Regulations and Supervision

12 Months Ended

Dec. 31, 2022

Capital Requirements:

The Company and its subsidiary bank 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 bank are also subject to qualitative judgments by regulators concerning components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of common equity Tier I capital, total capital and Tier 1 capital to risk-weighted assets (as defined in the regulation), and of Tier 1 capital to average assets (as defined in the regulation). Management believes that the Company and its subsidiary bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2022, the most recent notifications from Federal bank regulatory agencies categorized the Company's subsidiary bank as "well capitalized" under the regulatory framework for PCA. To be categorized as well capitalized, the Company and its subsidiary bank must maintain total risk-based, Tier 1 risk-based, common equity Tier 1 capital and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the capital category of the Company or its subsidiary bank.

In the first quarter of 2020, U.S. Federal regulatory authorities issued an interim final rule that provided 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 elected to utilize the five-year CECL transition.

The following table presents actual and required capital ratios as of December 31, 2022 and December 31, 2021 for Tompkins and its banking subsidiaries. Effective January 1, 2022, the Company's four wholly-owned banking subsidiaries were combined into one bank, with the Bank of of Castile, Mahopac Bank, and VIST Bank merging with and into Tompkins Trust Company (the "Trust Company") with the Trust Company as the surviving institution. Immediately following the merger, the Trust Company changed its name to Tompkins Community Bank. At December 31, 2022, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank.

The minimum capital amounts required under Basel III includes the capital conservation buffer of 2.5%, which must be added to each of the minimum required risk-based capital ratios (Total capital to risk-weighted assets, Common equity Tier 1 capital to risk weighted assets and Tier 1 capital to risk weighted assets). Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

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


	Actual	Minimum Capital Required- Basel III Fully-Phased-In	Required to be Considered Well Capitalized
(dollar amounts in thousands)	Amount/Ratio	Amount/Ratio	Amount/Ratio
December 31, 2022
Total Capital (to risk-weighted assets)
The Company (consolidated)	$780,472 /14.4%	$568,431/>10.5%	$541,363/>10.0%
Tompkins Community Bank	$736,099/13.6%	$567,793/>10.5%	$540,755/>10.0%



Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$730,330/13.5%	$378,954/>7.0%	$351,886/>6.5%
Tompkins Community Bank	$685,956/12.7%	$378,529/>7.0%	$351,491/>6.5%



Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$730,330/13.5%	$460,159/>8.5%	$433,091/>8.0%
Tompkins Community Bank	$685,956/12.7%	$459,642/>8.5%	$432,604/>8.0%




Tier 1 Capital (to average assets)
The Company (consolidated)	$730,330/9.3%	$312,695/>4.0%	$390,868/>5.0%
Tompkins Community Bank	$685,956/8.8%	$312,057/>4.0%	$390,071/>5.0%




December 31, 2021
Total Capital (to risk-weighted assets)
The Company (consolidated)	$735,187 /14.2%	$524,345/>10.5%	$516,519/>10.0%
Trust Company	$219,976/14.8%	$156,631/>10.5%	$149,172/>10.0%
Castile	$160,757/12.2%	$138,104/>10.5%	$131,527/>10.0%
Mahopac	$136,247/12.7%	$112,649/>10.5%	$107,285/>10.0%
VIST	$173,889/13.6%	$134,403/>10.5%	$128,003/>10.0%
Common Equity Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$688,425/13.3%	$361,563/>7.0%	$335,737/>6.5%
Trust Company	$207,632/13.9%	$104,421/>7.0%	$96,962/>6.5%
Castile	$149,154/11.3%	$92,069/>7.0%	$85,493/>6.5%
Mahopac	$126,718/11.8%	$75,100/>7.0%	$69,735/>6.5%
VIST	$163,145/12.8%	$89,602/>7.0%	$83,202/>6.5%
Tier 1 Capital (to risk-weighted assets)
The Company (consolidated)	$688,425/13.3%	$439,041/>8.5%	$413,215/>8.0%
Trust Company	$207,632/13.9%	$126,797/>8.5%	$119,338/>8.0%
Castile	$149,154/11.3%	$111,798/>8.5%	$105,222/>8.0%
Mahopac	$126,718/11.8%	$91,192/>8.5%	$85,282/>8.0%
VIST	$163,145/12.8%	$108,803/>8.5%	$102,403/>8.0%
Tier 1 Capital (to average assets)
The Company (consolidated)	$688,425/8.7%	$315,820/>4.0%	$394,775/>5.0%
Trust Company	$207,632/8.4%	$99,000/>4.0%	$123,751/>5.0%
Castile	$149,154/7.9%	$75,935/>4.0%	$94,918/>5.0%
Mahopac	$126,718/8.1%	$62,815/>4.0%	$78,519/>5.0%
VIST	$163,145/8.4%	$77,953/>4.0%	$97,441/>5.0%

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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