10,230	13,014
Net Interest Income	52,969	51,914
Provision for credit loss expense	16,294	445
Noninterest income	18,960	19,407
Noninterest expense	45,740	44,209
Income Before Income Tax Expense	9,895	26,667
Income tax expense	1,909	5,595
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	7,986	21,072
Less: Net Income Attributable to Noncontrolling Interests	37	32
Net Income Attributable to Tompkins Financial Corporation	7,949	21,040
Depreciation and amortization	2,554	2,480
Assets	6,743,114	6,738,719	$ 6,725,623
Goodwill	92,447	92,283	92,447
Other intangibles, net	5,847	7,266	6,223
Net loans and leases	4,885,418	4,749,372	4,877,658
Deposits	5,409,363	4,989,925	5,212,921
Total Equity	682,597	647,267	$ 663,054	$ 620,871
Operating Segments | Banking
Segment Reporting Information [Line Items]
Interest income	63,199	64,929
Interest expense	10,231	13,016
Net Interest Income	52,968	51,913
Provision for credit loss expense	16,294	445
Noninterest income	6,992	7,568
Noninterest expense	36,689	35,327
Income Before Income Tax Expense	6,977	23,709
Income tax expense	1,157	4,834
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	5,820	18,875
Less: Net Income Attributable to Noncontrolling Interests	37	32
Net Income Attributable to Tompkins Financial Corporation	5,783	18,843
Depreciation and amortization	2,485	2,414
Assets	6,690,574	6,689,882
Goodwill	64,585	64,370
Other intangibles, net	2,972	4,019
Net loans and leases	4,885,418	4,749,372
Deposits	5,422,258	5,003,696
Total Equity	627,223	593,791
Operating Segments | Insurance
Segment Reporting Information [Line Items]
Interest income	1	1
Interest expense	0	0
Net Interest Income	1	1
Provision for credit loss expense	0	0
Noninterest income	8,150	8,148
Noninterest expense	6,562	6,277
Income Before Income Tax Expense	1,589	1,872
Income tax expense	430	490
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	1,159	1,382
Less: Net Income Attributable to Noncontrolling Interests	0	0
Net Income Attributable to Tompkins Financial Corporation	1,159	1,382
Depreciation and amortization	59	56
Assets	41,444	41,156
Goodwill	19,866	19,702
Other intangibles, net	2,741	3,051
Net loans and leases	0	0
Deposits	0	0
Total Equity	32,632	33,774
Operating Segments | Wealth Management
Segment Reporting Information [Line Items]
Interest income	0	0
Interest expense	0	0
Net Interest Income	0	0
Provision for credit loss expense	0	0
Noninterest income	4,374	4,198
Noninterest expense	3,045	3,112
Income Before Income Tax Expense	1,329	1,086
Income tax expense	322	271
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	1,007	815
Less: Net Income Attributable to Noncontrolling Interests	0	0
Net Income Attributable to Tompkins Financial Corporation	1,007	815
Depreciation and amortization	10	10
Assets	24,562	21,573
Goodwill	7,996	8,211
Other intangibles, net	134	196
Net loans and leases	0	0
Deposits	0	0
Total Equity	22,742	19,702
Intercompany
Segment Reporting Information [Line Items]
Interest income	(1)	(2)
Interest expense	(1)	(2)
Net Interest Income	0	0
Provision for credit loss expense	0	0
Noninterest income	(556)	(507)
Noninterest expense	(556)	(507)
Income Before Income Tax Expense	0	0
Income tax expense	0	0
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	0	0
Less: Net Income Attributable to Noncontrolling Interests	0	0
Net Income Attributable to Tompkins Financial Corporation	0	0
Depreciation and amortization	0	0
Assets	(13,466)	(13,892)
Goodwill	0	0
Other intangibles, net	0	0
Net loans and leases	0	0
Deposits	(12,895)	(13,771)
Total Equity	$ 0	$ 0

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Leasing (Details)	3 Months Ended
	Mar. 31, 2020
Lessee, Lease, Description [Line Items]
Termination period (days)	30 days
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term (years)	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term (years)	22 years
Renewal term (years)	29 years

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Allowance for Loan and Lease Losses - Recorded Investment and Related Allowance (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Originated
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	$ 15,849
Unpaid Principal Balance With No Related Allowance	16,974
Recorded Investment With Related Allowance	3,536
Unpaid Principal Balance With Related Allowance	3,536
Related Allowance	907
Recorded Investment	19,385
Unpaid Principal Balance	20,510
Originated | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	1,865
Unpaid Principal Balance With No Related Allowance	1,965
Recorded Investment With Related Allowance	245
Unpaid Principal Balance With Related Allowance	245
Related Allowance	245
Originated | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	10,205
Unpaid Principal Balance With No Related Allowance	11,017
Recorded Investment With Related Allowance	3,291
Unpaid Principal Balance With Related Allowance	3,291
Related Allowance	662
Originated | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	3,779
Unpaid Principal Balance With No Related Allowance	3,992
Acquired
Financing Receivable, Impaired [Line Items]
Related Allowance	0
Recorded Investment	2,830
Unpaid Principal Balance	2,933
Acquired | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	2
Unpaid Principal Balance With No Related Allowance	2
Acquired | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	714
Unpaid Principal Balance With No Related Allowance	714
Acquired | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	2,114
Unpaid Principal Balance With No Related Allowance	$ 2,217

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Allowance for Loan and Lease Losses - Schedule of Detail in Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 39,892	$ 43,410
Charge-offs	(1,430)	(3,921)
Recoveries	182	394
Provision for credit loss expense	16,294	445
Ending balance	52,404	40,328
Commercial and industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	10,541	11,272
Charge-offs	(1)	(380)
Recoveries	16	59
Provision for credit loss expense	3,117	572
Ending balance	11,665	11,523
Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	21,608	23,483
Charge-offs	(1,290)	(3,343)
Recoveries	18	7
Provision for credit loss expense	8,027	923
Ending balance	22,446	21,070
Residential real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	6,381	7,345
Charge-offs	(2)	(18)
Recoveries	79	233
Provision for credit loss expense	5,413	(1,098)
Ending balance	16,330	6,462
Consumer and other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,362	1,310
Charge-offs	(137)	(180)
Recoveries	69	95
Provision for credit loss expense	(261)	48
Ending balance	1,883	1,273
Finance Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	0	0
Charge-offs	0	0
Recoveries	0	0
Provision for credit loss expense	(2)	0
Ending balance	80	$ 0
Impact of adopting ASC 326
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	(2,534)
Impact of adopting ASC 326 | Commercial and industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	(2,008)
Impact of adopting ASC 326 | Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	(5,917)
Impact of adopting ASC 326 | Residential real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,459
Impact of adopting ASC 326 | Consumer and other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	850
Impact of adopting ASC 326 | Finance Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 82

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Leasing (Notes)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leasing

Leasing

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. 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 year to 22 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. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term 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)		March 31, 2020		December 31, 2019
Assets	Classification
ROU assets	Other assets	$	33,231	$	33,501
Liabilities
Current lease liabilities	Other liabilities	$	3,188	$	3,256
Non-current lease liabilities	Other liabilities	32,450		32,666
Total lease liabilities		$	35,638	$	35,922

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

(In thousands)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Lease Costs
Operating lease cost	$	1,174		$	1,142
Variable lease cost	164			96
Short-term lease cost	0			0
Sublease income	(8		)	(8		)
Total lease cost	$	1,330		$	1,230

At March 31, 2020, we did not have any material finance lease assets or liabilities.

Other information related to operating leases was as follows:

(In thousands)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,189		$	1,159
Weighted-average remaining lease term on operating leases	13.72 years			14.12 years
Weighted-average discount rates on operating leases	3.53		%	3.53		%
ROU assets obtained in exchange for lease liabilities	549			35,706

Future minimum lease payments under operating leases were as follows:

(In thousands)	Operating Leases
Nine Months 2020	$	3,326
2021	4,163
2022	4,117
2023	3,876
2024	3,742
2025 and subsequent years	26,979
Total lease payments	$	46,203
Less: Interest	(10,565		)
Present value of lease liabilities	$	35,638

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Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Schedule of originated and acquired loan and lease losses by portfolio segment

Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three Months Ended March 31, 2020
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for credit losses:
Beginning balance, prior to adoption of ASC 326	$	10,541		$	21,608		$	6,381		$	1,362		$	0		$	39,892
Impact of adopting ASC 326	(2,008		)	(5,917		)	4,459			850			82			(2,534		)
Charge-offs	(1		)	(1,290		)	(2		)	(137		)	0			(1,430		)
Recoveries	16			18			79			69			0			182
Provision for credit loss expense	3,117			8,027			5,413			(261		)	(2		)	16,294
Ending Balance	$	11,665		$	22,446		$	16,330		$	1,883		$	80		$	52,404

Three Months Ended March 31, 2019
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for credit losses
Beginning balance	$	11,272		$	23,483		$	7,345		$	1,310		$	0	43,410
Charge-offs	(380		)	(3,343		)	(18		)	(180		)	0		(3,921		)
Recoveries	59			7			233			95			0		394
Provision (credit)	572			923			(1,098		)	48			0		445
Ending Balance	$	11,523		$	21,070		$	6,462		$	1,273		$	0	$	40,328

 The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans:

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
March 31, 2020
Commercial and Industrial	$	0	$	631	$	93	$	724	$	131
Commercial Real Estate	7,705		0		60		7,765		225
Commercial Real Estate - Agriculture	1,559		0		0		1,559		0
Residential - Mortgages	46		0		0		46		0
Total	$	9,310	$	631	$	153	$	10,094	$	356

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

The following table presents information pertaining to the allocation of the allowance for loan and lease losses as of December 31, 2019, as determined in accordance with ASC 310, prior to the adoption of ASU 2016-13: 

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
December 31, 2019
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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for acquired loans
December 31, 2019
Collectively evaluated for impairment	$	0	$	51	$	21	$	6	$	0	$	78
Ending balance	$	0	$	51	$	21	$	6	$	0	$	78

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 was as follows:

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer  and Other		Finance Leases		Total
Originated loans and leases
December 31, 2019
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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer  and Other		Finance Leases		Total
Acquired loans
December 31, 2019
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

Schedule of average recorded investment and interest income on impaired loans

Impaired loans at December 31, 2019 were as follows:

 

	December 31, 2019
(In thousands)	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
Commercial real estate
Commercial real estate other	10,205		11,017		0
Residential real estate
Home equity	3,779		3,992		0
Subtotal	$	15,849	$	16,974	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	245		245		245
Commercial real estate
Commercial real estate other	3,291		3,291		662
Subtotal	$	3,536	$	3,536	$	907
Total	$	19,385	$	20,510	$	907

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

The following table presents average impaired loans, as determined in accordance with ASC 310, prior to the adoption of ASU 2016-13, and interest recognized on such loans, for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
(In thousands)	Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	1,468	$	0
Commercial real estate
Commercial real estate other	6,099		0
Residential real estate
Home equity	3,981		0
Subtotal	$	11,548	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	581		0
Commercial real estate
Commercial real estate other	445		0
Subtotal	$	1,026	$	0
Total	$	12,574	$	0

	Three Months Ended March 31, 2019
(In thousands)	Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	22	$	0
Commercial real estate
Commercial real estate other	855		0
Residential real estate
Home equity	2,577		0
Subtotal	$	3,454	$	0
Total	$	3,454	$	0

Schedule of recorded investments in impaired loans

The following tables present information on loans modified in troubled debt restructuring during the periods indicated and their balances immediately prior to the modification date and post-modification as of March 31, 2020 and 2019.

March 31, 2020	Three 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	0	$	0	$	0	1	$	37
Residential real estate
Home equity1	2	121		121		1	87
Total	2	$	121	$	121	2	$	124

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

² TDRs that defaulted during the three months ended March 31, 2020 that were restructured in the prior twelve months.

March 31, 2019	Three 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
Residential real estate
Home equity1	1	$	168	$	168	0	$	0
Total	1	$	168	$	168	0	$	0

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

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

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

The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of December 31, 2019.

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 and Leases
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

The following table presents credit quality indicators by total loans amortized cost basis by origination year as of March 31, 2020.

(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	42,295	$	83,851	$	71,313	$	88,343	$	46,007	$	283,285	$	260,678	$	655	$	876,427
Special Mention	0		104		263		1,178		2,821		136		540		0		5,042
Substandard	0		112		1,240		286		626		866		3,244		0		6,374
Total Commercial and Industrial - Other	$	42,295	$	84,067	$	72,816	$	89,807	$	49,454	$	284,286	$	264,462	$	655	$	887,843
Commercial and Industrial - Agriculture:
Internal risk grade:
Pass	$	1,520	$	13,214	$	14,996	$	8,135	$	5,170	$	2,395	$	38,484	$	0	$	83,914
Special Mention	0		80		127		109		0		0		435		0		751
Substandard	100		107		3		894		35		2,310		7,271		0		10,720
Total Commercial and Industrial - Agriculture	$	1,620	$	13,401	$	15,126	$	9,138	$	5,205	$	4,705	$	46,190	$	0	$	95,385
Commercial Real Estate
Internal risk grade:
Pass	$	99,145	$	247,630	$	239,644	$	258,039	$	340,595	$	505,182	$	381,049	$	2,752	$	2,074,036
Special Mention	0		0		2,728		2,400		5,503		9,253		3,048		0		22,932
Substandard	0		1,700		764		3,334		349		9,717		8,107		0		23,971
Total Commercial Real Estate	$	99,145	$	249,330	$	243,136	$	263,773	$	346,447	$	524,152	$	392,204	$	2,752	$	2,120,939
Commercial Real Estate - Agriculture:
Internal risk grade:
Pass	$	2,028	$	30,493	$	42,366	$	23,728	$	14,147	$	39,835	$	16,842	$	448	$	169,887
Special Mention	1,510		0		2,418		120		1,264		361		11		0		5,684
Substandard	0		1,618		558		3,169		4,356		912		877		0		11,490
Total Commercial Real Estate - Agriculture	$	3,538	$	32,111	$	45,342	$	27,017	$	19,767	$	41,108	$	17,730	$	448	$	187,061
Commercial Real Estate - Construction
Internal risk grade:
Pass	$	1,194	$	22,565	$	9,552	$	3,011	$	2,165	$	4,169	$	121,760	$	983	$	165,399
Special Mention	0		0		0		0		0		603		2,109		0		2,712
Substandard	0		0		0		0		0		339		0		0		339
Total Commercial Real Estate - Construction	$	1,194	$	22,565	$	9,552	$	3,011	$	2,165	$	5,111	$	123,869	$	983	$	168,450

The following table presents credit quality indicators by total loans amortized cost basis by origination year as of March 31, 2020, continued.

(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Residential - Home Equity
Performing	$	3,948	$	28,694	$	23,181	$	25,332	$	21,014	$	40,444	$	70,006	$	406	$	213,025
Nonperforming	0		19		67		0		0		528		2,101		0		2,715
Total Residential - Home Equity	$	3,948	$	28,713	$	23,248	$	25,332	$	21,014	$	40,972	$	72,107	$	406	$	215,740
Residential - Mortgages
Performing	$	56,373	$	205,326	$	146,568	$	191,872	$	207,389	$	159,262	$	200,151	$	204	$	1,167,145
Nonperforming	0		266		406		453		1,291		2,385		4,027		0		8,828
Total Residential - Mortgages	$	56,373	$	205,592	$	146,974	$	192,325	$	208,680	$	161,647	$	204,178	$	204	$	1,175,973
Consumer - Direct
Performing	$	4,186	$	16,392	$	10,746	$	9,326	$	4,812	$	11,230	$	4,350	$	0	$	61,042
Nonperforming	0		47		44		10		0		18		0		0		119
Total Consumer - Direct	$	4,186	$	16,439	$	10,790	$	9,336	$	4,812	$	11,248	$	4,350	$	0	$	61,161
Consumer - Indirect
Performing	$	616	$	2,904	$	4,886	$	2,001	$	895	$	422	$	0	$	0	$	11,724
Nonperforming	0		57		25		6		39		20		0		0		147
Total Consumer Indirect	$	616	$	2,961	$	4,911	$	2,007	$	934	$	442	$	0	$	0	$	11,871

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

The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of December 31, 2019. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing.

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

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$ 7,986	$ 21,072
Available-for-sale debt securities:
Change in net unrealized gain/(loss) during the period	22,123	11,894
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	(324)	0
Employee benefit plans:
Amortization of net retirement plan actuarial loss	454	318
Amortization of net retirement plan prior service cost	40	3
Other comprehensive income	22,293	12,215
Total Comprehensive Income	30,279	33,287
Less: Net income attributable to noncontrolling interests	(37)	(32)
Total comprehensive income attributable to Tompkins Financial Corporation	$ 30,242	$ 33,255

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Securities - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Realized gain on available for sale debt securities	$ 178	$ 0
Realized losses on available for sale debt securities	0	0
Realized gains on called securities	251	0
Equity Securities, FV-NI, Realized Gain	14	$ 12
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	15,600
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	8,500
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

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

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

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements
March 31, 2020
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	1,750	$	0	$	1,750	$	0
Obligations of U.S. Government sponsored entities	313,428		0		313,428		0
Obligations of U.S. states and political subdivisions	102,484		0		102,484		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	174,515		0		174,515		0
U.S. Government sponsored entities	758,027		0		758,027		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale debt securities	$	1,352,637	$	0	$	1,352,637	$	0
Equity securities, at fair value	$	930	$	0	$	0	$	930

Recurring Fair Value Measurements
December 31, 2019
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt 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, issued by:
U.S. Government agencies	164,451		0		164,451		0
U.S. Government sponsored entities	659,590		0		659,590		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale debt securities	$	1,298,587	$	0	$	1,298,587	$	0
Equity securities, at fair value	$	915	$	0	$	0	$	915

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

Three months ended March 31, 2020
(in thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2020		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2020
Individually evaluated	$	4,893	$	0	$	4,893	$	0	$	(1,290	)
Other real estate owned	220		0		220		0		(52		)

Three months ended March 31, 2019
(in thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2019		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2019
Individually evaluated	$	4,786	$	0	$	4,786	$	0	$	(3,571	)
Other real estate owned	0		0		0		0		0

Schedule of carrying amount and fair value of financial instruments

Estimated Fair Value of Financial Instruments
March 31, 2020
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	115,263	$	115,263	$	115,263	$	0	$	0
FHLB and other stock	24,212		24,212		0		24,212		0
Accrued interest receivable	18,007		18,007		0		18,007		0
Loans/leases, net1	4,885,418		4,834,400		0		4,893		4,829,507
Financial Liabilities:
Time deposits	$	708,933	$	716,275	$	0	$	716,275	$	0
Other deposits	4,700,430		4,700,430		0		4,700,430		0
Fed funds purchased and securities sold
under agreements to repurchase	68,993		68,993		0		68,993		0
Other borrowings	457,983		466,974		0		466,974		0
Trust preferred debentures	17,078		20,138		0		20,138		0
Accrued interest payable	2,244		2,244		0		2,244		0

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
FHLB and other stock	33,695		33,695		0		33,695		0
Accrued interest receivable	19,293		19,293		0		19,293		0
Loans/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
Fed funds purchased and 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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Cover Page - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Entity Central Index Key	0001005817
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
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, $0.10 are value
Trading Symbol	TMP
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	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 Common Stock, Shares Outstanding		14,907,286

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Business

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

Business

Tompkins Financial Corporation (“Tompkins” or the “Company”) is headquartered in Ithaca, New York and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company is a locally oriented, community-based financial services organization that offers a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, and insurance services. At March 31, 2020, 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 Street, 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.”

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

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

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Basis of Presentation

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

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

In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year ended December 31, 2020. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Effective January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 makes significant changes to the accounting for credit losses on financial instruments presented on an amortized cost basis and disclosures about them. These changes are discussed below, under "Impact of Adoption of ASU 2016-13".

Other than the changes resulting from the adoption of ASU 2016-13, there have been no significant changes to the Company’s accounting policies from those presented in the 2019 Annual Report on Form 10-K. Refer to MD&A under "Recently Issued Accounting Standards" of this Report for a discussion of recently issued accounting guidelines.

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

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

The consolidated financial information included herein combines the results of operations, the assets, liabilities, and shareholders’ equity of the Company and its subsidiaries. Amounts in the prior periods’ unaudited condensed consolidated financial statements are reclassified when necessary to conform to the current periods’ presentation. All significant intercompany balances and transactions are eliminated in consolidation.

Impact of Adoption of ASU 2016-13

Securities

For available for sale debt securities in an unrealized loss position, the Company evaluates the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit-related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) on the Statement of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company intends to sell an impaired available- for-sale debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount must be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the ACL when management believes the uncollectability of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable is excluded from the estimate of credit losses.

Acquired Loans

Acquired loans are recorded at fair value at the date of acquisition based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Certain larger purchased loans are individually evaluated while certain purchased loans are grouped together according to similar risk characteristics and are treated in the aggregate when applying various valuation techniques. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

Prior to January 1, 2020, loans acquired in a business combination that had evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that the Company would be unable to collect all contractually required payments receivable were considered purchased credit impaired (“PCI”). PCI loans were individually evaluated and recorded at fair value at the date of acquisition with no initial valuation allowance based on a discounted cash flow methodology that considered various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’ assessment of risk inherent in the cash flow estimates. The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield,” was recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference,” were not recognized on the Statement of Condition and did not result in any yield adjustments, loss accruals or valuation allowances. Increases in expected cash flows, including prepayments, subsequent to the initial investment were recognized prospectively through adjustment of the yield on the loan over its remaining life. Decreases in expected cash flows were recognized as impairment. Valuation allowances on PCI loans reflected only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately were not to be received).

Subsequent to January 1, 2020 in connection with the Company's adoption of ASU 2016-13, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date.

The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

Allowance for Credit Losses – Loans

Under the current expected credit loss model, the ACL on loans is a valuation allowance estimated at each balance sheet date in accordance with U.S. GAAP that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.

The Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL.

Expected credit losses are reflected in the ACL through a charge to the provision for credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the ACL is reduced by the same amount. 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. Subsequent recoveries, if any, are credited to the ACL when received.

The Company measures expected credit losses of financial assets at the loan level by segment, by pooling loans when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company uses a discounted cash flow (“DCF”) method to estimate expected credit losses. Allowance on loans that do not share risk characteristics are evaluated on an individual basis. The Company assigns a credit risk rating to all commercial and commercial real estate loans. The Company reviews commercial and commercial real estate loans rated Substandard or worse, on nonaccrual and greater than $250,000 for loss potential and when deemed appropriate assigns an allowance based on an individual evaluation.

The Company’s methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. The Company’s methodologies revert back to average historical loss information on a straight line basis over eight quarters when it can no longer develop reasonable and supportable forecasts.

The Company has identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses: commercial, commercial real estate, residential, home equity, consumer and leases. This segmentation was selected based on the differences in the risk profile of each of these categories and aligns well with regulatory reporting categories. This segmentation separates borrower type, collateral type and the nature of the loan. The differences in risk profiles of these segments enables the ACL to be more precise in its allocation due to the inherent risk in these specific portfolios.

Discounted Cash Flow Method

The Company uses the discounted cash flow method to estimate expected credit losses for the commercial, commercial real estate, residential, home equity, and consumer loan pools. For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.

The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method, management utilizes and forecasts one or both of the following economic factors; national unemployment and gross domestic product as loss drivers.

For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. Management leverages economic projections from an independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. The model considers a base case forecast and two alternative forecasts and assigns weightings to these three scenarios based on current conditions and expectations for future conditions.

The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows (“NPV”). An ACL is established for the difference between the instrument’s NPV and amortized cost basis.

The model also considers the need to qualitatively adjust expected loss estimates for information not already captured in the loss estimation process. These qualitative factors include those suggested by the Interagency Policy Statement on Allowances for Credit Losses. These qualitative factor adjustments may increase or decrease the Company's estimate of expected credit losses.

Collateral Dependent Financial Assets

Loans that do not share common risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral less cost to sell, and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring.

Troubled Debt Restructuring

A loan that has been modified or renewed is considered a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. The Company’s ACL reflects all effects of a TDR when an individual asset is specifically identified as a reasonably expected TDR. The Company has determined that a TDR is reasonably expected no later than the point when the lender concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession from the lender to avoid a default. Reasonably expected TDRs and executed non-performing TDRs are evaluated individually to determine the required ACL. TDRs performing in accordance with their modified contractual terms for a reasonable period of time may be included in the Company’s existing pools based on the underlying risk characteristics of the loan to measure the ACL. In accordance with the provisions of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and related interagency guidance issued by Federal banking regulators, we are not designating eligible loan modifications or deferrals due to impacts of the coronavirus ("COVID-19") pandemic as TDRs.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans, unused lines of credit and commercial letters of credit, issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to the provision for credit loss expense for off-balance sheet credit exposures included in other noninterest expense in the Company’s consolidated statements of income. The ACL on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using similar methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in other liabilities on the Company’s statements of condition.

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Earnings Per Share

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Earnings per share in the table below, for the three month periods ended March 31, 2020 and 2019 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share. ASC 260 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company has issued restricted stock awards that contain such rights and are therefore considered participating securities. Basic earnings per common share are calculated by dividing net income allocable to common stock by the weighted average number of common shares, excluding participating securities, during the period. Diluted earnings per common share include the dilutive effect of participating securities.

 

	Three Months Ended
(In thousands, except share and per share data)	3/31/2020			3/31/2019
Basic
Net income available to common shareholders	$	7,949		$	21,040
Less: income attributable to unvested stock-based compensation awards	(99		)	(349		)
Net earnings allocated to common shareholders	7,850			20,691
Weighted average shares outstanding, including unvested stock-based compensation awards	14,904,067			15,313.635
Less: unvested stock-based compensation awards	(185,119		)	(253,460		)
Weighted average shares outstanding - Basic	14,718,948			15,060,175
Diluted
Net earnings allocated to common shareholders	7,850			20,691
Weighted average shares outstanding - Basic	14,718.948			15,060.175
Plus:  incremental shares from assumed conversion of stock-based compensation awards	55,321			76,348
Weighted average shares outstanding - Diluted	14,774,269			15,136,523
Basic EPS	$	0.53		$	1.37
Diluted EPS	$	0.53		$	1.37

Stock-based compensation awards representing 17,956 and 18,886 of common shares during the three months ended March 31, 2020 and 2019, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been anti-dilutive.

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Revenue Recognition

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

In addition to revenue from loans and securities, the Company also generates revenues from other services provided as described below.

Insurance Commissions and Fees

Fees are earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. The Company has historically recognized revenue in this manner, with the noted exception related to installment billing discussed below.

Installment Billing - Agency Bill

Revenue associated with the issuance of policies is recognized upon the effective date of the associated policy regardless of the billing method. Revenue is 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.

Contingent Commissions

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. Contingent commissions are 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 the level of commissions paid to the Company that will 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 to which the Company does not expect to be entitled, and a corresponding reduction to the gross commission received or receivable. This is 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 the customer's account. 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, for the three months ended March 31, 2020 and 2019.

	Three Months Ended
(In thousands)	03/31/2020			03/31/2019
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	7,385		$	7,099
Installment Billing		(30	)		(71	)
Refund of Commissions		(127	)		(12	)
Contract Liabilities/Deferred Revenue		(4	)		0
Contingent Commissions		821			1,029
Subtotal Insurance Revenues		8,045			8,045
Trust and Asset Management		2,943			2,850
Mutual Fund & Investment Income		1,259			1,234
Subtotal Investment Service Income		4,202			4,084
Service Charges on Deposit Accounts		1,983			1,998
Card Services Income		2,183			2,790
Other		314			307
Noninterest Income (in-scope of ASC 606)		16,727			17,224
Noninterest Income (out-of-scope of ASC 606)1		2,233			2,183
Total Noninterest Income	$	18,960		$	19,407

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 $3.9 million and $1.8 million, respectively, at March 31, 2020, compared to $4.7 million and $2.0 million, respectively, at December 31, 2019 and were included in other assets in the Condensed 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. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of March 31, 2020 and December 31, 2019, the Company did not have any significant contract balances.

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 Condensed Consolidated Statements of Condition based on the timing of when the Company expects to recognize revenue. As of March 31, 2020 and December 31, 2019, contract liabilities were $629,000 and $2,000,000, respectively, and are included within accrued expenses in the accompanying Condensed Consolidated Statements of Condition. The liabilities include premiums due to insurance carriers in addition to unearned commission revenue.

The decrease in the contract liability balance during the three-month period ended March 31, 2020 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.

Contract Acquisition Costs

The Company 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.

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Leasing - Other Operating Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating cash flows from operating leases	$ 1,189	$ 1,159
Weighted-average remaining lease term on operating leases (years)	13 years 8 months 19 days	14 years 1 month 13 days
Weighted-average discount rates on operating leases (percent)	3.53%	3.53%
ROU assets obtained in exchange for lease liabilities	$ 549	$ 35,706

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Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Basic
Net income available to common shareholders	$ 7,949	$ 21,040
Less: income attributable to unvested stock-based compensation awards	(99)	(349)
Net earnings allocated to common shareholders	$ 7,850	$ 20,691
Weighted average shares outstanding, including unvested stock-based compensation awards (in shares)	14,904,067	15,313,635
Less: unvested stock-based compensation awards (in shares)	(185,119)	(253,460)
Weighted average shares outstanding - Basic (in shares)	14,718,948	15,060,175
Diluted
Net earnings allocated to common shareholders	$ 7,850	$ 20,691
Weighted average shares outstanding - Basic (in shares)	14,718,948	15,060,175
Plus: Incremental shares from assumed conversion of stock-based compensation awards (in shares)	55,321	76,348
Weighted average shares outstanding - Diluted (in shares)	14,774,269	15,136,523
Basic EPS (in dollars per share)	$ 0.53	$ 1.37
Diluted EPS (in dollars per share)	$ 0.53	$ 1.37

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Other Comprehensive Income (Loss) - Reclassified Out of Each Component of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net gain on securities transactions	$ 9,895	$ 26,667
Tax expense	(1,909)	(5,595)
Other operating expense	(11,875)	(11,505)
Net income attributable to Tompkins Financial Corporation	7,949	21,040
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Available-for-sale debt securities:
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net gain on securities transactions	429	0
Tax expense	(105)	0
Net of tax	324	0
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Net retirement plan actuarial (gain) loss
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Other operating expense	(601)	(421)
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Net retirement plan prior service cost
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Other operating expense	(53)	(4)
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Employee Benefit Plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net gain on securities transactions	(654)	(425)
Tax expense	160	104
Net income attributable to Tompkins Financial Corporation	$ (494)	$ (321)

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Allowance for Loan and Lease Losses - Loans Evaluated for Impairment (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 356
Ending balance	52,404	$ 39,892
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	131
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 225
Originated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		907
Collectively evaluated for impairment		38,907
Ending balance		39,814
Originated | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		245
Collectively evaluated for impairment		10,296
Ending balance		10,541
Originated | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		662
Collectively evaluated for impairment		20,895
Ending balance		21,557
Originated | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Collectively evaluated for impairment		6,360
Ending balance		6,360
Originated | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Collectively evaluated for impairment		1,356
Ending balance		1,356
Originated | Finance Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Collectively evaluated for impairment		0
Ending balance		0
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collectively evaluated for impairment		78
Ending balance		78
Acquired | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collectively evaluated for impairment		0
Ending balance		0
Acquired | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collectively evaluated for impairment		51
Ending balance		51
Acquired | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collectively evaluated for impairment		21
Ending balance		21
Acquired | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collectively evaluated for impairment		6
Ending balance		6
Acquired | Finance Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collectively evaluated for impairment		0
Ending balance		$ 0

XML

Loans and Leases - Schedule of Past Due Loans and Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Financing Receivable, Past Due [Line Items]
Total	$ 4,941,469	$ 4,921,195
Less: unearned income and deferred costs and fees	(3,647)	(3,645)
Total loans and leases, net of unearned income and deferred costs and fees	4,937,822	4,917,550
Commercial and industrial
Financing Receivable, Past Due [Line Items]
Total	983,228	1,008,061
Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Total	95,385	105,786
Total loans and leases, net of unearned income and deferred costs and fees	95,385
Commercial and industrial | Other
Financing Receivable, Past Due [Line Items]
Total	887,843	902,275
Total loans and leases, net of unearned income and deferred costs and fees	887,843
Commercial real estate
Financing Receivable, Past Due [Line Items]
Total	2,476,450	2,443,565
Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Total	187,061	184,898
Total loans and leases, net of unearned income and deferred costs and fees	187,061
Commercial real estate | Other
Financing Receivable, Past Due [Line Items]
Total	2,120,939	2,045,030
Total loans and leases, net of unearned income and deferred costs and fees	2,120,939
Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Total	168,450	213,637
Total loans and leases, net of unearned income and deferred costs and fees	168,450
Residential real estate
Financing Receivable, Past Due [Line Items]
Total	1,391,713	1,377,837
Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Total	215,740	219,245
Total loans and leases, net of unearned income and deferred costs and fees	215,740
Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Total	1,175,973	1,158,592
Total loans and leases, net of unearned income and deferred costs and fees	1,175,973
Consumer and other
Financing Receivable, Past Due [Line Items]
Total	73,032	74,410
Consumer and other | Other
Financing Receivable, Past Due [Line Items]
Total	61,161	61,446
Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Total	11,871	12,964
Total loans and leases, net of unearned income and deferred costs and fees	11,871
Leases
Financing Receivable, Past Due [Line Items]
Total	17,046	17,322
Originated
Financing Receivable, Past Due [Line Items]
Past Due	21,982
Current Loans	4,705,942	4,681,206
Total	4,727,924	4,701,046
90 Days and Accruing	0	0
Nonaccrual Loans	21,472	22,485
Less: unearned income and deferred costs and fees, past due	0
Less: unearned income and deferred costs and fees, Current Loans	(3,647)	(3,645)
Less: unearned income and deferred costs and fees	(3,647)	(3,645)
Less: unearned income and deferred costs and fees, 90 days and accruing		0
Less: unearned income and deferred costs and fees, Nonaccrual		0
Total originated loans and leases, net of unearned income and deferred costs and fees, past due	21,982
Total originated loans and leases, net of unearned income and deferred costs and fees, current loans	4,702,295	4,677,561
Total loans and leases, net of unearned income and deferred costs and fees	4,724,277	4,697,401
Originated | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	6,999
Less: unearned income and deferred costs and fees, past due	0
Total originated loans and leases, net of unearned income and deferred costs and fees, past due	6,999
Originated | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	1,954
Less: unearned income and deferred costs and fees, past due	0
Total originated loans and leases, net of unearned income and deferred costs and fees, past due	1,954
Originated | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		3,559
Less: unearned income and deferred costs and fees, past due		0
Total originated loans and leases, net of unearned income and deferred costs and fees, past due		3,559
Originated | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	13,029	16,281
Less: unearned income and deferred costs and fees, past due	0	0
Total originated loans and leases, net of unearned income and deferred costs and fees, past due	13,029	16,281
Originated | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Past Due	5,097
Current Loans	939,561	966,428
Total	944,658	968,985
90 Days and Accruing	0	0
Nonaccrual Loans	2,047	2,334
Originated | Commercial and industrial | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	1,577
Originated | Commercial and industrial | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	1,750
Originated | Commercial and industrial | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		413
Originated | Commercial and industrial | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	1,770	2,144
Originated | Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Past Due	538
Current Loans	94,847	105,721
Total	95,385	105,786
90 Days and Accruing		0
Nonaccrual Loans		0
Originated | Commercial and industrial | Agriculture | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	538
Originated | Commercial and industrial | Agriculture | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Commercial and industrial | Agriculture | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Originated | Commercial and industrial | Agriculture | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	65
Originated | Commercial and industrial | Other
Financing Receivable, Past Due [Line Items]
Past Due	4,559
Current Loans	844,714	860,707
Total	849,273	863,199
90 Days and Accruing	0	0
Nonaccrual Loans	2,047	2,334
Originated | Commercial and industrial | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	1,039
Originated | Commercial and industrial | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	1,750
Originated | Commercial and industrial | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		413
Originated | Commercial and industrial | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	1,770	2,079
Originated | Commercial real estate
Financing Receivable, Past Due [Line Items]
Past Due	9,826
Current Loans	2,324,447	2,285,437
Total	2,334,273	2,296,648
90 Days and Accruing	0	0
Nonaccrual Loans	9,532	10,617
Originated | Commercial real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	3,541
Originated | Commercial real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Commercial real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		1,116
Originated | Commercial real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	6,285	10,095
Originated | Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Past Due	141
Current Loans	186,729	184,701
Total	186,870	184,701
90 Days and Accruing		0
Nonaccrual Loans		0
Originated | Commercial real estate | Agriculture | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	141
Originated | Commercial real estate | Agriculture | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Commercial real estate | Agriculture | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Originated | Commercial real estate | Agriculture | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	0
Originated | Commercial real estate | Other
Financing Receivable, Past Due [Line Items]
Past Due	9,685
Current Loans	1,970,579	1,888,434
Total	1,980,264	1,899,645
90 Days and Accruing	0	0
Nonaccrual Loans	9,532	10,617
Originated | Commercial real estate | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	3,400
Originated | Commercial real estate | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Commercial real estate | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		1,116
Originated | Commercial real estate | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	6,285	10,095
Originated | Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Past Due	0
Current Loans	167,139	212,302
Total	167,139	212,302
90 Days and Accruing		0
Nonaccrual Loans		0
Originated | Commercial real estate | Construction | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Commercial real estate | Construction | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Commercial real estate | Construction | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Originated | Commercial real estate | Construction | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	0
Originated | Residential real estate
Financing Receivable, Past Due [Line Items]
Past Due	6,399
Current Loans	1,353,376	1,338,999
Total	1,359,775	1,344,466
90 Days and Accruing	0	0
Nonaccrual Loans	9,628	9,259
Originated | Residential real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	1,558
Originated | Residential real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	43
Originated | Residential real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		1,551
Originated | Residential real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	4,798	3,916
Originated | Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Past Due	1,025
Current Loans	200,206	203,002
Total	201,231	203,894
90 Days and Accruing	0	0
Nonaccrual Loans	1,870	1,924
Originated | Residential real estate | Home equity | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	410
Originated | Residential real estate | Home equity | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Residential real estate | Home equity | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		290
Originated | Residential real estate | Home equity | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	615	602
Originated | Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Past Due	5,374
Current Loans	1,153,170	1,135,997
Total	1,158,544	1,140,572
90 Days and Accruing	0	0
Nonaccrual Loans	7,758	7,335
Originated | Residential real estate | Mortgages | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	1,148
Originated | Residential real estate | Mortgages | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	43
Originated | Residential real estate | Mortgages | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		1,261
Originated | Residential real estate | Mortgages | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	4,183	3,314
Originated | Consumer and other
Financing Receivable, Past Due [Line Items]
Past Due	660
Current Loans	71,512	73,020
Total	72,172	73,625
90 Days and Accruing	0	0
Nonaccrual Loans	265	275
Originated | Consumer and other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	323
Originated | Consumer and other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	161
Originated | Consumer and other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		479
Originated | Consumer and other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	176	126
Originated | Consumer and other | Other
Financing Receivable, Past Due [Line Items]
Past Due	375
Current Loans	59,926	60,428
Total	60,301	60,661
90 Days and Accruing	0	0
Nonaccrual Loans	118	158
Originated | Consumer and other | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	175
Originated | Consumer and other | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	107
Originated | Consumer and other | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		167
Originated | Consumer and other | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	93	66
Originated | Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Past Due	285
Current Loans	11,586	12,592
Total	11,871	12,964
90 Days and Accruing	0	0
Nonaccrual Loans	147	117
Originated | Consumer and other | Indirect | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	148
Originated | Consumer and other | Indirect | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	54
Originated | Consumer and other | Indirect | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		312
Originated | Consumer and other | Indirect | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	83	60
Originated | Leases
Financing Receivable, Past Due [Line Items]
Past Due	0
Current Loans	17,046	17,322
Total	17,046	17,322
90 Days and Accruing		0
Nonaccrual Loans		0
Originated | Leases | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Leases | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Originated | Leases | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Originated | Leases | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	0
Acquired
Financing Receivable, Past Due [Line Items]
Past Due	1,318
Current Loans	212,227	218,501
Total	213,545	220,149
90 Days and Accruing	0	794
Nonaccrual Loans	2,084	1,796
Less: unearned income and deferred costs and fees	0	0
Total loans and leases, net of unearned income and deferred costs and fees	213,545	220,149
Acquired | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	366
Acquired | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	9
Acquired | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		165
Acquired | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	943	1,483
Acquired | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Past Due	2
Current Loans	38,568	39,074
Total	38,570	39,076
90 Days and Accruing	0	2
Nonaccrual Loans	2	1
Acquired | Commercial and industrial | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial and industrial | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial and industrial | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Acquired | Commercial and industrial | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	2	2
Acquired | Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Total	0	0
Acquired | Commercial and industrial | Other
Financing Receivable, Past Due [Line Items]
Past Due	2
Current Loans	38,568	39,074
Total	38,570	39,076
90 Days and Accruing	0	2
Nonaccrual Loans	2	1
Acquired | Commercial and industrial | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial and industrial | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial and industrial | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Acquired | Commercial and industrial | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	2	2
Acquired | Commercial real estate
Financing Receivable, Past Due [Line Items]
Past Due	50
Current Loans	142,127	146,208
Total	142,177	146,917
90 Days and Accruing	0	542
Nonaccrual Loans	166	172
Acquired | Commercial real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	15
Acquired | Commercial real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		24
Acquired | Commercial real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	35	685
Acquired | Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Past Due	0
Current Loans	191	197
Total	191	197
90 Days and Accruing		0
Nonaccrual Loans		0
Acquired | Commercial real estate | Agriculture | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial real estate | Agriculture | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial real estate | Agriculture | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Acquired | Commercial real estate | Agriculture | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	0
Acquired | Commercial real estate | Other
Financing Receivable, Past Due [Line Items]
Past Due	50
Current Loans	140,625	144,676
Total	140,675	145,385
90 Days and Accruing	0	542
Nonaccrual Loans	166	172
Acquired | Commercial real estate | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	15
Acquired | Commercial real estate | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial real estate | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		24
Acquired | Commercial real estate | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	35	685
Acquired | Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Past Due	0
Current Loans	1,311	1,335
Total	1,311	1,335
90 Days and Accruing		0
Nonaccrual Loans		0
Acquired | Commercial real estate | Construction | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial real estate | Construction | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Commercial real estate | Construction | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Acquired | Commercial real estate | Construction | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	0
Acquired | Residential real estate
Financing Receivable, Past Due [Line Items]
Past Due	1,266
Current Loans	30,672	32,434
Total	31,938	33,371
90 Days and Accruing	0	250
Nonaccrual Loans	1,916	1,623
Acquired | Residential real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	351
Acquired | Residential real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	9
Acquired | Residential real estate | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		141
Acquired | Residential real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	906	796
Acquired | Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Past Due	517
Current Loans	13,992	15,168
Total	14,509	15,351
90 Days and Accruing	0	55
Nonaccrual Loans	847	872
Acquired | Residential real estate | Home equity | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	283
Acquired | Residential real estate | Home equity | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	9
Acquired | Residential real estate | Home equity | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		58
Acquired | Residential real estate | Home equity | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	225	125
Acquired | Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Past Due	749
Current Loans	16,680	17,266
Total	17,429	18,020
90 Days and Accruing	0	195
Nonaccrual Loans	1,069	751
Acquired | Residential real estate | Mortgages | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	68
Acquired | Residential real estate | Mortgages | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Residential real estate | Mortgages | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		83
Acquired | Residential real estate | Mortgages | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	681	671
Acquired | Consumer and other
Financing Receivable, Past Due [Line Items]
Past Due	0
Current Loans	860	785
Total	860	785
90 Days and Accruing		0
Nonaccrual Loans		0
Acquired | Consumer and other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Consumer and other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Consumer and other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Acquired | Consumer and other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	0
Acquired | Consumer and other | Other
Financing Receivable, Past Due [Line Items]
Past Due	0
Current Loans	860	785
Total	860	785
90 Days and Accruing		0
Nonaccrual Loans		0
Acquired | Consumer and other | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Consumer and other | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Past Due	0
Acquired | Consumer and other | Other | 30-89 days
Financing Receivable, Past Due [Line Items]
Past Due		0
Acquired | Consumer and other | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Past Due	0	0
Acquired | Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Total	0	0
Acquired | Leases
Financing Receivable, Past Due [Line Items]
Total	$ 0	$ 0

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Allowance for Loan and Lease Losses - Loans Modified in Troubled Debt Restructuring (Details) - Originated $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) loan	Mar. 31, 2019 USD ($) loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | loan	2	1
Pre-Modification Outstanding Recorded Investment	$ 121	$ 168
Post-Modification Outstanding Recorded Investment	$ 121	$ 168
Defaulted TDRs, Number of Loans | loan	2	0
Defaulted TDRs, Post-Modification Outstanding Recorded Investment	$ 124	$ 0
Commercial real estate | Other
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | loan	0
Pre-Modification Outstanding Recorded Investment	$ 0
Post-Modification Outstanding Recorded Investment	$ 0
Defaulted TDRs, Number of Loans | loan	1
Defaulted TDRs, Post-Modification Outstanding Recorded Investment	$ 37
Residential real estate | Home equity
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | loan	2	1
Pre-Modification Outstanding Recorded Investment	$ 121	$ 168
Post-Modification Outstanding Recorded Investment	$ 121	$ 168
Defaulted TDRs, Number of Loans | loan	1	0
Defaulted TDRs, Post-Modification Outstanding Recorded Investment	$ 87	$ 0

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Financial Guarantees (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Guarantees [Abstract]
Obligations to extend credit for loan commitments	$ 33.1	$ 30.5

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Fair Value Measurements - Assets Measured at Fair Value (Details) - Non-Recurring - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated	$ 4,893	$ 4,786
Gain (loss) on impaired loans	(1,290)	(3,571)
Other real estate owned	220	0
Gain (loss) on other real estate owned	(52)	0
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated	0	0
Other real estate owned	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated	4,893	4,786
Other real estate owned	220	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated	0	0
Other real estate owned	$ 0	$ 0

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Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Schedule of tax effect allocated to each component of other comprehensive income

The following tables present reclassifications out of the accumulated other comprehensive income (loss) for the three month periods ended March 31, 2020 and 2019.

	Three Months Ended March 31, 2020
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net of Tax
Available-for-sale debt securities:
Change in net unrealized gain/loss during the period	$	29,302		$	(7,179	)	$	22,123
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	(429		)	105			(324		)
Net unrealized gains/losses	28,873			(7,074		)	21,799
Employee benefit plans:
Amortization of net retirement plan actuarial gain	601			(147		)	454
Amortization of net retirement plan prior service cost	53			(13		)	40
Employee benefit plans	654			(160		)	494
Other comprehensive income	$	29,527		$	(7,234	)	$	22,293

	Three Months Ended March 31, 2019
(In thousands)	Before-Tax Amount		Tax (Expense) Benefit			Net of Tax
Available-for-sale debt securities:
Change in net unrealized gain/loss during the period	$	15,756	$	(3,862	)	$	11,894
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	0		0			0
Net unrealized gains/losses	15,756		(3,862		)	11,894
Employee benefit plans:
Amortization of net retirement plan actuarial gain	421		(103		)	318
Amortization of net retirement plan prior service cost	4		(1		)	3
Employee benefit plans	425		(104		)	321
Other comprehensive income	$	16,181	$	(3,966	)	$	12,215

Schedule of accumulated other comprehensive income

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

(In thousands)	Available-for- Sale Debt Securities			Employee Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance at January 1, 2020	$	4,039		$	(47,603	)	$	(43,564	)
Other comprehensive income (loss) before reclassifications	22,123			0			22,123
Amounts reclassified from accumulated other comprehensive (loss) income	(324		)	494			170
Net current-period other comprehensive income	21,799			494			22,293
Balance at March 31, 2020	$	25,838		$	(47,109	)	$	(21,271	)
Balance at January 1, 2019	$	(23,589	)	$	(39,576	)	$	(63,165	)
Other comprehensive income (loss) before reclassifications	11,894			0			11,894
Amounts reclassified from accumulated other comprehensive (loss) income	0			321			321
Net current-period other comprehensive income	11,894			321			12,215
Balance at March 31, 2019	$	(11,695	)	$	(39,255	)	$	(50,950	)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three months ended March 31, 2020 and 2019. 

Three Months Ended March 31, 2020
Details about Accumulated other Comprehensive Income (Loss) Components (In thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss) Income1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale debt securities:
Unrealized gains and losses on available-for-sale debt securities	$	429		Net gain on securities transactions
	(105		)	Tax expense
	324			Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(601		)	Other operating expense
Net retirement plan prior service cost	(53		)	Other operating expense
	(654		)	Total before tax
	160			Tax benefit
	$	(494	)	Net of tax

Three Months Ended March 31, 2019
Details about Accumulated other Comprehensive Income (Loss) Components (In thousands)	Amount Reclassified from Accumulated Other Comprehensive (Loss) Income1			Affected Line Item in the Statement Where Net Income is Presented
Available-for-sale debt securities:
Unrealized gains and losses on available-for-sale debt securities	$	0		Net gain on securities transactions
	0			Tax expense
	0			Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(421		)	Other operating expense
Net retirement plan prior service cost	(4		)	Other operating expense
	(425		)	Total before tax
	104			Tax benefit
	$	(321	)	Net of tax

¹ Amounts in parentheses indicated debits in income statement.

² The accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost (See Note 8 - “Employee Benefit Plan”).

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Segment and Related Information

3 Months Ended

Mar. 31, 2020

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

Banking

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

Insurance

 The Company provides property and casualty insurance services and employee benefits consulting through Tompkins Insurance Agencies, Inc., a 100% wholly-owned subsidiary of the Company, headquartered in Batavia, New York. Tompkins Insurance is an independent insurance agency, representing many major insurance carriers and provides employee benefit consulting to employers in Western and Central New York and Southeastern Pennsylvania, assisting them with their medical, group life insurance and group disability insurance. 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, insurance and wealth management services segments. The Company accounts for intercompany fees and services at an estimated fair value according to regulatory requirements for the services provided. Intercompany items relate primarily to the use of human resources, information systems, accounting and marketing services provided by any of the banks and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the 2019 Annual Report on Form 10-K.

As of and for the three months ended March 31, 2020
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	63,199	$	1	$	0	$	(1	)	$	63,199
Interest expense	10,231		0		0		(1		)	10,230
Net interest income	52,968		1		0		0			52,969
Provision for credit loss expense	16,294		0		0		0			16,294
Noninterest income	6,992		8,150		4,374		(556		)	18,960
Noninterest expense	36,689		6,562		3,045		(556		)	45,740
Income before income tax expense	6,977		1,589		1,329		0			9,895
Income tax expense	1,157		430		322		0			1,909
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	5,820		1,159		1,007		0			7,986
Less:  Net income attributable to noncontrolling interests	37		0		0		0			37
Net Income attributable to Tompkins Financial Corporation	$	5,783	$	1,159	$	1,007	$	0		$	7,949
Depreciation and amortization	$	2,485	$	59	$	10	$	0		$	2,554
Assets	6,690,574		41,444		24,562		(13,466		)	6,743,114
Goodwill	64,585		19,866		7,996		0			92,447
Other intangibles, net	2,972		2,741		134		0			5,847
Net loans and leases	4,885,418		0		0		0			4,885,418
Deposits	5,422,258		0		0		(12,895		)	5,409,363
Total Equity	627,223		32,632		22,742		0			682,597

As of and for the three months ended March 31, 2019
(In thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	64,929	$	1	$	0	$	(2	)	$	64,928
Interest expense	13,016		0		0		(2		)	13,014
Net interest income	51,913		1		0		0			51,914
Provision for credit loss expense	445		0		0		0			445
Noninterest income	7,568		8,148		4,198		(507		)	19,407
Noninterest expense	35,327		6,277		3,112		(507		)	44,209
Income before income tax expense	23,709		1,872		1,086		0			26,667
Income tax expense	4,834		490		271		0			5,595
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	18,875		1,382		815		0			21,072
Less:  Net income attributable to noncontrolling interests	32		0		0		0			32
Net Income attributable to Tompkins Financial  Corporation	$	18,843	$	1,382	$	815	$	0		$	21,040
Depreciation and amortization	$	2,414	$	56	$	10	$	0		$	2,480
Assets	6,689,882		41,156		21,573		(13,892		)	6,738,719
Goodwill	64,370		19,702		8,211		0			92,283
Other intangibles, net	4,019		3,051		196		0			7,266
Net loans and leases	4,749,372		0		0		0			4,749,372
Deposits	5,003,696		0		0		(13,771		)	4,989,925
Total Equity	593,791		33,774		19,702		0			647,267

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Securities (Tables)

3 Months Ended

Mar. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Schedule of available for sale securities

The following table summarizes available-for-sale debt securities held by the Company at March 31, 2020:

	Available-for-Sale Debt Securities
March 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	1,745	$	5	$	0	$	1,750
Obligations of U.S. Government sponsored entities	302,086		11,384		42		313,428
Obligations of U.S. states and political subdivisions	101,452		1,159		127		102,484
Mortgage-backed securities – residential, issued by
U.S. Government agencies	171,500		3,469		454		174,515
U.S. Government sponsored entities	739,133		19,013		119		758,027
U.S. corporate debt securities	2,500		0		67		2,433
Total available-for-sale debt securities	$	1,318,416	$	35,030	$	809	$	1,352,637

 The following table summarizes available-for-sale debt securities held by the Company at December 31, 2019:  

	Available-for-Sale Debt 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 debt securities	$	1,293,239	$	10,466	$	5,118	$	1,298,587

Schedule of available for sale securities with unrealized losses

The following table summarizes available-for-sale debt securities that had unrealized losses at March 31, 2020:  

	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	$	24,209	$	42	$	0	$	0	$	24,209	$	42
Obligations of U.S. states and political subdivisions	18,179		127		0		0		18,179		127
Mortgage-backed securities – residential, issued by
U.S. Government agencies	38,813		340		6,618		114		45,431		454
U.S. Government sponsored entities	4,435		10		11,038		109		15,473		119
U.S. corporate debt securities	0		0		2,433		67		2,433		67
Total available-for-sale debt securities	$	85,636	$	519	$	20,089	$	290	$	105,725	$	809

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

	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 debt securities	$	241,757	$	1,371	$	288,210	$	3,747	$	529,967	$	5,118

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.

March 31, 2020
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	63,817	$	64,031
Due after one year through five years	222,678		232,268
Due after five years through ten years	81,418		83,920
Due after ten years	39,870		39,876
Total	407,783		420,095
Mortgage-backed securities	910,633		932,542
Total available-for-sale debt securities	$	1,318,416	$	1,352,637

December 31, 2019
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt 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

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Loans and Leases

3 Months Ended

Mar. 31, 2020

Loans and Leases Receivable Disclosure [Abstract]

Loans and Leases

Loans and Leases

Loans and Leases at March 31, 2020 and December 31, 2019 were as follows:

	3/31/2020								12/31/2019
(In thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	95,385		$	0	$	95,385		$	105,786		$	0	$	105,786
Commercial and industrial other	849,273			38,570		887,843			863,199			39,076		902,275
Subtotal commercial and industrial	944,658			38,570		983,228			968,985			39,076		1,008,061
Commercial real estate
Construction	167,139			1,311		168,450			212,302			1,335		213,637
Agriculture	186,870			191		187,061			184,701			197		184,898
Commercial real estate other	1,980,264			140,675		2,120,939			1,899,645			145,385		2,045,030
Subtotal commercial real estate	2,334,273			142,177		2,476,450			2,296,648			146,917		2,443,565
Residential real estate
Home equity	201,231			14,509		215,740			203,894			15,351		219,245
Mortgages	1,158,544			17,429		1,175,973			1,140,572			18,020		1,158,592
Subtotal residential real estate	1,359,775			31,938		1,391,713			1,344,466			33,371		1,377,837
Consumer and other
Indirect	11,871			0		11,871			12,964			0		12,964
Consumer and other	60,301			860		61,161			60,661			785		61,446
Subtotal consumer and other	72,172			860		73,032			73,625			785		74,410
Leases	17,046			0		17,046			17,322			0		17,322
Total loans and leases	4,727,924			213,545		4,941,469			4,701,046			220,149		4,921,195
Less: unearned income and deferred costs and fees	(3,647		)	0		(3,647		)	(3,645		)	0		(3,645		)
Total loans and leases, net of unearned income and deferred costs and fees	$	4,724,277		$	213,545	$	4,937,822		$	4,697,401		$	220,149	$	4,917,550

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 4 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes in these policies and guidelines since the date of that report. As such, these policies are reflective of new originations as well as those balances held at March 31, 2020. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan origination, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Generally loans are placed on nonaccrual status if principal or interest payments become 90 days or more contractually past due and/or management deems the collectability of the principal and/or interest to be in question as well as when required by regulatory agencies. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan. Loans are generally returned to accrual status when all the principal and interest amounts contractually due are brought current, the borrower has established a payment history, and future payments are reasonably assured. When management determines that the collection of principal in full is not probable, 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.

The below table is an age analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of March 31, 2020 and December 31, 2019.

March 31, 2020
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans			Total Loans
Originated Loans and Leases
Commercial and industrial
Agriculture	$	538	$	0	$	0	$	538	$	94,847		$	95,385
Commercial and industrial other	1,039		1,750		1,770		4,559		844,714			849,273
Subtotal commercial and industrial	1,577		1,750		1,770		5,097		939,561			944,658
Commercial real estate
Construction	0		0		0		0		167,139			167,139
Agriculture	141		0		0		141		186,729			186,870
Commercial real estate other	3,400		0		6,285		9,685		1,970,579			1,980,264
Subtotal commercial real estate	3,541		0		6,285		9,826		2,324,447			2,334,273
Residential real estate
Home equity	410		0		615		1,025		200,206			201,231
Mortgages	1,148		43		4,183		5,374		1,153,170			1,158,544
Subtotal residential real estate	1,558		43		4,798		6,399		1,353,376			1,359,775
Consumer and other
Indirect	148		54		83		285		11,586			11,871
Consumer and other	175		107		93		375		59,926			60,301
Subtotal consumer and other	323		161		176		660		71,512			72,172
Leases	0		0		0		0		17,046			17,046
Total loans and leases	6,999		1,954		13,029		21,982		4,705,942			4,727,924
Less: unearned income and deferred costs and fees	0		0		0		0		(3,647		)	(3,647		)
Total originated loans and leases, net of unearned income and deferred costs and fees	$	6,999	$	1,954	$	13,029	$	21,982	$	4,702,295		$	4,724,277
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	0		0		2		2		38,568			38,570
Subtotal commercial and industrial	0		0		2		2		38,568			38,570
Commercial real estate
Construction	0		0		0		0		1,311			1,311
Agriculture	0		0		0		0		191			191
Commercial real estate other	15		0		35		50		140,625			140,675
Subtotal commercial real estate	15		0		35		50		142,127			142,177
Residential real estate
Home equity	283		9		225		517		13,992			14,509
Mortgages	68		0		681		749		16,680			17,429
Subtotal residential real estate	351		9		906		1,266		30,672			31,938
Consumer and other
Consumer and other	0		0		0		0		860			860
Subtotal consumer and other	0		0		0		0		860			860
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	366	$	9	$	943	$	1,318	$	212,227		$	213,545

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.

The following table presents the amortized cost basis of loans on nonaccrual status and the amortized cost basis of loans on nonaccrual status for which there was no related allowance for credit losses. The below table is an age analysis of nonaccrual loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of March 31, 2020.

(In thousands)	Nonaccrual Loans with no Allowance for Credit Losses		Nonaccrual Loans		Loans Past Due Over 89 Days and Accruing
Originated Loans and Leases
Commercial and industrial
Commercial and industrial other	$	1,030	$	2,047	$	0
Subtotal commercial and industrial	1,030		2,047		0
Commercial real estate
Commercial real estate other	7,309		9,532		0
Subtotal commercial real estate	7,309		9,532		0
Residential real estate
Home equity	264		1,870		0
Mortgages	922		7,758		0
Subtotal residential real estate	1,186		9,628		0
Consumer and other
Indirect	0		147		0
Consumer and other	0		118		0
Subtotal consumer and other	0		265		0
Total loans and leases	9,525		21,472		0
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	0		2		0
Subtotal commercial and industrial	0		2		0
Commercial real estate
Commercial real estate other	0		166		0
Subtotal commercial real estate	0		166		0
Residential real estate
Home equity	0		847		0
Mortgages	0		1,069		0
Subtotal residential real estate	0		1,916		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	0	$	2,084	$	0

The Company recognized $0 of interest income on nonaccrual loans during the three months ended March 31, 2020.

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Employee Benefit Plan

3 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Employee Benefit Plan

Employee Benefit Plan

The following table sets forth the amount of the net periodic benefit cost recognized by the Company for the Company’s pension plan, post-retirement plan (Life and Health), and supplemental employee retirement plans (“SERP”) including the following components: service cost, interest cost, expected return on plan assets for the period, amortization of net retirement plan actuarial loss, and prior service cost recognized.

Components of Net Periodic Benefit Cost

	Pension Benefits Three Months Ended						Life and Health Three Months Ended						SERP Benefits Three Months Ended
(In thousands)	3/31/2020			3/31/2019			3/31/2020			3/31/2019			3/31/2020		3/31/2019
Service cost	$	0		$	0		$	41		$	50		$	46	$	37
Interest cost	641			745			64			73			240		229
Expected return on plan assets	(1,355		)	(1,234		)	0			0			0		0
Amortization of net retirement plan actuarial loss	350			337			26			0			225		85
Amortization of net retirement plan prior service (credit) cost	(3		)	(3		)	(15		)	(15		)	71		22
Net periodic benefit (income) cost	$	(367	)	$	(155	)	$	116		$	108		$	582	$	373

 The service component of net periodic benefit cost for the Company's benefit plans is recorded as a part of salaries and wages in the consolidated statements of income. All other components are recorded as part of other operating expenses in the consolidated statements of income.

The Company realized approximately $494,000 and $321,000, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive (loss) income, for the three months ended March 31, 2020 and 2019, respectively.

The Company is not required to contribute to the pension plan in 2020, but it may make voluntary contributions. The Company did not contribute to the pension plan in the first three months of 2020 and 2019.

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Label	Element	Value
Cumulative Effect, Period Of Adoption, Adjustment [Member]
Financing Receivable, Allowance for Credit Loss	us-gaap_FinancingReceivableAllowanceForCreditLosses	$ (2,500,000)
Accounting Standards Update 2016-13 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	1,707,000
Accounting Standards Update 2016-13 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	1,707,000
Accounting Standards Update 2016-13 [Member] | AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption

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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, 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	21,072			21,040			32
Other comprehensive income	12,215				12,215
Total Comprehensive Income	33,287
Cash dividends	(7,657)			(7,657)
Net exercise of stock options	(219)		(219)
Stock-based compensation expense	985		985
Directors deferred compensation plan	0		(116)			116
Restricted stock activity	0
Balances at Ending at Mar. 31, 2019	647,267	1,535	367,245	332,779	(50,950)	(4,786)	1,444
Balances at Beginning at Dec. 31, 2019	663,054	1,501	338,507	370,477	(43,564)	(5,279)	1,412
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	7,986			7,949			37
Other comprehensive income	22,293				22,293
Total Comprehensive Income	30,279
Cash dividends	(7,789)			(7,789)
Net exercise of stock options	(209)		(209)
Common stock repurchased and returned to unissued status	(5,620)	(7)	(5,613)
Stock-based compensation expense	1,180		1,180
Directors deferred compensation plan	0		(203)			203
Restricted stock activity	0
Partial repurchase of noncontrolling interest	(5)						(5)
Balances at Ending at Mar. 31, 2020	$ 682,597	$ 1,494	$ 333,662	$ 372,344	$ (21,271)	$ (5,076)	$ 1,444

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Business - Narrative (Details)	3 Months Ended
	Mar. 31, 2020 subsidiary
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of wholly owned subsidiaries	4

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Noninterest Income

The following presents noninterest income, segregated by revenue streams, for the three months ended March 31, 2020 and 2019.

	Three Months Ended
(In thousands)	03/31/2020			03/31/2019
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	7,385		$	7,099
Installment Billing		(30	)		(71	)
Refund of Commissions		(127	)		(12	)
Contract Liabilities/Deferred Revenue		(4	)		0
Contingent Commissions		821			1,029
Subtotal Insurance Revenues		8,045			8,045
Trust and Asset Management		2,943			2,850
Mutual Fund & Investment Income		1,259			1,234
Subtotal Investment Service Income		4,202			4,084
Service Charges on Deposit Accounts		1,983			1,998
Card Services Income		2,183			2,790
Other		314			307
Noninterest Income (in-scope of ASC 606)		16,727			17,224
Noninterest Income (out-of-scope of ASC 606)1		2,233			2,183
Total Noninterest Income	$	18,960		$	19,407

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CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Available-for-sale securities, at amortized cost	$ 1,318,416	$ 1,293,239
Equity securities, at amortized cost	$ 930,000	$ 915,000
Common Stock, par value (in dollars per share)	$ 0.1	$ 0.1
Common Stock, authorized (in shares)	25,000,000	25,000,000
Common Stock, issued (in shares)	14,943,857	15,014,499
Treasury stock, shares (in shares)	117,940	123,956

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Securities - Available for Sale Securities Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Amortized Cost
Amortized Cost	$ 1,318,416	$ 1,293,239
Fair Value
Total	1,352,637	1,298,587
Total available-for-sale securities
Amortized Cost
Due in one year or less	63,817	107,975
Due after one year through five years	222,678	270,477
Due after five years through ten years	81,418	77,710
Due after ten years	39,870	12,397
Amortized Cost	407,783	468,559
Fair Value
Due in one year or less	64,031	108,089
Due after one year through five years	232,268	274,798
Due after five years through ten years	83,920	79,165
Due after ten years	39,876	12,494
Total	420,095	474,546
Mortgage-backed securities
Amortized Cost
Amortized Cost	910,633	824,680
Fair Value
Total	$ 932,542	$ 824,041

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Employee Benefit Plan - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Retirement Benefits [Abstract]
Amortization of amounts previously recognized in accumulated other comprehensive income	$ 494,000	$ 321,000
Contribution to pension plan	$ 0	$ 0

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Allowance for Loan and Lease Losses - Credit Quality Indicators by Commercial and Industrial Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases, net of unearned income and deferred costs and fees	$ 4,937,822	$ 4,917,550
Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	42,295
2021	84,067
2022	72,816
2023	89,807
2024	49,454
Prior	284,286
Revolving Loans Amortized Cost Basis	264,462
Revolving Loans Converted to Term	655
Total loans and leases, net of unearned income and deferred costs and fees	887,843
Commercial and industrial | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	42,295
2021	83,851
2022	71,313
2023	88,343
2024	46,007
Prior	283,285
Revolving Loans Amortized Cost Basis	260,678
Revolving Loans Converted to Term	655
Total loans and leases, net of unearned income and deferred costs and fees	876,427
Commercial and industrial | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	104
2022	263
2023	1,178
2024	2,821
Prior	136
Revolving Loans Amortized Cost Basis	540
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	5,042
Commercial and industrial | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	112
2022	1,240
2023	286
2024	626
Prior	866
Revolving Loans Amortized Cost Basis	3,244
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	6,374
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	1,620
2021	13,401
2022	15,126
2023	9,138
2024	5,205
Prior	4,705
Revolving Loans Amortized Cost Basis	46,190
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	95,385
Commercial and industrial | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	1,520
2021	13,214
2022	14,996
2023	8,135
2024	5,170
Prior	2,395
Revolving Loans Amortized Cost Basis	38,484
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	83,914
Commercial and industrial | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	80
2022	127
2023	109
2024	0
Prior	0
Revolving Loans Amortized Cost Basis	435
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	751
Commercial and industrial | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	100
2021	107
2022	3
2023	894
2024	35
Prior	2,310
Revolving Loans Amortized Cost Basis	7,271
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	10,720
Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	99,145
2021	249,330
2022	243,136
2023	263,773
2024	346,447
Prior	524,152
Revolving Loans Amortized Cost Basis	392,204
Revolving Loans Converted to Term	2,752
Total loans and leases, net of unearned income and deferred costs and fees	2,120,939
Commercial real estate | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	99,145
2021	247,630
2022	239,644
2023	258,039
2024	340,595
Prior	505,182
Revolving Loans Amortized Cost Basis	381,049
Revolving Loans Converted to Term	2,752
Total loans and leases, net of unearned income and deferred costs and fees	2,074,036
Commercial real estate | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	0
2022	2,728
2023	2,400
2024	5,503
Prior	9,253
Revolving Loans Amortized Cost Basis	3,048
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	22,932
Commercial real estate | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	1,700
2022	764
2023	3,334
2024	349
Prior	9,717
Revolving Loans Amortized Cost Basis	8,107
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	23,971
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	3,538
2021	32,111
2022	45,342
2023	27,017
2024	19,767
Prior	41,108
Revolving Loans Amortized Cost Basis	17,730
Revolving Loans Converted to Term	448
Total loans and leases, net of unearned income and deferred costs and fees	187,061
Commercial real estate | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	2,028
2021	30,493
2022	42,366
2023	23,728
2024	14,147
Prior	39,835
Revolving Loans Amortized Cost Basis	16,842
Revolving Loans Converted to Term	448
Total loans and leases, net of unearned income and deferred costs and fees	169,887
Commercial real estate | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	1,510
2021	0
2022	2,418
2023	120
2024	1,264
Prior	361
Revolving Loans Amortized Cost Basis	11
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	5,684
Commercial real estate | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	1,618
2022	558
2023	3,169
2024	4,356
Prior	912
Revolving Loans Amortized Cost Basis	877
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	11,490
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	1,194
2021	22,565
2022	9,552
2023	3,011
2024	2,165
Prior	5,111
Revolving Loans Amortized Cost Basis	123,869
Revolving Loans Converted to Term	983
Total loans and leases, net of unearned income and deferred costs and fees	168,450
Commercial real estate | Construction | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	1,194
2021	22,565
2022	9,552
2023	3,011
2024	2,165
Prior	4,169
Revolving Loans Amortized Cost Basis	121,760
Revolving Loans Converted to Term	983
Total loans and leases, net of unearned income and deferred costs and fees	165,399
Commercial real estate | Construction | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	0
2022	0
2023	0
2024	0
Prior	603
Revolving Loans Amortized Cost Basis	2,109
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	2,712
Commercial real estate | Construction | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	0
2022	0
2023	0
2024	0
Prior	339
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	339
Originated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases, net of unearned income and deferred costs and fees	4,724,277	4,697,401
Loans and Leases, gross		3,265,633
Originated | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		3,177,741
Originated | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		29,800
Originated | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		58,092
Originated | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		863,199
Originated | Commercial and industrial | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		851,517
Originated | Commercial and industrial | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		8,306
Originated | Commercial and industrial | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		3,376
Originated | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		105,786
Originated | Commercial and industrial | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		89,892
Originated | Commercial and industrial | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,698
Originated | Commercial and industrial | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		14,196
Originated | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,899,645
Originated | Commercial real estate | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,857,142
Originated | Commercial real estate | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		16,623
Originated | Commercial real estate | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		25,880
Originated | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		184,701
Originated | Commercial real estate | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		166,888
Originated | Commercial real estate | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		3,173
Originated | Commercial real estate | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		14,640
Originated | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		212,302
Originated | Commercial real estate | Construction | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		212,302
Originated | Commercial real estate | Construction | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Originated | Commercial real estate | Construction | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases, net of unearned income and deferred costs and fees	$ 213,545	220,149
Loans and Leases, gross		185,993
Acquired | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		183,586
Acquired | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		2,407
Acquired | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		39,076
Acquired | Commercial and industrial | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		38,879
Acquired | Commercial and industrial | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial and industrial | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		197
Acquired | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial and industrial | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial and industrial | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial and industrial | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		145,385
Acquired | Commercial real estate | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		143,175
Acquired | Commercial real estate | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial real estate | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		2,210
Acquired | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		197
Acquired | Commercial real estate | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		197
Acquired | Commercial real estate | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial real estate | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,335
Acquired | Commercial real estate | Construction | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,335
Acquired | Commercial real estate | Construction | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Commercial real estate | Construction | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		$ 0

XML

Other Comprehensive Income (Loss) - Reclassification Out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Before-Tax Amount
Net unrealized gains/losses	$ 29,527	$ 16,181
Tax (Expense) Benefit
Net unrealized gains/losses	(7,234)	(3,966)
Net of Tax
Other comprehensive income	22,293	12,215
Net unrealized gains/losses
Before-Tax Amount
Change in net unrealized gain/loss during the period	29,302	15,756
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	(429)	0
Net unrealized gains/losses	28,873	15,756
Tax (Expense) Benefit
Change in net unrealized gain/loss during the period	(7,179)	(3,862)
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	105	0
Net unrealized gains/losses	(7,074)	(3,862)
Net of Tax
Change in net unrealized gain/loss during the period	22,123	11,894
Net of tax	(324)	0
Other comprehensive income	21,799	11,894
Amortization of net retirement plan actuarial gain
Before-Tax Amount
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	601	421
Tax (Expense) Benefit
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	(147)	(103)
Net of Tax
Net of tax	454	318
Amortization of net retirement plan prior service cost
Before-Tax Amount
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	53	4
Tax (Expense) Benefit
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	(13)	(1)
Net of Tax
Net of tax	40	3
Employee benefit plans
Before-Tax Amount
Net unrealized gains/losses	654	425
Tax (Expense) Benefit
Net unrealized gains/losses	(160)	(104)
Net of Tax
Other comprehensive income	$ 494	$ 321

XML

Allowance for Loan and Lease Losses

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Allowance for Loan and Lease Losses

Allowance for Credit Losses

Management reviews the appropriateness of the allowance for credit losses (“allowance” or "ACL") 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 credit 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. 119, Measurement of Credit Losses on Financial Instruments ("CECL"), and Financial Instruments - Credit Losses and ASC Topic 326, Financial Instruments - Credit Losses.

The Company uses a discounted cash flow ("DCF") method to estimate expected credit losses for all loan segments. For each of these loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, recovery lag probability of default, and loss give default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on internal historical data.

The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loans utilizing the DCF method, management utilizes and forecasts national unemployment and a one year percentage change in national gross domestic product as loss drivers in the model.

For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.

The combination of adjustments for credit expectations and timing expectations produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce a net present value of expected cash flows ("NPV"). An ACL is established for the difference between the NPV and amortized cost basis.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets purchased with credit deterioration ("PCD") that were previously classified as purchased credit impaired ("PCI") and accounted for under ASC 310-30. In accordance with the standard, the Company did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The remaining discount on the PCD assets will be accreted into interest income on a level-yield method over the life of the loans.

Since the methodology is based upon historical experience and trends, current conditions, and reasonable and supportable forecasts, as well as management’s judgment, factors may arise that result in different estimates. While management’s evaluation of the allowance as of March 31, 2020, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance.

Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans, and commercial letters of credit. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to credit loss expense for off-balance sheet credit exposures included in other noninterest expense in the Company's consolidated statements of income.

The following table details activity in the allowance for credit losses on loans for the three months ended March 31, 2020 and 2019. The Company adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach. Results for the periods beginning after January 1, 2020 are presented under ASC 326, while prior period amounts continue to be reported in accordance with previously applicable U.S. GAAP. The transition adjustment includes a decrease in the allowance of $2.5 million. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three Months Ended March 31, 2020
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases			Total
Allowance for credit losses:
Beginning balance, prior to adoption of ASC 326	$	10,541		$	21,608		$	6,381		$	1,362		$	0		$	39,892
Impact of adopting ASC 326	(2,008		)	(5,917		)	4,459			850			82			(2,534		)
Charge-offs	(1		)	(1,290		)	(2		)	(137		)	0			(1,430		)
Recoveries	16			18			79			69			0			182
Provision for credit loss expense	3,117			8,027			5,413			(261		)	(2		)	16,294
Ending Balance	$	11,665		$	22,446		$	16,330		$	1,883		$	80		$	52,404

Three Months Ended March 31, 2019
(In thousands)	Commercial and Industrial			Commercial Real Estate			Residential Real Estate			Consumer and Other			Finance Leases		Total
Allowance for credit losses
Beginning balance	$	11,272		$	23,483		$	7,345		$	1,310		$	0	43,410
Charge-offs	(380		)	(3,343		)	(18		)	(180		)	0		(3,921		)
Recoveries	59			7			233			95			0		394
Provision (credit)	572			923			(1,098		)	48			0		445
Ending Balance	$	11,523		$	21,070		$	6,462		$	1,273		$	0	$	40,328

 The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans:

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
March 31, 2020
Commercial and Industrial	$	0	$	631	$	93	$	724	$	131
Commercial Real Estate	7,705		0		60		7,765		225
Commercial Real Estate - Agriculture	1,559		0		0		1,559		0
Residential - Mortgages	46		0		0		46		0
Total	$	9,310	$	631	$	153	$	10,094	$	356

The following table presents information pertaining to the allocation of the allowance for loan and lease losses as of December 31, 2019, as determined in accordance with ASC 310, prior to the adoption of ASU 2016-13: 

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for originated loans and leases
December 31, 2019
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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for acquired loans
December 31, 2019
Collectively evaluated for impairment	$	0	$	51	$	21	$	6	$	0	$	78
Ending balance	$	0	$	51	$	21	$	6	$	0	$	78

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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer  and Other		Finance Leases		Total
Originated loans and leases
December 31, 2019
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

(In thousands)	Commercial and Industrial		Commercial Real Estate		Residential Real Estate		Consumer  and Other		Finance Leases		Total
Acquired loans
December 31, 2019
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

Prior to the adoption of ASC 326, a loan was considered impaired when, based on current information and events, it was probable that we would be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans consisted of non-homogenous nonaccrual loans, and all loans restructured in a troubled debt restructuring (TDR). Specific reserves on individually identified impaired loans that were not collateral dependent were measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that were collateral dependent, impairment was measured based on the fair value of the collateral less estimated selling costs, and such impaired amounts were generally charged off. The majority of impaired loans were collateral dependent impaired loans that had 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.

Impaired loans at December 31, 2019 were as follows:

 

	December 31, 2019
(In thousands)	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
Commercial real estate
Commercial real estate other	10,205		11,017		0
Residential real estate
Home equity	3,779		3,992		0
Subtotal	$	15,849	$	16,974	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	245		245		245
Commercial real estate
Commercial real estate other	3,291		3,291		662
Subtotal	$	3,536	$	3,536	$	907
Total	$	19,385	$	20,510	$	907

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

The following table presents average impaired loans, as determined in accordance with ASC 310, prior to the adoption of ASU 2016-13, and interest recognized on such loans, for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
(In thousands)	Average Recorded Investment		Interest Income Recognized
Originated loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	1,468	$	0
Commercial real estate
Commercial real estate other	6,099		0
Residential real estate
Home equity	3,981		0
Subtotal	$	11,548	$	0
Originated loans and leases with related allowance
Commercial and industrial
Commercial and industrial other	581		0
Commercial real estate
Commercial real estate other	445		0
Subtotal	$	1,026	$	0
Total	$	12,574	$	0

	Three Months Ended March 31, 2019
(In thousands)	Average Recorded Investment		Interest Income Recognized
Acquired loans and leases with no related allowance
Commercial and industrial
Commercial and industrial other	$	22	$	0
Commercial real estate
Commercial real estate other	855		0
Residential real estate
Home equity	2,577		0
Subtotal	$	3,454	$	0
Total	$	3,454	$	0

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

The following tables present information on loans modified in troubled debt restructuring during the periods indicated and their balances immediately prior to the modification date and post-modification as of March 31, 2020 and 2019.

March 31, 2020	Three 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	0	$	0	$	0	1	$	37
Residential real estate
Home equity1	2	121		121		1	87
Total	2	$	121	$	121	2	$	124

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

² TDRs that defaulted during the three months ended March 31, 2020 that were restructured in the prior twelve months.

March 31, 2019	Three 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
Residential real estate
Home equity1	1	$	168	$	168	0	$	0
Total	1	$	168	$	168	0	$	0

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

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

For customers affected by COVID-19, the Company implemented a loan payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19. The current program allows for deferral of payments of principal and interest for up to 90 days and customers will be able to request a payment deferral through the middle of May 2020. The provisions of the CARES Act and recently issued interagency guidance issued by Federal banking regulators provided guidance and clarification related to modifications and deferral programs to assist borrowers who are negatively impacted by the COVID-19 national emergency. The guidance and clarifications detail certain provisions whereby banks are permitted to make deferrals and modifications to the terms of a loan which would not require the loan to be reported as a troubled debt restructuring. In accordance with the CARES Act and the interagency guidance, the Company elected to adopt the provisions to not report eligible loan modifications as troubled debt restructurings.

The following table presents credit quality indicators by total loans amortized cost basis by origination year as of March 31, 2020.

(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	42,295	$	83,851	$	71,313	$	88,343	$	46,007	$	283,285	$	260,678	$	655	$	876,427
Special Mention	0		104		263		1,178		2,821		136		540		0		5,042
Substandard	0		112		1,240		286		626		866		3,244		0		6,374
Total Commercial and Industrial - Other	$	42,295	$	84,067	$	72,816	$	89,807	$	49,454	$	284,286	$	264,462	$	655	$	887,843
Commercial and Industrial - Agriculture:
Internal risk grade:
Pass	$	1,520	$	13,214	$	14,996	$	8,135	$	5,170	$	2,395	$	38,484	$	0	$	83,914
Special Mention	0		80		127		109		0		0		435		0		751
Substandard	100		107		3		894		35		2,310		7,271		0		10,720
Total Commercial and Industrial - Agriculture	$	1,620	$	13,401	$	15,126	$	9,138	$	5,205	$	4,705	$	46,190	$	0	$	95,385
Commercial Real Estate
Internal risk grade:
Pass	$	99,145	$	247,630	$	239,644	$	258,039	$	340,595	$	505,182	$	381,049	$	2,752	$	2,074,036
Special Mention	0		0		2,728		2,400		5,503		9,253		3,048		0		22,932
Substandard	0		1,700		764		3,334		349		9,717		8,107		0		23,971
Total Commercial Real Estate	$	99,145	$	249,330	$	243,136	$	263,773	$	346,447	$	524,152	$	392,204	$	2,752	$	2,120,939
Commercial Real Estate - Agriculture:
Internal risk grade:
Pass	$	2,028	$	30,493	$	42,366	$	23,728	$	14,147	$	39,835	$	16,842	$	448	$	169,887
Special Mention	1,510		0		2,418		120		1,264		361		11		0		5,684
Substandard	0		1,618		558		3,169		4,356		912		877		0		11,490
Total Commercial Real Estate - Agriculture	$	3,538	$	32,111	$	45,342	$	27,017	$	19,767	$	41,108	$	17,730	$	448	$	187,061
Commercial Real Estate - Construction
Internal risk grade:
Pass	$	1,194	$	22,565	$	9,552	$	3,011	$	2,165	$	4,169	$	121,760	$	983	$	165,399
Special Mention	0		0		0		0		0		603		2,109		0		2,712
Substandard	0		0		0		0		0		339		0		0		339
Total Commercial Real Estate - Construction	$	1,194	$	22,565	$	9,552	$	3,011	$	2,165	$	5,111	$	123,869	$	983	$	168,450

The following table presents credit quality indicators by total loans amortized cost basis by origination year as of March 31, 2020, continued.

(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Residential - Home Equity
Performing	$	3,948	$	28,694	$	23,181	$	25,332	$	21,014	$	40,444	$	70,006	$	406	$	213,025
Nonperforming	0		19		67		0		0		528		2,101		0		2,715
Total Residential - Home Equity	$	3,948	$	28,713	$	23,248	$	25,332	$	21,014	$	40,972	$	72,107	$	406	$	215,740
Residential - Mortgages
Performing	$	56,373	$	205,326	$	146,568	$	191,872	$	207,389	$	159,262	$	200,151	$	204	$	1,167,145
Nonperforming	0		266		406		453		1,291		2,385		4,027		0		8,828
Total Residential - Mortgages	$	56,373	$	205,592	$	146,974	$	192,325	$	208,680	$	161,647	$	204,178	$	204	$	1,175,973
Consumer - Direct
Performing	$	4,186	$	16,392	$	10,746	$	9,326	$	4,812	$	11,230	$	4,350	$	0	$	61,042
Nonperforming	0		47		44		10		0		18		0		0		119
Total Consumer - Direct	$	4,186	$	16,439	$	10,790	$	9,336	$	4,812	$	11,248	$	4,350	$	0	$	61,161
Consumer - Indirect
Performing	$	616	$	2,904	$	4,886	$	2,001	$	895	$	422	$	0	$	0	$	11,724
Nonperforming	0		57		25		6		39		20		0		0		147
Total Consumer Indirect	$	616	$	2,961	$	4,911	$	2,007	$	934	$	442	$	0	$	0	$	11,871

The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of December 31, 2019.

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 and Leases
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

The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of December 31, 2019. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing.

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

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Other Income and Operating Expense

3 Months Ended

Mar. 31, 2020

Other Income and Expenses [Abstract]

Other Income and Operating Expense

Other Income and Operating Expense

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

	Three Months Ended
(In thousands)	3/31/2020		3/31/2019
Noninterest Income
Other service charges	$	805	$	893
Increase in cash surrender value of corporate owned life insurance	324		643
Net gain on sale of loans	176		94
Other income	799		848
Total other income	$	2,104	$	2,478
Noninterest Expenses
Marketing expense	$	941	$	1,162
Professional fees	1,835		1,916
Legal fees	222		303
Technology expense	2,863		2,580
Cardholder expense	829		957
Other expenses	5,185		4,587
Total other operating expense	$	11,875	$	11,505

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Securities - Securities with Unrealized Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Available-for-sale securities
Fair value, less than 12 months	$ 85,636	$ 241,757
Unrealized losses, less than 12 months	519	1,371
Fair value, 12 months or longer	20,089	288,210
Unrealized losses, 12 months or longer	290	3,747
Fair Value	105,725	529,967
Unrealized Losses	809	5,118
Obligations of U.S. Government sponsored entities
Available-for-sale securities
Fair value, less than 12 months	24,209	18,654
Unrealized losses, less than 12 months	42	76
Fair value, 12 months or longer	0	3,479
Unrealized losses, 12 months or longer	0	8
Fair Value	24,209	22,133
Unrealized Losses	42	84
Obligations of U.S. states and political subdivisions
Available-for-sale securities
Fair value, less than 12 months	18,179	10,456
Unrealized losses, less than 12 months	127	54
Fair value, 12 months or longer	0	2,300
Unrealized losses, 12 months or longer	0	7
Fair Value	18,179	12,756
Unrealized Losses	127	61
U.S. Government agencies
Available-for-sale securities
Fair value, less than 12 months	38,813	54,846
Unrealized losses, less than 12 months	340	489
Fair value, 12 months or longer	6,618	45,999
Unrealized losses, 12 months or longer	114	1,030
Fair Value	45,431	100,845
Unrealized Losses	454	1,519
U.S. Government sponsored entities
Available-for-sale securities
Fair value, less than 12 months	4,435	157,801
Unrealized losses, less than 12 months	10	752
Fair value, 12 months or longer	11,038	233,999
Unrealized losses, 12 months or longer	109	2,635
Fair Value	15,473	391,800
Unrealized Losses	119	3,387
U.S. corporate debt securities
Available-for-sale securities
Fair value, less than 12 months	0	0
Unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	2,433	2,433
Unrealized losses, 12 months or longer	67	67
Fair Value	2,433	2,433
Unrealized Losses	$ 67	$ 67

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$ 7,949	$ 21,040
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit loss expense	16,294	445
Depreciation and amortization of premises, equipment, and software	2,554	2,480
Amortization of intangible assets	374	412
Earnings from corporate owned life insurance	(324)	(643)
Net amortization on securities	1,937	1,786
Amortization/accretion related to purchase accounting	(372)	(369)
Net gain on securities transactions	(443)	(12)
Net gain on sale of loans originated for sale	(176)	(94)
Proceeds from sale of loans originated for sale	4,260	8,586
Loans originated for sale	(4,514)	(6,059)
Net (gain) loss on sale of bank premises and equipment	(3)	7
Net excess tax benefit from stock based compensation	118	139
Stock-based compensation expense	1,180	985
Decrease (increase) in accrued interest receivable	1,286	(3,068)
Decrease in accrued interest payable	(242)	(274)
Other, net	(5,735)	(8,923)
Net Cash Provided by Operating Activities	24,143	16,438
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale debt securities	156,834	51,409
Proceeds from sales of available-for-sale debt securities	42,584	0
Proceeds from maturities, calls and principal paydowns of held-to-maturity securities	0	3,821
Purchases of available-for-sale debt securities	(226,103)	(48,293)
Purchases of held-to-maturity securities	0	(2,985)
Net (increase) decrease in loans	(20,879)	38,424
Proceeds from redemption/sale of Federal Home Loan Bank and other stock	34,088	35,293
Purchases of Federal Home Loan Bank and other stock	(24,605)	(28,119)
Proceeds from sale of bank premises and equipment	4	40
Purchases of bank premises, equipment and software	(909)	(1,641)
Other, net	548	0
Net Cash (Used in) Provided by Investing Activities	(38,438)	47,949
FINANCING ACTIVITIES
Net increase in demand, money market, and savings deposits	162,523	76,549
Net increase in time deposits	34,141	24,697
Net increase (decrease) in Federal funds purchased and securities sold under agreements to repurchase	8,647	(14,924)
Increase in other borrowings	74,583	13,752
Repayment of other borrowings	(274,700)	(166,400)
Cash dividends	(7,789)	(7,657)
Repurchase of common stock	(5,620)	0
Net proceeds from exercise of stock options	(209)	(219)
Net Cash Used in Financing Activities	(8,424)	(74,202)
Net Decrease in Cash and Cash Equivalents	(22,719)	(9,815)
Cash and cash equivalents at beginning of period	137,982	80,389
Total Cash and Cash Equivalents at End of Period	115,263	70,574
Cash paid during the year for - Interest	10,694	13,568
Cash paid during the year for - Taxes	1,214	54
Transfer of loans to other real estate owned	$ 104	$ 0

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Leasing (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Supplemental Lease Information

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

(In thousands)		March 31, 2020		December 31, 2019
Assets	Classification
ROU assets	Other assets	$	33,231	$	33,501
Liabilities
Current lease liabilities	Other liabilities	$	3,188	$	3,256
Non-current lease liabilities	Other liabilities	32,450		32,666
Total lease liabilities		$	35,638	$	35,922

Other information related to operating leases was as follows:

(In thousands)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,189		$	1,159
Weighted-average remaining lease term on operating leases	13.72 years			14.12 years
Weighted-average discount rates on operating leases	3.53		%	3.53		%
ROU assets obtained in exchange for lease liabilities	549			35,706

Components of Operating Lease Expense

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

(In thousands)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Lease Costs
Operating lease cost	$	1,174		$	1,142
Variable lease cost	164			96
Short-term lease cost	0			0
Sublease income	(8		)	(8		)
Total lease cost	$	1,330		$	1,230

Other information related to operating leases was as follows:

(In thousands)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,189		$	1,159
Weighted-average remaining lease term on operating leases	13.72 years			14.12 years
Weighted-average discount rates on operating leases	3.53		%	3.53		%
ROU assets obtained in exchange for lease liabilities	549			35,706

Schedule of Operating Lease Liability Maturities

Future minimum lease payments under operating leases were as follows:

(In thousands)	Operating Leases
Nine Months 2020	$	3,326
2021	4,163
2022	4,117
2023	3,876
2024	3,742
2025 and subsequent years	26,979
Total lease payments	$	46,203
Less: Interest	(10,565		)
Present value of lease liabilities	$	35,638

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Other Income and Operating Expense (Tables)

3 Months Ended

Mar. 31, 2020

Other Income and Expenses [Abstract]

Schedule of other income and operating expense

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

	Three Months Ended
(In thousands)	3/31/2020		3/31/2019
Noninterest Income
Other service charges	$	805	$	893
Increase in cash surrender value of corporate owned life insurance	324		643
Net gain on sale of loans	176		94
Other income	799		848
Total other income	$	2,104	$	2,478
Noninterest Expenses
Marketing expense	$	941	$	1,162
Professional fees	1,835		1,916
Legal fees	222		303
Technology expense	2,863		2,580
Cardholder expense	829		957
Other expenses	5,185		4,587
Total other operating expense	$	11,875	$	11,505

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CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
ASSETS
Cash and noninterest bearing balances due from banks	$ 110,998	$ 136,010
Interest bearing balances due from banks	4,265	1,972
Cash and Cash Equivalents	115,263	137,982
Available-for-sale debt securities, at fair value (amortized cost of $1,318,416 at March 31, 2020 and $1,293,239 at December 31, 2019)	1,352,637	1,298,587
Equity securities, at fair value (amortized cost $930 at March 31, 2020 and $915 at December 31, 2019)	930	915
Originated loans and leases, net of unearned income and deferred costs and fees	4,724,277	4,697,401
Acquired loans	213,545	220,149
Less: Allowance for credit losses	52,404	39,892
Net Loans and Leases	4,885,418	4,877,658
Federal Home Loan Bank and other stock	24,212	33,695
Bank premises and equipment, net	93,604	94,355
Corporate owned life insurance	82,872	82,961
Goodwill	92,447	92,447
Other intangible assets, net	5,847	6,223
Accrued interest and other assets	89,884	100,800
Total Assets	6,743,114	6,725,623
Interest bearing:
Checking, savings and money market	3,273,813	3,080,686
Time	708,933	675,014
Noninterest bearing	1,426,617	1,457,221
Total Deposits	5,409,363	5,212,921
Federal funds purchased and securities sold under agreements to repurchase	68,993	60,346
Other borrowings	457,983	658,100
Trust preferred debentures	17,078	17,035
Other liabilities	107,100	114,167
Total Liabilities	6,060,517	6,062,569
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,943,857 at March 31, 2020; and 15,014,499 at December 31, 2019	1,494	1,501
Additional paid-in capital	333,662	338,507
Retained earnings	372,344	370,477
Accumulated other comprehensive loss	(21,271)	(43,564)
Treasury stock, at cost – 117,940 shares at March 31, 2020, and 123,956 shares at December 31, 2019	(5,076)	(5,279)
Total Tompkins Financial Corporation Shareholders’ Equity	681,153	661,642
Noncontrolling interests	1,444	1,412
Total Equity	682,597	663,054
Total Liabilities and Equity	$ 6,743,114	$ 6,725,623

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Allowance for Loan and Lease Losses - Credit Quality Indicators by Class of Residential Real Estate and Consumer Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases, net of unearned income and deferred costs and fees	$ 4,937,822	$ 4,917,550
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	3,948
2021	28,713
2022	23,248
2023	25,332
2024	21,014
Prior	40,972
Revolving Loans Amortized Cost Basis	72,107
Revolving Loans Converted to Term	406
Total loans and leases, net of unearned income and deferred costs and fees	215,740
Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	56,373
2021	205,592
2022	146,974
2023	192,325
2024	208,680
Prior	161,647
Revolving Loans Amortized Cost Basis	204,178
Revolving Loans Converted to Term	204
Total loans and leases, net of unearned income and deferred costs and fees	1,175,973
Residential real estate | Performing | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	3,948
2021	28,694
2022	23,181
2023	25,332
2024	21,014
Prior	40,444
Revolving Loans Amortized Cost Basis	70,006
Revolving Loans Converted to Term	406
Total loans and leases, net of unearned income and deferred costs and fees	213,025
Residential real estate | Performing | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	56,373
2021	205,326
2022	146,568
2023	191,872
2024	207,389
Prior	159,262
Revolving Loans Amortized Cost Basis	200,151
Revolving Loans Converted to Term	204
Total loans and leases, net of unearned income and deferred costs and fees	1,167,145
Residential real estate | Nonperforming | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	19
2022	67
2023	0
2024	0
Prior	528
Revolving Loans Amortized Cost Basis	2,101
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	2,715
Residential real estate | Nonperforming | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	266
2022	406
2023	453
2024	1,291
Prior	2,385
Revolving Loans Amortized Cost Basis	4,027
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	8,828
Consumer and other | Direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	4,186
2021	16,439
2022	10,790
2023	9,336
2024	4,812
Prior	11,248
Revolving Loans Amortized Cost Basis	4,350
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	61,161
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	616
2021	2,961
2022	4,911
2023	2,007
2024	934
Prior	442
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	11,871
Consumer and other | Performing | Direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	4,186
2021	16,392
2022	10,746
2023	9,326
2024	4,812
Prior	11,230
Revolving Loans Amortized Cost Basis	4,350
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	61,042
Consumer and other | Performing | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	616
2021	2,904
2022	4,886
2023	2,001
2024	895
Prior	422
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	11,724
Consumer and other | Nonperforming | Direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	47
2022	44
2023	10
2024	0
Prior	18
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	119
Consumer and other | Nonperforming | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
2020	0
2021	57
2022	25
2023	6
2024	39
Prior	20
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total loans and leases, net of unearned income and deferred costs and fees	147
Originated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases, net of unearned income and deferred costs and fees	4,724,277	4,697,401
Loans and Leases, gross		1,418,091
Originated | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,408,557
Originated | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		9,534
Originated | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		203,894
Originated | Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,140,572
Originated | Residential real estate | Performing | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		201,970
Originated | Residential real estate | Performing | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,133,237
Originated | Residential real estate | Nonperforming | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,924
Originated | Residential real estate | Nonperforming | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		7,335
Originated | Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		12,964
Originated | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		60,661
Originated | Consumer and other | Performing | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		12,847
Originated | Consumer and other | Performing | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		60,503
Originated | Consumer and other | Nonperforming | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		117
Originated | Consumer and other | Nonperforming | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		158
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases, net of unearned income and deferred costs and fees	$ 213,545	220,149
Loans and Leases, gross		34,156
Acquired | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		32,533
Acquired | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		1,623
Acquired | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		15,351
Acquired | Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		18,020
Acquired | Residential real estate | Performing | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		14,479
Acquired | Residential real estate | Performing | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		17,269
Acquired | Residential real estate | Nonperforming | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		872
Acquired | Residential real estate | Nonperforming | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		751
Acquired | Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		785
Acquired | Consumer and other | Performing | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Consumer and other | Performing | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		785
Acquired | Consumer and other | Nonperforming | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		0
Acquired | Consumer and other | Nonperforming | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases, gross		$ 0

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Other Comprehensive Income (Loss) - Activity in AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	$ 663,054	$ 620,871
Other comprehensive income	22,293	12,215
Balances at Ending	682,597	647,267
Available-for-Sale Debt Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	4,039	(23,589)
Other comprehensive income (loss) before reclassifications	22,123	11,894
Amounts reclassified from accumulated other comprehensive (loss) income	(324)	0
Other comprehensive income	21,799	11,894
Balances at Ending	25,838	(11,695)
Employee Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	(47,603)	(39,576)
Other comprehensive income (loss) before reclassifications	0	0
Amounts reclassified from accumulated other comprehensive (loss) income	494	321
Other comprehensive income	494	321
Balances at Ending	(47,109)	(39,255)
Accumulated Other Comprehensive (Loss) Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	(43,564)	(63,165)
Other comprehensive income (loss) before reclassifications	22,123	11,894
Amounts reclassified from accumulated other comprehensive (loss) income	170	321
Other comprehensive income	22,293	12,215
Balances at Ending	$ (21,271)	$ (50,950)

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Other Income and Operating Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Other Income and Expenses [Abstract]
Reporting threshold for other income and operating expenses (percent, greater than)	1.00%
Noninterest Income
Other service charges	$ 805	$ 893
Increase in cash surrender value of corporate owned life insurance	324	643
Net gain on sale of loans	176	94
Other income	799	848
Total other income	2,104	2,478
Noninterest Expenses
Marketing expense	941	1,162
Professional fees	1,835	1,916
Legal fees	222	303
Technology expense	2,863	2,580
Cardholder expense	829	957
Other expenses	5,185	4,587
Total other operating expense	$ 11,875	$ 11,505

XML

Leasing - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Nine Months 2020	$ 3,326
2021	4,163
2022	4,117
2023	3,876
2024	3,742
2025 and subsequent years	26,979
Total lease payments	46,203
Less: Interest	(10,565)
Present value of lease liabilities	$ 35,638	$ 35,922

XML

Allowance for Loan and Lease Losses - Average Recorded Investment and Interest Income (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Originated
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	$ 11,548
Interest Income Recognized With No Related Allowance	0
Average Recorded Investment With Related Allowance	1,026
Interest Income Recognized With Related Allowance	0
Total Average Recorded Investment	12,574
Total Interest Income Recognized	0
Originated | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	1,468
Interest Income Recognized With No Related Allowance	0
Average Recorded Investment With Related Allowance	581
Interest Income Recognized With Related Allowance	0
Originated | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	6,099
Interest Income Recognized With No Related Allowance	0
Average Recorded Investment With Related Allowance	445
Interest Income Recognized With Related Allowance	0
Originated | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	3,981
Interest Income Recognized With No Related Allowance	0
Acquired
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	3,454
Interest Income Recognized With No Related Allowance	0
Total Average Recorded Investment	3,454
Total Interest Income Recognized	0
Acquired | Commercial and industrial | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	22
Interest Income Recognized With No Related Allowance	0
Acquired | Commercial real estate | Other
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	855
Interest Income Recognized With No Related Allowance	0
Acquired | Residential real estate | Home equity
Financing Receivable, Impaired [Line Items]
Average Recorded Investment With No Related Allowance	2,577
Interest Income Recognized With No Related Allowance	$ 0

XML

Allowance for Loan and Lease Losses - Collateral Dependent Loans (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 10,094
ACL Allocation	356
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	9,310
Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	631
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	153
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	724
ACL Allocation	131
Commercial and Industrial | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0
Commercial and Industrial | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	631
Commercial and Industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	93
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	7,765
ACL Allocation	225
Commercial Real Estate | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	7,705
Commercial Real Estate | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0
Commercial Real Estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	60
Commercial Real Estate - Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	1,559
ACL Allocation	0
Commercial Real Estate - Agriculture | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	1,559
Commercial Real Estate - Agriculture | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0
Commercial Real Estate - Agriculture | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0
Residential - Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	46
ACL Allocation	0
Residential - Mortgages | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	46
Residential - Mortgages | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0
Residential - Mortgages | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 0

XML

Loans and Leases - Schedule of Loans and Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 4,941,469	$ 4,921,195
Less: unearned income and deferred costs and fees	(3,647)	(3,645)
Total loans and leases, net of unearned income and deferred costs and fees	4,937,822	4,917,550
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	983,228	1,008,061
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	95,385	105,786
Total loans and leases, net of unearned income and deferred costs and fees	95,385
Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	887,843	902,275
Total loans and leases, net of unearned income and deferred costs and fees	887,843
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,476,450	2,443,565
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	187,061	184,898
Total loans and leases, net of unearned income and deferred costs and fees	187,061
Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,120,939	2,045,030
Total loans and leases, net of unearned income and deferred costs and fees	2,120,939
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	168,450	213,637
Total loans and leases, net of unearned income and deferred costs and fees	168,450
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,391,713	1,377,837
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	215,740	219,245
Total loans and leases, net of unearned income and deferred costs and fees	215,740
Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,175,973	1,158,592
Total loans and leases, net of unearned income and deferred costs and fees	1,175,973
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	73,032	74,410
Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	61,161	61,446
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	11,871	12,964
Total loans and leases, net of unearned income and deferred costs and fees	11,871
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	17,046	17,322
Originated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	4,727,924	4,701,046
Less: unearned income and deferred costs and fees	(3,647)	(3,645)
Total loans and leases, net of unearned income and deferred costs and fees	4,724,277	4,697,401
Originated | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	944,658	968,985
Originated | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	95,385	105,786
Originated | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	849,273	863,199
Originated | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,334,273	2,296,648
Originated | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	186,870	184,701
Originated | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,980,264	1,899,645
Originated | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	167,139	212,302
Originated | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,359,775	1,344,466
Originated | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	201,231	203,894
Originated | Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,158,544	1,140,572
Originated | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	72,172	73,625
Originated | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	60,301	60,661
Originated | Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	11,871	12,964
Originated | Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	17,046	17,322
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	213,545	220,149
Less: unearned income and deferred costs and fees	0	0
Total loans and leases, net of unearned income and deferred costs and fees	213,545	220,149
Acquired | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	38,570	39,076
Acquired | Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	0
Acquired | Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	38,570	39,076
Acquired | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	142,177	146,917
Acquired | Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	191	197
Acquired | Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	140,675	145,385
Acquired | Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,311	1,335
Acquired | Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	31,938	33,371
Acquired | Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	14,509	15,351
Acquired | Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	17,429	18,020
Acquired | Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	860	785
Acquired | Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	860	785
Acquired | Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	0	0
Acquired | Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 0	$ 0

XML

Segment and Related Information - Narrative (Details)	3 Months Ended
	Mar. 31, 2020 office banking_office segment subsidiary_bank
Segment Reporting Information [Line Items]
Number of reportable segments | segment	3
Nature of operations, number of subsidiary banks | subsidiary_bank	4
Tompkins, Cayuga, Cortland and Schuyler Counties, New York
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	14
Wyoming, Livingston, Genessee, Orleans and Monroe, New York
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	16
Western New York
Segment Reporting Information [Line Items]
Number of offices | office	5
Putnam Country, Dutchess Country and Westchester, New York
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	14
Berks, Montgomery, Philadelphia, Deleware and Schuylkill, Pennsylvania
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	20
Tompkins Insurance Agencies, Inc.
Segment Reporting Information [Line Items]
Noncontrolling interest, ownership percentage by parent	100.00%

XML

Fair Value Measurements - Estimated Fair Value of Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Financial Assets:
FHLB and other stock	$ 24,212	$ 33,695
Financial Liabilities:
Time deposits	708,933	675,014
Fed funds purchased and securities sold under agreements to repurchase	68,993	60,346
Other borrowings	457,983	658,100
Trust preferred debentures	17,078	17,035
Level 1
Financial Assets:
Cash and cash equivalents	115,263	137,982
FHLB and other stock	0	0
Accrued interest receivable	0	0
Loans/leases, net	0	0
Financial Liabilities:
Time deposits	0	0
Other deposits	0	0
Fed funds purchased and securities sold under agreements to repurchase	0	0
Other borrowings	0	0
Trust preferred debentures	0	0
Accrued interest payable	0	0
Level 2
Financial Assets:
Cash and cash equivalents	0	0
FHLB and other stock	24,212	33,695
Accrued interest receivable	18,007	19,293
Loans/leases, net	4,893	14,050
Financial Liabilities:
Time deposits	716,275	677,205
Other deposits	4,700,430	4,537,907
Fed funds purchased and securities sold under agreements to repurchase	68,993	60,346
Other borrowings	466,974	659,895
Trust preferred debentures	20,138	21,904
Accrued interest payable	2,244	2,486
Level 3
Financial Assets:
Cash and cash equivalents	0	0
FHLB and other stock	0	0
Accrued interest receivable	0	0
Loans/leases, net	4,829,507	4,784,218
Financial Liabilities:
Time deposits	0	0
Other deposits	0	0
Fed funds purchased and securities sold under agreements to repurchase	0	0
Other borrowings	0	0
Trust preferred debentures	0	0
Accrued interest payable	0	0
Carrying Amount
Financial Assets:
Cash and cash equivalents	115,263	137,982
FHLB and other stock	24,212	33,695
Accrued interest receivable	18,007	19,293
Loans/leases, net	4,885,418	4,877,658
Financial Liabilities:
Time deposits	708,933	675,014
Other deposits	4,700,430	4,537,907
Fed funds purchased and securities sold under agreements to repurchase	68,993	60,346
Other borrowings	457,983	658,100
Trust preferred debentures	17,078	17,035
Accrued interest payable	2,244	2,486
Fair Value
Financial Assets:
Cash and cash equivalents	115,263	137,982
FHLB and other stock	24,212	33,695
Accrued interest receivable	18,007	19,293
Loans/leases, net	4,834,400	4,798,268
Financial Liabilities:
Time deposits	716,275	677,205
Other deposits	4,700,430	4,537,907
Fed funds purchased and securities sold under agreements to repurchase	68,993	60,346
Other borrowings	466,974	659,895
Trust preferred debentures	20,138	21,904
Accrued interest payable	$ 2,244	$ 2,486

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2020

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). Transfers between levels, when determined to be appropriate, are recognized at the end of each reporting period.  

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

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

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

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

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.

Recurring Fair Value Measurements
March 31, 2020
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	1,750	$	0	$	1,750	$	0
Obligations of U.S. Government sponsored entities	313,428		0		313,428		0
Obligations of U.S. states and political subdivisions	102,484		0		102,484		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	174,515		0		174,515		0
U.S. Government sponsored entities	758,027		0		758,027		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale debt securities	$	1,352,637	$	0	$	1,352,637	$	0
Equity securities, at fair value	$	930	$	0	$	0	$	930

Recurring Fair Value Measurements
December 31, 2019
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt 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, issued by:
U.S. Government agencies	164,451		0		164,451		0
U.S. Government sponsored entities	659,590		0		659,590		0
U.S. corporate debt securities	2,433		0		2,433		0
Total Available-for-sale debt securities	$	1,298,587	$	0	$	1,298,587	$	0
Equity securities, at fair value	$	915	$	0	$	0	$	915

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

The change in the fair value of equity securities valued using significant unobservable inputs (level 3), between December 31, 2019 and March 31, 2020, was immaterial.

There were no transfers between Levels 1, 2 and 3 for the three months ended March 31, 2020.

The Company determines fair value for its available-for-sale debt securities using an independent bond pricing service for identical assets or very similar securities.  The Company determines fair value for its equity securities based on the underlying equity fund’s pricing and valuation procedures which consider recent sales price, market quotations from a pricing service, or market quotes from an independent broker-dealer.  The Company has reviewed the pricing sources, including methodologies used, and finds them to be fairly stated.

Certain assets are measured at fair value on a nonrecurring basis. For the Company, these include loans held for sale, collateral dependent evaluated loans, and other real estate owned (“OREO”). During the first quarter of 2020, certain collateral dependent evaluated loans were remeasured and reported at fair value through a specific valuation allowance and/or partial charge-offs for credit losses based upon the fair value of the underlying collateral. Collateral values are estimated using Level 2 inputs based upon observable market data. In addition to collateral dependent evaluated loans, certain other real estate owned were remeasured and reported at fair value based upon the fair value of the underlying collateral. The fair values of other real estate owned are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. In general, the fair values of other real estate owned are based upon appraisals, with discounts made to reflect estimated costs to sell the real estate. Upon initial recognition, fair value write-downs are taken through a charge-off to the allowance for credit losses. Subsequent fair value write-downs on other real estate owned are reported in other noninterest expense.

Three months ended March 31, 2020
(in thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2020		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2020
Individually evaluated	$	4,893	$	0	$	4,893	$	0	$	(1,290	)
Other real estate owned	220		0		220		0		(52		)

Three months ended March 31, 2019
(in thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2019		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2019
Individually evaluated	$	4,786	$	0	$	4,786	$	0	$	(3,571	)
Other real estate owned	0		0		0		0		0

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at March 31, 2020 and December 31, 2019. 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 U.S. GAAP and should be read in conjunction with the financial statements and notes included herein.

For collateral dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. For real estate loans, fair value of the loan’s collateral is determined by third party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods

being the predominant approach. The Company reviews the third party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5% to 8% of the appraised value. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.

Estimated Fair Value of Financial Instruments
March 31, 2020
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	115,263	$	115,263	$	115,263	$	0	$	0
FHLB and other stock	24,212		24,212		0		24,212		0
Accrued interest receivable	18,007		18,007		0		18,007		0
Loans/leases, net1	4,885,418		4,834,400		0		4,893		4,829,507
Financial Liabilities:
Time deposits	$	708,933	$	716,275	$	0	$	716,275	$	0
Other deposits	4,700,430		4,700,430		0		4,700,430		0
Fed funds purchased and securities sold
under agreements to repurchase	68,993		68,993		0		68,993		0
Other borrowings	457,983		466,974		0		466,974		0
Trust preferred debentures	17,078		20,138		0		20,138		0
Accrued interest payable	2,244		2,244		0		2,244		0

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
FHLB and other stock	33,695		33,695		0		33,695		0
Accrued interest receivable	19,293		19,293		0		19,293		0
Loans/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
Fed funds purchased and 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.

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.

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.

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

Accrued Interest Receivable and Accrued Interest Payable: The carrying amount of these short term instruments approximate fair value.

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

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

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

Fair values of borrowings are estimated using Level 2 inputs based upon observable market data. The Company determines fair value for its borrowings using a discounted cash flow technique based upon expected cash flows and current spreads on FHLB advances with the same structure and terms. The Company also receives pricing information from third parties, including the FHLB. The pricing obtained is considered representative of the transfer price if the liabilities were assumed by a third party.

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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Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2020

Loans and Leases Receivable Disclosure [Abstract]

Schedule of loans and leases

Loans and Leases at March 31, 2020 and December 31, 2019 were as follows:

	3/31/2020								12/31/2019
(In thousands)	Originated			Acquired		Total Loans and Leases			Originated			Acquired		Total Loans and Leases
Commercial and industrial
Agriculture	$	95,385		$	0	$	95,385		$	105,786		$	0	$	105,786
Commercial and industrial other	849,273			38,570		887,843			863,199			39,076		902,275
Subtotal commercial and industrial	944,658			38,570		983,228			968,985			39,076		1,008,061
Commercial real estate
Construction	167,139			1,311		168,450			212,302			1,335		213,637
Agriculture	186,870			191		187,061			184,701			197		184,898
Commercial real estate other	1,980,264			140,675		2,120,939			1,899,645			145,385		2,045,030
Subtotal commercial real estate	2,334,273			142,177		2,476,450			2,296,648			146,917		2,443,565
Residential real estate
Home equity	201,231			14,509		215,740			203,894			15,351		219,245
Mortgages	1,158,544			17,429		1,175,973			1,140,572			18,020		1,158,592
Subtotal residential real estate	1,359,775			31,938		1,391,713			1,344,466			33,371		1,377,837
Consumer and other
Indirect	11,871			0		11,871			12,964			0		12,964
Consumer and other	60,301			860		61,161			60,661			785		61,446
Subtotal consumer and other	72,172			860		73,032			73,625			785		74,410
Leases	17,046			0		17,046			17,322			0		17,322
Total loans and leases	4,727,924			213,545		4,941,469			4,701,046			220,149		4,921,195
Less: unearned income and deferred costs and fees	(3,647		)	0		(3,647		)	(3,645		)	0		(3,645		)
Total loans and leases, net of unearned income and deferred costs and fees	$	4,724,277		$	213,545	$	4,937,822		$	4,697,401		$	220,149	$	4,917,550

Schedule of age analysis of past due loans

March 31, 2020
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans			Total Loans
Originated Loans and Leases
Commercial and industrial
Agriculture	$	538	$	0	$	0	$	538	$	94,847		$	95,385
Commercial and industrial other	1,039		1,750		1,770		4,559		844,714			849,273
Subtotal commercial and industrial	1,577		1,750		1,770		5,097		939,561			944,658
Commercial real estate
Construction	0		0		0		0		167,139			167,139
Agriculture	141		0		0		141		186,729			186,870
Commercial real estate other	3,400		0		6,285		9,685		1,970,579			1,980,264
Subtotal commercial real estate	3,541		0		6,285		9,826		2,324,447			2,334,273
Residential real estate
Home equity	410		0		615		1,025		200,206			201,231
Mortgages	1,148		43		4,183		5,374		1,153,170			1,158,544
Subtotal residential real estate	1,558		43		4,798		6,399		1,353,376			1,359,775
Consumer and other
Indirect	148		54		83		285		11,586			11,871
Consumer and other	175		107		93		375		59,926			60,301
Subtotal consumer and other	323		161		176		660		71,512			72,172
Leases	0		0		0		0		17,046			17,046
Total loans and leases	6,999		1,954		13,029		21,982		4,705,942			4,727,924
Less: unearned income and deferred costs and fees	0		0		0		0		(3,647		)	(3,647		)
Total originated loans and leases, net of unearned income and deferred costs and fees	$	6,999	$	1,954	$	13,029	$	21,982	$	4,702,295		$	4,724,277
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	0		0		2		2		38,568			38,570
Subtotal commercial and industrial	0		0		2		2		38,568			38,570
Commercial real estate
Construction	0		0		0		0		1,311			1,311
Agriculture	0		0		0		0		191			191
Commercial real estate other	15		0		35		50		140,625			140,675
Subtotal commercial real estate	15		0		35		50		142,127			142,177
Residential real estate
Home equity	283		9		225		517		13,992			14,509
Mortgages	68		0		681		749		16,680			17,429
Subtotal residential real estate	351		9		906		1,266		30,672			31,938
Consumer and other
Consumer and other	0		0		0		0		860			860
Subtotal consumer and other	0		0		0		0		860			860
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	366	$	9	$	943	$	1,318	$	212,227		$	213,545

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.

Nonaccrual loans

The below table is an age analysis of nonaccrual loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of March 31, 2020.

(In thousands)	Nonaccrual Loans with no Allowance for Credit Losses		Nonaccrual Loans		Loans Past Due Over 89 Days and Accruing
Originated Loans and Leases
Commercial and industrial
Commercial and industrial other	$	1,030	$	2,047	$	0
Subtotal commercial and industrial	1,030		2,047		0
Commercial real estate
Commercial real estate other	7,309		9,532		0
Subtotal commercial real estate	7,309		9,532		0
Residential real estate
Home equity	264		1,870		0
Mortgages	922		7,758		0
Subtotal residential real estate	1,186		9,628		0
Consumer and other
Indirect	0		147		0
Consumer and other	0		118		0
Subtotal consumer and other	0		265		0
Total loans and leases	9,525		21,472		0
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other	0		2		0
Subtotal commercial and industrial	0		2		0
Commercial real estate
Commercial real estate other	0		166		0
Subtotal commercial real estate	0		166		0
Residential real estate
Home equity	0		847		0
Mortgages	0		1,069		0
Subtotal residential real estate	0		1,916		0
Total acquired loans and leases, net of unearned income and deferred costs and fees	$	0	$	2,084	$	0

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Employee Benefit Plan (Tables)

3 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Schedule of net periodic benefit cost and other comprehensive income

Components of Net Periodic Benefit Cost

	Pension Benefits Three Months Ended						Life and Health Three Months Ended						SERP Benefits Three Months Ended
(In thousands)	3/31/2020			3/31/2019			3/31/2020			3/31/2019			3/31/2020		3/31/2019
Service cost	$	0		$	0		$	41		$	50		$	46	$	37
Interest cost	641			745			64			73			240		229
Expected return on plan assets	(1,355		)	(1,234		)	0			0			0		0
Amortization of net retirement plan actuarial loss	350			337			26			0			225		85
Amortization of net retirement plan prior service (credit) cost	(3		)	(3		)	(15		)	(15		)	71		22
Net periodic benefit (income) cost	$	(367	)	$	(155	)	$	116		$	108		$	582	$	373