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, 2023

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.)

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 par 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: 14,518,876 shares as of May 4, 2023.

TOMPKINS FINANCIAL CORPORATION

FORM 10-Q

INDEX

PART I -FINANCIAL INFORMATION
			PAGE
	Item 1 –	Financial Statements Consolidated Statements of Condition as of March 31, 2023 (Unaudited) and December 31, 2022 (Audited)	1
		Consolidated Statements of Income for the three months ended March 31, 2023 and 2022 (Unaudited)	2
		Consolidated Statements of Comprehensive Income for the three months ended March 31, 2023 and 2022 (Unaudited)	3
		Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (Unaudited)	4
		Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2023 and 2022 (Unaudited)	6
		Notes to Unaudited Consolidated Financial Statements	7
	Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
	Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	55
	Item 4 -	Controls and Procedures	57
PART II - OTHER INFORMATION
	Item 1 –	Legal Proceedings	57
	Item 1A – Risk Factors		57
	Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds	58
	Item 3 -	Defaults Upon Senior Securities	58
	Item 4 -	Mine Safety Disclosures	58
	Item 5 -	Other Information	58
	Item 6 -	Exhibits	58
SIGNATURES			60

Item 1. Financial Statements

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data)	As of		As of
ASSETS	03/31/2023		12/31/2022
	(unaudited)		(audited)
Cash and noninterest bearing balances due from banks	$	49,753	$	18,572
Interest bearing balances due from banks	20,784		59,265
Cash and Cash Equivalents	70,537		77,837
Available-for-sale debt securities, at fair value (amortized cost of $1,795,423 at March 31, 2023 and $1,831,791 at December 31, 2022)	1,585,854		1,594,967
Held-to-maturity securities, at amortized cost (fair value of $267,099 at March 31, 2023 and $261,692 at December 31, 2022)	312,357		312,344
Equity securities, at fair value	790		777
Total loans and leases, net of unearned income and deferred costs and fees	5,273,671		5,268,911
Less: Allowance for credit losses	46,099		45,934
Net Loans and Leases	5,227,572		5,222,977
Federal Home Loan Bank and other stock	19,326		17,720
Bank premises and equipment, net	81,633		82,140
Corporate owned life insurance	86,175		85,556
Goodwill	92,602		92,602
Other intangible assets, net	2,605		2,708
Accrued interest and other assets	164,920		181,058
Total Assets	$	7,644,371	$	7,670,686
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market	3,774,092		3,820,739
Time	725,338		631,411
Noninterest bearing	2,009,579		2,150,145
Total Deposits	6,509,009		6,602,295
Federal funds purchased and securities sold under agreements to repurchase	63,491		56,278
Other borrowings	327,000		291,300
Other liabilities	95,106		103,423
Total Liabilities	$	6,994,606	$	7,053,296
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $0.10 per share: Authorized 25,000,000 shares; Issued: 14,555,658 at March 31, 2023; and 14,555,741 at December 31, 2022	1,456		1,456
Additional paid-in capital	303,357		302,763
Retained earnings	537,331		526,727
Accumulated other comprehensive loss	(187,846)		(208,689)
Treasury stock, at cost – 120,879 shares at March 31, 2023, and 128,749 shares at December 31, 2022	(5,976)		(6,279)
Total Tompkins Financial Corporation Shareholders’ Equity	648,322		615,978
Noncontrolling interests	1,443		1,412
Total Equity	$	649,765	$	617,390
Total Liabilities and Equity	$	7,644,371	$	7,670,686

See notes to unaudited consolidated financial statements.

1

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME 

	Three Months Ended
(In thousands, except per share data) (Unaudited)	03/31/2023		03/31/2022
INTEREST AND DIVIDEND INCOME
Loans	$	60,842	$	51,131
Due from banks	139		41
Available-for-sale debt securities	6,743		6,770
Held-to-maturity securities	1,214		1,129
Federal Home Loan Bank and other stock	300		105
Total Interest and Dividend Income	69,238		59,176
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	1,788		426
Other deposits	10,394		1,620
Federal funds purchased and securities sold under agreements to repurchase	14		16
Other borrowings	2,796		500
Total Interest Expense	14,992		2,562
Net Interest Income	54,246		56,614
Less: (Credit) for credit loss expense	(825)		(520)
Net Interest Income After Credit for Credit Loss Expense	55,071		57,134
NONINTEREST INCOME
Insurance commissions and fees	9,509		9,317
Wealth management fees	4,509		4,917
Service charges on deposit accounts	1,746		1,779
Card services income	2,682		2,543
Other income	1,941		1,476
Net gain (loss) on securities transactions	13		(47)
Total Noninterest Income	20,400		19,985
NONINTEREST EXPENSE
Salaries and wages	24,512		23,272
Other employee benefits	6,741		5,797
Net occupancy expense of premises	3,299		3,541
Furniture and fixture expense	2,054		1,991
Amortization of intangible assets	83		218
Other operating expense	13,469		12,020
Total Noninterest Expenses	50,158		46,839
Income Before Income Tax Expense	25,313		30,280
Income Tax Expense	5,901		6,976
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	19,412		23,304
Less: Net Income Attributable to Noncontrolling Interests	31		31
Net Income Attributable to Tompkins Financial Corporation	$	19,381	$	23,273
Basic Earnings Per Share	$	1.35	$	1.61
Diluted Earnings Per Share	$	1.35	$	1.60

See notes to unaudited consolidated financial statements.

2

TOMPKINS FINANCIAL CORPORATION

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

	Three Months Ended
(In thousands) (Unaudited)	03/31/2023		03/31/2022
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$	19,412	$	23,304
Other comprehensive (loss) income, net of tax:
Available-for-sale debt securities:
Change in net unrealized gain (loss) during the period	20,578		(80,405)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	0		0
Employee benefit plans:
Amortization of net retirement plan actuarial loss	224		464
Amortization of net retirement plan prior service cost	41		42
Other comprehensive income (loss)	20,843		(79,899)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	40,255		(56,595)
Less: Net income attributable to noncontrolling interests	(31)		(31)
Total comprehensive income (loss) attributable to Tompkins Financial Corporation	$	40,224	$	(56,626)

See notes to unaudited consolidated financial statements.

3

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
(In thousands) (Unaudited)	03/31/2023		03/31/2022
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$	19,381	$	23,273
Adjustments to reconcile net income to net cash provided by operating activities:
(Credit) for credit loss expense	(825)		(520)
Depreciation and amortization of premises, equipment, and software	2,678		2,650
Amortization of intangible assets	83		218
Earnings from corporate owned life insurance	(615)		(423)
Net amortization on securities	961		1,819
Amortization/accretion related to purchase accounting	(213)		(191)
Net (gain) loss on securities transactions	(13)		47
Net gain on sale of loans originated for sale	(38)		(4)
Proceeds from sale of loans originated for sale	1,345		139
Loans originated for sale	(1,453)		(685)
Net gain on sale of bank premises and equipment	(20)		(17)
Net excess tax benefit from stock based compensation	41		21
Stock-based compensation expense	1,045		945
Decrease in accrued interest receivable	1,236		1,047
Increase (decrease) in accrued interest payable	159		(106)
Other, net	(994)		(4,295)
Net Cash Provided by Operating Activities	22,758		23,918
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale debt securities	35,646		79,753
Proceeds from sales of available-for-sale debt securities	0		0
Purchases of available-for-sale debt securities	(252)		(124,668)
Purchases of held-to-maturity securities	0		(19,534)
Net (increase) decrease in loans	(3,218)		12,662
Proceeds from sale/redemptions of Federal Home Loan Bank stock	25,507		12,751
Purchases of Federal Home Loan Bank and other stock	(27,113)		(8,870)
Proceeds from sale of bank premises and equipment	55		42
Purchases of bank premises, equipment and software	(1,406)		(27)
Other, net	(138)		0
Net Cash Provided by (Used in) Investing Activities	29,081		(47,891)
FINANCING ACTIVITIES
Net (decrease) increase in demand, money market, and savings deposits	(187,213)		249,042
Net increase (decrease) in time deposits	94,021		(23,630)
Net increase (decrease) in Federal funds purchased and securities sold under agreements to repurchase	7,213		(9,672)
Increase in other borrowings	85,000		0
Repayment of other borrowings	(49,300)		(64,000)
Cash dividends	(8,712)		(8,335)
Repurchase of common stock	0		(10,370)
Shares issued for employee stock ownership plan	0		2,951
Net shares issued related to restricted stock awards	(40)		(3)
Net proceeds from exercise of stock options	(108)		(42)
Net Cash (Used) Provided by Financing Activities	(59,139)		135,941
Net (Decrease) Increase in Cash and Cash Equivalents	(7,300)		111,968
Cash and cash equivalents at beginning of period	77,837		63,107
Total Cash and Cash Equivalents at End of Period	$	70,537	$	175,075

See notes to unaudited consolidated financial statements.

4

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
(In thousands) (Unaudited)	03/31/2023		03/31/2022
Supplemental Information:
Cash paid during the year for - Interest	$	14,927	$	2,775
Cash paid during the year for - Taxes	1,249		1,396
Transfer of loans to other real estate owned	0		49
Initial recognition of operating lease right-of-use assets	0		0
Initial recognition of operating lease liabilities	0		0
Right-of-use assets obtained in exchange for new lease liabilities	418		552

See notes to unaudited 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, 2022	$	1,470	$	312,538	$	475,262	$	(55,950)	$	(5,791)	$	1,412	$	728,941
Net income attributable to noncontrolling interests and Tompkins Financial Corporation					23,273						31		23,304
Other comprehensive loss							(79,899)						(79,899)
Total Comprehensive Loss													(56,595)
Cash dividends ($0.57 per share)					(8,335)								(8,335)
Net exercise of stock options (630 shares)			(42)										(42)
Common stock repurchased and returned to unissued status (130,168 shares)	(13)		(10,357)										(10,370)
Stock-based compensation expense			945										945
Shares issued for employee stock ownership plan (37,454 shares)	4		2,947										2,951
Directors deferred compensation plan (4,367 shares)			(149)						149				0
Restricted stock activity (7,467 shares)	(1)		(2)										(3)
Balances at March 31, 2022	$	1,460	$	305,880	$	490,200	$	(135,849)	$	(5,642)	$	1,443	$	657,492
Balances at January 1, 2023	$	1,456	$	302,763	$	526,727	$	(208,689)	$	(6,279)	$	1,412	$	617,390
Net income attributable to noncontrolling interests and Tompkins Financial Corporation					19,381						31		19,412
Other comprehensive income							20,843						20,843
Total Comprehensive Income													40,255
Cash dividends ($0.60 per share)					(8,712)								(8,712)
Net exercise of stock options (1,509 shares)			(108)										(108)
Stock-based compensation expense			1,045										1,045
Directors deferred compensation plan (7,870 shares)			(303)						303				0
Restricted stock activity (1,592 shares)			(40)										(40)
Adoption of Accounting Guidance					(65)								(65)
Balances at March 31, 2023	$	1,456	$	303,357	$	537,331	$	(187,846)	$	(5,976)	$	1,443	$	649,765

See notes to unaudited consolidated financial statements.

6

NOTES TO UNAUDITED 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, 2023, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank. Tompkins Community Bank provides a full array of trust and wealth management 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 also has a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. ("Tompkins Insurance"). 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."

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.

Tompkins Community Bank is subject to examination and comprehensive regulation by various regulatory authorities, including the Federal Deposit Insurance Corporation ("FDIC"), and the New York State Department of Financial Services ("NYSDFS"). 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. These agencies also examine and regulate the trust business of Tompkins Community Bank.

Tompkins Insurance is subject to examination and regulation by the NYSDFS and the Pennsylvania Insurance Department.

2. Basis of Presentation

The unaudited 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 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 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, 2023. The unaudited 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, 2022.

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.

7

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 consolidated financial statements are reclassified when necessary to conform to the current periods’ presentation. All significant intercompany balances and transactions are eliminated in consolidation.

3. Securities

Available-for-Sale Debt Securities

The following table summarizes available-for-sale debt securities held by the Company at March 31, 2023:

	Available-for-Sale Debt Securities
March 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,220	$	0	$	19,406	$	170,814
Obligations of U.S. Government sponsored entities	670,978		0		71,216		599,762
Obligations of U.S. states and political subdivisions	92,915		10		6,241		86,684
Mortgage-backed securities – residential, issued by
U.S. Government agencies	56,224		15		5,348		50,891
U.S. Government sponsored entities	782,586		0		107,276		675,310
U.S. corporate debt securities	2,500		0		107		2,393
Total available-for-sale debt securities	$	1,795,423	$	25	$	209,594	$	1,585,854

The following table summarizes available-for-sale debt securities held by the Company at December 31, 2022:

	Available-for-Sale Debt Securities
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,170	$	0	$	22,919	$	167,251
Obligations of U.S. Government sponsored entities	681,192		0		80,025		601,167
Obligations of U.S. states and political subdivisions	93,599		8		8,326		85,281
Mortgage-backed securities – residential, issued by
U.S. Government agencies	58,727		12		6,071		52,668
U.S. Government sponsored entities	805,603		0		119,381		686,222
U.S. corporate debt securities	2,500		0		122		2,378
Total available-for-sale debt securities	$	1,831,791	$	20	$	236,844	$	1,594,967

8

Held-to-Maturity Debt Securities

The following table summarizes held-to-maturity debt securities held by the Company at March 31, 2023:

	Held-to-Maturity Securities
March 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,425	$	0	$	10,966	$	75,459
Obligations of U.S. Government sponsored entities	225,932		0		34,292		191,640
Total held-to-maturity debt securities	$	312,357	$	0	$	45,258	$	267,099

The following table summarizes held-to-maturity debt securities held by the Company at December 31, 2022:

	Held-to-Maturity Securities
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,478	$	0	$	12,937	$	73,541
Obligations of U.S. Government sponsored entities	225,866		0		37,715		188,151
Total held-to-maturity debt securities	$	312,344	$	0	$	50,652	$	261,692

The Company may from time to time sell debt securities from its available-for-sale portfolio. There were no sales of available-for-sale debt securities for both the three months ended March 31, 2023 and the three months ended March 31, 2022. Realized gains (losses) on sales of available-for-sale debt securities were $0 for both the three months ended March 31, 2023 and the three months ended March 31, 2022. The Company's available-for-sale portfolio includes callable securities that may be called prior to maturity. There were no realized gains (losses) on called available-for-sale debt securities for the three months ended March 31, 2023 and the three months ended March 31, 2022. The Company also recognized net gains on equity securities of $13,000 for the three months ended March 31, 2023 and net losses of $47,000 for the same period during 2022, reflecting the change in fair value.

The following table summarizes available-for-sale debt securities that had unrealized losses at March 31, 2023:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	170,814	$	19,406	$	170,814	$	19,406
Obligations of U.S. Government sponsored entities	95,536		1,931		504,226		69,286		599,762		71,217
Obligations of U.S. states and political subdivisions	20,397		306		58,598		5,936		78,995		6,242
Mortgage-backed securities – residential, issued by
U.S. Government agencies	5,484		183		45,046		5,164		50,530		5,347
U.S. Government sponsored entities	16,950		761		658,360		106,514		675,310		107,275
U.S. corporate debt securities	0		0		2,393		107		2,393		107
Total available-for-sale debt securities	$	138,367	$	3,181	$	1,439,437	$	206,413	$	1,577,804	$	209,594

9

The following table summarizes available-for-sale debt securities that had unrealized losses at December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	28,602	$	2,132	$	138,649	$	20,787	$	167,251	$	22,919
Obligations of U.S. Government sponsored entities	143,794		7,508		457,373		72,517		601,167		80,025
Obligations of U.S. states and political subdivisions	46,638		2,385		33,435		5,941		80,073		8,326
Mortgage-backed securities – residential, issued by
U.S. Government agencies	22,945		1,258		29,356		4,813		52,301		6,071
U.S. Government sponsored entities	186,690		16,869		499,532		102,512		686,222		119,381
U.S. corporate debt securities	0		0		2,378		122		2,378		122
Total available-for-sale debt securities	$	428,669	$	30,152	$	1,160,723	$	206,692	$	1,589,392	$	236,844

The following table summarizes held-to-maturity debt securities that had unrealized losses at March 31, 2023:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	75,459	$	10,966	$	75,459	$	10,966
Obligations of U.S. Government sponsored entities	8,293		604		183,347		33,688		191,640		34,292
Total held-to-maturity debt securities	$	8,293	$	604	$	258,806	$	44,654	$	267,099	$	45,258

The following table summarizes held-to-maturity debt securities that had unrealized losses at December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	73,542	$	12,937	$	73,542	$	12,937
Obligations of U.S. Government sponsored entities	24,543		3,903		163,607		33,812		188,150		37,715
Total held-to-maturity debt securities	$	24,543	$	3,903	$	237,149	$	46,749	$	261,692	$	50,652

The Company evaluates available-for-sale debt securities for expected credit losses ("ECL") 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.

Factors that may be indicative of ECL include, but are not limited to, the following:

•Extent to which the fair value is less than the amortized cost basis.

•Adverse conditions specifically related to the security, an industry, or geographic area (changes in technology, business practice).

•Payment structure of the debt security with respect to underlying issuer or obligor.

•Failure of the issuer to make scheduled payment of principal and/or interest.

•Changes to the rating of a security or issuer by a nationally recognized statistical rating organization.

•Changes in tax or regulatory guidelines that impact a security or underlying issuer.

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 (technical impairment) is the result of changes in interest rates or reflects a fundamental change in the credit worthiness of the underlying issuer. Any impairment that is not credit related is

10

recognized in other comprehensive income (loss), 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.

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management has made the accounting policy election to exclude accrued interest receivable on held-to-maturity debt securities from the estimate of credit losses. As of March 31, 2023, the held-to- maturity portfolio consisted of U.S. Treasury securities and securities issued by U.S. government-sponsored enterprises, including The Federal National Mortgage Agency and the Federal Farm Credit Banks Funding Corporation. U.S. Treasury securities are backed by the full faith and credit of and/or guaranteed by the U.S. government, and it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities. Securities issued by U.S. government agencies or U.S. government-sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as "low-risk," and have a long history of zero credit loss. As such, the Company did not record an allowance for credit losses for these securities as of March 31, 2023.

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-related quality of the investment securities. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost.

The Company did not recognize any net credit impairment charge to earnings on investment securities in the first quarter of 2023.

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, 2023
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	40,237	$	39,828
Due after one year through five years	554,392		506,082
Due after five years through ten years	325,346		283,610
Due after ten years	36,638		30,133
Total	956,613		859,653
Mortgage-backed securities	838,810		726,201
Total available-for-sale debt securities	$	1,795,423	$	1,585,854

11

December 31, 2022
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	50,922	$	50,269
Due after one year through five years	508,880		459,721
Due after five years through ten years	367,743		314,408
Due after ten years	39,916		31,679
Total	967,461		856,077
Mortgage-backed securities	864,330		738,890
Total available-for-sale debt securities	$	1,831,791	$	1,594,967

March 31, 2023
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,357	$	267,099
Total held-to-maturity debt securities	$	312,357	$	267,099

December 31, 2022
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,344	$	261,692
Total held-to-maturity debt securities	$	312,344	$	261,692

The Company also holds non-marketable Federal Home Loan Bank New York ("FHLBNY") stock and non-marketable Atlantic Community Bankers Bank ("ACBB") stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in Federal Home Loan Bank ("FHLB") stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock and ACBB stock totaled $19.2 million and $95,000, respectively, at March 31, 2023. These securities are carried at par, which is also cost. The FHLBNY continues 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, 2023, we determined that no impairment write-downs were required.

12

4. Loans and Leases

Loans and Leases at March 31, 2023 and December 31, 2022 were as follows:

(In thousands)	03/31/2023		12/31/2022
Commercial and industrial
Agriculture	$	65,223	$	85,073
Commercial and industrial other	673,104		705,700
PPP loans*	686		756
Subtotal commercial and industrial	739,013		791,529
Commercial real estate
Construction	219,789		201,116
Agriculture	214,014		214,963
Commercial real estate other	2,476,532		2,437,339
Subtotal commercial real estate	2,910,335		2,853,418
Residential real estate
Home equity	183,636		188,623
Mortgages	1,342,214		1,346,318
Subtotal residential real estate	1,525,850		1,534,941
Consumer and other
Indirect	1,783		2,224
Consumer and other	83,775		75,412
Subtotal consumer and other	85,558		77,636
Leases	18,016		16,134
Total loans and leases	5,278,772		5,273,658
Less: unearned income and deferred costs and fees	(5,101)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,273,671	$	5,268,911
*SBA Paycheck Protection Program ("PPP")

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 3 – "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, 2022. There have been no significant changes in these policies and guidelines since the date of that report. 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.

13

The below tables are an age analysis of past due loans, segregated by class of loans as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	152	$	0	$	0	$	152	$	65,071	$	65,223
Commercial and industrial other	2,586		46		371		3,003		670,101		673,104
PPP loans*	0		0		0		0		686		686
Subtotal commercial and industrial	2,738		46		371		3,155		735,858		739,013
Commercial real estate
Construction	0		0		0		0		219,789		219,789
Agriculture	170		0		0		170		213,844		214,014
Commercial real estate other	0		0		10,037		10,037		2,466,495		2,476,532
Subtotal commercial real estate	170		0		10,037		10,207		2,900,128		2,910,335
Residential real estate
Home equity	512		400		1,426		2,338		181,298		183,636
Mortgages	1,741		30		6,505		8,276		1,333,938		1,342,214
Subtotal residential real estate	2,253		430		7,931		10,614		1,515,236		1,525,850
Consumer and other
Indirect	56		11		41		108		1,675		1,783
Consumer and other	120		70		104		294		83,481		83,775
Subtotal consumer and other	176		81		145		402		85,156		85,558
Leases	0		0		0		0		18,016		18,016
Total loans and leases	5,337		557		18,484		24,378		5,254,394		5,278,772
Less: unearned income and deferred costs and fees	0		0		0		0		(5,101)		(5,101)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,337	$	557	$	18,484	$	24,378	$	5,249,293	$	5,273,671
*SBA Paycheck Protection Program ("PPP")

14

December 31, 2022
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	58	$	0	$	0	$	58	$	85,015	$	85,073
Commercial and industrial other	50		381		82		513		705,187		705,700
PPP loans*	0		0		0		0		756		756
Subtotal commercial and industrial	108		381		82		571		790,958		791,529
Commercial real estate
Construction	0		0		0		0		201,116		201,116
Agriculture	128		0		0		128		214,835		214,963
Commercial real estate other	0		0		11,449		11,449		2,425,890		2,437,339
Subtotal commercial real estate	128		0		11,449		11,577		2,841,841		2,853,418
Residential real estate
Home equity	435		204		1,628		2,267		186,356		188,623
Mortgages	1,748		0		6,802		8,550		1,337,768		1,346,318
Subtotal residential real estate	2,183		204		8,430		10,817		1,524,124		1,534,941
Consumer and other
Indirect	66		31		53		150		2,074		2,224
Consumer and other	52		19		112		183		75,229		75,412
Subtotal consumer and other	118		50		165		333		77,303		77,636
Leases	0		0		0		0		16,134		16,134
Total loans and leases	2,537		635		20,126		23,298		5,250,360		5,273,658
Less: unearned income and deferred costs and fees	0		0		0		0		(4,747)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	2,537	$	635	$	20,126	$	23,298	$	5,245,613	$	5,268,911
*SBA Paycheck Protection Program ("PPP")

15

The following tables present 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 tables are an age analysis of nonaccrual loans segregated by class of loans, as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial
Agriculture	$	0	$	17	$	0
Commercial and industrial other	0		906		0
Subtotal commercial and industrial	0		923		0
Commercial real estate
Agriculture	0		183		0
Commercial real estate other	10,547		12,197		0
Subtotal commercial real estate	10,547		12,380		0
Residential real estate
Home equity	0		2,547		0
Mortgages	181		12,322		0
Subtotal residential real estate	181		14,869		0
Consumer and other
Indirect	0		78		0
Consumer and other	0		174		13
Subtotal consumer and other	0		252		13
Total loans and leases	$	10,728	$	28,424	$	13

December 31, 2022
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial
Commercial and industrial other	$	411	$	618	$	25
Subtotal commercial and industrial	411		618		25
Commercial real estate
Agriculture	186		186		0
Commercial real estate other	13,101		13,672		0
Subtotal commercial real estate	13,287		13,858		0
Residential real estate
Home equity	318		2,391		0
Mortgages	1,177		11,153		0
Subtotal residential real estate	1,495		13,544		0
Consumer and other
Indirect	0		94		0
Consumer and other	0		175		0
Subtotal consumer and other	0		269		0
Total loans and leases	$	15,193	$	28,289	$	25

16

The Company recognized $0 of interest income on nonaccrual loans during the three months ended March 31, 2023.

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.

The Company uses a Discounted Cash Flow ("DCF") method to estimate expected credit losses for all loan segments excluding the leasing segment. 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 given 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 forecasts of 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, and scenario weightings, are also considered by management when developing the forecast metrics.

Due to the size and characteristics of the leasing portfolio, the Company uses the remaining life method, using the historical loss rate of the commercial and industrial segment, to determine the allowance for credit losses.

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.

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, 2023, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance. In addition, various federal and State regulatory agencies, as part of their examination process, review the Company's allowance and may require the Company to recognize additions to the allowance based on their judgements and information available to them at the time of their examinations.

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 cancellable, through a charge to credit loss expense for off-balance sheet credit exposures included in provision for credit loss expense in the Company's consolidated statements of income.

17

The following table details activity in the allowance for credit losses on loans and leases for the three months ended March 31, 2023 and 2022. 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, 2023
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,039	$	27,287	$	11,154	$	1,358	$	96	$	45,934
Impact of adopting ASU 2022-22	2		16		46		0		0		64
Charge-offs	0		0		(2)		(106)		0		(108)
Recoveries	46		1,246		64		33		0		1,389
(Credit) provision for credit loss expense	229		(1,363)		(404)		343		15		(1,180)
Ending Balance	$	6,316	$	27,186	$	10,858	$	1,628	$	111	$	46,099

Three Months Ended March 31, 2022
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,335	$	24,813	$	10,139	$	1,492	$	64	42,843
Charge-offs	(23)		(27)		0		(196)		0		(246)
Recoveries	20		42		109		92		0		263
(Credit) provision for credit loss expense	695		(1,846)		199		200		18		(734)
Ending Balance	$	7,027	$	22,982	$	10,447	$	1,588	$	82	$	42,126

The following table details activity in the liabilities for off-balance sheet credit exposures for the three months ended March 31, 2023 and 2022:

(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	2,796	$	2,507
Provision for credit loss expense related to off-balance sheet credit exposures	355		214
Liabilities for off-balance sheet credit exposures at end of period	$	3,151	$	2,721

18

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:

March 31, 2023
(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
Commercial Real Estate	$	10,547	$	0	$	0	$	10,547	$	0
Residential Real Estate	181		0		0		181		0
Total	$	10,728	$	0	$	0	$	10,728	$	0

December 31, 2022
(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
Commercial and Industrial	$	642	$	28	$	0	$	670	$	0
Commercial Real Estate	13,209		0		78		13,287		0
Commercial Real Estate - Agriculture	1,515		0		0		1,515		0
Residential Real Estate	188		0		0		188		3
Total	$	15,554	$	28	$	78	$	15,660	$	3

The Company adopted ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2022-02") effective January 1, 2023. ASU 2022-02 eliminates the guidance on troubled debt restructurings (TDRs) and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases, which has been incorporated in the credit quality table below.

There were no new borrowers experiencing financial difficulty in the first quarter of 2023, and no new TDRs reported in the first quarter of 2022.

The following tables present credit quality indicators by total loans on an amortized cost basis by origination year as of March 31, 2023 and December 31, 2022:

19

March 31, 2023
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	16,897	$	113,621	$	80,606	$	36,432	$	44,230	$	167,183	$	203,174	$	1,170	$	663,313
Special Mention	0		0		120		338		132		1,339		800		0		2,729
Substandard	0		0		102		417		65		1,562		4,916		0		7,062
Total Commercial and Industrial - Other	$	16,897	$	113,621	$	80,828	$	37,187	$	44,427	$	170,084	$	208,890	$	1,170	$	673,104
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - PPP:
Pass	$	0	$	0	$	383	$	303	$	0	$	0	$	0	$	0	$	686
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial and Industrial - PPP	$	0	$	0	$	383	$	303	$	0	$	0	$	0	$	0	$	686
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - Agriculture:
Pass	$	2,152	$	15,034	$	4,399	$	4,162	$	3,479	$	12,092	$	23,745	$	0	$	65,063
Special Mention	0		0		56		0		0		0		20		0		76
Substandard	0		0		0		67		0		13		4		0		84
Total Commercial and Industrial - Agriculture	$	2,152	$	15,034	$	4,455	$	4,229	$	3,479	$	12,105	$	23,769	$	0	$	65,223
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate
Pass	$	39,210	$	340,604	$	367,485	$	317,991	$	278,372	$	1,021,145	$	35,794	$	2,056	$	2,402,657
Special Mention	0		643		0		1,682		11,380		21,234		0		0		34,939
Substandard	0		74		109		0		3,147		35,482		124		0		38,936
Total Commercial Real Estate	$	39,210	$	341,321	$	367,594	319,673		292,899		1,077,861		$	35,918	$	2,056	$	2,476,532
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate - Agriculture:
Pass	$	2,578	$	34,652	$	23,976	$	22,525	$	24,893	$	100,038	$	2,158	$	1,450	$	212,270
Special Mention	0		0		0		0		396		1,115		0		0		1,511
Substandard	0		0		0		0		183		50		0		0		233
Total Commercial Real Estate - Agriculture	$	2,578	$	34,652	$	23,976	$	22,525	$	25,472	$	101,203	$	2,158	$	1,450	$	214,014
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

20

(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial Real Estate - Construction
Pass	$	0	$	30,152	$	73,446	$	17,738	$	11,859	$	16,312	$	62,168	$	8,114	$	219,789
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial Real Estate - Construction	$	0	$	30,152	$	73,446	$	17,738	$	11,859	$	16,312	$	62,168	$	8,114	$	219,789
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Residential - Home Equity
Performing	$	499	$	2,357	$	1,033	$	610	$	953	$	10,589	$	164,730	$	317	$	181,088
Nonperforming	0		0		0		0		0		288		2,260		0		2,548
Total Residential - Home Equity	$	499	$	2,357	$	1,033	$	610	$	953	$	10,877	$	166,990	$	317	$	183,636
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	2	$	0	$	0	$	2
Residential - Mortgages
Performing	$	15,811	$	192,106	$	269,413	$	235,432	$	116,045	$	501,085	$	0	$	0	$	1,329,892
Nonperforming	0		218		330		619		670		10,485		0		0		12,322
Total Residential - Mortgages	$	15,811	$	192,324	$	269,743	$	236,051	$	116,715	$	511,570	$	0	$	0	$	1,342,214
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Consumer - Direct
Performing	$	26,213	$	16,366	$	13,338	$	6,844	$	5,762	$	11,873	$	3,205	$	0	$	83,601
Nonperforming	0		0		0		0		63		108		3		0		174
Total Consumer - Direct	$	26,213	$	16,366	$	13,338	$	6,844	$	5,825	$	11,981	$	3,208	$	0	$	83,775
Current-period gross writeoffs	$	33	$	0	$	0	$	14	$	20	$	3	$	0	$	0	$	70
Consumer - Indirect
Performing	$	0	$	0	$	139	$	127	$	885	$	554	$	0	$	0	$	1,705
Nonperforming	0		0		0		0		55		23		0		0		78
Total Consumer - Indirect	$	0	$	0	$	139	$	127	$	940	$	577	$	0	$	0	$	1,783
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	31	$	5	$	0	$	0	$	36

21

December 31, 2022
(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	124,190	$	79,861	$	38,158	$	41,391	$	33,238	$	156,038	$	215,890	$	6,466	$	695,232
Special Mention	0		127		421		285		271		1,380		501		0		2,985
Substandard	0		111		442		35		733		503		5,659		0		7,483
Total Commercial and Industrial - Other	$	124,190	$	80,099	$	39,021	$	41,711	$	34,242	$	157,921	$	222,050	$	6,466	$	705,700
Commercial and Industrial - Agriculture:
Pass	$	16,694	$	4,120	$	4,944	$	4,186	$	7,734	$	4,883	$	42,097	$	215	$	84,873
Special Mention	0		58		0		0		0		0		50		0		108
Substandard	0		0		71		0		0		16		5		0		92
Total Commercial and Industrial - Agriculture	$	16,694	$	4,178	$	5,015	$	4,186	$	7,734	$	4,899	$	42,152	$	215	$	85,073
Commercial and Industrial - PPP:
Pass	$	0	$	416	$	340	$	0	$	0	$	0	$	0	$	0	$	756
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial and Industrial - PPP	$	0	$	416	$	340	$	0	$	0	$	0	$	0	$	0	$	756
Commercial Real Estate
Pass	$	342,311	$	367,104	$	311,607	$	279,587	$	203,016	$	812,563	$	10,906	$	24,503	$	2,351,597
Special Mention	643		3,406		1,688		11,462		2,555		25,361		0		0		45,115
Substandard	78		110		0		3,394		1,692		35,221		132		0		40,627
Total Commercial Real Estate	$	343,032	$	370,620	$	313,295	$	294,443	$	207,263	$	873,145	$	11,038	$	24,503	$	2,437,339
Commercial Real Estate - Agriculture:
Pass	$	33,241	$	24,125	$	22,831	$	25,576	$	37,835	$	65,112	$	3,131	$	1,235	$	213,086
Special Mention	0		0		0		401		0		1,142		0		0		1,543
Substandard	0		0		0		186		38		110		0		0		334
Total Commercial Real Estate - Agriculture	$	33,241	$	24,125	$	22,831	$	26,163	$	37,873	$	66,364	$	3,131	$	1,235	$	214,963
Commercial Real Estate - Construction
Pass	$	23,105	$	75,245	$	27,584	$	14,842	$	9,083	$	7,268	$	42,701	$	1,288	$	201,116
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial Real Estate - Construction	$	23,105	$	75,245	$	27,584	$	14,842	$	9,083	$	7,268	$	42,701	$	1,288	$	201,116

22

The following tables present credit quality indicators by total loans on an amortized cost basis by origination year as of December 31, 2022, continued:

December 31, 2022
(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Residential - Home Equity
Performing	$	3,030	$	1,062	$	637	$	992	$	792	$	3,183	$	175,451	$	1,085	$	186,232
Nonperforming	0		0		0		14		0		25		2,352		0		2,391
Total Residential - Home Equity	$	3,030	$	1,062	$	637	$	1,006	$	792	$	3,208	$	177,803	$	1,085	$	188,623
Residential - Mortgages
Performing	$	187,129	$	272,235	$	239,584	$	117,391	$	66,605	$	452,221	$	0	$	0	$	1,335,165
Nonperforming	218		335		628		682		1,552		7,738		0		0		11,153
Total Residential - Mortgages	$	187,347	$	272,570	$	240,212	$	118,073	$	68,157	$	459,959	$	0	$	0	$	1,346,318
Consumer - Direct
Performing	$	31,243	$	13,999	$	7,372	$	6,138	$	4,386	$	8,029	$	4,070	$	0	$	75,237
Nonperforming	0		0		3		93		76		0		3		0		175
Total Consumer - Direct	$	31,243	$	13,999	$	7,375	$	6,231	$	4,462	$	8,029	$	4,073	$	0	$	75,412
Consumer - Indirect
Performing	$	0	$	156	$	146	$	1,092	$	635	$	101	$	0	$	0	$	2,130
Nonperforming	0		0		0		76		10		8		0		0		94
Total Consumer - Indirect	$	0	$	156	$	146	$	1,168	$	645	$	109	$	0	$	0	$	2,224

6. Earnings Per Share

Earnings per share in the table below, for the three month periods ended March 31, 2023 and 2022 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share (ASC 260). 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.

23

	Three Months Ended
(In thousands, except share and per share data)	03/31/2023		03/31/2022
Basic
Net income available to common shareholders	$	19,381	$	23,273
Less: income attributable to unvested stock-based compensation awards	(18)		(76)
Net earnings allocated to common shareholders	19,363		23,197
Weighted average shares outstanding, including unvested stock-based compensation awards	14,520,092		14,611,709
Less: average unvested stock-based compensation awards	(193,497)		(211,706)
Weighted average shares outstanding - Basic	14,326,595		14,400,003
Diluted
Net earnings allocated to common shareholders	19,363		23,197
Weighted average shares outstanding - Basic	14,326,595		14,400,003
Plus: incremental shares from assumed conversion of stock-based compensation awards	63,078		78,180
Weighted average shares outstanding - Diluted	14,389,673		14,478,183
Basic EPS	$	1.35	$	1.61
Diluted EPS	$	1.35	$	1.60

Stock-based compensation awards representing 2,860 and 1,848 of common shares during the three months ended March 31, 2023 and 2022, 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, 2023 and 2022:

	Three Months Ended March 31, 2023
(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	$	27,255	$	(6,677)	$	20,578
Net unrealized gains/losses	27,255		(6,677)		20,578
Employee benefit plans:
Amortization of net retirement plan actuarial gain	297		(73)		224
Amortization of net retirement plan prior service cost	55		(14)		41
Employee benefit plans	352		(87)		265
Other comprehensive (loss) income	$	27,607	$	(6,764)	$	20,843

24

	Three Months Ended March 31, 2022
(In thousands)	Before-Tax Amount		Tax (Expense) Benefit		Net of Tax
Available-for-sale debt securities:
Change in net unrealized (loss) gain during the period	$	(106,481)	$	26,076	$	(80,405)
Net unrealized gains/losses	(106,481)		26,076		(80,405)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	615		(151)		464
Amortization of net retirement plan prior service cost	56		(14)		42
Employee benefit plans	671		(165)		506
Other comprehensive (loss) income	$	(105,810)	$	25,911	$	(79,899)

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, 2023	$	(178,803)	$	(29,886)	$	(208,689)
Other comprehensive income before reclassifications	20,578		0		20,578
Amounts reclassified from accumulated other comprehensive (loss) income	0		265		265
Net current-period other comprehensive income (loss)	20,578		265		20,843
Balance at March 31, 2023	$	(158,225)	$	(29,621)	$	(187,846)
Balance at January 1, 2022	$	(14,560)	$	(41,390)	$	(55,950)
Other comprehensive loss before reclassifications	(80,405)		0		(80,405)
Amounts reclassified from accumulated other comprehensive (loss) income	0		506		506
Net current-period other comprehensive income (loss)	(80,405)		506		(79,899)
March 31, 2022	$	(94,965)	$	(40,884)	$	(135,849)

25

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023
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 (loss) gain on securities transactions
	0		Tax expense
	0		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(297)		Other operating expense
Net retirement plan prior service cost	(55)		Other operating expense
	(352)		Total before tax
	87		Tax benefit
	$	(265)	Net of tax

Three Months Ended March 31, 2022
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 (loss) gain on securities transactions
	0		Tax expense
	0		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(615)		Other operating expense
Net retirement plan prior service cost	(56)		Other operating expense
	(671)		Total before tax
	165		Tax benefit
	$	(506)	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").

26

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				Life and Health				SERP Benefits
	Three Months Ended				Three Months Ended				Three Months Ended
(In thousands)	03/31/2023		03/31/2022		03/31/2023		03/31/2022		03/31/2023		03/31/2022
Service cost	$	0	$	0	$	15	$	44	$	14	$	52
Interest cost	823		463		89		52		299		201
Expected return on plan assets	(1,199)		(1,468)		0		0		0		0
Amortization of net retirement plan actuarial loss	304		323		(7)		52		0		240
Amortization of net retirement plan prior service (credit) cost	0		0		(15)		(15)		70		71
Net periodic benefit (income) cost	$	(72)	$	(682)	$	82	$	133	$	383	$	564

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 $266,000 and $506,000, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive (loss) income, for the three months ended March 31, 2023 and 2022, respectively.

The Company is not required to contribute to the pension plan in 2023, but it may make voluntary contributions. The Company did not contribute to the pension plan in the first three months of 2023 and 2022.

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 periods presented below are stated separately.

	Three Months Ended
(In thousands)	03/31/2023		03/31/2022
Noninterest Income
Other service charges	$	615	$	627
Earnings from corporate owned life insurance	615		423
Net gains on the sale of loans originated for sale	38		4
Other income	673		422
Total other income	$	1,941	$	1,476
Noninterest Expenses
Marketing expense	$	1,105	$	1,056
Professional fees	1,804		1,606
Legal fees	419		210
Technology expense	4,007		3,683
FDIC insurance	1,054		701
Cardholder expense	1,016		1,141
Other expenses	4,064		3,623
Total other operating expense	$	13,469	$	12,020

27

10. Revenue Recognition

As stated in Note 1 - "Summary of Significant Accounting Policies," in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, the Company adopted ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers on January 1, 2022. The update relates to the previous adoption of ASC 606, "Revenue from Contracts with Customers" and all subsequent ASUs that modified ASC 606, and will be applied to future acquisitions. As there were no acquisitions during the current year, the adoption of ASU No. 2021-08 had no effect on the financial statements for the current fiscal year.

Generally, this new guidance strives to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity and inconsistency amongst entities in measuring contract assets and liabilities. The update requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contract. Changes in the acquiree’s balance of contract asset and contract liabilities identified as necessary to conform to the acquirer’s accounting policies would result in a reallocation of the purchase price.

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

Insurance Commissions and Fees

Insurance commissions and fees from insurance product sales are typically earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. Commission revenue on policies billed in installments is now accrued based upon the completion of the performance obligation creating a current asset for the unbilled revenue until such time as an invoice is generated, typically not to exceed twelve months. The impact of these changes was not significant, but it will result in slight variances from quarter to quarter. Contingent commissions are estimated based upon management’s expectations for the year with an appropriate constraint applied and accrued relative to the recognition of the corresponding core commissions.

Trust & Asset Management

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

Mutual Fund & Investment Income

Mutual fund and investment income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, investment advisory fees from the Company’s Strategic Asset Management Services (SAM) wealth management product. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value, 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

28

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. Payment on these revenue streams is received primarily through a direct charge to the customer’s account, immediately or in the following month, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time.

The following table presents noninterest income, segregated by revenue streams, for the three months ended March 31, 2023 and 2022:

	Three Months Ended
(In thousands)	03/31/2023		03/31/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	8,517	$	7,964
Installment Billing	1		44
Refund of Commissions	59		(28)
Contract Liabilities/Deferred Revenue	(3)		(1)
Contingent Commissions	935		1,338
Subtotal Insurance Revenues	9,509		9,317
Trust and Asset Management	3,435		3,503
Mutual Fund & Investment Income	1,074		1,414
Subtotal Investment Service Income	4,509		4,917
Service Charges on Deposit Accounts	1,746		1,779
Card Services Income	2,682		2,543
Other	351		316
Noninterest Income (in-scope of ASC 606)	18,797		18,872
Noninterest Income (out-of-scope of ASC 606)	1,603		1,113
Total Noninterest Income	$	20,400	$	19,985

29

Contract Balances

A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration or before payment is due, which would result in contract receivables or assets, respectively. A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment or for which payment is due from the customer. 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. 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 for the insurance and wealth management services amounted to $4.3 million and $2.8 million, respectively, at March 31, 2023, compared to $6.1 million and $2.5 million, respectively, at December 31, 2022. Additionally, the Company had contract assets related to contingent income of $0.7 million and $2.9 million, respectively, at March 31, 2023 and December 31, 2022, and contract liabilities of $0.8 million and $1.6 million, respectively at March 31, 2023 and December 31, 2022.

Contract Acquisition Costs

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

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, 2023, the Company’s maximum potential obligation under standby letters of credit was $34.9 million compared to $35.8 million at December 31, 2022. 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

Tompkins Community Bank has twelve banking offices located in Ithaca, NY and surrounding communities; sixteen banking offices located in the Genesee Valley region of New York State, which includes Monroe County; thirteen banking offices located in the counties north of New York City; and nineteen 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 regional markets.

30

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 the bank and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Three months ended March 31, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	69,238	$	1	$	0	$	(1)	$	69,238
Interest expense	14,993		0		0		(1)		14,992
Net interest income	54,245		1		0		0		54,246
Credit for credit loss expense	(825)		0		0		0		(825)
Noninterest income	6,698		9,636		4,621		(555)		20,400
Noninterest expense	39,848		7,215		3,650		(555)		50,158
Income before income tax expense	21,920		2,422		971		0		25,313
Income tax expense	4,989		673		239		0		5,901
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	16,931		1,749		732		0		19,412
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	16,900	$	1,749	$	732	$	0	$	19,381
Depreciation and amortization	$	2,589	$	44	$	45	$	0	$	2,678
Assets	7,586,753		43,779		29,013		(15,174)		7,644,371
Goodwill	64,655		19,866		8,081		0		92,602
Other intangibles, net	984		1,576		45		0		2,605
Net loans and leases	5,227,572		0		0		0		5,227,572
Deposits	6,527,953		0		(4,245)		(14,699)		6,509,009
Total Equity	$	584,650	$	35,625	$	29,490	$	0	$	649,765

31

Three months ended March 31, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	59,176	$	1	$	0	$	(1)	$	59,176
Interest expense	2,563		0		0		(1)		2,562
Net interest income	56,613		1		0		0		56,614
Credit for credit loss expense	(520)		0		0		0		(520)
Noninterest income	6,193		9,434		4,934		(576)		19,985
Noninterest expense	37,190		6,501		3,724		(576)		46,839
Income before income tax expense	26,136		2,934		1,210		0		30,280
Income tax expense	5,791		815		370		0		6,976
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	20,345		2,119		840		0		23,304
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	20,314	$	2,119	$	840	$	0	$	23,273
Depreciation and amortization	$	2,578	$	44	$	28	$	0	$	2,650
Assets	7,835,767		44,247		26,684		(15,587)		7,891,111
Goodwill	64,500		19,866		8,081		0		92,447
Other intangibles, net	1,402		1,917		63		0		3,382
Net loans and leases	5,021,325		0		0		0		5,021,325
Deposits	7,031,223		0		(10)		(14,474)		7,016,739
Total Equity	$	598,707	$	34,128	$	24,657	$	0	$	657,492

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).

32

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value: 

Recurring Fair Value Measurements
March 31, 2023
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	170,814	$	0	$	170,814	$	0
Obligations of U.S. Government sponsored entities	599,762		0		599,762		0
Obligations of U.S. states and political subdivisions	86,684		0		86,684		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	50,891		0		50,891		0
U.S. Government sponsored entities	675,310		0		675,310		0
U.S. corporate debt securities	2,393		0		2,393		0
Total Available-for-sale debt securities	$	1,585,854	$	0	$	1,585,854	$	0
Equity securities, at fair value	$	790	$	0	$	0	$	790

Recurring Fair Value Measurements
December 31, 2022
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	167,251	$	0	$	167,251	$	0
Obligations of U.S. Government sponsored entities	601,167		0		601,167		0
Obligations of U.S. states and political subdivisions	85,281		0		85,281		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	52,668		0		52,668		0
U.S. Government sponsored entities	686,222		0		686,222		0
U.S. corporate debt securities	2,378		0		2,378		0
Total Available-for-sale debt securities	$	1,594,967	$	0	$	1,594,967	$	0
Equity securities, at fair value	$	777	$	0	$	0	$	777

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 a 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, 2022 and March 31, 2023, was immaterial.

There were no transfers between Levels 1, 2 and 3 for the three months ended March 31, 2023.

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.

33

Certain assets are measured at fair value on a nonrecurring basis. For the Company, these include loans held for sale, collateral dependent individually evaluated loans, and other real estate owned ("OREO"). As of March 31, 2023 and 2022, 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 3 inputs. 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.

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at March 31, 2023 and 2022. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions:

Three months ended March 31, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2023
Individually evaluated loans	$	0	$	0	$	0	$	0	$	826
Other real estate owned	36		0				36		22

December 31, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 12/31/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 12/31/2022
Individually evaluated loans	$	9,460	$	0	$	0	$	9,460	$	59
Other real estate owned	152		0		0		152		15

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 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.

34

Estimated Fair Value of Financial Instruments
March 31, 2023
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	70,537	$	70,537	$	70,537	$	0	$	0
Securities - held-to-maturity	312,357		267,099		0		267,099		0
FHLB and other stock	19,326		19,326		0		19,326		0
Accrued interest receivable	23,629		23,629		0		23,629		0
Loans/leases, net1	5,227,572		4,911,105		0		0		4,911,105
Financial Liabilities:
Time deposits	$	725,338	$	713,125	$	0	$	713,125	$	0
Other deposits	5,783,671		5,783,671		0		5,783,671		0
Fed funds purchased and securities sold
under agreements to repurchase	63,491		63,491		0		63,491		0
Other borrowings	327,000		324,849		0		324,849		0
Accrued interest payable	1,579		1,579		0		1,579		0

Estimated Fair Value of Financial Instruments
December 31, 2022
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	77,837	$	77,837	$	77,837	$	0	$	0
Securities - held to maturity	312,344		261,692		0		261,692		0
FHLB and other stock	17,720		17,720		0		17,720		0
Accrued interest receivable	24,865		24,865		0		24,865		0
Loans/leases, net1	5,222,977		4,939,246		0		0		4,939,246
Financial Liabilities:
Time deposits	$	631,411	$	616,488	$	0	$	616,488	$	0
Other deposits	5,970,884		5,970,884		0		5,970,884		0
Fed funds purchased and securities
sold under agreements to repurchase	56,278		56,278		0		56,278		0
Other borrowings	291,300		289,234		0		289,234		0
Accrued interest payable	1,420		1,420		0		1,420		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.

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 other stock reported above, carrying value is cost.

35

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

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

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

Other borrowings: The fair value of other borrowings is based upon discounted cash flow analyses using current rates offered for FHLB advances, with similar terms.

14. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Management of economic risks, by the Company, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. Existing credit derivatives result from participation in loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities.

Non-designated Hedges

The Company’s existing credit derivatives result from participation in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, and therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans.

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated statements of condition as of March 31, 2023 and December 31, 2022. The Company began entering into derivative transactions in the second quarter of 2022.

Derivative Liabilities
	March 31, 2023					December 31, 2022
	Notional		Balance Sheet	Fair		Balance Sheet	Fair
(In thousands)	Amount		Location	Value		Location	Value
Derivatives not designated as hedging instruments
Interest Rate Products	$	0	Other Liabilities	$	0	Other Liabilities	$	0
Risk Participation Agreement	7,499		Other Liabilities	26		Other Liabilities	21
Total derivatives not designated as hedging instruments				$	26		$	21

Tabular Disclosure of the Effect of Derivatives Not Designated as Hedging Instruments on the Income Statement

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the three months ended March 31, 2023:

36

Effect of Derivatives Not Designated as Hedging Instruments on the Statement of Financial Performance
Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
(In thousands)		Three Months Ended March 31, 2023
Interest Rate Products	Other income / (expense)	$	0
Risk Participation Agreement	Other income / (expense)	(6)
Total		$	(6)

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

BUSINESS

Overview

Tompkins Financial Corporation ("Tompkins" or the "Company") is headquartered in Ithaca, New York and is registered as a Financial Holding Company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. The Company is a locally oriented, community-based financial services organization that offers a full array of products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, and insurance services. At March 31, 2023, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank. Tompkins Community Bank provides a full array of wealth management 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 also has a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. ("Tompkins Insurance"). The Company’s principal offices are located at 118 E. Seneca Street, P.O. Box 460, Ithaca, NY, 14850, and its telephone number is (888) 503-5753. The Company’s common stock is traded on the NYSE American under the Symbol "TMP."

The Tompkins strategy centers around our core values and a commitment to delivering long-term value to our clients, communities, and shareholders. A key strategic initiative for the Company is a focus on responsible and sustainable growth, including 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 Tompkins Community Bank, which has 60 banking offices (41 offices in New York and 19 offices in Pennsylvania) and using those deposits to originate a variety of commercial loans, agricultural loans, consumer loans, real estate loans, 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 under the trade name Tompkins Financial Advisors. Tompkins Financial Advisors offers services to customers of Tompkins Community Bank and shares offices in each of the banking markets.

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. Tompkins Insurance offers services to customers of Tompkins Community Bank and shares offices in each of the banking markets. 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.

37

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.

Competition

Competition for commercial banking and other financial services is strong in the Company’s market areas. In one or more aspects of its business, the Company’s subsidiaries compete with other commercial banks, savings and loan associations, credit unions, finance companies, Internet-based financial services companies, mutual funds, insurance companies, brokerage and investment banking companies, and other financial intermediaries. Some of these competitors have substantially greater resources and lending capabilities and may offer services that the Company does not currently provide. In addition, many of the Company’s non-bank competitors are not subject to the same extensive Federal regulations that govern financial holding companies and Federally-insured banks.

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 the Company’s subsidiary bank 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, including products that are accessible to our customers through digital means. 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 including a community bank, 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, 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, 2023. 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, 2022, and the Unaudited 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 167 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, 2022 (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; whether, when and how borrowers will repay deferred amounts and resume scheduled payments; the sufficiency of liquidity sources; the Company's exposure to changes in interest rates, and to new, changed, or extended government/regulatory expectations; the need to sell securities before recovery of amortized cost; 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

38

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 and historical performance. The following factors, in addition to those listed as Risk Factors in Item 1A of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2022, are among those that could cause actual results to differ materially from the forward-looking statements and historical performance: changes in general economic, market and regulatory conditions; our ability to attract and retain deposits and other sources of liquidity; GDP growth and inflation trends; the impact of the interest rate and inflationary environment on the Company' business, financial condition and results of operations; 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 state and local government mandates, the Dodd-Frank Act and Basel III and the Economic Growth, Regulatory Relief, and Consumer Protection Act; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; 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; the impact of national and global events, including the response to recent bank failures, the war in Ukraine, widespread protests, civil unrest, political uncertainty, and pandemics or other public health crises, including the COVID-19 pandemic on the economy and the financial services industry; and access to 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. generally accepted accounting principles ("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 policies relating to the allowance for credit losses ("allowance", or "ACL"), and the review of the securities portfolio for other-than-temporary impairment to be critical accounting policies because of the uncertainty and subjectivity involved in these policies and the material effect that estimates related to these areas can have on the Company’s results of operations.

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 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, 2022.

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, 2022. Refer to "Recently Issued Accounting Standards" in Management's Discussion and Analysis in this Quarterly Report on Form 10-Q for a discussion of recent accounting updates.

Critical Accounting Estimates

The Company's significant accounting policies conform with U.S. generally accepted accounting principles ("GAAP") and are described in 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, 2022. In applying those accounting policies, management of the Company is required to exercise judgment in determining many of the methodologies, assumptions and estimates to be utilized. Certain critical accounting estimates are more dependent on such judgment and in some cases may contribute to volatility in the Company's reported financial performance should the assumptions and estimates used change over time due to changes in circumstances. The more significant area in which management of the Company applies critical assumptions and estimates includes the following:

39

•Accounting for credit losses - The Company accounts for the allowance for credit losses using the current expected credit loss model. Under this accounting guidance, the allowance for credit losses represents a valuation account that is deducted from the amortized cost basis of certain financial assets, including loans and leases, to present the net amount expected to be collected at the balance sheet date. A provision for credit losses is recorded to adjust the level of the allowance as deemed necessary by management. In estimating expected losses in the loan and lease portfolio, borrower-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. For certain loan pools that share similar risk characteristics, the Company utilizes statistically developed models to estimate amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers' abilities to repay obligations. Such models consider historical correlations of credit losses with various macroeconomic assumptions including unemployment and gross domestic product. These forecasts may be adjusted for inherent limitations or biases of the models. Subsequent to the forecast period, the Company utilizes longer-term historical loss experience to estimate losses over the remaining contractual life of the loans. Changes in the circumstances considered when determining management's estimates and assumptions could result in changes in those estimates and assumptions, which could result in adjustment of the allowance for credit losses in future periods. A discussion of facts and circumstances considered by management in determining the allowance for credit losses is included herein in Note 5 - "Allowance for Credit Losses" in the Note to the Unaudited Consolidated Financial Statements.

Recent Events

During the first quarter of 2023, the banking industry experienced significant volatility with the recent high-profile bank failures, which resulted in industry wide concerns related to liquidity, deposit outflows, unrealized securities losses and eroding consumer confidence in the banking system. In response to these recent developments, the Company took a number of preemptive actions, which included proactive outreach to clients and actions to maximize its funding sources such as establishing the ability to borrow through the newly established Federal Reserve borrowing program called the Bank Term Funding Program. The Company maintains ready access liquidity of $1.7 billion through its membership with the FHLB and FRB. As of March 31, 2023, the Company’s liquidity and balance sheet remain well positioned and stable. The Company’s total deposits of $6.5 billion at March 31, 2023 were down $93.3 million or 1.4% from December 31, 2022, reflecting minimal deposit outflow. At March 31, 2023, the Company estimates total uninsured deposits of $2.6 billion, which is unchanged from December 31, 2022, including $1.1 billion of collateralized government deposits and $1.5 billion of uninsured customer deposits without liquid collateral pledged. Total insured deposits and collateralized government deposits represent 76.9% of the Company's total deposits of $6.5 billion at March 31, 2023. Furthermore, the Company’s regulatory capital ratios at March 31, 2023, were up over December 31, 2022. At March 31, 2023, Tier 1 leverage and Total Capital ratios were 9.63% and 14.62%, respectively, compared to 9.34% and 14.42% at December 31, 2022.

RESULTS OF OPERATIONS

Performance Summary

Net income for the first quarter of 2023 was $19.4 million or $1.35 diluted earnings per share, compared to $23.3 million or $1.60 diluted earnings per share for the same period in 2022. The decrease in net income for the first quarter of 2023 compared to the first quarter of 2022 was mainly a result of increased interest expense and increases in other operating expenses.

Return on average assets ("ROA") for the quarter ended March 31, 2023 was 1.03%, compared to 1.19% for the quarter ended March 31, 2022. Return on average shareholders’ equity ("ROE") for the first quarter of 2023 was 12.45%, compared to 13.24% for the same period in 2022.

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 $16.9 million for the first quarter of 2023, a decrease of $3.4 million or 16.8% from net income of $20.3 million for the same period in 2022. The decrease in net income for the first quarter of 2023 compared to the first quarter of 2022 was primarily due to increased funding costs coupled with increases in operating expenses.

40

Net interest income of $54.2 million for the first quarter of 2023 was down $2.4 million or 4.2% from the same period in 2022. The decrease in net interest income was primarily due to higher funding costs and a decrease in average earnings assets, partially offset by an increase in the average yield on interest-earning assets in the first quarter of 2023 compared to the first quarter of 2022. The average yield on interest-earning assets benefited from higher market interest rates as well as a shift in the composition of average earning assets with growth in average loan balances.

The provision for credit losses was a credit of $825,000 for the three months ended March 31, 2023, compared to a credit of $520,000 for the same period in 2022. For additional information, see the section titled "The Allowance for Credit Losses" below.

Noninterest income of $6.7 million for the three months ended March 31, 2023 was up $505,000 or 8.2% compared to the same period in 2022. The increase in the three months ended March 31, 2023, from the same period in 2022 included an increase in earnings on bank-owned life insurance ("BOLI") and incentive fees related to renewal of our debit card services contract.

Noninterest expense of $39.8 million for the first quarter of 2023 was up $2.7 million or 7.2% from the same period in 2022. Salaries and employee benefits were up compared to the same period in 2022 mainly due to yearly merit increases and higher healthcare expense. Higher FDIC insurance expense and technology expenses in the first quarter of 2023 also contributed to increases in noninterest expense as compared to same period in 2022. Higher FDIC insurance expense was mainly due to an increase in assessment rates in 2023.

Insurance Segment

The insurance segment reported net income of $1.7 million for the three months ended March 31, 2023, which was down $370,000 or 17.5% compared to the first quarter of 2022. Noninterest income in the first quarter of 2023 increased by $202,000 or 2.1% compared to the same period in 2022. Insurance commissions were up $617,000 or 7.6%, partially offset by lower contingency revenue, which was down $402,000 or 30.1% from the first quarter of 2022.

Noninterest expenses were up $714,000 or 11.0% compared to the first quarter of 2022. The increase was mainly in salaries and wages, reflecting annual merit increases; incentive commissions related to new business and growth in revenues; and employee benefits, including increases in health insurance.

Wealth Management Segment

The wealth management segment reported net income of $732,000 for the three months ended March 31, 2023, which was down $108,000 or 12.9% compared to the first quarter of 2022. The decrease in net income for the three month period ended March 31, 2023, compared to the same period in 2022, was mainly attributable to a decrease in revenue, driven by a decrease in assets under management; which was primarily a result of volatile market conditions. Noninterest expense for the first quarter of 2023 decreased $74,000 or 2.0% compared to the same period of 2022. The decrease was mainly in salaries, wages and benefits, which were down $141,000 or 5.7% for the first three months of 2023 compared to the same period prior year.

41

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, 2023 and 2022:

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Quarter Ended						Quarter Ended
	March 31, 2023						March 31, 2022
	Average						Average
	Balance				Average		Balance				Average
(Dollar amounts in thousands)	(QTD)		Interest		Yield/Rate		(QTD)		Interest		Yield/Rate
ASSETS
Interest-earning assets
Interest-bearing balances due from banks	$	12,733	$	139	4.42	%	$	134,129	$	41	0.12	%
Securities (1)
U.S. Government securities	2,033,307		7,424		1.48	%	2,293,611		7,362		1.30	%
State and municipal (2)	93,201		599		2.60	%	101,746		649		2.59	%
Other securities (2)	3,284		53		6.55	%	3,390		23		2.73	%
Total securities	2,129,792		8,076		1.54	%	2,398,747		8,034		1.36	%
FHLBNY and FRB stock	16,750		300		7.26	%	10,098		105		4.23	%
Total loans and leases, net of unearned income (2)(3)	5,251,278		61,034		4.71	%	5,055,948		51,355		4.12	%
Total interest-earning assets	7,410,553		69,549		3.81	%	7,598,922		59,535		3.18	%
Other assets	223,240						311,125
Total assets	$	7,633,793					$	7,910,047
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market	3,833,566		8,641		0.91	%	4,160,946		750		0.07	%
Time deposits	673,871		3,541		2.13	%	631,594		1,296		0.83	%
Total interest-bearing deposits	4,507,437		12,182		1.10	%	4,792,540		2,046		0.17	%
Federal funds purchased & securities sold under agreements to repurchase	57,523		14		0.10	%	64,237		16		0.10	%
Other borrowings	269,752		2,796		4.20	%	125,298		500		1.62	%
Total interest-bearing liabilities	4,834,712		14,992		1.26	%	4,982,075		2,562		0.21	%
Noninterest bearing deposits	2,065,701						2,108,825
Accrued expenses and other liabilities	102,172						106,120
Total liabilities	7,002,585						7,197,020
Tompkins Financial Corporation Shareholders’ equity	629,784						711,601
Noncontrolling interest	1,424						1,426
Total equity	631,208						713,027
Total liabilities and equity	$	7,633,793					$	7,910,047
Interest rate spread					2.55	%					2.97	%
Net interest income/margin on earning assets			54,557		2.99	%			56,973		3.04	%
Tax Equivalent Adjustment			(311)						(359)
Net interest income per consolidated financial statements			$	54,246					$	56,614

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 2023 and 2022 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, 2022.

42

Net Interest Income 

Net interest income is the Company’s largest source of revenue, representing 72.7% of total revenues for the three months ended March 31, 2023, compared to 73.9% for the same period in 2022. 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.

Net interest income for the three months ended March 31, 2023, was down $2.4 million or 4.2% from the same period in 2022. The decrease was primarily due to higher funding costs and a decrease in average earnings assets, partially offset by an increase in the average yield on interest-earning assets in the quarter ended March 31, 2023 compared to the same period in 2022. For the three months ended March 31, 2023, average total deposits represented 93.9% of average total liabilities compared to 95.9% for the same period in 2022, while total average borrowings represented 3.9% of average total liabilities for the period ended March 31, 2023 compared to 1.7% in 2022. Average earnings assets for the three months ended March 31, 2023 were down $188.4 million or 2.5% over the same period in 2022, while average asset yields for the first quarter of 2023 were up 63 basis points from the first quarter of 2022.

Net interest margin for the three months ended March 31, 2023 was 2.99% compared to 3.04% for the same period in 2022. The decrease in net interest margin for 2023 compared to 2022 was due to an increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment, as well as increases in higher rate borrowings due to lower deposit balances.

Interest income for the three months ended March 31, 2023, was $69.5 million, up 17.0% compared to the same period in 2022, reflecting higher average yields, partially offset by lower average balances of interest-earning assets. The average yield on interest-earning assets increased 63 basis points, while average interest earning assets decreased $188.4 million or 2.5%. The increase in interest income was mainly in interest and fees on loans, driven by higher yields and higher average balances for the three months ended March 31, 2023, compared to the same period in 2022. Average loan balances for the first quarter of 2023 were up $195.3 million or 3.9% from the first quarter of 2022, while the average yield on loans of 4.71% for the first quarter of 2023 was up 59 basis points from the average loan yield in the first quarter of 2022. Interest income in the first quarter of 2023 included $2,000 of net deferred loan fees related to PPP loans compared to net deferred loan fees of $2.0 million in the first quarter of 2022. For the three months ended March 31, 2023, average balances for securities were down $269.0 million or 11.2% over the first quarter of 2022, while the average yield on securities of 1.54% for the first quarter of 2023 was up 18 basis points. For the three months ended March 31, 2023, average interest-bearing balances were down $121.4 million or 90.5%, while the average yield on interest-bearing balances of 4.42% was up 330 basis points.

Interest expense for the three months ended March 31, 2023 increased by $12.4 million or 485.2% compared to the same period in 2022, reflecting higher average costs of funds and a shift in funding mix, partially offset by a decrease in average interest-bearing liabilities. The average cost of interest-bearing liabilities for the first quarter of 2023 increased 105 basis points from the first quarter of 2022 as a result of higher market interest rates and a change in the mix of interest-bearing liabilities, with an increase in average time deposits and average other borrowings. The average cost of interest bearing liabilities was 1.26% for the first quarter of 2023, compared to 0.21% for the first quarter of 2022. Average interest bearing deposits for the first quarter of 2023 were down $285.1 million or 6.0% compared to the same period in 2022. Average other borrowings for the three months ended March 31, 2023 were up $144.5 million or 115.3% compared to the same period in 2022.

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, 2023 was a credit of $825,000 compared to a credit of $520,000 for the same period in 2022. Included in the credits for both the first quarter of 2023 and 2022 were provision expenses of $355,000 and $214,000, respectively, related to off-balance sheet credit exposures. The provision credit in the first quarter of 2023 was mainly driven by improvement in the macroeconomic factor assumptions utilized in the allowance calculation as well as net loan recoveries during the quarter and stable asset quality. 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 $20.4 million for the first quarter of 2023, up 2.1% compared to the first quarter of 2022. Noninterest income represented 27.3% of total revenue for the three months ended March 31, 2023, compared to 26.1% for the same period in 2022.

43

Insurance commissions and fees of $9.5 million in the first quarter of 2023 were up $192,000 or 2.1% compared to the same period prior year. Insurance commissions were up $617,000 or 7.6%, while contingency and other revenue was down $416,000 compared to the first quarter of 2022.

Investment services income of $4.5 million in the first quarter of 2023 was down $408,000 or 8.3% compared to the first quarter of 2022. The decrease in investment services income for the three-month period ended March 31, 2023, was mainly attributable to a decrease in advisory fees related to a decrease in period end assets compared to the same quarter prior year, primarily due to volatile market conditions throughout 2022. Investment services income includes investment management, trust and estate, financial and tax planning, and brokerage related services. The fair value of assets managed by, or in custody of, Tompkins was $3.1 billion at March 31, 2023, compared to $4.4 billion at March 31, 2022. The fair value of assets at March 31, 2022, includes $1.3 billion of Company-owned securities where Tompkins is custodian. The Company outsourced the custody of Company-owned securities to a third party in 2022.

Card services income of $2.7 million in the first quarter of 2023 was up $139,000 or 5.6% compared to the same period in 2022. Debit card income, the largest component of card services income, was in line compared to the same period in 2022.

Other income of $1.9 million in the first quarter of 2023 was up $465,000 or 31.5% compared to the same period in 2022. The increase in the first quarter of 2023 compared to the same period in 2022, included an increase in earnings on bank owned life insurance (up $192,000) and recognition of incentives related to card services contract ($450,000).

Noninterest Expense 

Noninterest expense was $50.1 million for the first quarter of 2023, up 7.1% compared to the same period in 2022. Noninterest expense as a percentage of total revenue for the first quarter of 2023 was 67.2% compared to 61.2% for the same period in 2022.

Expenses associated with salaries and wages and employee benefits are the largest component of noninterest expense, representing 62.3% of total noninterest expense for the first quarter of 2023, compared to 62.1% for the first quarter of 2022. Salaries and wages and employee benefit expense for the three months ended March 31, 2023 were up $2.2 million or 7.5% from the same period in 2022, resulting from normal merit adjustments and an increase in healthcare expense in the first quarter of 2023 over the same period prior year.

Other expense categories not related to compensation and benefits, such as technology, FDIC insurance, and professional fee expenses, for the three months ended March 31, 2023, were up $1.4 million or 12.1% compared to the same period in 2022. Technology expenses for the first quarter of 2023 were up $324,000 or 8.8% over the same period in 2022, driven mainly by annual software increases. FDIC insurance expense for the first quarter of 2023 was up $353,000 or 50.4% over the same period in 2022, driven by an increase in assessment rates.

Income Tax Expense 

The provision for income taxes was $5.9 million for an effective rate of 23.3% for the first quarter of 2023, compared to tax expense of $7.0 million and an effective rate of 23.0% for the same quarter in 2022. 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. The effective tax rate assumes the anticipated loss of certain New York State tax benefits due to the expectation that average assets will exceed $8.0 billion for the 2023 tax year.

The Company's banking subsidiary has an investment in a real estate investment trust that provides certain benefits on its New York State tax return for qualifying entities. A condition to claim the benefit is that the consolidated company has average assets of no more than $8 billion for the taxable year. The Company expects average assets to exceed the $8.0 billion threshold for the 2023 tax year. As of March 31, 2023, the Company's consolidated average assets, as defined by New York tax law, were slightly under the $8.0 billion threshold. The Company will continue to monitor the consolidated average assets during 2023 to determine future eligibility.

FINANCIAL CONDITION

Total assets were $7.6 billion at March 31, 2023, down $26.3 million or 0.3% from December 31, 2022. Total securities and total loans at March 31, 2023 were in line with year-end 2022. Total deposits were down $93.3 million or 1.4% from December 31, 2022, and total borrowings were up $35.7 million or 12.3% from December 31, 2022. The decrease in deposits at March 31, 2023 was in noninterest bearing deposits, which were down $140.6 million or 6.5%, and checking, savings and money market account, which were down $46.6 million or 1.2%. Time deposits at March 31, 2023, were up $93.9 million or 14.9% from December 31, 2022.

44

Securities

As of March 31, 2023, the Company’s securities portfolio was $1.9 billion or 24.8% of total assets, compared to $1.9 billion or 24.9% of total assets at year-end 2022. The following table details the composition of the securities portfolio:

Available-for-Sale Debt Securities
	March 31, 2023				December 31, 2022
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasuries	$	190,220	$	170,814	$	190,170	$	167,251
Obligations of U.S. Government sponsored entities	670,978		599,762		681,192		601,167
Obligations of U.S. states and political subdivisions	92,915		86,684		93,599		85,281
Mortgage-backed securities - residential, issued by
U.S. Government agencies	56,224		50,891		58,727		52,668
U.S. Government sponsored entities	782,586		675,310		805,603		686,222
U.S. corporate debt securities	2,500		2,393		2,500		2,378
Total available-for-sale debt securities	$	1,795,423	$	1,585,854	$	1,831,791	$	1,594,967

Held-to-Maturity Debt Securities
	March 31, 2023				December 31, 2022
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasuries	$	86,425	$	75,459	$	86,478	$	73,541
Obligations of U.S. Government sponsored entities	225,932		191,640		225,866		188,151
Total held-to-maturity debt securities	$	312,357	$	267,099	$	312,344	$	261,692

The decrease in unrealized losses, which reflects the amount that amortized cost exceeds fair value, related to the available-for-sale debt and held-to-maturity debt portfolios was due primarily to changes in market interest rates during the first three months of 2023. 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.

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 (technical impairment) is the result of changes in interest rates or reflects a fundamental change in the credit worthiness of the underlying issuer. Any impairment that is not credit related is recognized in other comprehensive income (loss), net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses ("ACL") on the Statements 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.

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-related quality of the investment securities. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost.

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management has made the accounting policy election to exclude accrued interest receivable on held-to-maturity debt securities from the estimate of credit losses. As of March 31, 2023, the held-to- maturity portfolio consisted of U.S. Treasury securities and securities issued by U.S. government-sponsored enterprises, including The Federal National Mortgage Agency, the FHLB and the Federal Farm Credit Banks Funding Corporation. U.S.

45

Treasury securities are backed by the full faith and credit of and/or guaranteed by the U.S. government, and it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities. Securities issued by U.S. government agencies or U.S. government-sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as "risk-free," and have a long history of zero credit loss. As such, the Company did not record an allowance for credit losses for these securities as of March 31, 2023. Net unrealized losses on held-to-maturity securities, tax effected, at March 31, 2023, totaled 5.3% of total common equity capital and 6.2% of tangible common equity compared to 6.2% of total equity capital and 7.3% of tangible common equity capital at December 31, 2022.

The Company did not recognize any net credit impairment charge to earnings on investment securities in the first quarter of 2023.

Loans and Leases
Loans and leases as of the end of the first quarter and prior year-end period were as follows:
(In thousands)	03/31/2023		12/31/2022
Commercial and industrial
Agriculture	$	65,223	$	85,073
Commercial and industrial other	673,104		705,700
PPP loans*	686		756
Subtotal commercial and industrial	739,013		791,529
Commercial real estate
Construction	219,789		201,116
Agriculture	214,014		214,963
Commercial real estate other	2,476,532		2,437,339
Subtotal commercial real estate	2,910,335		2,853,418
Residential real estate
Home equity	183,636		188,623
Mortgages	1,342,214		1,346,318
Subtotal residential real estate	1,525,850		1,534,941
Consumer and other
Indirect	1,783		2,224
Consumer and other	83,775		75,412
Subtotal consumer and other	85,558		77,636
Leases	18,016		16,134
Total loans and leases	5,278,772		5,273,658
Less: unearned income and deferred costs and fees	(5,101)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,273,671	$	5,268,911
*SBA Paycheck Protection Program ("PPP")

46

The below table shows a more detailed break-out of CRE loans as of March 31, 2023 and December 31, 2022.

	03/31/2023				12/31/2022
CRE Concentration	Balance		% CRE		Balance		% CRE
Construction	$	219,789	7.55	%	$	201,031	7.05	%
Multi-family/Single family real estate	600,816		20.64	%	587,467		20.59	%
Agriculture	215,038		7.39	%	211,231		7.40	%
Retail1	432,076		14.85	%	434,998		15.25	%
Hotels/motels	151,517		5.21	%	144,710		5.07	%
Office space2	242,585		8.34	%	236,281		8.28	%
Mixed/Other	1,048,515		36.03	%	1,037,614		36.36	%
Total CRE	$	2,910,336	100.00	%	$	2,853,332	100.00	%
1Reatail includes 3.1% and 3.2% of owner occupied real estate at March 31, 2023 and December 31, 2022.
2Office space includes 1.5% of owner occupied real estate at both March 31, 2023 and December 31, 2022.

Total loans and leases of $5.3 billion at March 31, 2023 were up $4.8 million or 0.1% from December 31, 2022. The increase was mainly in commercial real estate loans, which were up $56.9 million or 2.0%, to $2.9 billion at March 31, 2023. As of March 31, 2023, total loans and leases represented 69.0% of total assets compared to 68.7% of total assets at December 31, 2022.

Residential real estate loans, including home equity loans were $1.5 billion at March 31, 2023, down $9.1 million or 0.6% compared to December 31, 2022, and comprised 28.9% of total loans and leases at March 31, 2023. 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 2023 and 2022, the Company sold residential loans totaling $1.3 million and $135,000, respectively, recognizing gains on these sales of $38,000 and $4,000, 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 $1.0 million at both March 31, 2023 and December 31, 2022. 

Commercial real estate loans and commercial and industrial loans totaled $2.9 billion and $739.0 million, respectively, and represented 55.2% and 14.0%, respectively of total loans as of March 31, 2023. The commercial real estate portfolio was up $56.9 million or 2.0% over year-end 2022, while commercial and industrial loans were down $52.5 million or 6.6% from year-end 2022.

As of March 31, 2023, agriculturally-related loans totaled $279.2 million or 5.3% of total loans and leases, compared to $300.0 million or 5.7% of total loans and leases at December 31, 2022. Agriculturally-related loans include loans to dairy farms and crop farms. Agricultural-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.

47

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, 2022. There have been no significant changes in these policies and guidelines since the date of that report. 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 subsidiary bank. 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.

Allowance for Credit Losses

The below tables represents the allowance for credit losses as of March 31, 2023 and December 31, 2022. 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)	03/31/2023		12/31/2022
Allowance for credit losses
Commercial and industrial	$	6,316	$	6,039
Commercial real estate	27,186		27,287
Residential real estate	10,858		11,154
Consumer and other	1,628		1,358
Finance leases	111		96
Total	$	46,099	$	45,934

As of March 31, 2023, the total allowance for credit losses for loans was $46.1 million, and was in line with December 31, 2022. The allowance for credit losses as a percentage of total loans measured 0.87% at both March 31, 2023 and December 31, 2022.

Asset quality measures at March 31, 2023 were generally favorable compared to December 31, 2022. Loans internally-classified Special Mention or Substandard were down $12.7 million or 12.9% compared to December 31, 2022. Nonperforming loans and leases were down $4.4 million or 13.4% from year end 2022 and represented 0.54% of total loans at March 31, 2023 compared to 0.62% at December 31, 2022. The allowance for credit losses covered 162.11% of nonperforming loans and leases as of March 31, 2023, compared to 139.86% at December 31, 2022. The Company had net recoveries of $1.3 million in the first quarter of 2023, compared to net recoveries of $17,000 for the same period in 2022.

48

Activity in the Company’s allowance for credit losses during the first three months of 2023 and 2022 is illustrated in the table below:

Analysis of the Allowance for Credit Losses
(In thousands)	03/31/2023			03/31/2022
Average loans outstanding during period	$	5,251,278		$	5,055,948
Allowance at beginning of year, prior to adoption of ASU 2022-02	45,934			42,843
Impact of adopting ASU 2022-02	64			0
Balance of allowance at beginning of year	45,998			42,843
LOANS CHARGED-OFF:
Commercial and industrial	0			23
Commercial real estate	0			27
Residential real estate	2			0
Consumer and other	106			196
Total loans charged-off	$	108		$	246
RECOVERIES OF LOANS PREVIOUSLY CHARGED-OFF:
Commercial and industrial	46			20
Commercial real estate	1,246			42
Residential real estate	64			109
Consumer and other	33			92
Total loans recovered	$	1,389		$	263
Net loans recovered	(1,281)			(17)
(Credit) for credit losses related to loans	(1,180)			(734)
Balance of allowance at end of period	$	46,099		$	42,126
Allowance for credit losses as a percentage of total loans and leases	0.87		%	0.83		%
Annualized net (recoveries) charge-offs on loans to average total loans and leases during the period	(0.10)		%	0.00		%

The provision for credit losses for loans was a credit of $1.2 million for the three months ended March 31, 2023, compared to a credit of $734,000 for the same period in 2022. The provision for credit losses for loans is based upon the Company's quarterly evaluation of the appropriateness of the allowance for credit losses. The March 31, 2023, allowance for credit losses model estimated a modest increase in reserves compared to year-end 2022. Increases in qualitative and large loan reserves were mainly offset by lower quantitative reserves as forecasts for economic growth and unemployment were slightly improved as compared to December 31, 2022.

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 provision for credit loss expense in the Company's consolidated statements of income.

For the three months ended March 31, 2023, the provision for credit losses for off-balance sheet credit exposures was $355,000 compared to $214,000 for the same period in 2022. The provision in 2023 was driven by an increase in off-balance sheet exposures, specifically commercial real estate loan commitments.

49

Analysis of Past Due and Nonperforming Loans
(In thousands)	03/31/2023			12/31/2022			03/31/2022
Loans 90 days past due and accruing
Commercial and industrial	$	0		$	25		$	0
Consumer and other	13			0			0
Total loans 90 days past due and accruing	$	13		$	25		$	0
Nonaccrual loans
Commercial and industrial	923			618			806
Commercial real estate	12,380			13,858			13,623
Residential real estate	14,869			13,544			10,200
Consumer and other	252			269			571
Total nonaccrual loans	$	28,424		$	28,289		$	25,200
Performing troubled debt restructuring*	0			4,530			5,064
Total nonperforming loans and leases	$	28,437		$	32,844		$	30,264
Other real estate owned	36			152			88
Total nonperforming assets	$	28,473		$	32,996		$	30,352
Allowance as a percentage of nonperforming loans and leases	162.11		%	139.86		%	139.20		%
Total nonperforming loans and leases as percentage of total loans and leases	0.54		%	0.62		%	0.60		%
Total nonperforming assets as percentage of total assets	0.37		%	0.43		%	0.38		%

*No amount shown for periods subsequent to the Company's adoption of ASU 2022-02 effective January 1, 2023.

Nonperforming assets include nonaccrual loans, TDRs, and foreclosed real estate/other real estate owned. Total nonperforming assets of $28.5 million at March 31, 2023 were down $4.5 million or 13.7% compared to December 31, 2022, and down $1.9 million or 6.2% compared to March 31, 2022. The decrease in nonperforming assets from March 31, 2022, was mainly due to the adoption of ASU 2022-02, which eliminates the TDR designation and requires entities to evaluate all loan modifications under the same guidance and report on modifications where the borrower is experiencing financial difficulty at the time of the modification. Nonperforming assets represented 0.37% of total assets at March 31, 2023, down from 0.43% at December 31, 2022, and 0.38% at March 31, 2022. Our peer group's average ratio of nonperforming assets to total assets was 0.35% at December 31, 2022.

The Company adopted ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2022-02") effective January 1, 2023. ASU 2022-02 eliminates the guidance on TDRs and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. Loans in the current period are reported using ASU 2022-02, while loans for prior periods are reported using the previous TDR guidance. Loans are considered modified if the Company makes a concession(s) to a borrower experiencing financial difficulty 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. Modified loans and TDRs reported for prior periods are included in the above table within the following categories: "loans 90 days past due and accruing", "nonaccrual loans", or "borrowers experiencing financial difficulty not included above". Loans in the latter category include loans that meet the definition of a modified loan but are performing in accordance with the modified terms and have shown a satisfactory period of repayment (generally six consecutive months) and where full collection of all is reasonably assured. At March 31, 2023, the Company had no modified loans under the new guidance.

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. 

50

The ratio of the allowance to nonperforming loans and leases (loans past due 90 days and accruing, nonaccrual loans and restructured troubled debt) was 162.11% at March 31, 2023, compared to 139.86% at December 31, 2022, and 139.20% at March 31, 2022. The Company’s nonperforming loans and leases are mostly comprised of collateral dependent 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.

The Company, through its internal loan review function, identified 17 commercial relationships totaling $32.8 million at March 31, 2023 that were potential problem loans. At December 31, 2022, the Company had identified 17 relationships totaling $33.3 million that were potential problem loans. Of the 17 commercial relationships at March 31, 2023 that were Substandard, there were 5 relationships that equaled or exceeded $1.0 million, which in aggregate totaled $28.8 million, the largest of which was $16.9 million. The potential problem loans remain in a performing status due to a variety of factors, including payment history, the value of collateral supporting the credits, and personal or government guarantees. These factors, when considered in the aggregate, give management reason to believe that the current risk exposure on these loans does not warrant accounting for these loans as nonperforming. However, these loans do exhibit certain risk factors, which have the potential to cause them to become nonperforming. Accordingly, management’s attention is focused on these credits, which are reviewed on at least a quarterly basis.

Capital

Total equity was $649.8 million at March 31, 2023, an increase of $32.4 million or 5.2% from December 31, 2022. The increase was mainly a result of the decrease in accumulated other comprehensive loss, reflecting the change in unrealized gains/loss on available-for-sale securities from an unrealized loss of $178.8 million at December 31, 2022 to an unrealized loss of $158.2 million at March 31, 2023. During the first quarter of 2023, retained earnings increased $10.7 million.

Additional paid-in capital increased from $302.8 million at December 31, 2022, to $303.4 million at March 31, 2023. The increase was primarily attributable to $1.0 million related to stock based compensation; partially offset by $303,000 of deferred director compensation. Retained earnings increased by $10.6 million from $526.7 million at December 31, 2022, to $537.3 million at March 31, 2023, reflecting net income of $19.4 million less dividends of $8.7 million. Accumulated other comprehensive loss decreased from a net loss of $208.7 million at December 31, 2022, to a net loss of $187.8 million at March 31, 2023, reflecting a $20.6 million decrease in unrealized losses on available-for-sale debt securities due to changes in market rates coupled with a $265,000 decrease related to post-retirement benefit plans.

Cash dividends paid in the first three months of 2023 totaled approximately $8.7 million or $0.60 per common share, representing 45.0% of year to date 2023 earnings through March 31, 2023, and were up 5.3% over cash dividends of $8.3 million or $0.57 per common share paid in the first three months of 2022.

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 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 bank 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 2.5% capital conservation buffer, which has been fully phased in and must be added to each of the minimum capital ratios and is designed to absorb losses during periods of economic stress.

51

The following table provides a summary of the Company’s capital ratios as of March 31, 2023:

Regulatory Capital Analysis
March 31, 2023	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)	$	792,609	14.62	%	$	569,163	10.50	%	$	542,060	10.00	%
Tier 1 Capital (to risk weighted assets)	741,915		13.69	%	460,751		8.50	%	433,648		8.00	%
Tier 1 Common Equity (to risk weighted assets)	741,915		13.69	%	379,442		7.00	%	352,339		6.50	%
Tier 1 Capital (to average assets)	741,915		9.63	%	308,123		4.00	%	385,153		5.00	%

As of March 31, 2023, 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 14.6% at March 31, 2023, compared with 14.4% as of December 31, 2022. Tier 1 capital as a percent of risk weighted assets increased from 13.5% at the end of 2022 to 13.7% as of March 31, 2023. Tier 1 capital as a percent of average assets was 9.6% at March 31, 2023, which is up from 9.3% at December 31, 2022. Common equity Tier 1 capital was 13.7% at the end of the first quarter of 2023, up from 13.5% at the end of 2022.

As of March 31, 2023, the capital ratios for the Company’s subsidiary banks also exceeded 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 $6.5 billion at March 31, 2023 were down $93.3 million or 1.4% from December 31, 2022. The decrease from year-end was primarily in checking, money market and savings balances, which collectively were down $46.6 million or 1.2% and in non-interest bearing deposits, down $140.6 million or 6.5% from year end 2022. The decrease was partially offset by an increase in time deposits of $93.9 million or 14.9%. The decline in elevated customer deposit balances was largely driven by stimulus funding and tightening monetary policy that has led to a declining trend in bank deposits on a national level, as reported by the Federal Reserve.

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 down by $181.1 million or 3.2% from year-end 2022, to $5.4 billion at March 31, 2023. Core deposits represented 82.9% of total deposits at March 31, 2023, compared to 84.5% of total deposits at December 31, 2022.

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 $63.5 million at March 31, 2023, and $56.3 million at December 31, 2022. Management generally views local repurchase agreements as an alternative to large time deposits.

52

The Company’s other borrowings totaled $327.0 million at March 31, 2023, compared to $291.3 at December 31, 2022. Lower deposit balances compared to year-end 2022 contributed to the increase in other borrowings. Other borrowings at March 31, 2023 represented $192.0 million in overnight advances from the FHLB and $135.0 million of FHLB term advances. The $291.3 million in other borrowings at December 31, 2022, represented $241.3 million in overnight advances from the FHLB and $50.0 million in term advances from the FHLB. Of the $135.0 million in FHLB term advances at March 31, 2023, $115.0 million was due in over one year.

Liquidity

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 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 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 $1.5 billion at March 31, 2023 increased $130.8 million or 9.5% as compared to year end 2022. Non-core funding sources, as a percentage of total liabilities, were 21.5% at March 31, 2023, compared to 19.4% at December 31, 2022. 

Non-core funding sources may require securities to be pledged against the underlying liability. Securities carried at $1.8 billion at both March 31, 2023 and December 31, 2022, were either pledged or sold under agreements to repurchase. Pledged securities represented 85.6% of total securities at March 31, 2023, compared to 82.4% of total securities at December 31, 2022.

Cash and cash equivalents totaled $70.5 million as of March 31, 2023 which decreased from $77.8 million at December 31, 2022. Short-term investments, consisting of securities due in one year or less, decreased from $50.3 million at December 31, 2022, to $39.8 million at March 31, 2023.

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 $726.2 million at March 31, 2023 compared with $738.9 million at December 31, 2022. Outstanding principal balances of residential mortgage loans, consumer loans, and leases totaled approximately $1.6 billion at March 31, 2023, unchanged compared with year end 2022. 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, Federal Reserve Bank Discount Window advances and FHLB advances. Through its subsidiary bank, the Company has borrowing relationships with the FHLB, the Federal Reserve Bank and correspondent banks, which provide secured and unsecured borrowing capacity. As members of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At March 31, 2023, the established borrowing capacity with the FHLB was $1.6 billion, with available unencumbered mortgage-related assets of $1.31 billion. Additional assets may also qualify as collateral for FHLB advances, upon approval of the FHLB. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At March 31, 2023 the available borrowing capacity with the Federal Reserve Bank was $157 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, the Company maintains $265 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.

53

Non-GAAP Financial Information

The following table includes disclosure of non-GAAP financial measures. Tangible common equity, a non-GAAP financial measure, is total stockholders' equity less intangible assets. Tangible book value per share is tangible equity divided by total shares issued and outstanding. These measures adjust common equity per share to exclude the effects of goodwill and intangible amortization expense on earnings, equity, and capital. The Company believes the non-GAAP measures provide meaningful comparisons of our underlying operational performance and facilitate management's and investors' assessments of business and performance trends in comparison to others in the financial services industry. These non-GAAP financial measures should be considered as supplemental in nature and not as a substitute for our superior to the related financial information prepared in accordance with GAAP. Tangible book value per share as presented herein may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies.

Reconciliation of Tangible Book Value Per Share (non-GAAP) to Common Equity Book Value Per Share (GAAP)
	Quarter-Ended		Year-ended
	03/31/2023		12/31/2022
Total common equity	$	648,322	$	615,978
Less: Goodwill and intangibles	94,253		94,336
Tangible common equity (Non-GAAP)	554,069		521,642
Ending shares outstanding	14,519,748		14,519,831
Common equity per share	$	44.65	$	42.42
Tangible book value per share (Non-GAAP)	$	38.16	$	35.93

Newly Adopted Accounting Standards

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 U.S. 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. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.

ASU 2022-01, "Derivatives and Hedging (Topic 815)" ("ASU 2022-01") clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios and financial assets. Among other things, the amended guidance established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible and renamed that method the “portfolio layer” method. ASU 2022-01 became effective for the Company on January 1, 2023. As there are no securities in our portfolio that are subject to this pronouncement in the current or prior year of adoption, the adoption of ASU 2022-01 had no effect on the financial statements for the current fiscal year, and the Company will apply the guidance prospectively, where applicable.

ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2022-02") eliminates the guidance on troubled debt restructurings and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases. ASU 2022-02 became effective for the Company on January 1, 2023. The Company elected to apply the ASU on a modified retrospective basis to recognize any change in the allowance for credit losses that had been recognized for receivables previously modified (or reasonably expected to be modified) in a TDR. This election resulted in cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amount of the adjustment to retained earnings was a decrease of $64,000. See Note 5 in the Consolidated Financial Statements for changes in disclosures related to this adoption. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.

ASU No. 2022-03, "Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions." The amendments in this update provides clarification on guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and provides new disclosure requirements for equity securities subject to contractual sale restrictions, that are

54

measured at fair value. ASU 2022-03 became effective for the Company on January 1, 2023. As there are no equity securities subject to contract sales during the current or prior year, the adoption of ASU 2022-03 had no effect on the financial statements for the current fiscal year, and the Company will apply the guidance prospectively to future acquisitions.

Accounting Standards Pending Adoption

ASU No. 2023-02, "Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." This update will allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits or other income tax benefits. This update applies this to all reporting entities that hold (1) tax equity investments that meet the conditions for and elect to account for them using the proportional amortization method or (2) an investment in a LIHTC structure through a limited liability entity that is not accounted for using the proportional amortization method and to which certain LIHTC specific guidance removed from Subtopic 323-740 has been applied. Additionally, the disclosure requirements apply to investments that generate income tax credits and other income tax benefits from a tax credit program for which the entity has elected to apply the proportional amortization method (including investments within that elected program that do not meet the conditions to apply the proportional amortization method). The amendments in this Update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. ASU 2023-02 is effective for fiscal years beginning after December 15, 2023 and interim periods in those years. Tompkins is currently evaluating the potential impact of ASU 2023-02 on our consolidated financial statements.

The Company reviewed new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s 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 Board-approved levels. 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 most recent simulation analysis performed as of February 28, 2023, 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 4.3%, while a 200 basis point parallel decline in interest rates over a one-year period would result in a one year increase in net interest income of 2.6% from the base case. This simulation assumes no balance sheet growth, no changes in balance sheet mix, deposit rates move in a manner that reflects the historical relationship between deposit rate movement and changes in Federal funds rate, and no management action to address balance sheet mismatches.

The decrease in net interest income in the rising rate scenario is a result of the balance sheet showing a more liability sensitive position over a one year time horizon. As such, in the short-term net interest income is expected to trend slightly below the base assumption, as upward adjustments to rate sensitive deposits and short-term funding outpace increases to asset yields which are concentrated in intermediate to longer-term products. As intermediate and longer-term assets continue to reprice/adjust into higher rate environment and funding costs stabilize, the simulation shows net interest income is expected to trend upwards.

The down 200 basis point scenario increases net income slightly in the first year as a result of the Company's assets repricing downward to a lesser degree than the rates on the Company's interest-bearing liabilities, mainly deposits and overnight borrowings. 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 in addition to the above assumptions, also assumes interest rates remain unchanged from the date of the simulation, reflects a net interest margin that is increasing slightly over the next 12 to 18 months.

55

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, balance sheet mix, 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, 2023. The Company’s one-year net interest rate gap was a negative $738.8 million or 9.67% of total assets at March 31, 2023, compared with a negative $656.5 million or 8.56% of total assets at December 31, 2022. 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 contains a higher degree of risk in a rising rate environment over the next 12 months. 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, 2023						Repricing Interval
(In thousands)	Total		0-3 months			3-6 months			6-12 months			Cumulative 12 months
Interest-earning assets1	$	7,422,351	$	950,893		$	309,368		$	529,553		$	1,789,814
Interest-bearing liabilities	4,889,921		2,133,366			142,679			252,614			2,528,659
Net gap position			(1,182,473)			166,689			276,939			(738,845)
Net gap position as a percentage of total assets			(15.47)		%	2.18		%	3.62		%	(9.67)		%

 1 Balances of available securities are shown at amortized cost 

56

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, 2023.

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

There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended March 31, 2023, 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, 2023, 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

The following risk factors supplement the risk factors previously disclosed under Item 1A in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and should be read in conjunction therewith.

Adverse developments affecting the banking industry, and resulting media coverage, have contributed to market volatility and eroded confidence in the banking system and could have a material effect on the Company's results of operations and/or stock price.

Recent events impacting the financial services industry, including bank failures, have resulted in decreased confidence in banks among investors, customers and counterparties, which has generated significant market volatility among publicly traded bank holding companies. As a result, customers may choose to maintain deposits with other financial institutions or invest in higher yielding short term fixed income securities, which could adversely impact our liquidity and results of operations. Uncertainty and concern regarding soundness or creditworthiness of other financial institutions has been, and may be in the future, compounded by advances in technology that increase the speed at which deposits can be moved, as well as the speed and reach of media attention, including social media, and its ability to disseminate concerns or rumors, in each case potentially exacerbating liquidity concerns and market disruption within the financial services industry, and may increase the risk of a wider economic recession. These recent events have, and could continue to, adversely impact the market price and volatility of the Company's common stock.

These recent events may also result in potentially adverse changes to laws or regulations governing banks and bank holding companies or result in the impositions of restrictions through supervisory or enforcement activities, including higher capital requirements. The cost of resolving the recent bank failures may prompt the FDIC to increase its premiums above the recently increased levels or to issue additional special assessments. Any of these changes could have a material impact on our business, financial condition and results of operations.

57

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, 2023 through January 31, 2023	1,487	$	75.83	0	169,818
February 1, 2023 through February 28, 2023	1,186	77.51		0	169,818
March 1, 2023 through March 31, 2023	0	0		0	169,818
Total	2,673	$	76.58	0	169,818

Included above are 1,487 shares purchased in January 2023, at an average cost of $75.83, and 663 shares purchased in February 2023, at an average cost of $77.46, 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 523 shares delivered to the Company in February 2023 at an average cost of $77.51 to satisfy mandatory tax withholding requirements upon vesting of restricted stock under the Company's 2009 Equity Plan. 

On October 22, 2021, the Company’s Board of Directors authorized a share repurchase plan (the "2021 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. Shares may be repurchased from time to time under the 2021 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 2021 Repurchase Plan, the Company has repurchased a total of 230,182 shares through March 31, 2023, at an average cost of $78.31.

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

58

Item 6. Exhibits

EXHIBIT INDEX

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of the Company, incorporated herein by reference to Exhibit 3(i) to the Company’s Form 10-Q, filed with the Commission on August 11, 2008.
3.2	Second Amended and Restated Bylaws of the Company, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 31, 2011.
4.1	Form of Specimen Common Stock Certificate of the Company, incorporated herein by reference to Exhibit 4 to the Company’s Registration Statement on Form 8-A (No. 0-27514), filed with the Commission on December 29, 1995.
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.

** Attached as Exhibit 101 to this report are the following formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Condition as of March 31, 2023 and December 31, 2022; (ii) Consolidated Statements of Income for the three months ended March 31, 2023 and 2022; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2023 and 2022; (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022; (v) Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2023 and 2022; and (vi) Notes to Unaudited Consolidated Financial Statements.

59

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 10, 2023

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)

60

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 10, 2023
/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 10, 2023
/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, 2023 (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 10, 2023
	/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, 2023 (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 10, 2023
	/s/ Francis M. Fetsko
	Francis M. Fetsko
	Executive Vice President,
	Chief Financial Officer, and Chief Operating Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	May 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
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	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 par 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		14,518,876
Entity Central Index Key	0001005817
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023

XML

CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
ASSETS
Cash and noninterest bearing balances due from banks	$ 49,753	$ 18,572
Interest bearing balances due from banks	20,784	59,265
Cash and Cash Equivalents	70,537	77,837
Available-for-sale debt securities, at fair value (amortized cost of $1,795,423 at March 31, 2023 and $1,831,791 at December 31, 2022)	1,585,854	1,594,967
Held-to-maturity securities, at amortized cost (fair value of $267,099 at March 31, 2023 and $261,692 at December 31, 2022)	312,357	312,344
Equity securities, at fair value	790	777
Total loans and leases, net of unearned income and deferred costs and fees	5,273,671	5,268,911
Less: Allowance for credit losses	46,099	45,934
Net Loans and Leases	5,227,572	5,222,977
Federal Home Loan Bank and other stock	19,326	17,720
Bank premises and equipment, net	81,633	82,140
Corporate owned life insurance	86,175	85,556
Goodwill	92,602	92,602
Other intangible assets, net	2,605	2,708
Accrued interest and other assets	164,920	181,058
Total Assets	7,644,371	7,670,686
Interest bearing:
Checking, savings and money market	3,774,092	3,820,739
Time	725,338	631,411
Noninterest bearing	2,009,579	2,150,145
Total Deposits	6,509,009	6,602,295
Federal funds purchased and securities sold under agreements to repurchase	63,491	56,278
Other borrowings	327,000	291,300
Other liabilities	95,106	103,423
Total Liabilities	6,994,606	7,053,296
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $0.10 per share: Authorized 25,000,000 shares; Issued: 14,555,658 at March 31, 2023; and 14,555,741 at December 31, 2022	1,456	1,456
Additional paid-in capital	303,357	302,763
Retained earnings	537,331	526,727
Accumulated other comprehensive loss	(187,846)	(208,689)
Treasury stock, at cost – 120,879 shares at March 31, 2023, and 128,749 shares at December 31, 2022	(5,976)	(6,279)
Total Tompkins Financial Corporation Shareholders’ Equity	648,322	615,978
Noncontrolling interests	1,443	1,412
Total Equity	649,765	617,390
Total Liabilities and Equity	$ 7,644,371	$ 7,670,686

XML

CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Available-for-sale securities, at amortized cost	$ 1,795,423	$ 1,831,791
Fair Value	$ 267,099	$ 261,692
Common Stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common Stock, authorized (in shares)	25,000,000	25,000,000
Common Stock, issued (in shares)	14,555,658	14,555,741
Treasury stock, shares (in shares)	120,879	128,749

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
INTEREST AND DIVIDEND INCOME
Loans	$ 60,842	$ 51,131
Due from banks	139	41
Available-for-sale debt securities	6,743	6,770
Held-to-maturity securities	1,214	1,129
Federal Home Loan Bank and other stock	300	105
Total Interest and Dividend Income	69,238	59,176
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	1,788	426
Other deposits	10,394	1,620
Federal funds purchased and securities sold under agreements to repurchase	14	16
Other borrowings	2,796	500
Total Interest Expense	14,992	2,562
Net Interest Income	54,246	56,614
Less: (Credit) for credit loss expense	(825)	(520)
Net Interest Income After Credit for Credit Loss Expense	55,071	57,134
NONINTEREST INCOME
Insurance commissions and fees	9,509	9,317
Wealth management fees	4,509	4,917
Service charges on deposit accounts	1,746	1,779
Card services income	2,682	2,543
Other income	1,941	1,476
Net gain (loss) on securities transactions	13	(47)
Total Noninterest Income	20,400	19,985
NONINTEREST EXPENSE
Salaries and wages	24,512	23,272
Other employee benefits	6,741	5,797
Net occupancy expense of premises	3,299	3,541
Furniture and fixture expense	2,054	1,991
Amortization of intangible assets	83	218
Other operating expense	13,469	12,020
Total Noninterest Expenses	50,158	46,839
Income Before Income Tax Expense	25,313	30,280
Income Tax Expense	5,901	6,976
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	19,412	23,304
Less: Net Income Attributable to Noncontrolling Interests	31	31
Net Income Attributable to Tompkins Financial Corporation	$ 19,381	$ 23,273
Basic Earnings Per Share (in dollars per share)	$ 1.35	$ 1.61
Diluted Earnings Per Share (in dollars per share)	$ 1.35	$ 1.60

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$ 19,412	$ 23,304
Available-for-sale debt securities:
Change in net unrealized gain (loss) during the period	20,578	(80,405)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	0	0
Employee benefit plans:
Amortization of net retirement plan actuarial loss	224	464
Amortization of net retirement plan prior service cost	41	42
Other comprehensive income (loss)	20,843	(79,899)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	40,255	(56,595)
Less: Net income attributable to noncontrolling interests	(31)	(31)
Total comprehensive income (loss) attributable to Tompkins Financial Corporation	$ 40,224	$ (56,626)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$ 19,381,000	$ 23,273,000
Adjustments to reconcile net income to net cash provided by operating activities:
(Credit) for credit loss expense	(825,000)	(520,000)
Depreciation and amortization of premises, equipment, and software	2,678,000	2,650,000
Amortization of intangible assets	83,000	218,000
Earnings from corporate owned life insurance	(615,000)	(423,000)
Net amortization on securities	961,000	1,819,000
Amortization/accretion related to purchase accounting	(213,000)	(191,000)
Net (gain) loss on securities transactions	(13,000)	47,000
Net gain on sale of loans originated for sale	(38,000)	(4,000)
Proceeds from sale of loans originated for sale	1,345,000	139,000
Loans originated for sale	(1,453,000)	(685,000)
Net gain on sale of bank premises and equipment	(20,000)	(17,000)
Net excess tax benefit from stock based compensation	41,000	21,000
Stock-based compensation expense	1,045,000	945,000
Decrease in accrued interest receivable	1,236,000	1,047,000
Increase (decrease) in accrued interest payable	159,000	(106,000)
Other, net	(994,000)	(4,295,000)
Net Cash Provided by Operating Activities	22,758,000	23,918,000
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale debt securities	35,646,000	79,753,000
Proceeds from sales of available-for-sale debt securities	0	0
Purchases of available-for-sale debt securities	(252,000)	(124,668,000)
Purchases of held-to-maturity securities	0	(19,534,000)
Net (increase) decrease in loans	(3,218,000)	12,662,000
Proceeds from sale/redemptions of Federal Home Loan Bank stock	25,507,000	12,751,000
Purchases of Federal Home Loan Bank and other stock	(27,113,000)	(8,870,000)
Proceeds from sale of bank premises and equipment	55,000	42,000
Purchases of bank premises, equipment and software	(1,406,000)	(27,000)
Other, net	(138,000)	0
Net Cash Provided by (Used in) Investing Activities	29,081,000	(47,891,000)
FINANCING ACTIVITIES
Net (decrease) increase in demand, money market, and savings deposits	(187,213,000)	249,042,000
Net increase (decrease) in time deposits	94,021,000	(23,630,000)
Net increase (decrease) in Federal funds purchased and securities sold under agreements to repurchase	7,213,000	(9,672,000)
Increase in other borrowings	85,000,000	0
Repayment of other borrowings	(49,300,000)	(64,000,000)
Cash dividends	(8,712,000)	(8,335,000)
Repurchase of common stock	0	(10,370,000)
Shares issued for employee stock ownership plan	0	2,951,000
Net shares issued related to restricted stock awards	(40,000)	(3,000)
Net proceeds from exercise of stock options	(108,000)	(42,000)
Net Cash (Used) Provided by Financing Activities	(59,139,000)	135,941,000
Net (Decrease) Increase in Cash and Cash Equivalents	(7,300,000)	111,968,000
Cash and cash equivalents at beginning of period	77,837,000	63,107,000
Total Cash and Cash Equivalents at End of Period	70,537,000	175,075,000
Supplemental Information:
Cash paid during the year for - Interest	14,927,000	2,775,000
Cash paid during the year for - Taxes	1,249,000	1,396,000
Transfer of loans to other real estate owned	0	49,000
Initial recognition of operating lease right-of-use assets	0	0
Initial recognition of operating lease liabilities	0	0
Right-of-use assets obtained in exchange for new lease liabilities	$ 418,000	$ 552,000

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Adjustment	Common Stock	Additional Paid-in Capital	Retained Earnings	Retained Earnings Cumulative Effect, Adjustment	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Non- controlling Interests
Balances at Beginning at Dec. 31, 2021	$ 728,941		$ 1,470	$ 312,538	$ 475,262		$ (55,950)	$ (5,791)	$ 1,412
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	23,304				23,273				31
Other comprehensive income (loss)	(79,899)						(79,899)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	(56,595)
Cash dividends	(8,335)				(8,335)
Net exercise of stock options	(42)			(42)
Common stock repurchased and returned to unissued status	(10,370)		(13)	(10,357)
Stock-based compensation expense	945			945
Shares issued for employee stock ownership plan	2,951		4	2,947
Directors deferred compensation plan	0			(149)				149
Restricted stock activity	(3)		(1)	(2)
Balances at Ending at Mar. 31, 2022	657,492		1,460	305,880	490,200		(135,849)	(5,642)	1,443
Balances at Beginning at Dec. 31, 2022	617,390	$ (65)	1,456	302,763	526,727	$ (65)	(208,689)	(6,279)	1,412
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	19,412				19,381				31
Other comprehensive income (loss)	20,843						20,843
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	40,255
Cash dividends	(8,712)				(8,712)
Net exercise of stock options	(108)			(108)
Stock-based compensation expense	1,045			1,045
Directors deferred compensation plan	0			(303)				303
Restricted stock activity	(40)			(40)
Balances at Ending at Mar. 31, 2023	$ 649,765		$ 1,456	$ 303,357	$ 537,331		$ (187,846)	$ (5,976)	$ 1,443

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 0.60	$ 0.57
Net exercise of stock options (in shares)	1,509	630
Common stock repurchased and returned to unissued status (in shares)		(130,168)
Shares issued for employee stock ownership plan (in shares)		37,454
Directors deferred compensation plan	(7,870)	(4,367)
Restricted stock activity	(1,592)	(7,467)

XML

Business

3 Months Ended

Mar. 31, 2023

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, 2023, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank. Tompkins Community Bank provides a full array of trust and wealth management 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 also has a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. ("Tompkins Insurance"). 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."

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.

Tompkins Community Bank is subject to examination and comprehensive regulation by various regulatory authorities, including the Federal Deposit Insurance Corporation ("FDIC"), and the New York State Department of Financial Services ("NYSDFS"). 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. These agencies also examine and regulate the trust business of Tompkins Community Bank.

Tompkins Insurance is subject to examination and regulation by the NYSDFS and the Pennsylvania Insurance Department.

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited 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 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 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, 2023. The unaudited 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, 2022.

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 consolidated financial statements are reclassified when necessary to conform to the current periods’ presentation. All significant intercompany balances and transactions are eliminated in consolidation.

XML

Securities

3 Months Ended

Mar. 31, 2023

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, 2023:

	Available-for-Sale Debt Securities
March 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,220	$	0	$	19,406	$	170,814
Obligations of U.S. Government sponsored entities	670,978		0		71,216		599,762
Obligations of U.S. states and political subdivisions	92,915		10		6,241		86,684
Mortgage-backed securities – residential, issued by
U.S. Government agencies	56,224		15		5,348		50,891
U.S. Government sponsored entities	782,586		0		107,276		675,310
U.S. corporate debt securities	2,500		0		107		2,393
Total available-for-sale debt securities	$	1,795,423	$	25	$	209,594	$	1,585,854

The following table summarizes available-for-sale debt securities held by the Company at December 31, 2022:

	Available-for-Sale Debt Securities
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,170	$	0	$	22,919	$	167,251
Obligations of U.S. Government sponsored entities	681,192		0		80,025		601,167
Obligations of U.S. states and political subdivisions	93,599		8		8,326		85,281
Mortgage-backed securities – residential, issued by
U.S. Government agencies	58,727		12		6,071		52,668
U.S. Government sponsored entities	805,603		0		119,381		686,222
U.S. corporate debt securities	2,500		0		122		2,378
Total available-for-sale debt securities	$	1,831,791	$	20	$	236,844	$	1,594,967

Held-to-Maturity Debt Securities

The following table summarizes held-to-maturity debt securities held by the Company at March 31, 2023:

	Held-to-Maturity Securities
March 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,425	$	0	$	10,966	$	75,459
Obligations of U.S. Government sponsored entities	225,932		0		34,292		191,640
Total held-to-maturity debt securities	$	312,357	$	0	$	45,258	$	267,099

The following table summarizes held-to-maturity debt securities held by the Company at December 31, 2022:

	Held-to-Maturity Securities
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,478	$	0	$	12,937	$	73,541
Obligations of U.S. Government sponsored entities	225,866		0		37,715		188,151
Total held-to-maturity debt securities	$	312,344	$	0	$	50,652	$	261,692

The Company may from time to time sell debt securities from its available-for-sale portfolio. There were no sales of available-for-sale debt securities for both the three months ended March 31, 2023 and the three months ended March 31, 2022. Realized gains (losses) on sales of available-for-sale debt securities were $0 for both the three months ended March 31, 2023 and the three months ended March 31, 2022. The Company's available-for-sale portfolio includes callable securities that may be called prior to maturity. There were no realized gains (losses) on called available-for-sale debt securities for the three months ended March 31, 2023 and the three months ended March 31, 2022. The Company also recognized net gains on equity securities of $13,000 for the three months ended March 31, 2023 and net losses of $47,000 for the same period during 2022, reflecting the change in fair value.

The following table summarizes available-for-sale debt securities that had unrealized losses at March 31, 2023:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	170,814	$	19,406	$	170,814	$	19,406
Obligations of U.S. Government sponsored entities	95,536		1,931		504,226		69,286		599,762		71,217
Obligations of U.S. states and political subdivisions	20,397		306		58,598		5,936		78,995		6,242
Mortgage-backed securities – residential, issued by
U.S. Government agencies	5,484		183		45,046		5,164		50,530		5,347
U.S. Government sponsored entities	16,950		761		658,360		106,514		675,310		107,275
U.S. corporate debt securities	0		0		2,393		107		2,393		107
Total available-for-sale debt securities	$	138,367	$	3,181	$	1,439,437	$	206,413	$	1,577,804	$	209,594

The following table summarizes available-for-sale debt securities that had unrealized losses at December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	28,602	$	2,132	$	138,649	$	20,787	$	167,251	$	22,919
Obligations of U.S. Government sponsored entities	143,794		7,508		457,373		72,517		601,167		80,025
Obligations of U.S. states and political subdivisions	46,638		2,385		33,435		5,941		80,073		8,326
Mortgage-backed securities – residential, issued by
U.S. Government agencies	22,945		1,258		29,356		4,813		52,301		6,071
U.S. Government sponsored entities	186,690		16,869		499,532		102,512		686,222		119,381
U.S. corporate debt securities	0		0		2,378		122		2,378		122
Total available-for-sale debt securities	$	428,669	$	30,152	$	1,160,723	$	206,692	$	1,589,392	$	236,844

The following table summarizes held-to-maturity debt securities that had unrealized losses at March 31, 2023:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	75,459	$	10,966	$	75,459	$	10,966
Obligations of U.S. Government sponsored entities	8,293		604		183,347		33,688		191,640		34,292
Total held-to-maturity debt securities	$	8,293	$	604	$	258,806	$	44,654	$	267,099	$	45,258

The following table summarizes held-to-maturity debt securities that had unrealized losses at December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	73,542	$	12,937	$	73,542	$	12,937
Obligations of U.S. Government sponsored entities	24,543		3,903		163,607		33,812		188,150		37,715
Total held-to-maturity debt securities	$	24,543	$	3,903	$	237,149	$	46,749	$	261,692	$	50,652

The Company evaluates available-for-sale debt securities for expected credit losses ("ECL") 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.

Factors that may be indicative of ECL include, but are not limited to, the following:

•Extent to which the fair value is less than the amortized cost basis.

•Adverse conditions specifically related to the security, an industry, or geographic area (changes in technology, business practice).

•Payment structure of the debt security with respect to underlying issuer or obligor.

•Failure of the issuer to make scheduled payment of principal and/or interest.

•Changes to the rating of a security or issuer by a nationally recognized statistical rating organization.

•Changes in tax or regulatory guidelines that impact a security or underlying issuer.

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 (technical impairment) is the result of changes in interest rates or reflects a fundamental change in the credit worthiness of the underlying issuer. Any impairment that is not credit related is

recognized in other comprehensive income (loss), 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.

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management has made the accounting policy election to exclude accrued interest receivable on held-to-maturity debt securities from the estimate of credit losses. As of March 31, 2023, the held-to- maturity portfolio consisted of U.S. Treasury securities and securities issued by U.S. government-sponsored enterprises, including The Federal National Mortgage Agency and the Federal Farm Credit Banks Funding Corporation. U.S. Treasury securities are backed by the full faith and credit of and/or guaranteed by the U.S. government, and it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities. Securities issued by U.S. government agencies or U.S. government-sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as "low-risk," and have a long history of zero credit loss. As such, the Company did not record an allowance for credit losses for these securities as of March 31, 2023.

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-related quality of the investment securities. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost.

The Company did not recognize any net credit impairment charge to earnings on investment securities in the first quarter of 2023.

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, 2023
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	40,237	$	39,828
Due after one year through five years	554,392		506,082
Due after five years through ten years	325,346		283,610
Due after ten years	36,638		30,133
Total	956,613		859,653
Mortgage-backed securities	838,810		726,201
Total available-for-sale debt securities	$	1,795,423	$	1,585,854

December 31, 2022
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	50,922	$	50,269
Due after one year through five years	508,880		459,721
Due after five years through ten years	367,743		314,408
Due after ten years	39,916		31,679
Total	967,461		856,077
Mortgage-backed securities	864,330		738,890
Total available-for-sale debt securities	$	1,831,791	$	1,594,967

March 31, 2023
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,357	$	267,099
Total held-to-maturity debt securities	$	312,357	$	267,099

December 31, 2022
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,344	$	261,692
Total held-to-maturity debt securities	$	312,344	$	261,692

The Company also holds non-marketable Federal Home Loan Bank New York ("FHLBNY") stock and non-marketable Atlantic Community Bankers Bank ("ACBB") stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in Federal Home Loan Bank ("FHLB") stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock and ACBB stock totaled $19.2 million and $95,000, respectively, at March 31, 2023. These securities are carried at par, which is also cost. The FHLBNY continues 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, 2023, we determined that no impairment write-downs were required.

XML

Loans and Leases

3 Months Ended

Mar. 31, 2023

Loans and Leases Receivable Disclosure [Abstract]

Loans and Leases

Loans and Leases

Loans and Leases at March 31, 2023 and December 31, 2022 were as follows:

(In thousands)	03/31/2023		12/31/2022
Commercial and industrial
Agriculture	$	65,223	$	85,073
Commercial and industrial other	673,104		705,700
PPP loans*	686		756
Subtotal commercial and industrial	739,013		791,529
Commercial real estate
Construction	219,789		201,116
Agriculture	214,014		214,963
Commercial real estate other	2,476,532		2,437,339
Subtotal commercial real estate	2,910,335		2,853,418
Residential real estate
Home equity	183,636		188,623
Mortgages	1,342,214		1,346,318
Subtotal residential real estate	1,525,850		1,534,941
Consumer and other
Indirect	1,783		2,224
Consumer and other	83,775		75,412
Subtotal consumer and other	85,558		77,636
Leases	18,016		16,134
Total loans and leases	5,278,772		5,273,658
Less: unearned income and deferred costs and fees	(5,101)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,273,671	$	5,268,911
*SBA Paycheck Protection Program ("PPP")

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 3 – "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, 2022. There have been no significant changes in these policies and guidelines since the date of that report. 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 tables are an age analysis of past due loans, segregated by class of loans as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	152	$	0	$	0	$	152	$	65,071	$	65,223
Commercial and industrial other	2,586		46		371		3,003		670,101		673,104
PPP loans*	0		0		0		0		686		686
Subtotal commercial and industrial	2,738		46		371		3,155		735,858		739,013
Commercial real estate
Construction	0		0		0		0		219,789		219,789
Agriculture	170		0		0		170		213,844		214,014
Commercial real estate other	0		0		10,037		10,037		2,466,495		2,476,532
Subtotal commercial real estate	170		0		10,037		10,207		2,900,128		2,910,335
Residential real estate
Home equity	512		400		1,426		2,338		181,298		183,636
Mortgages	1,741		30		6,505		8,276		1,333,938		1,342,214
Subtotal residential real estate	2,253		430		7,931		10,614		1,515,236		1,525,850
Consumer and other
Indirect	56		11		41		108		1,675		1,783
Consumer and other	120		70		104		294		83,481		83,775
Subtotal consumer and other	176		81		145		402		85,156		85,558
Leases	0		0		0		0		18,016		18,016
Total loans and leases	5,337		557		18,484		24,378		5,254,394		5,278,772
Less: unearned income and deferred costs and fees	0		0		0		0		(5,101)		(5,101)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,337	$	557	$	18,484	$	24,378	$	5,249,293	$	5,273,671
*SBA Paycheck Protection Program ("PPP")

December 31, 2022
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	58	$	0	$	0	$	58	$	85,015	$	85,073
Commercial and industrial other	50		381		82		513		705,187		705,700
PPP loans*	0		0		0		0		756		756
Subtotal commercial and industrial	108		381		82		571		790,958		791,529
Commercial real estate
Construction	0		0		0		0		201,116		201,116
Agriculture	128		0		0		128		214,835		214,963
Commercial real estate other	0		0		11,449		11,449		2,425,890		2,437,339
Subtotal commercial real estate	128		0		11,449		11,577		2,841,841		2,853,418
Residential real estate
Home equity	435		204		1,628		2,267		186,356		188,623
Mortgages	1,748		0		6,802		8,550		1,337,768		1,346,318
Subtotal residential real estate	2,183		204		8,430		10,817		1,524,124		1,534,941
Consumer and other
Indirect	66		31		53		150		2,074		2,224
Consumer and other	52		19		112		183		75,229		75,412
Subtotal consumer and other	118		50		165		333		77,303		77,636
Leases	0		0		0		0		16,134		16,134
Total loans and leases	2,537		635		20,126		23,298		5,250,360		5,273,658
Less: unearned income and deferred costs and fees	0		0		0		0		(4,747)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	2,537	$	635	$	20,126	$	23,298	$	5,245,613	$	5,268,911
*SBA Paycheck Protection Program ("PPP")

The following tables present 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 tables are an age analysis of nonaccrual loans segregated by class of loans, as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial
Agriculture	$	0	$	17	$	0
Commercial and industrial other	0		906		0
Subtotal commercial and industrial	0		923		0
Commercial real estate
Agriculture	0		183		0
Commercial real estate other	10,547		12,197		0
Subtotal commercial real estate	10,547		12,380		0
Residential real estate
Home equity	0		2,547		0
Mortgages	181		12,322		0
Subtotal residential real estate	181		14,869		0
Consumer and other
Indirect	0		78		0
Consumer and other	0		174		13
Subtotal consumer and other	0		252		13
Total loans and leases	$	10,728	$	28,424	$	13

December 31, 2022
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial
Commercial and industrial other	$	411	$	618	$	25
Subtotal commercial and industrial	411		618		25
Commercial real estate
Agriculture	186		186		0
Commercial real estate other	13,101		13,672		0
Subtotal commercial real estate	13,287		13,858		0
Residential real estate
Home equity	318		2,391		0
Mortgages	1,177		11,153		0
Subtotal residential real estate	1,495		13,544		0
Consumer and other
Indirect	0		94		0
Consumer and other	0		175		0
Subtotal consumer and other	0		269		0
Total loans and leases	$	15,193	$	28,289	$	25

The Company recognized $0 of interest income on nonaccrual loans during the three months ended March 31, 2023.

XML

Allowance for Credit Losses

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Allowance for Credit 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 excluding the leasing segment. 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 given 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 forecasts of 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, and scenario weightings, are also considered by management when developing the forecast metrics.

Due to the size and characteristics of the leasing portfolio, the Company uses the remaining life method, using the historical loss rate of the commercial and industrial segment, to determine the allowance for credit losses.

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.

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, 2023, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance. In addition, various federal and State regulatory agencies, as part of their examination process, review the Company's allowance and may require the Company to recognize additions to the allowance based on their judgements and information available to them at the time of their examinations.

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 cancellable, through a charge to credit loss expense for off-balance sheet credit exposures included in provision for credit loss expense in the Company's consolidated statements of income.

The following table details activity in the allowance for credit losses on loans and leases for the three months ended March 31, 2023 and 2022. 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, 2023
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,039	$	27,287	$	11,154	$	1,358	$	96	$	45,934
Impact of adopting ASU 2022-22	2		16		46		0		0		64
Charge-offs	0		0		(2)		(106)		0		(108)
Recoveries	46		1,246		64		33		0		1,389
(Credit) provision for credit loss expense	229		(1,363)		(404)		343		15		(1,180)
Ending Balance	$	6,316	$	27,186	$	10,858	$	1,628	$	111	$	46,099

Three Months Ended March 31, 2022
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,335	$	24,813	$	10,139	$	1,492	$	64	42,843
Charge-offs	(23)		(27)		0		(196)		0		(246)
Recoveries	20		42		109		92		0		263
(Credit) provision for credit loss expense	695		(1,846)		199		200		18		(734)
Ending Balance	$	7,027	$	22,982	$	10,447	$	1,588	$	82	$	42,126

The following table details activity in the liabilities for off-balance sheet credit exposures for the three months ended March 31, 2023 and 2022:

(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	2,796	$	2,507
Provision for credit loss expense related to off-balance sheet credit exposures	355		214
Liabilities for off-balance sheet credit exposures at end of period	$	3,151	$	2,721

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:

March 31, 2023
(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
Commercial Real Estate	$	10,547	$	0	$	0	$	10,547	$	0
Residential Real Estate	181		0		0		181		0
Total	$	10,728	$	0	$	0	$	10,728	$	0

December 31, 2022
(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
Commercial and Industrial	$	642	$	28	$	0	$	670	$	0
Commercial Real Estate	13,209		0		78		13,287		0
Commercial Real Estate - Agriculture	1,515		0		0		1,515		0
Residential Real Estate	188		0		0		188		3
Total	$	15,554	$	28	$	78	$	15,660	$	3

The Company adopted ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2022-02") effective January 1, 2023. ASU 2022-02 eliminates the guidance on troubled debt restructurings (TDRs) and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases, which has been incorporated in the credit quality table below.

There were no new borrowers experiencing financial difficulty in the first quarter of 2023, and no new TDRs reported in the first quarter of 2022.

The following tables present credit quality indicators by total loans on an amortized cost basis by origination year as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	16,897	$	113,621	$	80,606	$	36,432	$	44,230	$	167,183	$	203,174	$	1,170	$	663,313
Special Mention	0		0		120		338		132		1,339		800		0		2,729
Substandard	0		0		102		417		65		1,562		4,916		0		7,062
Total Commercial and Industrial - Other	$	16,897	$	113,621	$	80,828	$	37,187	$	44,427	$	170,084	$	208,890	$	1,170	$	673,104
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - PPP:
Pass	$	0	$	0	$	383	$	303	$	0	$	0	$	0	$	0	$	686
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial and Industrial - PPP	$	0	$	0	$	383	$	303	$	0	$	0	$	0	$	0	$	686
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - Agriculture:
Pass	$	2,152	$	15,034	$	4,399	$	4,162	$	3,479	$	12,092	$	23,745	$	0	$	65,063
Special Mention	0		0		56		0		0		0		20		0		76
Substandard	0		0		0		67		0		13		4		0		84
Total Commercial and Industrial - Agriculture	$	2,152	$	15,034	$	4,455	$	4,229	$	3,479	$	12,105	$	23,769	$	0	$	65,223
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate
Pass	$	39,210	$	340,604	$	367,485	$	317,991	$	278,372	$	1,021,145	$	35,794	$	2,056	$	2,402,657
Special Mention	0		643		0		1,682		11,380		21,234		0		0		34,939
Substandard	0		74		109		0		3,147		35,482		124		0		38,936
Total Commercial Real Estate	$	39,210	$	341,321	$	367,594	319,673		292,899		1,077,861		$	35,918	$	2,056	$	2,476,532
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate - Agriculture:
Pass	$	2,578	$	34,652	$	23,976	$	22,525	$	24,893	$	100,038	$	2,158	$	1,450	$	212,270
Special Mention	0		0		0		0		396		1,115		0		0		1,511
Substandard	0		0		0		0		183		50		0		0		233
Total Commercial Real Estate - Agriculture	$	2,578	$	34,652	$	23,976	$	22,525	$	25,472	$	101,203	$	2,158	$	1,450	$	214,014
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial Real Estate - Construction
Pass	$	0	$	30,152	$	73,446	$	17,738	$	11,859	$	16,312	$	62,168	$	8,114	$	219,789
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial Real Estate - Construction	$	0	$	30,152	$	73,446	$	17,738	$	11,859	$	16,312	$	62,168	$	8,114	$	219,789
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Residential - Home Equity
Performing	$	499	$	2,357	$	1,033	$	610	$	953	$	10,589	$	164,730	$	317	$	181,088
Nonperforming	0		0		0		0		0		288		2,260		0		2,548
Total Residential - Home Equity	$	499	$	2,357	$	1,033	$	610	$	953	$	10,877	$	166,990	$	317	$	183,636
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	2	$	0	$	0	$	2
Residential - Mortgages
Performing	$	15,811	$	192,106	$	269,413	$	235,432	$	116,045	$	501,085	$	0	$	0	$	1,329,892
Nonperforming	0		218		330		619		670		10,485		0		0		12,322
Total Residential - Mortgages	$	15,811	$	192,324	$	269,743	$	236,051	$	116,715	$	511,570	$	0	$	0	$	1,342,214
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Consumer - Direct
Performing	$	26,213	$	16,366	$	13,338	$	6,844	$	5,762	$	11,873	$	3,205	$	0	$	83,601
Nonperforming	0		0		0		0		63		108		3		0		174
Total Consumer - Direct	$	26,213	$	16,366	$	13,338	$	6,844	$	5,825	$	11,981	$	3,208	$	0	$	83,775
Current-period gross writeoffs	$	33	$	0	$	0	$	14	$	20	$	3	$	0	$	0	$	70
Consumer - Indirect
Performing	$	0	$	0	$	139	$	127	$	885	$	554	$	0	$	0	$	1,705
Nonperforming	0		0		0		0		55		23		0		0		78
Total Consumer - Indirect	$	0	$	0	$	139	$	127	$	940	$	577	$	0	$	0	$	1,783
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	31	$	5	$	0	$	0	$	36

December 31, 2022
(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	124,190	$	79,861	$	38,158	$	41,391	$	33,238	$	156,038	$	215,890	$	6,466	$	695,232
Special Mention	0		127		421		285		271		1,380		501		0		2,985
Substandard	0		111		442		35		733		503		5,659		0		7,483
Total Commercial and Industrial - Other	$	124,190	$	80,099	$	39,021	$	41,711	$	34,242	$	157,921	$	222,050	$	6,466	$	705,700
Commercial and Industrial - Agriculture:
Pass	$	16,694	$	4,120	$	4,944	$	4,186	$	7,734	$	4,883	$	42,097	$	215	$	84,873
Special Mention	0		58		0		0		0		0		50		0		108
Substandard	0		0		71		0		0		16		5		0		92
Total Commercial and Industrial - Agriculture	$	16,694	$	4,178	$	5,015	$	4,186	$	7,734	$	4,899	$	42,152	$	215	$	85,073
Commercial and Industrial - PPP:
Pass	$	0	$	416	$	340	$	0	$	0	$	0	$	0	$	0	$	756
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial and Industrial - PPP	$	0	$	416	$	340	$	0	$	0	$	0	$	0	$	0	$	756
Commercial Real Estate
Pass	$	342,311	$	367,104	$	311,607	$	279,587	$	203,016	$	812,563	$	10,906	$	24,503	$	2,351,597
Special Mention	643		3,406		1,688		11,462		2,555		25,361		0		0		45,115
Substandard	78		110		0		3,394		1,692		35,221		132		0		40,627
Total Commercial Real Estate	$	343,032	$	370,620	$	313,295	$	294,443	$	207,263	$	873,145	$	11,038	$	24,503	$	2,437,339
Commercial Real Estate - Agriculture:
Pass	$	33,241	$	24,125	$	22,831	$	25,576	$	37,835	$	65,112	$	3,131	$	1,235	$	213,086
Special Mention	0		0		0		401		0		1,142		0		0		1,543
Substandard	0		0		0		186		38		110		0		0		334
Total Commercial Real Estate - Agriculture	$	33,241	$	24,125	$	22,831	$	26,163	$	37,873	$	66,364	$	3,131	$	1,235	$	214,963
Commercial Real Estate - Construction
Pass	$	23,105	$	75,245	$	27,584	$	14,842	$	9,083	$	7,268	$	42,701	$	1,288	$	201,116
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial Real Estate - Construction	$	23,105	$	75,245	$	27,584	$	14,842	$	9,083	$	7,268	$	42,701	$	1,288	$	201,116

The following tables present credit quality indicators by total loans on an amortized cost basis by origination year as of December 31, 2022, continued:

December 31, 2022
(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Residential - Home Equity
Performing	$	3,030	$	1,062	$	637	$	992	$	792	$	3,183	$	175,451	$	1,085	$	186,232
Nonperforming	0		0		0		14		0		25		2,352		0		2,391
Total Residential - Home Equity	$	3,030	$	1,062	$	637	$	1,006	$	792	$	3,208	$	177,803	$	1,085	$	188,623
Residential - Mortgages
Performing	$	187,129	$	272,235	$	239,584	$	117,391	$	66,605	$	452,221	$	0	$	0	$	1,335,165
Nonperforming	218		335		628		682		1,552		7,738		0		0		11,153
Total Residential - Mortgages	$	187,347	$	272,570	$	240,212	$	118,073	$	68,157	$	459,959	$	0	$	0	$	1,346,318
Consumer - Direct
Performing	$	31,243	$	13,999	$	7,372	$	6,138	$	4,386	$	8,029	$	4,070	$	0	$	75,237
Nonperforming	0		0		3		93		76		0		3		0		175
Total Consumer - Direct	$	31,243	$	13,999	$	7,375	$	6,231	$	4,462	$	8,029	$	4,073	$	0	$	75,412
Consumer - Indirect
Performing	$	0	$	156	$	146	$	1,092	$	635	$	101	$	0	$	0	$	2,130
Nonperforming	0		0		0		76		10		8		0		0		94
Total Consumer - Indirect	$	0	$	156	$	146	$	1,168	$	645	$	109	$	0	$	0	$	2,224

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2023

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, 2023 and 2022 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share (ASC 260). 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)	03/31/2023		03/31/2022
Basic
Net income available to common shareholders	$	19,381	$	23,273
Less: income attributable to unvested stock-based compensation awards	(18)		(76)
Net earnings allocated to common shareholders	19,363		23,197
Weighted average shares outstanding, including unvested stock-based compensation awards	14,520,092		14,611,709
Less: average unvested stock-based compensation awards	(193,497)		(211,706)
Weighted average shares outstanding - Basic	14,326,595		14,400,003
Diluted
Net earnings allocated to common shareholders	19,363		23,197
Weighted average shares outstanding - Basic	14,326,595		14,400,003
Plus: incremental shares from assumed conversion of stock-based compensation awards	63,078		78,180
Weighted average shares outstanding - Diluted	14,389,673		14,478,183
Basic EPS	$	1.35	$	1.61
Diluted EPS	$	1.35	$	1.60

Stock-based compensation awards representing 2,860 and 1,848 of common shares during the three months ended March 31, 2023 and 2022, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been anti-dilutive.

XML

Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2023

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, 2023 and 2022:

	Three Months Ended March 31, 2023
(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	$	27,255	$	(6,677)	$	20,578
Net unrealized gains/losses	27,255		(6,677)		20,578
Employee benefit plans:
Amortization of net retirement plan actuarial gain	297		(73)		224
Amortization of net retirement plan prior service cost	55		(14)		41
Employee benefit plans	352		(87)		265
Other comprehensive (loss) income	$	27,607	$	(6,764)	$	20,843

	Three Months Ended March 31, 2022
(In thousands)	Before-Tax Amount		Tax (Expense) Benefit		Net of Tax
Available-for-sale debt securities:
Change in net unrealized (loss) gain during the period	$	(106,481)	$	26,076	$	(80,405)
Net unrealized gains/losses	(106,481)		26,076		(80,405)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	615		(151)		464
Amortization of net retirement plan prior service cost	56		(14)		42
Employee benefit plans	671		(165)		506
Other comprehensive (loss) income	$	(105,810)	$	25,911	$	(79,899)

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, 2023	$	(178,803)	$	(29,886)	$	(208,689)
Other comprehensive income before reclassifications	20,578		0		20,578
Amounts reclassified from accumulated other comprehensive (loss) income	0		265		265
Net current-period other comprehensive income (loss)	20,578		265		20,843
Balance at March 31, 2023	$	(158,225)	$	(29,621)	$	(187,846)
Balance at January 1, 2022	$	(14,560)	$	(41,390)	$	(55,950)
Other comprehensive loss before reclassifications	(80,405)		0		(80,405)
Amounts reclassified from accumulated other comprehensive (loss) income	0		506		506
Net current-period other comprehensive income (loss)	(80,405)		506		(79,899)
March 31, 2022	$	(94,965)	$	(40,884)	$	(135,849)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023
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 (loss) gain on securities transactions
	0		Tax expense
	0		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(297)		Other operating expense
Net retirement plan prior service cost	(55)		Other operating expense
	(352)		Total before tax
	87		Tax benefit
	$	(265)	Net of tax

Three Months Ended March 31, 2022
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 (loss) gain on securities transactions
	0		Tax expense
	0		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(615)		Other operating expense
Net retirement plan prior service cost	(56)		Other operating expense
	(671)		Total before tax
	165		Tax benefit
	$	(506)	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").

XML

Employee Benefit Plan

3 Months Ended

Mar. 31, 2023

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				Life and Health				SERP Benefits
	Three Months Ended				Three Months Ended				Three Months Ended
(In thousands)	03/31/2023		03/31/2022		03/31/2023		03/31/2022		03/31/2023		03/31/2022
Service cost	$	0	$	0	$	15	$	44	$	14	$	52
Interest cost	823		463		89		52		299		201
Expected return on plan assets	(1,199)		(1,468)		0		0		0		0
Amortization of net retirement plan actuarial loss	304		323		(7)		52		0		240
Amortization of net retirement plan prior service (credit) cost	0		0		(15)		(15)		70		71
Net periodic benefit (income) cost	$	(72)	$	(682)	$	82	$	133	$	383	$	564

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 $266,000 and $506,000, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive (loss) income, for the three months ended March 31, 2023 and 2022, respectively.

The Company is not required to contribute to the pension plan in 2023, but it may make voluntary contributions. The Company did not contribute to the pension plan in the first three months of 2023 and 2022.

XML

Other Income and Operating Expense

3 Months Ended

Mar. 31, 2023

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 periods presented below are stated separately.

	Three Months Ended
(In thousands)	03/31/2023		03/31/2022
Noninterest Income
Other service charges	$	615	$	627
Earnings from corporate owned life insurance	615		423
Net gains on the sale of loans originated for sale	38		4
Other income	673		422
Total other income	$	1,941	$	1,476
Noninterest Expenses
Marketing expense	$	1,105	$	1,056
Professional fees	1,804		1,606
Legal fees	419		210
Technology expense	4,007		3,683
FDIC insurance	1,054		701
Cardholder expense	1,016		1,141
Other expenses	4,064		3,623
Total other operating expense	$	13,469	$	12,020

XML

Revenue Recognition

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

As stated in Note 1 - "Summary of Significant Accounting Policies," in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, the Company adopted ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers on January 1, 2022. The update relates to the previous adoption of ASC 606, "Revenue from Contracts with Customers" and all subsequent ASUs that modified ASC 606, and will be applied to future acquisitions. As there were no acquisitions during the current year, the adoption of ASU No. 2021-08 had no effect on the financial statements for the current fiscal year.

Generally, this new guidance strives to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity and inconsistency amongst entities in measuring contract assets and liabilities. The update requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contract. Changes in the acquiree’s balance of contract asset and contract liabilities identified as necessary to conform to the acquirer’s accounting policies would result in a reallocation of the purchase price.

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

Insurance Commissions and Fees

Insurance commissions and fees from insurance product sales are typically earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. Commission revenue on policies billed in installments is now accrued based upon the completion of the performance obligation creating a current asset for the unbilled revenue until such time as an invoice is generated, typically not to exceed twelve months. The impact of these changes was not significant, but it will result in slight variances from quarter to quarter. Contingent commissions are estimated based upon management’s expectations for the year with an appropriate constraint applied and accrued relative to the recognition of the corresponding core commissions.

Trust & Asset Management

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

Mutual Fund & Investment Income

Mutual fund and investment income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, investment advisory fees from the Company’s Strategic Asset Management Services (SAM) wealth management product. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value, 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. Payment on these revenue streams is received primarily through a direct charge to the customer’s account, immediately or in the following month, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time.

The following table presents noninterest income, segregated by revenue streams, for the three months ended March 31, 2023 and 2022:

	Three Months Ended
(In thousands)	03/31/2023		03/31/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	8,517	$	7,964
Installment Billing	1		44
Refund of Commissions	59		(28)
Contract Liabilities/Deferred Revenue	(3)		(1)
Contingent Commissions	935		1,338
Subtotal Insurance Revenues	9,509		9,317
Trust and Asset Management	3,435		3,503
Mutual Fund & Investment Income	1,074		1,414
Subtotal Investment Service Income	4,509		4,917
Service Charges on Deposit Accounts	1,746		1,779
Card Services Income	2,682		2,543
Other	351		316
Noninterest Income (in-scope of ASC 606)	18,797		18,872
Noninterest Income (out-of-scope of ASC 606)	1,603		1,113
Total Noninterest Income	$	20,400	$	19,985

Contract Balances

A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration or before payment is due, which would result in contract receivables or assets, respectively. A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment or for which payment is due from the customer. 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. 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 for the insurance and wealth management services amounted to $4.3 million and $2.8 million, respectively, at March 31, 2023, compared to $6.1 million and $2.5 million, respectively, at December 31, 2022. Additionally, the Company had contract assets related to contingent income of $0.7 million and $2.9 million, respectively, at March 31, 2023 and December 31, 2022, and contract liabilities of $0.8 million and $1.6 million, respectively at March 31, 2023 and December 31, 2022.

Contract Acquisition Costs

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

XML

Financial Guarantees

3 Months Ended

Mar. 31, 2023

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, 2023, the Company’s maximum potential obligation under standby letters of credit was $34.9 million compared to $35.8 million at December 31, 2022. 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

Segment and Related Information

3 Months Ended

Mar. 31, 2023

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

Tompkins Community Bank has twelve banking offices located in Ithaca, NY and surrounding communities; sixteen banking offices located in the Genesee Valley region of New York State, which includes Monroe County; thirteen banking offices located in the counties north of New York City; and nineteen 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 regional markets.

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 the bank and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Three months ended March 31, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	69,238	$	1	$	0	$	(1)	$	69,238
Interest expense	14,993		0		0		(1)		14,992
Net interest income	54,245		1		0		0		54,246
Credit for credit loss expense	(825)		0		0		0		(825)
Noninterest income	6,698		9,636		4,621		(555)		20,400
Noninterest expense	39,848		7,215		3,650		(555)		50,158
Income before income tax expense	21,920		2,422		971		0		25,313
Income tax expense	4,989		673		239		0		5,901
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	16,931		1,749		732		0		19,412
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	16,900	$	1,749	$	732	$	0	$	19,381
Depreciation and amortization	$	2,589	$	44	$	45	$	0	$	2,678
Assets	7,586,753		43,779		29,013		(15,174)		7,644,371
Goodwill	64,655		19,866		8,081		0		92,602
Other intangibles, net	984		1,576		45		0		2,605
Net loans and leases	5,227,572		0		0		0		5,227,572
Deposits	6,527,953		0		(4,245)		(14,699)		6,509,009
Total Equity	$	584,650	$	35,625	$	29,490	$	0	$	649,765

Three months ended March 31, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	59,176	$	1	$	0	$	(1)	$	59,176
Interest expense	2,563		0		0		(1)		2,562
Net interest income	56,613		1		0		0		56,614
Credit for credit loss expense	(520)		0		0		0		(520)
Noninterest income	6,193		9,434		4,934		(576)		19,985
Noninterest expense	37,190		6,501		3,724		(576)		46,839
Income before income tax expense	26,136		2,934		1,210		0		30,280
Income tax expense	5,791		815		370		0		6,976
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	20,345		2,119		840		0		23,304
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	20,314	$	2,119	$	840	$	0	$	23,273
Depreciation and amortization	$	2,578	$	44	$	28	$	0	$	2,650
Assets	7,835,767		44,247		26,684		(15,587)		7,891,111
Goodwill	64,500		19,866		8,081		0		92,447
Other intangibles, net	1,402		1,917		63		0		3,382
Net loans and leases	5,021,325		0		0		0		5,021,325
Deposits	7,031,223		0		(10)		(14,474)		7,016,739
Total Equity	$	598,707	$	34,128	$	24,657	$	0	$	657,492

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

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 tables summarize financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value: 

Recurring Fair Value Measurements
March 31, 2023
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	170,814	$	0	$	170,814	$	0
Obligations of U.S. Government sponsored entities	599,762		0		599,762		0
Obligations of U.S. states and political subdivisions	86,684		0		86,684		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	50,891		0		50,891		0
U.S. Government sponsored entities	675,310		0		675,310		0
U.S. corporate debt securities	2,393		0		2,393		0
Total Available-for-sale debt securities	$	1,585,854	$	0	$	1,585,854	$	0
Equity securities, at fair value	$	790	$	0	$	0	$	790

Recurring Fair Value Measurements
December 31, 2022
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	167,251	$	0	$	167,251	$	0
Obligations of U.S. Government sponsored entities	601,167		0		601,167		0
Obligations of U.S. states and political subdivisions	85,281		0		85,281		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	52,668		0		52,668		0
U.S. Government sponsored entities	686,222		0		686,222		0
U.S. corporate debt securities	2,378		0		2,378		0
Total Available-for-sale debt securities	$	1,594,967	$	0	$	1,594,967	$	0
Equity securities, at fair value	$	777	$	0	$	0	$	777

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 a 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, 2022 and March 31, 2023, was immaterial.

There were no transfers between Levels 1, 2 and 3 for the three months ended March 31, 2023.

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 individually evaluated loans, and other real estate owned ("OREO"). As of March 31, 2023 and 2022, 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 3 inputs. 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.

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at March 31, 2023 and 2022. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions:

Three months ended March 31, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2023
Individually evaluated loans	$	0	$	0	$	0	$	0	$	826
Other real estate owned	36		0				36		22

December 31, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 12/31/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 12/31/2022
Individually evaluated loans	$	9,460	$	0	$	0	$	9,460	$	59
Other real estate owned	152		0		0		152		15

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 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, 2023
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	70,537	$	70,537	$	70,537	$	0	$	0
Securities - held-to-maturity	312,357		267,099		0		267,099		0
FHLB and other stock	19,326		19,326		0		19,326		0
Accrued interest receivable	23,629		23,629		0		23,629		0
Loans/leases, net1	5,227,572		4,911,105		0		0		4,911,105
Financial Liabilities:
Time deposits	$	725,338	$	713,125	$	0	$	713,125	$	0
Other deposits	5,783,671		5,783,671		0		5,783,671		0
Fed funds purchased and securities sold
under agreements to repurchase	63,491		63,491		0		63,491		0
Other borrowings	327,000		324,849		0		324,849		0
Accrued interest payable	1,579		1,579		0		1,579		0

Estimated Fair Value of Financial Instruments
December 31, 2022
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	77,837	$	77,837	$	77,837	$	0	$	0
Securities - held to maturity	312,344		261,692		0		261,692		0
FHLB and other stock	17,720		17,720		0		17,720		0
Accrued interest receivable	24,865		24,865		0		24,865		0
Loans/leases, net1	5,222,977		4,939,246		0		0		4,939,246
Financial Liabilities:
Time deposits	$	631,411	$	616,488	$	0	$	616,488	$	0
Other deposits	5,970,884		5,970,884		0		5,970,884		0
Fed funds purchased and securities
sold under agreements to repurchase	56,278		56,278		0		56,278		0
Other borrowings	291,300		289,234		0		289,234		0
Accrued interest payable	1,420		1,420		0		1,420		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.

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 other stock reported above, carrying value is cost.

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

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

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

Other borrowings: The fair value of other borrowings is based upon discounted cash flow analyses using current rates offered for FHLB advances, with similar terms.

XML

Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Management of economic risks, by the Company, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. Existing credit derivatives result from participation in loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities.

Non-designated Hedges

The Company’s existing credit derivatives result from participation in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, and therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans.

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated statements of condition as of March 31, 2023 and December 31, 2022. The Company began entering into derivative transactions in the second quarter of 2022.

Derivative Liabilities
	March 31, 2023					December 31, 2022
	Notional		Balance Sheet	Fair		Balance Sheet	Fair
(In thousands)	Amount		Location	Value		Location	Value
Derivatives not designated as hedging instruments
Interest Rate Products	$	0	Other Liabilities	$	0	Other Liabilities	$	0
Risk Participation Agreement	7,499		Other Liabilities	26		Other Liabilities	21
Total derivatives not designated as hedging instruments				$	26		$	21

Tabular Disclosure of the Effect of Derivatives Not Designated as Hedging Instruments on the Income Statement

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the three months ended March 31, 2023:

Effect of Derivatives Not Designated as Hedging Instruments on the Statement of Financial Performance
Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
(In thousands)		Three Months Ended March 31, 2023
Interest Rate Products	Other income / (expense)	$	0
Risk Participation Agreement	Other income / (expense)	(6)
Total		$	(6)

XML

Securities (Tables)

3 Months Ended

Mar. 31, 2023

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, 2023:

	Available-for-Sale Debt Securities
March 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,220	$	0	$	19,406	$	170,814
Obligations of U.S. Government sponsored entities	670,978		0		71,216		599,762
Obligations of U.S. states and political subdivisions	92,915		10		6,241		86,684
Mortgage-backed securities – residential, issued by
U.S. Government agencies	56,224		15		5,348		50,891
U.S. Government sponsored entities	782,586		0		107,276		675,310
U.S. corporate debt securities	2,500		0		107		2,393
Total available-for-sale debt securities	$	1,795,423	$	25	$	209,594	$	1,585,854

The following table summarizes available-for-sale debt securities held by the Company at December 31, 2022:

	Available-for-Sale Debt Securities
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,170	$	0	$	22,919	$	167,251
Obligations of U.S. Government sponsored entities	681,192		0		80,025		601,167
Obligations of U.S. states and political subdivisions	93,599		8		8,326		85,281
Mortgage-backed securities – residential, issued by
U.S. Government agencies	58,727		12		6,071		52,668
U.S. Government sponsored entities	805,603		0		119,381		686,222
U.S. corporate debt securities	2,500		0		122		2,378
Total available-for-sale debt securities	$	1,831,791	$	20	$	236,844	$	1,594,967

Schedule of held to maturity securities

The following table summarizes held-to-maturity debt securities held by the Company at March 31, 2023:

	Held-to-Maturity Securities
March 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,425	$	0	$	10,966	$	75,459
Obligations of U.S. Government sponsored entities	225,932		0		34,292		191,640
Total held-to-maturity debt securities	$	312,357	$	0	$	45,258	$	267,099

The following table summarizes held-to-maturity debt securities held by the Company at December 31, 2022:

	Held-to-Maturity Securities
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,478	$	0	$	12,937	$	73,541
Obligations of U.S. Government sponsored entities	225,866		0		37,715		188,151
Total held-to-maturity debt securities	$	312,344	$	0	$	50,652	$	261,692

March 31, 2023
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,357	$	267,099
Total held-to-maturity debt securities	$	312,357	$	267,099

December 31, 2022
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,344	$	261,692
Total held-to-maturity debt securities	$	312,344	$	261,692

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, 2023:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	170,814	$	19,406	$	170,814	$	19,406
Obligations of U.S. Government sponsored entities	95,536		1,931		504,226		69,286		599,762		71,217
Obligations of U.S. states and political subdivisions	20,397		306		58,598		5,936		78,995		6,242
Mortgage-backed securities – residential, issued by
U.S. Government agencies	5,484		183		45,046		5,164		50,530		5,347
U.S. Government sponsored entities	16,950		761		658,360		106,514		675,310		107,275
U.S. corporate debt securities	0		0		2,393		107		2,393		107
Total available-for-sale debt securities	$	138,367	$	3,181	$	1,439,437	$	206,413	$	1,577,804	$	209,594

The following table summarizes available-for-sale debt securities that had unrealized losses at December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	28,602	$	2,132	$	138,649	$	20,787	$	167,251	$	22,919
Obligations of U.S. Government sponsored entities	143,794		7,508		457,373		72,517		601,167		80,025
Obligations of U.S. states and political subdivisions	46,638		2,385		33,435		5,941		80,073		8,326
Mortgage-backed securities – residential, issued by
U.S. Government agencies	22,945		1,258		29,356		4,813		52,301		6,071
U.S. Government sponsored entities	186,690		16,869		499,532		102,512		686,222		119,381
U.S. corporate debt securities	0		0		2,378		122		2,378		122
Total available-for-sale debt securities	$	428,669	$	30,152	$	1,160,723	$	206,692	$	1,589,392	$	236,844

Schedule held-to-maturity securities with unrealized losses

The following table summarizes held-to-maturity debt securities that had unrealized losses at March 31, 2023:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	75,459	$	10,966	$	75,459	$	10,966
Obligations of U.S. Government sponsored entities	8,293		604		183,347		33,688		191,640		34,292
Total held-to-maturity debt securities	$	8,293	$	604	$	258,806	$	44,654	$	267,099	$	45,258

The following table summarizes held-to-maturity debt securities that had unrealized losses at December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	73,542	$	12,937	$	73,542	$	12,937
Obligations of U.S. Government sponsored entities	24,543		3,903		163,607		33,812		188,150		37,715
Total held-to-maturity debt securities	$	24,543	$	3,903	$	237,149	$	46,749	$	261,692	$	50,652

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, 2023
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	40,237	$	39,828
Due after one year through five years	554,392		506,082
Due after five years through ten years	325,346		283,610
Due after ten years	36,638		30,133
Total	956,613		859,653
Mortgage-backed securities	838,810		726,201
Total available-for-sale debt securities	$	1,795,423	$	1,585,854

December 31, 2022
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	50,922	$	50,269
Due after one year through five years	508,880		459,721
Due after five years through ten years	367,743		314,408
Due after ten years	39,916		31,679
Total	967,461		856,077
Mortgage-backed securities	864,330		738,890
Total available-for-sale debt securities	$	1,831,791	$	1,594,967

XML

Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2023

Loans and Leases Receivable Disclosure [Abstract]

Schedule of loans and leases

Loans and Leases at March 31, 2023 and December 31, 2022 were as follows:

(In thousands)	03/31/2023		12/31/2022
Commercial and industrial
Agriculture	$	65,223	$	85,073
Commercial and industrial other	673,104		705,700
PPP loans*	686		756
Subtotal commercial and industrial	739,013		791,529
Commercial real estate
Construction	219,789		201,116
Agriculture	214,014		214,963
Commercial real estate other	2,476,532		2,437,339
Subtotal commercial real estate	2,910,335		2,853,418
Residential real estate
Home equity	183,636		188,623
Mortgages	1,342,214		1,346,318
Subtotal residential real estate	1,525,850		1,534,941
Consumer and other
Indirect	1,783		2,224
Consumer and other	83,775		75,412
Subtotal consumer and other	85,558		77,636
Leases	18,016		16,134
Total loans and leases	5,278,772		5,273,658
Less: unearned income and deferred costs and fees	(5,101)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,273,671	$	5,268,911
*SBA Paycheck Protection Program ("PPP")

Schedule of age analysis of past due loans

The below tables are an age analysis of past due loans, segregated by class of loans as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	152	$	0	$	0	$	152	$	65,071	$	65,223
Commercial and industrial other	2,586		46		371		3,003		670,101		673,104
PPP loans*	0		0		0		0		686		686
Subtotal commercial and industrial	2,738		46		371		3,155		735,858		739,013
Commercial real estate
Construction	0		0		0		0		219,789		219,789
Agriculture	170		0		0		170		213,844		214,014
Commercial real estate other	0		0		10,037		10,037		2,466,495		2,476,532
Subtotal commercial real estate	170		0		10,037		10,207		2,900,128		2,910,335
Residential real estate
Home equity	512		400		1,426		2,338		181,298		183,636
Mortgages	1,741		30		6,505		8,276		1,333,938		1,342,214
Subtotal residential real estate	2,253		430		7,931		10,614		1,515,236		1,525,850
Consumer and other
Indirect	56		11		41		108		1,675		1,783
Consumer and other	120		70		104		294		83,481		83,775
Subtotal consumer and other	176		81		145		402		85,156		85,558
Leases	0		0		0		0		18,016		18,016
Total loans and leases	5,337		557		18,484		24,378		5,254,394		5,278,772
Less: unearned income and deferred costs and fees	0		0		0		0		(5,101)		(5,101)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,337	$	557	$	18,484	$	24,378	$	5,249,293	$	5,273,671
*SBA Paycheck Protection Program ("PPP")

December 31, 2022
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	58	$	0	$	0	$	58	$	85,015	$	85,073
Commercial and industrial other	50		381		82		513		705,187		705,700
PPP loans*	0		0		0		0		756		756
Subtotal commercial and industrial	108		381		82		571		790,958		791,529
Commercial real estate
Construction	0		0		0		0		201,116		201,116
Agriculture	128		0		0		128		214,835		214,963
Commercial real estate other	0		0		11,449		11,449		2,425,890		2,437,339
Subtotal commercial real estate	128		0		11,449		11,577		2,841,841		2,853,418
Residential real estate
Home equity	435		204		1,628		2,267		186,356		188,623
Mortgages	1,748		0		6,802		8,550		1,337,768		1,346,318
Subtotal residential real estate	2,183		204		8,430		10,817		1,524,124		1,534,941
Consumer and other
Indirect	66		31		53		150		2,074		2,224
Consumer and other	52		19		112		183		75,229		75,412
Subtotal consumer and other	118		50		165		333		77,303		77,636
Leases	0		0		0		0		16,134		16,134
Total loans and leases	2,537		635		20,126		23,298		5,250,360		5,273,658
Less: unearned income and deferred costs and fees	0		0		0		0		(4,747)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	2,537	$	635	$	20,126	$	23,298	$	5,245,613	$	5,268,911
*SBA Paycheck Protection Program ("PPP")

Schedule of nonaccrual loans

The below tables are an age analysis of nonaccrual loans segregated by class of loans, as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial
Agriculture	$	0	$	17	$	0
Commercial and industrial other	0		906		0
Subtotal commercial and industrial	0		923		0
Commercial real estate
Agriculture	0		183		0
Commercial real estate other	10,547		12,197		0
Subtotal commercial real estate	10,547		12,380		0
Residential real estate
Home equity	0		2,547		0
Mortgages	181		12,322		0
Subtotal residential real estate	181		14,869		0
Consumer and other
Indirect	0		78		0
Consumer and other	0		174		13
Subtotal consumer and other	0		252		13
Total loans and leases	$	10,728	$	28,424	$	13

December 31, 2022
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial
Commercial and industrial other	$	411	$	618	$	25
Subtotal commercial and industrial	411		618		25
Commercial real estate
Agriculture	186		186		0
Commercial real estate other	13,101		13,672		0
Subtotal commercial real estate	13,287		13,858		0
Residential real estate
Home equity	318		2,391		0
Mortgages	1,177		11,153		0
Subtotal residential real estate	1,495		13,544		0
Consumer and other
Indirect	0		94		0
Consumer and other	0		175		0
Subtotal consumer and other	0		269		0
Total loans and leases	$	15,193	$	28,289	$	25

XML

Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

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

The following table details activity in the allowance for credit losses on loans and leases for the three months ended March 31, 2023 and 2022. 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, 2023
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,039	$	27,287	$	11,154	$	1,358	$	96	$	45,934
Impact of adopting ASU 2022-22	2		16		46		0		0		64
Charge-offs	0		0		(2)		(106)		0		(108)
Recoveries	46		1,246		64		33		0		1,389
(Credit) provision for credit loss expense	229		(1,363)		(404)		343		15		(1,180)
Ending Balance	$	6,316	$	27,186	$	10,858	$	1,628	$	111	$	46,099

Three Months Ended March 31, 2022
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,335	$	24,813	$	10,139	$	1,492	$	64	42,843
Charge-offs	(23)		(27)		0		(196)		0		(246)
Recoveries	20		42		109		92		0		263
(Credit) provision for credit loss expense	695		(1,846)		199		200		18		(734)
Ending Balance	$	7,027	$	22,982	$	10,447	$	1,588	$	82	$	42,126

The following table details activity in the liabilities for off-balance sheet credit exposures for the three months ended March 31, 2023 and 2022:

(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	2,796	$	2,507
Provision for credit loss expense related to off-balance sheet credit exposures	355		214
Liabilities for off-balance sheet credit exposures at end of period	$	3,151	$	2,721

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:

March 31, 2023
(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
Commercial Real Estate	$	10,547	$	0	$	0	$	10,547	$	0
Residential Real Estate	181		0		0		181		0
Total	$	10,728	$	0	$	0	$	10,728	$	0

December 31, 2022
(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
Commercial and Industrial	$	642	$	28	$	0	$	670	$	0
Commercial Real Estate	13,209		0		78		13,287		0
Commercial Real Estate - Agriculture	1,515		0		0		1,515		0
Residential Real Estate	188		0		0		188		3
Total	$	15,554	$	28	$	78	$	15,660	$	3

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 by total loans on an amortized cost basis by origination year as of March 31, 2023 and December 31, 2022:

March 31, 2023
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	16,897	$	113,621	$	80,606	$	36,432	$	44,230	$	167,183	$	203,174	$	1,170	$	663,313
Special Mention	0		0		120		338		132		1,339		800		0		2,729
Substandard	0		0		102		417		65		1,562		4,916		0		7,062
Total Commercial and Industrial - Other	$	16,897	$	113,621	$	80,828	$	37,187	$	44,427	$	170,084	$	208,890	$	1,170	$	673,104
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - PPP:
Pass	$	0	$	0	$	383	$	303	$	0	$	0	$	0	$	0	$	686
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial and Industrial - PPP	$	0	$	0	$	383	$	303	$	0	$	0	$	0	$	0	$	686
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - Agriculture:
Pass	$	2,152	$	15,034	$	4,399	$	4,162	$	3,479	$	12,092	$	23,745	$	0	$	65,063
Special Mention	0		0		56		0		0		0		20		0		76
Substandard	0		0		0		67		0		13		4		0		84
Total Commercial and Industrial - Agriculture	$	2,152	$	15,034	$	4,455	$	4,229	$	3,479	$	12,105	$	23,769	$	0	$	65,223
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate
Pass	$	39,210	$	340,604	$	367,485	$	317,991	$	278,372	$	1,021,145	$	35,794	$	2,056	$	2,402,657
Special Mention	0		643		0		1,682		11,380		21,234		0		0		34,939
Substandard	0		74		109		0		3,147		35,482		124		0		38,936
Total Commercial Real Estate	$	39,210	$	341,321	$	367,594	319,673		292,899		1,077,861		$	35,918	$	2,056	$	2,476,532
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate - Agriculture:
Pass	$	2,578	$	34,652	$	23,976	$	22,525	$	24,893	$	100,038	$	2,158	$	1,450	$	212,270
Special Mention	0		0		0		0		396		1,115		0		0		1,511
Substandard	0		0		0		0		183		50		0		0		233
Total Commercial Real Estate - Agriculture	$	2,578	$	34,652	$	23,976	$	22,525	$	25,472	$	101,203	$	2,158	$	1,450	$	214,014
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial Real Estate - Construction
Pass	$	0	$	30,152	$	73,446	$	17,738	$	11,859	$	16,312	$	62,168	$	8,114	$	219,789
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial Real Estate - Construction	$	0	$	30,152	$	73,446	$	17,738	$	11,859	$	16,312	$	62,168	$	8,114	$	219,789
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Residential - Home Equity
Performing	$	499	$	2,357	$	1,033	$	610	$	953	$	10,589	$	164,730	$	317	$	181,088
Nonperforming	0		0		0		0		0		288		2,260		0		2,548
Total Residential - Home Equity	$	499	$	2,357	$	1,033	$	610	$	953	$	10,877	$	166,990	$	317	$	183,636
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	2	$	0	$	0	$	2
Residential - Mortgages
Performing	$	15,811	$	192,106	$	269,413	$	235,432	$	116,045	$	501,085	$	0	$	0	$	1,329,892
Nonperforming	0		218		330		619		670		10,485		0		0		12,322
Total Residential - Mortgages	$	15,811	$	192,324	$	269,743	$	236,051	$	116,715	$	511,570	$	0	$	0	$	1,342,214
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Consumer - Direct
Performing	$	26,213	$	16,366	$	13,338	$	6,844	$	5,762	$	11,873	$	3,205	$	0	$	83,601
Nonperforming	0		0		0		0		63		108		3		0		174
Total Consumer - Direct	$	26,213	$	16,366	$	13,338	$	6,844	$	5,825	$	11,981	$	3,208	$	0	$	83,775
Current-period gross writeoffs	$	33	$	0	$	0	$	14	$	20	$	3	$	0	$	0	$	70
Consumer - Indirect
Performing	$	0	$	0	$	139	$	127	$	885	$	554	$	0	$	0	$	1,705
Nonperforming	0		0		0		0		55		23		0		0		78
Total Consumer - Indirect	$	0	$	0	$	139	$	127	$	940	$	577	$	0	$	0	$	1,783
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	31	$	5	$	0	$	0	$	36

December 31, 2022
(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Commercial and Industrial - Other:
Internal risk grade:
Pass	$	124,190	$	79,861	$	38,158	$	41,391	$	33,238	$	156,038	$	215,890	$	6,466	$	695,232
Special Mention	0		127		421		285		271		1,380		501		0		2,985
Substandard	0		111		442		35		733		503		5,659		0		7,483
Total Commercial and Industrial - Other	$	124,190	$	80,099	$	39,021	$	41,711	$	34,242	$	157,921	$	222,050	$	6,466	$	705,700
Commercial and Industrial - Agriculture:
Pass	$	16,694	$	4,120	$	4,944	$	4,186	$	7,734	$	4,883	$	42,097	$	215	$	84,873
Special Mention	0		58		0		0		0		0		50		0		108
Substandard	0		0		71		0		0		16		5		0		92
Total Commercial and Industrial - Agriculture	$	16,694	$	4,178	$	5,015	$	4,186	$	7,734	$	4,899	$	42,152	$	215	$	85,073
Commercial and Industrial - PPP:
Pass	$	0	$	416	$	340	$	0	$	0	$	0	$	0	$	0	$	756
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial and Industrial - PPP	$	0	$	416	$	340	$	0	$	0	$	0	$	0	$	0	$	756
Commercial Real Estate
Pass	$	342,311	$	367,104	$	311,607	$	279,587	$	203,016	$	812,563	$	10,906	$	24,503	$	2,351,597
Special Mention	643		3,406		1,688		11,462		2,555		25,361		0		0		45,115
Substandard	78		110		0		3,394		1,692		35,221		132		0		40,627
Total Commercial Real Estate	$	343,032	$	370,620	$	313,295	$	294,443	$	207,263	$	873,145	$	11,038	$	24,503	$	2,437,339
Commercial Real Estate - Agriculture:
Pass	$	33,241	$	24,125	$	22,831	$	25,576	$	37,835	$	65,112	$	3,131	$	1,235	$	213,086
Special Mention	0		0		0		401		0		1,142		0		0		1,543
Substandard	0		0		0		186		38		110		0		0		334
Total Commercial Real Estate - Agriculture	$	33,241	$	24,125	$	22,831	$	26,163	$	37,873	$	66,364	$	3,131	$	1,235	$	214,963
Commercial Real Estate - Construction
Pass	$	23,105	$	75,245	$	27,584	$	14,842	$	9,083	$	7,268	$	42,701	$	1,288	$	201,116
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0
Total Commercial Real Estate - Construction	$	23,105	$	75,245	$	27,584	$	14,842	$	9,083	$	7,268	$	42,701	$	1,288	$	201,116

The following tables present credit quality indicators by total loans on an amortized cost basis by origination year as of December 31, 2022, continued:

December 31, 2022
(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total Loans
Residential - Home Equity
Performing	$	3,030	$	1,062	$	637	$	992	$	792	$	3,183	$	175,451	$	1,085	$	186,232
Nonperforming	0		0		0		14		0		25		2,352		0		2,391
Total Residential - Home Equity	$	3,030	$	1,062	$	637	$	1,006	$	792	$	3,208	$	177,803	$	1,085	$	188,623
Residential - Mortgages
Performing	$	187,129	$	272,235	$	239,584	$	117,391	$	66,605	$	452,221	$	0	$	0	$	1,335,165
Nonperforming	218		335		628		682		1,552		7,738		0		0		11,153
Total Residential - Mortgages	$	187,347	$	272,570	$	240,212	$	118,073	$	68,157	$	459,959	$	0	$	0	$	1,346,318
Consumer - Direct
Performing	$	31,243	$	13,999	$	7,372	$	6,138	$	4,386	$	8,029	$	4,070	$	0	$	75,237
Nonperforming	0		0		3		93		76		0		3		0		175
Total Consumer - Direct	$	31,243	$	13,999	$	7,375	$	6,231	$	4,462	$	8,029	$	4,073	$	0	$	75,412
Consumer - Indirect
Performing	$	0	$	156	$	146	$	1,092	$	635	$	101	$	0	$	0	$	2,130
Nonperforming	0		0		0		76		10		8		0		0		94
Total Consumer - Indirect	$	0	$	156	$	146	$	1,168	$	645	$	109	$	0	$	0	$	2,224

XML

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

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, 2023 and 2022 are calculated under the two-class method as required by ASC Topic 260, Earnings Per Share (ASC 260). 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)	03/31/2023		03/31/2022
Basic
Net income available to common shareholders	$	19,381	$	23,273
Less: income attributable to unvested stock-based compensation awards	(18)		(76)
Net earnings allocated to common shareholders	19,363		23,197
Weighted average shares outstanding, including unvested stock-based compensation awards	14,520,092		14,611,709
Less: average unvested stock-based compensation awards	(193,497)		(211,706)
Weighted average shares outstanding - Basic	14,326,595		14,400,003
Diluted
Net earnings allocated to common shareholders	19,363		23,197
Weighted average shares outstanding - Basic	14,326,595		14,400,003
Plus: incremental shares from assumed conversion of stock-based compensation awards	63,078		78,180
Weighted average shares outstanding - Diluted	14,389,673		14,478,183
Basic EPS	$	1.35	$	1.61
Diluted EPS	$	1.35	$	1.60

XML

Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2023

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, 2023 and 2022:

	Three Months Ended March 31, 2023
(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	$	27,255	$	(6,677)	$	20,578
Net unrealized gains/losses	27,255		(6,677)		20,578
Employee benefit plans:
Amortization of net retirement plan actuarial gain	297		(73)		224
Amortization of net retirement plan prior service cost	55		(14)		41
Employee benefit plans	352		(87)		265
Other comprehensive (loss) income	$	27,607	$	(6,764)	$	20,843

	Three Months Ended March 31, 2022
(In thousands)	Before-Tax Amount		Tax (Expense) Benefit		Net of Tax
Available-for-sale debt securities:
Change in net unrealized (loss) gain during the period	$	(106,481)	$	26,076	$	(80,405)
Net unrealized gains/losses	(106,481)		26,076		(80,405)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	615		(151)		464
Amortization of net retirement plan prior service cost	56		(14)		42
Employee benefit plans	671		(165)		506
Other comprehensive (loss) income	$	(105,810)	$	25,911	$	(79,899)

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, 2023	$	(178,803)	$	(29,886)	$	(208,689)
Other comprehensive income before reclassifications	20,578		0		20,578
Amounts reclassified from accumulated other comprehensive (loss) income	0		265		265
Net current-period other comprehensive income (loss)	20,578		265		20,843
Balance at March 31, 2023	$	(158,225)	$	(29,621)	$	(187,846)
Balance at January 1, 2022	$	(14,560)	$	(41,390)	$	(55,950)
Other comprehensive loss before reclassifications	(80,405)		0		(80,405)
Amounts reclassified from accumulated other comprehensive (loss) income	0		506		506
Net current-period other comprehensive income (loss)	(80,405)		506		(79,899)
March 31, 2022	$	(94,965)	$	(40,884)	$	(135,849)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023
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 (loss) gain on securities transactions
	0		Tax expense
	0		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(297)		Other operating expense
Net retirement plan prior service cost	(55)		Other operating expense
	(352)		Total before tax
	87		Tax benefit
	$	(265)	Net of tax

Three Months Ended March 31, 2022
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 (loss) gain on securities transactions
	0		Tax expense
	0		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(615)		Other operating expense
Net retirement plan prior service cost	(56)		Other operating expense
	(671)		Total before tax
	165		Tax benefit
	$	(506)	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").

XML

Employee Benefit Plan (Tables)

3 Months Ended

Mar. 31, 2023

Retirement Benefits [Abstract]

Schedule of net periodic benefit cost and other comprehensive income (loss)

Components of Net Periodic Benefit Cost:

	Pension Benefits				Life and Health				SERP Benefits
	Three Months Ended				Three Months Ended				Three Months Ended
(In thousands)	03/31/2023		03/31/2022		03/31/2023		03/31/2022		03/31/2023		03/31/2022
Service cost	$	0	$	0	$	15	$	44	$	14	$	52
Interest cost	823		463		89		52		299		201
Expected return on plan assets	(1,199)		(1,468)		0		0		0		0
Amortization of net retirement plan actuarial loss	304		323		(7)		52		0		240
Amortization of net retirement plan prior service (credit) cost	0		0		(15)		(15)		70		71
Net periodic benefit (income) cost	$	(72)	$	(682)	$	82	$	133	$	383	$	564

XML

Other Income and Operating Expense (Tables)

3 Months Ended

Mar. 31, 2023

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 periods presented below are stated separately.

	Three Months Ended
(In thousands)	03/31/2023		03/31/2022
Noninterest Income
Other service charges	$	615	$	627
Earnings from corporate owned life insurance	615		423
Net gains on the sale of loans originated for sale	38		4
Other income	673		422
Total other income	$	1,941	$	1,476
Noninterest Expenses
Marketing expense	$	1,105	$	1,056
Professional fees	1,804		1,606
Legal fees	419		210
Technology expense	4,007		3,683
FDIC insurance	1,054		701
Cardholder expense	1,016		1,141
Other expenses	4,064		3,623
Total other operating expense	$	13,469	$	12,020

XML

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of disaggregation of noninterest income

The following table presents noninterest income, segregated by revenue streams, for the three months ended March 31, 2023 and 2022:

	Three Months Ended
(In thousands)	03/31/2023		03/31/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	8,517	$	7,964
Installment Billing	1		44
Refund of Commissions	59		(28)
Contract Liabilities/Deferred Revenue	(3)		(1)
Contingent Commissions	935		1,338
Subtotal Insurance Revenues	9,509		9,317
Trust and Asset Management	3,435		3,503
Mutual Fund & Investment Income	1,074		1,414
Subtotal Investment Service Income	4,509		4,917
Service Charges on Deposit Accounts	1,746		1,779
Card Services Income	2,682		2,543
Other	351		316
Noninterest Income (in-scope of ASC 606)	18,797		18,872
Noninterest Income (out-of-scope of ASC 606)	1,603		1,113
Total Noninterest Income	$	20,400	$	19,985

XML

Segment and Related Information (Tables)

3 Months Ended

Mar. 31, 2023

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 the bank and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Three months ended March 31, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	69,238	$	1	$	0	$	(1)	$	69,238
Interest expense	14,993		0		0		(1)		14,992
Net interest income	54,245		1		0		0		54,246
Credit for credit loss expense	(825)		0		0		0		(825)
Noninterest income	6,698		9,636		4,621		(555)		20,400
Noninterest expense	39,848		7,215		3,650		(555)		50,158
Income before income tax expense	21,920		2,422		971		0		25,313
Income tax expense	4,989		673		239		0		5,901
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	16,931		1,749		732		0		19,412
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	16,900	$	1,749	$	732	$	0	$	19,381
Depreciation and amortization	$	2,589	$	44	$	45	$	0	$	2,678
Assets	7,586,753		43,779		29,013		(15,174)		7,644,371
Goodwill	64,655		19,866		8,081		0		92,602
Other intangibles, net	984		1,576		45		0		2,605
Net loans and leases	5,227,572		0		0		0		5,227,572
Deposits	6,527,953		0		(4,245)		(14,699)		6,509,009
Total Equity	$	584,650	$	35,625	$	29,490	$	0	$	649,765

Three months ended March 31, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	59,176	$	1	$	0	$	(1)	$	59,176
Interest expense	2,563		0		0		(1)		2,562
Net interest income	56,613		1		0		0		56,614
Credit for credit loss expense	(520)		0		0		0		(520)
Noninterest income	6,193		9,434		4,934		(576)		19,985
Noninterest expense	37,190		6,501		3,724		(576)		46,839
Income before income tax expense	26,136		2,934		1,210		0		30,280
Income tax expense	5,791		815		370		0		6,976
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	20,345		2,119		840		0		23,304
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	20,314	$	2,119	$	840	$	0	$	23,273
Depreciation and amortization	$	2,578	$	44	$	28	$	0	$	2,650
Assets	7,835,767		44,247		26,684		(15,587)		7,891,111
Goodwill	64,500		19,866		8,081		0		92,447
Other intangibles, net	1,402		1,917		63		0		3,382
Net loans and leases	5,021,325		0		0		0		5,021,325
Deposits	7,031,223		0		(10)		(14,474)		7,016,739
Total Equity	$	598,707	$	34,128	$	24,657	$	0	$	657,492

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

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

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value: 

Recurring Fair Value Measurements
March 31, 2023
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	170,814	$	0	$	170,814	$	0
Obligations of U.S. Government sponsored entities	599,762		0		599,762		0
Obligations of U.S. states and political subdivisions	86,684		0		86,684		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	50,891		0		50,891		0
U.S. Government sponsored entities	675,310		0		675,310		0
U.S. corporate debt securities	2,393		0		2,393		0
Total Available-for-sale debt securities	$	1,585,854	$	0	$	1,585,854	$	0
Equity securities, at fair value	$	790	$	0	$	0	$	790

Recurring Fair Value Measurements
December 31, 2022
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	167,251	$	0	$	167,251	$	0
Obligations of U.S. Government sponsored entities	601,167		0		601,167		0
Obligations of U.S. states and political subdivisions	85,281		0		85,281		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	52,668		0		52,668		0
U.S. Government sponsored entities	686,222		0		686,222		0
U.S. corporate debt securities	2,378		0		2,378		0
Total Available-for-sale debt securities	$	1,594,967	$	0	$	1,594,967	$	0
Equity securities, at fair value	$	777	$	0	$	0	$	777

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

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at March 31, 2023 and 2022. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions:

Three months ended March 31, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 03/31/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 03/31/2023
Individually evaluated loans	$	0	$	0	$	0	$	0	$	826
Other real estate owned	36		0				36		22

December 31, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 12/31/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 12/31/2022
Individually evaluated loans	$	9,460	$	0	$	0	$	9,460	$	59
Other real estate owned	152		0		0		152		15

Schedule of carrying amount and fair value of financial instruments

Estimated Fair Value of Financial Instruments
March 31, 2023
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	70,537	$	70,537	$	70,537	$	0	$	0
Securities - held-to-maturity	312,357		267,099		0		267,099		0
FHLB and other stock	19,326		19,326		0		19,326		0
Accrued interest receivable	23,629		23,629		0		23,629		0
Loans/leases, net1	5,227,572		4,911,105		0		0		4,911,105
Financial Liabilities:
Time deposits	$	725,338	$	713,125	$	0	$	713,125	$	0
Other deposits	5,783,671		5,783,671		0		5,783,671		0
Fed funds purchased and securities sold
under agreements to repurchase	63,491		63,491		0		63,491		0
Other borrowings	327,000		324,849		0		324,849		0
Accrued interest payable	1,579		1,579		0		1,579		0

Estimated Fair Value of Financial Instruments
December 31, 2022
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	77,837	$	77,837	$	77,837	$	0	$	0
Securities - held to maturity	312,344		261,692		0		261,692		0
FHLB and other stock	17,720		17,720		0		17,720		0
Accrued interest receivable	24,865		24,865		0		24,865		0
Loans/leases, net1	5,222,977		4,939,246		0		0		4,939,246
Financial Liabilities:
Time deposits	$	631,411	$	616,488	$	0	$	616,488	$	0
Other deposits	5,970,884		5,970,884		0		5,970,884		0
Fed funds purchased and securities
sold under agreements to repurchase	56,278		56,278		0		56,278		0
Other borrowings	291,300		289,234		0		289,234		0
Accrued interest payable	1,420		1,420		0		1,420		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.

XML

Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The Company began entering into derivative transactions in the second quarter of 2022.

Derivative Liabilities
	March 31, 2023					December 31, 2022
	Notional		Balance Sheet	Fair		Balance Sheet	Fair
(In thousands)	Amount		Location	Value		Location	Value
Derivatives not designated as hedging instruments
Interest Rate Products	$	0	Other Liabilities	$	0	Other Liabilities	$	0
Risk Participation Agreement	7,499		Other Liabilities	26		Other Liabilities	21
Total derivatives not designated as hedging instruments				$	26		$	21

Schedule of Derivative Instruments in Statement of Income

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the three months ended March 31, 2023:

Effect of Derivatives Not Designated as Hedging Instruments on the Statement of Financial Performance
Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
(In thousands)		Three Months Ended March 31, 2023
Interest Rate Products	Other income / (expense)	$	0
Risk Participation Agreement	Other income / (expense)	(6)
Total		$	(6)

XML

Business (Details)	3 Months Ended
	Mar. 31, 2023 subsidiary_Bank
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of wholly owned subsidiaries	1

XML

Securities - Available-for-Sale Securities Held by Company (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,795,423	$ 1,831,791
Gross Unrealized Gains	25	20
Gross Unrealized Losses	209,594	236,844
Fair Value	1,585,854	1,594,967
U.S. Treasuries
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	190,220	190,170
Gross Unrealized Gains	0	0
Gross Unrealized Losses	19,406	22,919
Fair Value	170,814	167,251
Obligations of U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	670,978	681,192
Gross Unrealized Gains	0	0
Gross Unrealized Losses	71,216	80,025
Fair Value	599,762	601,167
Obligations of U.S. states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	92,915	93,599
Gross Unrealized Gains	10	8
Gross Unrealized Losses	6,241	8,326
Fair Value	86,684	85,281
U.S. Government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	56,224	58,727
Gross Unrealized Gains	15	12
Gross Unrealized Losses	5,348	6,071
Fair Value	50,891	52,668
U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	782,586	805,603
Gross Unrealized Gains	0	0
Gross Unrealized Losses	107,276	119,381
Fair Value	675,310	686,222
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	107	122
Fair Value	$ 2,393	$ 2,378

XML

Securities - Held-to-Maturity Securities Held by Company (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 312,357	$ 312,344
Gross Unrealized Gains	0	0
Gross Unrealized Losses	45,258	50,652
Fair Value	267,099	261,692
U.S. Treasuries
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	86,425	86,478
Gross Unrealized Gains	0	0
Gross Unrealized Losses	10,966	12,937
Fair Value	75,459	73,541
Obligations of U.S. Government sponsored entities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	225,932	225,866
Gross Unrealized Gains	0	0
Gross Unrealized Losses	34,292	37,715
Fair Value	$ 191,640	$ 188,151

XML

Securities - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Proceeds from sales of available-for-sale debt securities	$ 0	$ 0
Realized gain (loss) on available for sale debt securities	0	0
Realized gains (losses) on called securities	0	0
Gain on equity securities	13,000
Loss on equity securities		$ 47,000
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	19,200,000
Atlantic Central Bankers Bank (ACBB)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal Home Loan Bank, Advances, Branch of FHLB bank, amount of advances	$ 95,000

XML

Securities - Unrealized Losses on Available-for-Sale of Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value
Less than 12 Months	$ 138,367	$ 428,669
12 Months or Longer	1,439,437	1,160,723
Total	1,577,804	1,589,392
Unrealized Losses
Less than 12 Months	3,181	30,152
12 Months or Longer	206,413	206,692
Total	209,594	236,844
U.S. Treasuries
Fair Value
Less than 12 Months	0	28,602
12 Months or Longer	170,814	138,649
Total	170,814	167,251
Unrealized Losses
Less than 12 Months	0	2,132
12 Months or Longer	19,406	20,787
Total	19,406	22,919
Obligations of U.S. Government sponsored entities
Fair Value
Less than 12 Months	95,536	143,794
12 Months or Longer	504,226	457,373
Total	599,762	601,167
Unrealized Losses
Less than 12 Months	1,931	7,508
12 Months or Longer	69,286	72,517
Total	71,217	80,025
Obligations of U.S. states and political subdivisions
Fair Value
Less than 12 Months	20,397	46,638
12 Months or Longer	58,598	33,435
Total	78,995	80,073
Unrealized Losses
Less than 12 Months	306	2,385
12 Months or Longer	5,936	5,941
Total	6,242	8,326
U.S. Government agencies
Fair Value
Less than 12 Months	5,484	22,945
12 Months or Longer	45,046	29,356
Total	50,530	52,301
Unrealized Losses
Less than 12 Months	183	1,258
12 Months or Longer	5,164	4,813
Total	5,347	6,071
U.S. Government sponsored entities
Fair Value
Less than 12 Months	16,950	186,690
12 Months or Longer	658,360	499,532
Total	675,310	686,222
Unrealized Losses
Less than 12 Months	761	16,869
12 Months or Longer	106,514	102,512
Total	107,275	119,381
U.S. corporate debt securities
Fair Value
Less than 12 Months	0	0
12 Months or Longer	2,393	2,378
Total	2,393	2,378
Unrealized Losses
Less than 12 Months	0	0
12 Months or Longer	107	122
Total	$ 107	$ 122

XML

Securities - Unrealized Losses on Held-to-Maturity Debt Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value
Less than 12 Months	$ 8,293	$ 24,543
12 Months or Longer	258,806	237,149
Total	267,099	261,692
Unrealized Losses
Less than 12 Months	604	3,903
12 Months or Longer	44,654	46,749
Total	45,258	50,652
U.S. Treasuries
Fair Value
Less than 12 Months	0	0
12 Months or Longer	75,459	73,542
Total	75,459	73,542
Unrealized Losses
Less than 12 Months	0	0
12 Months or Longer	10,966	12,937
Total	10,966	12,937
Obligations of U.S. Government sponsored entities
Fair Value
Less than 12 Months	8,293	24,543
12 Months or Longer	183,347	163,607
Total	191,640	188,150
Unrealized Losses
Less than 12 Months	604	3,903
12 Months or Longer	33,688	33,812
Total	$ 34,292	$ 37,715

XML

Securities - Amortized Cost and Estimated Fair Value of Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Amortized Cost
Due in one year or less	$ 40,237	$ 50,922
Due after one year through five years	554,392	508,880
Due after five years through ten years	325,346	367,743
Due after ten years	36,638	39,916
Total	956,613	967,461
Mortgage-backed securities	838,810	864,330
Amortized Cost	1,795,423	1,831,791
Fair Value
Due in one year or less	39,828	50,269
Due after one year through five years	506,082	459,721
Due after five years through ten years	283,610	314,408
Due after ten years	30,133	31,679
Total	859,653	856,077
Mortgage-backed securities	726,201	738,890
Fair Value	$ 1,585,854	$ 1,594,967

XML

Securities - Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Amortized Cost
Held-to-maturity debt securities:	$ 312,357	$ 312,344
Total held-to-maturity debt securities	312,357	312,344
Fair Value
Due after five years through ten years	267,099	261,692
Total held-to-maturity debt securities	$ 267,099	$ 261,692

XML

Loans and Leases - Schedule of Loans and Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 5,278,772	$ 5,273,658
Less: unearned income and deferred costs and fees	(5,101)	(4,747)
Total Loans	5,273,671	5,268,911
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	739,013	791,529
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	65,223	85,073
Total Loans	65,223	85,073
Commercial and industrial | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	673,104	705,700
Total Loans	673,104	705,700
Commercial and industrial | PPP loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	686	756
Total Loans	686	756
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,910,335	2,853,418
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	214,014	214,963
Total Loans	214,014	214,963
Commercial real estate | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,476,532	2,437,339
Total Loans	2,476,532	2,437,339
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	219,789	201,116
Total Loans	219,789	201,116
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,525,850	1,534,941
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	183,636	188,623
Total Loans	183,636	188,623
Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,342,214	1,346,318
Total Loans	1,342,214	1,346,318
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	85,558	77,636
Consumer and other | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	83,775	75,412
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,783	2,224
Total Loans	1,783	2,224
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 18,016	$ 16,134

XML

Loans and Leases - Schedule of Past Due Loans and Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total loans and leases	$ 5,278,772	$ 5,273,658
Less: unearned income and deferred costs and fees	(5,101)	(4,747)
Total Loans	5,273,671	5,268,911
30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	5,337	2,537
60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	557	635
90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	18,484	20,126
Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	24,378	23,298
Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	5,254,394	5,250,360
Less: unearned income and deferred costs and fees	(5,101)	(4,747)
Total Loans	5,249,293	5,245,613
Commercial and industrial
Financing Receivable, Past Due [Line Items]
Total loans and leases	739,013	791,529
Commercial and industrial | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,738	108
Commercial and industrial | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	46	381
Commercial and industrial | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	371	82
Commercial and industrial | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	3,155	571
Commercial and industrial | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	735,858	790,958
Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Total loans and leases	65,223	85,073
Total Loans	65,223	85,073
Commercial and industrial | Agriculture | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	152	58
Commercial and industrial | Agriculture | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial and industrial | Agriculture | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial and industrial | Agriculture | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	152	58
Commercial and industrial | Agriculture | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	65,071	85,015
Commercial and industrial | Commercial and industrial other
Financing Receivable, Past Due [Line Items]
Total loans and leases	673,104	705,700
Total Loans	673,104	705,700
Commercial and industrial | Commercial and industrial other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,586	50
Commercial and industrial | Commercial and industrial other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	46	381
Commercial and industrial | Commercial and industrial other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	371	82
Commercial and industrial | Commercial and industrial other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	3,003	513
Commercial and industrial | Commercial and industrial other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	670,101	705,187
Commercial and industrial | PPP loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	686	756
Total Loans	686	756
Commercial and industrial | PPP loans | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial and industrial | PPP loans | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial and industrial | PPP loans | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial and industrial | PPP loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial and industrial | PPP loans | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	686	756
Commercial real estate
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,910,335	2,853,418
Commercial real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	170	128
Commercial real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	10,037	11,449
Commercial real estate | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	10,207	11,577
Commercial real estate | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,900,128	2,841,841
Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Total loans and leases	214,014	214,963
Total Loans	214,014	214,963
Commercial real estate | Agriculture | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	170	128
Commercial real estate | Agriculture | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Agriculture | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Agriculture | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	170	128
Commercial real estate | Agriculture | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	213,844	214,835
Commercial real estate | Commercial and industrial other
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,476,532	2,437,339
Total Loans	2,476,532	2,437,339
Commercial real estate | Commercial and industrial other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Commercial and industrial other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Commercial and industrial other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	10,037	11,449
Commercial real estate | Commercial and industrial other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	10,037	11,449
Commercial real estate | Commercial and industrial other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,466,495	2,425,890
Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Total loans and leases	219,789	201,116
Total Loans	219,789	201,116
Commercial real estate | Construction | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Construction | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Construction | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Construction | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Construction | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	219,789	201,116
Residential real estate
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,525,850	1,534,941
Residential real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,253	2,183
Residential real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	430	204
Residential real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	7,931	8,430
Residential real estate | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	10,614	10,817
Residential real estate | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,515,236	1,524,124
Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Total loans and leases	183,636	188,623
Total Loans	183,636	188,623
Residential real estate | Home equity | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	512	435
Residential real estate | Home equity | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	400	204
Residential real estate | Home equity | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,426	1,628
Residential real estate | Home equity | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,338	2,267
Residential real estate | Home equity | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	181,298	186,356
Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,342,214	1,346,318
Total Loans	1,342,214	1,346,318
Residential real estate | Mortgages | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,741	1,748
Residential real estate | Mortgages | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	30	0
Residential real estate | Mortgages | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	6,505	6,802
Residential real estate | Mortgages | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	8,276	8,550
Residential real estate | Mortgages | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,333,938	1,337,768
Consumer and other
Financing Receivable, Past Due [Line Items]
Total loans and leases	85,558	77,636
Consumer and other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	176	118
Consumer and other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	81	50
Consumer and other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	145	165
Consumer and other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	402	333
Consumer and other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	85,156	77,303
Consumer and other | Commercial and industrial other
Financing Receivable, Past Due [Line Items]
Total loans and leases	83,775	75,412
Consumer and other | Commercial and industrial other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	120	52
Consumer and other | Commercial and industrial other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	70	19
Consumer and other | Commercial and industrial other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	104	112
Consumer and other | Commercial and industrial other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	294	183
Consumer and other | Commercial and industrial other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	83,481	75,229
Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,783	2,224
Total Loans	1,783	2,224
Consumer and other | Indirect | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	56	66
Consumer and other | Indirect | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	11	31
Consumer and other | Indirect | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	41	53
Consumer and other | Indirect | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	108	150
Consumer and other | Indirect | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,675	2,074
Leases
Financing Receivable, Past Due [Line Items]
Total loans and leases	18,016	16,134
Leases | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Leases | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Leases | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Leases | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Leases | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	$ 18,016	$ 16,134

XML

Loans and Leases - Nonaccrual Loans (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	$ 10,728,000	$ 15,193,000
Nonaccrual Loans and Leases	28,424,000	28,289,000
Loans and Leases Past Due Over 89 Days and Accruing	13,000	25,000
Interest on nonaccrual loans	0
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0	411,000
Nonaccrual Loans and Leases	923,000	618,000
Loans and Leases Past Due Over 89 Days and Accruing	0	25,000
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0
Nonaccrual Loans and Leases	17,000
Loans and Leases Past Due Over 89 Days and Accruing	0
Commercial and industrial | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0	411,000
Nonaccrual Loans and Leases	906,000	618,000
Loans and Leases Past Due Over 89 Days and Accruing	0	25,000
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	10,547,000	13,287,000
Nonaccrual Loans and Leases	12,380,000	13,858,000
Loans and Leases Past Due Over 89 Days and Accruing	0	0
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0	186,000
Nonaccrual Loans and Leases	183,000	186,000
Loans and Leases Past Due Over 89 Days and Accruing	0	0
Commercial real estate | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	10,547,000	13,101,000
Nonaccrual Loans and Leases	12,197,000	13,672,000
Loans and Leases Past Due Over 89 Days and Accruing	0	0
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	181,000	1,495,000
Nonaccrual Loans and Leases	14,869,000	13,544,000
Loans and Leases Past Due Over 89 Days and Accruing	0	0
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0	318,000
Nonaccrual Loans and Leases	2,547,000	2,391,000
Loans and Leases Past Due Over 89 Days and Accruing	0	0
Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	181,000	1,177,000
Nonaccrual Loans and Leases	12,322,000	11,153,000
Loans and Leases Past Due Over 89 Days and Accruing	0	0
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0	0
Nonaccrual Loans and Leases	252,000	269,000
Loans and Leases Past Due Over 89 Days and Accruing	13,000	0
Consumer and other | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0	0
Nonaccrual Loans and Leases	174,000	175,000
Loans and Leases Past Due Over 89 Days and Accruing	13,000	0
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0	0
Nonaccrual Loans and Leases	78,000	94,000
Loans and Leases Past Due Over 89 Days and Accruing	$ 0	$ 0

XML

Allowance for Credit Losses - Schedule of Detail in Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 45,934	$ 42,843
Charge-offs	(108)	(246)
Recoveries	1,389	263
(Credit) provision for credit loss expense	(1,180)	(734)
Ending Balance	46,099	42,126
Cumulative Effect, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	64
Commercial and industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	6,039	6,335
Charge-offs	0	(23)
Recoveries	46	20
(Credit) provision for credit loss expense	229	695
Ending Balance	6,316	7,027
Commercial and industrial | Cumulative Effect, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2
Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	27,287	24,813
Charge-offs	0	(27)
Recoveries	1,246	42
(Credit) provision for credit loss expense	(1,363)	(1,846)
Ending Balance	27,186	22,982
Commercial real estate | Cumulative Effect, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	16
Residential real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	11,154	10,139
Charge-offs	(2)	0
Recoveries	64	109
(Credit) provision for credit loss expense	(404)	199
Ending Balance	10,858	10,447
Residential real estate | Cumulative Effect, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	46
Consumer and other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,358	1,492
Charge-offs	(106)	(196)
Recoveries	33	92
(Credit) provision for credit loss expense	343	200
Ending Balance	1,628	1,588
Consumer and other | Cumulative Effect, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	0
Finance Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	96	64
Charge-offs	0	0
Recoveries	0	0
(Credit) provision for credit loss expense	15	18
Ending Balance	111	$ 82
Finance Leases | Cumulative Effect, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 0

XML

Allowance for Credit Losses - Off-Balance Sheet Credit Exposures (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Liabilities for off-balance sheet credit exposures at beginning of period	$ 2,796	$ 2,507
Provision for credit loss expense related to off-balance sheet credit exposures	355	214
Liabilities for off-balance sheet credit exposures at end of period	$ 3,151	$ 2,721

XML

Allowance for Credit Losses - Collateral Dependent Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	$ 10,728	$ 15,660
ACL Allocation	0	3
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	10,728	15,554
Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	0	28
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	0	78
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	10,547	13,287
ACL Allocation	0	0
Commercial Real Estate | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	10,547	13,209
Commercial Real Estate | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	0	0
Commercial Real Estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	0	78
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	181	188
ACL Allocation	0	3
Residential Real Estate | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	181	188
Residential Real Estate | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	0	0
Residential Real Estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment	$ 0	0
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		670
ACL Allocation		0
Commercial and Industrial | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		642
Commercial and Industrial | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		28
Commercial and Industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		0
Commercial Real Estate - Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		1,515
ACL Allocation		0
Commercial Real Estate - Agriculture | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		1,515
Commercial Real Estate - Agriculture | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		0
Commercial Real Estate - Agriculture | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, individually evaluated for impairment		$ 0

XML

Allowance for Credit Losses - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Receivables [Abstract]
TDRs reported during period	$ 0	$ 0

XML

Allowance for Credit Losses - Credit Quality Indicators by Commercial and Industrial Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 5,273,671	$ 5,268,911
Commercial and industrial | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	16,897	124,190
One year before current fiscal year	113,621	80,099
Two years before current fiscal year	80,828	39,021
Three years before current fiscal year	37,187	41,711
Four years before current fiscal year	44,427	34,242
Prior	170,084	157,921
Revolving Loans Amortized Cost Basis	208,890	222,050
Revolving Loans Converted to Term	1,170	6,466
Total Loans	673,104	705,700
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	0
Commercial and industrial | Commercial and industrial other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	16,897	124,190
One year before current fiscal year	113,621	79,861
Two years before current fiscal year	80,606	38,158
Three years before current fiscal year	36,432	41,391
Four years before current fiscal year	44,230	33,238
Prior	167,183	156,038
Revolving Loans Amortized Cost Basis	203,174	215,890
Revolving Loans Converted to Term	1,170	6,466
Total Loans	663,313	695,232
Commercial and industrial | Commercial and industrial other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	127
Two years before current fiscal year	120	421
Three years before current fiscal year	338	285
Four years before current fiscal year	132	271
Prior	1,339	1,380
Revolving Loans Amortized Cost Basis	800	501
Revolving Loans Converted to Term	0	0
Total Loans	2,729	2,985
Commercial and industrial | Commercial and industrial other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	111
Two years before current fiscal year	102	442
Three years before current fiscal year	417	35
Four years before current fiscal year	65	733
Prior	1,562	503
Revolving Loans Amortized Cost Basis	4,916	5,659
Revolving Loans Converted to Term	0	0
Total Loans	7,062	7,483
Commercial and industrial | PPP loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	416
Two years before current fiscal year	383	340
Three years before current fiscal year	303	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	686	756
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	0
Commercial and industrial | PPP loans | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	416
Two years before current fiscal year	383	340
Three years before current fiscal year	303	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	686	756
Commercial and industrial | PPP loans | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	0	0
Commercial and industrial | PPP loans | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	0	0
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	2,152	16,694
One year before current fiscal year	15,034	4,178
Two years before current fiscal year	4,455	5,015
Three years before current fiscal year	4,229	4,186
Four years before current fiscal year	3,479	7,734
Prior	12,105	4,899
Revolving Loans Amortized Cost Basis	23,769	42,152
Revolving Loans Converted to Term	0	215
Total Loans	65,223	85,073
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	0
Commercial and industrial | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	2,152	16,694
One year before current fiscal year	15,034	4,120
Two years before current fiscal year	4,399	4,944
Three years before current fiscal year	4,162	4,186
Four years before current fiscal year	3,479	7,734
Prior	12,092	4,883
Revolving Loans Amortized Cost Basis	23,745	42,097
Revolving Loans Converted to Term	0	215
Total Loans	65,063	84,873
Commercial and industrial | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	58
Two years before current fiscal year	56	0
Three years before current fiscal year	0	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	20	50
Revolving Loans Converted to Term	0	0
Total Loans	76	108
Commercial and industrial | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	71
Three years before current fiscal year	67	0
Four years before current fiscal year	0	0
Prior	13	16
Revolving Loans Amortized Cost Basis	4	5
Revolving Loans Converted to Term	0	0
Total Loans	84	92
Commercial real estate | Commercial and industrial other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	39,210	343,032
One year before current fiscal year	341,321	370,620
Two years before current fiscal year	367,594	313,295
Three years before current fiscal year	319,673	294,443
Four years before current fiscal year	292,899	207,263
Prior	1,077,861	873,145
Revolving Loans Amortized Cost Basis	35,918	11,038
Revolving Loans Converted to Term	2,056	24,503
Total Loans	2,476,532	2,437,339
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	0
Commercial real estate | Commercial and industrial other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	39,210	342,311
One year before current fiscal year	340,604	367,104
Two years before current fiscal year	367,485	311,607
Three years before current fiscal year	317,991	279,587
Four years before current fiscal year	278,372	203,016
Prior	1,021,145	812,563
Revolving Loans Amortized Cost Basis	35,794	10,906
Revolving Loans Converted to Term	2,056	24,503
Total Loans	2,402,657	2,351,597
Commercial real estate | Commercial and industrial other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	643
One year before current fiscal year	643	3,406
Two years before current fiscal year	0	1,688
Three years before current fiscal year	1,682	11,462
Four years before current fiscal year	11,380	2,555
Prior	21,234	25,361
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	34,939	45,115
Commercial real estate | Commercial and industrial other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	78
One year before current fiscal year	74	110
Two years before current fiscal year	109	0
Three years before current fiscal year	0	3,394
Four years before current fiscal year	3,147	1,692
Prior	35,482	35,221
Revolving Loans Amortized Cost Basis	124	132
Revolving Loans Converted to Term	0	0
Total Loans	38,936	40,627
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	2,578	33,241
One year before current fiscal year	34,652	24,125
Two years before current fiscal year	23,976	22,831
Three years before current fiscal year	22,525	26,163
Four years before current fiscal year	25,472	37,873
Prior	101,203	66,364
Revolving Loans Amortized Cost Basis	2,158	3,131
Revolving Loans Converted to Term	1,450	1,235
Total Loans	214,014	214,963
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	0
Commercial real estate | Agriculture | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	2,578	33,241
One year before current fiscal year	34,652	24,125
Two years before current fiscal year	23,976	22,831
Three years before current fiscal year	22,525	25,576
Four years before current fiscal year	24,893	37,835
Prior	100,038	65,112
Revolving Loans Amortized Cost Basis	2,158	3,131
Revolving Loans Converted to Term	1,450	1,235
Total Loans	212,270	213,086
Commercial real estate | Agriculture | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	401
Four years before current fiscal year	396	0
Prior	1,115	1,142
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	1,511	1,543
Commercial real estate | Agriculture | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	186
Four years before current fiscal year	183	38
Prior	50	110
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	233	334
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	23,105
One year before current fiscal year	30,152	75,245
Two years before current fiscal year	73,446	27,584
Three years before current fiscal year	17,738	14,842
Four years before current fiscal year	11,859	9,083
Prior	16,312	7,268
Revolving Loans Amortized Cost Basis	62,168	42,701
Revolving Loans Converted to Term	8,114	1,288
Total Loans	219,789	201,116
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	0
Commercial real estate | Construction | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	23,105
One year before current fiscal year	30,152	75,245
Two years before current fiscal year	73,446	27,584
Three years before current fiscal year	17,738	14,842
Four years before current fiscal year	11,859	9,083
Prior	16,312	7,268
Revolving Loans Amortized Cost Basis	62,168	42,701
Revolving Loans Converted to Term	8,114	1,288
Total Loans	219,789	201,116
Commercial real estate | Construction | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	0	0
Commercial real estate | Construction | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	0	0
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	499	3,030
One year before current fiscal year	2,357	1,062
Two years before current fiscal year	1,033	637
Three years before current fiscal year	610	1,006
Four years before current fiscal year	953	792
Prior	10,877	3,208
Revolving Loans Amortized Cost Basis	166,990	177,803
Revolving Loans Converted to Term	317	1,085
Total Loans	183,636	188,623
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	2
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	2
Residential real estate | Home equity | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	499	3,030
One year before current fiscal year	2,357	1,062
Two years before current fiscal year	1,033	637
Three years before current fiscal year	610	992
Four years before current fiscal year	953	792
Prior	10,589	3,183
Revolving Loans Amortized Cost Basis	164,730	175,451
Revolving Loans Converted to Term	317	1,085
Total Loans	181,088	186,232
Residential real estate | Home equity | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	14
Four years before current fiscal year	0	0
Prior	288	25
Revolving Loans Amortized Cost Basis	2,260	2,352
Revolving Loans Converted to Term	0	0
Total Loans	2,548	2,391
Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	15,811	187,347
One year before current fiscal year	192,324	272,570
Two years before current fiscal year	269,743	240,212
Three years before current fiscal year	236,051	118,073
Four years before current fiscal year	116,715	68,157
Prior	511,570	459,959
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	1,342,214	1,346,318
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	0
Residential real estate | Mortgages | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	15,811	187,129
One year before current fiscal year	192,106	272,235
Two years before current fiscal year	269,413	239,584
Three years before current fiscal year	235,432	117,391
Four years before current fiscal year	116,045	66,605
Prior	501,085	452,221
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	1,329,892	1,335,165
Residential real estate | Mortgages | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	218
One year before current fiscal year	218	335
Two years before current fiscal year	330	628
Three years before current fiscal year	619	682
Four years before current fiscal year	670	1,552
Prior	10,485	7,738
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	12,322	11,153
Consumer and other | Direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	26,213	31,243
One year before current fiscal year	16,366	13,999
Two years before current fiscal year	13,338	7,375
Three years before current fiscal year	6,844	6,231
Four years before current fiscal year	5,825	4,462
Prior	11,981	8,029
Revolving Loans Amortized Cost Basis	3,208	4,073
Revolving Loans Converted to Term	0	0
Total Loans	83,775	75,412
Current-period gross writeoffs
2023	33
2022	0
2021	0
2020	14
2019	3
Prior	20
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	70
Consumer and other | Direct | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	26,213	31,243
One year before current fiscal year	16,366	13,999
Two years before current fiscal year	13,338	7,372
Three years before current fiscal year	6,844	6,138
Four years before current fiscal year	5,762	4,386
Prior	11,873	8,029
Revolving Loans Amortized Cost Basis	3,205	4,070
Revolving Loans Converted to Term	0	0
Total Loans	83,601	75,237
Consumer and other | Direct | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	3
Three years before current fiscal year	0	93
Four years before current fiscal year	63	76
Prior	108	0
Revolving Loans Amortized Cost Basis	3	3
Revolving Loans Converted to Term	0	0
Total Loans	174	175
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	156
Two years before current fiscal year	139	146
Three years before current fiscal year	127	1,168
Four years before current fiscal year	940	645
Prior	577	109
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	1,783	2,224
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	5
Prior	31
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	36
Consumer and other | Indirect | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	156
Two years before current fiscal year	139	146
Three years before current fiscal year	127	1,092
Four years before current fiscal year	885	635
Prior	554	101
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	1,705	2,130
Consumer and other | Indirect | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	76
Four years before current fiscal year	55	10
Prior	23	8
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total Loans	$ 78	$ 94

XML

Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Basic
Net income available to common shareholders	$ 19,381	$ 23,273
Less: income attributable to unvested stock-based compensation awards	(18)	(76)
Net earnings allocated to common shareholders	$ 19,363	$ 23,197
Weighted average shares outstanding, including unvested stock-based compensation awards (in shares)	14,520,092	14,611,709
Less: average unvested stock-based compensation awards (in shares)	(193,497)	(211,706)
Weighted average shares outstanding - Basic (in shares)	14,326,595	14,400,003
Diluted
Net earnings allocated to common shareholders	$ 19,363	$ 23,197
Weighted average shares outstanding - Basic (in shares)	14,326,595	14,400,003
Plus:  incremental shares from assumed conversion of stock-based compensation awards (in shares)	63,078	78,180
Weighted average shares outstanding - Diluted (in shares)	14,389,673	14,478,183
Basic EPS (in dollars per share)	$ 1.35	$ 1.61
Diluted EPS (in dollars per share)	$ 1.35	$ 1.60

XML

Earnings Per Share - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earning per share (in shares)	2,860	1,848

XML

Other Comprehensive Income (Loss) - Reclassification Out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Before-Tax Amount
Net unrealized gains/losses	$ 27,607	$ (105,810)
Tax (Expense) Benefit
Net unrealized gains/losses	(6,764)	25,911
Net of Tax
Other comprehensive income (loss)	20,843	(79,899)
Net unrealized gains/losses
Before-Tax Amount
Change in net unrealized gain (loss) during the period	27,255	(106,481)
Net unrealized gains/losses	27,255	(106,481)
Tax (Expense) Benefit
Change in net unrealized gain (loss) during the period	(6,677)	26,076
Net unrealized gains/losses	(6,677)	26,076
Net of Tax
Change in net unrealized gain (loss) during the period	20,578	(80,405)
Other comprehensive income (loss)	20,578	(80,405)
Amortization of net retirement plan actuarial gain
Before-Tax Amount
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	297	615
Tax (Expense) Benefit
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	(73)	(151)
Net of Tax
Net of tax	224	464
Amortization of net retirement plan prior service cost
Before-Tax Amount
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	55	56
Tax (Expense) Benefit
Reclassification adjustment for net realized gain on sale included in available-for-sale securities	(14)	(14)
Net of Tax
Net of tax	41	42
Employee benefit plans
Before-Tax Amount
Net unrealized gains/losses	352	671
Tax (Expense) Benefit
Net unrealized gains/losses	(87)	(165)
Net of Tax
Other comprehensive income (loss)	$ 265	$ 506

XML

Other Comprehensive Income (Loss) - Activity in AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	$ 617,390	$ 728,941
Other comprehensive income (loss)	20,843	(79,899)
Balances at Ending	649,765	657,492
Available-for- Sale Debt Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	(178,803)	(14,560)
Other comprehensive income (loss) before reclassifications	20,578	(80,405)
Amounts reclassified from accumulated other comprehensive (loss) income	0	0
Other comprehensive income (loss)	20,578	(80,405)
Balances at Ending	(158,225)	(94,965)
Employee Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	(29,886)	(41,390)
Other comprehensive income (loss) before reclassifications	0	0
Amounts reclassified from accumulated other comprehensive (loss) income	265	506
Other comprehensive income (loss)	265	506
Balances at Ending	(29,621)	(40,884)
Accumulated Other Comprehensive (Loss) Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at Beginning	(208,689)	(55,950)
Other comprehensive income (loss) before reclassifications	20,578	(80,405)
Amounts reclassified from accumulated other comprehensive (loss) income	265	506
Other comprehensive income (loss)	20,843	(79,899)
Balances at Ending	$ (187,846)	$ (135,849)

XML

Other Comprehensive Income (Loss) - Reclassified Out of Each Component of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net gain (loss) on securities transactions	$ 13	$ (47)
Other operating expense	(13,469)	(12,020)
Income Before Income Tax Expense	25,313	30,280
Tax expense (benefit)	(5,901)	(6,976)
Net income attributable to Tompkins Financial Corporation	19,381	23,273
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Unrealized gains and losses on available-for-sale debt securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net gain (loss) on securities transactions	0	0
Tax expense (benefit)	0	0
Net income attributable to Tompkins Financial Corporation	0	0
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Net retirement plan actuarial loss
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Other operating expense	(297)	(615)
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	(55)	(56)
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Employee Benefit Plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income Before Income Tax Expense	(352)	(671)
Tax expense (benefit)	87	165
Net income attributable to Tompkins Financial Corporation	$ (265)	$ (506)

XML

Employee Benefit Plan - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Pension Benefits
Components of net periodic benefit cost
Service cost	$ 0	$ 0
Interest cost	823	463
Expected return on plan assets	(1,199)	(1,468)
Amortization of net retirement plan actuarial loss	304	323
Amortization of net retirement plan prior service (credit) cost	0	0
Net periodic benefit (income) cost	(72)	(682)
Life and Health
Components of net periodic benefit cost
Service cost	15	44
Interest cost	89	52
Expected return on plan assets	0	0
Amortization of net retirement plan actuarial loss	(7)	52
Amortization of net retirement plan prior service (credit) cost	(15)	(15)
Net periodic benefit (income) cost	82	133
SERP Benefits
Components of net periodic benefit cost
Service cost	14	52
Interest cost	299	201
Expected return on plan assets	0	0
Amortization of net retirement plan actuarial loss	0	240
Amortization of net retirement plan prior service (credit) cost	70	71
Net periodic benefit (income) cost	$ 383	$ 564

XML

Employee Benefit Plan - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Retirement Benefits [Abstract]
Amortization of amounts previously recognized in accumulated other comprehensive income	$ 266,000	$ 506,000
Contribution to pension plan	$ 0	$ 0

XML

Other Income and Operating Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Other Income and Expenses [Abstract]
Reporting threshold for other income and operating expenses (percent, greater than)	1.00%
Noninterest Income
Other service charges	$ 615	$ 627
Earnings from corporate owned life insurance	615	423
Net gains on the sale of loans originated for sale	38	4
Other income	673	422
Total other income	1,941	1,476
Noninterest Expenses
Marketing expense	1,105	1,056
Professional fees	1,804	1,606
Legal fees	419	210
Technology expense	4,007	3,683
FDIC insurance	1,054	701
Cardholder expense	1,016	1,141
Other expenses	4,064	3,623
Total other operating expense	$ 13,469	$ 12,020

XML

Revenue Recognition - Schedule of Disaggregation of Noninterest Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 18,797	$ 18,872
Noninterest Income (out-of-scope of ASC 606)	1,603	1,113
Total Noninterest Income	20,400	19,985
Commissions and Fees
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	8,517	7,964
Installment Billing
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	1	44
Refund of Commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	59	(28)
Contract Liabilities/Deferred Revenue
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(3)	(1)
Contingent Commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	935	1,338
Subtotal Insurance Revenues
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	9,509	9,317
Trust and Asset Management
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	3,435	3,503
Mutual Fund & Investment Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	1,074	1,414
Subtotal Investment Service Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	4,509	4,917
Service Charges on Deposit Accounts
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	1,746	1,779
Card Services Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	2,682	2,543
Other
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 351	$ 316

XML

Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Net increase to beginning retained earnings	$ 537,331	$ 526,727
Contingent Income
Disaggregation of Revenue [Line Items]
Contract assets, receivables	700	2,900
Contract liabilities	800	1,600
Insurance
Disaggregation of Revenue [Line Items]
Net increase to beginning retained earnings	4,300	6,100
Wealth Management
Disaggregation of Revenue [Line Items]
Net increase to beginning retained earnings	$ 2,800	$ 2,500

XML

Financial Guarantees (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Guarantees [Abstract]
Obligations to extend credit for loan commitments	$ 34.9	$ 35.8

XML

Segment and Related Information - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 office banking_Office segment
Segment Reporting Information [Line Items]
Number of reportable segments | segment	3
Tompkins Insurance Agencies, Inc.
Segment Reporting Information [Line Items]
Noncontrolling interest, ownership percentage by parent	100.00%
Tompkins, Cayuga, Cortland and Schuyler Counties, New York
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	12
Wyoming, Livingston, Genessee, Orleans and Monroe, New York
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	16
Putnam Country, Dutchess Country and Westchester, New York
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	13
Berks, Montgomery, Philadelphia, Deleware and Schuylkill, Pennsylvania
Segment Reporting Information [Line Items]
Nature of operations, number of banking offices	19
Western New York
Segment Reporting Information [Line Items]
Number of offices | office	5

XML

Segment and Related Information - Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Interest income	$ 69,238	$ 59,176
Interest expense	14,992	2,562
Net Interest Income	54,246	56,614
(Credit) for credit loss expense	(825)	(520)
Noninterest income	20,400	19,985
Noninterest expense	50,158	46,839
Income Before Income Tax Expense	25,313	30,280
Income tax expense	5,901	6,976
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	19,412	23,304
Less: Net Income Attributable to Noncontrolling Interests	31	31
Net Income Attributable to Tompkins Financial Corporation	19,381	23,273
Depreciation and amortization	2,678	2,650
Assets	7,644,371	7,891,111	$ 7,670,686
Goodwill	92,602	92,447	92,602
Other intangibles, net	2,605	3,382	2,708
Net loans and leases	5,227,572	5,021,325	5,222,977
Deposits	6,509,009	7,016,739	6,602,295
Total Equity	649,765	657,492	$ 617,390	$ 728,941
Operating Segments | Banking
Segment Reporting Information [Line Items]
Interest income	69,238	59,176
Interest expense	14,993	2,563
Net Interest Income	54,245	56,613
(Credit) for credit loss expense	(825)	(520)
Noninterest income	6,698	6,193
Noninterest expense	39,848	37,190
Income Before Income Tax Expense	21,920	26,136
Income tax expense	4,989	5,791
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	16,931	20,345
Less: Net Income Attributable to Noncontrolling Interests	31	31
Net Income Attributable to Tompkins Financial Corporation	16,900	20,314
Depreciation and amortization	2,589	2,578
Assets	7,586,753	7,835,767
Goodwill	64,655	64,500
Other intangibles, net	984	1,402
Net loans and leases	5,227,572	5,021,325
Deposits	6,527,953	7,031,223
Total Equity	584,650	598,707
Operating Segments | Insurance
Segment Reporting Information [Line Items]
Interest income	1	1
Interest expense	0	0
Net Interest Income	1	1
(Credit) for credit loss expense	0	0
Noninterest income	9,636	9,434
Noninterest expense	7,215	6,501
Income Before Income Tax Expense	2,422	2,934
Income tax expense	673	815
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	1,749	2,119
Less: Net Income Attributable to Noncontrolling Interests	0	0
Net Income Attributable to Tompkins Financial Corporation	1,749	2,119
Depreciation and amortization	44	44
Assets	43,779	44,247
Goodwill	19,866	19,866
Other intangibles, net	1,576	1,917
Net loans and leases	0	0
Deposits	0	0
Total Equity	35,625	34,128
Operating Segments | Wealth Management
Segment Reporting Information [Line Items]
Interest income	0	0
Interest expense	0	0
Net Interest Income	0	0
(Credit) for credit loss expense	0	0
Noninterest income	4,621	4,934
Noninterest expense	3,650	3,724
Income Before Income Tax Expense	971	1,210
Income tax expense	239	370
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	732	840
Less: Net Income Attributable to Noncontrolling Interests	0	0
Net Income Attributable to Tompkins Financial Corporation	732	840
Depreciation and amortization	45	28
Assets	29,013	26,684
Goodwill	8,081	8,081
Other intangibles, net	45	63
Net loans and leases	0	0
Deposits	(4,245)	(10)
Total Equity	29,490	24,657
Intercompany
Segment Reporting Information [Line Items]
Interest income	(1)	(1)
Interest expense	(1)	(1)
Net Interest Income	0	0
(Credit) for credit loss expense	0	0
Noninterest income	(555)	(576)
Noninterest expense	(555)	(576)
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	(15,174)	(15,587)
Goodwill	0	0
Other intangibles, net	0	0
Net loans and leases	0	0
Deposits	(14,699)	(14,474)
Total Equity	$ 0	$ 0

XML

Fair Value Measurements - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	$ 790	$ 777
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	1,585,854	1,594,967
Equity securities, at fair value	790	777
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
Equity securities, at 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	1,585,854	1,594,967
Equity securities, at fair value	0	0
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
Equity securities, at fair value	790	777
Recurring | U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	170,814	167,251
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	170,814	167,251
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
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	599,762	601,167
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	599,762	601,167
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
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	86,684	85,281
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	86,684	85,281
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
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	50,891	52,668
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	50,891	52,668
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
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	675,310	686,222
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	675,310	686,222
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
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale debt securities, fair value	2,393	2,378
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	2,393	2,378
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

XML

Fair Value Measurements - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	$ 10,728	$ 15,660
Non-Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	0	9,460
Other real estate owned	36	152
Gain (losses) from fair value changes, Impaired loans	826	59
Gain (losses) from fair value changes, Other real estate owned	22	15
Non-Recurring | (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	0	0
Other real estate owned	0	0
Non-Recurring | (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	0	0
Other real estate owned		0
Non-Recurring | (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	0	9,460
Other real estate owned	$ 36	$ 152

XML

Fair Value Measurements - Narrative (Details)	Mar. 31, 2023
Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Land selling and closing costs, as percentage of appraisal value	5.00%
Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Land selling and closing costs, as percentage of appraisal value	8.00%

XML

Fair Value Measurements - Estimated Fair Value of Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financial Assets:
Securities - held-to-maturity	$ 267,099	$ 261,692
FHLB and other stock	19,326	17,720
Financial Liabilities:
Time deposits	725,338	631,411
Fed funds purchased and securities sold under agreements to repurchase	63,491	56,278
Other borrowings	327,000	291,300
(Level 1)
Financial Assets:
Cash and cash equivalents	70,537	77,837
Securities - held-to-maturity	0	0
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
Accrued interest payable	0	0
(Level 2)
Financial Assets:
Cash and cash equivalents	0	0
Securities - held-to-maturity	267,099	261,692
FHLB and other stock	19,326	17,720
Accrued interest receivable	23,629	24,865
Loans/leases, net	0	0
Financial Liabilities:
Time deposits	713,125	616,488
Other deposits	5,783,671	5,970,884
Fed funds purchased and securities sold under agreements to repurchase	63,491	56,278
Other borrowings	324,849	289,234
Accrued interest payable	1,579	1,420
(Level 3)
Financial Assets:
Cash and cash equivalents	0	0
Securities - held-to-maturity	0	0
FHLB and other stock	0	0
Accrued interest receivable	0	0
Loans/leases, net	4,911,105	4,939,246
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
Accrued interest payable	0	0
Carrying Amount
Financial Assets:
Cash and cash equivalents	70,537	77,837
Securities - held-to-maturity	312,357	312,344
FHLB and other stock	19,326	17,720
Accrued interest receivable	23,629	24,865
Loans/leases, net	5,227,572	5,222,977
Financial Liabilities:
Time deposits	725,338	631,411
Other deposits	5,783,671	5,970,884
Fed funds purchased and securities sold under agreements to repurchase	63,491	56,278
Other borrowings	327,000	291,300
Accrued interest payable	1,579	1,420
Fair Value
Financial Assets:
Cash and cash equivalents	70,537	77,837
Securities - held-to-maturity	267,099	261,692
FHLB and other stock	19,326	17,720
Accrued interest receivable	23,629	24,865
Loans/leases, net	4,911,105	4,939,246
Financial Liabilities:
Time deposits	713,125	616,488
Other deposits	5,783,671	5,970,884
Fed funds purchased and securities sold under agreements to repurchase	63,491	56,278
Other borrowings	324,849	289,234
Accrued interest payable	$ 1,579	$ 1,420

XML

Derivatives and Hedging Activities - Derivative Instruments in Statement of Financial Position (Details) - Derivatives not designated as hedging instruments - Other Liabilities - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivatives, Fair Value [Line Items]
Fair Value	$ 26	$ 21
Interest Rate Products
Derivatives, Fair Value [Line Items]
Notional Amount	0
Fair Value	0	0
Risk Participation Agreement
Derivatives, Fair Value [Line Items]
Notional Amount	7,499
Fair Value	$ 26	$ 21

XML

Derivatives and Hedging Activities - Derivative Instruments in Statement of Income (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative	$ (6)
Interest Rate Products | Other income / (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative	0
Risk Participation Agreement | Other income / (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative	$ (6)